Central European Media Enterprises Reports Third Quarter 2005 Results

Central European Media Enterprises Reports Third Quarter 2005 Results

THIRD QUARTER

-Net Revenues Increase 138%-

-Net Loss from Continuing Operations Improves $0.3 million to $(6.3) million-

-Segment EBITDA Increases by $15.7 million-

NINE MONTHS

-Net Revenues Increase 112%-

-Net Income from Continuing Operations grows $8.6 million to $13.3 million-

-Segment EBITDA Doubles-

HAMILTON, Bermuda, Nov. 3 /PRNewswire-FirstCall/ -- Central European Media Enterprises Ltd. (CME) (Nasdaq: CETV; Prague Stock Exchange: CETV) today announced financial results for the third quarter and nine months ended September 30, 2005.

TV Nova in the Czech Republic has been included in our consolidated and segment results from May 2, 2005.

Compared to the third quarter of 2004, consolidated net revenues for the third quarter of 2005 increased 138% to $87.1 million. Operating income for the quarter was $4.8 million compared to an operating loss of $(6.7) million in the third quarter of 2004. Net loss from continuing operations improved $0.3 million to $(6.3) million, and fully diluted loss per share in respect of continuing operations improved to $(0.16) from $(0.23) for the third quarter of 2004. Compared to the third quarter of 2004, Segment(1) EBITDA for the quarter increased 433% to $19.4 million.

Compared to the nine months ended September 30, 2004, consolidated net revenues for the nine months ended September 30, 2005 increased 112% to $248 million. Operating income increased $1.3 million to $9.4 million. Net income from continuing operations increased $8.6 million to $13.3 million, and fully diluted earnings per share in respect of continuing operations increased to $0.39 from $0.16. Compared to the nine months ended September 30, 2004, Segment(1) EBITDA for the nine months ended September 30, 2005 increased 101% to $87.6 million.

Michael Garin, Chief Executive Officer of CME, said, "The strength of our results in the third quarter, the slowest quarter for all commercial broadcasters, reflects excellent performance in our core markets as well as the transforming impact of the Czech acquisition. In our core markets of Romania, Slovak Republic, Slovenia and Ukraine, Segment Net Revenues increased in excess of 23% in the quarter and 21% for the nine month period, with Segment EBITDA margins in the quarter almost doubling to 23% and growing to more than 30% in the nine month period."

(1) Segment Data, Segment Net Revenues and Segment EBITDA include certain
operations that are not consolidated under US-GAAP and are all non
US-GAAP measures (for further details see footnote (3) to the attached
'Reconciliation Between Consolidated Statements of Operations and
Segment Data (non US-GAAP)). For a reconciliation to the most
directly comparable US-GAAP financial measures, see 'Reconciliation
Between Consolidated Statements of Operations and Segment Data (non
US-GAAP)' below. We define Segment EBITDA margin as Segment EBITDA
expressed as a percentage of Segment Net Revenue.

Consolidated Results for the Three Months Ended September 30, 2005

Consolidated Net Revenues for the three months ended September 30, 2005 increased by 138% to $87.1 million from $36.5 million for the three months ended September 30, 2004. Operating income for the quarter was $4.8 million compared with an operating loss of $(6.7) million for the three months ended September 30, 2004. Net loss for the quarter was $(9.6) million compared to $(5.6) million for the three months ended September 30, 2004. Fully diluted loss per share was $(0.25) for the three months ended September 30, 2005 compared to $(0.20) for the three months ended September 30, 2004.

Headline Consolidated Results for the three months ended September 30, 2005 and 2004 were:

CONSOLIDATED RESULTS (Unaudited)
For the Three Months Ended September 30,
(US $000's)
2005 2004 $change % change
Net Revenues $87,067 $36,543 $50,524 138 %
Operating income/(loss) $4,792 $(6,736) $11,528 Nm
Net loss from continuing
operations $(6,282) $(6,590) $308 5 %
Net loss $(9,614) $(5,647) $(3,967) 70 %
Fully diluted loss per
share from continuing
operations (1) $(0.16) $(0.23) $0.07 30 %
Fully diluted loss per
share (1) $(0.25) $(0.20) $(0.05) 25 %

(1) Restated in 2004. For further details see footnote (1) to the
attached consolidated statement of operations.

