- Net Revenue up by 24%
- Adjusted EBITDA improved by 77%
- Margin improvement of 42%
- Net loss decreased 21%
LUXEMBOURG, May 23 /PRNewswire-FirstCall/ -- SBS Broadcasting SA
(Nasdaq: SBTV; Euronext Amsterdam N.V.: SBS) today reported financial results
for the three months ended March 31, 2005.
Results, which are attached, are in thousands of euro (except share and
per share data) converted from local currencies. The following report should
be read in conjunction with the accompanying unaudited financial statements.
Financial highlights are as follows:
Three months ended March 31,
2004 2005 % change
(unaudited) (unaudited)
Net revenue(1) euro 140,674 euro 175,067 24%
Adjusted EBITDA(1)(2) 4,613 8,144 77%
Operating income (loss)(1) (2,522) 188 -
Net loss (3,906) (3,091) 21%
Net loss per common share euro (0.13) euro (0.10) 23%
Weighted average common shares (000) 31,075 31,963
Cash provided by (used in) operating
activities (11,411) 11,712
Adjusted EBITDA margin(3) 3.3% 4.7% 42%
(1) Excluding the impact of our newly acquired businesses, C More, Prima
TV and the Romanian Radio stations, and the recently launched
television stations, The Voice TV, VijfTV and Irisz, net revenue
increased euro 18,133, or 13%, adjusted EBITDA increased euro 5,592,
or 121%, and operating income (loss) improved euro 5,027.
(2) Adjusted EBITDA is defined as operating income (loss) plus non-cash
compensation, depreciation and amortization expenses (see page 9).
(3) Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage
of net revenue.
Commenting on the results, Markus Tellenbach, Chief Executive Officer of
SBS, said: "In the first quarter we continued to improve our operating
performance and our revenue growth outpaced the market in most of our
territories. We also continued to invest in popular programming, start-up
operations and complementary activities. Through the successful launch of new
digital channels and the acquisition of the C More Group we are rapidly
expanding and diversifying our revenue streams. Moreover, we are executing
this growth strategy in a manner that enables us to continue to expand our
cash generating ability.
"With the successful conclusion of our recent euro 325 million bank
refinancing, we have repaid our C More acquisition debt and defeased and
called for redemption our 12% Senior Notes. We will benefit from the
significant reduction in interest rates compared to our 12% Senior Notes, that
was achieved based on our strengthened balance sheet and improving cash flows.
As we are not heavily leveraged based on our cash flows and total net debt, we
are in a strong position to capitalize on the rapidly developing digital
content market while continuing to seek prudent expansion opportunities to
drive growth."
Recent Developments
Romania
On March 1, 2005, we increased our equity stake in Prima TV to 86%
following the purchase of an additional 48.8% indirect equity stake for euro
7,800 from Romanian Investment and Development srl. SBS has held a minority
ownership interest in Prima TV since July 2001 and originally invested in
Prima TV in March 2000.
We also acquired Romania's leading FM radio network Kiss FM, and FM radio
network Radio Star from MG Media Group Holding S.A. for a total of euro 22,500
on a debt-free basis.
Premium Pay
On March 8, 2005, we acquired all of the shares of C More Group AB for
euro 269,600 in cash. The acquired net assets of C More included approximately
euro 20,000 in cash at December 31, 2004. The sellers were primarily private
equity funds represented by Baker Capital and Nordic Capital.
C More is the leading Nordic pay entertainment provider, with over 770,000
subscribers in Sweden, Norway, Finland and Denmark. As a provider of both
premium sports and premium movies in the Nordic region, which it provides
under the Canal+ and C More brands, C More enjoys market-leading positions in
Sweden, Norway and Finland. The channels are distributed primarily by direct-
to-home satellite (DTH), cable, broadband and, increasingly, by digital
terrestrial transmission (DTT). In 2004, C More Group had revenues of SEK
1,657,000 (euro 181,000) from channel subscriptions and other sources. C More
has had positive net income for the last three years and has no debt.
