China Cablecom Holdings, Ltd. Reports Second Quarter 2008 Financial Results

China Cablecom Holdings, Ltd. Reports Second Quarter 2008 Financial Results

SHANGHAI, China, Sept. 9 /PRNewswire-FirstCall/ -- China Cablecom Holdings, Ltd. ("China Cablecom") (Nasdaq: CABL; CABLW; CABLU), a joint- venture provider of cable television services in the People's Republic of China (PRC), announced today its unaudited financial results for the second quarter ended June 30, 2008.

This earnings release reflects both pro forma and actual financial results due to the completion of China Cablecom's acquisition of a 60 percent economic interest in Hubei Chutian Video & Information Network ("Hubei") late in the second quarter of 2008. For purposes of U.S. Generally Accepted Accounting Principles (GAAP) , the financial results of Hubei are not included in the actual second quarter 2008 results, but will be reflected in the financial statements beginning July 1, 2008. To enhance comparability, pro forma results of operations reflect the Hubei acquisition as well as the business combination with Jaguar Acquisition Corporation and the acquisition of Binzhou Broadcasting and Television Information Network Co. Ltd. ("Binzhou") as if they had occurred on January 1, 2008.

   Highlights    -- Hubei revenues for the first six months of 2008 increased to $12.5      million, up 35% from the same period last year   -- Hubei earnings before interest, taxes, depreciation and amortization      (EBITDA) for the first six months of 2008 increased to $3.2 million, up      31% from the same period last year   -- Hubei paying subscribers as of June 30, 2008 were 862,983, up 19% over      the same date last year   -- Binzhou revenues for the second quarter of 2008 increased to $2.3      million, up 18% from the same period last year; revenues for the first      six months of 2008 declined slightly by 3% to $4.3 million from prior      year comparison   -- Binzhou EBITDA for the second quarter of 2008 increased to $0.9      million, up 15% from the same period last year; EBITDA for the first      six months of 2008 increased 5% to $1.8 million from prior year      comparison   -- Binzhou paying subscribers as of June 30, 2008 were 470,111, up 6% over      the same date last year   -- Consolidated pro forma paying subscribers for China Cablecom as of June      30, 2008 were 1.3 million     Comments from Mr. Clive Ng, Founder and Executive Chairman  

"We are very pleased with the progress and integration of our Binzhou and Hubei assets," said Clive Ng, Executive Chairman of China Cablecom. "We demonstrated strong operating and financial performance at the operating cable TV joint ventures. We saw measurable increases in our second quarter operating results for Hubei and Binzhou in revenues, EBITDA, paying subscribers and ARPU."

"We invested in and established our corporate infrastructure which provides a platform to manage the significant growth in subscribers we anticipate. In the past 6 months, we built and strengthened our public company infrastructure, completed a realignment of our board reflective of our international focus, hired our President & CFO, established offices in New York City and Shanghai, and became listed on NASDAQ. This investment has served us well through this growth including the 22 cable TV properties we now operate, and provides a foundation for continued expansion and growth."

Financial Results for the Quarter Ended June 30, 2008 - Pro Forma Basis

Pro forma revenues for the second quarter of 2008 were $8.7 million compared to $8.1 million for the first quarter of 2008. The increase was primarily due to the growth in paying subscribers, including revenue generated through installation fees.

Pro forma operating expenses for the second quarter increased to $6.4 million compared to $5.9 million for the first quarter this year, due to increases in general and administrative expenses related to our corporate infrastructure.

On a GAAP basis, net comprehensive loss for the second quarter of 2008 was $3.5 million, or $0.38 per basic and fully diluted share, compared to $1.6 million or $0.98 per basic and fully diluted share, in the first quarter of 2008. The net loss for the second quarter 2008 was significantly impacted by (1) non-cash amortization of intangible assets which were acquired in connection with China Cablecom's acquisition of Binzhou Broadcasting in the amount of $0.4 million and (2) interest expense associated with original issue debt discount and deferred financing costs relating to China Cablecom's September 2007 bridge financing and May 2008 convertible note offering in the amount of $2.1 million of which $1.8 million is non-cash interest expense.

