Acme's Core Advertisers Boost 2Q Results

Core ad categories helped mid-size TV station owner Acme Communications perk up 6 percent in net second-quarter revenue to $9.5 million, versus $9.0 million a year ago. But third-quarter numbers could spell trouble.

Although 2006 has been a strong TV political year for most stations, the Santa Ana, Calif.-based station group of seven stations says political ad spending matched spending during the same period in 2005. Its bread-and-butter advertisers, however--which generally include automotive, financial and fast-food marketers--showed gains.

For the quarter, it pushed Acme's net income in the black to $3.8 million, from a net loss of $1.8 million a year ago.

The group's cash flow from its broadcast operations improved by 50 percent to $1.3 million over the same period in 2005. Its overall cash flow--earnings before interest, taxes, depreciation and amortization (EBITDA) was more than six times higher than 2005, at $414,000.

Acme expects third-quarter 2006 net revenues to be performing at lower levels, predicting flat to 2 percent improvement over third-quarter 2005 net revenues of $8.6 million. Acme attributes this to lower-performing program ratings from its network affiliations with The WB and UPN.

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"We expect near-term challenges related to reduced programming investment by The WB and UPN networks, which is adversely affecting our ratings and revenues leading up to the September launches of The CW Network and MyNetworkTV...," the company said in a statement.

Six of the company's seven stations are WB affiliates that will be converting to CW next month. One of Acme's Albuquerque-Santa Fe, N.M. stations will change to MyNetworkTV next month from its UPN affiliation. Acme recently agreed in principal to sell its WTVK Fort Myers-Naples, Fla. station for $45 million to Sun Broadcasting.

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