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SCANDINAVIAN BROADCASTING SYSTEM SA REPORTS RESULTS FOR 1993'S SECOND QUARTER AND FIRST SIX MONTHS

 LUXEMBOURG, Aug. 19 /PRNewswire/ -- Scandinavian Broadcasting System SA (NASDAQ-NMS: SBTVF) today reported higher revenues and improved station operating cash flow for the three- and six-month periods ended June 30, 1993. Results are in thousands of U.S. dollars (except per share data) converted from the Norwegian, Swedish, and Danish Kroner.
 SCANDINAVIAN BROADCASTING SYSTEM SA
 Financial Highlights
 Six months ended June 30, 1993 1992
 Net revenue $23,283 $ 8,474
 Operating loss (314) (1,577)
 Station operating cash flow(A) 2,540 297
 Net loss (2,608) (1,658)
 Earnings per share (loss) (0.34) (0.42)
 Common & common equivalent shares
 outstanding (000's) 7,619 3,932
 Three months ended June 30, 1993 1992
 Net revenue $11,177 $ 4,698
 Operating loss (1,118) (1,004)
 Station operating cash flow(A) 485 163
 Net loss (1,662) (1,217)
 Earnings per share (loss) (0.18) (0.30)
 Common & common equivalent shares
 outstanding (000's) 9,256 3,932
 (A) Station operating cash flow is defined as operating income (loss) plus corporate expenses (which include non-cash compensation), depreciation and amortization.
 In commenting on the results, Harry Evans Sloan, SBS's chairman and chief executive officer, said, "Our second quarter was characterized by significant progress, particularly at TV5 Nordic in Sweden. Our financial performance was highlighted by higher revenues and station operating cash flow. We also used a substantial portion of the net proceeds from our initial public offering to pay down debt and complete the purchase of TV Norge.
 "Our strong financial condition supports our continuing efforts to broaden and enhance our strategic position through acquisitions and programming investments. In June, we acquired TV Odense which serves Denmark's third largest city and expands our audience base from about 1.8 million people to 2.1 million people in that country. We also announced today that we have signed a definitive agreement to acquire a 30 percent stake in GE Program Group, the producer of Sweden's most popular commercial television program, "Bingo Lotto," and the owner of TV 21, that country's first interactive entertainment and games channel. Also, GE owns and operates Kanal Goteborg, the only local commercial television station in Gothenburg, and two commercial radio stations located in Gothenburg and Malmo, Sweden's second and third largest cities respectively.
 "Our programming investments in Denmark and Sweden have yielded higher ratings and market share gains. We will continue to upgrade our programming inventory and capability throughout our properties. As allocations for television advertising in the region rise in tandem with commercial TV viewing and regulatory adjustment, advertising inventory will expand, as it recently did in Norway. SBS is poised, positioned, and ready to benefit from this expansion."
 Results From Operations
 The company's operating results for the three- and six-month periods ended June 30, 1992, include contribution from television stations Kanal 2 (Denmark) and TV5 Nordic (Sweden), but exclude the results of television station TV Norge (Norway), which was accounted for under the equity method for the two respective periods. The company's performance for the three- and six-month periods ended June 30, 1993 include operating results for all three television stations.
 Accordingly, year-over-year results are most comparable on a pro forma basis. Thus, the following discussion, with the exception of station operating cash flow, compares the actual operating results of 1993's second quarter and first half with the company's pro forma operating results, adjusted to include TV Norge, in 1992's same three- and six-month periods.
 Six Months Ended June 30, 1993 Compared To Six Months Ended June 30, 1992
 On a local currency basis, net revenues increased by 20 percent in the six months ended June 30, 1993 compared to the pro forma six months ended June 30, 1992. However, due to the strengthening of the U.S. dollar against local currencies in which the company operates, net revenue in U.S. dollars increased by 1,712,000, or 8 percent, to $23,283,000 for the six months ended June 30, 1993 from $21,571,000 for the pro forma six months ended June 30, 1992. This increase was primarily attributable to increased revenues at TV5 Nordic and Kanal 2.
