CHINA CABLECOM HOLDINGS LTD. 
By SHANGHAI, Oct. 15 /PRNewswire-FirstCall/ -- China Cablecom Holdings, Ltd. ("China Cablecom" or the "Company") (Nasdaq: CABL), a joint-venture provider of cable television services in the People's Republic of China ("PRC" or "China"), announced today its unaudited financial results for the second quarter ended June 30, 2010.
Second Quarter 2010 Highlights:
-- Hubei revenues were $10.9 million, an increase of 29% over the second
quarter of 2009
-- Hubei earnings before interest, taxes, depreciation and amortization
("EBITDA") representing the Company's 55% share was $2.6 million, an
increase of 38% over the second quarter of 2009
-- Hubei added nearly 23,000 subscribers during the quarter
-- Binzhou revenues were $3.1 million, an increase of 34% over the second
quarter of 2009
-- Binzhou EBITDA representing the Company's 60% share was $1.4 million, an
increase of 54% over the second quarter of 2009
Comments from Mr. Clive Ng, Founder & Executive Chairman
"We have delivered another quarter of strong performance," says Clive Ng, Founder and Executive Chairman of China Cablecom. "The first half of 2010 has been a productive year for our joint venture partners and cable operations in Binzhou and Hubei. China's deployment of digitalization continue nationwide with expectations of a full digital TV broadcasting by 2015, and we are pleased to announce that our digital subscribers have grown 20% from a quarter-to-quarter comparison. We continue to implement aggressive cost-cutting efforts in our China and U.S. operations and with the continued increase in paying subscribers, digital growth and ARPU rates, we are confident in the development of China's media opportunities and of the future progress of our operations."
Financial Results for the Second Quarter of 2010
Consolidated revenues for the second quarter of 2010 were $14 million compared to consolidated revenues of $10.7 million for the second quarter of 2009. The increase was due to growth in paying subscribers and revenues generated in subscription and installation fees. Consolidated operating expenses for the second quarter of 2010 were $5.7 million compared to consolidated operating expenses of $4.7 million for the second quarter of 2009.
Based on U.S. GAAP, net loss attributable to ordinary shareholders for the second quarter of 2010 was $2.4 million or $0.39 per basic and fully diluted share compared to a net loss attributable to ordinary shareholders of $4.4 million, or $1.37 per basic and fully diluted share in the second quarter of 2009.
The net loss for the second quarter 2010 was significantly impacted by (1) non-cash amortization of intangible assets which were acquired in connection with China Cablecom's acquisition of Binzhou Broadcasting and Hubei in the amount of $0.37 million and $0.33 million, respectively, (2) non-cash interest expense associated with original issue debt discount and deferred financing costs relating to China Cablecom's senior secured, junior secured and unsecured notes in the amount of $0.93 million, (3) non-cash stock based compensation in the amount of $0.41 million.
Business Outlook
For the full year of 2010, China Cablecom reiterates its revenue guidance of $50-55 million. This includes total paying subscribers of 1.8 million and consolidated digital subscribers of 750,000.
Based on these metrics, the Company estimates EBITDA for 2010 to be in the range of $14-15 million, accounting for the 60% economic ownership in Binzhou and 55% economic ownership in Hubei.
Operating Metrics
The following summary financial and operating highlights for Binzhou and Hubei reflect the results of the respective operating joint ventures on a stand-alone basis and do not include China Cablecom's corporate operations and overhead. EBITDA reflects China Cablecom's consolidated share of 55% and 60% in Hubei Chutian and Binzhou Broadcasting, respectively.
Quarter ended June 30,
(unaudited) 2010 2009 %
---- ---- --
Binzhou Broadcasting
Revenue $3,111,074 $2,322,358 34%
EBITDA - 60% share $1,372,856 $891,286 54%
Non-financial metrics:
----------------------
Paying subscribers 486,192 479,604 1%
Digital subscribers 83,126 3,465 2,299%
ARPU $1.94 $1.40 39%
Hubei Chutian
Revenue $10,864,841 $8,399,810 29%
EBITDA - 55% share $2,589,652 $1,872,004 38%
Non-financial metrics:
----------------------
Paying subscribers 1,254,699 1,125,021 12%
Digital subscribers 513,001 185,794 176%
ARPU $2.51 $2.08 21%
Total revenue $13,975,915 $10,722,168 30%
Total EBITDA -CABL's
share $3,962,508 $2,763,290 43%
Six months ended June 30,
-------------------------
(unaudited) 2010 2009 %
---- ---- --
Binzhou Broadcasting
Revenue $6,198,727 $4,604,957 35%
EBITDA - 60% share $2,464,017 $1,814,817 36%
Non-financial metrics:
----------------------
Paying subscribers 486,192 479,604 1%
Digital subscribers 83,126 3,465 2,299%
ARPU $1.92 $1.38 39%
Hubei Chutian
Revenue $21,201,836 $16,076,056 32%
EBITDA - 55% share $5,077,499 $3,204,963 58%
Non-financial metrics:
----------------------
Paying subscribers 1,254,699 1,125,021 12%
Digital subscribers 513,001 185,794 176%
ARPU $2.49 $2.07 20%
Total revenue $27,400,563 $20,681,013 32%
Total EBITDA -CABL's
share $7,541,516 $5,019,780 50%
nm = not meaningful
Conference Call and Webcast
China Cablecom's management team will host a conference call today at 8:30 a.m. EDT, October 15, 2010 (or 8:30 p.m., October 15, 2010 Shanghai time). To listen to the conference call, please use the dial-in numbers below:
USA Toll Number: 1-877-941-1465
International: 1-480-629-9644
A replay of the call will be available for two weeks following the call and can be accessed by dialing the numbers below:
USA Toll Number: 1-800-406-7325
International: 1-303-590-3030
PASSCODE: 4373677#
The conference call will be available on webcast live and available for replay at: www.chinacablecom.net.
