| Scripps Operating Cash Flow Up 10 Percent |
CINCINNATI, July 12 /PRNewswire/ -- The E.W. Scripps Company's (NYSE: SSP) operating cash flow increased 10 percent to $121 million in the second quarter. Results were driven by rapid growth of the company's cable television networks and improved performance by the company's television station group. Earnings per share from core operations were 59 cents vs. 56 cents during the same quarter a year earlier. The company announced during the quarter that it has asked the U.S. Attorney General to approve a joint operating agreement between the Denver Rocky Mountain News and The Denver Post, which is owned by privately held MediaNews Group Inc. Such agreements are allowed under the Newspaper Preservation Act of 1970. The agreement calls for the creation of the Denver Newspaper Agency, a third party entity owned equally by Scripps and MediaNews, to handle all of the business functions of the two Denver newspapers. Both newspapers will maintain independent news operations. Full implementation of the agreement is pending the Attorney General's approval. The company announced earlier this week that negotiators for the Denver Newspaper Agency had reached long-term collective bargaining agreements with the unions that represent 2,600 employees at the two newspapers. The labor agreements will become effective when the joint operating agreement is approved. In a related development, the unions this week have asked the Attorney General to promptly approve the proposed joint operating agreement. Excluding operating losses at the Denver Rocky Mountain News, second quarter earnings per share increased 14 percent to 66 cents vs. 58 cents in 1999. Operating losses during the second quarter at the News, including depreciation and amortization expenses, were $8.6 million compared to $2.8 million for the same period in 1999. In its category media division, Scripps announced during the second quarter that it will launch a fourth cable television and Internet network, Fine Living, in the second half of 2001. Fine Living will be a 24-hour cable TV network, with companion Web site, that targets the interests and passions of higher income viewers and taps the $200 billion-plus luxury consumer goods and services market. "We made key strategic decisions during the second quarter to position Scripps for continued growth and the creation of long-term value," said William R. Burleigh, chairman and chief executive officer. "We moved decisively to put the company's largest newspaper on more secure financial footing by petitioning for a joint operating agreement. It was a difficult decision, but one we believe is best for the Denver community, our employees, the company and its shareholders." "Building on the phenomenal success of Home & Garden Television and the Food Network, we announced plans last month to launch our fourth cable television network, Fine Living," Burleigh said. "Our category media division, which also includes the increasingly popular Do It Yourself television and Internet brand, continues to grow rapidly." "At our television stations, improved ratings for ABC network programming have provided a welcomed boost in primetime revenues. A modestly improved TV advertising environment, the return of political advertising and continued cost discipline measures, are driving better broadcast television results." "At the Scripps newspapers, advertising revenue growth was solid, but continued operating losses at the Denver Rocky Mountain News, higher newsprint prices and increased spending on new online and print products inhibited cash flow growth," Burleigh said. "On the interactive media front, the local portals we've developed around our TV stations and newspapers are handily meeting the online challenge," Burleigh added. "Strong online recruitment, automotive and real estate products are capturing new revenues in all of our markets, and we see scant evidence that classified advertising revenues are eroding away to Internet competitors. Our category media sites, including comics.com, hgtv.com, foodtv.com and diynet.com, are rapidly gaining scale." Following are results by operating group: Newspapers Operating cash flow decreased 8.2 percent to $64 million. Excluding the Denver Rocky Mountain News, operating cash flow decreased 1.5 percent. An 8 percent year-over-year increase in newsprint prices, and increased investment in online and print products, contributed to lower cash flow in the newspaper division. Newspaper advertising revenue during the second quarter increased 8.4 percent to $187 million. Broken down by category:
Circulation revenues decreased 4.3 percent to $36.3 million. Total newspaper revenues were $239 million, up 5 percent. Category Media Category media operating cash flow increased 76 percent to $25.2 million. Home & Garden Television produced operating cash flow of $23.8 million vs. $11.4 million in the year-ago period. HGTV revenues grew 47 percent to $60 million. Home & Garden Television now reaches 62.9 million domestic subscribers, an increase of 7.7 million in the past 12 months and up 2.4 million in the second quarter. The Food Network had revenues of $26.3 million, up 67 percent. Food Network operating cash flow was $4.9 million compared to $3.3 million in the second quarter last year. The network reaches 49.1 million domestic subscribers, up 8.4 million in the past 12 months and up 2.7 million in the second quarter. Start-up costs for the Do It Yourself (DIY) network were $2.5 million vs. $900,000 in the year-ago period. DIY, launched Sept. 30, is a simultaneous on-air, on-line network that provides immediate access to step-by-step instructions, in-depth demonstrations and tips for the do-it-yourself home enthusiast. The network now reaches several million homes served by satellite and cable television services. The company currently anticipates that Fine Living's impact on earnings per share will be negligible for 2000 and up to 10 cents per share for 2001. Broadcast Television Broadcast television operating cash flow increased 19 percent to $32.9 million. Revenues increased 7.2 percent to $87.5 million. Broadcast television cash operating costs during the second quarter increased 1.2 percent. In the second half of the last congressional election year, 1998, the company's television stations carried $16.6 million in political advertising. A similar amount is expected in the second half of 2000. Licensing and Other Media Revenues increased 15 percent to $26 million. Operating cash flow was $4 million vs. $2.8 million in the second quarter of last year. Internet The 31 Scripps Internet sites recorded approximately 329 million page views during the second quarter compared to 232 million in the same period last year, an increase of 42 percent. Broken down by category, second quarter page views were:
The company's Internet sites generated $5 million in revenue during the second quarter. Related costs were $7 million. This press release contains certain forward-looking statements related to the company's newspaper publishing, category media and broadcast television 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 F-4 of its 1999 SEC Form 10K and page F-13 of its most recent Form 10Q. The E.W. Scripps Company is a diverse media concern with interests in newspaper publishing, broadcast television, cable television programming and interactive media. Scripps operates 20 daily newspapers, 10 broadcast TV stations and three cable television networks, with plans to launch a fourth. Scripps cable television network brands include Home & Garden Television, Food Network, Do it Yourself, and Fine Living, due to launch in the second half of 2001. The company also operates Scripps Howard News Service, United Media, the worldwide licensing and syndication home of PEANUTS and DILBERT, and 31 Web sites, including hgtv.com, foodtv.com, diynet.com and comics.com.
