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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, 1997
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)
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KOELNER STRASSE 6, 65760 ESCHBORN, GERMANY
(Address of principal executive offices)
Registrant's telephone number, including area code: 011-49-6196-926360
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.
Yes [ ] No [X]
Included in this filing are xx 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, 1997
and 1996; Six months ended June 30, 1997 and 1996................................. 3
Condensed consolidated balance sheets -- June 30, 1997 and December 31, 1996......... 4
Condensed consolidated statements of cash flows -- Six months ended June 30, 1997 and
1996.............................................................................. 5
Notes to condensed consolidated financial statements................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations........................................................................... 8
PART II. OTHER INFORMATION............................................................ 12
Signatures............................................................................. 13
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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 30, 1997 JUNE 30, 1997
--------------------------- ---------------------------
1996 1997 1997 1996 1997 1997
------- ------- ------- ------- ------- -------
DM DM U.S.$ DM DM U.S.$
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Revenues................................. 15,735 18,026 10,337 31,062 35,458 20,334
Operating costs and expenses:
Operations............................. 2,544 3,009 1,726 5,463 6,015 3,449
Selling, general and administrative.... 2,598 2,932 1,681 5,608 6,259 3,589
Corporate overhead..................... 2,397 2,287 1,312 3,757 4,015 2,302
Depreciation and amortization.......... 11,660 12,566 7,206 22,391 24,454 14,023
------- ------- ------- ------- ------- -------
Total.................................... 19,199 20,794 11,925 37,219 40,743 23,363
------- ------- ------- ------- ------- -------
Operating loss........................... (3,464) (2,768) (1,588) (6,157) (5,285) (3,029)
Interest expense:
Bank debt and other.................... (5,489) (2,762) (1,584) (9,595) (5,609) (3,216)
Senior Discount Notes.................. -- (6,246) (3,582) -- (12,184) (6,987)
Subordinated Shareholder Loans......... (4,473) -- -- (8,968) -- --
Unrealized foreign currency gain......... -- 792 454 -- 5 2
Other.................................... (18) 14 8 9 16 9
------- ------- ------- ------- ------- -------
Loss before income taxes................. (13,444) (10,970) (6,292) (24,711) (23,057) (13,221)
Income tax expense....................... (725) (210) (120) (126) (189) (108)
------- ------- ------- ------- ------- -------
Net loss................................. (14,169) (11,180) (6,412) (24,837) (23,246) (13,329)
======= ======= ======= ======= ======= =======
</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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DECEMBER 31,
1996 JUNE 30, 1997
------------ --------------------------
DM DM U.S.$
(UNAUDITED) (UNAUDITED)
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Cash....................................................... 951 266 153
Accounts receivable -- net................................. 2,815 3,940 2,260
Inventory.................................................. 1,811 2,433 1,395
Property, plant and equipment -- net....................... 230,341 228,632 131,111
Goodwill -- net............................................ 147,747 155,872 89,387
Foreign currency forward contracts......................... 9,062 32,069 18,390
Other assets............................................... 29,305 32,786 18,801
-------- -------- --------
TOTAL ASSETS............................................... 422,032 455,998 261,497
======== ======== ========
Accounts payable........................................... 6,290 4,744 2,720
Accrued expenses and other liabilities..................... 10,140 10,021 5,747
Deferred gain on foreign currency forward contracts........ 7,606 8,452 4,847
Deferred revenue........................................... 8,703 8,149 4,673
Deferred purchase obligations.............................. 7,875 11,047 6,335
Bank debt.................................................. 111,175 132,249 75,840
Senior Discount Notes...................................... 163,131 197,470 113,241
-------- -------- --------
TOTAL LIABILITIES.......................................... 314,920 372,132 213,403
SHAREHOLDER'S EQUITY
Registered capital......................................... 10,000 10,000 5,735
Capital contributions...................................... 200,192 200,192 114,802
Accumulated deficit........................................ (103,080) (126,326) (72,443)
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY................................. 107,112 83,866 48,094
