|Scripps Reports First-Quarter Results|
In February, the company closed the Rocky Mountain News after an
unsuccessful search for a buyer. As part of the process of exiting the
The quarterly results reflect continued weakness in advertising sales at
the company's newspapers and television stations. Consolidated revenue
decreased 20 percent to
Income (loss) from continuing operations, net of tax, included the following items in the first quarter:
-- a preliminary non-cash impairment charge of
Excluding those items, the net loss from continuing operations
attributable to Scripps shareholders would have been
At the end of the quarter, the company's long-term debt stood at
"In the first quarter we made a series of tough decisions intended to
improve our financial position through the current economic downturn and
beyond into what we believe will be a restructured environment for local
"We also suspended the company's match of employee contributions to their 401(k) accounts, reduced salaries, eliminated bonuses, and decided to freeze our pension plan, plus we reduced or cut out a long list of other expenses. These savings will become more significant as we move through the remainder of the year.
"Despite all we've done to reduce expenses during these difficult days, we have not done so indiscriminately. Today our low debt is a competitive advantage, allowing us to leverage our investments in local news and information content. In this period of dramatic economic pressure, we're determined to stay focused on the needs of viewers, readers and advertisers."
First-quarter results by segment are as follows: Television
Revenue from the company's television stations was
Revenue broken down by category was: -- Local, down 22.1 percent to
The decrease in the local and national revenue was largely attributable to reduced spending by advertisers in the automotive, financial services and retail categories. As is common for this stage of the election cycle, there was virtually no political spending in the first quarter of 2009, compared with the year-ago period that included local, state and national primaries.
Cash expenses for the station group increased slightly to
The segment loss for the television division was
Year-over-year revenue from newspapers managed solely by Scripps fell 21.7
Advertising revenue broken down by category was: -- Local, down 24.9 percent to
The decline in online ad revenue is attributable to the weakness in print
classified advertising, to which 55 percent of the online advertising is tied.
Revenue from pure-play advertisers who only purchase ads on the company's
newspaper Web sites rose 30 percent to
Circulation revenue rose slightly to
Cash expenses for Scripps newspapers were down 8.6 percent from the prior
Segment profit at newspapers managed solely by the company was
Licensing and Other Media
The senior management of The
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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 F-3 of its 2008 SEC Form 10K. We undertake no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.
Loss from continuing operations before income tax was affected by the following:
2009 - Separation costs include the costs to separate and install separate
information systems as well as other costs related to our separation from SNI.
Efforts to separate and install separate systems are expected to continue
through the end of the second quarter. These costs increased loss from
continuing operations by
In the first quarter we recorded a
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 15 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.
JOAs and newspaper partnerships include a newspaper that is operated
pursuant to the terms of joint operating agreement. The newspaper in the JOA
maintains an independent editorial operation and receives a share of the
operating profits of the combined newspaper operations. This segment also
includes newspaper partnerships. We account for our share of the earnings of
our JOA and newspaper partnerships using the equity method of accounting. Our
equity in earnings of our JOA and newspaper partnerships is included in
"Equity in earnings of JOAs and other joint ventures" in our results from
operations. When we ceased the publication of our
Television includes six ABC-affiliated stations, three NBC-affiliated stations and one independent station. Our television stations reach approximately 10% of the nation's television households. Television stations earn revenue primarily from the sale of advertising to local and national advertisers.
Licensing and other media aggregates our operating segments that are too small to report separately, and primarily includes syndication and licensing of news features and comics.
In addition, certain corporate costs and expenses, including information technology, pensions and other employee benefits, and other shared services, are allocated to our business segments. The allocations are generally amounts agreed upon by management, which may differ from amounts that would be incurred if such services were purchased separately by the business segment. 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 (as defined by SFAS 131 - Segment
Reporting) evaluates the operating performance of our business segments and
makes decisions about the allocation of resources to our business segments
using a measure we call segment profit. Segment profit excludes interest,
income taxes, depreciation and amortization, impairment charges, divested
operating units, restructuring activities (including our proportionate share
of JOA restructuring activities), investment results and certain other items
that are included in net income (loss) determined in accordance with
accounting principles generally accepted in the
Information regarding our business segments is as follows: Three months ended March 31, (in thousands) 2009 2008 Change Segment operating revenues: Newspapers $121,825 $155,599 (21.7)% JOAs and newspaper partnerships 19 61 (68.9)% Television 60,406 76,019 (20.5)% Licensing and other 23,118 23,619 (2.1)% Corporate - 396 Total operating revenues $205,368 $255,694 (19.7)% Segment profit (loss): Newspapers $2,947 $25,550 (88.5)% JOAs and newspaper partnerships (21,086) 235 Television (2,413) 14,170 Licensing and other 3,135 2,088 50.1 % Corporate (7,812) (13,782) (43.3)% Depreciation and amortization (11,763) (11,086) Impairment of goodwill and indefinite-lived assets (216,413) - Equity earnings in investments (85) 1,780 Losses on disposal of property, plant and equipment (338) (103) Interest expense (246) (6,101) Separation costs (1,493) (1,059) Miscellaneous, net (1,028) 899 Income (loss) from continuing operations before income taxes $(256,595) $12,591 Three months ended March 31, (in thousands) 2009 2008 Depreciation: Newspapers $5,474 $5,373 JOAs and newspaper partnerships 309 324 Television 4,759 4,413 Licensing and other media 322 117 Corporate 179 59 Total depreciation $11,043 $10,286 Amortization of intangibles: Newspapers $637 $519 Television 83 281 Total amortization of intangibles $720 $800 Additions to property, plant and equipment: Newspapers $13,072 $13,766 JOAs and newspaper partnerships - 17 Television 957 4,714 Licensing and other 158 665 Corporate 61 787 Total additions to property, plant and equipment $14,248 $19,949 The following is segment operating revenues for newspapers: Three months ended March 31, (in thousands) 2009 2008 Change Segment operating revenues: Local $26,552 $35,378 (24.9)% Classified 26,642 42,763 (37.7)% National 5,982 8,051 (25.7)% Online 7,314 9,947 (26.5)% Preprint and other 19,269 24,006 (19.7)% Newspaper advertising 85,759 120,145 (28.6)% Circulation 30,637 30,514 0.4 % Other 5,429 4,940 9.9 % Total operating revenues $121,825 $155,599 (21.7)% The following is segment operating revenues for television: Three months ended March 31, (in thousands) 2009 2008 Change Segment operating revenues: Local $35,644 $45,746 (22.1)% National 18,372 22,104 (16.9)% Political 177 3,055 (94.2)% Network compensation 2,056 2,177 (5.6)% Other 4,157 2,937 41.5 % Total operating revenues $60,406 $76,019 (20.5)% 3. JOINT OPERATING AGREEMENT AND NEWSPAPER PARTNERSHIPS Financial information related to our Denver JOA and
We closed our
4. CONSOLIDATED BALANCE SHEETS
The following are the Condensed Consolidated Balance Sheets for The
In addition to the results reported in accordance with accounting
principals generally accepted in the
The table below reconciles Net income (loss) from continuing operations prepared in accordance with GAAP to Adjusted net income (loss) from continuing operations: Three months ended March 31, (in thousands) 2009 2008 Net income (loss) from continuing operations (GAAP basis) $(220,847) $8,621 Impairment of goodwill and indefinite-lived assets, net of tax 191,943 - Pension curtailment loss, net of tax 2,566 - (Income) loss for our JOA and newspaper partnerships, net of tax 13,335 (1,243) Adjusted net income (loss) from continuing operations $(13,003) $7,378