Income attributable to the shareholders of Scripps was
Business notes:
- The company expects total 2024 presidential-year political advertising revenue in the Local Media division to reach at least
$340 million , a record level that far exceeded the guidance of$270-$290 million Scripps issued in August. The results were driven by strong advertising buys with Scripps stations inArizona ,Michigan ,Montana ,Ohio ,Nevada andWisconsin . The political advertising demand caused significant displacement of core advertising in those 15 markets. - The record political advertising revenue helped the company achieve record third-quarter revenue of
$646 million . - In the Scripps Networks division, tight expense management resulted in a nearly 4% decline in expenses. For the fourth quarter, Scripps expects an even greater decline in Networks expense, down in the high single-digits percent range, because of reductions at
Scripps News and ongoing cost controls. - This
WNBA season, seven of ION's Friday night franchise telecasts surpassed 1 million viewers. The average ratings across the season more than doubled from last year, proving the value of the platform to attract key demos with live sports. ION's top-performing night wasAug. 30 , when theIndiana Fever andChicago Sky played on the national network, drawing about 1.6 million viewers and a peak of nearly 2 million. Scripps' full-season 2024WNBA revenue was double that of the 2023 season. - During the third quarter, the company paid down
$115 million of debt and ended the quarter with a leverage ratio of 5.1x, a significant improvement from 6.0x at the end of Q2. The company will pay down a total of approximately$300 million in debt this year.
From Scripps President and CEO
"Scripps' Local Media political advertising revenue came in nearly 30% higher than our last presidential-election year political revenue, which also was a record year. This 2024 level is a testament to the durability of local broadcast programming as the perfect vehicle for massive reach to deliver candidate and political action committee messaging. Our local news has always been a go-to for political advertising. This time around, our sports programming created significant additional opportunities for campaigns to efficiently and effectively reach voters, further boosting our political advertising revenue.
"Scripps' record political advertising revenue translated to record third-quarter company revenue this year and combined with prudent expense management to help us significantly exceed expectations for third-quarter EBITDA. These results helped drive our leverage ratio down by nearly a full turn, from 6.0x in the second quarter to 5.1x at the end of the third. And with a strong finish to political and our fourth-quarter performance, we expect to continue to deleverage to the high-4x range by year-end.
"Through continued expense management and prudent growth initiatives, we expect our operating performance improvement will continue into next year across the enterprise, including a Scripps Networks margin improvement of at least 400-600 basis points in 2025. I hope it's clear that we are effectively executing a plan to improve our operating performance and manage down the company's debt to better position Scripps for future growth."
Operating results
Total third-quarter company revenue was
Income attributable to the shareholders of Scripps was
Third-quarter 2024 results by segment compared to prior-period amounts:
Local Media
Revenue was
- Core advertising revenue decreased 9.2% to
$129 million , due in part to displacement from political advertising. - Political revenue was
$125 million , compared to$9.1 million in the prior-year quarter, a non-election year. - Distribution revenue was
$186 million , compared to$198 million in the prior-year quarter.
Segment expenses increased 2.4% to
Segment profit was
Scripps Networks
Revenue was
Segment profit was
Financial condition
On
During the first nine months of 2024, we reduced the outstanding balance on our revolving credit facility by
We did not declare or provide payment for any of the 2024 quarterly preferred stock dividends. We have sufficient liquidity to pay the scheduled dividends on the preferred shares; however, this action provides us better flexibility for accelerating deleveraging and maximizing the paydown of our traditional bank debt. The dividend rate on the preferred shares, which compounds quarterly, increased to 9% per annum and will remain at that rate. At
Year-to-date operating results
The following comparisons are to the period ending
Revenue was
Costs and expenses for segments, shared services and corporate were
Income attributable to the shareholders of Scripps was
Looking ahead
Comparisons for our segments are to the same period in 2023.
|
|
Fourth-quarter 2024 |
Local Media revenue |
|
Up low-to-mid 30% range |
Local Media expense |
|
Up mid-single-digit percent range |
Scripps Networks revenue |
|
Down mid-single-digit percent range |
Scripps Networks expense |
|
Down high-single-digit percent range |
Shared services and corporate |
|
About |
Conference call
The senior management of
To access the conference call by telephone, dial (844) 867-6169 (
A replay line will be open from
A replay of the conference call will be archived and available online for an extended period of time following the call. To access the audio replay, visit http://ir.scripps.com/ approximately four hours after the call, and the link can be found on that page under "audio/video links."
