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| Scripps Reports Third-Quarter Results |
Also during the quarter, the company strengthened its financial condition by reducing long-term debt to a level that is below the value of its cash and short-term investments. Consolidated revenues were "We're determined to position Scripps for continued success in the rapidly evolving news industry. In the third quarter we made significant progress," said "During the third quarter, we significantly reduced our bank debt, giving us the flexibility we need to pursue strategies for expanding audiences and revenue streams across multiple platforms despite the difficult economic environment. "In the TV station markets, we're seeing some modest improvement in the flow of advertising dollars but we intend to continue funding much of our investment in content and new business categories through the shifting of internal resources. At the newspapers, where ad revenues continue to be very weak, we're deep into a restructuring of operations that will both reduce expenses and bring a sharper focus to content and advertising sales. "As we head into the last quarter of this very difficult year, we believe the advertising and expense trends we experienced in the third quarter will continue. Newspaper ad revenue declines are moderating slightly, and local and national TV revenues have shown gradual sequential improvement. Comparisons for the TV station group are difficult given the The operations that formerly comprised the company's Scripps Networks and interactive media divisions, which were spun off into Scripps Networks Interactive on As part of the wind-down of the JOA in Third-quarter results by segment are as follows: Television Revenue from the company's television stations was Advertising revenue broken down by category was:
-- Local, down 15 percent to
The decrease in revenue from local and national advertisers was largely attributable to reduced spending by automotive, financial services and retail advertisers, but the year-over-year declines in local and national advertising showed sequential improvement compared with the second quarter, when local was down 26 percent and national was down 29 percent. As is common for this stage of the election cycle, political spending in the third quarter of 2009 was down significantly compared with the year-ago period that included political advertising in advance of the November elections at the local, state and national levels. Segment expenses for the station group decreased 5.4 percent to The television division reported segment profit of Newspapers Year-over-year revenue from Scripps newspapers fell 20 percent to Advertising revenue broken down by category was:
-- Local, down 27 percent to
The decline in online advertising revenue is attributable to the weakness in print classified advertising, to which roughly half of the online advertising is tied. Revenue from online-only ad sales rose 38 percent to Circulation revenue rose 2.8 percent to Year-over-year employee costs declined 15 percent in the quarter due to this year's decision to adjust compensation programs. Excluding the favorable impact of a Segment expenses for Scripps newspapers were down 20 percent from the prior-year period to Segment profit in the newspaper division was Licensing and other media Third-quarter revenues from our licensing and syndication businesses were flat at Financial flexibility During the quarter, the company used Federal tax refunds totaling Year-to-date results Revenues from continuing operations through the first nine months of the year were The company reported a net loss from continuing operations in the first three quarters of 2009 of The year-to-date 2009 results reflect two non-recurring items from the first quarter, net of taxes: 1) an impairment charge of Conference call The senior management of The To access the conference call by telephone, dial 1-800-398-9386 (U.S.) or 1-612-332-0345 (International), approximately 10 minutes before the start of the call. Callers will need the name of the call ("third quarter earnings report") to be granted access. Callers also will be asked to provide their name and company affiliation. The media and general public are provided access to the conference call on a listen-only basis. 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 www.scripps.com approximately four hours after the call, choose "investor relations" then follow the "audio archives" link on the left navigation bar. Forward-looking statements This press release contains certain forward-looking statements related to the company's businesses that are based on management's current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The company's written policy on forward-looking statements can be found on page About Scripps The
THE
Notes to Results of Operations 1. OTHER CHARGES AND CREDITS Loss from continuing operations before income tax was affected by the following: 2009 - Separation and restructuring costs include the costs to restructure our operations and to install separate information systems as well as other costs related to affect the spin-off of SNI. These costs increased loss from continuing operations before taxes by In the first quarter we recorded a We also recorded a 2008 - In the second quarter we recorded a In the second quarter of 2008, we redeemed the remaining balances of our outstanding notes and recorded a Transaction costs and other activities related to the spin-off of SNI increased our costs and expenses by Investment results, reported in the caption "Miscellaneous, net" in our Condensed Consolidated Statements of Operations, include realized gains of 2. SEGMENT INFORMATION We determine our business segments based upon our management and internal reporting structure. Our reportable segments are strategic businesses that offer different products and services. Our newspaper business segment includes daily and community newspapers in 13 markets in the U.S. Newspapers earn revenue primarily from the sale of advertising to local and national advertisers and from the sale of newspapers to readers. Television includes six Licensing and other media primarily include licensing of worldwide copyrights relating to "Peanuts," "Dilbert" and other properties for use on numerous products, including plush toys, greeting cards and apparel, for promotional purposes and for exhibit on television and other media syndication of news features and comics and other features for the newspaper industry. The accounting policies of each of our business segments are those described in Note 1 in our Annual Report on Form 10-K for the year ended We allocate a portion of certain corporate costs and expenses, including information technology, pensions and other employee benefits, and other shared services, to our business segments. The allocations are generally amounts agreed upon by management, which may differ from an arms-length amount. Corporate assets are primarily cash, cash equivalents and other short-term investments, 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, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in Information regarding our business segments is as follows:
