Statement re UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER AND
FIRST SIX MONTHS OF 2009
JSC Sitronics
JSC SITRONICS
UNAUDITED FINANCIAL RESULTS FOR
THE
SECOND QUARTER AND FIRST SIX MONTHS OF 2009
MOSCOW, Russia – September 9, 2009 – JSC SITRONICS (‘SITRONICS’
or ‘the Group’) (LSE: SITR), a leading provider of telecommunication,
information technology and microelectronic solutions in Russia and the
CIS, with a growing presence in other EEMEA emerging markets, today
announced its unaudited consolidated US GAAP financial results for the
second quarter and six months ended June 30, 2009.
The Group’s results for both 2008 and 2009 have been restated to reflect
the sale of the distribution businesses on April 13, 2009 according to
FASB Statement No. 144 (as amended) entitled “Accounting for impairment
or disposal of long-lived assets”. The results of the discontinued
distribution operations, including the impact of the disposal, are
reported in the discontinued operations line of the Group’s financial
statements for the second quarter and first six months of 2008 and 2009.
SECOND QUARTER HIGHLIGHTS
-
Consolidated revenues of US$ 247.1 million
-
Telecommunication Solutions revenues of US$ 140.6 million; Information
Technologies revenues of US$ 46.2 million; and Microelectronics
revenues of US$ 57.0 million
-
OIBDA1 profit of US$ 21.0 million
-
Net profit attributable to SITRONICS of US$ 1.0 million, when
excluding US$ 27.6 million impact of sale of distribution business in
April 2009
-
Total assets of US$ 1.8 billion
SIX MONTH HIGHLIGHTS
-
Consolidated revenues of US$ 404.0 million
-
Telecommunication Solutions revenues of US$ 246.2 million; Information
Technologies revenues of US$ 65.6 million; and Microelectronics
revenues of US$ 86.1 million
-
OIBDA profit of US$ 14.1 million
-
Net loss attributable to SITRONICS of US$ 40.8 million when excluding
US$ 26.2 million impact of sale of distribution business in April 2009
-
US$ 476.2 million of new contracts secured since the beginning of 2009
Sergey Aslanian, President of SITRONICS, commented: “The operating
environment remained challenging throughout the first half of 2009 but
our businesses have continued to outperform with revenues down less than
6% year on year in the second quarter at constant exchange rates. We
have now won over US$ 476.2 million of new contracts since the beginning
of the year”.
“The actions that we have taken to optimize our cost base have enabled
us to deliver OIBDA margins of 8.5% in the second quarter and 3.5% for
the half year and we generated operating free cash flow for the first
six months of the year. When excluding the impact of the sale of our
distribution business in April, we actually delivered a net profit in
the second quarter.”
“We continue to expect to deliver a positive OIBDA result for the full
year and we have now successfully refinanced or extended over US$ 300
million of our borrowings since the beginning of the year.”
FINANCIAL SUMMARY
|
(US$ millions)
|
|
Q2 2009
|
|
Q2 2008
|
|
6M 2009
|
|
6M 2008
|
|
|
Revenues
|
|
247.1
|
|
332.0
|
|
404.0
|
|
625.6
|
|
|
OIBDA
|
|
21.0
|
|
19.6
|
|
14.1
|
|
30.4
|
|
|
Net income / (loss) from continuing operations
|
|
3.3
|
|
(12.9)
|
|
(42.3)
|
|
(28.0)
|
|
|
Net income / (loss) from discontinued operations
|
|
(27.6)
|
|
5.3
|
|
(26.2)
|
|
14.3
|
|
|
Net income / (loss) attributable to Sitronics
|
|
(26.6)
|
|
(12.0)
|
|
(66.9)
|
|
(20.2)
|
|
|
Total assets
|
|
1,844.8
|
|
2,192.4
|
|
1,844.8
|
|
2,192.4
|
|
OPERATING REVIEW
Group Overview
The Group’s consolidated revenues were down 5.8% year on year in
constant exchange rates in the second quarter of 2009, and down 18.4%
for the first six months of 2009. The decline reflected the overall
weakness in the market and the impact of the adverse economic
conditions. The reported year on year decline also reflected the
significant weakening of the Group’s operating currencies against its US
dollar reporting currency. Consolidated revenues were up 57.5% at
current exchange rates compared to the first quarter of 2009. The Group
has now won a further US$ 476.2 million of new contracts since the
beginning of 2009.
