EURO Eurotrust A/S ADS (MM)

EuroTrust A/S (Nasdaq: EURO) today reported operating results for, the three and six month periods ended June 30, 2005. Net revenue for the three months ended June 30, 2005 was 27,606,000 DKK, or approximately $4,480,000 U.S., compared to 26,840,000 DKK for the three months ended June 30, 2004. Net revenue for the three-months ended June 30, 2005 was an approximate 35% increase in net revenue over the first three months of the current year, resulting in total net revenue of 48,055,000 DKK, or approximately $7,798,000 U.S., for the six months ended June 30, 2005. This was a reduction from 60,916,000 DKK of net revenue for the first six months of 2004 largely due to the sale of most of EuroTrust's Internet services business units in the 2004 period which are no longer included in EuroTrust's operating results in 2005. In the three-month and six-month periods ended June 30, 2005, the sale of the balance of EuroTrust's Internet services business units and related facilities produced gains of 5,276,000 DKK and 6,670,000 DKK, respectively. This contrasted with the gains from sales of such businesses in the comparable period for the prior year that increased income for both the three-month and six-month periods ended June 30, 2004 by approximately 63 million DKK. Due to this substantial difference in non-recurring other income, the three-month period ended June 30, 2005 realized a net loss of 2,214,000 DKK, or approximately $360,000 U.S., as compared to net income of 55,278,000 DKK for the three months ended June 30, 2004. Similarly, the six-month period ended June 30, 2005 realized a net loss of 4,911,000 DKK, or approximately $821,000 U.S., as compared to net income of 56,870,000 DKK for the six months ended June 30, 2004. Aldo Petersen, Chief Executive Officer of EuroTrust said, "Now that we have completed the sales of our various Internet-related business units, our resources are fully focused on our media operations, allowing us to expand our programming beyond that offered by our original channel, dk4. In addition to our 4 Sport channel, which we launched in the latter part of last year to provide coverage of sporting events of particular interest to Danish subscribers, in 2005 we have also launched an interactive game channel, Game Zone TV. We are encouraged by the early response to these expanded offerings." About EuroTrust A/S: EuroTrust (Nasdaq ADS: EURO) owns cable/satellite networks in Denmark and is the largest provider of mobile television production services in Scandinavia, operating a fleet of eight state-of-the-art mobile units including one of the few high definition production units in Northern Europe. More information about EuroTrust and its subsidiaries is available at www.eurotrust.dk EUROTRUST A/S CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) (Unaudited) -0- *T Six months ended June Three months ended June 30, 30, 2004 2005 2005 2004 2005 2005 ------- -------- ------- ------- ------- ------- DKK DKK USD DKK DKK USD Net revenue 60,916 48,055 $7,798 26,840 27,606 $4,480 Operating expenses: Cost of revenues, (exclusive of depreciation shown separately below) 35,490 34,564 5,609 19,469 21,220 3,444 Selling and marketing 14,510 9,058 1,470 6,941 5,034 817 General and administrative 12,944 11,092 1,800 6,979 6,212 1,008 Depreciation 4,141 5,279 857 935 2,609 423 ------- -------- ------- ------- ------- ------- Total operating expenses 67,085 59,993 9,736 34,324 35,075 5,692 ------- -------- ------- ------- ------- ------- Operating income (loss) (6,169) (11,938) (1,938) (7,484) (7,469) (1,212) Other income (expenses) Interest income 38 362 59 35 163 26 Interest expense (255) (696) (113) (153) (398) (65) Foreign exchange gain (loss), net (19) 697 113 (41) 355 58 Gains from sales of businesses 63,331 6,670 1,082 63,131 5,276 856 Other (expenses) income, net (239) (150) (24) (210) (150) (24) ------- -------- ------- ------- ------- ------- (Loss) income before income taxes and minority interest 56,687 (5,055) (821) 55,278 (2,223) (361) Income tax expense 0 104 17 0 0 0 Minority interest in net income (loss) of subsidiaries 183 40 6 0 9 1 ------- -------- ------- ------- ------- ------- Net (loss) income 56,870 (4,911) $(798) 55,278 (2,214) $(360) ======= ======== ======= ======= ======= ======= Basic income (loss) per weighted average common share