Claxson Interactive (NASDAQ:XSON)
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Claxson Reports 2004 First Quarter Financial Results
BUENOS AIRES, Argentina, May 19 /PRNewswire-FirstCall/ -- Claxson Interactive
Group Inc. (BULLETIN BOARD: XSON) ("Claxson" or the "Company") today announced
financial results for the three-month period ended March 31, 2004.
Financial Highlights
Net revenues for the first quarter of 2004 were $20.3 million, a 10% increase
from net revenues of $18.5 million for the first quarter of 2003, reflecting
the improved performance of the Broadcasting Division and of the Argentine pay
TV advertising market. Operating expenses for the three months ended March 31,
2004 were $20.6 million, an 11% increase from the $18.6 million in the first
quarter of 2003. Operating results for the three- month period ended March 31,
2004 represented a loss of $0.3 million, compared to a loss of $0.2 million for
the three-month period ended March 31, 2003. Foreign exchange gain for the
three-month period ended March 31, 2004 was $0.8 million compared to a $7.3
million gain in the same period of 2003. Net income for the three months ended
March 31, 2004 was $0.2 million ($0.01 per common share), compared to $5.7
million ($0.31 per common share) for the same period in 2003.
During the first quarter of 2004, the average exchange rate of the Argentine
and Chilean currencies compared to the U.S. dollar appreciated 7% and 20%,
respectively, versus the same period in 2003.
CLAXSON
CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION - BY SEGMENT
(In Thousands of U.S. dollars)
Operating
expenses Operating
Net (before depr. Depr. & Total Income
Revenues and amort.) Amort. expenses (loss)
For the Three Months Ended
March 31, 2004:
Pay TV $11,345 $9,903 $841 $10,744 $601
Broadcast 8,945 7,550 716 8,266 679
Broadband & Internet 26 261 -- 261 (235)
Corporate -- 1,326 -- 1,326 (1,326)
Total $20,316 $19,040 $1,557 $20,597 $(281)
For the Three Months Ended
March 31, 2003:
Pay TV $12,056 $9,515 $754 $10,269 $1,787
Broadcast 6,389 5,623 836 6,459 (70)
Broadband & Internet 28 488 -- 488 (460)
Corporate -- 1,419 -- 1,419 (1,419)
Total $18,473 $17,045 $1,590 $18,635 $(162)
"As planned, during the first quarter, we focused on reinvesting in the
development and marketing of our properties to grow revenue and improve our
competitive position for 2004 across the region," said Roberto Vivo, Chairman
and CEO. "We are pleased with the performance of all our business units, in
particular Broadcast, where we experienced significant ad revenue growth as a
result of higher ratings. In addition, our Pay TV division developed new
programming that, together with a larger marketing investment, helped solidify
our position in key strategic markets, especially in the adult genre."
PAY TV
Net revenues for the first quarter of 2004 were $11.3 million, a 6% decrease
from net revenues of $12.1 million for the first quarter of 2003. The decrease
in net revenues is principally attributable to a $0.7 million decrease in
production and other services as a result of the cancellation of the playout
and other services provided to Locomotion, as well as an overall slowdown in
the language conversion business of The Kitchen, Inc.
Operating expenses (excluding depreciation and amortization) for the first
quarter of 2004 were $9.9 million compared to $9.5 million for the same period
in 2003. The increase is principally attributed to marketing expenses related
to the adult and entertainment brands.
Operating income for the first quarter of 2004 was $0.6 million compared to
$1.8 million for the same period in 2003.
On April 28, 2004 Claxson announced the launch of Playboy TV on Digital Plus,
the new digital DTH platform resulting from the merger of Canal Satelite
Digital and Via Digital, which is controlled by Sogecable, a leading pay TV
group in Spain. Playboy TV became part of Digital Plus' premium offering
available to 1.8 million subscribers, who can enjoy a 24/7 customized version
of the channel tailored to the needs and tastes of the Spanish audiences.
