SANTA ANA, Calif., Nov. 13, 2008 (GLOBE NEWSWIRE) -- ACME Communications, Inc. (Pink Sheets:ACME) today announced its financial results for the third quarter ended September 30, 2008.
Our net revenues from continuing operations increased 5% to $8.5 million for the third quarter compared to net revenues of $8.1 million in the third quarter of 2007. The increase was driven by a 1% increase in net revenues at our television stations and a 67% revenue increase at "The Daily Buzz". Total operating costs for the third quarter of 2008 were $9.4 million compared to $12.7 million for the third quarter of 2007. The decrease was mainly driven by a $3.7 million impairment charge related to our FCC broadcast licenses which we took during the third quarter of 2007. No such impairment charge was taken during the third quarter of 2008. This non-cash charge had no effect on our operating cash flow, liquidity or borrowings available under our revolving credit facility. Station cash-based operating expenses increased 4%, principally on higher programming payments and accelerated promotion expenses to support the early fall launch of The CW Network. Our resulting broadcast cash flow for the quarter was $640,000 compared to $517,000 for the third quarter of 2007, a 24% increase. Adjusted EBITDA from continuing operations increased to $73,000 compared to negative EBITDA of $260,000 on higher broadcast cash flow and sharply lower corporate expenses. Our net loss from continuing operations for the third quarter of 2008 was $1.0 million, compared to a net loss of $2.5 million for the third quarter of 2007, driven primarily by the aforementioned non-cash write-down of broadcast licenses during the third quarter of 2007.
Commenting on the quarter's results, Jamie Kellner, ACME's Chairman and CEO, said, "We are pleased to report a net revenue gain at our stations during a quarter which saw increasing weakness in non-political revenues as it progressed. Our results were driven by our ability to drive increased viewing and revenue shares as we benefited from a stronger programming slate. Looking ahead, the advertising downturn has accelerated in the fourth quarter and we expect to face a very difficult operating environment well into 2009. Given the depressed state of the economy, we will continue to focus on reducing our station and corporate expenses, while prudently supporting our ability to maximize revenues."
Use of Broadcast Cash Flow, Adjusted EBITDA and Same Station Results
GAAP refers to generally accepted accounting principles in the United States. Broadcast cash flow, station cash-based operating expenses and adjusted EBITDA are non-GAAP measures. Broadcast cash flow is commonly used as an indicator of operating performance for broadcasting companies and is also used to value broadcasting assets. Station cash-based operating expenses, which use program payments in place of program amortization, exclude "The Daily Buzz" production costs and exclude non-cash operating expenses like depreciation and amortization, impairment of intangibles, lease abandonment costs and equity-based compensation, are an important metric in determining our cash expense growth. Adjusted EBITDA is also used as a performance measure and often used to measure a company's ability to service debt, as evidenced by the fact that our senior credit facility historically contained financial covenants relating to our adjusted EBITDA.
Broadcast cash flow, station cash-based operating expenses and adjusted EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. We consider operating loss to be the most comparable GAAP measure to broadcast cash flow and to adjusted EBITDA; therefore, the Company has included a reconciliation of operating loss to broadcast cash flow and adjusted EBITDA in Supplemental Table 1. A reconciliation of operating expenses to cash-based station operating expenses is included in Supplemental Table 2. Because broadcast cash flow, cash-based station operating expenses and adjusted EBITDA are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, the broadcast cash flow, cash-based station operating expenses and adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.
Third Quarter Conference Call
Senior management of ACME will host a conference call to discuss their third quarter 2008 results on Thursday, November 13th at 4:30 p.m. Eastern Time. To access the conference call, please dial 973-582-2700 ten minutes prior to the start time and reference passcode 72499742. A replay of the conference call will be available through Thursday, November 27th by dialing 800-642-1687 (U.S.) or 706-645-9291 (International), passcode 72499742. In addition, we will provide a live webcast of the conference call on our Web site, located at http://www.acmecommunications.com. The webcast will also be archived on our Web site until Thursday, November 27, 2008. The Company will post its full quarterly unaudited financial report on the Company's Web site on Friday, November 14, 2008.
About ACME Communications
ACME Communications, Inc. owns and operates six television stations serving markets covering 2.2% of the nation's television households. The Company's stations are: KWBQ-TV and KASY-TV, Albuquerque-Santa Fe, NM; WBXX-TV, Knoxville, TN; WBDT-TV, Dayton, OH; WIWB-TV, Green Bay-Appleton, WI and WBUW-TV, Madison, WI. All of the Company's stations, except KASY-TV, a MyNetworkTV affiliate, are affiliates of The CW Network. The Company also produces The Daily Buzz, a nationally syndicated morning news and lifestyle program which airs on more than 140 television stations across the country. Our shares are traded over the counter under the symbol: ACME.
