Crown Media Holdings Announces 71% Increase in Net Revenues and 35% Increase in Subscribers for First Quarter 2002.Business Editors GREENWOOD Greenwood. 1 City (1990 pop. 26,265), Johnson co., central Ind.; settled 1822, inc. as a city 1960. A residential suburb of Indianapolis, Greenwood is in a retail shopping area. Manufactures include motor vehicle parts and metal products. VILLAGE, Colo.--(BUSINESS WIRE)--May 7, 2002 Crown Media Holdings, Inc. (Nasdaq: CRWN CRWN Composite Reconfigurable Wireless Network ) today reported net revenues of $39.5 million for the first quarter of 2002, a 71% increase from $23.0 million for the first quarter of 2001. Operating Highlights for the Quarter and Year - Crown Media's gross revenues increased to $41.4 million in the first quarter of 2002, a 68% increase from $24.7 million in the first quarter of 2001. Net revenue in the first quarter of 2002 increased 71% to $39.5 million, from $23.0 million in the prior year's quarter. The difference in gross and net revenues is due to the netting of subscriber acquisition costs and other fees against revenue. - Hallmark Channel subscribers increased 35% to 91.5 million worldwide as of March 31, 2002, from 67.6 million subscribers as of March 31, 2001. The Hallmark Channel ended the quarter with 44.9 million subscribers in the United States and 46.6 million international subscribers across over 110 countries. Subscribers of our domestic channel increased 55% over first quarter 2001 and 3% over fourth quarter 2001. Subscribers of our international channel increased 21% over first quarter 2001 and 5% over fourth quarter 2001. - During the first quarter of 2002, the Hallmark Channel U.S. achieved its highest-rated quarter in network history, according to Nielsen Media Research, averaging a 0.6 primetime household rating. This represents a 50% increase from the fourth quarter of 2001. The Hallmark Channel U.S. has shown the most growth in primetime household delivery among all advertising-supported cable networks since its launch on August 5, 2001. - In March 2002, the Hallmark Channel U.S. announced that it would commission 24 movies to be produced by Hallmark Entertainment. The Hallmark Channel will begin to premier these original movies before Christmas 2002. These films will represent a wide array of genres, including dramas, mysteries, and westerns. - More recently, the Hallmark Channel U.S. announced a long-term programming agreement with Paramount Domestic Television. Under the agreement, the Hallmark Channel secured the rights to dozens of Paramount's top films, comedies, dramas and westerns, and series, including Perry Mason, Hogan's Heroes, The Beverly Hillbillies, and Rawhide. - Crown Media U.S. has purchased an original one-hour non-scripted reality series, Adoption, portraying real-life experiences of people who have been involved in the process of trying to adopt a child. Produced exclusively for the Hallmark Channel U.S. by Hallmark Entertainment, Inc., this series will premier in early June. - The Hallmark Channel U.S. and Hallmark Gold Crown(R) stores are teaming up for their first-ever cross-promotional effort in support of the network's upcoming original miniseries, Stranded, which will air exclusively on Hallmark Channel in June 2002. The cross-promotional campaign will rollout nationally May 13, to coincide with Hallmark Gold Crown stores' Father's Day sales period. "We are very pleased with the continued success of the Hallmark hallmark, mark impressed on silverwork or goldwork to signify official approval of the standard of purity of the metal, also called plate mark. The hallmark was introduced by statute in England in 1300 and enforced by the Goldsmiths' Hall, London. Channel, as is evident by increased ratings performance both in the U.S. and abroad," stated David Evans David Evans may mean:
He continued, "First quarter 2002 primetime ratings for the Hallmark Channel U.S. increased 50% from the fourth quarter of 2001. In addition, the Hallmark Channel U.S. scored its 10 highest-rated primetime telecasts ever during the first quarter of 2002. Meanwhile, in the United Kingdom, ratings increased 69% for the first quarter of 2002 versus the fourth quarter of 2001. Clearly, our investments in broad distribution, a widely recognized brand, and premier, high quality family-oriented content are yielding benefits." Financial Results On March 15, 2001, Crown Media Holdings acquired the following interests not owned by Crown Media Holdings: the remaining 22.5% of the common interests in Crown Media United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ; and the remaining 50% interest in H&H Programming-Asia, which operated The Kermit A file transfer protocol developed at Columbia University, noted for its adaptability to noisy lines, enabling transfers to succeed under the worst conditions. Kermit supports streaming over the Internet, sliding windows for links with long round-trip delays, record and character Channel, which were held by The Jim Henson Noun 1. Jim Henson - United States puppeteer who created a troupe of puppet characters (1936-1990) Henson Company, Inc. The consolidated historical financial statements of Crown Media Holdings include each of the interests described above from the date of acquisition. Historical financial information is provided in tables at the end of this release. Crown Media reported gross revenue, before amortization of subscriber acquisition fees, of $41.4 million for the first quarter of 2002, a 68% increase from $24.7 million for the first quarter of 2001. Net revenue in the first quarter of 2002 increased 71% to $39.5 million, from $23.0 million in the prior year's quarter. Gross subscriber fees revenue in the first quarter increased 13% to $19.8 million, from $17.6 million in the prior year's quarter, reflecting increased distribution worldwide, offset in part by the amortization of subscriber acquisition and other fees. Advertising and other revenue increased 104% to $14.6 million during the quarter, from $7.2 million in the first quarter of 2001, reflecting the increased distribution, enhanced programming schedule, and higher ratings for our channels. The licensing fees of $7.0 million represent revenues in the first quarter of 2002 from licensing programs in Crown Media's film library, which was acquired on September September: see month. 28, 2001. For the first quarter of 2002, total cost of services increased to $49.7 million from $35.1 million during the same quarter of 2001. Within cost of services, programming expenses rose 18% quarter over quarter to $23.8 million. The acquisition of third party programming, particularly series-based programming, was the primary driver of the increase in programming expense. Amortization of our film assets was $7.2 million during the first quarter of 2002 and was not a component of cost of sales during the same quarter of 2001. We also expanded distribution in our domestic markets, driving an increase in amortization expense related to subscriber acquisition fees of $4.2 million. Operating costs operating costs npl → gastos mpl operacionales , which consist of playback Playback could mean:
removal of most of the comb of day-old chickens. See also decombing. and subtitling, transponder A receiver/transmitter on a communications satellite. It receives a microwave signal from earth (uplink), amplifies it and retransmits it back to earth at a different frequency (downlink). A satellite has several transponders. , and interstitial In a separate window. See interstitial ad. (World-Wide Web) interstitial - A World-Wide Web page that appears before the expected content page. Interstitials can be used for advertising (intermercial, transition ad) or to confirm that the user is old enough to view the expenses, decreased 6% to $13.2 million for the first quarter of 2002, as a result of the use of public service announcements in some of our international markets as a substitute for purchased interstitials. Selling, general and administrative expenses increased to $16.6 million for the three months ended March 31, 2002, from $15.7 million in the year earlier period, as a result of escalations in rent and salaries. Marketing expenses decreased to $9.8 million for the three months ended March 31, 2002, from $10.5 million in the year earlier. During first quarter 2001, marketing expenses were higher due to the introduction of our brand package, which included branded theme blocks, a new positioning line, on-air on-air adj. Spoken, occurring, or used during broadcasting: an on-air gaffe; changed his on-air name. graphics and signature music. As of January January: see month. 1, 2002, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States, we ceased the amortization of our goodwill. The loss before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) totaled $21.9 million for the first quarter of 2002, compared to an EBITDA loss of $35.6 million for the same period last year. The net loss for the three-month period ended March 31, 2002 totaled $56.0 million, or $0.54 per share, compared to $45.2 million, or $0.74 per share, in the first quarter of 2001. At March 31, 2002, Crown Media had available cash and cash equivalents totaling $8.6 million, an unused $75.0 million line of credit with HC Crown Corporation, and a $320.0 million credit agreement with a group of banks with $113.5 million being the undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely balance as of March 31, 2002. Capital expenditures for the first quarter of 2002 totaled $1.6 million, while the cost of programming acquired totaled $44.6 million. Conference Call and Webcast to be Held May 7th at 11:00 a.m. ET Crown Media Holdings' management will conduct a conference call this morning at 11:00 a.m. Eastern Time to discuss the first quarter results. Investors and interested parties may listen to the call via a live webcast accessible through the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Company's web site at www.crownmedia.net. To listen, please register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. audio software at the site at least 15 minutes prior to the start time. The webcast will be available on the site for approximately three months, while a telephone replay of the call is available for 7 days beginning at 1:00 p.m. Eastern Time, May 7th, at 800-633-8284 or 858-812-6440 (international callers), reservation #20466672. About Crown Media Holdings, Inc. Crown Media Holdings, Inc. owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The company currently operates and distributes the Hallmark Channel in the U.S. and more than 110 countries. The combined channels have over 91 million subscribers worldwide. Significant investors in Crown Media Holdings include Hallmark Entertainment Holdings, Inc., a subsidiary of Hallmark Cards Hallmark Cards, a privately owned American company based in Kansas City, Missouri, is the largest manufacturer of greeting cards in the United States. Approximately 50% of greeting cards sent in