Operating expenses, when excluding depreciation and amortization costs,
were reduced by 26.6% year on year to US$ 48.5 million in the second
quarter, and by 20.4% to US$ 98.3 million for the first six months of
the year. The reduction was due to the cost saving measures implemented
during the second half of 2008 and first half of 2009. Selling, general
and administration expenses, net of stock option expenses and bad debt
provisions, were reduced by 30.7% year on year in the second quarter and
by 27.0% for the six month period.
SITRONICS therefore reported an increased OIBDA profit of US$ 21.0
million in the second quarter, when compared to a profit of US$ 19.6
million for the same period of 2008, and an OIBDA profit of US$ 14.1
million for the first half of the year compared to a profit of US$ 30.4
million in the first half of 2008. The Group therefore delivered OIBDA
margins of 8.5% in the second quarter and 3.5% for the first half of the
year, compared to 5.9% and 4.9% for the comparative periods of 2008.
The lower depreciation and amortization charges of US$ 12.7 million in
the second quarter and US$ 25.4 million for the six months primarily
reflected the impact of currency exchange rate fluctuations.
The Group’s net interest expenses increased year on year to US$ 13.5
million from US$ 8.4 million in the second quarter, and to US$ 24.3
million from US$ 14.3 million for the year to date, due to the year on
year increase in the Group’s debt levels and adverse currency exchange
rate movements.
The Group reported a foreign exchange gain of US$ 14.4 million in the
second quarter but incurred a foreign exchange loss of US$ 5.1 million
during the first six months of 2009, which was primarily due to the
difference in the value of the Group’s US dollar denominated borrowings
between the balance sheet dates.
The Group’s results also included a net loss from discontinued
operations of US$ 27.6 million in the second quarter and of US$ 26.2
million for the year to date, which included the US$ 25.8 net loss
arising from the difference between the book value of the distribution
businesses sold in April 2009 and the sale price as well as the losses
from the operations for both periods. The transaction did not impact the
Group’s cash flows.
The Group therefore reported an underlying net profit attributable to
Sitronics, when excluding the discontinued operations, of US$ 1.0
million in the second quarter and a net loss of US$ 40.8 million for the
first six months of the year, compared to losses of US$ 17.3 million and
US$ 34.4 million for the corresponding periods of 2008.
Segmental Review
SITRONICS Telecommunication Solutions
|
(US$ millions)
|
|
Q2 2009
|
|
Q2 2008
|
|
6M 2009
|
|
6M 2008
|
|
|
Revenues
|
|
140.6
|
|
194.1
|
|
246.2
|
|
349.4
|
|
|
OIBDA
|
|
4.8
|
|
8.1
|
|
3.7
|
|
14.1
|
|
|
Net income (loss)
|
|
(6.9)
|
|
(12.4)
|
|
(22.4)
|
|
(27.3)
|
|
|
Total assets
|
|
943.0
|
|
1,069.7
|
|
943.0
|
|
1,069.7
|
|
Revenues were down 13.8% year on year at constant exchange rates in the
second quarter and down 16.4% for the first six months of the year. The
segment accounted for 56.9% of Group revenues in the second quarter and
60.9% for the half year, compared to 58.5% and 55.8% for the same
periods of 2008.
The business reported an OIBDA profit of US$ 4.8 million in the second
quarter of 2009, compared to an OIBDA profit of US$ 8.1 million for the
respective period of 2008, and an OIBDA profit of US$ 3.7 million for
the first six months of 2009, compared to an OIBDA profit of US$ 14.1
million for the first six months of 2008.
The segment businesses have now secured US$ 372.8 million of new
contracts since the beginning of 2009.
SITRONICS Telecom Solutions signed two new contracts in April 2009 with
a total value of over US$ 64 million to deliver, deploy and support a
CRM and Billing System for pan-Indian telecoms operator Sistema Shyam
TeleServices. INTRACOM TELECOM also signed a US$ 85 million contract in
April to supply radio relay equipment to Sistema Shyam TeleServices. The
project is being implemented in cooperation with ZTE and is expected to
be completed at the end of 2009.
INTRACOM TELECOM signed a contract in April with Santa Rosa Telephone
Cooperative, Inc., in Texas in the United States to deploy an IPTV
solution for the delivery of High Definition video and Digital Video
Recorder services to Santa Rosa’s telephony subscribers. The project is
expected to be completed by the end of 2009.