Consolidated Results for the Nine Months Ended September 30, 2005

Consolidated Net Revenues for the nine months ended September 30, 2005 increased by 112% to $248.5 million from $117.3 million for the nine months ended September 30, 2004. Operating income for the nine months ended September 30, 2005 was $9.4 million compared with $8.1 million for the nine months ended September 30, 2004. Net income for the nine months ended September 30, 2005 was $7.9 million compared to $5.6 million for the nine months ended September 30, 2004. Fully diluted income per share was $0.23 for the nine months ended September 30, 2005, increasing $0.04 compared to the nine months ended September 30, 2004.

Headline Consolidated Results for the nine months ended September 30, 2005 and 2004 were:

CONSOLIDATED RESULTS (Unaudited)
For the Nine Months Ended September 30,
(US $000's)
2005 2004 $change % change
Net Revenues $248,480 $117,277 $131,203 112 %
Operating income $9,402 $8,058 $1,344 17 %
Net income from
continuing operations $13,272 $4,659 $8,613 185 %
Net income $7,896 $5,557 $2,339 42 %
Fully diluted earnings
per share from continuing
operations (1) $0.39 $0.16 $0.23 144 %
Fully diluted earnings
per share (1) $0.23 $0.19 $0.04 21 %

(1) Restated in 2004. For further details see footnote (1) to the
attached consolidated statement of operations.

Segment(1) Results

We evaluate the performance of our television operations based on Segment(1) Net Revenues and EBITDA (earnings before interest, taxes, depreciation and amortization).

Segment(1) Results for the Three Months Ended September 30, 2005

For the three months ended September 30, 2005, Total Segment(1) Net Revenues increased 109% to $98.8 million from $47.2 million for the three months ended September 30, 2004. Total Segment(1) EBITDA for the three months ended September 30, 2005 increased 433% to $19.4 million from $3.6 million for the three months ended September 30, 2004. Segment(1) EBITDA Margin for the three months ended September 30, 2005 increased to 20% from 8% for the three months ended September 30, 2004.

Our Total Segment(1) Net Revenues, Total Segment(1) EBITDA and Segment(1) EBITDA margin for the three months ended September 30, 2005 and 2004 were:

SEGMENT(1) RESULTS (Unaudited)
For the Three Months Ended September 30,
(US $000's)
2005 2004 $change % change
Total Segment Net Revenues $98,787 $47,227 $51,560 109 %
Total Segment EBITDA $19,376 $3,637 $15,739 433 %
Segment EBITDA Margin 20 % 8 %

Segment(1) Results for the Nine Months Ended September 30, 2005

For the nine months ended September 30, 2005, Total Segment(1) Net Revenues increased 85% to $292.5 million from $158.1 million for the nine months ended September 30, 2004. Total Segment(1) EBITDA for the nine months ended September 30, 2005 increased 101% to $87.6 million from $43.6 million for the nine months ended September 30, 2004. Segment(1) EBITDA Margin for the nine months ended September 30, 2005 increased to 30% from 28% for the nine months ended September 30, 2004.

Our Total Segment(1) Net Revenues, Total Segment(1) EBITDA and Segment(1) EBITDA margin for the nine months ended September 30, 2005 and 2004 were:

SEGMENT (1) RESULTS (Unaudited)
For the Nine Months Ended September 30,
(US $000's)
2005 2004 $change % change
Total Segment Net Revenues $292,470 $158,118 $134,352 85 %
Total Segment EBITDA $87,620 $43,638 $43,982 101 %
Segment EBITDA Margin 30 % 28 %

(1) Segment Data, Segment Net Revenues and Segment EBITDA include certain
operations that are not consolidated under US-GAAP and are all non
US-GAAP measures (for further details see footnote (3) to the attached
'Reconciliation Between Consolidated Statements of Operations and
Segment Data (non US-GAAP)). For a reconciliation to the most
directly comparable US-GAAP financial measures, see 'Reconciliation
Between Consolidated Statements of Operations and Segment Data (non
US-GAAP)' below. We define Segment EBITDA margin as Segment EBITDA
expressed as a percentage of Segment Net Revenue