Financing
On March 7, 2005, we entered into a euro 300,000 unsecured bridge facility
agreement with ABN AMRO Bank N.V. ("ABN AMRO") and then drew down euro 210,000
in order to finance in part our acquisition of C More. We financed the
remainder of the purchase price from the Company's cash balances. Amounts
outstanding under the bridge facility bore interest at a rate of EURIBOR plus
0.7% per annum. The bridge facility had a term of six-months.
On May 12, 2005, we entered into a euro 325,000 secured syndicated
multicurrency revolving credit facility (the "Facility") with ABN AMRO,
Citigroup Global Markets Limited, Deutsche Bank AG London and The Royal Bank
of Scotland plc, as lead arrangers.
In connection with the Facility, we called for redemption all of our 12%
Senior Notes due 2008 (the "Senior Notes"), which had an outstanding principal
amount of euro 103,655. Holders of the Senior Notes will receive a redemption
price of 106% of the principal amount of the Senior Notes plus accrued and
unpaid interest on the Senior Notes on the redemption date, which will be June
15, 2005. We deposited with the trustee for the Senior Notes cash sufficient
to fund the redemption and thereby defeased the covenants contained in the
indenture for the Senior Notes until their redemption.
We funded the defeasance and redemption of the Senior Notes with funds
drawn under the Facility and we utilized the remaining amounts under the
Facility and a portion of our cash reserves to fully repay euro 210,000 and
accrued interest due under the euro 300,000 bridge facility with ABN AMRO.
The Facility is a fully revolving facility with a term of five years,
although we have the right during the first twelve months to request a one-
year extension. Amounts borrowed under the Facility bear interest at a rate of
EURIBOR plus a margin based on our senior net debt leverage ratio. The initial
margin is 0.75%. To provide security, the Company and certain of its
subsidiaries have pledged shares of certain wholly owned group companies in
Belgium, The Netherlands, Norway, Sweden and the United Kingdom. Certain
wholly owned subsidiaries in these jurisdictions also guarantee the Facility.
Financial Statements
We prepare our financial statements in euro and in accordance with
accounting principles generally accepted in the United States ("U.S. GAAP").
Our consolidated broadcasting operations generate revenues primarily in
euro, Hungarian forint, Swedish kronor, Norwegian kroner and Danish kroner and
incur substantial operating expenses in these currencies. We also incur
significant operating expenses for programming in U.S. dollars. Balance sheet
accounts are translated from foreign currencies into euro at the period-end
exchange rates and statement of operations accounts are translated at the
weighted average exchange rates for the period. Any resulting balance sheet
translation adjustments are recorded as accumulated other comprehensive income
(loss) within shareholders' equity. Currency translation adjustments relating
to transactions in currencies other than the functional currency of the entity
involved are reflected in the results of operations as foreign exchange gain
(loss).
In the discussions of the results for the three months ended March 31,
2005 compared to the three months ended March 31, 2004, we divide our
operations into four segments:
(1) "Television operations", which include:
* SBS6, NET5 and Veronica (in The Netherlands) and jointly referred
to as "our Dutch Television operations";
* TV2 and, since September 2004, Irisz (in Hungary) and jointly
referred to as "our Hungarian Television operations";
* Kanal 5 (in Sweden);
* VT4 and, since October 2004, VijfTV (in Flemish Belgium) and
jointly referred to as "our Belgian Television operations";
* TVNorge (in Norway);
* TvDanmark and Kanal 5 (in Denmark) and jointly referred to as
"our Danish Television operations";
* since March 1, 2005, Prima TV (in Romania);
* since August 2004, The Voice TV (in Denmark, Norway, Sweden and
Finland); and
* other related operations that are not material.
(2) "Premium pay operations", which include C More Group AB in Sweden,
Norway, Finland and Denmark. We acquired C More on March 8, 2005
and, accordingly, the results of operations have been reflected in
our consolidated financial statements since that date.
(3) "Radio operations", which include:
* Mix Megapol, The Voice, Radio City, 106.7 Rockklassiker, Studio
107.5, Vinyl and Lugna Melodier (in Sweden) and jointly referred
to as "our Swedish Radio operations";
* KISS FM, Radio City, Radio Sata, Radio Mega, Radio 957, Radio
Jyvaskyla and Iskelmaradio (in Finland) and jointly referred to
as "our Finnish Radio operations";
* The Voice and Radio 2 (in Denmark) and jointly referred to as
"our Danish Radio operations";
* Radio 1 and The Voice (in Norway) and jointly referred to as "our
Norwegian Radio operations";
* Since March 1, 2005, KISS FM and Radio STAR (in Romania) and
jointly referred to as "our Romanian Radio operations"; and
Lampsi (in Greece).