About China Cablecom Holdings
China Cablecom is a joint-venture provider of cable television services in the People's Republic of China, operating in partnership with a local state-owned enterprise ("SOE") authorized by the PRC government to control the distribution of cable TV services through the deployment of analog and digital cable services. China Cablecom has consummated the acquisition of a 55 percent economic interest in a cable network in Hubei province with paying subscribers exceeding 1,200,000. The Company originally acquired operating rights of the Binzhou Broadcasting network in Binzhou, Shandong Province in September 2007 by entering into a series of asset purchase and services agreements with a company organized by SOEs, owned directly or indirectly by local branches of State Administration of Radio, Film and Television in five different municipalities to serve as a holding company of the relevant businesses. China Cablecom now operates 28 cable networks with over 1.7 million paying subscribers. China Cablecom's strategy is to replicate the acquisitions by operating partnership models in other municipalities and provinces in the PRC and then introducing operating efficiencies and increasing service offerings in the networks in which it operates.
Safe Harbor Statement
The matters discussed in this press release contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this presentation and in the Company's other written and oral reports are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. Any forward-looking statements are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry may differ materially from those made in or suggested by the forward-looking statements contained herein. These forward-looking statements are subject to numerous risks, uncertainties and assumptions. The forward-looking statements herein speak only as of the date stated herein and might not occur in light of these risks, uncertainties, and assumptions. China Cablecom Holdings undertakes no obligation and disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You should carefully consider these factors as well as the additional risk factors outlined in the filings that China Cablecom Holdings makes with the U.S. Securities and Exchange Commission, including the Annual Report on Form 20-F filed with respect to the year ended December 31, 2009.
CHINA CABLECOM HOLDINGS LIMITED
-------------------------------
Unaudited Consolidated Balance Sheets
June 30, 2010 December 31, 2009
------------- -----------------
(unaudited) (audited)
ASSETS
------
Current Assets:
Cash and cash equivalents $24,741,970 $23,938,460
Accounts receivable 1,416,775 1,973,333
Prepaid expenses and advances 9,272,660 9,222,547
Inventories 8,223,774 6,033,914
Total Current Assets 43,655,179 41,168,254
---------- ----------
Property, Plant & Equipment,
net 92,113,229 89,329,880
Construction In Progress 6,137,716 3,967,552
Intangible assets, net 33,638,841 35,042,708
Goodwill 19,275,561 19,275,561
Other Assets:
Deferred financing costs, net 1,816,990 1,987,215
Total Assets $196,637,516 $190,771,170
============ ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
-----------------------------
Current Liabilities:
Accounts payable $21,683,311 $17,504,073
Service performance obligation
- deferred revenue 6,914,980 3,069,899
Other current liabilities 11,293,561 9,374,749
Note payable - noncontrolling
interest 24,112,196 27,626,772
Total Current Liabilities 64,004,048 57,575,493
Long Term Liabilities:
Senior secured notes, net of
discount 9,207,887 7,973,096
Secured notes, net of discount 16,159,034 17,062,563
Unsecured notes, net of
discount 5,134,795 5,134,795
Note payable - noncontrolling
interest, net of current
portion 57,191,241 64,347,852
Total Liabilities 151,697,005 152,093,799
------- -------
EQUITY
------
Series A convertible preferred
shares, $.0005 par value;
70,000,000 authorized shares,
59,621,981 shares issued and
outstanding (December 31,
2009 62,161,965 shares
issued) 29,811 31,081
Series B convertible preferred
shares, $.0005 par value;
25,000,000 authorized shares,
19,791,825 shares issued and
outstanding (December 31,
2009 23,158,080 shares
issued) 9,896 11,579
Ordinary shares, $.0015 par