The Company will host a teleconference to discuss its results on Thursday, November 3, 2005 at 10:00 am (New York Time) (3:00 p.m. London Time, 4:00 p.m. Prague Time). Please note: Related presentation materials are available on our website, located at http://www.cetv-net.com/. To access the teleconference, please dial +1 973-409-9259 (U.S. and international callers) ten minutes prior to the start time. The teleconference will also be available via live webcast on the Company's website, located at http://www.cetv-net.com/. If you cannot listen to the teleconference at its scheduled time, there will be a replay available through November 10, 2005 that can be accessed by dialing +1 877-519-4471 (U.S. callers) or +1 973-341-3080 (international callers), passcode: 6652342. A replay will also be archived on the Company's website.

This press release should be read in conjunction with our Form 10-Q for the period ended September 30, 2005, which was filed with the Securities and Exchange Commission on November 3, 2005, and our Form 10-K for the year ended December 31, 2004, filed with the SEC on March 15, 2005, as amended by our Form 10-K/A filed with the SEC on April 1, 2005.

The Company makes available, free of charge, on our website at http://www.cetv-net.com/ our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

Central European Media Enterprises Ltd. (CME) is a TV broadcasting company with leading stations in six Central and Eastern European countries reaching an aggregate of approximately 90 million people. The Company's television stations are located in Croatia (NOVA TV), the Czech Republic (TV NOVA and GALAXIE SPORT), Romania (PRO TV, ACASA, PRO CINEMA and PRO TV INTERNATIONAL), Slovakia (MARKIZA), Slovenia (POP TV, KANAL A) and Ukraine (STUDIO 1+1). CME is traded on NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US$000s, except share and per share data)
(Unaudited)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2005 2004 2005 2004
Net revenues $87,067 $36,543 $248,480 $117,277
Operating costs 15,331 9,055 44,733 22,464
Cost of programming 40,470 17,266 94,873 46,829
Depreciation of station fixed
assets and other intangibles 8,908 2,080 15,903 4,940
Total station operating costs and
expenses 64,709 28,401 155,509 74,233
Station selling, general and
administrative expenses 12,766 6,676 32,256 14,560
Corporate operating costs
(including non-cash stock based
compensation of $0.6 million
and $2.7 million for the three
months ended September 30, 2005
and 2004, respectively and
$2.3 million and $7.0 million
for the nine months ended
September 30, 2005 and 2004,
respectively) 4,800 8,202 15,982 20,426
Impairment charge - - 35,331 -
Operating income/(loss) 4,792 (6,736) 9,402 8,058
Interest income 1,716 960 3,354 3,200
Interest expense (11,574) (599) (18,305) (1,484)
Foreign currency exchange
gain/(loss), net 856 1,133 30,286 (789)
Other expense (840) (159) (4,529) (940)
Income/(loss) before provision
for income taxes, minority
interest, equity in income of
unconsolidated affiliates and
discontinued operations (5,050) (5,401) 20,208 8,045
Provision for income taxes (2,206) (1,120) (8,112) (8,059)
Income/(loss) before minority
interest, equity in income of
unconsolidated affiliates and
discontinued operations (7,256) (6,521) 12,096 (14)
Minority interest in
(income)/loss of consolidated
subsidiaries 1,037 (153) (3,644) (610)
Equity in income of
unconsolidated affiliates (63) 84 4,820 5,283
Net income/(loss) from continuing
operations (6,282) (6,590) 13,272 4,659
Discontinued operations - Czech
Republic:
Pre-tax income from
discontinued operations - 107 164 62
Tax on disposal of
discontinued operations (3,332) 836 (5,540) 836
Net income/(loss) from
discontinued operations (3,332) 943 (5,376) 898
Net income/(loss) $(9,614) $(5,647) $7,896 $5,557