SITRONICS Telecom Solutions signed a framework agreement with the
Bashenergo power generation and distribution company in June 2009 to
provide UTILIS billing system software. The project is expected to be
completed by the end of 2009.
Finally, INTRACOM TELECOM’s new contract to provide Point-to-Point
Microwave equipment services for pan-Indian telecoms operator Sistema
Shyam TeleServices is expected to be completed by the end of 2009.
SITRONICS Information Technologies
|
(US$ millions)
|
|
Q2 2009
|
|
Q2 2008
|
|
6M 2009
|
|
6M 2008
|
|
|
Revenues
|
|
46.2
|
|
39.2
|
|
65.6
|
|
87.1
|
|
|
OIBDA
|
|
11.4
|
|
0.6
|
|
8.9
|
|
(3.8)
|
|
|
Net income (loss) from continuing operations
|
|
8.6
|
|
0.5
|
|
5.9
|
|
(4.8)
|
|
|
Net income (loss) from discontinued operations
|
|
(27.6)
|
|
5.3
|
|
(26.2)
|
|
14.3
|
|
|
Net income (loss)
|
|
(19.0)
|
|
5.7
|
|
(20.3)
|
|
9.5
|
|
|
Total assets
|
|
266.1
|
|
393.6
|
|
266.1
|
|
393.6
|
|
Revenues were up 63.5% year on year at constant exchange rates in the
second quarter and up 6.1% for the first six months of the year. The
segment accounted for 18.7% of Group revenues in the second quarter and
16.2% for the half year, compared to 11.8% and 13.9% for the same
periods of 2008.
The business segment reported a year on year increase in OIBDA profit to
US$ 11.4 million from US$ 0.6 million for the second quarter, and an
OIBDA profit of US$ 8.9 million for the first six months of 2009,
compared to an OIBDA loss of US$ 3.8 million for the first six months of
2008.
The business segment reported a year on year increase in OIBDA for both
reporting periods and substantially improved OIBDA margins of 24.6% and
13.6% for the two respective periods following the growth in the
business and a year on year reduction in operating expenses and
resulting improvement in operating efficiency levels.
SITRONICS disposed of a part of the distribution business of its
wholly-owned subsidiary, SITRONICS IT B.V, on April 13, 2009. The seven
distribution companies were transferred to Melrose Holding for a total
consideration of US$ 49.8 million. The book value of the assets was US$
76.0 million at the date of sale. As a result of the sale and subsequent
settlement transactions, the Group therefore reported a loss for
discontinued operations of US$ 27.6 million in the second quarter and
US$ 26.2 million for the year to date. When excluding the effect of the
discontinued operations, the Information Technologies segment was
therefore profitable in both the second quarter and for the year to
date. The discontinued distribution operations reported US$ 60.8 million
of revenues for the first half of the year, compared to US$ 306.1
million for the same period of 2008, and reported an OIBDA profit of US$
1.3 million for the half year, compared to an OIBDA profit of US$ 15.6
million for the same period of 2008.
US$ 89.7 million of new contracts have now been secured since the
beginning of 2009.
SITRONICS signed a contract in May to provide support to Mobile
TeleSystems’ data processing centre in Siberia. The project is expected
to be completed by the end of 2009.
SITRONICS signed a three-year agreement in June to deploy an IT
infrastructure for the government of Bashkortostan.
SITRONICS Microelectronics
|
(US$ millions)
|
|
Q2 2009
|
|
Q2 2008
|
|
6M 2009
|
|
6M 2008
|
|
|
Revenues
|
|
57.0
|
|
91.1
|
|
86.1
|
|
160.9
|
|
|
OIBDA
|
|
12.5
|
|
22.2
|
|
16.4
|
|
33.6
|
|
|
Net income (loss)
|
|
(0.1)
|
|
9.6
|
|
(5.8)
|
|
15.3
|
|
|
Total assets
|
|
532.7
|
|
609.4
|
|
532.7
|
|
609.4
|
|
Revenues were down 15.3% year on year at constant exchange rates in the
second quarter and down 27.0% for the year to date. The segment
accounted for 23.1% of Group revenues in the second quarter and 21.3%
for the half year, compared to 27.4% and 25.7% for the same periods of
2008.
