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Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO RULE 13a - 16 OR 15(d) - 16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
COMMISSION FILE NUMBER X-XXXXX
KABELMEDIA HOLDING GMBH
(Exact name of registrant as specified in its charter)
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FEDERAL REPUBLIC OF GERMANY NOT APPLICABLE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
OBERER STEINWEG 10, 08523 PLAUEN, GERMANY
(Address of principal executive offices)
Registrant's telephone number, including area code: 011-49-3741-26060
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X
Yes ________ No _______
Included in this filing are 14 pages, sequentially numbered in the bottom center
of each page.
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KABELMEDIA HOLDING GMBH
FORM 10-Q
INDEX
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PAGE
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Part I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed consolidated statements of operations -- Three months ended June
30, 1996 and 1995; Six months ended June 30, 1996 and 1995................
Condensed consolidated balance sheets -- June 30, 1996 and December 31,
1995......................................................................
Condensed consolidated statements of cash flows -- Six months ended June
30, 1996 and 1995.........................................................
Notes to condensed consolidated financial statements......................
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................
Part II. Other Information.........................................................
Signatures..........................................................................
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KABELMEDIA HOLDING GMBH AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
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FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED JUNE
JUNE 30, 30,
----------------------------- -----------------------------
1995 1996 1996 1995 1996 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
DM DM U.S.$ DM DM U.S.$
Revenues........................... 6,104 15,735 10,345 11,708 31,062 20,422
Operating costs and expenses
Operations....................... 885 2,883 1,895 1,740 5,802 3,815
Selling, general and
administrative................ 3,284 4,656 3,061 6,311 9,026 5,934
Depreciation and amortization.... 4,364 11,660 7,666 8,486 22,391 14,721
------- ------- ------- ------- ------- -------
Total.............................. 8,533 19,199 12,622 16,537 37,219 24,470
------- ------- ------- ------- ------- -------
Operating loss..................... (2,429) (3,464) (2,277) (4,829) (6,157) (4,048)
Interest expense:
Bank debt........................ 2,076 5,489 3,609 3,978 9,595 6,308
Subordinated Shareholder Loans... 2,755 4,473 2,941 5,461 8,968 5,896
Minority interest in net (income)
loss of subsidiaries............. 24 (18) (12) 45 9 6
------- ------- ------- ------- ------- -------
Loss before income taxes........... (7,236) (13,444) (8,839) (14,223) (24,711) (16,246)
Income tax expense................. -- 725 477 -- 126 83
------- ------- ------- ------- ------- -------
Net loss........................... (7,236) (14,169) (9,316) (14,223) (24,837) (16,329)
======= ======= ======= ======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements
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KABELMEDIA HOLDING GMBH AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
JUNE 30,
DECEMBER 31, ---------------------------
1995 1996 1996
------------ ----------- -----------
<S> <C> <C> <C>
DM DM U.S.$
(UNAUDITED) (UNAUDITED)
ASSETS
Cash.................................................. 7,866 10,172 6,688
Accounts receivable -- net............................ 2,291 2,855 1,878
Inventory............................................. 1,185 1,497 984
Property, plant and equipment -- net.................. 235,327 232,797 153,055
Goodwill -- net....................................... 153,155 158,017 103,890
Other assets.......................................... 21,041 22,673 14,907
------- ------- -------
TOTAL ASSETS.......................................... 420,865 428,011 281,402
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Accounts payable...................................... 13,930 8,889 5,844
Accrued expenses and other liabilities................ 21,540 23,174 15,237
Deferred revenue...................................... 9,830 9,475 6,229
Bank debt............................................. 228,812 246,644 162,160
Subordinated Shareholder Loans........................ 172,638 -- --
------- ------- -------
TOTAL LIABILITIES..................................... 446,750 288,182 189,470
Minority interest in subsidiaries..................... 1,727 473 311
SHAREHOLDERS' EQUITY (DEFICIENCY)
Registered capital.................................... 100 100 66
Capital contributions................................. 18,187 209,992 138,061