 In U.S. dollars, station operating cash flow (defined as operating income (loss) plus corporate expenses (which include non-cash compensation), depreciation and amortization) improved significantly for the first half of 1993 when compared to the first half of 1992. Station operating cash flow was $2,540,000 as of June 30, 1993 compared to $297,000 at the end of 1992's pro forma first half.
 In U.S. dollars, station operating expenses increased $1,989,000, or 16 percent, to $14,596,000 for the six months ended June 30, 1993 from $12,607,000 for the three months ended June 30, 1992. This increase was primarily attributable to increased costs related to the company's decision to upgrade programming at TV5 Nordic and Kanal 2.
 In U.S. dollars, selling, general and administrative expenses increased $373,000, or 6 percent, to $6,147,000 for the six months ended June 30, 1993 from $5,774,000 for the pro forma six months ended June 30, 1992. This increase was primarily attributable to higher commissions to salesmen as a result of increased advertising sales and a rise in promotion costs related to the introduction of new programming at TV5 Nordic and Kanal 2.
 In U.S. dollars, corporate expenses, including non-cash corporate expenses increased $250,000, or 18 percent, to $1,632,000 for the six months ended June 30, 1993 from $1,382,000 for the pro forma six months ended June 30, 1992. This increase was attributed primarily to the addition of one senior executive and increased costs associated with being a public company. For the first six months of 1993, non-cash corporate expenses relating primarily to the issuance of stock options to certain executive officers were $326,000.
 In U.S. dollars, depreciation and amortization decreased $207,000, or 14 percent, to $1,222,000 for the six months ended June 30, 1993 from $1,429,000 for the pro forma six months ended June 30, 1992. This decrease was primarily attributable to equipment at Kanal 2 becoming fully depreciated in 1992 and the amortization of goodwill associated with the acquisition of TV Norge for six months in the 1992 pro forma period compared to five months in the actual 1993 period.
 In U.S. dollars, net interest expense increased $769,000, or 136 percent, to $1,336,000 for the six months ended June 30, 1993 from $567,000 for the pro forma six months ended June 30, 1992. This increase was primarily attributable to additional borrowing related to the acquisition of a controlling interest in TV Norge, all of which was repaid in June, 1993, and a $500,000 non-cash expense relating to warrants issued to obtain financing for the TV Norge acquisition.
 As a result of the foregoing, the company's net loss in U.S. dollars for the six months ended June 30, 1993 was $2,608,000 as compared with $1,658,000 in 1992's comparable six month period and $1,196,000 in 1992's pro forma first half.
 Three Months Ended June 30, 1993 Compared To Three Months Ended June 30, 1992
 On a local currency basis, net revenue increased 17 percent in the three months ended June 30, 1993 compared to the pro forma three months ended June 30, 1992. However, due to the strengthening of the U.S. dollar against the local currencies in which the company operates, net revenue in U.S. dollars increased $589,000, or 6 percent, to $11,177,000 for the three months ended June 30, 1993 from $10,558,000 for the pro forma three months ended June 30, 1992. This increase was primarily due to the surge in revenues at TV5 Nordic.
 In U.S. dollars, station operating cash flow (defined as operating income (loss) plus corporate expenses (which include non-cash compensation), depreciation and amortization) increased by $322,000, or 297 percent, to $485,000 in the three months ended June 30, 1993 from $163,000 for the three months ended June 30, 1992.
 In U.S. dollars, station operating expenses increased $829,000, or 13 percent, to $6,974,000 for the three months ended June 30, 1993 from $6,145,000 for the pro forma three months ended June 30, 1992. This increase was primarily attributable to the higher costs associated with the company's decision to upgrade programming at TV5 Nordic and Kanal 2.
 In U.S. dollars, selling, general and administrative expenses increased $431,000, or 13 percent, to $3,718,000 for the three months ended June 30, 1993, from $3,287,000 for the pro forma three months ended June 30, 1992. This increase was primarily attributable to higher commissions to salesmen as a result of increased advertising sales and a rise in promotion costs related to the introduction of new programming at TV5 Nordic and Kanal 2.
