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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
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[X] AMENDED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-84191
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ACME COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0866283
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2101 E. FOURTH STREET, SUITE 202 A
SANTA ANA, CALIFORNIA, 92705
(714) 245-9499
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
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Indicate by check mark whether the registrant (1) has 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) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of May 12, 2000, ACME Communications, Inc. had 16,750,000 shares of
common stock outstanding.
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ACME Communications, Inc. hereby amends its Quarterly Report on Form 10-Q for
the quarter ended March 31, 2000, initially filed with the Securities and
Exchange Commission on May 12, 2000, by restating the prior year (1999) Pro
forma tax benefit, Pro forma minority interest allocation, Pro forma net loss
and the Pro forma net loss per share, basic and diluted, that appear on the
Consolidated Statements of Operations in Item 1 of Part 1 thereof. The
restatement of these pro forma elements is necessitated by an error in our
calculation of the 1999 Pro forma tax benefit. No other revisions or
restatements to our original filing have been made through this amended filing.
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ACME COMMUNICATIONS, INC.
FORM 10-Q/A
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM
NUMBER PAGE
------ ----
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ACME Communications, Inc. and Subsidiaries
Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999......................... 3
Consolidated Statements of Operations for the Three Months Ended
March 31, 2000 and March 31, 1999.............................................................. 4
Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2000..... 5
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2000 and March 31, 1999.............................................................. 6
Notes to Consolidated Financial Statements..................................................... 7
</TABLE>
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ACME COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, MARCH 31,
1999 2000
------------ -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 23,846 $ 21,260
Accounts receivable, net 14,090 12,126
Current portion of programming rights 11,331 11,135
Prepaid expenses and other current assets 1,065 1,885
Deferred income taxes 2,448 2,574
--------- ---------
Total current assets 52,780 48,980
Property and equipment, net 25,116 24,969
Programming rights, net of current portion 14,704 12,537
Intangible assets, net 303,812 300,029
Other assets 11,295 11,197
--------- ---------
Total assets $ 407,707 $ 397,712
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,570 $ 5,845
Accrued liabilities 8,231 3,826
Current portion of programming rights payable 10,727 10,854
Current portion of obligations under lease 1,617 1,590
--------- ---------
Total current liabilities 26,145 22,115
Programming rights payable, net of current portion 13,605 11,076
Obligations under lease, net of current portion 5,796 5,434
Other liabilities 297 268
Deferred income taxes 25,364 22,518
10 7/8% senior discount notes 161,695 165,975
12% senior secured notes 47,970 49,549
--------- ---------
Total liabilities 280,872 276,935
--------- ---------
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $.01 par value; 16,750,000 shares issued and
outstanding at March 31, 2000 and December 31, 1999 168 168
Additional paid-in capital 130,279 130,411
Accumulated deficit (3,612) (9,802)
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Total stockholders' equity 126,835 120,777
--------- ---------
Total liabilities and stockholders' equity $ 407,707 $ 397,712
========= =========
</TABLE>
See the notes to the consolidated financial statements.
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ACME COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
-----------------------------
1999 2000
-----------------------------
(IN THOUSANDS)
<S> <C> <C>
Net revenues $ 11,123 $ 16,218
----------- ------------
Operating expenses:
Station operating expenses 8,430 12,655
Depreciation and amortization 3,766 5,444
Corporate 721 908
Equity-based compensation 2,500 132
----------- ------------
Operating loss (4,294) (2,921)
Other income (expenses):
Interest income 9 297
Interest expense (6,466) (6,356)
Other income (expense) 5 (1)
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Loss before income taxes and
minority interest (10,746) (8,981)
Income tax benefit (expense) (2,255) 2,791
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Loss before minority interest (13,001) (6,190)
Minority interest 723 --
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Net loss $ (12,278) $ (6,190)
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Pro forma net loss per share:
Loss before income taxes and
minority interest, as reported $ (10,746) $ (8,981)
Pro forma tax benefit 2,641 2,791
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Loss before minority interest (8,105) (6,190)
Pro forma minority interest allocation 441 --
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Pro forma net loss $ (7,664) $ (6,190)
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Pro forma net loss per share, basic
and diluted $ (1.48) $ (0.37)
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Basic and diluted weighted average
common shares outstanding 5,180,051 16,750,000
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</TABLE>
See the notes to the consolidated financial statements.
