<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACTS OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED June 30, 1999
COMMISSION FILE NUMBERS:
ACME Intermediate Holdings, LLC 333-40277
ACME Television, LLC 333-40281
----------------
ACME INTERMEDIATE HOLDINGS, LLC
and
ACME TELEVISION, LLC
- --------------------------------------------------------------------------------
(Exact name of registrants as specified in their charter)
<TABLE>
<S> <C> <C>
Delaware ACME Intermediate Holdings, LLC 52-2050589
Delaware ACME Television, LLC 52-2050588
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
----------------
2101 E. Fourth Street, Suite 202
Santa Ana, California, 92705
(714) 245-9499
- --------------------------------------------------------------------------------
(Address and Telephone number of Principal Executive Offices)
----------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) have been subject to such filing
requirements for the past 90 days. Yes [X] No[ ]
92.14% of the membership units of ACME Intermediate Holdings, LLC are owned
directly or indirectly by ACME Television Holdings, LLC. 100% of the membership
units of ACME Television, LLC are owned directly or indirectly by ACME
Intermediate Holdings, LLC. Such membership units are not publicly traded.
As of August 16, 1999, ACME Intermediate Holdings, LLC had 910,986 common
membership units outstanding.
As of August 16, 1999, ACME Television, LLC had 200 common membership units
outstanding.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This Amendment Number 1 to ACME Intermediate Holdings, LLC and ACME Television,
LLC's (together, the Companies) reports on Form 10-Q for the quarter ended June
30, 1999, is being filed to adjust the income tax expense for the first quarter
of 1999 and the associated deferred tax liability, footnotes and management
discussion and analysis to record the estimated tax effect relating to an
inadvertent merger of two of the Company's subsidiaries during the first
quarter. The Company was not aware of the tax exposure at time of the original
filing of this document. The Company obtained appropriate state governmental
rescissions of the merger during the quarter ended September 30, 1999, and the
adjustment to the tax provision made for the first quarter 1999, as reflected in
this filing, was reversed at that time and is reflected in the Companies'
reports on Form 10-Q for the quarter ended September 30, 1999.
In response to the SEC's request in conjunction with the Companies' parent, ACME
Communications', initial public offering and ACME Communications' prospectus
filed with the SEC on September 29, 1999, we have also changed the presentation
format of our broadcast cash flow and adjusted EBITDA tables and made minor
grammatical changes to certain footnotes and management discussion and analysis
comments to conform this document to the Companies' Form 10-K/As for the year
ended December 31, 1998, which was filed October 14, 1999.
<PAGE> 3
ACME INTERMEDIATE HOLDINGS, LLC
And
ACME TELEVISION, LLC
FORM 10-Q/A
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM
NUMBER PAGE
------ ----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ACME INTERMEDIATE HOLDINGS, LLC and Subsidiaries and
ACME TELEVISION, LLC and Subsidiaries
Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998.................................. 3
Consolidated Statements of Operations
for the Three Months Ended June 30, 1999 and June 30, 1998........... 4
Consolidated Statements of Operations
for the Six Months Ended June 30, 1999 and June 30, 1998............. 5
Consolidated Statements of Members' Capital.......................... 6
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1999 and June 30, 1998................................ 7
Notes to Consolidated Financial Statements........................... 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.................................................. 11
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................. 14
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS........................................................... 14
Item 6. EXHIBITS AND REPORTS ON FORM 8-K............................................ 15
</TABLE>
2
<PAGE> 4
PART I - FINANCIAL INFORMATION
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF JUNE 30,
------------------------- --------------------------
1998 1999
------------------------- --------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS TELEVISION HOLDINGS TELEVISION
------------ ---------- ------------ -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 953 $ 953 $ 1,617 $ 1,617
Accounts receivable, net 10,609 10,609 13,151 13,151
Due from affiliates 4 131 5 5
Current portion of programming rights 6,357 6,357 6,508 6,508
Prepaid expenses and other current assets 414 414 767 767
--------- --------- --------- ---------
Total current assets 18,337 18,464 22,048 22,048
Property and equipment, net 16,441 16,441 25,002 25,002
Programming rights, net of current portion 8,046 8,046 5,757 5,757
Deposits 36 36 536 536
Deferred income taxes 3,811 3,811 3,971 3,971
Intangible assets, net 222,987 222,987 261,156 261,156
Other assets 17,187 15,592 10,808 9,237
--------- --------- --------- ---------
Total assets $ 286,845 $ 285,377 $ 329,278 $ 327,707
========= ========= ========= =========
LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
Bank borrowings $ 8,000 $ 8,000 $ 39,400 $ 39,400
Accounts payable 4,425 4,425 4,951 4,951
Accrued liabilities 4,210 4,210 7,831 7,831
Due from affiliates -- -- 205 78
Current portion of programming rights
payable 7,649 7,649 6,082 6,082
Current portion of obligations under
lease 1,273 1,273 1,277 1,277
--------- --------- --------- ---------
Total current liabilities 25,557 25,557 59,746 59,619
Programming rights payable, net of
current portion 6,512 6,512 4,964 4,964
Obligations under lease, net of
current portion 4,199 4,199 4,078 4,078
Other liabilities 1,125 1,125 540 541
Deferred income taxes 31,241 31,241 33,439 33,439
10 7/8% Senior discount notes 145,448 145,448 153,357 153,357
12% Senior secured notes 42,051 -- 44,913 --
--------- --------- --------- ---------
Total liabilities 256,133 214,082 301,037 255,998
--------- --------- --------- ---------
Redeemable members' capital -- -- 15,366 --
--------- --------- --------- ---------
Members' capital 58,402 92,563 68,736 118,263
Accumulated deficit (27,690) (21,268) (55,861) (46,554)
--------- --------- --------- ---------
Total members' capital 30,712 71,295 12,875 71,709
--------- --------- --------- ---------
Total liabilities and members' capital $ 286,845 $ 285,377 $ 329,278 $ 327,707
========= ========= ========= =========
</TABLE>
See the notes to the consolidated financial statements
3
<PAGE> 5
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30,
-------------------------------------------------------------------
1998 1999