 In U.S. dollars, corporate expenses, which include non-cash compensation of $163,000, declined $7,000 to $912,000 for the three months ended June 30, 1993 from $919,000 for the pro forma three months ended June 30, 1992. Also, in U.S. dollars, deprecation and amortization decreased $31,000, or 4 percent, to $691,000 for the three months ended June 30, 1993 from $722,000 for the pro forma three months ended June 30, 1992.
 In U.S. dollars, net interest declined $24,000, to $36,000 for the three months ended June 30, 1993 from net interest expense of $60,000 for the pro
forma three months ended June 30, 1992. This decrease was primarily attributable to the repayment of a significant portion of the company's indebtedness with the proceeds of its initial public offering.
 As a result of the foregoing, the company's net loss in U.S. dollars for the three months ended June 30, 1993 was $1,662,000, as compared with a loss of $1,217,000 in 1992's June period and $916,000 in the 1992 pro forma second quarter.
 Scandinavian Broadcasting System (SBS) is one of the first broadcasters to enter Scandinavia since commercial television was introduced to the region in 1988. SBS owns and operates four commercial television stations spanning Scandinavia. The company's stations include: TV Norge in Norway and TV5 in Sweden, national satellite-to- cable television stations that reach approximately 50 percent of the total viewing households in their respective countries, Kanal 2 in Denmark, an over-the-air television station that reaches over 87 percent of the total viewing households in greater Copenhagen, and TV Odense, which serves Denmark's third largest city. SBS also provides programming to and sells advertising for Kanal Denmark, a group of five local television stations, including Kanal 2, located throughout Denmark. Kanal Denmark reaches over 55 percent of the viewing households in Denmark. The company owns a 30 percent equity interest in GE Program Group, a Swedish television producer and broadcaster which owns the rights to and produces Sweden's most successful commercial television program, Bingo Lotto; owns Sweden's first interactive cable channel, TV 21; owns and operates Gothenburg's only local television station, Kanal Goteborg, and two radio stations in Gothenburg and Malmo. Scandinavian Broadcasting System is listed on the NASDAQ National Market System and trades under the symbol SBTVF.
 SCANDINAVIAN BROADCASTING SYSTEM SA
 Consolidated Statements of Operations
 (Unaudited)
 Periods ended Three months Six months
 June 30 1992 1993 1992 1993
 Net revenue $4,698 $11,177 $8,474 $23,283
 Operating expenses:
 Station operating expenses 2,549 6,974 4,996 14,596
 Selling, general and
 administrative expense 1,986 3,718 3,181 6,147
 Corporate expenses 919 912 1,382 1,632
 Depreciation 270 438 535 824
 Amortization and writedown
 of goodwill 50 326 100 543
 Amortization of
 negative goodwill (72) (73) (143) (145)
 Total operating expenses 5,702 12,295 10,051 23,597
 Operating income (loss) (1,004) (1 ? (1,577) (314)
 Equity in income of TV Norge 144 -- 537 --
 Interest expense, net (288) (36) (548) (1,336)
 Foreign exchange gains
 (losses), net (69) (539) (70) (669)
 Minority interest in loss
 (income) of TV Norge -- 31 -- (154)
 Net loss before income taxes (1,217) (1,662) (1,658) (2,473)
 Provision for income taxes -- -- -- (135)
 Net loss (1,217) (1,662) (1,658) (2,608)
 Income (loss) per common
 and common equivalent
 share ($0.30) ($0.18) ($0.42) ($0.34)
 Common and common
 equivalent shares
 outstanding 3,966 9,256 3,932 7,619
 Consolidated Balance Sheets
 (In thousands)
 12/31/92 6/30/93
 (Unaudited)
 ASSETS
 Current assets:
 Cash and cash equivalents $1,080 $25,026
 Accounts receivable trade,
 net of allowance for doubtful
 accounts of $255 in 1993
 ($39 -- 1992) 1,798 4,615
 Program rights inventory, current 867 8,565
 Restricted cash 274 --
 Other current assets 1,635 2,384
 Total current assets 5,654 40,590
 Equipment and improvements,