-------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................. 422,032 455,998 261,497
======== ======== ========
</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,
-------------------------------
1996 1997 1997
------- ------- -------
DM DM U.S.$
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OPERATING ACTIVITIES
Net cash provided by operating activities................... 1,174 3,707 2,126
INVESTING ACTIVITIES
Purchases of property, and plant equipment.................. (7,235) (5,030) (2,885)
Acquisition of businesses, less cash acquired............... (14,534) (23,168) (13,284)
Acquisition of other assets................................. (105) -- --
------- ------- -------
Net cash used in investing activities....................... (21,874) (28,194) (16,169)
FINANCING ACTIVITIES
Proceeds from bank debt..................................... 16,974 22,800 13,075
Proceeds from deferred purchase obligations................. -- 2,728 1,564
Payments of acquired debt................................... (4,625) -- --
Payments of capitalized bank refinancing costs.............. (400) -- --
Repayment of bank debt...................................... -- (2,300) (1,319)
Proceeds from bank overdrafts............................... 858 574 329
Proceeds from Subordinated Shareholder Loans................ 10,199 -- --
------- ------- -------
Net cash provided by financing activities................... 23,006 23,802 13,649
Net increase (decrease) in cash and cash equivalents........ 2,306 (685) (394)
Cash and cash equivalents at beginning of period............ 7,866 951 547
------- ------- -------
Cash and cash equivalents at end of period.................. 10,172 266 153
======= ======= =======
</TABLE>
See accompanying notes to the 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
U.S. 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. generally accepted accounting principles 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, 1997 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
December 31, 1996 included in the Company's Registration Statement on Form 10-K.
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, 1997 have been translated into United States dollars ("U.S. $) at the
rate of DM 1.7438 per $1.00, the Noon Buying Rate of the Federal Reserve Bank of
New York on June 30, 1997. 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. BUSINESS ACQUISITIONS
On January 31, 1997, Kabelmedia acquired the shares of Antennen-Lindemann
for a total consideration of DM 20,208,000 plus closing costs and expenses of DM
550,000. The purchase price consisted of cash payments of DM 16,938,000, the
assumption of liabilities of DM 770,000 and a deferred purchase obligation of DM
2,500,000. DM 500,000 of the deferred purchase obligation was paid on May 28,
1997. The remainder of the deferred purchase obligation plus accrued interest of
4% per annum is due on the third anniversary date of the acquisition. The
acquisition resulted in goodwill of DM 18,715,000.
On May 30, 1997 KabelMedia acquired the assets of Telekommunikation Doebis
Antennenservice for total consideration of DM 3,643,000 plus closing costs and
expenses of DM 85,000. The purchase price consisted of cash payments of DM
2,914,000 and a deferred purchase obligation of 728,000. The deferred purchase
obligation plus accrued interest of 4% is due and payable on May 30, 1998.
3. FOREIGN EXCHANGE
Through June 30, 1997 the Company entered into foreign currency forward
contracts to hedge against the effect of exchange rate fluctuations on the
Senior Discount Notes. The U.S. dollar denominated Senior Discount Notes are
recorded in Deutsche Marks at the Noon Buying Rate of the Federal Reserve Bank
of New York on June 30, 1997. The foreign currency forward contracts require the
Company to exchange Deutsche Marks for U.S. dollars and generally mature in four
to five years. The premium on the foreign currency forward contracts,
representing the difference between the contracted forward rate and the spot
rate at the date of the contracts, in an initial amount of DM 9,810,000 is being
amortized over the life of the contracts. The asset is adjusted to the
period-end exchange rate which offsets the related unrealized gain or
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loss on the Senior Discount Notes. The Company recorded an unrealized foreign
exchange gain of DM 4,000 as a result of entering into the foreign currency
forward contracts. At June 30, 1997, the Company had foreign currency forward
contracts to acquire $115,000,000 at exchange rates of between DM 1.4385 to DM
1.6055 with settlement dates ranging from October of 2001 to March of 2002.
4. RESERVE FOR CORPORATE RESTRUCTURING
During the three and six months ended June 30, 1997, the Company applied
approximately DM 360,000 and DM 604,000 of costs and expenses against the DM
1,611,000 restructuring accrual which was established in 1996 to allow for the
move of the Company's corporate office from Plauen to Frankfurt, respectively.
