China Cablecom Holdings, Ltd. Reports First Half 2009 Financial Results

China Cablecom Holdings, Ltd. Reports First Half 2009 Financial Results

SHANGHAI, Aug. 27 /PRNewswire-FirstCall/ -- China Cablecom Holdings, Ltd. ("China Cablecom" or the "Company") (NASDAQ:CABL) (NASDAQ:CABLW) (NASDAQ: 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 first half 2009.

This earnings release reflects both pro forma and actual financial results due to the completion of China Cablecom's acquisition of a 60% 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 (U.S. GAAP), the financial results of Hubei have been consolidated beginning July 1, 2008. To enhance comparability, pro forma first and second quarter 2008 results of operations reflect the Hubei acquisition as well as the business combination with Jaguar Acquisition Corporation as if they occurred on January 1, 2008.

   Second Quarter 2009 Highlights:    --  Hubei revenues were $8.4 million, an increase of 22% over last year       and 9% over last quarter   --  Hubei earnings before interest, taxes, depreciation and amortization       ("EBITDA") representing the Company's 60% share was $2.0 million, an       increase of 38% over last year and 40% over last quarter   --  Hubei added nearly 87,000 digital subscribers during the quarter   --  Binzhou revenues were $2.3 million, an increase of 2% over last year    --  Binzhou EBITDA representing the Company's 60% share was $0.9 million,       down 2% from last year    First Quarter 2009 Highlights:    --  Hubei revenues were $7.7 million, an increase of 22% over last year   --  Hubei EBITDA representing the Company's 60% share was $1.5 million,       down 2% over last year   --  Hubei added more than 84,000 digital subscribers during the quarter   --  Binzhou revenues were $2.3 million, an increase of 14% over last year    --  Binzhou EBITDA representing the Company's 60% share was $0.9 million,       an increase of 6% over last year    Six Months Ended June 30, 2009 Highlights:    --  Hubei revenues were $16.1 million, an increase of 22% over last year   --  Hubei EBITDA representing the Company's 60% share was $3.5 million, an       increase of 18% over last year   --  Hubei paying subscribers as of June 30, 2009 were 1,125,021, an       increase of 14% over last year and 5% over last quarter   --  Hubei added nearly 171,000 digital subscribers in the first half of       the year, more than 10 times the number of digital subscribers as of       January 1, 2009   --  Binzhou revenues were $4.6 million, an increase of 7% over last year   --  Binzhou EBITDA representing the Company's 60% share as of June 30,       2009, was $1.8 million, an increase of 2% over last year   --  Binzhou paying subscribers as of June 30, 2009 were 479,604, an       increase of 2% over last year    --  Consolidated pro forma paying subscribers for China Cablecom as of       June 30, 2009 was 1.6 million, an increase of 10% over last year    Comments from Mr. Pu Yue, Chief Executive Officer   

"The first half of 2009 presented measurable organic growth and ARPU increases at our Hubei and Binzhou operating entities. During the second quarter of this year, our team has been actively working with our debt holders to restructure our loan obligations as well as acquisition payment obligations to our Hubei joint venture partners. Though this has delayed our reporting of our results of operations, we are now current with our reporting calendar and believe that we will have a resolution to announce on these matters shortly," says Pu Yue, Chief Executive officer of China Cablecom.

"Despite the challenging financial markets, we believe that our cable operations in China are strong and growing. We set record revenue, EBITDA and paying subscriber levels at our operating subsidiaries during the first six months of 2009. We believe that we are poised for greater growth as we capture the enormous upside associated with the adoption and implementation of digital cable. At Hubei, the network continues to grow at an amazing pace as paying subscribers grew 14% over the last year. Digital cable subscribers also grew at a rapid rate as Hubei now has more than 10 times the number of digital subscribes than last year. Lastly, we remain conservative in managing our operating costs and expect to be on schedule to decrease our corporate overhead by more than 50%."