BROADCAST
Net revenues for the first quarter of 2004 were $8.9 million, a 39% increase
from net revenues of $6.4 million for the first quarter of 2003. The increase
is partially attributable to improved ratings of Chilevision that enabled the
channel to increase its prices, as well as a 20% appreciation in the Chilean
peso as compared to 2003.
Operating expenses (excluding depreciation and amortization) for the first
quarter of 2004 were $7.6 million compared to $5.6 million for the same period
in 2003. The increase is due to the appreciation of the Chilean peso, as well
as the increase in production costs as a result of the higher number of
original production hours incurred by Chilevision to achieve its ratings
growth.
Operating income for the first quarter of 2004 was $0.7 million compared to an
operating loss of $0.1 million for the same period in 2003.
BROADBAND & INTERNET
Net revenues for the first quarter of 2004 were $0.03 million, unchanged from
the first quarter of 2003.
Operating expenses (excluding depreciation and amortization) for the first
quarter of 2004 were $0.3 million compared to $0.5 million for the same period
in 2003. The decrease is due to the various cost reductions achieved during
2003.
Operating loss for the first quarter of 2004 was $0.2 million down from a $0.5
million loss for the same period in 2003.
As a result of the efforts to replicate the success of the digital platform in
Argentina, the Broadband & Internet Division signed an agreement with Marcos
Galassi, a well known Internet entrepreneur in Brazil, to direct the
distribution of its digital platform in that market.
The Broadband & Internet Division also announced the renewal of its agreement
with Fibertel, the largest broadband provider in Argentina, for another two
years. Accordingly, Fibertel started deploying version 4.0 of the ESDC Digital
Platform. With this agreement, Claxson is positioned in the pay per view
business to market its branded content in broadband networks, including adult
content, documentaries and entertainment.
Statement of Cash Flows
As of March 31, 2004, Claxson had a balance of cash and cash equivalents of
$5.2 million and $83.9 million in debt, which includes $18.5 million in future
interest payments on the 8.75% Senior Notes due in 2010. During the first
quarter of 2004, Claxson operating activities generated cash flows of $2.8
million compared to $4.7 million for the same period of 2003. The difference is
primarily due to the collection in first quarter of 2003 of certain 2002
receivables. Cash generated from operating activities was primarily used for
the payment of debt obligations of $3.7 million, the payment of fees related to
the Claxson formation transaction, and for capital expenditures. During the
first quarter of 2004, Claxson had a net use of cash of $2.5 million.
About Claxson
Claxson (XSON.OB) is a multimedia company providing branded entertainment
content targeted to Spanish and Portuguese speakers around the world. Claxson
has a portfolio of popular entertainment brands that are distributed over
multiple platforms through its assets in pay television, broadcast television,
radio and the Internet. Headquartered in Buenos Aires, Argentina, and Miami,
Florida, Claxson has a presence in all key Ibero-American countries, including
without limitation, Argentina, Mexico, Chile, Brazil, Spain, Portugal and the
United States. Claxson's principal shareholders are the Cisneros Group of
Companies and funds affiliated with Hicks, Muse, Tate & Furst Inc.
This press release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These statements are based on the current expectations or beliefs
of Claxson's management and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. For a detailed discussion of these
factors and other cautionary statements, please refer to Claxson's annual
report on Form 20F filed with the U.S. Securities and Exchange Commission on
July 15, 2003.