Three months ended Nine months ended
September 30, September 30,
(in thousands) 2009 2008 Change 2009 2008 Change
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Segment
operating
revenues:
Newspapers $104,397 $131,103 (20.4)% $338,031 $431,135 (21.6)%
JOA and
newspaper
partnerships - 25 - 74
Television 59,782 76,919 (22.3)% 181,286 233,458 (22.3)%
Licensing
and other 22,222 22,185 0.2 % 65,610 71,645 (8.4)%
Corporate
and shared
services - 13 - 456
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Total
operating
revenues $186,401 $230,245 (19.0)% $584,927 $736,768 (20.6)%
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Segment profit
(loss):
Newspapers $10,875 $14,001 (22.3)% $29,252 $58,625 (50.1)%
JOA and
newspaper
partnerships - 268 (211) (813) (74.0)%
Television 3,057 16,966 (82.0)% 5,493 49,441 (88.9)%
Licensing
and other 3,150 1,547 8,173 6,088 34.2 %
Corporate
and shared
services (8,040) (6,458) 24.5 % (22,027) (35,456) (37.9)%
Depreciation and
amortization (10,907) (11,947) (33,415) (34,517)
Impairment
of goodwill
and indefinite-
lived
assets - - (216,413) (778,900)
Equity earnings
in newspaper
partnership 587 599 1,011 3,453
Gains (losses)
on disposal
of property,
plant and
equipment 130 (17) (227) 2,244
Interest
expense (1,149) - (1,558) (10,547)
Separation and
restructuring
costs (1,221) (22,020) (4,155) (31,629)
Write-down
of investment
in newspaper
partnership - - - (10,000)
Losses
on repurchases
of debt - - - (26,380)
Miscellaneous,
net 270 (508) (988) 7,136
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Loss from
continuing
operations
before income
taxes $(3,248) $(7,569) $(235,065) $(801,255)
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Three months Nine months
ended ended
September 30, September 30,
(in thousands) 2009 2008 2009 2008
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Depreciation:
Newspapers $5,715 $5,517 $17,026 $16,327
JOA and newspaper partnerships - 305 - 916
Television 4,305 4,788 13,399 13,925
Licensing and other 312 242 949 478
Corporate and shared services 193 285 556 460
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Total depreciation $10,525 $11,137 $31,930 $32,106
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Amortization of intangibles:
Newspapers $297 $525 $1,234 $1,563
Television 85 285 251 848
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Total amortization of intangibles $382 $810 $1,485 $2,411
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Additions to property, plant and equipment:
Newspapers $11,804 $14,474 $34,069 $39,895
JOA and newspaper partnerships 17 1 17 31
Television 3,677 5,654 5,156 16,675
Licensing and other 30 270 327 1,538
Corporate and shared services 43 3,421 138 3,583
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Total additions to property, plant
and equipment $15,571 $23,820 $39,707 $61,722
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The following is segment operating revenue for newspapers:
Three months ended Nine months ended
September 30, September 30,
(in thousands) 2009 2008 Change 2009 2008 Change
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Segment operating
revenues:
Local $21,490 $29,230 (26.5)% $71,656 $97,228 (26.3)%
Classified 22,312 34,644 (35.6)% 73,096 117,078 (37.6)%
National 4,937 5,975 (17.4)% 15,953 20,744 (23.1)%
Online 7,278 9,058 (19.7)% 21,928 28,800 (23.9)%
Preprint and other 17,263 21,739 (20.6)% 55,810 68,851 (18.9)%
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Newspaper
advertising 73,280 100,646 (27.2)% 238,443 332,701 (28.3)%
Circulation 27,309 26,576 2.8 % 86,511 85,079 1.7 %
Other 3,808 3,881 (1.9)% 13,077 13,355 (2.1)%
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Total operating
revenues $104,397 $131,103 (20.4)% $338,031 $431,135 (21.6)%
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The following is segment operating revenue for television:
Three months ended Nine months ended
September 30, September 30,
(in thousands) 2009 2008 Change 2009 2008 Change
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Segment operating
revenues:
Local $35,955 $42,350 (15.1)% $108,925 $138,519 (21.4)%
National 16,064 19,539 (17.8)% 51,328 65,493 (21.6)%
Political 1,651 10,293 (84.0)% 2,161 14,968 (85.6)%
Network
compensation 1,927 1,854 3.9 % 5,926 5,870 1.0 %
Other 4,185 2,883 45.2 % 12,946 8,608 50.4 %
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Total operating
revenues $59,782 $76,919 (22.3)% $181,286 $233,458 (22.3)%
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3. CONSOLIDATED BALANCE SHEETS The following are our Condensed Consolidated Balance Sheets:
As of As of
September 30, December 31,
(in thousands) 2009 2008
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ASSETS
Current assets:
Cash and cash equivalents $10,408 $5,376
Short-term investments 21,254 21,130
Other current assets 214,630 259,030
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Total current assets 246,292 285,536
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Investments 10,812 12,720
Property, plant and equipment 432,107 426,671
Goodwill - 215,432
Other intangible assets 23,980 26,464
Deferred income taxes 63,075 80,600
Other long-term assets 14,367 9,281
Assets of discontinued
operations - noncurrent - 32,272
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TOTAL ASSETS $790,633 $1,088,976
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LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $25,814 $55,889
Customer deposits and unearned
revenue 32,014 38,817
Accrued expenses and other current
liabilities 77,205 90,653
Liabilities of discontinued
operations - current - 2,225
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Total current liabilities 135,033 187,584
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Long-term debt 29,455 61,166
Other liabilities (less current
portion) 190,855 245,259
Total equity 435,290 594,967
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TOTAL LIABILITIES AND EQUITY $790,633 $1,088,976
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SOURCE The Tim King, The E.W. Scripps Company, +1-513-977-3732, tim.king@scripps.com |