Accumulated deficit................................... (45,899) (70,736) (46,506)
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY)............... (27,612) 139,356 91,621
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIENCY)........................................ 420,865 428,011 281,402
======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements
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KABELMEDIA HOLDING GMBH AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
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FOR THE SIX MONTHS ENDED JUNE
30,
-------------------------------
1995 1996 1996
------- ------- -------
<S> <C> <C> <C>
DM DM U.S. $
OPERATING ACTIVITIES
Net cash provided by operating activities................... 2,690 1,174 772
INVESTING ACTIVITIES
Purchases of property, plant and equipment.................. (4,702) (7,235) (4,757)
Acquisition of businesses, less cash acquired............... (33,863) (14,534) (9,556)
Acquisition of other assets................................. (224) (105) (69)
------- ------- -------
Net cash used in investing activities....................... (38,789) (21,874) (14,382)
FINANCING ACTIVITIES
Proceeds from debt.......................................... 27,811 16,974 11,160
Contributions to capital.................................... 3,000 -- --
Payments of acquired debt................................... (15,691) (4,625) (3,041)
Payments of capitalized bank financing costs................ -- (400) (263)
Proceeds from bank overdrafts............................... 678 858 564
Proceeds from Subordinated Shareholder Loans................ 19,658 10,199 6,706
------- ------- -------
Net cash provided by financing activities................... 35,456 23,006 15,126
Net increase (decrease) in cash and cash equivalents........ (643) 2,306 1,516
Cash and cash equivalents at beginning of period............ 2,478 7,866 5,172
------- ------- -------
Cash and cash equivalents at end of period.................. 1,835 10,172 6,688
======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements
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KABELMEDIA HOLDING GMBH AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Kabelmedia Holding GmbH (the "Company") have been prepared in accordance with
United States generally accepted accounting principles ("U.S. GAAP") for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by U.S. GAAP for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three- and six-month periods ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1996. For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended December 31, 1995 included
in the Company's Registration Statement on Form S-1 dated July 23, 1996.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with U.S. GAAP including those principles specific
to the cable television industry. The Company maintains its financial records in
accordance with the German Commercial Code, which represents generally accepted
accounting principles in Germany ("German GAAP"). Generally accepted accounting
principles in Germany vary in certain significant respects from U.S. GAAP.
Accordingly, the Company has recorded certain adjustments in order that these
unaudited condensed financial statements be in accordance with U.S. GAAP for
interim financial information.
Solely for the convenience of the reader, the accompanying unaudited
consolidated financial statements as of and for the three and six months ended
June 30, 1996 have been translated into United States dollars ("U.S. $") at the
rate of DM1.521 per $1.00 the Noon Buying Rate of the Federal Reserve Bank of
New York on June 28, 1996. The translations should not be construed as a
representation that the amounts shown could have been, or could be, converted
into U.S. dollars at that or any other rate.
2. RELATED PARTY TRANSACTION
On June 19, 1996, subordinated loans to the Company by certain of its
shareholders, including accrued interest thereon, in the aggregate amount of DM
191,805,000 (the "Subordinated Shareholder Loans") were contributed to the
capital of Kabelmedia Holding GmbH by such shareholders and the Company's
capital surplus was increased by the equivalent amount.
3. SUBSEQUENT EVENTS
On July 23, 1996, the Company entered into a new revolving credit facility
totalling DM 375,000,000, a working capital facility of DM 20,000,000, and an
overdraft facility of DM 5,000,000 with a number of banks (hereafter the "1996
Facility"). The interest rate under the 1996 Facility is based on London
Interbank Offered Rates plus a margin ranging from 1.25% per annum to 2.00% per
annum, depending on the ratio of senior indebtedness for borrowed money to the
Company's annualized operating cash flow. The proceeds received under the 1996
Facility were used to repay obligations under the Company's existing revolving
credit facilities as of June 30, 1996 (hereafter the "1995 Facilities"). An
extraordinary loss of approximately DM 5,119,000, resulting from the full
amortization of unamortized bank financing fees relating to the 1995 Facilities,
was recorded in July, 1996.