Forward-looking statements
This document contains "forward-looking statements" within the meaning of the safe harbor provisions of the
Media contact:
Investor contact:
About Scripps
|
||||||||
RESULTS OF OPERATIONS |
||||||||
|
||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(in thousands, except per share data) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Operating revenues |
|
$ 646,300 |
|
$ 566,529 |
|
$ 1,781,393 |
|
$ 1,677,143 |
Segment, shared services and corporate expenses |
|
(472,267) |
|
(469,076) |
|
(1,425,132) |
|
(1,395,508) |
Restructuring costs |
|
(12,665) |
|
(4,705) |
|
(18,653) |
|
(29,208) |
Depreciation and amortization of intangible assets |
|
(38,861) |
|
(38,588) |
|
(116,017) |
|
(115,759) |
Impairment of goodwill |
|
— |
|
— |
|
— |
|
(686,000) |
Gains (losses), net on disposal of property and equipment |
|
(727) |
|
(1,066) |
|
(717) |
|
(2,320) |
Operating expenses |
|
(524,520) |
|
(513,435) |
|
(1,560,519) |
|
(2,228,795) |
Operating income (loss) |
|
121,780 |
|
53,094 |
|
220,874 |
|
(551,652) |
Interest expense |
|
(54,442) |
|
(56,916) |
|
(161,482) |
|
(158,029) |
Defined benefit pension plan income |
|
152 |
|
251 |
|
506 |
|
519 |
Miscellaneous, net |
|
447 |
|
1,309 |
|
16,849 |
|
131 |
Income (loss) from operations before income taxes |
|
67,937 |
|
(2,262) |
|
76,747 |
|
(709,031) |
Benefit (provision) for income taxes |
|
(20,161) |
|
(1,391) |
|
(25,916) |
|
17,009 |
Net income (loss) |
|
47,776 |
|
(3,653) |
|
50,831 |
|
(692,022) |
Preferred stock dividends |
|
(14,743) |
|
(12,576) |
|
(43,552) |
|
(37,729) |
Net income (loss) attributable to the shareholders of |
|
$ 33,033 |
|
$ (16,229) |
|
$ 7,279 |
|
$ (729,751) |
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted share of common stock |
|
$ 0.37 |
|
$ (0.19) |
|
$ 0.08 |
|
$ (8.67) |
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding |
|
86,067 |
|
84,433 |
|
85,546 |
|
84,162 |
See notes to results of operations. |
Notes to Results of Operations
1. SEGMENT INFORMATION
We determine our business segments based upon our management and internal reporting structures, as well as the basis on which our chief operating decision maker makes resource-allocation decisions.
Our Local Media segment includes more than 60 local television stations and their related digital operations. It is comprised of 18
Our Scripps Networks segment includes national news outlets
Our respective business segment results reflect the impact of intercompany carriage agreements between our local broadcast television stations and our national networks. We also allocate a portion of certain corporate costs and expenses, including accounting, human resources, employee benefit and information technology to our business segments. These intercompany agreements and allocations are generally amounts agreed upon by management, which may differ from an arms-length amount.
The other segment caption aggregates our operating segments that are too small to report separately. Costs for centrally provided services and certain corporate costs that are not allocated to the business segments are included in shared services and corporate costs. These unallocated corporate costs would also include the costs associated with being a public company. Corporate assets are primarily cash and cash equivalents, property and equipment primarily used for corporate purposes and deferred income taxes.
Our chief operating decision maker evaluates the operating performance of our business segments and makes decisions about the allocation of resources to our business segments using a measure called segment profit. Segment profit excludes interest, defined benefit pension plan amounts, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in
Information regarding the operating results of our business segments is as follows:
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||
(in thousands) |
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Local Media |
|
$ 445,553 |
|
$ 353,061 |
|
26.2 % |
|
$ 1,163,315 |
|
$ 1,017,203 |
|
14.4 % |
Scripps Networks |
|
201,672 |
|
215,393 |
|
(6.4) % |
|
619,670 |
|
663,095 |
|
(6.5) % |
Other |
|
3,843 |
|
2,620 |
|
46.7 % |
|
12,702 |
|
10,149 |
|
25.2 % |
Intersegment eliminations |
|
(4,768) |
|
(4,545) |
|
4.9 % |
|
(14,294) |
|
(13,304) |
|
7.4 % |
Total operating revenues |
|
$ 646,300 |
|
$ 566,529 |
|
14.1 % |
|
$ 1,781,393 |
|
$ 1,677,143 |
|
6.2 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Local Media |