value; 51,666,667 authorized
shares, 7,256,883 shares
issued and outstanding
(December 31, 2009 4,688,151
shares issued) 10,886 7,033
Additional paid-in capital 112,084,017 109,452,870
Statutory reserves 141,582 141,582
Accumulated deficit (77,817,812) (73,111,896)
Accumulated other
comprehensive income 568,224 595,396
------- -------
Shareholders' equity 35,026,604 37,127,645
Non-controlling interest 9,913,907 1,549,726
Total equity 44,940,511 38,677,371
--------- ---------
Total liabilities and
shareholders' equity $196,637,516 $190,771,170
============ ============
CHINA CABLECOM HOLDINGS LIMITED
-------------------------------
Unaudited Consolidated Statements of Operations
(in US dollars, except share data)
----------------------------------
Quarter ended June 30,
2010 2009
---- ----
Revenue $13,975,915 $10,722,168
Cost of sales 8,804,244 6,608,915
------------- --------- ---------
Gross profit 5,171,671 4,113,253
Operating expenses
General and
administrative
expenses 5,735,650 4,689,379
--------------- --------- ---------
Loss from operations (563,979) (576,126)
-------------------- -------- --------
Other income (expense)
Interest income 44,195 38,373
Other income 429,519 241,644
Interest expense (1,092,935) (3,488,622)
(619,222) (3,208,605)
-------- ----------
Loss before income
taxes (1,183,201) (3,784,731)
Income taxes (635,999) (144,026)
------------------ -------- --------
Loss from operations
before noncontrolling
("minority") interest (1,819,199) (3,928,757)
Noncontrolling
("minority") interest
in income (532,961) (474,651)
---------------------- -------- --------
Net loss (2,352,160) (4,403,408)
Loss per common share:
-Basic and fully
diluted ($0.39) ($1.37)
Weighted average
shares
-Basic and fully
diluted 5,957,866 3,225,710
---------------- --------- ---------
Six months ended June 30,
2010 2009
---- ----
Revenue $27,400,563 $20,681,013
Cost of sales 17,281,563 13,025,441
------------- ---------- ----------
Gross profit 10,119,000 7,655,572
Operating expenses
General and
administrative
expenses 11,381,502 10,515,740
--------------- ---------- ----------
Loss from operations (1,262,502) (2,860,168)
-------------------- ---------- ----------
Other income (expense)
Interest income 78,743 82,847
Other income 595,343 453,257
Interest expense (2,060,882) (6,780,875)
(1,386,796) (6,244,771)
---------- ----------
Loss before income
taxes (2,649,298) (9,104,939)
Income taxes (1,116,652) (254,512)
------------ ---------- --------
Loss from operations
before noncontrolling
("minority") interest (3,765,950) (9,359,451)
Noncontrolling
("minority") interest
in income (939,966) (592,525)
---------------------- -------- --------
Net loss (4,705,916) (9,951,976)
Loss per common share:
-Basic and fully
diluted ($0.87) ($3.09)
Weighted average
shares
-Basic and fully
diluted 5,424,637 3,225,710
---------------- --------- ---------
Reconciliation of Non-U.S. GAAP Measures
This release contains discussion of China Cablecom's revenues, as well as EBITDA. Although EBITDA is not a measure of financial condition or performance determined in accordance with U.S. GAAP, China Cablecom uses EBITDA to value businesses it acquires or anticipates acquiring. EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same.
Below is a table reconciling certain non- U.S. GAAP financial measures appearing elsewhere herein relating to China Cablecom to the most closely analogous U.S. GAAP measures:
3 Month ended 6 Month ended
30-Jun-10 30-Jun-10
Net loss attribute to ordinary
share holders (2,352,160) (4,705,915)
Amortization 787,517 1,574,092
Depreciation 2,825,017 5,596,407
Interest income (27,181) (49,479)
Interest & Finance 1,020,967 1,954,096
Stock based compensation to
employee 414,580 841,095
Stock based compensation to
service provider 326,250 326,250
Income tax 361,007 629,750
Non-GAAP income (EBITDA) 3,355,997 6,166,296
== ==
Reconciliation to operating
metrics
Binzhou Broadcasting EBITDA -
60% share 1,372,856 2,464,017
Hubei Chutian EBITDA -55%
share 2,589,652 5,077,499
Corporate overhead (606,511) (1,375,220)
3,355,997 6,166,296
== ==
China Cablecom Holdings, Ltd.
www.chinacablecom.net
CONTACT: 212-888-8890
Email: ir@chinacablecom.net
SOURCE China Cablecom Holdings, Ltd.