On July 29, 1996 the Company issued $100,179,660 of Senior Discount Notes
at 13.625% per annum and maturing on August 1, 2006. Cash interest will not
accrue on the Senior Discount Notes prior to August 1, 2001. Thereafter, cash
interest on the Senior Discount Notes will be payable at a rate of 13.625% per
annum, semi-annually in arrears on each February 1 and August 1, commencing
February 1, 2002. The Company raised approximately DM 143,700,000 in net
proceeds after the payment of underwriting discounts and commissions from the
sale of the Senior Discount Notes. These funds, together with an initial draw
down of DM 112,000,000 on the 1996 Facility, provided the funds necessary to pay
all fees and expenses related to the issuance of the Senior Discount Notes and
the origination of the 1996 Facility, to repay the 1995 Facilities and
approximately DM 3,500,000 of other bank debt and provided a substantial
increase in working capital. On August 30, 1996 the Company repaid DM 5,000,000
of the initial draw down on the 1996 Bank Facility.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE-MONTH PERIODS ENDED JUNE 30, 1995 AND 1996
REVENUES. Revenues increased 157.8% from DM 6,104,000 in the second quarter
of 1995 to DM 15,735,000 in the second quarter of 1996. The increase was
primarily attributable to a 95.9% increase (from 183,381 to 359,246) in the
average monthly number of customers and a 31.5% increase (from DM 11.10 to DM
14.60) in the average monthly revenue per customer from the second quarter of
1995 to the second quarter of 1996. The increase in the Company's average
monthly number of customers was primarily related to the acquisitions of cable
television companies subsequent to March 31, 1995 which as of the respective
dates of the acquisitions, collectively served approximately 175,800 customers.
In addition the company acquired approximately 10,500 additional customers by
building out its existing cable systems during this same time period.
Approximately 77.1% of the increase in the average monthly revenue per customer
is attributable to higher average monthly revenue per customer in the cable
television companies acquired subsequent to March 31, 1995. The remaining 22.9%
of the increase in average monthly revenue per customer is attributable to rate
increases implemented since March 31, 1995.
OPERATING EXPENSES. Operating expenses increased 225.8% from DM 885,000 in
the second quarter of 1995 to DM 2,883,000 in the second quarter of 1996,
principally as a result of the increased number of personnel related to the
cable television companies acquired subsequent to March 31, 1995, increased
costs associated with the maintenance of a larger customer base, increased costs
associated with updating and maintaining a larger customer base in the billing
subscriber system and increased costs under the Company's signal delivery
contracts with Deutsche Telekom AG, under which programming is procured for a
portion of the Company's cable systems. The increase in costs during the second
quarter ended June 30, 1996 associated with the signal delivery contracts with
Deutsche Telekom primarily relates to a system in Osnabruk, a Level 4 or B-1
Model, in which Deutsche Telekom owns and operates the head-end and the
principal transmission lines. The total increase attributable to this system was
approximately DM 1,100,000 compared to the same period in 1995. The Osnabruck
system was acquired in September 1995 and had average monthly customers of
approximately 25,400 in the second quarter of 1996. Signal delivery fees for
Level 4 or B-1 Model systems represent a higher percentage of revenues than
applies to the Company's remaining systems, which are predominantly Level 2
systems, where the Company owns the entire cable system from the head-end
through the in-house connections, or Level 3 systems, where the Company owns the
principal transmission line from the Deutsche Telekom signal delivery connection
point through the in-house connections, because the signal delivery fees for
such Level 4 or B-1 Model systems include a fee for the rental of Deutsche
Telekom's principal transmission lines to the home.
SELLING GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by 41.8% from DM 3,284,000 in the second quarter of 1995 to
DM 4,656,000 in the second quarter of 1996, principally as a result of increases
in legal and financial consulting costs related to due diligence on
acquisitions, the development of accounting and other in-house functions and the
increased cost of personnel associated with the cable television companies
acquired subsequent to March 31, 1995. As a percent of revenues, selling,
general and administrative expenses declined from 53.8% in the second quarter of
1995 to 29.6% in the second quarter of 1996, reflecting higher revenue per
subscriber and improved efficiencies.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
167.2% from DM 4,364,000 in the second quarter of 1995 to DM 11,660,000 in the
second quarter of 1996, principally as a result of increased depreciation and
amortization associated with the acquisitions of cable television companies and
of increased amortization of costs and expenses associated with the origination
of the 1995 Facilities.