The expenses incurred primarily relate to the rehabilitation of lease hold
improvements in Plauen and severance payments.
5. RECLASSIFICATION
The Company has made the decision to report its corporate overhead as a
separate line item in its Condensed Consolidated Statements of Operations.
Corporate overhead is primarily comprised of the salaries of senior management
and the administrative, accounting and MIS staffs, the lease of office space for
corporate activities and fees and expenses paid to the Company's legal and
accounting consultants.
The three and six month periods ended June 30, 1996 have been restated to
reflect this change in accounting presentation by allocating DM 2,397,000 and DM
3,757,000 from operating and selling, general and administrative expenses to
corporate overhead, respectively.
6. SUBSEQUENT EVENT
On July 4, 1997 the Company sold its 50% interest in BKG
Breitbandkabelgesellschaft mbH, Neuruppin for total cash consideration of DM
1,850,000.
On July 30, 1997 the Company entered into a foreign exchange forward
contract to acquire $15,000,000 at an exchange rate of DM 1.7552. Total foreign
exchange forward contracts entered into by the Company at July 30, 1997 was
$130,000,000 at exchange rates ranging from DM 1.4385 to DM 1.7552 with
settlement dates between October of 2001 to June of 2002.
In July 1997 the Company cancelled DM 75,000,000 of its unused 1996 Bank
Facility. An extraordinary loss of approximately DM 1,000,000 resulting from the
full amortization of unamortized bank financing fees relating to the 1996 Bank
Facility was recorded in July, 1997.
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE-MONTH PERIODS ENDED JUNE 30, 1996 AND 1997
REVENUES. Revenues increased 14.6% from DM 15,735,000 in the second
quarter of 1996 to DM 18,026,000 in the second quarter of 1997. The increase was
primarily attributable to a 8.2% increase (from 359,246 to 388,798) in the
average monthly number of customers and a 5.8% increase (from DM 14.60 to DM
15.45) in the average monthly revenue per customer from the second quarter of
1996 to the second quarter of 1997. The increase in the Company's average
monthly number of customers was primarily related to the acquisitions of cable
television companies in 1997, which as of the respective dates of the
acquisitions, collectively served approximately 25,400 customers (approximately
19,300 acquired on January 31, 1997 and approximately 6,100 acquired on May 31,
1997). In addition the Company acquired approximately 10,000 (4,500 built out in
1996 and 5,500 built out in thus far in 1997) additional customers by building
out its existing cable systems during this same time period. The increase in the
average monthly revenue per customer is attributable to rate increases
implemented since March 31, 1996 as the 25,400 customers acquired in 1997 had
average monthly revenue per customer of approximately DM 12.13.
OPERATING EXPENSES. Operating expenses increased 18.3% from DM 2,544,000
in the second quarter of 1996 to DM 3,009,000 in the second quarter of 1997,
principally as a result of 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.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by 15.3% from DM 2,544,000 in the second quarter of 1996 to
DM 2,932,000 in the second quarter of 1997, principally as a result of the
increased costs associated with the cable television companies acquired in 1997,
increased costs associated with system subscriber audits, and increased costs
associated with a more aggressive marketing plan. As a percent of revenue
selling, general and administrative expenses declined from 16.5% in the second
quarter of 1996 to 16.3% in the second quarter of 1997.
CORPORATE OVERHEAD. Corporate overhead decreased by 4.6% from DM 2,397,000
in the second quarter of 1996 to DM 2,287,000 in the second quarter of 1997. The
decrease was primarily attributable to a reduction in legal, accounting and
consulting expenses.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
DM 906,000 from DM 11,660,000 in the second quarter of 1996 to DM 12,566,000 in
the second quarter of 1997, principally as a result of increased assets and
goodwill associated with acquisitions of cable television companies.
INTEREST EXPENSE. Interest expense decreased 9.6% from DM 9,962,000 in the
second quarter of 1996 to DM 9,008,000 in the second quarter of 1997 as the
result of a decrease in the average indebtedness from DM 429,575,000 to DM
320,014,000. The primary reason for the decline in average indebtedness resulted
from the conversion of the Subordinated Shareholder Loans to shareholder capital
on June 19, 1996. Of the total interest accrued in the second quarter of 1997,
DM 6,246,000 related to non-cash interest on the Senior Discount Notes and DM
197,000 related to the amortization of bank financing fees.
