China Cablecom Holdings, Ltd. Reports Third Quarter 2009 Financial Results

China Cablecom Holdings, Ltd. Reports Third Quarter 2009 Financial Results

SHANGHAI, Dec. 8 /PRNewswire-FirstCall/ -- China Cablecom Holdings, Ltd. ("China Cablecom" or the "Company") (NASDAQ:CABL)(NASDAQ:CABLW)(NASDAQ: CABLU), a joint-venture provider of cable television services in the People's Republic of China ("PRC"), announced today its unaudited financial results for the third quarter ended September 30, 2009.

This earnings release reflects both pro forma and actual financial results due to the completion of China Cablecom's acquisition of a 60% economic interest in Hubei Chutian Video & Information Network ("Hubei") late in the second quarter of 2008. For purposes of U.S. Generally Accepted Accounting Principles (U.S. GAAP), the financial results of Hubei have been consolidated beginning July 1, 2008. To enhance comparability, pro forma third quarter of 2009 results of operations reflect the Hubei acquisition as well as the business combination with Jaguar Acquisition Corporation as if they occurred on January 1, 2008.

Third Quarter 2009 Highlights:

-- Hubei revenues for the first nine months of 2009 were $25.1 million,
up 25% over the same period last year
-- Hubei earnings before interest, taxes, depreciation and amortization
(EBITDA) for the first nine months of 2009 were $5.8 million, up 34%
over the same period last year
-- Hubei paying subscribers as of September 30, 2009 were 1,166,178, up
16% over the same date last year
-- Binzhou revenues for the first nine months of 2009 were $7.3 million,
up 7% over the same period last year
-- Binzhou EBITDA for the first nine months of 2009 were $2.7 million,
down 7% over the same period last year
-- Binzhou paying subscribers as of September 30, 2009 were 481,186, up
1% over the same date last year
-- Consolidated paying subscribers as of September 30, 2009 were
approximately 1.6 million, up 11% over the same date last year

Comments from Mr. Clive Ng, Founder & Executive Chairman and Mr. Pu Yue, Chief Executive Officer

"Our primary focus for 2009 was on growing our cable operations organically and establishing a value-added service platform to enhance ARPU opportunities. As a result, we've demonstrated sustainable growth in our Hubei and Binzhou ventures and more recently announced a strategic broadband development agreement with one of China's largest service providers," says Clive Ng, Founder & Executive Chairman of China Cablecom.

"Throughout the fiscal year, we believe that China Cablecom has delivered top line growth at a rate of 18%, this quarter adding an additional 42,739 paying subscribers, indicative of the strength in our growth despite the softening of global financial markets," comments Pu Yue, Chief Executive Officer of China Cablecom. "While digitization is still in its infancy when compared to other parts of the world, we have witnessed the acceleration of this conversion beyond our expectations with digital subscribers of 210,000 in Hubei and 50,000 in Binzhou. Digital ARPU on average accounts for nearly twice as much as analog cable, driving up our EBITDA and cash flows and we believe we are positioned to seize upon this highly profitable digital cable market."

Financial Results for the Quarter Ended September 30, 2009

Consolidated revenues for the third quarter of 2009 were $11.7 million compared to revenues of $9.4 million for the third quarter of 2008. The increase was primarily due to the growth in paying subscribers, including revenue generated through installation fees.

Consolidated operating expenses for the third quarter of 2009 were $4.9 million compared to operating expenses of $5.5 million for the third quarter of 2008. The reduction of operating costs resulted from the reduction of overhead, both in corporate and operating entities.

Based on U.S. GAAP, net comprehensive loss for the third quarter of 2009 was $2.9 million, or $0.30 per basic and fully diluted share, compared to a net comprehensive loss of $4.5 million or $0.48 per basic and fully diluted share, in the third quarter of 2008. The net loss for the third quarter of 2009 was significantly impacted by (1) non-cash amortization of intangible assets of which were acquired in connection with China Cablecom's acquisition of Binzhou Broadcasting and Hubei in the amount of $0.37 and $0.33 million, respectively, and (2) non-cash interest expense associated with original issue debt discount and deferred financing costs relating to China Cablecom's May 2008 convertible note offering in the amount of $2.34 million.