The business segment continued to report a positive OIBDA result. OIBDA
decreased year on year from US$ 22.2 million to US$ 12.5 million in the
second quarter and from US$ 33.6 million to US$ 16.4 million for the
first six months of 2009.
US$ 13.6 million of new contracts have now been secured since the
beginning of 2009.
SITRONICS continues to supply RFID tickets for the Moscow Metro, Russian
Railways, and a number of transportation companies in large Russian
cities with populations exceeding 1 million people, including Kazan and
Nizhny Novgorod.
SITRONICS Smart Technologies signed a new contract in June 2009 to
deliver RUIM cards to Altel in Kazakhstan. The project is expected to be
implemented in one year.
SITRONICS Smart Technologies also won a tender in July 2009 to provide
VISA Classic and VISA Platinum banking cards for VTB24. The contract
provides for the delivery of cards to VTB24 within one year.
SITRONICS Smart Technologies secured further contracts in July 2009 to
deliver 10 million SIM cards to Mobile TeleSystems in Russia and more
than 5 million SIM cards to Mobile TeleSystems in Ukraine. The projects
are expected to be implemented by the end of the third quarter of 2010.
The business also won a tender to supply Megafon, Russia’s third largest
mobile operator, with SIM cards over one year.
SITRONICS intends to commence the modernization of manufacturing
facilities for the production of 90 nanometre microchips in cooperation
with the Russian Corporation of Nanotechnologies. The new facilities
will be built around the existing Micron plant. This follows the
approval by the Russian Corporation of Nanotechnologies in July of a RUR
6.5 billion investment in the project.
FINANCIAL POSITION
Net cash provided by operating activities amounted to US$ 39.2 million
for the first six months of 2009, compared to US$ 0.1 million for the
same period of 2008.
Net cash used in investing activities amounted to US$ 69.2 million for
the first six months of 2009 and included capital expenditure of US$
51.5 million. This compared with total investments of US$ 226.3 million
and capital expenditure of US$ 140.1 million in the first half of 2008.
Net cash flow from financing activities amounted to US$ 79.1 million for
the first six months of 2009 and mainly reflected the increase in the
Group’s total borrowings to US$ 809.9 million from US$ 726.2 million at
the end of 2008. The increase in borrowings primarily comprised a US$
63.9 million loan provided by MDM Bank and US$ 29 million of loans
secured by INTRACOM TELECOM in Greece. SITRONICS’ weighted average cost
of borrowing was approximately 8.9% as at June 30, 2009. SITRONICS
repaid, refinanced or extended US$ 221.6 million of loans during the
first half of 2009, including the repayment of the US$ 75 million
Dresdner Bank loan, as well as 99% of the RUR 3 billion of bonds. US$
21.2 million of loans from the Greek banks to INTRACOM TELECOM and the
US$ 63.9 million MDM loan were repaid after the end of the quarter in
July 2009.
The Group’s cash and cash equivalents therefore increased to US$ 174.9
million at June 30, 2009, compared to US$ 116.7 million at the end of
2008, and the Group’s net debt amounted to US$ 635.0 million at the end
of the period, compared to US$ 609.5 million at the end of 2008.
SITRONICS’ 3 billion rubles of bonds were included in the Bank of
Russia’s Lombard List in August 2009. The list comprises Russian
infrastructure companies whose securities can be used as collateral to
secure loans from The Bank of Russia.
OTHER INFORMATION
Conference call
SITRONICS management will host a conference call today at 4.00 PM Moscow
local time, 1.00 PM London local time and 8.00 AM New York local time to
present and discuss these results. Participants may dial the following
numbers in order to access the call:
UK / International: +44 20 8515 2302
US: +1 480 629 9722US: +1 480 629 9722
A replay facility will also be made available for 7 days after the call
and may be accessed by dialing the following numbers and using the
following pin code:
UK / International: +44 20 7154 2833
US: +1 303 590 3030US: +1 303 590 3030
PIN
CODE: 4147191#
PIN
CODE: 4147191#
For further information, please visit www.sitronics.com
or contact:
SITRONICS is a leading provider of telecommunication solutions,
including software, equipment and systems integration, IT solutions and
microelectronic solutions in Russia and the Commonwealth of Independent
States with a strong presence in Central and Eastern Europe and a
growing presence in the Middle East and Africa.
SITRONICS serves over 3,500 clients, maintains offices in 32 countries
and exports its products and services to more than 60 countries.
