Hungarian Telephone and Cable Corp. (AMEX:HTC) announced today its
results for the quarter and six months ended June 30, 2008. Results
for Second Quarter HTCC�s second quarter 2008 results reflect the
inclusion of the Invitel Acquisition for the full quarter as
compared to the second quarter 2007 which only included the Invitel
Acquisition from April 27, 2007. HTCC increased its revenue by 60%
during the second quarter ended June 30, 2008 to $148.1 million as
compared to revenue of $92.8 million for the second quarter ended
June 30, 2007. HTCC's second quarter 2008 gross margin increased by
73% to $88.5 million as compared to $51.1 million for the second
quarter 2007. Income from operations increased by 125% in the
second quarter 2008 to $21.4 million compared to $9.5 million in
the second quarter 2007. Principally due to a non-cash loss on
derivative financial instruments of $66.7 million, offset partially
by a foreign exchange gain of $47.3 million, HTCC�s net loss
attributable to common stockholders for the second quarter 2008 was
$27.8 million, or $1.69 per (diluted) common share, as compared to
net loss attributable to common stockholders of $16.2 million, or
$1.00 per common share for the second quarter 2007. Mass Market
Voice - HTCC's Mass Market Voice revenue grew by 72% from $25.4
million in the second quarter 2007 to $43.7 million in the second
quarter 2008, mainly due to the inclusion of Invitel and Tele2
Hungary which was acquired in October 2007. Business - HTCC's
Business revenue grew by 37% from $28.6 million in the second
quarter 2007 to $39.1 million in the second quarter 2008, mainly as
a result of the Business revenue from the Invitel Acquisition. Mass
Market Internet - HTCC continued its growth in its Mass Market
Internet business reflecting the continued growth in broadband DSL
Internet penetration both inside and outside its historical
concession areas. HTCC's Mass Market Internet revenue increased to
$14.7 million in the second quarter 2008 as compared to $8.4
million in the second quarter 2007. HTCC increased its broadband
DSL customer base from approximately 109,000 subscribers as of the
end of the second quarter 2007 to 131,000 subscribers as of the end
of the second quarter 2008. Wholesale - HTCC's Wholesale revenue
increased 66% from $30.4 million in the second quarter 2007 to
$50.6 million in the second quarter 2008, primarily due to the
Invitel and Memorex Acquisitions. Please note that when comparing
the financial results for the quarter ended June 30, 2008 to the
financial results for the quarter ended June 30, 2007, the reported
results in U.S. dollars have been affected by the difference
between the average Hungarian forint/U.S. dollar exchange rates
during such periods. The Hungarian forint appreciated by 16% when
calculating the average Hungarian forint/U.S. dollar exchange rate
during the quarter ended June 30, 2008 as compared to the average
Hungarian forint/U.S. dollar exchange rate during the quarter ended
June 30, 2007. A reconciliation of the GAAP to Non-GAAP financial
measures has been provided in the financial statement tables
included in this press release. An explanation of these measures is
also included below under the heading �Non-GAAP Financial
Measures.� Results for Six Months HTCC�s results for the six months
ended June 30, 2008 reflect the inclusion of the Invitel
Acquisition for the full six months as compared to the six months
ended June 30, 2007 which only included the Invitel Acquisition
from April 27, 2007. HTCC increased its revenue by 97% to $279.5
million for the six months ended June 30, 2008 as compared to
revenue of $142.0 million for the six months ended June 30, 2007.
HTCC's gross margin increased by 119% to $164.3 million for the six
months ended June 30, 2008 as compared to $75.1 million for the six
months ended June 30, 2007. Income from operations increased by
171% for the six months ended June 30, 2008 to $43.9 million as
compared to $16.2 million for the six months ended June 30, 2007.
