CLAXSON
UNAUDITED BALANCE SHEETS
(In Thousands of U.S. dollars)
As of As of
September 30, December 31,
2005 2004
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 22,415 $ 7,270
Accounts receivable, net 22,097 23,018
Assets held for sale 417 25,701
Other current assets 7,208 8,698
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Total current assets 52,137 64,687
PROPERTY AND EQUIPMENT, net 10,630 10,946
PROGRAMMING RIGHTS, net 4,520 4,028
INVESTMENTS IN UNCONSOLIDATED AFFILIATES 2,310 3,407
INVESTMENTS IN EQUITY SECURITIES - 54
GOODWILL 52,356 51,021
BROADCAST LICENSES, net 16,656 16,722
OTHER ASSETS 7,896 5,650
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TOTAL ASSETS $ 146,505 $ 156,515
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, accrued and other
liabilities $ 25,241 24,444
Liabilities related to assets held for
sale - 14,927
Current portion of programming rights
obligations 5,053 5,332
Current portion of long-term debt 14,613 8,172
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Total current liabilities 44,907 52,875
LONG-TERM LIABILITIES:
Long-term debt, net of current portion 66,721 77,680
Other long-term liabilities 2,507 2,795
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Total long-term liabilities 69,228 80,475
MINORITY INTEREST 323 562
SHAREHOLDERS' EQUITY 32,047 22,603
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 146,505 $ 156,515
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CLAXSON
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of U.S. dollars, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ---------------------
2005 2004 2005 2004
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NET REVENUES:
Subscriber-based fees $ 12,021 $ 10,261 $ 33,700 $ 29,700
Advertising 8,245 5,669 21,250 16,066
Production services 387 291 1,038 537
Other 705 335 2,236 841
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Total net revenues 21,358 16,556 58,224 47,144
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OPERATING EXPENSES:
Product, content and
technology 7,746 6,481 21,644 18,693
Marketing and sales 3,816 3,118 10,537 8,570
Corporate and
administration 3,725 3,594 11,475 10,843
Depreciation and
amortization 1,124 1,131 3,050 3,476
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Total operating
expenses 16,411 14,324 46,706 41,582
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OPERATING INCOME 4,947 2,232 11,518 5,562
INTEREST EXPENSE (358) (471) (1,076) (1,345)
OTHER (EXPENSE) INCOME,
NET (799) 298 (8) 240
FOREIGN CURRENCY EXCHANGE
GAIN (LOSS) (774) (160) 321 (503)
NET (LOSS) INCOME FROM
UNCONSOLIDATED AFFILIATES (463) 116 (2,060) 992
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INCOME BEFORE INCOME
TAXES, MINORITY INTEREST
AND DISCONTINUED
OPERATIONS 2,553 2,015 8,695 4,946
INCOME TAXES (154) (406) (1,444) (927)
MINORITY INTEREST 10 49 246 52
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NET INCOME FROM CONTINUING
OPERATIONS 2,409 1,658 7,497 4,071
DISCONTINUED OPERATIONS
(Loss) income from
operations of
discontinued divisions -
net 147 267 (2,311) 318
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(LOSS) GAIN ON
DISCONTINUED OPERATIONS 147 267 (2,311) 318
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NET INCOME $ 2,556 $ 1,925 $ 5,186 $ 4,389
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NET INCOME PER COMMON SHARE:
Income from continuing
operations
Basic $ 0.12 $ 0.09 $ 0.37 $ 0.21
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Diluted $ 0.11 $ 0.08 $ 0.34 $ 0.20
========== ========== ========== ==========
(Loss) gain on discontinued
operations
Basic and diluted $ 0.01 $ 0.01 $ (0.11) $ 0.02
========== ========== ========== ==========
Diluted $ 0.01 $ 0.01 $ (0.11) $ 0.02
========== ========== ========== ==========
NET INCOME PER SHARE:
Basic $ 0.12 $ 0.10 $ 0.25 $ 0.23
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Diluted $ 0.12 $ 0.10 $ 0.24 $ 0.22
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NUMBER OF SHARES USED IN
PER SHARE CALCULATIONS:
Basic 20,468 19,481 20,395 19,461
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Diluted 21,941 19,860 21,896 19,891
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CLAXSON
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of U.S. dollars)
Nine Months Ended
September 30,
---------------------
2005 2004
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,186 $ 4,389
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of programming rights 3,245 3,992
Share-based compensation 43 52
Depreciation and amortization 3,495 4,476
Accrued and (uncollected) unpaid interest (145) 546
Exchange rate loss 112 693
Net (gain) loss on disposal of assets (156) 27
Loss (income) from unconsolidated affiliates 2,060 (989)
Minority interest (246) (52)
Changes in operating assets and liabilities (2,602) (9,874)
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Net cash provided by operating activities 10,992 3,260
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (1,785) (1,745)
Transaction costs paid - (1,438)
Distributions to minority owners of
unconsolidated subsidiaries - (380)
Investment in (distributions from)
unconsolidated affiliates (22) 247
Redemption of deposit for the sale of
subsidiary (506) -
Restricted cash released in guarantee of
Chilean syndicated loan - 907
Proceeds from sale of investments in
subsidiaries and affiliates, net 10,939 625
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Net cash provided by (used in) investing
activities 8,626 (1,784)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible
debentures - 3,500
Net repayments of short/long-term debt (5,631) (5,695)
Proceeds from exercised stock options 114 55
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Net cash (used in) financing activities (5,517) (2,140)
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EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH
AND CASH EQUIVALENTS 1,044 158
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 15,145 (506)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,270 7,682
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,415 $ 7,176
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