THE E.W. SCRIPPS COMPANY
(in thousands, except per share data)
Three months ended June 30, Six months ended June 30,
2000 1999 Fav(Unf) 2000 1999 Fav(Unf)
Operating Revenues:
Newspapers $239,273 $226,819 5.5% $469,297 $448,571 4.6%
Broadcast
television 87,471 81,605 7.2% 164,158 156,972 4.6%
Category
television 86,466 57,586 50.2% 159,789 105,786 51.0%
Licensing and
other media 26,014 22,585 15.2% 51,334 48,329 6.2%
Total 439,224 388,595 13.0% 844,578 759,658 11.2%
Divested
operations(a) 2,690 5,505 7,887
Total
operating
revenues $439,224 $391,285 12.3% $850,083 $767,545 10.8%
Operating Cash Flow:
Newspapers $64,016 $69,726 (8.2)% $126,477 $134,985 (6.3)%
Broadcast
television 32,910 27,709 18.8% 56,464 49,157 14.9%
Category
television 25,179 14,290 76.2% 40,517 19,284
Licensing and
other media 4,005 2,769 44.6% 8,179 6,806 20.2%
Corporate (4,735) (4,474) (9,561) (8,849)
Total 121,375 110,020 10.3% 222,076 201,383 10.3%
Divested
operations(a) 21 364 384
Total operating
cash flow 121,375 110,041 10.3% 222,440 201,767 10.2%
Depreciation 17,185 14,051 (22.3)% 34,259 30,404 (12.7)%
Amortization 10,071 9,716 (3.7)% 19,805 19,352 (2.3)%
Total
operating
income(c) 94,119 86,274 9.1% 168,376 152,011 10.8%
Interest
expense (13,481) (11,026) (26,117) (22,099)
Investment
results, net of
expenses(b) (1,449) 581 (10,511) 515
Net gains on
divested
operations(a) 6,269
Miscellaneous,
net 45 1,071 991 2,439
Provision for
income taxes (32,551) (31,556) (57,665) (54,488)
Minority
interests (1,063) (1,113) (2,119) (2,146)
Net income $45,620 $44,231 $79,224 $76,232
Per Share of Common Stock -- Diluted:
Net income $.58 $.56 $1.00 $.96
Weighted average
shares
outstanding 78,995 78,950 78,942 79,038
Excluding investment results and
net gains on divested operations:
Net income $46,570 $43,852 6.2% $82,305 $75,896 8.4%
Net income per share of
common stock
-- diluted $.59 $.56 5.4% $1.04 $.96 8.3%
(a) In the first quarter of 2000 the Company i) acquired the daily
newspaper in Fort Pierce, Florida, in exchange for its newspaper in
Destin, Florida, and cash and ii) sold its independent telephone
directories in Memphis, Tennessee, Kansas City, Missouri, and
North Palm Beach, Florida. The sales and trade resulted in net gains
of $6.3 million, $3.8 million after-tax ($.05 per share).
(b) Included in investment results in the second quarter of 2000 are
i) recognized investment gains and losses, including a $4.0 million
writedown of the Company's investment in garden.com, and ii) an
adjustment to accrued incentive compensation related to changes in
the net gains (realized and estimated unrealized) on the Scripps
Ventures I portfolio. Net income was reduced $1.0 million
($.01 per share) in the second quarter and $6.8 million
($.09 per share) year-to-date. Accrued incentive compensation was
decreased $3.3 million in the quarter, to $10.8 million, in
conjunction with the decrease of $22 million in the net gain on
Scripps Ventures I's portfolio, to $72 million at June 30, 2000. The
incentive compensation for Scripps Ventures I will be paid in 2001
based on the portfolio's return through June 2001. Scripps Ventures
II's portfolio managers have a minority equity interest in the income
or that portfolio. The estimated value of Scripps Ventures I and
II's portfolios at June 30, 2000, was $138 million.