------------------------------- ---------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- -------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues $ 11,570 $ 11,570 $ 15,512 $ 15,512
Operating expenses:
Station operating expenses 9,214 9,214 11,560 11,560
Depreciation and amortization 3,332 3,332 4,393 4,393
Corporate 605 605 762 762
Equity-based compensation -- -- 8,200 8,200
-------- -------- -------- --------
Total operating expenses 13,151 13,151 24,915 24,915
-------- -------- -------- --------
Operating income (loss) (1,581) (1,581) (9,403) (9,403)
Other income (expenses):
Interest income 115 115 12 12
Interest expense (5,303) (4,004) (6,600) (5,108)
-------- -------- -------- --------
Net loss before income taxes (6,769) (5,470) (15,991) (14,499)
Income tax benefit 385 385 191 191
-------- -------- -------- --------
Net loss $ (6,384) $ (5,085) $(15,800) $(14,308)
======== ======== ======== ========
</TABLE>
See the notes to the consolidated financial statements
4
<PAGE> 6
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------------------
1998 1999
------------------------------- ---------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- -------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues $ 19,327 $ 19,327 $ 26,635 $ 26,635
Operating expenses:
Station operating expenses 15,165 15,165 19,990 19,990
Depreciation and amortization 4,181 4,181 8,159 8,159
Corporate 1,194 1,194 1,483 1,483
Equity-based compensation -- -- 10,700 10,700
-------- -------- -------- --------
Total operating expenses 20,540 20,540 40,332 40,332
-------- -------- -------- --------
Operating income (loss) (1,213) (1,213) (13,697) (13,697)
Other income (expenses):
Interest income 188 188 20 20
Interest expense (10,194) (7,683) (12,430) (9,545)
-------- -------- -------- --------
Net loss before income taxes (11,219) (8,708) (26,107) (23,222)
Income tax benefit (expense) 365 365 2,064 2,064
-------- -------- -------- --------
Net loss $(10,854) $ (8,343) $(28,171) $(25,286)
======== ======== ======== ========
</TABLE>
See the notes to the consolidated financial statements
5
<PAGE> 7
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF MEMBERS' CAPITAL
<TABLE>
<CAPTION>
ACME INTERMEDIATE HOLDINGS, LLC
--------------------------------
COMMON TOTAL
MEMBERS' ACCUMULATED MEMBERS'
CAPITAL DEFICIT CAPITAL
-------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at December 31, 1998 58,402 (27,690) 30,712
Contribution of Parent 10,700 -- 10,700
Redeemable preferred dividend (366) -- (366)
Net loss -- (28,171) (28,171)
-------- -------- --------
Balance at June 30, 1999 (unaudited) 68,736 (55,861) 12,875
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
ACME TELEVISION, LLC
--------------------------------
TOTAL
MEMBERS' ACCUMULATED MEMBERS'
CAPITAL DEFICIT CAPITAL
-------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at December 31, 1998 92,563 (21,268) 71,295
Equity-based compensation 10,700 -- 10,700
Contribution of Parent 15,000 -- 15,000
Net loss -- (25,286) (25,286)
-------- -------- --------
Balance at June 30, 1999 (unaudited) $118,263 $(46,554) $ 71,709
======== ======== ========
</TABLE>
6
<PAGE> 8
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
------------------------------------------------------------------
JUNE 30, 1998 JUNE 30, 1999
----------------------------- ------------------------------
ACME ACME ACME ACME
INTERMEDIATE TELEVISION, INTERMEDIATE TELEVISION,
HOLDINGS, LLC LLC HOLDINGS, LLC LLC
------------- ----------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $(10,854) $ (8,343) $(28,171) $(25,286)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,181 4,181 8,159 8,159
Amortization of program rights 2,195 2,195 3,250 3,250
Amortization of debt issuance costs 185 180 285 261
Amortization of discount on senior discount notes 6,934 6,934 7,909 7,909
Amortization of discount on senior secured notes 2,503 -- 2,861 --
Non-cash compensation expense - Management Carry Units -- -- 10,700 10,700
Deferred taxes (345) (345) 2,038 2,038
Changes in assets and liabilities: -- -- -- --
Increase in accounts receivables, net (4,013) (4,013) (2,542) (2,542)
Increase in prepaid expenses (691) (691) (353) (353)
(Increase) decrease in due from affiliates -- -- 126 126
(Increase) other assets -- -- (2,583) (2,583)
Increase in accounts payable 102 102 526 526
Increase in accrued expenses 4,304 4,304 3,621 3,621
Payments on programming rights payable (2,853) (2,853) (4,227) (4,227)
Decrease in other liabilities (1,727) (1,730) (505) (505)
-------- -------- -------- --------
Net cash provided by (used in) operating activities (79) (79) 1,094 1,094
-------- -------- -------- --------
Cash flows from investing activities:
Purchase of property and equipment (3,934) (3,934) (4,493) (4,493)
Purchase of station interests (17,635) (17,635) (41,265) (41,265)
Cash acquired in acquisition - St. Louis 779 779 -- --
Deposits relating to station acquisitions -- -- (500) (500)
-------- -------- -------- --------
Net cash used in investing activities (20,790) (20,790) (46,258) (46,258)
-------- -------- -------- --------
Cash flows from financing activities:
Increase in notes payable to bank 12,000 12,000 31,400 31,400
Borrowings under (repayments of) capital leases 1,935 1,935 (572) (572)
Issuance of redeemable preferred membership units -- -- 15,000 --
Issuance of membership units -- -- -- 15,000
-------- -------- -------- --------
Net cash provided by financing activities 13,935 13,935 45,828 45,828
-------- -------- -------- --------
Net increase (decrease) in cash (6,934) (6,934) 664 664
Cash at beginning of period 8,820 8,820 953 953
-------- -------- -------- --------
Cash at end of period $ 1,886 $ 1,886 $ 1,617 $ 1,617
======== ======== ======== ========
Cash Payments for:
Interest 121 121 630 630
Taxes 18 18 25 25
======== ======== ======== ========
Non-Cash Transactions:
Purchases of property and equipment in exchange
for capital lease obligations 2,036 2,036 438 438
Exchange of note receivable and option deposit as
purchase consideration for station interest -- -- 7,000 7,000
Contribution of Parent for membership units $ 7,050 $ 7,050 $ -- $ --
======== ======== ======== ========
</TABLE>
See the notes to the consolidated financial statements
7
<PAGE> 9
ACME TELEVISION, LLC AND
ACME INTERMEDIATE HOLDINGS, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1999 and June 30, 1998
(Unaudited)
(1) DESCRIPTION OF THE BUSINESS AND FORMATION
Presentation/Interim Financial Statements
Financial statements are presented for each of ACME Intermediate Holdings, LLC
and its subsidiary, ACME Television, LLC. Unless the context requires otherwise,
references to the "Company" refers to ACME Intermediate Holdings; LLC and its
consolidated subsidiaries and references to "ACME Television" refer to ACME
Television, LLC and its consolidated subsidiaries. Segment information is not
presented since all of the Company's revenue is attributed to a single
reportable segment. Certain amounts previously reported for 1998 have been
reclassified to conform to the 1999 financial statement presentation.