-- Financial Tables Follow --
CLAXSON
BALANCE SHEETS
(In Thousands of U.S. dollars)
As of As of
March 31, December 31,
2004 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $5,163 $7,682
Restricted investments 183 213
Accounts receivable, net 22,998 25,249
Other current assets 7,826 7,409
Total current assets 36,170 40,553
RESTRICTED INVESTMENTS 750 750
PROPERTY AND EQUIPMENT, net 18,295 19,107
PROGRAMMING RIGHTS, net 5,109 4,804
INVESTMENTS IN UNCONSOLIDATED
SUBSIDIARIES 1,249 1,061
INVESTMENTS IN EQUITY SECURITIES 67 54
GOODWILL 52,664 53,627
BROADCAST LICENSES 20,124 21,160
OTHER ASSETS 4,063 4,223
TOTAL ASSETS $138,491 $145,339
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, accrued and other
liabilities $31,111 $30,928
Current portion of programming
rights obligations 9,843 10,082
8.75 % Senior Notes Due 2010,
including accrued interest 3,618 3,616
11 % Senior Notes Due 2005,
including accrued interest 2,993 2,928
6.25 % Senior Notes Due 2013,
including accrued interest 34 80
Current portion of long-term debt 7,720 8,033
Total current liabilities 55,319 55,667
LONG-TERM LIABILITIES:
Long-term debt, net of current
portion 10,429 12,707
8.75 % Senior Notes Due 2010,
including accrued interest 56,188 57,999
6.25 % Senior Notes Due 2013,
including accrued interest 2,667 2,666
5 % Senior Notes Due 2008,
including accrued interest 246 244
Other long-term liabilities 4,509 4,935
Total long-term liabilities 74,039 78,551
MINORITY INTEREST 814 1,128
SHAREHOLDERS' EQUITY 8,319 9,993
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $138,491 $145,339
CLAXSON
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of U.S. dollars, except per share data)
Three Months Ended
March 31,
2004 2003
NET REVENUES:
Subscriber-based fees $9,511 $9,793
Advertising 9,916 7,026
Production services 611 912
Other 278 742
Total net revenues 20,316 18,473
OPERATING EXPENSES:
Product, content and technology 10,154 8,811
Marketing and sales 4,377 3,380
Corporate and administration 4,509 4,854
Depreciation and amortization 1,557 1,590
Total operating expenses 20,597 18,635
OPERATING LOSS (281) (162)
INTEREST EXPENSE (458) (658)
OTHER INCOME (EXPENSE), NET 192 (59)
FOREIGN CURRENCY EXCHANGE GAIN 764 7,308
NET GAIN FROM UNCONSOLIDATED
AFFILIATES 197 22
PROVISION FOR INCOME TAXES (260) (761)
MINORITY INTEREST 27 41
NET INCOME $181 $5,731
NET INCOME PER COMMON SHARE
(Basic and diluted) $0.01 $0.31
NUMBER OF SHARES USED IN PER SHARE
CALCULATIONS (Basic) 19,446 18,678
NUMBER OF SHARES USED IN PER SHARE
CALCULATIONS (Diluted) 19,940 18,678
CLAXSON
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of U.S. dollars)
Three Months Ended
March 31,
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $181 $5,731
Adjustments to reconcile net loss to
net cash (used in) provided by
operating activities:
Amortization of programming rights 1,226 1,078
Share-based compensation 14 13
Depreciation and amortization 1,557 1,590
Interest accrued on notes receivable
from shareholders 23 42
Exchange rate gain (764) (7,308)
Gain on recovery of negative goodwill (168) --
Gain from unconsolidated subsidiaries (197) (22)
Minority interest (27) (41)
Changes in operating assets and
liabilities 921 3,659
Net cash provided by operating
activities 2,766 4,742
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (584) (608)
Payments for acquisition of minority
interest -- (1,260)
Transaction costs paid (723) (924)
Dividends distributions to minority
owners of subsidiaries (285) --
Investment in unconsolidated
subsidiaries -- (50)
Sale of investment in unconsolidated
subsidiary -- 300
Net cash used in investing activities (1,592) (2,542)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of short/long-term debt (3,699) (2,272)
Proceeds from exercised stock
options 48 --
Net cash used in financing activities (3,651) (2,272)
EFFECT OF FOREIGN CURRENCY
TRANSLATION ON CASH AND CASH
EQUIVALENTS (42) 139
NET DECREASE IN CASH AND CASH
EQUIVALENTS (2,519) 67
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 7,682 8,072
CASH AND CASH EQUIVALENTS, END OF
PERIOD $5,163 $8,139
DATASOURCE: Claxson Interactive Group, Inc.
CONTACT: Press, Alfredo Richard, SVP, Communications, +1-305-894-3588,
or Investors, Jose Antonio Ituarte, Chief Financial Officer,
+011-5411-4339-3700, both of Claxson
Web site: http://www.claxson.com/