HTCC's net loss attributable to common stockholders for the six
months ended June 30, 2008 was $23.8 million, or $1.45 per
(diluted) common share, as compared to net loss attributable to
common stockholders of $70.8 million, or $4.87 per common share for
the six months ended June 30, 2007. Mass Market Voice - HTCC's Mass
Market Voice revenue grew by 150% from $34.3 million in the six
months ended June 30, 2007 to $85.6 million in the six months ended
June 30, 2008, mainly due to the inclusion of Invitel and Tele2
Hungary. Business - HTCC's Business revenue grew by 76% from $43.3
million in the six months ended June 30, 2007 to $76.3 million in
the six months ended June 30, 2008 mainly as a result of the
Business revenue from the Invitel Acquisition. Mass Market Internet
- HTCC continued its growth in its Mass Market Internet business
reflecting the continued growth in broadband DSL Internet
penetration both inside and outside its historical concession
areas. HTCC's Mass Market Internet revenue increased to $28.2
million in the six months ended June 30, 2008 as compared to $9.5
million in the sixth months ended June 30, 2007. Wholesale - HTCC's
Wholesale revenue increased 63% from $54.9 million in the six
months ended June 30, 2007 to $89.4 million in the six months ended
June 30, 2008, primarily due to the Invitel and Memorex
Acquisitions. HTCC�s net cash provided by operations was $55.6
million for the six months ended June 30, 2008. Please note that
when comparing the financial results for the six months ended June
30, 2008 to the financial results for the six months ended June 30,
2007, the reported results in U.S. dollars have been affected by
the difference between the average Hungarian forint/U.S. dollar
exchange rates during such periods. The Hungarian forint
appreciated by 14% when calculating the average Hungarian
forint/U.S. dollar exchange rate during the six months ended June
30, 2008 as compared to the average Hungarian forint/U.S. dollar
exchange rate during the six months ended June 30, 2007. A
reconciliation of the GAAP to Non-GAAP financial measures has been
provided in the financial statement tables included in the press
release. An explanation of these measures is also included below
under the heading �Non-GAAP Financial Measures.� Comments from
Martin Lea Commenting on the financial results, HTCC�s President
and CEO Martin Lea said, �I am very pleased with our robust
financial results for the quarter which are in line with
management�s expectations. The Hungarian telecommunications market
conditions are stable and HTCC is well positioned to take advantage
of the growth opportunities in the Hungarian broadband and business
segments.� Mr. Lea went on to say, �The Invitel integration is
largely complete and the cost savings have exceeded our original
expectations. The Memorex integration is off to a great start and
we are in good shape to capitalize on our leading position in the
wholesale market for data and capacity services within the Central
and Eastern European region. I look forward to discussing our
financial results in greater detail during our investor call on
August 19th.� Conference Call On Tuesday, August 19, 2008 (at 14:00
UK time, 15:00 CET, 9:00 AM ET) the CEO and CFO of HTCC will host a
conference call to discuss its second quarter 2008 financial
results. You can participate in the conference call by dialing
+44-20-8515-2301 (UK), 800-279-2280 (UK toll free), +1-480-629-1990
(International) or +1-800-762-8908 (U.S. toll free) and referencing
�Hungarian Telephone and Cable Corp..� A web cast of the call and
the presentation materials will be available on the HTCC web site
at www.htcc.hu on the investor presentations and bondholder filings
page under investor relations. The web cast will be archived for 30
days. In addition, a replay of the call will be available two hours
after the call has ended and through August 26, 2008. To access the
replay of the call in the UK, please dial +44-207-154-2833 or
0800-358-3474 (toll free). In the U.S. please dial +1-800-406-7325
or internationally dial +1-303-590-3030 and enter the replay access
code 3910292. A copy of the presentation materials will also be
filed with the U.S. Securities and Exchange Commission prior to the
call. Non-Gaap Financial Measures HTCC has included certain
non-GAAP financial measures in Hungarian forints and euros,
including Pro-forma Adjusted EBITDA, in this press release. A
reconciliation of the differences between these non-GAAP financial
measures and the most directly comparable GAAP financial measures
(but stated in Hungarian forints) is included in a table that
follows. The non-GAAP financial measures referred to in this press
release are by definition not a measure of financial performance or
financial condition under generally accepted accounting principles
and are not alternatives to operating income or net income/loss
reflected in the statement of operations and are not necessarily
indicative of cash available to fund all cash flow needs. These
non-GAAP financial measures used by HTCC may not be comparable to
similarly titled measures of other companies. Management uses these
non-GAAP financial measures for various purposes including:
measuring and evaluating the Company�s financial and operational
performance and its financial condition; making compensation
decisions; planning and budgeting decisions; and financial planning
purposes. HTCC believes that presentation of these non-GAAP
financial measures is useful to investors because it (i) reflects
management�s view of core operations and cash flow generation and
financial condition upon which management bases financial,
operational, compensation and planning decisions and (ii) presents
a measurement that equity and debt investors and lending banks have
indicated to management is important in assessing HTCC's financial
performance and financial condition. While HTCC utilizes these
non-GAAP financial measures in managing its business and believes
that they are useful to management and to investors for the reasons
described above, these non-GAAP financial measures have certain
shortcomings. In particular, Pro-forma Adjusted EBITDA does not
take into account changes in working capital and financial
statement items below income from operations, and the resultant
effect of these items on HTCC's cash flow. Management compensates
for the shortcomings of these measures by utilizing them in
conjunction with their comparable GAAP financial measures. The
information in this press release should be read in conjunction
with the financial statements and footnotes contained in HTCC's
documents filed with the U.S. Securities and Exchange Commission.