Forward-Looking Statements:
The matters discussed in this press release include forward-looking statements. In addition, when used in this press release, the words "will", "expects", "intends" and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including (but not limited to) the ratings growth or decline of our programming, including The CW Network and, to a lesser extent, MyNetworkTV, the impact of changes in national and regional economies, including advertising demand, pricing fluctuations in local and national advertising, volatility in programming costs, and the other risk factors set forth in the Company's 2007 Form 10-K filed with the Securities and Exchange Commission on March 31, 2008. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
ACME Communications, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Net revenues $ 8,482 $ 8,050 $ 25,310 $ 23,621
-------- -------- -------- --------
Operating expenses:
Cost of service:
Programming, including
program amortization 3,782 3,132 11,450 8,613
Other costs of service
(excluding depreciation and
amortization of $681 and
$828 for the three months
ended September 30, 2008 and
2007, respectively, and
$2,101 and $2,412 for the
nine months ended
September 30, 2008 and 2007,
respectively) 1,440 1,280 4,009 3,817
Selling, general and
administrative expenses 2,880 2,957 8,820 8,801
Depreciation and amortization 690 836 2,122 2,434
Impairment of broadcast
licenses -- 3,700 11,959 3,700
Lease termination costs -- -- 653 --
Corporate expenses 578 804 1,769 2,690
-------- -------- -------- --------
Operating expenses 9,370 12,709 40,782 30,055
-------- -------- -------- --------
Operating loss (888) (4,659) (15,472) (6,434)
Other income (expenses):
Interest, net (64) 5 (397) 39
Equity in loss of
unconsolidated affiliate -- -- -- (251)
-------- -------- -------- --------
Loss from continuing operations
before income taxes (952) (4,654) (15,869) (6,646)
Income tax benefit (expense) (81) 2,125 1,964 2,046
-------- -------- -------- --------
Loss from continuing
operations (1,033) (2,529) (13,905) (4,600)
-------- -------- -------- --------
Discontinued operations:
Income (loss) from
discontinued operations,
before income taxes (11) (231) 17 24,492
Income tax expense -- (1,221) -- (1,428)
-------- -------- -------- --------
Income (loss) from
discontinued operations (11) (1,452) 17 23,064
-------- -------- -------- --------
Net income (loss) $ (1,044) $ (3,981) $(13,888) $ 18,464
======== ======== ======== ========
Net income (loss) per share,
basic and diluted:
Continuing operations $ (0.06) $ (0.16) $ (0.87) $ (0.29)
Discontinued operations -- (0.09) -- 1.44
-------- -------- -------- --------
Net income (loss) per share $ (0.06) $ (0.25) $ (0.87) $ 1.15
======== ======== ======== ========
Weighted average basic and
diluted common shares
outstanding 16,047 16,047 16,047 16,047
======== ======== ======== ========
Supplemental Table 1
--------------------
ACME Communications Inc. and Subsidiaries
Reconciliation of Operating Loss to Broadcast Cash Flow and Adjusted
EBITDA
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Operating loss $ (888) $ (4,659) $(15,472) $ (6,434)
Add (less):
Stock-based compensation at
stations 13 66 74 141
Depreciation and amortization 690 836 2,122 2,434
Impairment of broadcast
licenses -- 3,700 11,959 3,700
Amortization of program rights 1,833 1,478 5,724 4,305
Lease termination costs -- -- 653 --
Corporate expenses 578 804 1,769 2,690
Implied contribution from
former Daily Buzz venture
partner -- (160) -- (310)
Equity in loss of The Daily
Buzz, before depreciation -- -- -- (161)
Program payments (1,586) (1,548) (4,828) (4,476)
-------- -------- -------- --------
Broadcast cash flow(1) 640 517 2,001 1,889
Add (less):
Corporate expenses (578) (804) (1,769) (2,690)
Stock-based compensation at
corporate 11 27 57 161
-------- -------- -------- --------
Adjusted EBITDA $ 73 $ (260) $ 289 $ (640)
======== ======== ======== ========
Broadcast cash flow margin(1) 7.5% 6.4% 7.9% 8.0%
Adjusted EBITDA margin(1) 0.9% -3.2% 1.1% -2.7%
======== ======== ======== ========
(1) We define:
* Broadcast cash flow as operating income (loss), plus stock-based
compensation, depreciation and amortization, amortization of
program rights, impairment of broadcast licenses, non-cash lease
termination costs and corporate expenses, less program payments
(excluding program payments related to construction permits);
* Adjusted EBITDA as broadcast cash flow less corporate expenses,
exclusive of stock-based compensation;
* Broadcast cash flow margin is broadcast cash flow as a percentage
of net revenues; and
* Adjusted EBITDA margin is adjusted EBITDA as a percentage of net
revenues.
Supplemental Table 2
--------------------
ACME Communications Inc. and Subsidiaries
Reconciliation of Operating Expenses to Cash-Based Station Operating
Expenses
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Operating expenses $ 9,370 $ 12,709 $ 40,782 $ 30,055
Add (less):
Program payments 1,586 1,548 4,828 4,476
Depreciation and amortization (690) (836) (2,122) (2,434)
Impairment of broadcast
licenses -- (3,700) (11,959) (3,700)
Corporate expense (578) (804) (1,769) (2,690)
Barter program costs (794) (767) (2,343) (2,245)
Program amortization (1,833) (1,478) (5,724) (4,305)
Daily Buzz production costs (875) (688) (2,612) (1,538)
Lease termination costs -- -- (653) --
Stock-based compensation at
stations (13) (66) (74) (141)
-------- -------- -------- --------
Total cash-based station
operating expenses $ 6,173 $ 5,918 $ 18,354 $ 17,478
======== ======== ======== ========
Supplemental Table 3
--------------------
ACME Communications Inc. and Subsidiaries
Reconciliation of Net Revenues to Station Net Revenues
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Net revenues $ 8,482 $ 8,050 $ 25,310 $ 23,621
Less: Daily Buzz net revenues (871) (521) (1,465) (1,145)
-------- -------- -------- --------
Station net revenues $ 7,611 $ 7,529 $ 23,845 $ 22,476
======== ======== ======== ========