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(US$ 000's, except share and per share data)
(Unaudited)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2005 2004 2005 2004
PER SHARE DATA:
Net income per share
Continuing operations - Basic (1) $(0.16) $(0.23) $0.40 $0.17
Continuing operations - Diluted (1) $(0.16) $(0.23) $0.39 $0.16
Discontinued operations - Basic $(0.09) $0.03 $(0.16) $0.03
Discontinued operations - Diluted $(0.09) $0.03 $(0.16) $0.03
Net income - Basic (1) $(0.25) $(0.20) $0.24 $0.20
Net income - Diluted (1) $(0.25) $(0.20) $0.23 $0.19

Weighted average common shares
used in computing per share
amounts (000s):
Continuing operations - Basic (as
restated) (1) 37,883 28,167 33,549 27,705
Continuing operations - Diluted
(as restated) (1) 37,883 28,167 34,378 29,021
Discontinued operations - Basic
(as restated) (1) 37,883 28,167 33,549 27,705
Discontinued operations - Diluted
(as restated) (1) 37,883 28,167 34,378 29,021
Net income - Basic (as restated)
(1) 37,883 28,167 33,549 27,705
Net income - Diluted (as
restated) (1) 37,883 28,167 34,378 29,021

(1) FAS 128 requires the same number of potential common shares used in
computing the diluted per share amount for income from continuing
operations be used in computing the diluted per share amounts for
discontinued operations and net income where there is a loss from
continuing operations. Also, in determining the weighted average
number of common shares used in the earnings per share computations,
it is required to calculate a weighted average number of shares issued
and outstanding during the period. In the three months ended
September 30, 2004, we incorrectly computed the fully diluted earnings
per share for continuing operations and the fully diluted earnings per
share. In the nine months ended September 30, 2004 we incorrectly
computed the basic earnings per share for continuing operations, the
fully diluted earnings per share for continuing operations, the basic
earnings per share and the fully diluted earnings per share. We also
incorrectly calculated basic and diluted weighted average number of
shares outstanding in the three and nine months ended September 30,
2004. For further information, see Note 14, "Earnings Per Share" to
the financial statements in our Form 10-Q.

Segment Data

We manage our business on a country-by-country basis and review the performance of each business segment using data that reflects 100% of operating and license company results. Our business segments are comprised of Croatia, the Czech Republic, Romania, the Slovak Republic, Slovenia and Ukraine.

We evaluate the performance of our business segments based on Segment Net Revenues and Segment EBITDA. Segment Net Revenues and Segment EBITDA include STS and Markiza (our operating and license companies in the Slovak Republic) for the nine and three months ended September 30, 2005 and STS, Markiza and Radio Pro in Romania for the nine and three months ended September 30, 2004. These entities are not consolidated under US GAAP.

Our key performance measure of the efficiency of our business segments is EBITDA margin. We define Segment EBITDA margin as the ratio of Segment EBITDA to Segment Net Revenue.

Our assets and liabilities are managed centrally and are reported internally in the same manner as the consolidated financial statements, consequently no additional segment information is provided in respect of assets and liabilities.

Segment EBITDA is determined as segment net income/loss, which includes costs for program rights amortization, before interest, taxes, depreciation and amortization of intangible assets. Items that are not allocated to our business segments for purposes of evaluating their performance and therefore are not included in Segment EBITDA, include:

* expenses presented as corporate expenses in our consolidated statements
of operations (i.e., corporate operating costs, stock-based compensation
and amortization of intangibles);

* changes in the fair value of derivatives;

* foreign currency exchange gains and losses;

* certain unusual or infrequent items (e.g., extraordinary gains and
losses, impairments on assets or investments).

Segment EBITDA is also used as a component in determining management bonuses.

Below is a table showing our Segment EBITDA by operation and reconciling these figures to our consolidated US GAAP results for the three and nine months ended September 30, 2005 and 2004:

Reconciliation Between Consolidated Statements of Operations
and Segment Data (non US-GAAP)

SEGMENT FINANCIAL INFORMATION
For the Three Months Ended September 30,
(US $000's)
Segment Net Segment EBITDA
Revenues (1)
2005 2004 2005 2004
Country
Croatia (NOVA TV) $4,183 $3,740 $(4,786) $(1,648)
Czech Republic (TV NOVA) 40,883 - 11,940 -
Romania (2) 21,138 16,089 7,831 4,432
Slovak Republic (MARKIZA TV) 11,720 9,892 876 122
Slovenia (POP TV and KANAL A) 7,655 7,576 1,032 1,073
Ukraine (STUDIO 1+1) 13,208 9,930 2,483 (342)
Total Segment Data $98,787 $47,227 $19,376 $3,637

