Growth in net revenue comes without help from political, says group of eight (soon-to-be seven) TV stations. Third quarter appears flat as group’s seven WB affiliates count down final days of the network.
Santa Ana, Calif.-based Acme Communications reported this morning that its 6% year-over-year, second-quarter increase in net revenue came from core advertising. Political spending in the quarter was the same as last year, the station group said.
Broadcast cash flow for the quarter increased 50% to $1.3 million compared to broadcast cash flow of $861,000 for the second quarter of 2005. Adjusted EBITDA was $414,000 compared to $62,000 in the second quarter of 2005.
“We posted solid second-quarter results as the majority of our stations posted healthy non-political advertising gains which, coupled with our successful continuing efforts to reduce operating expenses, led to impressive broadcast cash flow and EBIDTA growth,” said Acme Chairman/CEO Jaime Kellner.
Based on current current sales pacings, Acme said, it expects third-quarter 2006 net revenues to increase 0%-2% over our third-quarter 2005 net revenues of $8.6 million.
Acme also expects cash-based station expenses to be relatively unchanged from the prior year, resulting in broadcast cash flow of $500,000 to $700,000 compared to broadcast cash flow of $509,000 for the third quarter of 2005.
Providing some “color” to securities analysts on a conference call, President/COO Doug Gealy said 2Q ad revenue was down in several key categories, including soft drinks (down 11%), fast food (down 5%) and movies (down 26%). Political spending and retail were essentially flat.
The good news—and the reason for the net revenue gain—was auto (up 3.4%), corporate (up 12.9%), schools and education (up 20%), telecommunications (up 81%) and banking (up 56%).
The Acme executives said the third quarter is suffering because of the low ratings of The WB as it ticks off its final days with little promotion. Gealy says primetime accounts for between 17% and 19% of each station’s revenue.
Things should turn around in the latter half of September after the debut of the CW, which is combining the best of The WB and UPN, they said.
Excluding KUWB and WTVK, Acme owns seven stations in six mid-sized markets. Six of the stations are WB affiliates that will be converting to CW next month. Acme’s second station in Albuquerque-Santa Fe will be going from UPN to Fox’s My Network Television.
Acme has been shedding stations lately. On April 4, it completed the sale of KUWB Salt Lake City to Clear Channel Broadcasting for $18.5 million. And on May 15, it announced that it was selling WTVK Fort Myers-Naples, Fla., to Sun Broadcasting for $45 million.
Acme said that its second-quarter results do not include those of KUWB and WTVK, which have been classified as discontinued operations.