Financial Results for the First Quarter of 2009 - Pro Forma Basis

Consolidated revenues for the first quarter of 2009 were $10.0 million compared to pro forma revenues of $8.3 million for the first quarter of 2008. The increase was due to growth in paying subscribers and revenues generated in subscription and installation fees. Consolidated operating expenses for the first quarter of 2009 were $5.8 million compared to pro forma operating expenses of $5.8 million for the first quarter of 2008.

Based on U.S. GAAP, net comprehensive loss for first quarter of 2009 was $5.7 million, or $0.58 loss per basic and fully diluted share, compared to a net comprehensive loss of $1.6 million, or $1.04 loss per basic and fully diluted share for the first quarter of 2008. The net loss for the first quarter of 2009 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, and (2) non-cash 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 $3.6 million.

Financial Results for the Second Quarter of 2009 - Pro Forma Basis

Consolidated revenues for the second quarter of 2009 were $10.7 million compared to pro forma revenues of $9.1 million for the second quarter of 2008. 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 2009 were $4.7 million compared to pro forma operating expenses of $6.8 million for the second quarter of 2008. The reduction of operating costs resulted from a significant decrease of approximately $2.0 million of selling, general administration expenses at Hubei after China Cablecom's acquisition.

Based on U.S. GAAP, net comprehensive loss for second quarter of 2009 was $4.4 million, or $0.46 loss per basic and fully diluted share, compared to a net comprehensive loss of $3.5 million, or $0.38 loss per basic and fully diluted share for the second quarter of 2008. The net loss for the second quarter of 2009 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, and (2) non-cash 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 $3.6 million.

Financial Results for the Six Months ended June 30, 2009

Consolidated revenues for the six months ended June 30, 2009 were $10.7 million compared to pro forma revenues of $9.1 million for same period in 2008. The increase was due to growth in paying subscribers and revenues generated in subscription and installation fees.

Consolidated operating expenses for the six months ended June 30, 2009 were $10.5 million compared to pro forma operating expenses of $12.6 million for the same period in 2008. The reduction in operating expenses was largely contributable to Hubei's savings on selling, general and administrative expenses post China Cablecom's acquisition.

Based on U.S. GAAP, net comprehensive loss for the six months ended June 30, 2009 was $10.1 million, or $1.04 loss per basic and fully diluted share, compared to a net comprehensive loss of $5.1 million, or $1.00 loss per basic and fully diluted share for the same period in 2008. The net loss for the six months ended June 30, 2009 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 $0.74 million and $0.66 million, respectively, and (2) non-cash 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 $7.2 million.

   Recent Company Highlights    --  In February 2009, management presented at the Roth Capital Growth       Stock Conference in Laguna Niguel, California   --  During the first quarter of 2009, the Company provided an update on       Binzhou Broadcasting whereby the joint venture partners granted an       extension on the remaining payments until December 31, 2009   --  Sikan Tong, previously serving as the Company's Senior Vice President       of Finance was appointed as the Chief Financial Officer of the Company       in March 2009    --  China Cablecom is currently in negotiations with the its joint venture       partners of Hubei SOE and local municipal branches of SARFT on       discussions involving the restructuring of the Company's debt, assets       and obligations with Hubei Chutian Broadcasting and Television Network       Company    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. The summary information is presented on a pro forma basis, which assumes that the acquisitions took place on January 1, 2008. For Hubei, the summary information reflects the 23 cities acquired in the amended acquisition agreement. EBITDA reflects China Cablecom's consolidated share of 60%.