SITRONICS has around 10,000 employees of whom approximately 4,500 are
involved in research and development.
SITRONICS’ key Telecommunication Solutions operations are based in
Prague, Czech Republic and Athens, Greece, while the company’s IT
Solutions and Microelectronics divisions are based in Kiev, Ukraine and
Zelenograd, Russia respectively.
SITRONICS generated revenues of US$ 404.0 million for the six months
ended June 30, 2009 and had total assets of US$ 1,844.8 million
at the end of the period. SITRONICS is majority owned by Sistema, the
largest public diversified corporation in Russia and the CIS, which
manages fast growing companies operating in the consumer services sector.
SITRONICS has developed strategic alliances in its home markets with
Cisco Systems, STMicroelectronics, Infineon and Giesecke & Devrient in
relation to certain products and services. SITRONICS has vendor
relationships with Siemens, Ericsson, Motorola, ORACLE, Intel, Sun
Microsystems and Microsoft. Key customers include Sistema group
companies, such as MTS, Comstar-UTS, and also OTE, Cosmote, Vodafone,
Ericsson, Arcelor Mittal (formerly Mittal Steel) and TCL.
Some of the information in this press release may contain projections
or other forward-looking statements regarding future events or the
future financial performance of SITRONICS. You can identify
forward-looking statements by terms such as 'expect,' 'believe,'
'anticipate,' 'estimate,' 'intend,' 'will,' 'could,' 'may' or 'might'
the negative of such terms or other expressions. These statements are
only predictions and actual events or results may differ materially. We
do not intend to or undertake any obligation to update these statements
to reflect events and circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events. Many factors could
cause the actual results to differ materially from those contained in
our projections or forward-looking statements, including, among others,
general economic conditions, our competitive environment, risks
associated with operating in Russia, rapid technological and market
change in our industries, and other factors specifically related to
SITRONICS and its operations.
JSC SITRONICS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS
OF JUNE 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008
(Amounts
in thousands of U.S. dollars)
|
|
|
|
June 30, 2009
|
|
|
December 31, 2008
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
174,949
|
|
$
|
116,720
|
|
Short-term investments
|
|
|
20,738
|
|
|
20,740
|
|
Trade receivables, net
|
|
|
450,414
|
|
|
566,326
|
|
Other receivables and prepaid expenses, net
|
|
|
123,387
|
|
|
117,276
|
|
Inventories, net
|
|
|
176,351
|
|
|
181,763
|
|
Restricted cash
|
|
|
459
|
|
|
7,492
|
|
Deferred tax assets, current portion
|
|
|
10,729
|
|
|
5,395
|
|
Current assets from discontinued operations
|
|
|
-
|
|
|
145,746
|
|
Total current assets
|
|
|
957, 027
|
|
|
1,161,458
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
485,069
|
|
|
499,541
|
|
Intangible assets, net
|
|
|
188,847
|
|
|
160,193
|
|
Goodwill
|
|
|
86,858
|
|
|
86,858
|
|
Inventories, net
|
|
|
23,576
|
|
|
30,768
|
|
Long-term investments
|
|
|
10,829
|
|
|
10,441
|
|
Long-term trade receivables
|
|
|
65,820
|
|
|
57,269
|
|
Deferred tax assets, non current portion
|
|
|
24,989
|
|
|
24,486
|
|
Other long-term assets
|
|
|
1,773
|
|
|
2,476
|
|
Non-current assets from discontinued operations
|
|
|
-
|
|
|
1,492
|
|
TOTAL ASSETS