Reconciliation to Consolidated
Statement of Operations:
Consolidated Net Revenues / loss
before provision for income
taxes, minority interest, equity in
income of unconsolidated
affiliates and discontinued
operations $87,067 $36,543 $(5,050) $(5,401)
Corporate operating costs (including
non-cash stock based
compensation of $0.6 million and
$2.7 million for the three
months ended September 30, 2005 and
2004, respectively) - - 4,800 8,202
Unconsolidated equity affiliates (3) 11,720 10,684 876 91
Station depreciation - - 8,908 2,080
Interest income - - (1,716) (960)
Interest expense - - 11,574 599
Foreign currency exchange (gain),
net - - (856) (1,133)
Other expense - - 840 159
Total Segment Data $98,787 $47,227 $19,376 $3,637

(1) All net revenues are derived from external customers. There are no
inter-segmental revenues.
(2) Romanian networks are PRO TV, PRO CINEMA, ACASA and PRO TV
INTERNATIONAL for the three months ended September 30, 2005 and
PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL, PRO FM and
INFOPRO for the three months ended September 30, 2004.
(3) Unconsolidated equity affiliates are STS and Markiza in the Slovak
Republic for the three months ended September 30, 2005 and STS,
Markiza and Radio Pro in Romania for the three months ended September
30, 2004.

SEGMENT FINANCIAL INFORMATION
For the Nine Months Ended September 30,
(US $000's)
Segment Net Segment EBITDA
Revenues (1)
2005 2004 2005 2004
Country
Croatia (NOVA TV)
$16,791 $3,740 $(9,547) $(1,648)
Czech Republic (TV NOVA) 88,647 - 40,226 -
Romania (2) 66,786 48,875 25,969 14,670
Slovak Republic (MARKIZA TV) 43,990 39,235 11,002 9,846
Slovenia (POP TV and KANAL A) 31,509 30,984 10,202 11,860
Ukraine (STUDIO 1+1) 44,747 35,284 9,768 8,910
Total Segment Data $292,470 $158,118 $87,620 $43,638

Reconciliation to Consolidated
Statement of Operations:
Consolidated Net Revenues / Income
before provision for
income taxes, minority interest,
equity in income of
unconsolidated affiliates and
discontinued operations $248,480 $117,277 $20,208 $8,045
Corporate operating costs (including
non-cash stock based
compensation of $2.3 million and
$7.0 million for the nine
months ended September 30, 2005 and
2004, respectively) - - 15,982 20,426
Impairment charge - - 35,331 -
Unconsolidated equity affiliates (3) 43,990 40,841 11,002 10,214
Station depreciation - - 15,903 4,940
Interest income - - (3,354) (3,200)
Interest expense - - 18,305 1,484
Foreign currency exchange
(gain)/loss, net - - (30,286) 789
Other expense - - 4,529 940
Total Segment Data $292,470 $158,118 $87,620 $43,638

(1) All net revenues are derived from external customers. There are no
inter-segmental revenues.
(2) Romanian networks are PRO TV, PRO CINEMA, ACASA and PRO TV
INTERNATIONAL for the nine months ended September 30, 2005 and PRO TV,
PRO CINEMA, ACASA, PRO TV INTERNATIONAL, PRO FM and INFOPRO for the
nine months ended September 30, 2004.
(3) Unconsolidated equity affiliates are STS and Markiza in the Slovak
Republic for the nine months ended September 30, 2005 and STS,
Markiza and Radio Pro in Romania for the nine months ended September
30, 2004.

Source: Central European Media Enterprises Ltd.

CONTACT: Romana Tomasova, Director of Corporate Communications of
Central European Media Enterprises, +44-20-7430-5357,
romana.tomasova@cme-net.com; or Jonathan Lesko, or Mike Smargiassi, Investors,
or Olga Shmuklyer, Press, all of Brainerd Communicators, Inc.,
+1-212-986-6667

Web site: http://www.cetv-net.com/

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