UNREALIZED FOREIGN CURRENCY TRANSACTION GAIN. The Company recorded an
unrealized foreign exchange gain of DM 791,000 in the second quarter of 1997 as
a result of entering into the foreign currency forward contracts. At June 30,
1997, the Company had entered into foreign exchange forward
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contracts of $115,000,000 at exchange rates between DM 1.4385 and DM 1.6055 with
settlement dates ranging from October of 2001 to March of 2002.
NET LOSS. Net loss decreased by DM 2,989,000 from DM 14,169,000 in the
second quarter of 1996 to DM 11,180,000 in the second quarter of 1997 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 (loss) 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 from DM 8,196,000 for the three months
June 30, 1996 to DM 9,798,000 for the three months ended June 30, 1997 primarily
as a result of revenues increasing at a faster rate than operating and selling,
general and administrative costs and expenses. The Company's EBITDA margin
improved from 52.1% in the second quarter of 1996 to 54.4% in the second quarter
in 1997. EBITDA per average subscriber increased by 13.3% from DM 7.60 per
subscriber in the second quarter of 1996 to DM 8.61 per subscriber in the second
quarter of 1997.
SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1997
REVENUES. Revenues increased 14.2% from DM 31,062,000 in the first half of
1996 to DM 35,458,000 in the second half of 1997. The increase was primarily
attributable to a 6.1% increase (from 358,409 to 380,300) in the average monthly
number of customers and a 7.6% increase (from DM 14.44 to DM 15.54) in the
average monthly revenue per customer from the first six months of 1996 to the
first six months of 1997. The increase in the Company's average monthly number
of customers was primarily related to the acquisitions of cable television
companies subsequent to December 31, 1995 and, as of the respective dates of the
acquisitions, collectively served approximately 40,100 customers (14,700
acquired on January 27, 1996; 19,300 acquired on January 31, 1997 and 6,100
acquired on May 31, 1997). In addition the Company acquired approximately 10,990
(5,400 built out in 1996 and 5,560 built out in 1997) additional customers by
building out its existing cable systems during this same time period. The
increase in the average monthly revenue per customer is attributable to rate
increases implemented since December 31, 1995 as the 40,100 customers acquired
had average monthly revenue per customer of approximately DM 12.51.
OPERATING EXPENSES. Operating expenses increased 10.1% from DM 5,463,000
in the first half of 1996 to DM 6,015,000 in the first half of 1997, principally
as a result of increased costs associated with the maintenance of a larger
customer base 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.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by 11.6% from DM 5,608,000 in the first six months of 1996 to
DM 6,259,000 in the first six months of 1997, principally as a result of the
increased costs associated with the cable television companies acquired
subsequent to December 31, 1995, increased costs associated with system audits
and increased costs associated with a more aggressive marketing plan. As a
percent of revenue selling, general and administrative expenses declined from
18.1% in the first half of 1996 to 17.7% in the first half of 1997, reflecting
higher revenue per subscriber and increased efficiencies.
CORPORATE OVERHEAD. Corporate overhead increased by 6.9% from DM 3,757,000
in the first half of 1996 to DM 4,015,000 in the first half of 1997. The
increase is attributable to the addition of the management, accounting,
administrative and MIS personnel required to manage a larger customer base. A
portion of the increase was partially offset by reductions in legal, accounting
and consulting costs.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
DM 2,063,000 from DM 22,391,000 in the first half of 1996 to DM 24,454,000 in
the first half of 1997,
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principally as a result of increased assets and goodwill associated with
acquisitions of cable television companies.