|
|
$
|
1,844,788
|
|
$
|
2,034,982
|
|
|
|
|
|
|
|
|
JSC SITRONICS AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS (CONTINUED)
AS OF JUNE 30, 2009 (UNAUDITED) AND
DECEMBER 31, 2008
(Amounts in thousands of U.S. dollars,
except share amounts or if otherwise stated)
|
Liabilities and shareholders’ equity
|
|
|
June 30, 2009
|
|
|
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
$
|
251,229
|
|
$
|
324,893
|
|
Taxes payable
|
|
|
24,566
|
|
|
25,861
|
|
Accrued expenses and other current liabilities
|
|
|
136,891
|
|
|
184,291
|
|
Derivative financial instruments
|
|
|
121
|
|
|
241
|
|
Short-term loans and notes payable
|
|
|
590,996
|
|
|
403,057
|
|
Current portion of long-term debt
|
|
|
21,143
|
|
|
123,436
|
|
Deferred tax liabilities, current portion
|
|
|
11,080
|
|
|
10,542
|
|
Current liabilities from discontinued operations
|
|
|
-
|
|
|
56,990
|
|
Total current liabilities
|
|
|
1 036 026
|
|
|
1,129,311
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
Capital lease obligations
|
|
|
3,120
|
|
|
3,963
|
|
Long-term debt
|
|
|
197,806
|
|
|
199,716
|
|
Other long-term liabilities
|
|
|
9,692
|
|
|
9,508
|
|
Deferred tax liabilities, non current portion
|
|
|
25,721
|
|
|
24,248
|
|
Non-current liabilities from discontinued operations
|
|
|
-
|
|
|
13,359
|
|
Total long-term liabilities
|
|
|
236,339
|
|
|
250,794
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
1,272,365
|
|
|
1,380,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
Share capital (9,547,087,190 and 9,547,087,190 shares authorized and
issued as of June 30, 2009 and December 31, 2008, respectively, with
par value of 1 ruble)
|
|
|
335,764
|
|
|
335,764
|
|
Treasury stock (745,853,607 and 739,856,026 shares with par value of
1 ruble as of June 30, 2009 and December 31, 2008, respectively)
|
|
|
(51,123)
|
|
|
(50,940)
|
|
Shareholders receivable
|
|
|
(9,903)
|
|
|
(9,552)
|
|
Additional paid-in capital
|
|
|
427,298
|
|
|
423,999
|
|
Accumulated deficit
|
|
|
(287,075)
|
|
|
(220,166)
|
|
Accumulated other comprehensive income
|
|
|
2,727
|
|
|
16,096
|
|
TOTAL SITRONICS SHAREHOLDERS’ EQUITY
|
|
|
417,688
|
|
|
495,201
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
154,735
|
|
|
159,676
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
572,423
|
|
|
654,877
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
1,844,788
|
|
$
|
2,034,982
|
|
|
|
|
|
|
|
|
JSC SITRONICS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
FOR THE SECOND QUATER
2009 (UNAUDITED) AND THE SECOND QUATER 2008 (UNAUDITED)
(Amounts
in thousands of U.S. dollars or if otherwise stated)
|
|
|
|
|
|
|
|
|
2Q 2009
|
|
2Q 2008
|
|
Revenues
|
$
|
247,113
|
$
|
331,984
|
|
|
|
|
|
|
|
Cost of sales exclusive of depreciation and amortization shown
separately below
|
|
(177,589)
|
|
(246,315)
|
|
|
|
|
|
|
|
Research and development expenses
|
|
(5,628)
|
|
(9,479)
|
|
Selling, general and administrative expenses
|
|
(45,691)
|
|
(59,239)
|
|
Depreciation and amortization
|
|
(12,741)
|
|
(18,409)
|
|
Other operating income, net
|
|
2,798
|
|
2,605
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
8,262
|
|
1,147
|
|
|
|
|
|
|
|
Interest income
|
|
4,162
|
|
1,141
|
|
Interest expense
|
|
(17,628)
|
|
(9,541)
|
|
Foreign currency transaction gains, net
|
|
14,358
|
|
2,701
|
|
Other non-operating losses
|
|
(695)
|
|
-
|
|
|
|
|
|
|
|
Income / (loss) from continuing operations before income tax
|
|
8,459
|
|
(4,552)
|
|
|
|
|
|
|
