DATE: Wednesday, May 14, 1997               TAG: 9705140699

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY LON WAGNER, STAFF WRITER 

                                            LENGTH:   39 lines

IFE HAS GOOD QUARTER, BUT BOTTOM LINE IS FLAT

International Family Entertainment's first quarter financial results improved by leaps and bounds in nearly all categories - except its bottom line, the company reported Tuesday.

IFE, the Virginia Beach-based parent of The Family Channel, said that its operating revenues for its fiscal first quarter ending March 31 grew 30.5 percent, from $74.5 million last year to $97.2 million this year.

IFE's advertising revenue jumped 23 percent.

But the company's net income remained at roughly the same level as the first quarter last year, rising by just $50,000 to $4.7 million. MTM Entertainment Inc. was primarily responsible for the drag on earnings.

``The Family Channel has continued to report strong results,'' said David R. Humphrey, senior vice president of investor relations. ``MTM is incurring a lot of costs in stepping up its programming for the networks and also for TFC.''

CEO Tim Robertson said MTM began production of several new television series that it hopes to license to broadcast networks, syndicate to TV stations or distribute internationally. Developing those programs is costly, Robertson said, and MTM's overhead costs have also been rising.

``MTM is creating television programming, and that's something you have to bear with,'' Humphrey said. ``If it's successful in creating a valuable product that is a good thing. We believe the reward is worth the risk.''

The Family Channel, IFE's flagship network, continued to shine. The Family Channel's revenue increased 22 percent over last year's first quarter to $69.7 million, the company said.

The Family Channel's increase in advertising revenue was driven by two factors: higher rates and growth in the average number of U.S. households it reaches.

The network reached an average of 68.6 million households in the company's fiscal first quarter. That was an increase of 6.2 percent, or 4 million households, over the same time last year, the company said.

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