About Hungarian Telephone and Cable Corp. Hungarian Telephone and
Cable Corp., operating under the Invitel brand name, is the number
one alternative and the second largest fixed line
telecommunications and broadband Internet Services Provider in the
Republic of Hungary with more than 1 million customers in Hungary.
In addition to delivering voice, data and Internet services in
Hungary, it is also a leading player in the Central and Eastern
European wholesale telecommunications capacity and data market.
Note: This press release may contain forward-looking statements as
that term is defined in the Private Securities Litigation Reform
Act of 1995. These and all forward-looking statements are only
predictions of current plans that are constantly under review by
the company. Such statements are qualified by important factors
that may cause actual results to differ from those contemplated,
including those risk factors detailed from time to time in the
company�s Securities and Exchange Commission (�SEC�) filings, which
may not be exhaustive. For a discussion of such risk factors, see
the company�s filings with the SEC including, but not limited to,
reports on Form 10-K and 10-Q. The company operates in a
continually changing business environment, and new risk factors
emerge from time to time. The company cannot predict such new risk
factors, nor can it assess the impact, if any, of such new risk
factors on its business or events described in any forward-looking
statements. The company has no obligation to publicly update or
revise any forward-looking statements to reflect the occurrence of
future events or circumstances. Hungarian Telephone and Cable
Corp.Financial Highlights(in millions, except per share
data)Statements of Operations � � � Three MonthsEndedJune 30,
2008(unaudited) Three MonthsEndedJune 30, 2007(unaudited) Six
MonthsEndedJune 30, 2008(unaudited) Six MonthsEndedJune 30,
2007(unaudited) � Mass Market Voice $ 43.7 $ 25.4 $ 85.6 $ 34.3
Business 39.1 28.6 76.3 43.3 Mass Market Internet 14.7 8.4 28.2 9.5
Wholesale 50.6 30.4 89.4 54.9 Total Revenue 148.1 92.8 279.5 142.0
� Cost of Sales 59.6 41.7 115.2 66.9 � Gross Margin 88.5 51.1 164.3
75.1 � Income from Operations 21.4 9.5 43.9 16.2 � Interest Expense
(30.3 ) (14.4 ) (57.9 ) (18.2 ) � Gains (losses) on derivative
financial instruments (66.7 ) (21.8 ) (37.6 ) (65.9 ) � Gains
(losses) from fair value changes of warrants - - - (15.1 ) � Net
income (loss) attributable to common stockholders (27.8 ) (16.2 )
(23.8 ) (70.8 ) � Net income (loss) per common share (diluted) $
(1.69 ) $ (1.00 ) $ (1.45 ) $ (4.87 ) � Hungarian Telephone and
Cable Corp.Financial Highlights(in millions, except per share
data)Balance Sheets � � Period Ended Period Ended June 30 December
31, 2008 2007 � (unaudited) � Current Assets $ 166.2 $ 118.8
Property, Plant and Equipment, net 917.8 691.5 Total Assets 1,501.8
1,110.2 � Total Current Liabilities 277.4 199.9 Long Term Debt
1,046.2 812.9 Total Stockholders Equity 24.3 21.1 Total Liabilities
and Stockholders Equity $ 1,501.8 $ 1,110.2 The following table
presents unaudited summarized pro-forma consolidated financial
information of HTCC, Invitel, Tele2 and Memorex on a pro-forma
basis in Forint and Euro as though the companies had been combined
at the beginning of the respective periods: Three months ended June
30 � Three months ended June 30(a) 2008Pro-forma � � 2007Pro-forma
� � 2008Pro-forma � � 2007Pro-forma � (in millions) (in thousands)
Gross Margin HUF 17,010 � HUF 16,915 � 70,479 � � 70,479 Adjusted
