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China Cablecom Holdings, Ltd. Reports
First Quarter 2008 Financial Results
July 10, 2008
China Cablecom Holdings, Ltd. ("China Cablecom") (OTCBB: CCCHF) (OTCBB:
CCCZF) (OTCBB: CCCWF), 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 quarter ended March
31, 2008.
China Cablecom's operating activity from its inception on October 6,
2006 to September 30, 2007, was limited and related to its
formation, and professional fees and expenses associated with its
acquisition activities. Through September 30, 2007, China Cablecom's
historical results of operations were insignificant and not
reflective of the results of operations after its acquisition of
Binzhou Broadcasting on October 1, 2007. Accordingly, China Cablecom
has compared its results of operations on a sequential quarterly
basis, which compares Q1 2008 to Q4 2007.
Financial and Operating Highlights for the First Quarter 2008
-- Revenues for Q1 2008 were $2.00 million compared to $1.99 million
for Q4 2007 -- EBITDA for Q1 2008 was $0.76 million compared to
$0.61 million for Q4 2007 -- EBITDA as a percentage of revenues was
38% for Q1 2008 up from 31% for Q4 2007 -- Gross profit was $0.92
million for Q1 2008 compared to $0.98 million for Q4 2007 -- Net
comprehensive loss for Q1 2008 was $1.58 million, or $1.04 loss per
share, compared to a net comprehensive loss of $1.80 million, or
$1.13 loss per share for Q4 2007 -- Cash and cash equivalents as of
March 31, 2008 were $14.06 million, up from $12.64 million as of
December 31, 2007 -- Paying subscribers increased by 15,439 during
Q1 2008 to 426,685 as of March 31, 2008 -- Homes passed increased by
8,778 during Q1 2008 to 643,638 as of March 31, 2008
Comments from Mr. Clive Ng, Founder and Executive Chairman
"I am pleased to report that under China Cablecom's ownership and
management for the past 6 months that Binzhou Broadcasting's
operations have stabilized and we believe it is in a position to
realize future growth," says Clive Ng, Founder and Executive
Chairman of China Cablecom. "It has been an extremely busy time for
China Cablecom as we have made tremendous strides in executing our
plan since the consummation of our merger with Jaguar Acquisition
Corporation, just 90 days ago. Given all of this activity, I am
proud of the fact that we added 15,439 paying subscribers at Binzhou
Broadcasting during Q1 2008. I am also pleased that Binzhou
Broadcasting added 8,778 homes passed to its network, bringing the
total increase of homes passed under China Cablecom's management to
68,778 in only 6 months.
"In the past 90 days, we successfully completed three significant
events for China Cablecom: (1) our merger with Jaguar Acquisition
Corporation was consummated on April 9, 2008, (2) we completed a
$43.175 million financing in May 2008, and (3) on June 18, 2008, we
closed phase one of the acquisition of Hubei Chutian Video &
Information Network ("Hubei Broadcasting"), representing 17 cities
in Hubei province, which added 800,000 paying subscribers to China
Cablecom for a total base of approximately 1.2 million paying
subscribers. At approximately 1.2 million paying subscribers, we
believe that China Cablecom is one of the largest cable operators in
the world by number of paying subscribers.
"Our entry into the Hubei Province now positions us as a market
leader in China's cable TV industry which we believe will begin
impacting our top and bottom line growth beginning in the third
quarter. We have successfully expanded our operations and look
forward to creating sustainable long-term growth for our
shareholders."
First Quarter of 2008 Results
Net revenues for the first quarter of 2008 were $2.00 million
compared to $1.99 million for the fourth quarter last year.
Gross profit for the first quarter of 2008 was $0.92, compared to
$0.98 million for the fourth quarter last year, yielding gross
margins of 46% and 49%, respectively. Operating expenses for the
first quarter decreased slightly to $1.63 million compared to $1.66
million for the fourth quarter last year.
Net comprehensive loss for the first quarter of 2008 was $1.58
million, or $1.04 per basic and fully diluted share, compared to
$1.80 million or $1.13 per basic and fully diluted share, in the
fourth quarter of 2007. The net loss for the first quarter 2008 is
primarily attributable to (1) the non-cash amortization of
intangible assets which were acquired in connection with China
Cablecom's acquisition of Binzhou Broadcasting; 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.
For the first quarter of 2008, the company used weighted average
shares outstanding of 1.9 million.
As of March 31, 2008, the Company had $14.06 million in cash and
cash equivalents compared to $12.64 million on December 31, 2007.
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
phase one of the acquisition of Hubei Broadcasting. 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 Broadcasting and Hubei Broadcasting; 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.
Recent Company Highlights
-- In May 2008, China Cablecom completed a convertible debt
financing with current and new investors resulting in net proceeds
of approximately $25.8 million. -- In June 2008, China Cablecom
completed the first phase to acquire a 60 percent economic interest
in Hubei Broadcasting. Completion of Phase one adds over 800,000
paying subscribers and brings China Cablecom's total paying
subscribers to over 1.2 million.
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
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 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 may contain
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Any forward-looking statements
contained in this press release 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 speak
only as of the date stated herein and are subject to numerous 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.
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