SANTA ANA, Calif., May 14, 2009 (GLOBE NEWSWIRE) -- ACME Communications, Inc. (Pink Sheets:ACME) today announced its financial results for the first quarter ended March 31, 2009.
Our net revenues from continuing operations decreased 20% to $6.5 million for the first quarter compared to net revenues of $8.2 million in the first quarter of 2008. The decrease was driven by sharply lower advertising demand resulting in a 22% decrease in net revenues at our television stations and a 4% revenue decrease at "The Daily Buzz". Total operating costs decreased 13% to $7.8 million for the first quarter compared to $9.0 million for the first quarter of 2008 -- driven mainly by lower program amortization and reduced promotion and compensation expense reflecting the Company's efforts to reduce all discretionary costs in the face of a severe economic downturn. Station cash-based operating expenses decreased 11%, principally on lower variable-based expenses. Our resulting broadcast cash flow for the quarter was negative $374,000 compared to $425,000 for the first quarter of 2008. Adjusted EBITDA from continuing operations decreased to negative $855,000 compared to negative EBITDA of $164,000 for the first quarter of 2008 on lower broadcast cash flow, offset somewhat by lower corporate expenses. Our loss from continuing operations of $1.6 million for the first quarter of 2009 was essentially unchanged from the first quarter of 2008.
Commenting on the quarter's results, Jamie Kellner, ACME's Chairman and CEO, said, "We are clearly operating in a very challenging marketplace and we are doing everything prudently possible to reduce costs to help minimize the adverse impact this recession is having on our financial performance. On a positive note, despite intense pressure from our more established and higher-rated in-market competitors, we once again delivered a year-over-year increase in our group share of non-political advertising revenues in our markets."
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.
First Quarter Conference Call
Senior management of ACME will host a conference call to discuss their first quarter 2009 results on Thursday May 14th at 4:30 p.m. Eastern Time. To access the conference call, please dial 888-562-3356 ten minutes prior to the start time and reference passcode 98691851. A replay of the conference call will be available on our Web site, www.acmecommunications.com, until Thursday, May 28, 2009. The Company anticipates that it will post its full quarterly unaudited financial report on the Company's Web site on Friday, May 15, 2009.
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.
ACME Communications, Inc. and Subsidiaries
Consolidated Statements of Operations
(Quarterly Data Unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
------------------
2009 2008
-------- --------
Net revenues $ 6,531 $ 8,158
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Operating expenses:
Cost of service:
Programming, including program amortization 3,031 3,402
Other costs of service (excluding depreciation
and amortization of $637 and $755 for the three
months ended March 31, 2009 and 2008,
respectively 1,022 1,235
Selling, general and administrative expenses 2,618 2,994
Depreciation and amortization 640 762
Corporate expenses 484 613
-------- --------
Operating expenses 7,795 9,006
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Operating loss (1,264) (848)
Other expenses:
Interest, net (64) (95)
-------- --------
Loss from continuing operations before income taxes (1,328) (943)
Income tax expense (265) (695)
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Loss from continuing operations (1,593) (1,638)
-------- --------
Discontinued operations:
Income (loss) from discontinued operations,
before income taxes (5) 8
Income tax expense -- --
-------- --------
Income (loss) from discontinued operations (5) 8
-------- --------
Net loss $ (1,598) $ (1,630)
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Net income (loss) per share, basic and diluted:
Continuing operations $ (0.10) $ (0.10)
Discontinued operations -- --
-------- --------
Net loss per share $ (0.10) $ (0.10)
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Weighted average basic and diluted common shares
outstanding 16,047 16,047
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Supplemental Table 1
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ACME Communications Inc. and Subsidiaries
Reconciliation of Operating Loss to Broadcast Cash Flow and
Adjusted EBITDA
(Unaudited)
(In thousands)
Three Months Ended
March 31,
------------------
2009 2008
-------- --------
Operating loss $ (1,264) $ (848)
Add (less):
Stock-based compensation at stations -- 30
Depreciation and amortization 640 762
Amortization of program rights 1,360 1,541
Corporate expenses 484 613
Program payments (1,594) (1,673)
-------- --------
Broadcast cash flow(1) (374) 425
Add (less):
Corporate expenses (484) (613)
Stock-based compensation at corporate 3 24
-------- --------
Adjusted EBITDA $ (855) $ (164)
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Broadcast cash flow margin(1) -5.7% 5.2%
Adjusted EBITDA margin(1) -13.1% -2.0%
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(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
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ACME Communications Inc. and Subsidiaries
Reconciliation of Operating Expenses to Cash-Based Station
Operating Expenses
(Unaudited)
(In thousands)
Three Months Ended
March 31,
------------------
2009 2008
-------- --------
Operating expenses $ 7,795 $ 9,006
Add (less):
Program payments 1,594 1,673
Depreciation and amortization (640) (762)
Corporate expense (484) (613)
Barter program costs (590) (747)
Program amortization (1,360) (1,541)
Daily Buzz production costs (870) (878)
Stock-based compensation at stations -- (30)
-------- --------
Total cash-based station operating expenses $ 5,445 $ 6,108
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Supplemental Table 3
--------------------
ACME Communications Inc. and Subsidiaries
Reconciliation of Net Revenues to Station Net Revenues
(Unaudited)
(In thousands)
Three Months Ended
March 31,
------------------
2009 2008
-------- --------
Net revenues $ 6,531 $ 8,158
Less: Daily Buzz net revenues (745) (780)
-------- --------
Station net revenues $ 5,786 $ 7,378
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