|
$ 160,685 |
|
$ 74,865 |
|
|
|
$ 314,371 |
|
$ 201,725 |
|
55.8 % |
Scripps Networks |
|
42,061 |
|
49,661 |
|
(15.3) % |
|
129,462 |
|
161,530 |
|
(19.9) % |
Other |
|
(7,744) |
|
(6,263) |
|
23.6 % |
|
(23,377) |
|
(14,074) |
|
66.1 % |
Shared services and corporate |
|
(20,969) |
|
(20,810) |
|
0.8 % |
|
(64,195) |
|
(67,546) |
|
(5.0) % |
Restructuring costs |
|
(12,665) |
|
(4,705) |
|
|
|
(18,653) |
|
(29,208) |
|
|
Depreciation and amortization of |
|
(38,861) |
|
(38,588) |
|
|
|
(116,017) |
|
(115,759) |
|
|
Impairment of goodwill |
|
— |
|
— |
|
|
|
— |
|
(686,000) |
|
|
Gains (losses), net on disposal of property |
|
(727) |
|
(1,066) |
|
|
|
(717) |
|
(2,320) |
|
|
Interest expense |
|
(54,442) |
|
(56,916) |
|
|
|
(161,482) |
|
(158,029) |
|
|
Defined benefit pension plan income |
|
152 |
|
251 |
|
|
|
506 |
|
519 |
|
|
Miscellaneous, net |
|
447 |
|
1,309 |
|
|
|
16,849 |
|
131 |
|
|
Income (loss) from operations before |
|
$ 67,937 |
|
$ (2,262) |
|
|
|
$ 76,747 |
|
$ (709,031) |
|
|
Operating results for our Local Media segment were as follows:
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||
(in thousands) |
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Core advertising |
|
$ 129,256 |
|
$ 142,295 |
|
(9.2) % |
|
$ 404,805 |
|
$ 433,057 |
|
(6.5) % |
Political |
|
125,213 |
|
9,130 |
|
|
|
168,530 |
|
16,501 |
|
|
Distribution |
|
186,480 |
|
197,842 |
|
(5.7) % |
|
578,170 |
|
556,549 |
|
3.9 % |
Other |
|
4,604 |
|
3,794 |
|
21.3 % |
|
11,810 |
|
11,096 |
|
6.4 % |
Total operating revenues |
|
445,553 |
|
353,061 |
|
26.2 % |
|
1,163,315 |
|
1,017,203 |
|
14.4 % |
Segment costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
111,767 |
|
109,566 |
|
2.0 % |
|
324,062 |
|
325,748 |
|
(0.5) % |
Programming |
|
124,747 |
|
122,923 |
|
1.5 % |
|
378,603 |
|
360,749 |
|
4.9 % |
Other expenses |
|
48,354 |
|
45,707 |
|
5.8 % |
|
146,279 |
|
128,981 |
|
13.4 % |
Total costs and expenses |
|
284,868 |
|
278,196 |
|
2.4 % |
|
848,944 |
|
815,478 |
|
4.1 % |
Segment profit |
|
$ 160,685 |
|
$ 74,865 |
|
|
|
$ 314,371 |
|
$ 201,725 |
|
55.8 % |
Operating results for our Scripps Networks segment were as follows:
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||
(in thousands) |
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues |
|
$ 201,672 |
|
$ 215,393 |
|
(6.4) % |
|
$ 619,670 |
|
$ 663,095 |
|
(6.5) % |
Segment costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
31,364 |
|
30,630 |
|
2.4 % |
|
91,126 |
|
94,383 |
|
(3.5) % |
Programming |
|
87,693 |
|
91,459 |
|
(4.1) % |
|
275,329 |
|
269,543 |
|
2.1 % |
Other expenses |
|
40,554 |
|
43,643 |
|
(7.1) % |
|
123,753 |
|
137,639 |
|
(10.1) % |
Total costs and expenses |
|
159,611 |
|
165,732 |
|
(3.7) % |
|
490,208 |
|
501,565 |
|
(2.3) % |
Segment profit |
|
$ 42,061 |
|
$ 49,661 |
|
(15.3) % |
|
$ 129,462 |
|
$ 161,530 |
|
(19.9) % |
2. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) |
|
As of
2024 |
|
As of |
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ 34,642 |
|
$ 35,319 |
Other current assets |
|
594,868 |
|
640,774 |
Total current assets |
|
629,510 |
|
676,093 |
Investments |
|
23,901 |
|
23,265 |
Property and equipment |
|
460,117 |
|
455,255 |
Operating lease right-of-use assets |
|
94,495 |
|
99,194 |
|
|
1,968,574 |
|
1,968,574 |
Other intangible assets |
|
1,658,788 |
|
1,727,178 |
Programming |
|
409,815 |
|
449,943 |
Miscellaneous |
|
8,947 |
|
10,618 |
TOTAL ASSETS |
|
$ 5,254,147 |
|
$ 5,410,120 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ 69,378 |
|
$ 76,383 |
Unearned revenue |
|
30,279 |
|
12,181 |
Current portion of long-term debt |
|
15,612 |
|
15,612 |
Accrued expenses and other current liabilities |
|
355,329 |
|
373,643 |
Total current liabilities |
|
470,598 |
|
477,819 |
Long-term debt (less current portion) |
|
2,737,126 |
|
2,896,824 |
Other liabilities (less current portion) |
|
827,205 |
|
879,294 |
Total equity |
|
1,219,218 |
|
1,156,183 |
TOTAL LIABILITIES AND EQUITY |
|
$ 5,254,147 |
|
$ 5,410,120 |
3. EARNINGS PER SHARE ("EPS")
Unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, such as our RSUs, are considered participating securities for purposes of calculating EPS. Under the two-class method, we allocate a portion of net income to these participating securities and, therefore, exclude that income from the calculation of EPS for common stock. We do not allocate losses to the participating securities.