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ACME COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON STOCK PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
--------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1999 16,750 $168 $130,279 $(3,612) $ 126,835
Equity-based compensation -- -- 132 -- 132
Net loss -- -- -- (6,190) (6,190)
------ ---- -------- ------- ---------
Balance at March 31, 2000 (unaudited) 16,750 $168 $130,411 $(9,802) $ 120,777
====== ==== ======== ======= =========
</TABLE>
See the notes to the consolidated financial statements.
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ACME COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------
1999 2000
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net loss $(12,278) $ (6,190)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,766 5,445
Amortization of program rights 1,582 2,949
Amortization of debt issuance costs 739 280
Amortization of discount on 10 7/8% senior discount notes 3,850 4,280
Amortization of discount on 12% senior secured notes 1,384 1,579
Minority interest allocation (736) --
Equity-based compensation 2,500 132
Deferred taxes 2,255 (2,791)
Changes in assets and liabilities:
Decrease in accounts receivables, net 1,595 1,964
(Increase) decrease in prepaid expenses (249) 141
Increase in other assets (80) (1,143)
Increase (decrease) in accounts payable (1,238) 273
Increase (decrease) in accrued liabilities 682 (4,403)
Payments on programming rights payable (2,072) (2,988)
Decrease in other liabilities (281) (210)
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Net cash provided by (used in) operating activities 1,419 (682)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (2,171) (1,193)
Purchase of and deposits for station interests (1,509) (322)
Investments in and advances to subsidiaries (2,428) --
-------- --------
Net cash used in investing activities (6,108) (1,515)
-------- --------
Cash flows from financing activities:
Increase in revolving credit facility, net of repayments 4,900 --
Payments of capital lease obligations (258) (389)
-------- --------
Net cash provided by (used in) financing activities 4,642 (389)
-------- --------
Net decrease in cash (47) (2,586)
Cash at beginning of period 1,001 23,846
-------- --------
Cash at end of period $ 954 $ 21,260
======== ========
Cash Payments for:
Interest $ 372 $ 212
Taxes $ 25 $ 181
======== ========
Non-Cash Transactions:
Program rights in exchange for program rights payable $ 628 $ 586
======== ========
</TABLE>
See the notes to the consolidated financial statements.
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ACME COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1999
AND MARCH 31, 2000
(1) FORMATION AND DESCRIPTION OF THE BUSINESS
FORMATION
ACME Communications, Inc. (the "Company") was formed on July 23, 1999,
in preparation for and in conjunction with an initial public offering of its
stock.
On September 27, 1999, the Board of Advisors of ACME Television
Holdings, LLC and its members and the Board of Directors of the Company and its
stockholder approved a merger and reorganization (the "Reorganization"), whereby
the Company became the direct parent of ACME Television Holdings. As a result of
the Reorganization, the Company is the ultimate parent of ACME Intermediate
Holdings, LLC, ("ACME Intermediate") and its wholly-owned subsidiary ACME
Television, LLC ("ACME Television"). All transactions contemplated as part of
The Reorganization closed on October 5, 1999.
Among the significant transactions of the Reorganization were the
exchange of shares of the Company's common stock for members' units, management
carry units ("MCU's") and convertible debt of ACME Television Holdings. The
common stock exchanged for members' units in ACME Television Holdings was
recorded at historical cost. The management carry units were treated as a
variable compensation plan. As the number of shares of common stock issued to
the holders of the management carry units were fixed and fully vested,
compensation expense was recorded for the difference between the fair value of
the shares issued and the MCU expense previously recorded. The convertible debt
was converted pursuant to its original conversion terms, and accordingly, no
gain or loss was recognized. Also, the Company acquired the minority interest in
ACME Intermediate Holdings for 923,938 shares of the Company's common stock. The
acquisition of the minority interest was accounted for at fair market value.