|
Income tax expense
|
|
(5,121)
|
|
(8,372)
|
|
|
|
|
|
|
|
INCOME / (LOSS) FROM CONTINUING OPERATIONS
|
$
|
3,338
|
$
|
(12,924)
|
|
|
|
|
|
|
|
(Loss)/ income on discontinued operations
|
|
(27,627)
|
|
5,328
|
|
|
|
|
|
|
|
NET LOSS
|
|
(24,289)
|
|
(7,596)
|
|
|
|
|
|
|
|
Less: net income attributable to the noncontrolling interest
|
|
(2,340)
|
|
(4,422)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO SITRONICS
|
$
|
(26,629)
|
$
|
(12,018)
|
|
|
|
|
|
|
JSC SITRONICS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED
JUNE 30, 2009 (UNAUDITED) AND 2008 (UNAUDITED)
(Amounts
in thousands of U.S. dollars unless otherwise stated)
|
|
|
|
Six month ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
404,043
|
|
$
|
625,629
|
|
|
|
|
|
|
|
|
Cost of sales exclusive of depreciation and amortization
shown
separately below
shown
separately below
|
|
|
(291,653)
|
|
|
(471,800)
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
(11,243)
|
|
|
(21,144)
|
|
Selling, general and administrative expenses
|
|
|
(88,030)
|
|
|
(108,128)
|
|
Depreciation and amortization
|
|
|
(25,401)
|
|
|
(33,765)
|
|
Other operating income, net
|
|
|
1,001
|
|
|
5,799
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS
|
|
|
(11,283)
|
|
|
(3,409)
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
5,501
|
|
|
2,399
|
|
Interest expense
|
|
|
(29,768)
|
|
|
(16,727)
|
|
Foreign currency transaction (losses) / gains, net
|
|
|
(5,055)
|
|
|
3,506
|
|
Other non-operating losses
|
|
|
(695)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income tax
|
|
|
(41,300)
|
|
|
(14,231)
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(1,034)
|
|
|
(13,723)
|
|
|
|
|
|
|
|
|
|
LOSS FROM CONTINUING OPERATIONS
|
|
|
(42,334)
|
|
|
(27,954)
|
|
|
|
|
|
|
|
|
|
(Loss)/ Income on discontinued operations
|
|
|
(26,154)
|
|
|
14,255
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(68,488)
|
|
$
|
(13,699)
|
|
|
|
|
|
|
|
|
|
Less: net loss / (income) attributable to the noncontrolling interest
|
|
|
1,579
|
|
$
|
(6,472)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO SITRONICS*
|
|
$
|
(66,909)
|
|
$
|
(20,171)
|
|
|
|
|
|
|
|
|
|
Translation adjustment, net of noncontrolling interest of $ (3,451)
and $12,726, respectively, and income tax effect of $nil
|
|
|
(13,369)
|
|
|
30,943
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE (LOSS) / INCOME
|
|
$
|
(80,278)
|
|
|
10,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding, basic and
diluted
|
|
|
8,807,198,028
|
|
|
8,750,310,750
|
|
|
|
|
|
|
|
|
|
Loss per, basic and diluted, USD:
|
|
|
(0.008)
|
|
|
(0.001)
|
|
|
|
|
|
|
|
|
*Net income (Noncontrolling interests)
Until December 31, 2008, Sitronics reported net income attributable to
noncontrolling interest as a deduction in arriving at consolidated net
income. With effect from January 1, 2009, Sitronics has adopted the new
mandatory provisions FASB Statement No. 160 (As Amended) “Noncontrolling
Interests in Consolidated Financial Statements”, which requires that
consolidated net income be reported to include the amounts attributable
both to the parent and to the noncontrolling interest. Sitronics has
therefore reported net income before the amounts attributable to the
noncontrolling shareholders of its subsidiaries, and the latter amounts
(previously referred to as “minority interests”) are separately
disclosed. All comparative financial information has been restated in
accordance with this new policy.