Financial Results for the Six Months Ended June 30, 2008 - Pro Forma Basis

Pro forma revenues for the six months ended June 30, 2008 were $16.8 million. Pro forma operating expenses for the six months ended June 30, 2008 were $12.3 million.

On a GAAP basis, net comprehensive loss for the six months ended June 30, 2008 was $5.1 million, or $1.00 per basic and fully diluted share. For the six months ended June 30, 2008, the company used weighted average shares outstanding of 5.2 million. The net loss for the six months ended June 30, 2008 was significantly impacted by (1) non-cash amortization of intangible assets which were acquired in connection with China Cablecom's acquisition of Binzhou Broadcasting in the amount of $0.7 million and (2) interest expense associated with original issue debt discount and deferred financing costs relating to China Cablecom's September 2007 bridge financing and May 2008 convertible note offering in the amount of $3.5 million of which $2.6 million is non-cash interest expense.

Balance Sheet Highlights

As of June 30, 2008, the Company had $29.17 million in cash and cash equivalents. This reflects the completion of the $43.175 million convertible debt financing in which China Cablecom received net proceeds of approximately $25 million.

   Recent Company Highlights   -- In June 2008, completed the first phase to acquire 60 percent economic      interest in Hubei. Completion of Phase one adds over 800,000 paying      subscribers and brings China Cablecom's total paying subscribers to      over 1.2 million.   -- Announced a framework agreement to acquire Phase two of Hubei,      representing an additional 800,000 paying subscribers.   -- Approved for listing and began trading on NASDAQ Capital Market on July      30, 2008. Participated in the ringing of the closing bell ceremony on      September 3, 2008.    

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 corporate operations and overhead. EBITDA reflects China Cablecom's consolidated share of 60%.

                    Quarter ended June 30,       Six months ended June 30,                ----------------------------   ----------------------------   (unaudited)     2008        2007       %        2008        2007      %                ----------------------------   ----------------------------   Binzhou    Broadcasting   Revenue      $2,286,451  $1,940,771   18%   $4,290,217  $4,424,554   -3%   EBITDA    - 60% share   $909,437    $791,972   15%   $1,779,322  $1,691,833    5%    Non-financial    metrics:   Paying    subscribers    470,111     442,900    6%      470,111     442,900    6%   ARPU              $1.35       $1.15              $1.36       $1.15    Hubei Chutian (1)   Revenue      $6,435,371  $4,714,323   37%  $12,511,457  $9,272,814   35%   EBITDA    - 60% share $1,701,665  $1,265,801   34%   $3,196,649  $2,438,311   31%    Non-financial    metrics:   Paying    subscribers    862,983     724,622   19%      862,983     724,622   19%   ARPU              $2.05       $2.05              $2.05       $2.05    (1) Hubei Chutian results of operations and non-financial metrics are       presented on a pro forma basis, which assumes the acquisition took       place on January 1, 2008.     

Selected audited pro forma information reflecting China Cablecom's 60 percent consolidation of Hubei, is as follows:

                                   Year ended      Six months ended                                   December 31,        June 30,                                      2007               2008                                ----------------   ----------------                                           (in millions)   Consolidated pro forma    China Cablecom (1)   Revenues                          $26.3              $16.8   EBITDA                             $7.3               $3.5     (1) Assumes the following took place on January 1, 2007: (1) the business       combination between Jaguar Acquisition Corporation and China Cablecom       and (2) the consummation of the consolidation of 17 cities included in       phase one of the Hubei Broadcasting acquisition.     Outlook for the full year 2008  

For the fiscal year 2008, the Company anticipates pro forma EBITDA of $11 million. The guidance set forth by management assumes current operations as well as the inclusion of consolidated operations from the acquisition of Hubei. Pro forma EBITDA is defined as net loss before interest, taxes, depreciation, amortization and other non-recurring acquisition-related charges.