(4) "Print operations", which include the Veronica Magazine and the
Satellite Magazine in The Netherlands.
Results from Prima TV in Romania, through February 28, 2005, are not
included in the operations referred to above, but are included in equity in
income (loss) from unconsolidated subsidiaries. From July 2001 until February
28, 2005, we held a minority interest in the station and were unable to
exercise control over the operations. Since March 1, 2005, we have
consolidated Prima TV's operations to reflect our 86% controlling interest.
When analyzing results within the different categories of operations for
any particular period, the sums of the individual items reported within each
category may differ from the total reported for such category. Differences are
primarily attributable to corporate charges, eliminations between categories
and items attributable to entities that are not separately disclosed but are
included within the totals for the different categories.
The consolidated statements of operations and balance sheet have been
prepared on the basis of a preliminary purchase price allocation of the
acquisitions completed during the first quarter of 2005. We expect the final
purchase price allocation to be completed during the second quarter.
Operating Expenses as a Percentage of Revenue
We monitor our operating expenses as a percentage of our net revenue as
part of our cost management efforts. We rely on this measurement, in
particular, to help plan and implement the expansion of our existing
businesses and the development of new revenue streams. The following table
shows our operating expenses as a percentage of net revenues for the periods
indicated.
Three months ended
March 31,
2004 2005
Net revenue 100.0% 100.0%
Operating expenses:
Station operating expenses 74.0% 70.1%
Selling, general and administrative expenses 20.3% 22.7%
Corporate expenses 2.4% 2.5%
Adjusted EBITDA margin 3.3% 4.7%
Non-cash compensation 0.6% 0.2%
Depreciation and amortization 4.5% 4.3%
Operating income (loss) margin (1.8%) 0.2%
Three months ended March 31, 2005 compared to three months ended March 31,
2004
Net Revenue
Net revenue increased euro 34,393, or 24%, from euro 140,674 in 2004 to
euro 175,067 in 2005. Our newly acquired businesses, C More, Prima TV and the
Romanian Radio stations, and the recently launched television stations, The
Voice TV, VijfTV and Irisz, had combined net revenue of euro 16,260. Excluding
our new businesses, our net revenue increased euro 18,133, or 13%.
The net revenue increased euro 18,857, or 16%, at our Television
operations mainly due to increased net revenue of euro 3,697, or 22%, at our
Hungarian Television operations, due to an increased television advertising
market and increased viewing shares mainly driven by the introduction of a new
daily soap on TV2. TVNorge and Kanal 5 had increased revenue of euro 3,430, or
30%, and euro 3,421, or 17%, respectively, mainly due to increased viewing
shares driven by new programming investments such as the Royal League
(Scandinavian football) and a co-produced version of Big Brother. Our Dutch
Television operations had increased net revenue of euro 2,178, or 5%, mainly
due to an increase in the television advertising market. Our Danish Television
operations had an increase in net revenue of euro 1,678, or 17%, mainly due to
increased viewing shares at Kanal 5 (Denmark) driven by the broadcast of the
Royal League and other sports programs. Our Belgian Television operations had
increased net revenue of euro 1,507, or 11%, approximately half of which came
from newly launched VijfTV. The increase in net revenue at VT4 was 6%, mainly
due to an increase in viewer-interactive TV programming revenues, which are
generated when viewers pay premium telephone rates to interact with programs.
Our Radio operations net revenue increased euro 1,219, or 10%, mainly due
to net revenue of euro 549 at the newly acquired Romanian Radio operations,
which we have consolidated from March 1, 2005. Excluding such revenue, net
revenue increased euro 670, or 6%, mainly due to increased net revenue at our
Norwegian Radio operations, arising from sales agreements with other radio
stations.
Our Print operations had increased net revenues of euro 1,146, or 8%,
mainly due to increased subscription income coming from a combination of an
increase in subscribers and an increase in magazine prices.