Net (loss) income 11.57 (0.92) $(0.15) 11.61 (0.41) $(0.07) ======= ======== ======= ======= ======= ======= Weighted average common shares outstanding 4,917 5,330 5,330 4,763 5,446 5,446 ================ ======= =============== ======= Diluted income (loss) per weighted average common shares Net (loss) income 9.85 (0.92) $(0.15) 9.83 (0.41) $(0.07) ======= ======== ======= ======= ======= ======= Weighted average common shares outstanding, assuming dilution 5,776 5,330 5,330 5,623 5,446 5,446 ======= ======== ======= ======= ======= ======= *T DKK amounts have been converted into US$ at an exchange rate of $1=DKK 6.1623. EUROTRUST A/S CONSOLIDATED BALANCE SHEETS (in thousands) -0- *T December 31, Unaudited -------- ----------------- 2004 June 30, 2005 -------- ----------------- DKK DKK USD ASSETS Current assets: Cash and cash equivalents 6,750 7,954 $1,291 Restricted cash 5,352 3,006 488 Debt securities, available for sale - 13,000 2,110 Accounts receivable trade, net of allowances for doubtful accounts of DKK 592 in 2004 and DKK 148 in 2005 17,173 17,370 2,819 Notes receivable, current 2,200 2,200 357 Broadcasting programming rights, current 2,928 2,928 475 Deferred tax assets, current - - - Valued added tax receivables 332 147 24 Prepaid expenses and deposits 2,263 2,659 431 Other receivables 2,748 6,385 1,036 -------- -------- -------- Total current assets 39,746 55,649 9,031 Marketable securities - available for sale 197 - - Notes receivable, net of current portion 8,800 8,250 1,339 Broadcasting programming rights, net of current portion 2,898 1,431 232 Rent and other long term deposits 3,256 2,361 383 Other receivables, long term 588 535 87 Long term investments at cost - - - Equity method investment in Mediehuset Danmark ApS 1,638 1,638 266 Property, plant and equipment, net 92,592 69,511 11,280 Goodwill 24,561 24,613 3,994 Deferred tax assets, net of current portion 3,972 3,715 603 -------- -------- -------- Total assets 178,248 167,703 $27,215 ======== ======== ======== *T DKK amounts have been converted into US$ at an exchange rate of $1=DKK 6.1623. EUROTRUST A/S CONSOLIDATED BALANCE SHEETS (Cont.) (in thousands) -0- *T December 31, Unaudited 2004 June 30, 2005 --------- ------------------ DKK DKK USD LIABILITIES AND SHAREHOLDERS` EQUITY Current liabilities: Secured line of credit 8,417 12,530 $2,033 Bank loan, current portion 741 741 120 Lease obligations, current portion 1,244 1,244 202 Accounts payable 24,026 14,102 2,289 Accrued expenses 12,613 11,619 1,886 Equipment purchase obligation, current 12,152 12,152 1,972 --------- --------- -------- Total current liabilities 59,193 52,388 8,502 Long term liabilities: Long term equipment purchase obligation, net of current portion 9,749 3,464 562 Bank loan, long term, less current maturities 3,099 2,739 445 Lease obligations, long term, less current maturities 4,585 3,972 645 --------- --------- -------- Total long term liabilities 17,433 10,175 1,652 Minority interest in subsidiaries 56 16 2 Shareholders' equity: Common shares - par value DKK 7.50, 7,991,000 and 8,445,292 authorized, 5,108,267 and 5,562,482 issued at December 31, 2004 and June 30, 2005, respectively 38,312 41,719 6,770 Additional paid-in capital 519,844 525,702 85,309 Accumulated deficit (457,386) (462,297) (75,020) Accumulative other comprehensive income 796 - - --------- --------- -------- Total shareholders' equity 101,566 105,124 17,059 --------- --------- -------- Total liabilities and shareholders' equity 178,248 167,703 $27,215 ========= ========= ======== *T DKK amounts have been converted into US$ at an exchange rate of $1=DKK 6.1623. Statements in this announcement other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties that could cause EuroTrust's actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, general economic conditions or other factors that might affect planned television production opportunities in the balance of 2004. More information about potential factors that could affect the company's business and financial results is included in EuroTrust's filings with the Securities and Exchange Commission, including in the company's Annual Report on Form 20-F for the year ended December 31, 2004 and quarterly reports on Form 6-K. EuroTrust undertakes no obligation to update any of the forward-looking statements after the date of this press release.