JSC SITRONICS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2009
(UNAUDITED) AND 2008 (UNAUDITED)
(Amounts in thousands of
U.S. dollars)
|
|
|
|
Six month ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(68,488)
|
|
$
|
(13,699)
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash provided by operations:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
25,401
|
|
|
33,771
|
|
Gain on disposal of property, plant and equipment
|
|
|
(190)
|
|
|
(3,657)
|
|
Loss on sale of subsidiaries
|
|
|
26,155
|
|
|
-
|
|
Deferred income tax
|
|
|
(3,438)
|
|
|
4,196
|
|
Bad debt expense
|
|
|
10,869
|
|
|
116
|
|
Stock based compensation
|
|
|
3,085
|
|
|
6,669
|
|
Fin 48 effect
|
|
|
417
|
|
|
(1,404)
|
|
Foreign currency transactions loss/(gain) on non-operating
activities, net
|
|
|
16,020
|
|
|
(10,881)
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
97,529
|
|
|
(22,028)
|
|
Other receivables and prepaid expenses
|
|
|
(9,719)
|
|
|
(13,057)
|
|
Inventories
|
|
|
(676)
|
|
|
(4,588)
|
|
Accounts payable
|
|
|
(15,633)
|
|
|
36,273
|
|
Taxes payable
|
|
|
(682)
|
|
|
(3,884)
|
|
Accrued expenses and other current liabilities
|
|
|
(41,492)
|
|
|
(7,724)
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
39,158
|
|
$
|
103
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(10,265)
|
|
|
(113 935)
|
|
Proceeds from disposal of property, plant and equipment
|
|
|
1,379
|
|
|
5,583
|
|
Purchases of intangible assets
|
|
|
(41,212)
|
|
|
(26 169)
|
|
Proceeds from disposal of intangible assets
|
|
|
190
|
|
|
-
|
|
Purchases of businesses, net of cash acquired
|
|
|
-
|
|
|
(92 900)
|
|
Proceeds from disposal of business
|
|
|
1,458
|
|
|
-
|
|
Cash disposed on sale of subsidiary
|
|
|
(10,455)
|
|
|
-
|
|
Change in restricted cash
|
|
|
6,689
|
|
|
254
|
|
Purchases of short-term investments
|
|
|
(18,699)
|
|
|
9,330
|
|
Proceeds from sales of short-term investments
|
|
|
2,611
|
|
|
(8,454)
|
|
Purchases of long-term investments
|
|
|
(926)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
$
|
(69,230)
|
|
$
|
(226,291)
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE
SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED) AND 2008 (UNAUDITED)
(Amounts
in thousands of U.S. dollars)
|
|
|
Six month ended June 30,
|
|
|
|
2009
|
|
2008
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from short-term borrowings
|
$
|
285,414
|
$
|
442,679
|
|
Principal payments on short-term borrowings
|
|
(200,331)
|
|
(124,286)
|
|
Principal payments on long-term borrowings
|
|
-
|
|
(174,820)
|
|
Principal payments on capital lease obligations
|
|
(5,827)
|
|
(2,343)
|
|
Debt issuance costs
|
|
-
|
|
(750)
|
|
Repurchase of common stock
|
|
(183)
|
|
(3,797)
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
$
|
79,073
|
$
|
136,683
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents
|
|
253
|
|
7,727
|
|
|
|
|
|
|
|
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
|
$
|
49,254
|
$
|
(81,778)
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning of the period
|
$
|
125,695
|
$
|
185,486
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of the period
|
$
|
174,949
|
$
|
103,708
|
|
|
|
|
|
|
|
CASH PAID DURING THE YEAR FOR:
|
|
|
|
|
|
Interest, net of amount capitalized
|
|
(23,027)
|
|
(8,738)
|
|
Income taxes
|
|
(4,068)
|
|
(16,223)
|
|
NON-CASH ITEMS:
|
|
|
|
|
|
Equipment acquired under capital lease
|
|
(4,657)
|
|
(1,324)
|
|
|
|
|
|
|
Attachment A
Non-GAAP financial measures. This press release includes
financial information prepared in accordance with accounting principles
generally accepted in the United States of America, or US GAAP, as well
as other financial measures referred to as non-GAAP. The non-GAAP
financial measures should be considered in addition to, but not as a
substitute for, the information prepared in accordance with US GAAP.
Operating Income Before Depreciation and Amortization (OIBDA) and
OIBDA margin. OIBDA represents operating income before depreciation
and amortization. OIBDA margin is defined as OIBDA as a percentage of
our net revenues. Our OIBDA may not be similar to OIBDA measures of
other companies; is not a measurement under accounting principles
generally accepted in the United States and should be considered in
addition to, but not as a substitute for, the information contained in
our consolidated statement of operations. While depreciation and
amortization are considered operating costs under generally accepted
accounting principles, these expenses primarily represent the non-cash
current period allocation of costs associated with long-lived assets
acquired or constructed in prior periods. OIBDA can be reconciled to our
consolidated statements of operations as follows:
|
(US$ 000’s)
|
|
Q2 2009
|
|
Q2 2008
|
|
6M 2009
|
|
6M 2008
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income / (Loss)
|
|
8,262
|
|
1,147
|
|
(11,283)
|
|
(3,409)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
12,741
|
|
18,409
|
|
25,401
|
|
33,765
|
|
|
|
|
|
|
|
|
|
|
|
OIBDA
|
|
21,003
|
|
19,556
|
|
14,118
|
|
30,356
|
1 OIBDA is defined as operating income before depreciation
and amortization. Please see Attachment A to this statement for further
information.