Station Operating Expenses
Station operating expenses increased euro 18,657, or 18%, from
euro 104,135 in 2004 to euro 122,792 in 2005. Our newly acquired businesses, C
More, Prima TV and the Romanian Radio stations, and the recently launched
television stations, The Voice TV, VijfTV and Irisz, had station operating
expenses of euro 11,797. Excluding such expenses, our station operating
expenses increased euro 6,860, or 7%. Station operating expenses expressed as
a percentage of net revenues were 74.0% and 70.1% in 2004 and 2005,
respectively.
The station operating expenses increased euro 12,598, or 14%, at our
Television operations, mainly due to programming expenses of euro 4,853 at our
recently launched television stations and Prima TV. Excluding such expenses,
our station operating expenses increased euro 7,745, or 9%, mainly due to our
programming investments in Royal League, the new daily soap at TV2 and a co-
produced Big Brother show in Norway and Sweden. Our Dutch Television
operations and VT4 had decreased station operating expenses of euro 871 and
euro 126, respectively.
Our Radio operations had decreased station operating expenses of euro 299,
or 5%, mainly due to cost savings of euro 716 at our Danish Radio operations
as a result of the closing of our news station and POP FM. Such savings were
partly offset by station operating expenses of euro 134 at the newly acquired
Romanian Radio operations.
Our Print operations had decreased expenses of euro 452, or 5%, mainly due
to reduced printing cost.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased euro 11,320, or
40%, from euro 28,489 in 2004 to euro 39,809 in 2005. Our newly acquired
businesses, C More, Prima TV and the Romanian Radio stations, and the recently
launched television stations, The Voice TV, VijfTV and Irisz, had selling,
general and administrative expenses of euro 6,524. Excluding such expenses,
our selling, general and administrative operating expenses increased euro
4,796, or 17%. Selling, general and administrative expenses expressed as a
percentage of net revenues were 20.3% and 22.7% in 2004 and 2005,
respectively.
Our Television operations had increased selling, general and
administrative expenses of euro 4,321, or 22%, mainly due to increased
marketing expenses at Kanal 5, TVNorge and TV2 related to the promotion of new
programming initiatives.
Our Radio operations had increased selling, general and administrative
expenses of euro 120, or 2%, due to expenses of euro 157 at the newly acquired
Romanian Radio operations. Excluding such expenses selling, general and
administrative expenses decreased by euro 37.
Our Print operations had increased selling, general and administrative
expenses of euro 1,106, or 48%, mainly due to increased promotion activities
to increase the number of subscribers.
Corporate Expenses
Corporate expenses increased euro 885 from euro 3,437 in 2004 to
euro 4,322 in 2005, mainly due to an increase in headcount and expenses
related to Sarbanes-Oxley compliance work. Corporate expenses expressed as a
percentage of net revenues were 2.4% and 2.5% in 2004 and 2005, respectively.
Non-cash Compensation
In 2004 we recorded non-cash compensation of euro 794, mainly related to
the impact of our increasing share price on options to purchase 466,667 shares
of common stock previously granted to certain of our employees. These options
are subject to variable accounting treatment, unlike the rest of our share
incentives. In 2005 we recorded non-cash compensation of euro 345, mainly
related to options to purchase 66,667 of the options to purchase shares of
common stock still subject to variable accounting treatment. Non-cash
compensation expressed as a percentage of net revenues was 0.6% and 0.2% in
2004 and 2005, respectively.
Depreciation and Amortization Expenses
Depreciation and amortization expenses increased euro 1,270, or 20%, from
euro 6,341 in 2004 to euro 7,611 in 2005, mainly due to increased amortization
expenses associated with our broadcasting licenses in Hungary and Radio
Sweden. Amortization also increased due to amortization of intangible assets
recorded on the acquisition of 49% of TVNorge in 2004. Depreciation and
amortization expenses expressed as a percentage of net revenues were 4.5% and
4.3% in 2004 and 2005, respectively.
Operating Income (Loss)
Operating income (loss) improved euro 2,710 from a loss of euro 2,522 in
2004 to an income of euro 188 in 2005.