The accompanying consolidated financial statements for the six months ended June
30, 1999 and 1998 are unaudited and have been prepared in accordance with
generally accepted accounting principles, the instructions to this Form 10-Q and
Article 10 of Regulation S-X. In the opinion of management, such financial
statements include all adjustments (consisting of normal recurring accruals)
considered necessary for the fair presentation of the financial position and the
results of operations, and cash flows for these periods. As permitted under the
applicable rules and regulations of the Securities and Exchange Commission,
these financials statements do not include all disclosures and footnotes
normally included with audited consolidated financial statements, and
accordingly, should be read in conjunction with the consolidated financial
statements, and the notes thereto, included in the integrated Annual Report on
Form 10-K for ACME Television and ACME Intermediate for the year ended December
31, 1998. The results of operations presented in the accompanying financial
statements are not necessarily indicative of the results that may be expected
for the year ending December 31, 1999.
Nature of Business
ACME Intermediate Holdings, LLC is a holding company with no assets or
independent operations other than its wholly-owned subsidiary, ACME Television,
LLC. ACME Television, through its subsidiaries, owns and/or operates the
following nine commercially licensed broadcast television stations (the
"Stations" or "Subsidiaries") located throughout the United States:
<TABLE>
<CAPTION>
Network
Station Market Affiliation Status
------- ------ ----------- ------
<S> <C> <C> <C>
KPLR - 11 St. Louis WB Owned and Operated
KWBP - 32 Portland, OR WB Owned and Operated
KUWB - 30 Salt Lake City WB Operated/Not Owned
KUPX - 16 Salt Lake City PAX Owned/Not Operated
KWBQ - 19 Albuquerque WB Owned and Operated
WBXX - 20 Knoxville WB Owned and Operated
WTVK - 46 Ft. Myers/Naples WB Owned and Operated
WBDT - 26 Dayton WB Owned and Operated
WIWB - 14 Green Bay WB Owned and Operated
WBUI - 23 Champaign-Springfield-Decatur WB Owned and Operated
</TABLE>
(2) ACQUISITIONS
On March 13, 1998, ACME Missouri completed its acquisition of Koplar
Communications, Inc. ("KCI") and acquired all of the outstanding stock of KCI
for a total consideration of approximately $146.3 million. The acquisition was
accounted for using the purchase method. Pursuant to an interim LMA entered into
with KCI in connection with the acquisition, effective October 1, 1997 all
revenues and operating expenses (except depreciation and amortization) of the
station for the period from September 30, 1997 to March 31, 1998 (the effective
date of the purchase transaction) are included in ACME Television's historical
operating results. The purchase transaction was recorded on the consolidated
balance sheet of ACME Television effective March 31, 1998 and beginning on April
1, 1998, ACME Television's results includes the amortization of all intangible
assets related to the acquisition.
8
<PAGE> 10
ACME TELEVISION, LLC AND
ACME INTERMEDIATE HOLDINGS, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Six Months Ended June 30, 1999 and June 30, 1998
(Unaudited)
On June 30, 1998, ACME Television acquired substantially all the assets and
assumed certain liabilities of WTVK-Channel 46 serving the Fort Myers/Naples,
Florida marketplace for approximately $14.5 million in cash and 1,047 membership
units in ACME Intermediate's parent, ACME Television Holdings, LLC ("ACME
Parent"), (valued at approximately $1.0 million). The acquisition was accounted
for using the purchase method and the value of the Parent membership units
issued was treated as a contribution from ACME Parent to ACME Intermediate and
then from ACME Intermediate to ACME Television. The excess of the purchase price
over the fair value of the net assets assumed of approximately $15.5 million was
recorded as an intangible asset and is being amortized over a period of 20
years. In connection with the acquisition, ACME Television entered into an LMA
agreement with WTVK wherein ACME Television, effective March 3, 1998, retained
all revenues generated by the station, bore all operating expenses (except
depreciation and amortization) of the station and had the right to program the
station (subject to WTVK's ultimate authority for programming) and the station's
existing ACME programming commitments. The LMA terminated upon the consummation
of the acquisition. Consequently, under the LMA the revenues and operating
expenses of the station are included in the Company's results of operations from
March 3, 1998 to June 30, 1998. The purchase transaction was recorded on the
consolidated balance sheet of the Company on June 30, 1998 and the Company's
results of operations includes revenues and expenses (including amortization of
intangible assets) beginning July 1, 1998.
On February 16, 1999, ACME Television acquired the remaining 51% interest in
Station KUPX in exchange for the payment of $7.0 million (consisting of (i) $3.0
million paid in December 1997 for an option to acquire the remaining 51% of
Station KUPX and (ii) $4.0 million in repayment of a loan from ACME Parent to
the sellers of this station) plus approximately $1.0 million in cash. In March
1999, the FCC approved the swap of station KUPX for station KUWB, which ACME
Television has been operating under an LMA since April 1998. Station KUPX has
been operated by the current owner of Station KUWB since May 1998 under a
reciprocal LMA agreement. The station swap is expected to close during the third
quarter of 1999, at which time the LMAs will terminate. ACME Television intends
to account for the swap as a business combination using fair market value, and
will record KUPX at its fair value. Any difference between the fair value and
the carrying value of KUWB will result in a gain or loss, however, the Company
believes that the fair value of station KUWB approximates the historical cost of
station KUPX.
On February 19, 1999, ACME Television entered into an agreement in principle
with Ramar Communications ("Ramar") to acquire the assets of Ramar's station,
KASY TV-50, serving the Albuquerque, NM, market for approximately $27 million.
In a related transaction, ACME Television will concurrently sell to Ramar the
broadcast license to operate station KWBQ, also serving the Albuquerque market.
ACME Television will also enter into a 10-year LMA agreement with Ramar to
operate KWBQ. This transaction has been approved by the FCC and is expected to
close in the fourth quarter of 1999. At the closing, Ramar will grant an
affiliate of the Company an option to repurchase KWBQ for $100,000 which we
expect will be assigned to us immediately after the closing of the sale of KWBQ
to Ramar.