Financial Results for the Nine Months Ended September 30, 2009 - Pro Forma Basis

Pro forma revenues for the nine months ended September 30, 2009 were $32.4 million. Pro forma operating expenses for the nine months ended September 30, 2009 were $15.4 million.

On a GAAP basis, net comprehensive loss for the nine months ended September 30, 2009 was $12.9 million, or $1.34 per basic and fully diluted share. For the nine months ended September 30, 2009, the company used weighted average shares outstanding of 9.7 million. The net loss for the nine months ended September 30, 2009 was significantly impacted by (1) non-cash amortization of intangible assets which were acquired in connection with China Cablecom's acquisition of Binzhou Broadcasting and Hubei in the amount of $1.12 and $0.98 million, respectively, and (2) interest expense associated with original issue debt discount and deferred financing costs relating to China Cablecom's September 2007 bridge financing and May 2008 convertible note offering in the amount of $9.5 million.

Recent Company Highlights

-- In early October, China Cablecom reached an agreement with majority
holders and holders of debt securities to restructure its outstanding
debt obligations and cash interest through the issuance of preferred
stock convertible into ordinary shares, in exchange for the reduction
of the principal amount of its long term remaining debt
-- In connection with the restructuring, the Company completed a $33
million private placement of senior secured notes with net proceeds
used to satisfy remaining payments of Hubei assets under the amended
framework agreement

Operating Metrics

The following summary financial and operating highlights for Binzhou and Hubei reflect the results of the respective operating joint ventures on a stand-alone basis and do not include China Cablecom's corporate operations and overhead. The summary information is presented on a pro forma basis, which assumes that the acquisitions took place on January 1, 2008. For Hubei, the summary information reflects the 23 cities acquired in the amended acquisition agreement. EBITDA reflects China Cablecom's consolidated share of 60%.

Quarter ended September 30,
----------------------------------------
(unaudited) 2009 2008 %
---------- ---------- ----
Binzhou Broadcasting
Revenue $2,699,219 $2,505,381 8%
EBITDA - 60% share $864,119 $1,094,207 -21%
Non-financial metrics:
----------------------
Paying subscribers 481,186 477,160 1%
Digital subscribers 58,657 nm
ARPU $1.56 $1.47 6%
Hubei Chutian
Revenue $9,020,850 $6,867,016 31%
EBITDA - 60% share $2,321,625 $1,369,586 70%
Non-financial metrics:
----------------------
Paying subscribers 1,166,178 1,009,347 16%
Digital subscribers 273,836 nm
ARPU $2.20 $1.81 22%

Total revenue $11,720,068 $9,372,397 25%
Total EBITDA - 60% $3,185,745 $2,463,794 29%

nm = not meaningful

9 months ended September 30,
----------------------------------------
(unaudited) 2009 2008 %
---------- ---------- ----
Binzhou Broadcasting
Revenue $7,304,176 $6,795,598 7%
EBITDA - 60% share $2,678,936 $2,873,528 -7%
Non-financial metrics:
----------------------
Paying subscribers 481,186 477,160 1%
Digital subscribers 58,657 nm
ARPU $1.44 $1.38 4%
Hubei Chutian
Revenue $25,096,906 $19,997,735 25%
EBITDA - 60% share $5,817,949 $4,333,312 34%
Non-financial metrics:
----------------------
Paying subscribers 1,166,178 1,009,347 16%
Digital subscribers 273,836 nm
ARPU $2.12 $1.76 20%

Total revenue $32,401,081 $26,793,333 21%
Total EBITDA - 60% $8,496,885 $7,206,840 18%

nm = not meaningful

Conference Call and Webcast

China Cablecom's management team will host a conference call today at 8:30 a.m. EST, December 8, 2009 (or 9:30 p.m., December 8, 2009 Shanghai time). To listen to the conference call, please use the dial in numbers below:

USA Toll Number: 1-866-225-8754
International: 1-408-629-9692

A replay of the call will be available for two weeks following the call and can be accessed by dialing the numbers below:

USA Toll Number: 1-800-406-7325
International: 1-303-590-3030
PASSCODE: 4181650#

The conference call will be available on webcast live and available for replay at: www.chinacablecom.net.

