SANTA ANA, Calif., Aug. 17, 2009 (GLOBE NEWSWIRE) -- ACME Communications, Inc. (Pink Sheets:ACME) today announced its financial results for the second quarter ended June 30, 2009.
Our net revenues from continuing operations decreased 21% to $6.9 million for the second quarter compared to net revenues of $8.7 million in the second quarter of 2008. The decrease was driven primarily by continued sharply lower advertising demand resulting in a 23% decrease in net revenues at our television stations. Revenues at The Daily Buzz actually increased 6% for the quarter on higher advertising sales driven by broader advertiser acceptance of the show. Total operating costs decreased 65% to $7.8 million for the second quarter compared to $22.4 million for the second quarter of 2008, which included a $12.0 million charge related to the impairment of our television licenses. Station cash-based operating expenses decreased 9%, primarily on reduced promotion and compensation expense reflecting the Company's continued efforts to reduce all discretionary costs in the face of the continued severe economic downturn. Our resulting broadcast cash flow for the quarter was negative $173,000 compared to $936,000 for the second quarter of 2008. Adjusted EBITDA from continuing operations decreased to negative $675,000 compared to EBITDA of $380,000 for the second quarter of 2008 on lower broadcast cash flow, offset somewhat by a 12% reduction in corporate expense. Our net loss for the second quarter of 2009 was $1.2 million, significantly less than the $11.2 million net loss for the second quarter of 2008 due to the prior year aforementioned impairment charge.
For the six-month period, our net revenues for continuing operations decreased 20% to $13.4 million compared to net revenues of $16.8 million for the first six months of 2008 on sharply lower advertising demand in our five television markets. Total operating costs decreased 50% to $15.6 million for the six-month period compared to operating costs of $31.4 million for the first six months of 2008 which included the aforementioned $12.0 million impairment charge on our television licenses. Station cash-based operating expenses were down 10% from the prior year period and broadcast cash flow declined to negative $547,000 from $1.4 million for the first six months of 2008. Adjusted EBITDA from continuing operations declined to negative $1.5 million from $216,000 and our net loss decreased to $2.8 million from the 2008 six-month period's net loss of $12.8 million.
Commenting on the quarter's results, Jamie Kellner, ACME's Chairman and CEO, said, "We continue operating in a very challenging marketplace and we are doing everything prudently possible to reduce costs to help minimize the adverse impact that this difficult economic environment is having on our financial performance. We have entered into agreements with certain of our key program suppliers to restructure our program payments which we believe, together with our current revolving credit facility, will give us financial flexibility to weather this economic storm."
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.
Second Quarter Conference Call
Senior management of ACME will host a conference call to discuss their second quarter 2009 results on Monday, August 17th at 4:30 p.m. Eastern Time. To access the conference call, please dial 888-562-3356 no sooner than ten minutes prior to the start time and reference passcode 24501929. A replay of the conference call will be available on our Web site, www.acmecommunications.com, until Monday, August 31, 2009. The Company will post its full quarterly unaudited financial report on the Company's Web site on Tuesday, August 18, 2009.
About ACME Communications, Inc.
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 150 television stations across the country. The Company's shares are traded over-the-counter under the symbol: ACME.PK.
ACME Communications, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Net revenues $ 6,850 $ 8,670 $ 13,381 $ 16,828
-------- -------- -------- --------
Operating expenses:
Cost of service:
Programming, including
program amortization 3,013 4,266 6,044 7,668
Other costs of service
(excluding depreciation
and amortization of $604
and $664 for the three
months ended June 30, 2009
and 2008, respectively,
and $1,241 and $1,419 for
the six months ended
June 30, 2009 and 2008,
respectively) 1,053 1,334 2,075 2,569
Selling, general and
administrative expenses 2,646 2,946 5,264 5,940
Depreciation and
amortization 607 670 1,247 1,432
Impairment of broadcast
licenses -- 11,959 -- 11,959
Lease termination costs -- 653 -- 653
Corporate expenses 506 578 990 1,191
-------- -------- -------- --------
Operating expenses 7,825 22,406 15,620 31,412
-------- -------- -------- --------
Operating loss (975) (13,736) (2,239) (14,584)
Other expenses:
Interest, net (71) (238) (135) (333)
-------- -------- -------- --------
Loss from continuing
operations, before income
taxes (1,046) (13,974) (2,374) (14,917)
Income tax benefit (expense) (69) 2,740 (334) 2,045
-------- -------- -------- --------
Loss from continuing
operations (1,115) (11,234) (2,708) (12,872)
-------- -------- -------- --------
Discontinued operations:
Income (loss) from
discontinued operations,
before income taxes (70) 20 (75) 28
Income tax benefit (expense) -- -- -- --
-------- -------- -------- --------
Income (loss) from
discontinued operations (70) 20 (75) 28
-------- -------- -------- --------
Net loss $ (1,185) $(11,214) $ (2,783) $(12,844)
======== ======== ======== ========
Net income (loss) per share,
basic and diluted:
Continuing operations $ (0.07) $ (0.70) $ (0.17) $ (0.80)
Discontinued operations -- -- -- --
-------- -------- -------- --------
Net loss per share $ (0.07) $ (0.70) $ (0.17) $ (0.80)
======== ======== ======== ========
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 Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Operating loss $ (975) $(13,736) $ (2,239) $(14,584)
Add (less):
Stock-based compensation at
stations -- 31 -- 61
Depreciation and amortization 607 670 1,247 1,432
Impairment of broadcast
licenses -- 11,959 -- 11,959
Amortization of program
rights 1,290 2,350 2,650 3,891
Lease termination costs -- 653 -- 653
Corporate expenses 506 578 990 1,191
Program payments (1,601) (1,569) (3,195) (3,242)
-------- -------- -------- --------
Broadcast cash flow (1) (173) 936 (547) 1,361
Add (less):
Corporate expenses (506) (578) (990) (1,191)
Stock-based compensation at
corporate 4 22 7 46
-------- -------- -------- --------
Adjusted EBITDA $ (675) $ 380 $ (1,530) $ 216
======== ======== ======== ========
Broadcast cash flow margin (1) -2.5% 10.8% -4.1% 8.1%
Adjusted EBITDA margin (1) -9.9% 4.4% -11.4% 1.3%
======== ======== ======== ========
(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
(before program supplier deferrals and 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 Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Operating expenses $ 7,825 $ 22,406 $ 15,620 $ 31,412
Add (less):
Program payments 1,601 1,569 3,195 3,242
Depreciation and amortization (607) (670) (1,247) (1,432)
Impairment of broadcast
licenses -- (11,959) -- (11,959)
Corporate expense (506) (578) (990) (1,191)
Barter program costs (632) (802) (1,222) (1,549)
Program amortization (1,290) (2,350) (2,650) (3,891)
Daily Buzz production costs (868) (859) (1,738) (1,737)
Lease termination costs -- (653) -- (653)
Stock-based compensation
at stations -- (31) -- (61)
-------- -------- -------- --------
Total cash-based station
operating expenses $ 5,523 $ 6,073 $ 10,968 $ 12,181
======== ======== ======== ========
Supplemental Table 3
--------------------
ACME Communications Inc. and Subsidiaries
Reconciliation of Net Revenues to Station Net Revenues
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Net revenues $ 6,850 $ 8,670 $ 13,381 $ 16,828
Less: Daily Buzz net revenues (725) (685) (1,470) (1,465)
-------- -------- -------- --------
Station net revenues $ 6,125 $ 7,985 $ 11,911 $ 15,363
======== ======== ======== ========