Despite operating losses of euro 2,921 at our recently launched television
stations, The Voice TV, VijfTV and Irisz, our Television operations improved
operating income by euro 1,027 from euro 2,364 in 2004 to euro 3,391 in 2005.
The increase was mainly due to increased operating income of euro 2,353 at our
Dutch Television operations driven by the growth in the Dutch television
advertising market.
Our Premium pay operations, which were consolidated from March 8, 2005,
had operating income of euro 494.
Our Radio operations reduced operating losses by euro 1,096 from
euro 3,223 in 2004 to euro 2,127 in 2005, mainly due to reduced losses of
euro 675 at our Danish Radio operations.
Our Print operations increased operating income by euro 529 from
euro 2,568 in 2004 to euro 3,097 in 2005.
Equity in Income (Loss) from Unconsolidated Subsidiaries
Equity in loss from unconsolidated subsidiaries increased euro 21, from
euro 576 in 2004 to euro 597 in 2005. The majority of these losses relates to
our investment in Prima TV, which has been consolidated since March 1, 2005.
Net Interest Expense
Net interest expense increased euro 1,264, or 67%, from euro 1,897 in 2004
to euro 3,161 in 2005. The increase was mainly due to the absence of a
euro 1,681 non- cash gain in 2004 on an interest rate swap related to our 12%
Senior Notes.
Foreign Exchange Gain
Foreign exchange gain decreased euro 461, from euro 775 in 2004 to
euro 314 in 2005. The foreign exchange gain in both years relates mainly to
our U.S. dollar- denominated program liabilities.
Investment Gain
In 2005 we recorded a gain of euro 61 on the sale of our equity interest
in QXL.com. We recorded no investment gains in 2004.
Other Expenses, Net
Other expenses, net, increased euro 604, from euro 547 in 2004 to euro
1,151 in 2005, mainly due to written-off project costs in 2005.
Income Taxes
In 2005 we recorded an income tax benefit of euro 1,155 corresponding to a
27% effective tax rate applied to our pre-tax loss. In 2004 we recorded an
income tax expense of euro 251, mainly related to pre-tax income in VT4 and
Lampsi.
Net Loss
As a result of the foregoing, our net loss decreased euro 815, from a loss
of euro 3,906 in 2004 to a loss of euro 3,091 in 2005.
Adjusted EBITDA
We use the key indicator of operating income before depreciation,
amortization and non-cash compensation ("adjusted EBITDA"), along with
adjusted EBITDA margin, primarily to evaluate the group's and our individual
subsidiaries' operating performance, and for planning and forecasting future
business operations. These key indicators provide investors the opportunity to
evaluate the group's performance as it is viewed by management. Although other
companies in the broadcast industry may present other financial measures, we
believe that adjusted EBITDA and adjusted EBITDA margin provide some
comparability in analyzing the operating performance of companies in our
industry.
Adjusted EBITDA and adjusted EBITDA margin exclude depreciation and
amortization expenses in order to eliminate the impact of generally long-term
capital investments that cannot be significantly influenced by our management
on a short-term basis. The measures also exclude non-cash compensation because
it does not reflect the operating results that we achieve from servicing our
customers.
There are material limitations to using measures such as adjusted EBITDA
and adjusted EBITDA margin, including the aforementioned difficulties
associated with comparing these performance measures as we calculate them to
similar performance measures presented by other companies, and the fact that
these performance measures do not take into account significant items, such as
depreciation and amortization. Adjusted EBITDA should be considered in
addition to, but not as a substitute for, other measures of financial
performance reported in accordance with U.S. GAAP, such as operating income
and net income. Management believes that when used in this fashion adjusted
EBITDA and adjusted EBITDA margin can be useful tools despite their
limitations.
We provide below, on a consolidated basis, a reconciliation of the
non-GAAP term adjusted EBITDA to operating income (loss), which is the most
directly comparable U.S. GAAP financial measure, for the three months ended
March 31, 2004 and 2005.