About China Cablecom

China Cablecom is a joint-venture provider of cable television services in the People's Republic of China, operating in partnership with a local state-owned enterprise ("SOE") authorized by the PRC government to control the distribution of cable TV services through the deployment of analog and digital cable services. China Cablecom has consummated the acquisition of a 55% economic interest in a cable network in Hubei province with paying subscribers exceeding 1,100,000. The Company originally acquired operating rights of the Binzhou Broadcasting network in Binzhou, Shandong Province in September 2007 by entering into a series of asset purchase and services agreements with a company organized by SOEs, owned directly or indirectly by local branches of State Administration of Radio, Film and Television in five different municipalities to serve as a holding company of the relevant businesses. China Cablecom now operates 28 cable networks with over 1.67 million paying subscribers. China Cablecom's strategy is to replicate the acquisitions by operating partnership models in other municipalities and provinces in the PRC and then introducing operating efficiencies and increasing service offerings in the networks in which it operates.

Safe Harbor Statement

The matters discussed in this press release contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this presentation and in the Company's other written and oral reports are based on current Company expectations and are subject to numerous risks, uncertainties and assumptions, Any forward-looking statements are not guarantees of future performance and actual results of operations, financial condition and liquidity. The forward-looking statements herein speak only as of the date stated herein and might not occur or the actual results may differ materially in light of these risks, uncertainties, and assumptions. The Company undertakes no obligation and disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You should carefully consider these factors, as well as the additional risk factors outlined in the filings that the Company makes with the U.S. Securities and Exchange Commission, including the Annual Report on Form 20-F filed on July 15, 2009.

China Cablecom Holdings, Ltd.
www.chinacablecom.net
CONTACT: Debra Chen (917-499-8129)
Email: debra@chinacablecom.net

CHINA CABLECOM HOLDINGS LIMITED
-------------------------------
Unaudited Consolidated Balance Sheets
(in US dollars, except share data)
----------------------------------

Sept. 30, 2009 Dec. 31, 2008
(unaudited) (audited)
-------------- -------------

ASSETS
Current Assets
Cash and cash equivalents $33,416,503 $29,182,251
Accounts receivable 1,190,359 1,628,710
Prepaid expenses and other receivables 8,028,202 9,236,025
Inventories 7,500,588 3,744,745
--------------------------------------- ----------- -----------
Total Current Assets 50,135,652 43,791,731

Property, Plant & Equipments, Net 84,651,352 79,877,186
Construction In Progress 4,353,686 1,036,667
Intangible assets, net 55,020,202 57,126,002
Other Assets
Deferred financing costs, net 836,624 1,243,923
--------------------------------------- ----------- -----------
Total Assets $194,997,516 $183,075,509
--------------------------------------- ----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long term debt -
net of discount $9,996,160 $9,481,940
Accounts payable 14,698,539 8,872,144
Service performance obligation-
deferred revenue assumed 5,149,476 1,661,311
Other current liabilities 9,140,139 7,630,924
Note payable-non controlling
("minority") interest 61,124,739 55,420,250
--------------------------------------- ----------- -----------
100,109,053 83,066,569
Long Term Liabilities
Note payable - noncontrolling
("minority") interest, net of current
portion 51,820,178 51,777,719
Convertible notes, net of discount and
current portion 23,994,922 16,684,044
--------------------------------------- ----------- -----------
Total Liabilities 175,924,153 151,528,332
--------------------------------------- ----------- -----------
Noncontrolling ("minority") interest 2,260,434 1,768,004
--------------------------------------- ----------- -----------

STOCKHOLDERS' EQUITY
Common stock, $.0005 par value;
40,000,000 authorized shares,
9,677,131 shares, 9,677,131 shares
and 9,308,031 shares issued and
outstanding at September 30, 2009
and December 31, 2008, respectively 4,839 4,839
Additional paid in capital 45,526,562 45,526,562
Statutory reserve 131,501 131,501
Accumulated deficit (29,445,627) (16,532,864)
Accumulated other comprehensive income 595,654 649,135
--------------------------------------- ----------- -----------
Total stockholders' equity 16,812,929 29,779,173
--------------------------------------- ----------- -----------
Total liabilities and stockholders'
equity $194,997,516 $183,075,509
--------------------------------------- ----------- -----------