The following table presents information about basic and diluted weighted-average shares outstanding:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Numerator (for basic and diluted earnings per share) |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ 47,776 |
|
$ (3,653) |
|
$ 50,831 |
|
$ (692,022) |
Less income allocated to RSUs |
|
(1,223) |
|
— |
|
(280) |
|
— |
Less preferred stock dividends |
|
(14,743) |
|
(12,576) |
|
(43,552) |
|
(37,729) |
Numerator for basic and diluted earnings per share |
|
$ 31,810 |
|
$ (16,229) |
|
$ 6,999 |
|
$ (729,751) |
Denominator |
|
|
|
|
|
|
|
|
Basic weighted-average shares outstanding |
|
86,067 |
|
84,433 |
|
85,546 |
|
84,162 |
Effect of dilutive securities |
|
— |
|
— |
|
— |
|
— |
Diluted weighted-average shares outstanding |
|
86,067 |
|
84,433 |
|
85,546 |
|
84,162 |
4. NON-GAAP INFORMATION
In addition to results prepared in accordance with GAAP, this earnings release discusses adjusted EBITDA, a non-GAAP performance measure that management and the company's Board of Directors uses to evaluate the performance of the business. We also believe that the non-GAAP measure provides useful information to investors by allowing them to view our business through the eyes of management and is a measure that is frequently used by industry analysts, investors and lenders as a measure of valuation for broadcast companies.
Adjusted EBITDA is calculated as income (loss) from continuing operations, net of tax, plus income tax expense (benefit), interest expense, losses (gains) on extinguishment of debt, defined benefit pension plan expense (income), share-based compensation costs, depreciation, amortization of intangible assets, impairment of goodwill, loss (gain) on business and asset disposals, acquisition and integration costs, restructuring charges and certain other miscellaneous items. We consider adjusted EBITDA to be an indicator of our operating performance.
A reconciliation of the adjusted EBITDA measure to the comparable financial measure in accordance with GAAP is as follows:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ 47,776 |
|
$ (3,653) |
|
$ 50,831 |
|
$ (692,022) |
Provision (benefit) for income taxes |
|
20,161 |
|
1,391 |
|
25,916 |
|
(17,009) |
Interest expense |
|
54,442 |
|
56,916 |
|
161,482 |
|
158,029 |
Defined benefit pension plan income |
|
(152) |
|
(251) |
|
(506) |
|
(519) |
Share-based compensation costs |
|
2,813 |
|
3,418 |
|
12,389 |
|
16,067 |
Depreciation |
|
15,811 |
|
15,100 |
|
46,081 |
|
45,290 |
Amortization of intangible assets |
|
23,050 |
|
23,488 |
|
69,936 |
|
70,469 |
Impairment of goodwill |
|
— |
|
— |
|
— |
|
686,000 |
Losses (gains), net on disposal of property and equipment |
|
727 |
|
1,066 |
|
717 |
|
2,320 |
Restructuring costs |
|
12,665 |
|
4,705 |
|
18,653 |
|
29,208 |
Miscellaneous, net |
|
(447) |
|
(1,309) |
|
(16,849) |
|
(131) |
Adjusted EBITDA |
|
$ 176,846 |
|
$ 100,871 |
|
$ 368,650 |
|
$ 297,702 |
5. SUPPLEMENTAL CASH FLOW INFORMATION
The following table presents additional information on certain sources and uses of cash:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ (13,451) |
|
$ (16,843) |
|
$ (54,497) |
|
$ (41,953) |
Preferred stock dividends paid |
|
— |
|
(12,000) |
|
— |
|
(36,000) |
Interest paid |
|
(67,965) |
|
(67,508) |
|
(169,123) |
|
(161,370) |
Income taxes paid |
|
(16,732) |
|
(13,042) |
|
(51,302) |
|
(25,932) |
Mandatory contributions to defined retirement plans |
|
(281) |
|
(254) |
|
(868) |
|
(884) |
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