On a GAAP basis, China Cablecom anticipates a net loss of $10 million for full year 2008. The net loss for 2008 is primarily attributable to (1) the non-cash amortization of intangible assets which were acquired in connection with China Cablecom's acquisitions of Binzhou and Hubei and (2) non-cash interest expense associated with the original issue debt discount and deferred financing costs relating to China Cablecom's September 2007 bridge financing and May 2008 convertible note financing.

About China Cablecom Holdings

China Cablecom Holdings 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 recently consummated an agreement to acquire a 60 percent economic interest in a cable network in Hubei province with paying subscribers exceeding 800,000. 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 SARFT in five different municipalities to serve as a holding company of the relevant businesses. China Cablecom now operates 22 cable networks with over 1.2 million paying subscribers. China Cablecom Holdings' 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 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 Registration Statement on Form S-1 filed on April 18, 2008.

   CHINA CABLECOM HOLDINGS LIMITED   --------------------------------------------------------------------------   Unaudited Consolidated Balance Sheets   (in US dollars, except share data)   --------------------------------------------------------------------------                                                June 30,       December 31,                                                  2008             2007                                              (Unaudited)        (Audited)   --------------------------------------------------------------------------   Assets     Current assets:     Cash and cash equivalents                 29,170,374      12,638,574     Restricted cash                                    -               -     Accounts receivable                            1,418               -     Prepaid expenses and other receivables     7,657,501         668,518     Inventories                                1,972,517         766,120     Note receivable                                    -         237,500     Due from related company                           -               -     Assets to be used by noncontrolling      ("minority") interest                     2,008,729       1,883,769   --------------------------------------------------------------------------                                               40,810,539      16,194,481      Property, Plant & Equipments, Net         21,017,972      20,721,845     Construction In Progress                   1,153,746       1,242,289     Intangible assets, net                    17,613,714      18,362,729   --------------------------------------------------------------------------   Other assets:     Note receivable                                    -         237,500     Deferred financing costs, net (bridge)       702,134       1,188,020     Deferred acquisition costs, net                    0         971,622     Deferred acquisition costs, Wuhan         17,804,629               -     Deferred financing costs, net      (Convertible)                             1,221,659               -     Deemed receivable from noncontrolling      ("minority") interest for settlement      of certain net liabilities               11,279,327      10,577,656   --------------------------------------------------------------------------   Total assets                               111,603,720      69,496,142   ==========================================================================   Liabilities and Stockholder's Equity     Current Liabilities:     Current portion of long term debt      - net of discount                         8,284,114       9,617,646     Accounts payable                           1,523,195       2,460,843     Service performance obligation-deferred      revenue assumed                           3,081,336         110,745     Other current liabilities                    687,805       1,378,135     Note payable-non controlling interest     16,660,661      17,218,612     Liabilities to be settled by      noncontrolling ("minority") interest     13,288,057      12,461,425   --------------------------------------------------------------------------                                               43,525,167      43,247,406     Long Term Liabilities :     Note payable - noncontrolling ("minority")      interest, net of current portion         18,643,845      17,046,817     Convertible notes, net of discount      and current portion                      12,702,548     Notes payable, net of discount      and current portion                               -       7,477,822   --------------------------------------------------------------------------                                               74,871,561      67,772,045   --------------------------------------------------------------------------     Noncontrolling ("minority") interest         338,099          21,883   --------------------------------------------------------------------------     Stockholder's equity     Common stock, $.0005 par value;      40,000,000 authorized shares,      9,308,031 shares and 0 shares issued      and outstanding at June 31, 2008 and      December 31, 2007, respectively               4,654               -     Additional paid in capital                43,329,247       3,577,070     Statutory reserve                             46,269          46,269     Accumulated deficit                      (7,408,484)     (2,274,783)     Accumulated other comprehensive income       422,374         353,658   --------------------------------------------------------------------------                                               36,394,060       1,702,214   --------------------------------------------------------------------------       Total liabilities and        stockholders' equity                  111,603,720      69,496,142   ==========================================================================      CHINA CABLECOM HOLDINGS LIMITED   --------------------------------------------------------------------------   Unaudited Consolidated Statements of Operations   (in US dollars, except share data)   --------------------------------------------------------------------------                                           Quarter    Six months                                            ended       ended     Year ended                                           June 30,    June 30,  December 31,                                             2008        2008        2007                                          (Unaudited) (Unaudited)  (Audited)   --------------------------------------------------------------------------   Revenues                                2,286,451   4,290,217   1,994,773   Cost of sales                           1,233,395   2,315,367   1,016,766   --------------------------------------------------------------------------   Gross profit                            1,053,056   1,974,850     978,007   --------------------------------------------------------------------------   Expenses   Selling expenses                                            -      66,853   Amortization expenses                     661,469   1,278,919           -   General and administrative expenses     1,608,814   2,617,618   1,595,106   --------------------------------------------------------------------------   Loss from operations                   (1,217,228) (1,921,688)   (683,952)   --------------------------------------------------------------------------   Other income and (expenses)   Interest income                           255,007     271,988      66,692   Other income                                2,513      67,847           -   Interest expense                       (1,892,121) (2,969,664) (1,473,766)   Other expenses                               (399)       (399)     (3,625)   --------------------------------------------------------------------------   Loss before income taxes               (2,852,227) (4,551,915) (2,094,651)   --------------------------------------------------------------------------   Income taxes                             (137,756)   (265,570)    (40,202)   --------------------------------------------------------------------------   Loss from operations before    noncontrolling ("minority") interest  (2,989,983) (4,817,485) (2,134,853)   --------------------------------------------------------------------------   Noncontrolling ("minority") interest    in income                               (162,874)   (316,216)    (20,551)   --------------------------------------------------------------------------   Net loss                               (3,152,857) (5,133,701) (2,155,404)   --------------------------------------------------------------------------   Other comprehensive income   Foreign currency translation    difference                              (335,933)     68,716     353,658   --------------------------------------------------------------------------   Net comprehensive loss                 (3,488,790) (5,064,985) (1,801,746)   --------------------------------------------------------------------------   Loss per share                              (0.38)      (1.00)   --------------------------------------------------------------------------   Weighted average shares                 8,230,501   5,149,090   --------------------------------------------------------------------------                          Non-GAAP Financial Measures   