On April 23, 1999, ACME Television through its newly created subsidiaries ACME
Television of Ohio, LLC ("ACME Ohio"), ACME Television of Illinois, LLC ("ACME
Illinois") and ACME Television of Wisconsin, LLC ("ACME Wisconsin"), acquired
all of the property and equipment of three wholly-owned subsidiaries of Paxson
Communications Corporation ("Paxson"): Paxson Communications of Dayton-26, Inc.
(Station WBDT, Channel 26, which is licensed to broadcast in the Dayton, Ohio
market), Paxson Communications of Green Bay-14, Inc. (Station WIWB, Channel 14,
which is licensed to broadcast in the Green Bay, Wisconsin market) and Paxson
Communications of Decatur-23, Inc. (Station WBUI, Channel 23, which is licensed
to broadcast in the Champaign-Decatur, Illinois market) (collectively, the
"Acquired Stations") for an aggregate purchase price of $32 million. Following
FCC approval of the transfer of the broadcast licenses and pursuant to the same
Asset Purchase Agreement , ACME acquired the licenses of the Acquired Stations
(the "Licenses Acquisition") for an additional aggregate consideration of $8
million on June 23, 1999. ACME Television operated the three stations under an
interim LMA agreement beginning June 2, 1999 and the operating results of the
three stations from the commencement of the LMA until the closing of the license
acquisition are included in the Company's results of operation for the second
quarter.
9
<PAGE> 11
ACME TELEVISION, LLC AND
ACME INTERMEDIATE HOLDINGS, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Six Months Ended June 30, 1999 and June 30, 1998
(Unaudited)
(3) ISSUANCE OF REDEEMABLE PREFERRED MEMBERSHIP UNITS
On April 23, 1999, in connection with the acquisition of the property and
equipment assets of the Paxson Acquired Stations, ACME Intermediate issued 7,000
units of a newly created class of mandatory redeemable preferred membership
units to ACME Parent in exchange for a $7 million cash contribution. On June 23,
1999, an additional $8 million contribution was received by ACME Intermediate
from ACME Parent in exchange for 8,000 preferred units. ACME Intermediate, on
the same days of receipt from ACME Parent, contributed to ACME Television the
aggregate $15 million.
The terms of the ACME Intermediate preferred units provide for dividend accruals
at the rate of 22.5% per annum for the first six months following issuance.
Thereafter, the dividend rate increases 2.5% every three months until it reaches
a 35% cap. All dividends along with the par value of the preferred units are
mandatorily redeemable to ACME Parent on the earlier of (a) the completion of
new permanent financing, including an initial public offering or a debt offering
or (b) October 1, 2005. ACME Intermediate may redeem, in whole or in part, the
preferred units earlier than the mandatory redemption date, without penalty, if
either by that date its Senior Secured Notes have been redeemed, or if approved
by a majority of those noteholders.
(4) RELATED PARTY TRANSACTIONS
In February 1999, ACME Parent acquired a 25% membership interest in Sylvan
Tower, LLC - an entity formed for the sole purpose of building digital
transmission facilities to service the Portland, Oregon marketplace - for
approximately $2.5 million. ACME Parent subsequently entered into an agreement
to enter into a long-term lease with ACME Television of Oregon, LLC (a
subsidiary of ACME Television ("ACME Oregon") which allows station KWBP to
install and operate a digital television antenna and transmitter at the site. In
connection with the acquisition of this lease, ACME Oregon paid to ACME Parent
approximately $2.5 million, which has been treated as deferred tower rent and is
included in other non-current assets as of June 30, 1999.
Also in February 1999, ACME Oregon exercised its option to purchase the property
where KWBP's corporate and studio facilities are located for $1.5 million from a
member of ACME Parent. Before this purchase, the same facility was leased from
an affiliate of this same member.
(5) CERTAIN COMPENSATION ARRANGEMENTS
ACME Parent has issued Management Carry Units ("MCUs") to certain founding
members of management. These units entitle the holders to certain distribution
rights, payable by ACME Parent, upon achievement of certain returns by
non-management investors and are subject to partial forfeiture or repurchase by
ACME Parent in the event of termination of each individual's employment by ACME
Parent under certain specified circumstances. These MCUs are accounted for as a
variable compensation plan, resulting in an expense when it is probable that any
such distributions will be made. Inasmuch as these MCUs represent a non-cash
expense to the Company, any expense incurred by the Company shall be deemed to
have been funded by a capital contribution from ACME Parent. For the six months
ended June 30, 1999 the Company has recorded compensation expense and a
corresponding capital contribution of $10.7 million related to the MCUs. For the
six months ended June 30, 1998, no expense or related capital contribution was
recorded.
(6) SUBSEQUENT EVENTS
On August 2, 1999, ACME Parent announced its plan to reorganize as ACME
Communications, Inc. in connection with a proposed initial public offering filed
by ACME Communications on Form S-1 with the Securities and Exchange Commission
on July 30, 1999. There is no guarantee that ACME Communications will be able to
complete its initial public offering.
10
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and related notes included in Item 1 of this
report.
OVERVIEW
We derive our revenues primarily from the sale of advertising time to
local, regional and national advertisers. Our revenues depend on our ability to
provide popular programming that attracts audiences in the demographic groups
targeted by advertisers, thereby allowing us to sell advertising time at
satisfactory rates. Our revenues also depend significantly on factors such as
the national and local economy and the level of local competition.
Our revenues are generally highest during the fourth quarter of each year,
primarily due to increased expenditures by advertisers in anticipation of
holiday season consumer spending and an increase in viewership during this
period. We generally pay commissions to advertising agencies on local, regional
and national advertising and to national sales representatives on national
advertising. Our revenues reflect deductions from gross revenues for commissions
payable to advertising agencies and national sales representatives.
Our primary operating expenses are programming costs, employee
compensation, advertising and promotion expenditures and depreciation and
amortization. Programming expense consists primarily of amortization of
broadcast rights relating to syndicated programs as well as news production and
sports rights fees. Changes in employee compensation expense result primarily
from increases in total staffing levels, from adjustments to fixed salaries
based on individual performance and inflation and from changes in sales
commissions paid to our sales staff based on levels of advertising revenues.