                                               Quarter ended March 31,                                      -------------------------------------   (unaudited)                              2009             2008       %                                            ----             ----      --   Binzhou Broadcasting   Revenue                            $2,282,599       $2,003,766      14%   EBITDA - 60% share                   $923,531         $869,884       6%   Non-financial metrics:   ----------------------   Paying subscribers                    478,129          426,685      12%   Digital subscribers                     2,000               nm   ARPU                                    $1.37            $1.38      -1%   Hubei Chutian   Revenue                            $7,676,246       $6,269,190      22%   EBITDA - 60% share                 $1,454,137       $1,483,060      -2%   Non-financial metrics:   ----------------------   Paying subscribers                  1,075,214          962,034      12%   Digital subscribers                    98,847               nm   ARPU                                    $2.06            $1.74      18%    Total revenue                      $9,958,845       $8,272,956      20%   Total EBITDA - 60%                 $2,377,668       $2,352,944       1%      nm = not meaningful                             Quarter ended June 30,   Six months ended June 30,                        ------------------------   --------------------------    (unaudited)             2009       2008    %      2009        2008     %                            ----       ----    -      ----        ----     -   Binzhou Broadcasting   Revenue              $2,322,358 $2,286,451  2%  $4,604,957  $4,290,217  7%   EBITDA - 60% share     $891,286   $909,437 -2%  $1,814,817  $1,779,321  2%   Non-financial metrics:   ---------------------   Paying subscribers      479,604    470,111  2%     479,604     470,111  2%   Digital subscribers       3,465         nm          3,465           nm   ARPU                      $1.40      $1.35  4%       $1.38       $1.36  1%   Hubei Chutian   Revenue              $8,399,810 $6,861,529 22% $16,076,056 $13,130,719 22%   EBITDA - 60% share   $2,042,186 $1,480,666 38%  $3,496,323  $2,963,726 18%   Non-financial metrics:   ---------------------   Paying subscribers    1,125,021    986,444 14%   1,125,021     986,444 14%   Digital subscribers     185,794         nm         185,794         nm     ARPU                    $2.08      $1.85 12%       $2.07       $1.80 15%    Total revenue       $10,722,168 $9,147,980 17% $20,681,013 $17,420,936 19%   Total EBITDA - 60%   $2,933,472 $2,390,103 23%  $5,311,140  $4,743,047 12%    nm = not meaningful     Conference Call and Webcast   

China Cablecom's management team will host a conference call today at 8:30 a.m. EDT, August 27, 2009 (or 8:30 p.m., August 27, 2009 Shanghai time). To listen to the conference call, please use the dial in numbers below:

   USA Toll Number: 1-877-941-9205   International: 1-408-629-9835   

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: 4145747#   

The conference call will be available on webcast live and available for replay at: www.chinacablecom.net.