INTEREST EXPENSE. Interest expense increased 106.2% from DM 4,831,000 in
the second quarter of 1995 to DM 9,962,000 in the second quarter of 1996 as a
result of additional indebtedness incurred under the 1995 Facilities, which
increased from DM 106,169,000 at June 30, 1995 to DM 237,500,000 at June 30,
1996,
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and Subordinated Shareholder Loans, which increased from DM 88,743,000 at June
30, 1995 to DM 191,805,000 at June 19, 1996, at which time they were contributed
to the Company's capital surplus. Of the total interest accrued in the second
quarter of 1996, DM 4,473,000 related to non-cash interest included in the
Subordinated Shareholder Loans.
NET LOSS. Net Loss increased 95.8% from DM 7,236,000 in the second quarter
of 1995 to DM 14,169,000 in the second quarter of 1996 as a result of the
factors discussed above.
EBITDA. In addition to other items, some of which are reflected in its
statement of operations data, the Company measures its financial performance by
EBITDA. The Company defines EBITDA as earnings (loss) before extraordinary
items, minority interests, net interest expense, income taxes and depreciation
and amortization. The Company believes that EBITDA is a meaningful measure of
performance because it is commonly used in the cable television industry to
analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. EBITDA is not a U.S. GAAP measure of income
(loss) or cash flow from operations and should not be considered as an
alternative to net income as an indication of the Company's financial
performance or as an alternative to cash flow from operating activities as a
measure of liquidity. EBITDA increased significantly from DM 1,935,000 for the
three months ended June 30, 1995 to DM 8,196,000 for the three months ended June
30, 1996, primarily as a result of revenues increasing at a faster rate than
selling, general and administrative costs and expenses. The Company's EBITDA
margin representing EBITDA as a percentage of revenues, improved from 31.7% in
the second quarter of 1995 to 52.1% in the second quarter in 1996. Average
monthly EBITDA per subscriber increased by 115.9% from DM 3.52 per subscriber in
the second quarter of 1995 to DM 7.60 per subscriber in the second quarter of
1996.
SIX-MONTH PERIODS ENDED JUNE 30, 1995 AND 1996
REVENUES. Revenues increased 165.3% from DM 11,708,000 in the first half of
1995 to DM 31,062,000 in the first half of 1996. The increase was primarily
attributable to a 121.3% increase (from 161,939 to 358,409) in the average
monthly number of customers and a 19.8% increase (from DM 12.05 to DM 14.44) in
the average monthly revenue per customer from the first half of 1995 to the
first half of 1996. The increase in the Company's average monthly number of
customers was primarily related to acquisitions of cable television companies
subsequent to December 31, 1994 which, as of the respective dates of the
acquisitions, collectively served approximately 283,500 customers. In addition,
the Company acquired approximately 18,600 additional customers by building out
its existing cable systems. Approximately 66.6% of the increase in the average
monthly revenue per customer is attributable to higher average monthly revenue
per customer in the cable television companies acquired subsequent to December
31, 1995. The remaining 33.4% of the increase in average monthly revenue per
customer is attributable to rate increases implemented since December 31, 1994.