CHINA CABLECOM HOLDINGS LIMITED
-----------------------------------
Unaudited Consolidated Statements of Operation
(in US dollars, except share data)
----------------------------------

Quarter ended Nine months ended
Sept. 30, Sept. 30,

2009 2008 2009 2008
---------- ---------- ---------- ----------

Revenue $11,720,068 $9,372,397 $32,401,081 $13,662,614

Cost of sales 7,160,277 5,369,616 20,185,718 7,684,984
------------------- ---------- ---------- ---------- ----------

Gross profit 4,559,791 4,002,781 12,215,363 5,977,630
Operating
expenses
Amortization
expenses

General and
administrative
expenses 4,881,269 5,553,279 15,397,009 9,449,817
------------------- ---------- ---------- ---------- ----------
Loss from
operations (321,478) (1,550,498) (3,181,646) (3,472,187)
------------------- ---------- ---------- ---------- ----------
Other income
(expense)

Interest income 28,226 119,998 111,073 391,986

Other income 203,122 274,840 656,379 342,288

Interest expense (2,240,009) (2,685,499) (9,020,884) (5,655,162)
------------------- ---------- ---------- ---------- ----------
(2,008,661) (2,290,661) (8,253,432) (4,920,888)
---------- ---------- ---------- ----------
Loss before
income taxes (2,330,139) (3,841,159) (11,435,078) (8,393,075)
Income taxes (121,927) (268,965) (376,439) (534,535)
------------------- ---------- ---------- ---------- ----------
Loss from
operations
before
noncontrolling
("minority")
interest (2,452,066) (4,110,124) (11,811,517) (8,927,610)
Noncontrolling
("minority")
Interest in
income (396,764) (315,629) (1,101,246) (631,845)
------------------- ---------- ---------- ---------- ----------

Net loss (2,848,830) (4,425,753) (12,912,763) (9,559,455)
Other
comprehensive
income

Foreign
currency
translation
difference (12,334) (82,800) (27,215) (14,084)
------------------- ---------- ---------- ---------- ----------

Net Comprehensive
loss $(2,861,164) (4,508,553) $(12,939,978) $(9,573,539)
------------------- ---------- ---------- ---------- ----------

Loss per common
share:
- Basic and
fully diluted $(0.30) (0.48) $(1.34) $(1.46)
Weighted average
shares
- Basic and
fully diluted 9,677,131 9,308,031 9,677,131 6,545,523
------------------- ---------- ---------- ---------- ----------

Reconciliation of Non-U.S. GAAP Measures

This release contains discussion of China Cablecom's revenues, and projected and pro forma revenues, as well as EBITDA and projected/pro forma EBITDA and EBITDA. Although EBITDA and projected/pro forma EBITDA are not measures of financial condition or performance determined in accordance with U.S. GAAP, China Cablecom uses EBITDA to value businesses it acquires or anticipates acquiring. EBITDA and projected/pro forma EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same.

Below is a table reconciling certain non- U.S. GAAP financial measures appearing elsewhere herein relating to China Cablecom to the most closely analogous U.S. GAAP measures:

Quarter ended Nine months ended
Sept. 30, 2009 Sept. 30, 2009
-------------- --------------
Net comprehensive loss $(2,870,969) $(12,939,978)
Amortization 808,011 2,663,099
Depreciation 2,363,893 6,610,229
Interest income (28,227) (111,074)
Interest & finance 2,240,009 9,020,884
Income tax 73,156 225,863
---------- ----------
Non-GAAP income (EBITDA) $2,585,873 $5,469,023
========== ==========

Reconciliation to
operating metrics
Binzhou Broadcasting EBITDA
-60% share $864,119 $2,678,936
Hubei Chutian EBITDA -60% share 2,321,625 5,817,949
Corporate overhead (599,871) (3,027,862)
---------- ----------
$2,585,873 $5,469,023
========== ==========

Source: China Cablecom Holdings, Ltd.

CONTACT: Debra Chen of China Cablecom Holdings, Ltd., +1-917-499-8129,
debra@chinacablecom.net

Web Site: http://www.chinacablecom.net/

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