Advertising and promotion expenses consist primarily of media and related
production costs resulting from the promotion of our stations and programs. This
amount is net of any reimbursement received or due for such advertisement and
promotion from any network, including The WB Network, or other program provider.
The carrying value of long-lived assets, consisting of tangible,
identifiable intangible, and goodwill, is reviewed if the facts and
circumstances suggest that they might be impaired. For purposes of this review,
assets are grouped at the operating company level, which is the lowest level for
which there are identifiable cash flows. If this review indicates that an
asset's carrying value will not be recoverable, as determined based on future
expected, undiscounted cash flows, the carrying value is reduced to fair market
value. There are neither facts nor circumstances that would lead management to
believe that any of our long-lived assets are impaired.
RESULTS OF OPERATIONS
The following table sets forth our calculation of broadcast cash flow and
adjusted EBITDA, along with a recap of our statement of cash flow data for the
periods indicated:
<TABLE>
<CAPTION>
ACME INTERMEDIATE AND ACME TELEVISION
--------------------------------------------------------
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1998 1999 1998 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Broadcast cash flow and adjusted EBITDA(1)
Operating loss $(1,581) $(9,403) $ (1,213) $(13,697)
Add back:
Equity based compensation -- 8,200 -- 10,700
Depreciation and amortization 3,332 4,393 4,181 8,159
Time brokerage fees 171 -- 228 --
Amortization of program rights 1,186 1,668 2,195 3,250
Corporate expenses 605 762 1,194 1,483
Adjusted program payments(1) (1,001) (1,736) (2,152) (3,379)
------- ------- -------- --------
Broadcast cash flow 2,712 3,884 4,433 6,516
Less:
Corporate expenses 605 762 1,194 1,483
------- ------- -------- --------
Adjusted EBITDA $ 2,107 $ 3,122 $ 3,239 $ 5,033
Broadcast cash flow margin(1) 23.4% 25.0% 22.9% 24.5%
Adjusted EBITDA margin(1) 18.2% 20.1% 16.8% 18.9%
Cash flows provided by (used in):
Operating activities $ (79) $ 1,094
Investing activities $(20,790) $(46,258)
Financing activities $ 13,935 $ 45,828
</TABLE>
11
<PAGE> 13
(1) We define:
- broadcast cash flow as operating income, plus equity-based compensation,
depreciation and amortization, time brokerage fees, amortization of
program rights, and corporate expenses, less program payments -- the
latter as adjusted to reflect reductions for liabilities relating to
expired rights or rights which have been written-off in connection with
acquisitions;
- adjusted EBITDA as broadcast cash flow less corporate expenses;
- broadcast cash flow margin as broadcast cash flow as a percentage of net
revenues; and
- adjusted EBITDA margin as adjusted EBITDA as a percentage of net
revenues.
We have included broadcast cash flow, broadcast cash flow margin, adjusted
EBITDA and adjusted EBITDA margin data because management believes that
these measures are useful to an investor to evaluate our ability to service
debt and to assess the earning ability of our stations' operations.
However, you should not consider these items in isolation or as substitutes
for net income, cash flows from operating activities or other statement of
operations or cash flows data prepared in accordance with generally
accepted accounting principles. These measures are not necessarily
comparable to similarly titled measures employed by other companies.
Net revenues increased 34% to $15.5 million for the second quarter and
increased 38% to $26.6 million for the first half of 1999 compared to the same
periods a year ago. These gains reflect solid growth at our flagship station
KPLR and significant increases in net revenues at our stations in Portland,
Oregon (KWBP), Salt Lake City (KUWB) and Knoxville (WBXX). The revenue gains in
these markets have been driven by improved audience ratings at these stations.
Station operating expenses increased 28% to $11.5 million for the second
quarter and increased 32% to $20.0 million for the first half of 1999 compared
to the same periods a year ago. These increases are primarily related to
increased programming and staffing related costs at our developing stations in
Portland, Oregon, Salt Lake City, Albuquerque, Knoxville and Ft. Myers.
Depreciation and amortization increased 32% to $4.4 million in the second
quarter and increased 95% to $8.2 million during the first half of 1999
compared to the corresponding periods a year ago. The second quarter increase
relates primarily to the increased depreciation of property, plant and equipment
additions since June 1998 and to the amortization of intangibles related to our
WTVK - Ft. Myers acquisition in June 1998. The significant increase for the
first half primarily relates to the March 1998 acquisition of KPLR - St. Louis
and the resulting amortization of intangibles for that station.
Corporate expenses increased 7% to $762,000 for the second quarter and increased
24% to $1.6 million for the first half of 1999. These increases in corporate
overhead relate primarily to increased staffing to support the growing
operations of our station group.
Equity-based compensation expense during the quarter was $8.2 million and for
the first half of 1999 totaled $10.7 million. There was no corresponding expense
in 1998. This expense, which is related to the June 1997 grant by ACME Parent of
Management Carry Units (MCU's) to the Company's founding executives, reflects
the significant increase in estimated value of ACME Parent during the past six
months and the resulting value of the MCU's. The increase in ACME Parent's value
has been driven primarily by the success of The WB Network, the recent results
of the Company and the increased number of the stations under ownership and
management.
Interest expense for ACME Television for the second quarter was $5.1 million,
an increase of 27% over the prior year second quarter. First half interest
expense increased 24% to $9.5 million. These increases in interest expense
relate primarily to the continued increased principal balance of ACME
Television's 10 7/8% senior discount notes and the April 1999 borrowings on the
Company's revolving credit facility in connection with the acquisition of the
Paxson Stations.
Interest expense for ACME Intermediate for the second quarter was $6.6
million, an increase of 24% over the prior year second quarter. First half
interest expense increased 22% to $12.4 million. These increases in interest
expense relate primarily to the increased ACME Television interest expense and
the continued increased principal balance of ACME Intermediate's 12% senior
secured notes.
The Company recorded a net income tax expense of $2.1 million during the first
half of 1999 compared to a $365,000 net income tax benefit recorded for the
first half of 1998. The tax expense for the first half of 1999 includes a $3.0
million accrual relating to the merger of two of the Company's subsidiaries
offset by a benefit of $936,000 relating to a net operating loss carryforward at
KPLR and a reduction of a deferred tax liability primarily related to KPLR'S FCC
license. The merger transaction was rescinded and the accrual will be reversed
in the third quarter of 1999.
