Scripps Reports 31% Increase In Revenue

The E.W. Scripps Company Friday reported operating results for the second quarter of 2018. Total revenue was $283 million compared to $216 million in second-quarter 2017.

Income from continuing operations was $8.7 million or 10 cents per share. Pre-tax costs for the current-year quarter included $2.3 million of restructuring charges. In the prior-year quarter, income from continuing operations was $6.9 million or 8 cents per share. Pre-tax activity in the 2017 quarter included a $2.4 million non-cash charge to interest expense to write off deferred costs associated with debt refinancing and $5.1 million of other income, primarily from the sale of our newspaper syndication business.

Business highlights:

• Political advertising revenue for the second quarter was $14.9 million, more than double the $7 million of pro forma political revenue in second-quarter 2014, the last midterm election year.
• Subscribers to over-the-top services in Scripps’ local broadcast markets grew from zero to nearly 500,000 from last July to March, the latest data available. Including these new subscribers, the company’s total pay TV subscriber count held steady during that period.
• The National Media segment marked its third consecutive quarter of profitability, with $2 million in segment profit in the second quarter.
• Revenue from the Katz networks was up 21 percent from the second quarter of 2017 on a pro forma basis, driven by audience delivery growth, rising advertising rates and continued expansion of distribution.
• Newsy has continued to grow its cable distribution and now has signed contracts covering 38 million cable and satellite households, significant progress toward its goal of 40 million by the end of 2018.
• On June 25, shareholders received a dividend of 5 cents per share. In February, Scripps initiated its first regular dividend in 10 years, indicating its continued commitment to returning capital to shareholders.
• As part of its comprehensive plan to improve short-term performance and position itself for long-term growth, the company is ahead of schedule to achieve $30 million in annual cost savings and now expects to realize $20 million of those savings this year and the full annual savings in 2019.
• In June, Scripps signed a deal to sell its first radio cluster: five stations in Tulsa, to Oklahoma-based Griffin Communications for $12.5 million. They comprise country KVOO 98.5 FM, CHR K-Hits 106.9 KHTT, classic hits 92.9 The Drive KBEZ, classic country Big Country 99.5 KXBL, and Talk Radio 1170 KFAQ.
• On July 30, Craig Karmazin’s Wisconsin-based Good Karma Broadcasting emerged as the victor for Scripps’ crown radio jewels in Milwaukee, when it paid $16 million for news/talk powerhouse WTMJ 620, country WKTI 94.5, and Milwaukee-licensed translator W277CV at 103.3 FM, which simulcasts WTMJ.

Commenting on the business highlights, Scripps President and CEO Adam Symson said:

“Today we are reporting strong second-quarter financial results that exceeded expectations across the board, including in both our Local Media and our National Media divisions and for both revenue and segment profit.

"We continue to drive forward with our performance improvement plan, designed to improve our short-term operating performance and foster long-term growth. We are moving faster than expected on our corporate cost-cutting intiatives, have announced two radio station deals and are aggressively pursuing television station acquisition opportunities, all on our path to produce meaningful margin and cash-flow improvement.”

Second-quarter operating results

Revenue was $283 million, an increase of 31 percent from the second quarter of 2017. Revenue from the Katz networks, which were acquired in the fourth quarter of 2017, was $47 million.

Costs and expenses for segments, shared services and corporate were $243 million, up from $184 million in the year-ago period, primarily driven by higher network programming fees and the acquisition of Katz.

Second-quarter segment profit was $53.4 million, compared to $48.7 million in the year-ago quarter.

On June 30, cash and cash equivalents totaled $126 million while total debt was $692 million.

During the quarter, the company made dividend payments totaling $4.1 million.

During Friday's conference with analysts,  Local Media President Brian Lawlor said, “We are well on our way to divesting our radio group.” The remaining Scripps markets are Boise, Knoxville, Omaha, Springfield, MO, Tucson, and Wichita. The company plans to use the money to purchase more TV stations.