The financial statements give effect to the exchange of common stock
for members' units for all periods presented.
On October 5, 1999, the Company completed its initial public offering
of 5,000,000 shares of common stock at $23 per share, before underwriters'
discounts and other issuance costs (the "IPO"). The Company received net
proceeds of approximately $105 million.
DESCRIPTION OF THE BUSINESS
ACME Communications is a holding company with no independent operations
other than its indirect wholly-owned subsidiary, ACME Television. ACME
Television, through its wholly-owned subsidiaries, owns and operates the
following ten commercially licensed broadcast television stations located
throughout the United States:
<TABLE>
<CAPTION>
NETWORK
STATION MARKET AFFILIATION
------- ------ -----------
<S> <C> <C>
KPLR - 11 St. Louis, MO......................................... WB
KWBP - 32 Portland, OR.......................................... WB
KUWB - 30 Salt Lake City, UT.................................... WB
KWBQ - 19 Albuquerque-Santa Fe, NM.............................. WB
KASY - 50 Albuquerque-Santa Fe, NM.............................. UPN
</TABLE>
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<TABLE>
<CAPTION>
NETWORK
STATION MARKET AFFILIATION
------- ------ -----------
<S> <C> <C>
WBXX - 20 Knoxville, TN......................................... WB
WTVK - 46 Ft. Myers-Naples, FL.................................. WB
WBDT - 26 Dayton, OH............................................ WB
WIWB - 14 Green Bay-Appleton, WI................................ WB
WBUI - 23 Champaign-Springfield-Decatur, IL..................... WB
</TABLE>
(2) PRESENTATION OF INTERIM FINANCIAL STATEMENTS
Unless the context requires otherwise, references to the Company refer
to ACME Communications, Inc and its wholly-owned subsidiaries. Segment
information is not presented because all of the Company's revenues are
attributed to a single reportable segment -- television broadcasting. Certain
amounts previously reported for 1999 have been reclassified to conform to the
2000 financial statement presentation.
The accompanying consolidated financial statements for the three months
ended March 31, 2000 and 1999 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 annual consolidated financial statements,
and accordingly, should be read in conjunction with the consolidated financial
statements, and the notes thereto, included in the Company's Annual Report on
Form 10-K filed with the SEC on March 28, 2000. 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,
2000.
(3) LOSS PER COMMON SHARE
The Company calculates loss per share in accordance with Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share. SFAS No. 128
requires a presentation of basic earnings per share ("EPS") and diluted EPS.
Basic EPS includes no dilution and is computed by dividing income available to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution from securities that
could share in the earnings of the Company, similar to fully diluted EPS under
APB No. 15. In calculating diluted EPS, no potential shares of common stock are
to be included in the computation when a loss from continuing operations
available to common stockholders exists. The statement requires dual
presentation of basic and diluted EPS by entities with complex capital
structures.
For periods prior to October 1, 1999, the Company calculated pro forma
net loss per share based upon the historical results of operations adjusted to
reflect (i) a provision for income taxes on historical earnings before income
taxes, which gives effect to the change in the Company's income tax status to a
C corporation and (ii) the impact on the net loss allocated to minority
interests. In addition, the Company has reflected the exchange of common stock
for units for all periods presented.
Stock options outstanding amounting to 3,039,191 shares at March 31,
2000, were not included in the computation of diluted EPS because to do so would
have been antidilutive.
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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 Communications, Inc.
Date: September 8, 2000 By: /s/ THOMAS ALLEN
---------------------------------
Thomas Allen
Executive Vice President/CFO
(Principal accounting officer)
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