INTEREST EXPENSE. Interest expense decreased 4.1% from DM 18,563,000 in
the first half of 1996 to DM 17,793,000 in the first half of 1997 as a result of
a decrease in average indebtedness outstanding from DM 420,200,000 to DM
304,780,000 . The primary reason for the decline in average indebtedness
resulted from the conversion of the Subordinated Shareholder Loans to
shareholder capital on June 19, 1996. Of the total interest accrued in the first
half of 1997, DM 12,184,000 related to non-cash interest on the Senior Discount
Notes and DM 394,000 related to the amortization of bank financing fees.
UNREALIZED FOREIGN CURRENCY TRANSACTION GAIN. The Company recorded an
unrealized foreign exchange gain of DM 4,000 in the first half of 1997. The gain
related to the Company entering into the foreign exchange currency forward
contracts. At June 30, 1997, the Company had entered into foreign exchange
forward contracts of $115,000,000 at exchange rates between DM 1.4385 and DM
1.6055 with settlement dates ranging from October of 2001 to March of 2002.
NET LOSS. Net loss decreased DM 1,591,000 from DM 24,837,000 in the first
half of 1996 to DM 23,246 in the first half of 1997 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 (loss) 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 from DM 16,234,000 for the six months
June 30, 1996 to DM 19,169,000 for the six months ended June 30, 1997 primarily
as a result of revenues increasing at a faster rate than operating and selling,
general and administrative costs and expenses. The Company's EBITDA margin
improved from 52.3% in the first half of 1996 to 54.1% in the first half in
1997. EBITDA per average subscriber increased by 13.8% from DM 7.55 per
subscriber in the first half of 1996 to DM 8.59 per subscriber in the first half
of 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically relied on four sources for necessary funding:
(i) borrowings under its bank facilities,
(ii) issuance of the Senior Discount Notes,
(iii) capital contributions from its equity investors, and
(iv) cash flow from operations.
At June 30, 1997, the Company's aggregate consolidated indebtedness was
approximately DM 340,766,000, comprised of DM 127,500,000 of debt outstanding
under its 1996 Bank Facility, DM 4,749,000 of other bank debt, DM 11,047,000 of
deferred purchase obligations and DM 197,470,000 of Senior Discount Notes. The
Senior Discount Notes are denominated in dollars and converted to Deutsche Marks
at the rate of DM 1.7438, the Noon Buying Rate of the Federal Reserve Bank of
New York on June 30, 1997. Recorded in assets and liabilities is foreign
exchange forward contracts of DM 32,069,000 and deferred gains on foreign
currency forward contracts of DM 8,149,000, respectively. The asset represents
the difference between the contracted forward rate and the period end exchange
rate. The liability represents the unamortized premium on foreign exchange
contracts entered into to hedge against the effect of exchange rate fluctuations
on the Senior Discount Notes.
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For the six months ended June 30, 1997 the company generated net cash from
operating activities of DM 3,707,000.
For the six months ended June 30, 1997, the Company used cash in investing
activities of DM 28,194,000. Such cash uses were primarily related to the
acquisition of the shares (Antenne Lindemann) and assets (Doebis) of two cable
television companies and capital expenditures, Net cash provided by financing
activities amounted to DM 23,802,000. Such net cash was primarily provided by DM
20,500,000 of net borrowings under the 1996 Bank Facilities, DM 2,728,000 of
deferred purchase obligations and proceeds of DM 574,000 under the overdraft
facility.
Net capital expenditures of DM 5,030,000 for the six month period ended
June 30, 1997 were related to the continued construction, expansion and
upgrading of existing systems and the sale of the Company airplane (DM 750,000).
Over the six month period ended June 30, 1997 the Company added 5,500 customers
by building out its existing 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 upgraded 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 Bank Facility.
Substantial amounts of depreciation and amortization expense and non-cash
interest which accrued on Senior Discount Notes continued to contribute to the
net losses experienced by the Company. These expenses, however, do not result in
a current 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 six month period ended June 30, 1997 was DM
19,169,000. Total interest expense for the same period was DM 17,793,000. Of the
total interest expense in the six month period, DM 12,184,000 related to
non-cash interest on the Senior Discount Notes and DM 394,000 related to the
amortization of bank financing fees.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 -- Financial Data Schedule.
(b) Reports on 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: August, 14,1997
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM S.E.C.
FORM 10-Q DATED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
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0
0
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</TABLE>