12
<PAGE> 14
ACME Intermediate's and ACME Television's net losses for the second quarter were
$15.8 million and $14.308 million, respectively, compared to net losses for the
second quarter of 1998 of $6.384 million and $5.085 million, respectively. These
increased net losses of approximately $9.4 million for ACME Intermediate and
$9.2 million for ACME Television are attributable primarily to the $8.2 million
equity-based compensation charge in the second quarter, increased interest
expense and increased depreciation and amortization, net of improved operating
results (exclusive of depreciation and amortization) at the stations. For the
first half, ACME Intermediate's net loss was $28.2 million compared to a $10.9
million net loss in the prior year period and ACME Television's net loss was
$25.3 million compared to $8.3 million net loss in the prior year period. These
increased losses were primarily attributable to the $10.2 million equity-based
compensation charge for the first half of 1999, the increased amortization
relating to the March 1998 acquisition of KPLR and increased interest expense,
and the accrual of the $3.0 million tax expense offset somewhat by improved
operating results (exclusive of depreciation and amortization) at the stations.
Broadcast cash flow for the second quarter increased 48% to $3.883 million and
for the first half increased 47% to $6.516 million. These increases were driven
by significant revenue gains and improved operating margins at all of our
stations. EBITDA increased 48% to $3.122 million for the second quarter and
increased 55% for the first half due to increased broadcast cash flow and a
lower growth of corporate expenses compared to our broadcast cash flow growth.
Liquidity and Capital Resources
Cash flows provided by operating activities for ACME Television and ACME
Intermediate were $1.1 million for the six months ended June 30 1999 compared to
cash flows used by operating activities of $79,000 for the first half of 1998.
This increase is related primarily to the Company's improved broadcast cash flow
for the period, offset by increased working capital needs.
Cash flows used by the Company in investing activities during the first half of
1999 were $46.3 million compared to $20.8 million used for investing activities
during the first six months of 1998. This increase relates primarily to the
acquisition of the Paxson Stations as described in note 2.
Cash flows provided by financing activities for the Company of $45.8 million for
the first half of 1999 related primarily to increased borrowings and the
issuance of membership units in connection with the second quarter 1999
acquisition of the Paxson Stations.
At June 30 1999, ACME Television's existing credit agreement allows for
revolving credit borrowings of up to a maximum of $40 million, dependent upon
its meeting certain financial ratio tests as set forth in the credit agreement.
The revolving credit facility can be used to fund future acquisitions of
broadcast stations and for general corporate purposes. At June 30 1999, $39.4
million was outstanding and $600,000 was available under the facility. The
interest rate on this outstanding principal amount was 8.00% per annum at June
30 1999.
ACME Television's 10 7/8% Senior Discount Notes, issued in September 1997, do
not accrue cash interest until October 1, 2000 with the first semi-annual
payment of interest due on June 30 2001. ACME Intermediate's 12% Senior Secured
Notes, also issued in September 1997, do not accrue cash interest until October
1, 2002 with the first semi-annual payment of interest due on June 30 2003.
The Company believes that internally generated funds from operations and
borrowings under its credit agreement, if necessary, will be sufficient to
satisfy the Company's cash requirements for its existing operations for at least
the next twelve months. The Company expects that any future acquisitions of
television stations would be financed through funds generated from operations,
through borrowings under the existing credit agreement and through additional
debt and equity financings. However there is no guarantee that such additional
debt and/or equity financing and/or equity contributions by ACME Parent will be
available or available at rates acceptable to the Company.
Year 2000
The Year 2000 ("Y2K") issues are a result of computer software applications
using a two-digit format, as opposed to a four-digit format, to indicate the
year. Some computer software applications might be unable to uniquely
distinguish dates beyond the year 1999, which could cause a system failure, or
miscalculations at our broadcast and corporate locations which could cause
disruption of operations, including a temporary inability to produce broadcast
signals or engage in normal business activities.
ACME Television is in the process of evaluating potential Year 2000 (Y2K) issues
for both its information technology (IT) and non-IT systems such as
13
<PAGE> 15
telephone/PBX systems, fax machines, editing equipment, cameras, microphones,
etc). All internal software and hardware is purchased, leased or licensed from
third party vendors. Most of the Company's station facilities are new or have
been recently upgraded and the Company has polled all of its significant
software vendors and has been advised by them that their software is Y2K
compliant.
The Company has completed its assessment, planning and testing phases, and has
commenced the final phase of its Y2K project-implementation. During this phase,
the Company will fix, retest and implement critical applications that were
discovered to be Y2K deficient during the preceding phases.
At this point in time, the Company is not aware of any additional significant
upgrades or changes that will need to be made to its internal software and
hardware to become Y2K ready, nor is it aware of any material supplier with Y2K
readiness problem, but this is subject to change as the compliance testing
process continues. The Company expects to be able to implement the systems and
programming changes necessary to address Y2K IT and non-IT readiness issues and,
based on preliminary estimates, does not believe that the costs associated with
such actions will have a material effect on the Company's results of operations
or financial condition. There can be no assurance, however, that there will not
be a delay in, or increased costs associated with the implementation of such
changes.
Adoption of Accounting Standard
The Company has adopted FASB (Financial Accounting Standards Board) statement
No. 133 "Accounting for Derivative Instruments and Hedging Activities". This
pronouncement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, (collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This pronouncement is not expected to impact the Company's
financial statements as the Company has no derivative instruments at June 30,
1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ACME Television's revolving credit facility has a variable interest rate.
Accordingly, the Company's interest expense can be materially affected by future
fluctuations in the applicable interest rate. Based on our June 30, 1999 loan
balance under the facility, a 100 basis point increase in the underlying rates
would result in additional interest expense of $3.9 million on an annualized
basis.
PART II - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
The Company currently and from time to time is involved in litigation incidental
to the conduct of its business. The Company maintains comprehensive general
liability and other insurance, which it believes to be adequate for the purpose.
The Company is not currently a party to any lawsuit or proceeding that
management believes would have a material adverse affect on its financial
condition or results of operations.
14
<PAGE> 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
3.1 Certificate of Formation of ACME Intermediate Holdings, LLC,
incorporated by reference to Exhibit 3.1 of ACME Intermediate
Holdings, LLC's Registration Statement on Form S-4, File No.
333-40277 filed on November 14, 1997 (the "Intermediate Registration
Statement").
3.2 Amended and Restated Limited Liability Company Agreement of ACME
Intermediate Holdings, LLC dated September 24, 1997, incorporated by
reference to Exhibit 3.2 of the Intermediate Registration Statement.