Three months ended
March 31,
2004 2005
Operating income (loss) euro (2,522) euro 188
Add: Non-cash compensation 794 345
Depreciation 3,133 3,566
Amortization 3,208 4,045
Adjusted EBITDA euro 4,613 euro 8,144
Adjusted EBITDA increased euro 3,531, or 77%, from euro 4,613 euro 8,
in 2005. The following table shows the changes in the adjusted EBITDA by
segment:
Three months ended
March 31,
2004 2005
Television operations euro 6,238 euro 8,176
Premium pay operations -- 588
Radio operations (1,784) (386)
Print operations 3,596 4,088
Cash corporate expenses (3,437) (4,322)
Adjusted EBITDA euro 4,613 euro 8,144
Despite losses of euro 2,778 at our recently launched television stations,
The Voice TV, VijfTV and Irisz, our Television operations improved adjusted
EBITDA by euro 1,938 to euro 8,176. The improvement was mainly due to improved
results from our Dutch Television operations.
Our Premium pay operations, which were consolidated from March 8, 2005,
generated adjusted EBITDA of euro 588.
Our Radio operations improved adjusted EBITDA by euro 1,398, mainly due to
decreasing losses in our Danish and Norwegian Radio operations.
Our Print operations improved adjusted EBITDA by euro 492 to euro 4,088.
Cash Flow
Cash provided by operations was euro 11,712 in 2005, compared to cash used
in operations of euro 11,411 in 2004. The improvement, euro 23,123, was
primarily due to timing differences related to programming payments.
Cash used in investing activities was euro 296,536 in 2005, compared to
euro 2,645 in 2004. The increase was mainly due to our investments in C More,
Prima TV and the Romanian radio operations.
Cash provided by financing activities was euro 219,686 in 2005, compared
to euro 1,814 in 2004. The change mainly reflects the euro 210,000 drawn on
the bridge facility to fund the C More acquisition and the proceeds of euro
8,811 from stock options exercised in 2005.
Forward-Looking Statements
Some of the statements in this press release are forward-looking,
including, without limitation: the statement that our revenue growth outpaced
the market in most of our territories; the statement that through the
successful launch of new digital channels and the acquisition of the C More
Group we are rapidly expanding and diversifying our revenue streams; the
statement that we are executing this growth strategy in a manner that enables
us to continue to expand our cash generating ability; the statement that the
Company will benefit from the significant reduction in interest rates compared
to our 12% Senior Notes that was achieved based on our strengthened balance
sheet and improving cash flows; the statement that as we are not heavily
leveraged based on our cash flows and total net debt, we are in a strong
position to capitalize on the rapidly developing digital content market while
continuing to seek prudent expansion opportunities to drive growth; and the
statement that holders of the Senior Notes will receive a redemption price of
106% of the principal amount of the Senior Notes plus accrued and unpaid
interest on the Senior Notes on the redemption date, which will be June 15,
2005. These forward-looking statements include statements relating to our
future performance, competition, trends and anticipated developments in the
television and radio broadcasting, and publishing industry. In addition, we
may make forward-looking statements in future filings with the Securities and
Exchange Commission, and in written material, press releases and oral
statements issued by us or on our behalf. Forward-looking statements include
statements regarding our intent, belief or current expectations or those of
our officers (including statements preceded by, followed by or that include
forward-looking terminology such as "may", "will", "should", "believes",
"expects", "anticipates", "estimates", "continues" or similar expressions or
comparable terminology) with respect to various matters.
It is important to note that our actual results in the future could differ
materially from those anticipated in these forward-looking statements
depending on various important factors. Some of these factors include: the
effects of, and changes in, regulation and government policy; the effects of
changes in general economic environment; the effects of changes in the
advertising and subscription spending growth; the effects of competition; our
ability to reduce costs; the timely development and acceptance of our new
channels, stations and/or services; the effects of technological changes in
broadcasting technology; and, our success at managing the risks that arise
from these factors.
All forward-looking statements in this press release are based on
information available to us on the date hereof. We do not undertake to update
any forward-looking statements that may be made by us or on our behalf, in
this press release or otherwise.
Conference Call
The Company will host a teleconference to discuss its results on Monday,
May 23, 2005 at 10:30 am New York Time, which is 4:30 pm Luxembourg Time.