EBITDA (1) 10,345 9,155 38,144 38,144 Net income (loss) (4,646 )
(4,383 ) (18,264 ) (18,264 ) � � Six months ended June 30 Six
months ended June 30(a) 2008Pro-forma � � 2007Pro-forma � �
2008Pro-forma � � 2007Pro-forma � (in millions) (in thousands)
Gross Margin HUF 34,356 HUF 34,514 � 143,150 � 143,808 Adjusted
EBITDA (1) 20,594 18,451 85,810 76,878 Net income (loss) (4,845 )
(15,776 ) (20,188 ) (65,735 ) � � June 30, 2008 � � March 31, 2008
� (in thousands) Cash and cash equivalents � 19,926 � 30,033
Cash-pay third party debt (2) 559,338 564,220 Third party debt
(including non cash-pay debt) (3) 708,168 708,299 Net cash-pay
third party debt (4) 539,412 534,187 Net third party debt
(including non cash-pay debt) (5) 688,242 678,266 Annualized
Adjusted EBITDA (6) 171,620 Leverage (7) 3.1x Leverage (including
non cash-pay debt) (8) 4.0x � (a) For purposes of convenience,
certain euro amounts have been converted from Hungarian forints at
the exchange rate of 240 HUF/EUR. Reconciliation of Non-GAAP
Financial Measures: � (1) Pro-forma Adjusted EBITDA is reconciled
to net income as follows: � Three months ended June 30 Six months
ended June 30 2008 Pro-forma � � 2007 Pro-Forma � � 2008 Pro-forma
� � 2007 Pro-Forma � (in millions) Adjusted EBITDA HUF 10,345 � HUF
9,155 HUF 20,594 � HUF 18,451 Cost of restructuring and integration
(986 ) (1,304 ) (1,966 ) (1,400 ) Due diligence expenses (103 )
(103 ) (215 ) (131 ) Turkey start-up expenses (119 ) (203 ) (314 )
(256 ) Provision for unused vacation (98 ) (293 ) (205 ) (300 )
Other one-off items, net (485 ) � (594 ) � (525 ) � (731 ) EBITDA
HUF 8,554 � � HUF 6,658 � � HUF 17,369 � � HUF 15,633 � Income
taxes 279 2,677 (743 ) 1,968 Minority interest 1 - - - Convertible
preferred stock dividends (4 ) (5 ) (9 ) (10 ) Financing expenses,
net (4,994 ) (4,747 ) (10,336 ) (9,868 ) Foreign exchange gains
(losses), net 7,955 1,314 5,284 2,412 Gains (losses) on derivatives
(11,277 ) (3,721 ) (6,239 ) (12,188 ) Gains (losses) on warrants -
- - (2,904 ) Depreciation and amortization (5,160 ) � (6,559 ) �
(10,171 ) � (10,819 ) Net income (loss) HUF (4,646 ) HUF (4,383 )
HUF (4,845 ) HUF (15,776 ) � (2)��Cash-pay third party debt
includes short and long term debt and liabilities relating to
financial leases but excludes liabilities relating to derivative
financial instruments. � (3) Third party debt (including non
cash-pay debt) includes short and long term debt, the 2006 PIK
Notes and liabilities relating to financial leases but excludes
liabilities relating to derivative financial instruments. � (4) Net
cash-pay third party debt equals cash-pay third party debt
calculated as described under (2) less cash and cash equivalents. �
(5) Net third party debt (including non cash-pay debt) equals third
party debt calculated as described under (3) less cash and cash
equivalents. � (6) Pro-forma Annualized Adjusted EBITDA is
calculated as Pro-forma Adjusted EBITDA for the six month period
ended June 30, 2008 multiplied by 2. � (7) Pro-forma Leverage is
calculated as net cash-pay third party debt as described under (4)
divided by Pro-forma Annualized Adjusted EBITDA as described under
(6). � (8) Pro-forma Leverage (including non cash-pay debt) is
calculated as net third party debt as described under (5) divided
by Pro-forma Annualized Adjusted EBITDA as described under (6).
Hungarian Telephone (AMEX:HTC)
Historical Stock Chart
From May 2024 to Jun 2024
Hungarian Telephone (AMEX:HTC)
Historical Stock Chart
From Jun 2023 to Jun 2024