 net of accumulated depreciation 2,746 5,985
 Goodwill, net of accumulated
 amortization of $767 in 1993
 ($172 -- 1992) 2,833 24,233
 Investments in TV Norge 1,977 --
 Other assets 265 861
 Program rights inventory, noncurrent 200 717
 Total assets 13,675 72,386
 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
 Current liabilities:
 Accounts payable and accrued expenses 5,028 7,619
 Program rights payable, current 1,844 6,917
 Notes payable 3,025 --
 Current portion of long-term debt 714 743
 Deferred income 975 1,131
 Obligations under capital
 leases, current 329 251
 Other current liabilities 1,329 794
 Total current liabilities 13,244 17,455
 Program rights payable, noncurrent 817 2,690
 Deferred income, noncurrent 642 566
 Long-term debt less current portion 2,857 4,036
 Notes payable, noncurrent 5,192 --
 Obligations under capital
 leases, noncurrent 684 664
 Other noncurrent liabilities 319 703
 Minority interest -- 645
 Shareholders' equity (deficit):
 Common shares (authorized, 75,000,
 issued and outstanding,
 4,608 (1992) and 9,511 (1993),
 at par value $1.50) 6,912 14,257
 Additional paid-in capital 6,869 57,723
 Accumulated deficit (22,689) (25,297)
 Unearned compensation (1,304) (978)
 Currency translation adjustments 132 (88)
 Total shareholders' equity (deficit) (10,080) 45,627
 Total liabilities and shareholders'
 equity (deficit) 13,675 72,386
 Consolidated Statements of Cash flows
 (Unaudited, in thousands)
 Six months ended June 30 1992 1993
 Cash flows from operating activities:
 Net loss $(1,658) $(2,608)
 Adjustments to reconcile net loss to net
 cash used in operating activities:
 Depreciation and amortization 492 1,222
 Non cash interest expense 21 810
 Equity in income of TV Norge (537) --
 Non cash compensation 585 326
 Minority interest in income of TV Norge -- 154
 Changes in operating assets and
 liabilities, net of amounts acquired:
 Accounts receivable (394) (893)
 Program rights inventory, net (294) (585)
 Other current assets (160) (437)
 Other noncurrent assets 92 (627)
 Accounts payable and accrued liabilities (332) 129
 Deferred income (261) (329)
 Other liabilities 157 49
 Cash provided by (used in)
 operating activities (2,289) (2,789)
 Cash flows from investing activities:
 Cash capital expenditure (88) (694)
 Payment for purchase of acquired business,
 net of cash acquired (2,543) (20,535)
 Cash (used in) investing activities (2,631) (21,229)
 Cash flows from financing activities:
 Net change in short-term borrowings 3,506 (3,022)
 Net proceeds from issuance of common shares 10 55,268
 Financing fee associated with
 TV Norge acquisition -- (100)
 Payment for retirement of warrants -- (300)
 Net change in restricted cash -- 473
 Payment of long-term debt (229) (4,665)
 Payment of capital lease obligations (31) (118)
 Cash (used in) provided by
 financing activities 3,256 47,536
 Effect of exchange rate changes on cash 43 428
 Net increase in cash and cash equivalents (1,621) 23,946
 Cash and cash equivalents,
 beginning of period 2,106 1,080
 Cash and cash equivalents, end of period 485 25,026
 Currency Translation Schedule
 Six months ended June 30(A) 1992 1993
 Norwegian kroner equivalent of $1.00
 - end of period 5.97 7.46
 - average during period 6.34 6.89
 Swedish kroner equivalent of $1.00
 - end of period 5.57 7.71
 - average during period 5.86 7.46
 Danish kroner equivalent of $1.00
 - end of period 5.86 6.50
 - average during period 6.26 6.25
 (A) -- The official exchange rate is equal to the noon buying rate in Sweden's, Norway's and Denmark's National Bank. The average rates were determined by averaging the exchange rate of the respective currencies on each day of each month within the period indicated.
 -0- 8/19/93
 /CONTACT: Diana Brainerd or Cameron Thomson of Abernathy/MacGregor/Scanlon, 212-371-5999, or fax, 212-371-7079/
 (SBTVF)


CO: Scandinavian Broadcasting System SA ST: IN: ENT SU: ERN

SM-SS -- NY008 -- 4257 08/19/93 10:52 EDT
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