To access the teleconference, please dial +1-973-321-1100 ten minutes
prior to the start time. The teleconference will also be available via live
webcast on the Company's website. If you cannot listen to the teleconference
at its scheduled time, there will be a replay available through May 30, 2005
that can be accessed by dialing +1-877-519-4471 (U.S. callers) or +1-973-341-
3080 (International callers), passcode 5989479. The webcast will be archived
on the Company's website for two weeks.
SBS is a European commercial television and radio broadcasting company
with operations in Western and Central Europe. Countries where SBS currently
has broadcasting assets include: Belgium (Flanders), Denmark, Finland, Greece,
Hungary, The Netherlands, Norway, Romania and Sweden.
For further information visit: http://www.sbsbroadcasting.com
SBS BROADCASTING SA
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands of euro, except share and per share data)
Three months ended
March 31,
2004 2005
Net revenue euro 140,674 euro 175,067
Operating expenses:
Station operating expenses (exclusive of
depreciation and amortization) 104,135 122,792
Selling, general and administrative expenses
(exclusive of depreciation and amortization) 28,489 39,809
Corporate expenses 3,437 4,322
Non-cash compensation 794 345
Depreciation 3,133 3,566
Amortization 3,208 4,045
Total operating expenses 143,196 174,879
Operating income (loss) (2,522) 188
Equity in loss from unconsolidated subsidiaries (576) (597)
Interest income 1,072 933
Interest expense (2,969) (4,094)
Foreign exchange gain 775 314
Investment gain -- 61
Other expense, net (547) (1,151)
Loss before income taxes and minority interest (4,767) (4,346)
Income taxes (251) 1,155
Loss before minority interest (5,018) (3,191)
Minority interest in losses, net 1,112 100
Net loss euro (3,906) euro (3,091)
Net loss per common share (basic and diluted) euro (0.13) euro (0.10)
Weighted average common shares (thousands) 31,075 31,963
SBS BROADCASTING SA
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands of euro)
December 31, March 31,
ASSETS 2004 2005
Current assets:
Cash and cash equivalents euro 196,033 euro 129,666
Short-term investments 354 252
Trade accounts receivable, net of allowance
for doubtful accounts of euro 5,070
(euro 4,294 in 2004) 88,398 101,586
Accounts receivable, affiliates 1,475 1,583
Restricted cash and cash in escrow 2,451 1,636
Program rights inventory, current 117,544 144,431
Deferred tax assets, current 2,372 11,509
Other current assets 23,702 43,519
Total current assets 432,329 434,182
Buildings, improvements, technical and other
equipment, net of accumulated depreciation 41,256 43,519
Goodwill and other intangible assets, net of
accumulated amortization 245,274 499,809
Program rights inventory, non-current 62,928 73,940
Deferred financing cost, net of accumulated
amortization 2,600 3,290
Investments in and advances to unconsolidated
subsidiaries 5,972 3,299
Other assets 388 614
Total assets euro 790,747 euro 1,058,653
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable euro 33,698 euro 39,715
Accrued expenses 66,702 75,606
Program rights payable, current 46,674 73,774
Income taxes payable 3,763 3,068
Current portion of long-term debt 2,550 8,815
Deferred income, current 40,785 41,506
Deferred taxes, current 9,271 9,613
Other current liabilities 19,780 23,137
Total current liabilities 223,223 275,234
Program rights payable, non-current 22,651 32,103
Bridge facility -- 210,000
12% senior notes due 2008 103,655 103,655
Other long-term debt 6,784 153
Deferred tax, non-current 23,109 22,447
Other non-current liabilities 7,588 8,093
Minority interest 58,791 58,873
Shareholders' equity:
Common Shares (authorized 75,000,000 issued
32,241,729 (31,780,895 in 2004) at
par value euro 2.00) 63,562 64,483
Additional paid-in capital 683,678 691,793
Accumulated deficit (394,965) (398,056)
Unearned compensation (1,376) (1,258)
Accumulated other comprehensive loss (5,953) (8,867)
Total shareholders' equity 344,946 348,095
Total liabilities and shareholders'
equity euro 790,747 euro 1,058,653