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 & digital cable services. China Cablecom recently entered into an agreement to acquire a 60% 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 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,      March 31,      Dec. 31,                                       2009          2009           2008                                   (unaudited)   (unaudited)     (audited)                                  -----------   -----------    ------------    ASSETS    Current Assets    Cash and cash equivalents      $31,145,513   $29,629,771   $29,182,251    Accounts receivable                301,065       745,671     1,628,710    Prepaid expenses and other     receivables                    10,389,334     9,820,393     9,236,025    Inventories                      6,658,038     4,174,194     3,744,745    ----------------------------- ------------  ------------  ------------         Total Current Assets       48,493,950    44,370,029    43,791,731     Property, Plant &    Equipments, Net                 80,492,398    79,259,733    79,877,186    Construction In Progress         3,251,779     2,045,005     1,036,667    Intangible assets, net          55,722,135    56,424,069    57,126,002    Other Assets    Deferred financing costs, net      792,703       914,373     1,243,923    ----------------------------- ------------  ------------  ------------    Total Assets                  $188,752,965  $183,013,209  $183,075,509    ----------------------------- ------------  ------------  ------------     LIABILITIES AND STOCKHOLDERS'     EQUITY    Current Liabilities    Current portion of long      term debt - net of discount   $9,996,160    $9,996,160    $9,481,940    Accounts payable                13,949,099     8,647,184     8,872,144    Service performance     obligation-deferred      revenue assumed                6,325,476     5,857,510     1,661,311    Other current liabilities        7,997,399     7,515,259     7,630,924    Note payable-non controlling     ("minority") interest          55,391,666    54,558,879    55,420,250    ----------------------------- ------------  ------------  ------------                                    93,659,800    86,574,992    83,066,569    Long Term Liabilities    Note payable - noncontrolling     ("minority") interest,      net of current portion        51,798,182    51,767,873    51,777,719    Convertible notes, net of     discount and current portion   21,756,033    19,188,078    16,684,044    ----------------------------- ------------  ------------  ------------    Total Liabilities              167,214,015   157,530,943   151,528,332    ----------------------------- ------------  ------------  ------------    Noncontrolling ("minority")     interest                        1,828,786     1,353,689     1,768,004    ----------------------------- ------------  ------------  ------------     STOCKHOLDERS' EQUITY    Common stock, $.0005 par     value; 40,000,000     authorized shares,     9,677,131 shares,     9,677,131 shares and     9,308,031 shares issued     and outstanding at June     30, 2009, March 31 and     December 31, 2008,     respectively                        4,839         4,839         4,839      Additional paid in capital    45,526,562    45,526,562    45,526,562      Statutory reserve                131,501       131,501       131,501      Accumulated deficit          (26,586,992)  (22,183,584)  (16,532,864)      Accumulated other       comprehensive income            634,254       649,259       649,135    ----------------------------- ------------  ------------  ------------    Total stockholders' equity      19,710,164    24,128,577    29,779,173    ----------------------------- ------------  ------------  ------------    Total liabilities and     stockholders' equity         $188,752,965  $183,013,209  $183,075,509    ----------------------------- ------------  ------------  ------------       CHINA CABLECOM HOLDINGS LIMITED    ----------------------------------------------    Unaudited Consolidated Statements of Operation    (in US dollars, except share data)    ----------------------------------------------                                                  Quarter ended March 31,                                                      2009          2008                                                     ----          ----     Revenue                                     $9,958,845    $2,003,766    Cost of sales                                6,416,527     1,081,972    ------------------------------------        ----------    ----------    Gross profit                                 3,542,318       921,794    Operating expenses     Amortization expenses                               -             -     General and administrative expenses         5,826,361     1,626,254    ------------------------------------        ----------    ----------                                                 5,826,361     1,626,254                                                ----------    ----------    Loss from operations                        (2,284,043)     (704,460)    ------------------------------------        ----------    ----------    Other income (expense)    Interest income                                 44,474        40,515    Other income                                   211,613        65,334    Interest expense                            (3,292,253)   (1,101,077)    ------------------------------------        ----------    ----------                                                (3,036,166)     (995,228)                                                ----------      --------    Loss before income taxes                    (5,320,209)   (1,699,688)    Income taxes                                  (110,485)     (127,814)    ------------------------------------        ----------    ----------    Loss from operations before     noncontrolling ("minority") interest       (5,430,694)   (1,827,502)    Noncontrolling ("minority") interest     in income                                    (220,026)     (153,342)    ------------------------------------        ----------    ----------    Net loss                                    (5,650,720)   (1,980,844)    Other comprehensive income    Foreign currency translation difference            124       404,649    ------------------------------------        ----------    ----------    Net comprehensive loss                     $(5,650,596)  $(1,576,195)    ------------------------------------        ----------    ----------    Loss per common share:    - Basic and fully diluted                       $(0.58)       $(1.04)    Weighted average shares    - Basic and fully diluted                    9,677,131     1,900,000    ------------------------------------        ----------    ----------      CHINA CABLECOM HOLDINGS LIMITED   ----------------------------------------------   Unaudited Consolidated Statements of Operation   (in US dollars, except share data)   ----------------------------------------------                           Quarter ended June 30,   Six months ended June 30,                               2009         2008          2009         2008                              ----         ----          ----         ----     Revenue             $10,722,168   $2,286,451   $20,681,013   $4,290,217    Cost of sales         6,608,915    1,233,395    13,025,441    2,315,367    ------------------- -----------  -----------   -----------  -----------    Gross profit          4,113,253    1,053,056     7,655,572    1,974,850    Operating expenses     Amortization      expenses                                            -     General and      administrative       expenses           4,689,379    2,270,283    10,515,740    3,896,537     ------------------ -----------  -----------   -----------  -----------                          4,689,379    2,270,283    10,515,740    3,896,537                        -----------  -----------   -----------  -----------    Loss from     operations            (576,126)  (1,217,227)   (2,860,168)  (1,921,687)    ------------------ -----------  -----------   -----------  -----------    Other income     (expense)    Interest income          38,373      231,473        82,847      271,988    Other income            241,644        2,114       453,257       67,448    Interest expense     (3,488,622)  (1,868,587)   (6,780,875)  (2,969,664)    ------------------- -----------  -----------   -----------  -----------                         (3,208,605)  (1,635,000)   (6,244,771)  (2,630,228)                        -----------  -----------   -----------  -----------    Loss before income     taxes               (3,784,731)  (2,852,227)   (9,104,939)  (4,551,915)    Income taxes           (144,026)    (137,756)     (254,512)    (265,570)    ------------------- -----------  -----------   -----------  -----------    Loss from     operations before     noncontrolling     ("minority")     interest            (3,928,757)  (2,989,983)   (9,359,451)  (4,817,485)    Noncontrolling     ("minority")     interest in income    (474,651)    (162,874)     (694,677)    (316,216)    ------------------- -----------  -----------   -----------  -----------    Net loss             (4,403,408)  (3,152,857)  (10,054,128)  (5,133,701)    Other comprehensive     income    Foreign currency     translation     difference             (15,005)    (335,933)      (14,881)      68,716    ------------------- -----------  -----------   -----------  -----------    Net comprehensive     loss               $(4,418,413) $(3,488,790) $(10,069,009) $(5,064,985)    ------------------- -----------  -----------   -----------  -----------    Loss per common     share:    - Basic and fully     diluted                 $(0.46)      $(0.38)       $(1.04)      $(1.00)    Weighted average     shares    - Basic and fully     diluted              9,677,131    8,230,501     9,677,131    5,149,090    ------------------- -----------  -----------   -----------  -----------    Reconciliation of Non-U.S. GAAP Measures   