3.3 Amendment to Amended and Restated Limited Liability Company
Agreement of ACME Intermediate Holdings, LLC, dated August 25, 1998.
3.4 Second Amended and Restated Limited Liability Company Agreement of
ACME Intermediate Holdings, LLC dated April 23, 1999.
3.5 Certificate of Formation of ACME Television, LLC, incorporated by
reference to Exhibit 3.1 of ACME Television, LLC's Registration
Statement on Form S-4, File No. 333-40281, filed on November 14,
1997 (the "Television Registration Statement").
3.6 Limited Liability Company Agreement of ACME Television, LLC,
incorporated by reference to Exhibit 3.2 of the Television
Registration Statement.
4.1 Indenture, dated September 30, 1997, by and among ACME Intermediate
Holdings, LLC and ACME Intermediate Finance, Inc., as Issuers, and
Wilmington Trust Company, incorporated by reference to Exhibit 4.2
of the Intermediate Registration Statement.
4.2 Form of Securities of ACME Intermediate Holdings, LLC, incorporated
by reference to Exhibit 4.3 of the Intermediate Registration
Statement.
4.3 Indenture, dated September 30, 1997, by and among ACME Television,
LLC and ACME Finance Corporation, as Issuers, the Guarantors named
therein, and Wilmington Trust Company, incorporated by reference to
Exhibit 4.1 of the Television Registration Statement.
4.5 First Supplemental Indenture, dated February 11, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending June 30 1998.
4.6 Second Supplemental Indenture, dated March 13, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
4.7 Third Supplemental Indenture, dated August 21, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, as issuers, the
Guarantors named therein, and Wilmington Trust Company, incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending September 30, 1998.
15
<PAGE> 17
10.1 Asset Purchase Agreement, dated April 23, 1999, by and among Paxson
Communications Corporation, Paxson Communications License Company,
LLC, Paxson Communications, of Green Bau-14, Inc., Paxson
Communications of Dayton-26, Inc., Paxson Dayton License, Inc.,
Paxson Communications of Decatur-23, Inc., Paxson Decatur License,
Inc., ACME Television of Ohio, LLC, ACME Television Licenses of
Ohio, LLC, ACME Television of Wisconsin, LLC, ACME Television
Licenses of Wisconsin, LLC, ACME Television of Illinois, LLC and
ACME Television Licenses of Illinois, LLC for WDPX(TV), Springfield,
Ohio, WPXG(TV), Suring WI and WPXU(TV), Decatur, IL. Incorporated by
reference to Registrant's Current Report on Form 8-K filed on May 7,
1999.
10.2 Time Brokerage Agreement, Dated April 23, 1999, by and among Paxson
Communications Licenses Company, LLC, Paxson Communications of Green
bay-14, Inc., and ACME Television of Wisconsin, LLC for Station
WPXG-TV, Suring, Wisconsin. Incorporated by reference to the
Registrant's report on Form 8-K filed May 7, 1999
10.3 Time Brokerage Agreement, Dated April 23, 1999, by and among Paxson
Dayton Licenses Inc., Paxson Communications of Decatur-23, Inc., and
ACME Television of Illinois, LLC for Station WPXU-TV, Decatur,
Illinois. Incorporated by reference to the Registrant's report on
Form 8-K filed May 7, 1999.
10.4 Time Brokerage Agreement, Dated April 23, 1999, by and among Paxson
Decatur Licenses Inc., Paxson Communications of Dayton-26, Inc., and
ACME Television of Ohio, LLC for Station WDPX-TV, Springfield, Ohio.
Incorporated by reference to the Registrant's report on Form 8-K
filed May 7, 1999.
10.5 Joint Sales Agreement by and between ACME Television Holdings, LlC
and DP Media, Inc., dated April 23, 1999. Incorporated by reference
to the Registration Statement for ACME Communications, Inc. on Form
S-1 No. 333-84191, filed on July 30, 1999.
10.6 Option Agreement dated April 23, 1999 by and between ACME Television
Holdings, LLC and DP Media, Inc. Incorporated by reference to the
Registration Statement for ACME Communications, Inc. on Form S-1 No.
333-84191, filed on July 30, 1999.
10.7 Amendment No. 1 to First Amended and Restated Credit Agreement,
dated June 30, 1998. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
10.8 Amendment No. 2 to First Amended and Restated Credit Agreement,
dated June 30, 1998. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
10.9 Third amendment to First Amended and Restated Credit Agreement,
dated March 1, 1999. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
10.10 Fourth Amendment to First Amended and Restated Credit Agreement,
dated April 23, 1999. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
27.1* Financial Data Schedule for ACME Intermediate Holdings, LLC,
available in electronic format as filed by the Registrant.
27.2* Financial Data Schedule for ACME Television, LLC, available in
electronic format as filed by the Registrant.
- ------------
* Filed herewith
b) REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K on July 7, 1999, for the Asset
Purchase Agreement dated April 23, 1999, described in the notes to the financial
statements, as filed herewith, under the caption "Acquisitions".
16
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACME TELEVISION, LLC.
Date: November 15, 1999 By: /s/ Doug Gealy
---------------------------------
Doug Gealy, President
Date: November 15, 1999 By: /s/ Thomas D. Allen
---------------------------------
Thomas D. Allen
Executive Vice President/CFO
(principal financial officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACME INTERMEDIATE HOLDINGS, LLC.
Date: November 15, 1999 By: /s/ Doug Gealy
--------------------------------
Doug Gealy, President
Date: November 15, 1999 By: /s/ Thomas D. Allen
--------------------------------
Thomas D. Allen
Executive Vice President/CFO
(principal financial officer)
17
<PAGE> 19
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
3.1 Certificate of Formation of ACME Intermediate Holdings, LLC,
incorporated by reference to Exhibit 3.1 of ACME Intermediate
Holdings, LLC's Registration Statement on Form S-4, File No.
333-40277 filed on November 14, 1997 (the "Intermediate Registration
Statement").
3.2 Amended and Restated Limited Liability Company Agreement of ACME
Intermediate Holdings, LLC dated September 24, 1997, incorporated by
reference to Exhibit 3.2 of the Intermediate Registration Statement.
3.3 Amendment to Amended and Restated Limited Liability Company
Agreement of ACME Intermediate Holdings, LLC, dated August 25, 1998.
3.4 Second Amended and Restated Limited Liability Company Agreement of
ACME Intermediate Holdings, LLC dated April 23, 1999.