OPERATING EXPENSES. Operating expenses increased 233.4% from DM 1,740,000
in the first half of 1995 to DM 5,802,000 in the first half of 1996, principally
as a result of the increased number of personnel related to the cable television
companies acquired subsequent to December 31, 1994, increased costs associated
with the maintenance of a larger customer base, increased costs associated with
updating and maintaining a larger customer base in the subscriber billing system
and increased costs under the Company's signal delivery contracts with Deutsche
Telekom. The increase in costs during the quarter ended June 30, 1996 associated
with the signal delivery contracts with Deutsche Telekom primarily relates to a
system in Osnabruck, a Level 4 or B-1 Model. The total increase in Deutsche
Telekom signal delivery fees attributable to the Osnabruck system was
approximately DM 1,926,000 compared to the same period in 1995. The Osnabruck
system was acquired in September of 1995 and had average subscribers of
approximately 24,500 in the first half of 1996. Signal delivery fees for Level 4
or B-1 systems, in which Deutsche Telekom owns and operates the head-end and the
principal transmission lines, represent a higher percentage of revenues than
applies to the Company's remaining systems, which are predominantly Level 2
systems, where the Company owns the entire cable system from the head-end
through the in-house connections, or Level 3 systems, where the Company owns the
principal transmission lines from the Deutsche Telekom signal delivery
connection
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point through the in-house connections, because the signal delivery fees for
such Level 4 or B-1 Model systems include a fee for the rental of Deutsche
Telekom's principal transmission lines to the home.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by 43.0% from DM 6,311,000 in the first half of 1995 to DM
9,026,000 in the first half of 1996, principally as a result of increases in
legal and financial consulting costs related to due diligence on acquisitions,
the development of accounting and other in-house functions and the increased
cost of personnel associated with the cable television companies acquired
subsequent to December 31, 1994. As a percent of revenue, selling, general and
administrative expenses declined from 53.9% in the first half of 1995 to 29.1%
in the first half of 1996, reflecting higher revenue per subscriber and improved
efficiencies.
DEPRECIATION AND AMORTIZATION. Depreciation and Amortization increased by
163.9% from DM 8,486,000 in the first half of 1995 to DM 22,391,000 in the first
half in 1996, principally as a result of increased depreciation and amortization
associated with the cable television companies acquired subsequent to December
31, 1994 and increased amortization of costs and expenses associated with the
1995 Facilities.
INTEREST EXPENSE. Interest Expense increased 96.7% from DM 9,439,000 in the
first half of 1995 to DM 18,563,000 in the first half of 1996 as a result of
additional indebtedness incurred under the 1995 Facilities, which increased from
DM 106,168,712 at June 30, 1995 to DM 237,500,000 at June 30, 1996 and
Subordinated Shareholder Loans, including accrued interest thereon, which
increased from DM 88,743,000 at June 30, 1995 to DM 191,805,000 at June 19,
1996, at which time they were contributed to the Company's capital surplus. Of
the total interest accrued in the first half of 1996, DM 8,968,000 related to
non-cash interest on the Subordinated Shareholder Loans.
NET LOSS. Net Loss increased 74.6% from DM 14,223,000 in the first half of
1995 to DM 24,837,000 in the first half of 1996 as a result of the factors
discussed above.
EBITDA. In addition to other items, some of which are reflected in its
statement of operations data, the Company measures its financial performance by
EBITDA. The Company defines EBITDA as earnings (loss) before extraordinary
items, minority interests, net interest expense, income taxes and depreciation
and amortization. The Company believes that EBITDA is a meaningful measure of
performance because it is commonly used in the cable television industry to
analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. EBITDA is not a U.S. GAAP measure of income
(loss) or cash flow from operations and should not be considered as an
alternative to net income as an indication of the Company's financial
performance or as an alternative to cash flow from operating activities as a
measure of liquidity. EBITDA increased significantly from DM 3,657,000 for the
six months ended June 30, 1995 to 16,234,000 for the six months ended June 30,
1996 primarily as a result of revenues increasing at a faster rate than selling,
general and administrative costs and expenses. The Company's EBITDA margin
improved from 31.2% in the first half of 1995 to 52.3% in the first half of
1996. EBITDA per average monthly subscriber increased by 100.8% from DM 3.76 per
subscriber in the first half of 1995 to DM 7.55 per subscriber in the second
quarter of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically relied on three sources for necessary funding:
(i) borrowings under its bank facilities
(ii) loans and contributions from its equity investors and
(iii) cash flow from operations.
At June 30, 1996, the Company's aggregate consolidated indebtedness was
approximately DM 246,644,000 comprised of DM 237,500,000 of debt outstanding
under its 1995 Facilities, and DM 9,144,000 of other bank debt.