This release contains discussion of China Cablecom's revenues, and projected and pro forma revenues, as well as 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 U.S. 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- U.S. GAAP financial measures appearing elsewhere herein relating to China Cablecom to the most closely analogous U.S. GAAP measures:

                                        Quarter ended                                 -----------------------------                                                                Six months                                                               ended June 30,                                 June 30, 2009  March 31, 2009      2009                                 -------------  -------------- --------------      Net comprehensive loss        $(4,418,413)  $(5,650,596)  $(10,069,009)     Amortization                      823,604     1,031,483      1,855,087     Depreciation                    2,150,038     2,096,298      4,246,336     Interest income                   (38,373)      (44,474)       (82,847)     Interest & finance              3,488,622     3,292,253      6,780,875     Income tax                         86,416        66,291        152,707                                        ------        ------        -------     Non-GAAP income (EBITDA)       $2,091,894      $791,255     $2,883,149                                    ==========      ========     ==========      Reconciliation to      operating metrics     Binzhou Broadcasting      EBITDA - 60% share              $891,286      $923,531     $1,814,817     Hubei Chutian EBITDA -      60% share                      2,042,186     1,454,137      3,496,323     Corporate overhead               (841,578)   (1,586,413)    (2,427,991)                                      --------    ----------     ----------                                    $2,091,894      $791,255     $2,883,149                                    ==========      ========     ==========     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, +1-917-499-8129, debra@chinacablecom.net

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

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