3.5 Certificate of Formation of ACME Television, LLC, incorporated by
reference to Exhibit 3.1 of ACME Television, LLC's Registration
Statement on Form S-4, File No. 333-40281, filed on November 14,
1997 (the "Television Registration Statement").
3.6 Limited Liability Company Agreement of ACME Television, LLC,
incorporated by reference to Exhibit 3.2 of the Television
Registration Statement.
4.1 Indenture, dated September 30, 1997, by and among ACME Intermediate
Holdings, LLC and ACME Intermediate Finance, Inc., as Issuers, and
Wilmington Trust Company, incorporated by reference to Exhibit 4.2
of the Intermediate Registration Statement.
4.2 Form of Securities of ACME Intermediate Holdings, LLC, incorporated
by reference to Exhibit 4.3 of the Intermediate Registration
Statement.
4.3 Indenture, dated September 30, 1997, by and among ACME Television,
LLC and ACME Finance Corporation, as Issuers, the Guarantors named
therein, and Wilmington Trust Company, incorporated by reference to
Exhibit 4.1 of the Television Registration Statement.
4.5 First Supplemental Indenture, dated February 11, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending June 30 1998.
4.6 Second Supplemental Indenture, dated March 13, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
4.7 Third Supplemental Indenture, dated August 21, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, as issuers, the
Guarantors named therein, and Wilmington Trust Company, incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending September 30, 1998.
10.1 Asset Purchase Agreement, dated April 23, 1999, by and among Paxson
Communications Corporation, Paxson Communications License Company,
LLC, Paxson Communications, of Green Bau-14, Inc., Paxson
Communications of Dayton-26, Inc., Paxson Dayton License, Inc.,
Paxson Communications of Decatur-23, Inc., Paxson Decatur License,
Inc., ACME Television of Ohio, LLC, ACME Television Licenses of
Ohio, LLC, ACME Television of Wisconsin, LLC, ACME Television
Licenses of Wisconsin, LLC, ACME Television of Illinois, LLC and
ACME Television Licenses of Illinois, LLC for WDPX(TV), Springfield,
Ohio, WPXG(TV), Suring WI and WPXU(TV), Decatur, IL. Incorporated by
reference to Registrant's Current Report on Form 8-K filed on May 7,
1999.
<PAGE> 20
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
10.2 Time Brokerage Agreement, Dated April 23, 1999, by and among Paxson
Communications Licenses Company, LLC, Paxson Communications of Green
bay-14, Inc., and ACME Television of Wisconsin, LLC for Station
WPXG-TV, Suring, Wisconsin. Incorporated by reference to the
Registrant's report on Form 8-K filed May 7, 1999
10.3 Time Brokerage Agreement, Dated April 23, 1999, by and among Paxson
Dayton Licenses Inc., Paxson Communications of Decatur-23, Inc., and
ACME Television of Illinois, LLC for Station WPXU-TV, Decatur,
Illinois. Incorporated by reference to the Registrant's report on
Form 8-K filed May 7, 1999.
10.4 Time Brokerage Agreement, Dated April 23, 1999, by and among Paxson
Decatur Licenses Inc., Paxson Communications of Dayton-26, Inc., and
ACME Television of Ohio, LLC for Station WDPX-TV, Springfield, Ohio.
Incorporated by reference to the Registrant's report on Form 8-K
filed May 7, 1999.
10.5 Joint Sales Agreement by and between ACME Television Holdings, LlC
and DP Media, Inc., dated April 23, 1999. Incorporated by reference
to the Registration Statement for ACME Communications, Inc. on Form
S-1 No. 333-84191, filed on July 30, 1999.
10.6 Option Agreement dated April 23, 1999 by and between ACME Television
Holdings, LLC and DP Media, Inc. Incorporated by reference to the
Registration Statement for ACME Communications, Inc. on Form S-1 No.
333-84191, filed on July 30, 1999.
10.7 Amendment No. 1 to First Amended and Restated Credit Agreement,
dated June 30, 1998. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
10.8 Amendment No. 2 to First Amended and Restated Credit Agreement,
dated June 30, 1998. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
10.9 Third amendment to First Amended and Restated Credit Agreement,
dated March 1, 1999. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
10.10 Fourth Amendment to First Amended and Restated Credit Agreement,
dated April 23, 1999. Incorporated by reference to the Registration
Statement for ACME Communications, Inc. on Form S-1 No. 333-84191,
filed on July 30, 1999.
27.1* Financial Data Schedule for ACME Intermediate Holdings, LLC,
available in electronic format as filed by the Registrant.
27.2* Financial Data Schedule for ACME Television, LLC, available in
electronic format as filed by the Registrant.
- ------------
* Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0001049530
<NAME> ACME INTERMEDIATE HOLDINGS, LLC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,617
<SECURITIES> 0
<RECEIVABLES> 13,151
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,048
<PP&E> 28,874
<DEPRECIATION> 3,872
<TOTAL-ASSETS> 329,278
<CURRENT-LIABILITIES> 59,746
<BONDS> 198,271
15,366
0
<COMMON> 0
<OTHER-SE> 15,875
<TOTAL-LIABILITY-AND-EQUITY> 329,278
<SALES> 0
<TOTAL-REVENUES> 26,635
<CGS> 0
<TOTAL-COSTS> 40,332
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,430
<INCOME-PRETAX> (26,107)
<INCOME-TAX> (2,064)
<INCOME-CONTINUING> (28,171)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (28,171)
<EPS-BASIC> 0.0
<EPS-DILUTED> 0.0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0001049510
<NAME> ACME TELEVISION, LLC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,617
<SECURITIES> 0
<RECEIVABLES> 13,151
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,048
<PP&E> 28,874
<DEPRECIATION> 3,872
<TOTAL-ASSETS> 327,707
<CURRENT-LIABILITIES> 59,619
<BONDS> 153,357
0
0
<COMMON> 0
<OTHER-SE> 118,263
<TOTAL-LIABILITY-AND-EQUITY> 327,707
<SALES> 0
<TOTAL-REVENUES> 26,635
<CGS> 0
<TOTAL-COSTS> 40,332
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,545
<INCOME-PRETAX> (23,222)
<INCOME-TAX> (2,064)
<INCOME-CONTINUING> (25,286)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,286)
<EPS-BASIC> 0.0
<EPS-DILUTED> 0.0
</TABLE>