(c) Operating income by segment is as follows:
(in thousands) Three months ended June 30, Six months ended June 30,
2000 1999 Fav(Unf) 2000 1999 Fav(Unf)
Operating Income:
Newspapers $47,870 $55,795 (14.2)% $94,744 $106,077 (10.7)%
Broadcast
television 25,829 20,927 23.4% 42,347 35,314 19.9%
Category
television 21,722 12,048 80.3% 33,476 13,653
Licensing and
other media 3,700 2,285 61.9% 7,581 6,078 24.7%
Corporate (5,002) (4,725) (10,065) (9,340)
Total 94,119 86,330 9.0% 168,083 151,782 10.7%
Divested
operations(a) (56) 293 229
Total
operating
income $94,119 $86,274 9.1% $168,376 $152,011 10.8%
(d) Operating results for the Company's Category Television networks are
as follows:
(in thousands,
except per
share data) Three months ended June 30, Six months ended June 30,
2000 1999 Fav(Unf) 2000 1999 Fav(Unf)
HGTV:
Operating
revenues $59,868 $40,863 46.5% $110,856 $73,918 50.0%
Operating
cash flow 23,760 11,419 38,195 16,015
Operating
income 22,414 11,267 98.9% 35,340 14,261
Net income
effect 13,682 7,077 93.3% 21,511 8,897
Net income effect
per share of
common stock --
assuming
dilution $.17 $.09 93.3% $.27 $.11
FOOD NETWORK:
Operating
revenues $26,348 $15,759 67.2% $48,538 $29,669 63.6%
Operating
cash flow 4,868 3,336 45.9% 7,818 3,831
Operating
income 2,819 1,441 95.6% 3,660 150
Net income
effect 1,751 897 95.2% 2,284 66
Net income effect
per share of
common stock --
assuming
dilution $.02 $.01 94.7% $.03 $.00
THE E.W. SCRIPPS COMPANY
Unaudited Revenue and Statistical Summary
Period: June
Report date: July 12, 2000
For comparative purposes, this report excludes divested operations, and includes acquired operations as if they had been purchased January 1, 1999.
June Year-to-date
2000 1999 % 2000 1999 %
CONSOLIDATED REVENUE
Newspapers $74.0 $71.6 3.3% $471.8 $453.8 4.0%
Broadcast
Television 28.0 25.5 9.8% 164.2 157.0 4.6%
Category
Television 27.1 18.1 50.3% 159.8 105.8 51.0%
Licensing and
Other Media 9.4 8.3 13.5% 51.3 48.3 6.2%
TOTAL $138.5 $123.4 12.2% $847.1 $764.9 10.7%
NEWSPAPERS ***
Revenue (in millions)
Local $21.2 $19.7 7.5% $137.4 $133.9 2.7%
Classified 25.0 23.7 5.7% 152.9 141.7 7.9%
National 3.1 3.1 0.2% 18.9 17.8 5.9%
Preprints
and other 8.9 8.2 7.7% 57.3 50.0 14.6%
Newspaper
advertising 58.2 54.7 6.3% 366.5 343.4 6.7%
Circulation 11.5 12.0 (4.2)% 74.9 78.9 (5.0)%
Other * 4.3 4.9 (12.2)% 30.4 31.6 (3.8)%
Newspapers $74.0 $71.6 3.3% $471.8 $453.8 4.0%
Ad inches (in thousands)
Local 748 742 0.8% 5,000 5,031 (0.6)%
Classified 994 969 2.6% 6,149 5,864 4.9%
National 80 77 3.6% 507 432 17.3%
Full run ROP 1,822 1,789 1.9% 11,657 11,327 2.9%
BROADCAST TELEVISION
Revenue
Local $14.7 $14.1 4.3% $89.2 $86.4 3.1%
National 10.2 9.6 6.1% 63.4 60.6 4.7%
Political 1.3 0.1 3.9 0.5
Other 1.8 1.7 6.5% 7.7 9.4 (18.3)%
Broadcast
Television $28.0 $25.5 9.8% $164.2 $157.0 4.6%
CATEGORY TELEVISION
Revenue
Advertising $21.9 $13.4 63.7% $128.2 $76.7 67.1%
Affiliate
fees 4.8 4.3 13.7% 29.2 24.6 18.4%
Other 0.4 0.4 (6.9)% 2.4 4.4 (44.9)%
Category
Television $27.1 $18.1 50.3% $159.8 $105.8 51.0%
Subscribers ** (homes in millions)
HGTV 62.9 55.2 13.9%
Food Network 49.1 40.7 20.6%
* Includes share of profits of JOA newspapers not managed by the
Company and commercial printing.
** According to Nielsen Homevideo Index of homes that receive cable networks. *** For comparative purposes, certain 1999 amounts have been reclassified to conform to 2000 classifications. SOURCE The E.W. Scripps Company
CONTACT: Tim Stautberg of The E.W. Scripps Company, 513-977-3826, or stautberg@scripps.com/ |