ACME Communications Q1 net revenues increased 13% to $8.2 million for the first quarter compared to net revenues of $7.2 million in the first quarter of 2007. The increase was driven by a 2% increase in net revenues at its television stations and the inclusion of The Daily Buzz in consolidated Q1 results compared to Q1 2007 when the venture’s results were accounted for using the equity-method. Operating expenses, which include the cost of The Daily Buzz, were up 12% to $9.0 million compared to $8.1 million for the first quarter of 2007. On a cash-based basis, station operating expenses increased 6%, principally on higher programming payments. Resulting broadcast cash flow for the quarter was $425,000 compared to $611,000 for Q1 2007, a 30% decrease. Net loss from continuing operations was $1.6 million compared to $1.1 million for Q1 2007 on higher tax expense as their Q1 2007 tax provision was net of a current tax benefit used to offset the tax on the gain from the February 2007 sale of their Ft. Myers station.
Said Jamie Kellner, ACME CEO: "We are pleased to report a net revenue gain during a quarter where most broadcasters experienced year-over-year declines. While the environment remains challenging and the advertising outlook is uncertain, our revenue growth has continued into the current quarter — driven by prudent investments in programming and promotion in the face of a disappointing performance by our primary network, The CW. At the same time, we have kept a tight lid on all other station operating costs and have continued to benefit from reduced corporate expenses. Despite the difficult M&A market, we continue to pursue all options for monetizing our station assets in the best interest of our shareholders."
ACME expects Q2 net revenues to increase 3-5% over Q2 2007 station net revenues of $8.3 million and expects cash-based station expenses to increase 3-5% above the levels of the prior year quarter on higher programming payments. They expect resulting broadcast cash flow for the second quarter of 2008 to be in the range of $1.0 – $1.2 million, compared to broadcast cash flow of $761,000 for Q2 2007.