the United States every year are manufactured by Hallmark. , Inc., Liberty Media Corp., DIRECTV DirecTV (trademarked as "DIRECTV") is a direct broadcast satellite (DBS) service based in El Segundo, California, USA, that transmits digital satellite television and audio to households in the United States, the Caribbean and Latin America except for Mexico. , Inc., VISN VISN Veterans Integrated Service Network VISN Virtual Integrated Sky Network (Loral Orion) VISN Visual Interactive Support Network Management Corp., a for-profit for-prof·it adj. Established or operated with the intention of making a profit: a for-profit organization. subsidiary of the National Interfaith in·ter·faith adj. Of, relating to, or involving persons of different religious faiths: an interfaith marriage; an interfaith forum. Cable Coalition, and J. P. Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. Partners (BHCA (Busy Hour Call Attempts) The number of times a telephone call is attempted during the busiest hour of the day. See busy hour. ), LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements contained in this press release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and that are based on management's current expectations, estimates and projections. Words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Such risks and uncertainties include: competition for distribution of channels, viewers, advertisers, and the acquisition of programming; fluctuations in the availability of programming; fluctuations in demand for the programming Crown Media airs on its channels; and other risks detailed in the Company's filings with the Securities and Exchange Commission, including the Risk Factors stated in the Company's 10-K Report for the year ended December December: see month. 31, 2001. Crown Media Holdings is not undertaking any obligation to release publicly any updates to any forward looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the occurrence of unanticipated events. Use of EBITDA Crown Media evaluates operating performance based on several factors, including EBITDA. Crown Media considers EBITDA an important indicator of the operational strength and performance of its businesses, including the ability to provide cash flows to service debt and fund capital expenditures. EBITDA eliminates, among other things, the amounts of non-cash depreciation of tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. and amortization of film assets (but not amortization of program license fees). However, EBITDA should be considered in addition to, not as a substitute for, historical operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. or loss, net loss and other measures of financial performance reported in accordance with accounting principles generally accepted in the United States.
Crown Media Holdings, Inc.
Selected First Quarter Financial Information
($ in thousands, except per share data)
Three Months Ended March 31,
2002 2001
-------------------------------------------
Gross revenues:
Subscriber fees $ 19,847 $ 17,553
Advertising 14,570 7,145
Licensing fees 6,979
Other 13 11
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Total gross revenues 41,409 24,709
Amortization of subscriber
acquisition fees (1,940) (1,670)
-------------------------------------------
Net revenues 39,469 23,039
Cost of services:
Programming costs 23,751 20,213
Amortization of film assets 7,248
Amortization of subscriber
acquisition fees 4,247
Depreciation and amortization 1,186 833
Operating costs 13,225 14,034
-------------------------------------------
Total cost of services 49,657 35,080
Selling, gen. & admin. expenses 16,567 15,654
Marketing expenses 9,794 10,455
Depreciation and amortization 2,220 1,690
Amort. of goodwill &
other intangibles 3,527
-------------------------------------------
Loss from operations $ (38,769) $ (43,367)
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Net loss $ (56,010) $ (45,167)
===========================================
Net loss per share $ (0.54) $ (0.74)
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Weighted avg. share out. 104,212 60,993
Crown Media Holdings, Inc.
Unaudited Consolidated Balance Sheet Data
(In thousands)
As of March 31, As of December 31,
2002 2001
------------------ --------------------
ASSETS:
Cash and cash equivalents $ 8,611 $ 13,859
Cash in escrow - 111,625
Accounts receivable, less
allowance for doubtful accounts 48,753 36,164
Program license fees, net of
accumulated amortization 161,661 141,522
Film assets, net of
accumulated amortization 801,964 808,138
Subscriber acquisition fees, net
of accumulated amortization 123,714 126,965
Property and equipment, net of
accumulated depreciation 42,444 43,882
Goodwill, net of
accumulated amortization 314,033 314,033
Prepaids and other assets 29,788 30,170
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Total assets $ 1,530,968 $ 1,626,358
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and
accrued liabilities $ 68,720 $ 81,415
License fees payable 138,715 118,514
Payables to Hallmark affiliates 106,203 105,952
Notes and interest payable 207,485 263,343
Convertible debt 44,591 43,733
Derivative liability 14,722 12,495
Guaranteed preferred beneficial
interest in Crown Media
Trust's debentures 203,794 199,040
Preferred minority interest 25,000 25,000
Stockholders' equity 721,738 776,866
------------------ --------------------
Total liabilities and
stockholders' equity $ 1,530,968 $ 1,626,358
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