$12 Million Write-Down Buzzes Acme
August 15, 2008
Acme Communications Inc. took a $12 million write-down on the value of its broadcast licenses in the second quarter, a reassessment triggered by its falling stock price and the general economic climate.
Not counting the write-down, the company’s net revenues for continuing operations rose 4 percent over the second quarter of 2007, to $8.7 million. That was driven by a 3 percent rise in revenue at its six television stations and a 10 percent revenue increase from its “The Daily Buzz” program, which is aired on 140 stations nationwide.
The company took an additional write-down of $807,000 for its program rights and suffered a $653,000 charge related to an abandoned backup transmitter lease for its Albuquerque station.
The charges meant a loss from continuing operations in the quarter of $11.2 million, compared to a net loss of $970,000 for the second quarter of 2007.
Chairman and CEO Jamie Kellner said the company might sell some assets.
“Looking ahead, overall advertising demand, apart from political spending, remains weak reflecting the economic slowdown,” he said. “However, we believe significant political spending in several of our markets will allow us to increase our share of non-political dollars, especially in the fall. Given the current environment, we are also focused on reducing station and corporate expenses, while prudently supporting our ability to maximize revenues. Despite a continued difficult M&A market, we continue to pursue all options for monetizing our station assets in the best interest of our shareholders.”
The company projects third quarter 2008 net revenues to grow by 1-2 percent over Q3 2007.
Acme, based in Santa Ana, Calif., owns and operates KWBQ and KASY (Albuquerque-Santa Fe, N.M.), WBXX (Knoxville, Tenn.), WBDT (Dayton, Ohio), WIWB (Green Bay-Appleton, Wis.) and WBUW-TV (Madison, Wis.).
Acme’s stock price, above $5 per share in parts of 2007, plunged from about $3 per share in March to barely $1 at the end of the second quarter.