For the six months ended June 30, 1996 the company used cash in investing
activities of DM 21,874,000. Such cash uses were primarily related to the
acquisition of a cable television company and capital expenditures
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and to a lesser extent the purchase of additional shares in a partially owned
subsidiary. Net cash provided by financing activities amounted to 23,006,000 for
the six month period ended June 30, 1996. Such cash was primarily provided by
increased borrowings under the 1995 Facilities and an advance by an equity
investor on the Subordinated Shareholder Loans on May 30, 1996. Repayments of DM
4,625,000 were made to retire the debt of cable television companies that were
acquired.
Capital expenditures of DM 7,235,000 for the six month period ended June
30, 1996, were related to the continued construction, expansion and upgrading of
existing systems. Over the six month period ended June 30, 1996 the Company
acquired approximately 1,200 customers by building out its existing systems and
increasing penetration of such systems. The Company has only minimal commitments
to make capital expenditures under the terms of concession or franchise
agreements or otherwise, but anticipates that it will continue to increase its
capital expenditures in the near future to further expand and upgrade existing
cable systems once they have been acquired. To the extent cash flow is not
sufficient to fund its capital expenditures, the Company expects to borrow the
necessary funds under the 1996 Facility.
Substantial amounts of depreciation and amortization expense and noncash
interest on Subordinated Shareholder Loans continued to contribute to the net
losses experienced by the Company. These expenses, however, do not result in an
outflow of cash.
The Company believes that EBITDA provides a more meaningful measure of
fixed cost coverage than does a deficiency of earnings to fixed charges. EBITDA
amounts in each period are not solely available to satisfy cash interest expense
amounts payable by the Company and may also be required for other corporate
purposes, including increases in working capital, principal payments on debt and
capital expenditures. EBITDA for the three and six month periods ended June 30,
1996 was DM 8,196,000 and DM 16,234,000, respectively. Interest on bank debt for
the same three and six month periods was DM 5,489,000 and DM 9,595,000,
respectively.
On July 29, 1996 the company raised approximately DM 143,700,000 in net
proceeds after the payment of underwriting commissions and discounts from the
sale of Senior Discount Notes. These funds coupled with an initial draw down of
DM 112,000,000 on the 1996 Facility provided the funds necessary to pay all fees
and expenses related to the issuance of the Senior Discount Notes and the
origination of the 1996 Facility, to repay the 1995 Facilities and approximately
DM 3,500,000 of other Bank Debt and provided a substantial increase in working
capital. On August 30, 1996 the Company repaid DM 5,000,000 of the initial draw
down on the 1996 Bank Facility.
TREASURY POLICIES
The Company's results of operations have not been significantly affected by
exchange rates because substantially all of its revenues, operating expenses and
interest expense have been in Deutsche Mark. On July 23, 1996 the Company raised
$100,179,600 through the sale of Senior Discount Notes, which are denominated in
U.S. dollars, and therefore the Company will encounter currency exchange rate
risk in the future. The Company is considering entering into transactions to
hedge the risk of exchange rate fluctuations. Derivative products will not be
used to enhance returns.
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PART II. OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS AND FORM 8-K
(a) Exhibits
None.
(b) Reports and Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KABELMEDIA HOLDING GMBH
/s/ BEN BARTEL
Ben Bartel
Chief Executive Officer and
Managing Director
/s/ PAUL THOMASON
Paul Thomason
Chief Financial Officer and
Controller
Dated: September 5, 1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q dated June 30, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> DEUTSCHE MARK
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1.521
<CASH> 10,172
<SECURITIES> 0
<RECEIVABLES> 2,855
<ALLOWANCES> 0
<INVENTORY> 1,497
<CURRENT-ASSETS> 0
<PP&E> 232,797
<DEPRECIATION> 0
<TOTAL-ASSETS> 428,011
<CURRENT-LIABILITIES> 41,538
<BONDS> 246,644
0
0
<COMMON> 100
<OTHER-SE> 139,256
<TOTAL-LIABILITY-AND-EQUITY> 428,011
<SALES> 0
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<INCOME-PRETAX> (24,711)
<INCOME-TAX> 126
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,837)
<EPS-PRIMARY> 0
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</TABLE>