SBS BROADCASTING SA
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of euro)
Three months ended March 31,
2004 2005
Cash flows from operating activities:
Net loss euro (3,906) euro (3,091)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Revenue recorded in exchange for equity
investments (703) (1,241)
Non-cash compensation 794 345
Depreciation and amortization 6,341 7,611
Equity in loss from unconsolidated subsidiaries 576 597
Non-cash interest expense (income) (1,966) 350
Foreign exchange gain on long-term debt (183) (167)
Investment gain -- (61)
Deferred tax expense (benefit) 251 (1,155)
Minority interest in losses (1,112) (100)
Changes in operating assets and liabilities,
net of amounts acquired:
Accounts receivable 10,484 (1,619)
Program rights inventory, net (2,124) 18,799
Other current assets 826 2,033
Other non-current assets (43) (1,229)
Accounts payable and accrued expenses (17,117) (7,327)
Deferred income (3,055) (518)
Other liabilities (474) (1,515)
Cash provided by (used in) operating
activities (11,411) 11,712
Cash flows from investing activities:
Proceeds from sale of short-term investments -- 163
Cash capital expenditures (2,645) (4,056)
Payments for purchase of acquired businesses,
net of cash acquired -- (292,643)
Cash used in investing activities (2,645) (296,536)
Cash flows from financing activities:
Proceeds from issuance of common shares 1,893 8,811
Proceeds from issuance of debt -- 210,000
Net change in restricted cash and cash in escrow 56 1,026
Payment of long-term debt (135) (151)
Cash provided by financing activities 1,814 219,686
Effect of exchange rate changes on cash and cash
equivalents (433) (1,229)
Net change in cash and cash equivalents (12,675) (66,367)
Cash and cash equivalents, beginning of period 245,836 196,033
Cash and cash equivalents, end of period euro 233,161 euro 129,666
SBS BROADCASTING SA
OPERATING RESULTS BY SEGMENT (UNAUDITED)
(in thousands of euro)
Three months ended March 31,
2004 2005
Television
Net revenue:
SBS6, NET5 and Veronica (in the Netherlands) euro 41,913 euro 44,091
TV2 & Irisz (in Hungary) 16,559 20,256
Kanal 5 (in Sweden) 20,148 23,569
VT4 & VijfTV (in Belgium) 13,990 15,497
TV Norge (in Norway) 11,256 14,686
TV Danmark and Kanal 5 (in Denmark) 9,721 11,399
Prima TV (in Romania) -- 955
The Voice TV -- 790
Other 765 1,966
Total net revenue 114,352 133,209
Station operating expenses 88,779 101,377
Selling, general and administrative expenses 19,335 23,656
Depreciation and amortization 3,874 4,785
Total operating expenses 111,988 129,818
Income from segment euro 2,364 euro 3,391
Premium pay
Net revenue: -- euro 13,171
Station operating expenses -- 6,810
Selling, general and administrative expenses -- 5,773
Depreciation and amortization -- 94
Total operating expenses -- 12,677
Income from segment -- euro 494
Radio
Net revenue:
Sweden euro 3,259 euro 3,243
Finland 2,925 3,093
Denmark 2,658 2,724
Norway 1,806 2,332
Romania -- 549
Greece 1,033 959
Total net revenue 11,681 12,900
Station operating expenses 6,627 6,328
Selling, general and administrative expenses 6,838 6,958
Depreciation and amortization 1,439 1,741
Total operating expenses 14,904 15,027
Loss from segment euro (3,223) euro (2,127)
Print
Net revenue: euro 14,641 euro 15,787
Station operating expenses 8,729 8,277
Selling, general and administrative expenses 2,316 3,422
Depreciation and amortization 1,028 991
Total operating expenses 12,073 12,690
Income from segment euro 2,568 euro 3,097
Consolidated
Net revenue: euro 140,674 euro 175,067
Income from operating segments 1,709 4,855
Corporate expenses (3,437) (4,322)
Non-cash compensation (794) (345)
Operating income (loss) euro (2,522) euro 188
SOURCE SBS Broadcasting SA
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Related links:
http://www.sbsbroadcasting.com
CONTACT:
Investors: Michael Smargiassi of Brainerd
Communicators, Inc., +1-212-986-6667; Press: Jeff Pryor of Pryor
Associates, +1-818-338-3555, or Catriona Cockburn of Citigate
Dewe Rogerson, +44-207-282-2924, all for SBS Broadcasting SA
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