This release contains discussion of China Cablecom's revenues, and projected and pro forma revenues, as well as earnings before interest, taxes, depreciation and amortization (EBITDA) and projected/pro forma EBITDA and EBITDA. Although EBITDA and projected/pro forma EBITDA are not measures of financial condition or performance determined in accordance with GAAP, China Cablecom uses EBITDA to value businesses it acquires or anticipates acquiring. EBITDA and projected/pro forma EBITDA are 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-GAAP financial measures appearing elsewhere herein relating to China Cablecom to the most closely analogous GAAP measures:

   CHINA CABLECOM HOLDINGS LIMITED   --------------------------------------------------------------------------   Non-GAAP financial reconciliation   (in US dollars, except share data)   --------------------------------------------------------------------------                                           Quarter    Six months                                            ended       ended     Year ended                                           June 30,    June 30,  December 31,                                             2008        2008        2007   --------------------------------------------------------------------------   Net comprehensive loss                 (3,488,790) (5,064,985) (1,801,746)     Amortization                            661,468   1,278,919     649,487     Depreciation                            611,949   1,190,284     333,107     Interest income                        (255,007)   (271,988)    (66,692)     Interest & finance                    1,892,121   2,969,664   1,473,766     Income tax                               82,654     159,342      24,121   --------------------------------------------------------------------------   Non-GAAP Income (EBITDA)                 (495,606)    261,235     612,043   --------------------------------------------------------------------------     China Cablecom Holdings, Ltd.   www.chinacablecom.net   CONTACT: Debra Chen (917-499-8129)   Email: debra@chinacablecom.net  

First Call Analyst:
FCMN Contact: debra@chinacableone.net

Source: China Cablecom Holdings, Ltd.

CONTACT: Debra Chen, China Cablecom Holdings, Ltd., +1-917-499-8129,
debra@chinacablecom.net

Web site: http://www.chinacablecom.net/

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