Ohio | 0-16914 | 31-1223339 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
312 Walnut Street Cincinnati, Ohio | 45202 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item No. | Page | |
2.02 | Results of Operations and Financial Condition | 3 |
9.01 | Financial Statements and Exhibits | 3 |
Exhibit Number | Description of Item | |
99.1 | Press release dated August 3, 2017 |
THE E.W. SCRIPPS COMPANY | ||
BY: | /s/ Douglas F. Lyons | |
Douglas F. Lyons | ||
Vice President, Controller and Treasurer | ||
(Principal Accounting Officer) |
For immediate release | ||
August 3, 2017 |
• | The company announced on Aug. 1 plans to acquire the Katz networks - four fast-growing, audience-targeted broadcast networks, for $302 million. Because Scripps was already a 5 percent owner in a portion of the business, the net purchase price is $292 million. Each network reaches more than 80 percent of U.S. television households and provides national advertising scale. The deal is expected to close Oct. 2. |
• | In June, the company exited the newspaper syndication business in a deal worth about $3 million with longtime partner Universal Uclick. Scripps sold the newspaper syndication rights for some popular comic strips and assigned other syndication rights to Universal Uclick for the comics in which Scripps owns the copyrights, including “Big Nate,” “Marmaduke” and “Nancy.” |
• | Retransmission revenue increased 24 percent to $66 million in the second quarter. For the year, retransmission revenue is expected to increase 20 percent and become about 35 percent of television division revenue. |
• | Digital revenue grew 27 percent in the second quarter, driven by growth at our industry-leading podcast company, Midroll, and our next-generation national news network, Newsy. |
• | In April, the company closed an offering of $400 million of new senior unsecured notes maturing in 2025. The notes have a coupon rate of 5.125 percent. Proceeds from the offering were used to repay a term loan, to pay related fees, and for general corporate purposes. Since this is a refinancing, the company did not significantly increase the total amount of debt outstanding. |
• | Local, down 3.8 percent to $85 million |
• | National, down 5.8 percent to $36 million |
• | Political, $2.5 million, compared to $8.4 million in 2016 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating revenues | $ | 231,820 | $ | 227,817 | $ | 442,821 | $ | 437,315 | ||||||||
Segment, shared services and corporate expenses | (196,054 | ) | (186,250 | ) | (390,755 | ) | (368,450 | ) | ||||||||
Acquisition and related integration costs | — | — | — | (578 | ) | |||||||||||
Depreciation and amortization | (14,649 | ) | (14,786 | ) | (29,373 | ) | (29,197 | ) | ||||||||
(Losses) gains, net on disposal of property and equipment | (224 | ) | (22 | ) | (311 | ) | (18 | ) | ||||||||
Operating expenses | (210,927 | ) | (201,058 | ) | (420,439 | ) | (398,243 | ) | ||||||||
Operating income | 20,893 | 26,759 | 22,382 | 39,072 | ||||||||||||
Interest expense | (8,248 | ) | (4,432 | ) | (12,443 | ) | (9,011 | ) | ||||||||
Defined benefit pension plan expense | (3,467 | ) | (3,449 | ) | (6,934 | ) | (6,899 | ) | ||||||||
Miscellaneous, net | 5,103 | (458 | ) | 4,224 | (649 | ) | ||||||||||
Income from operations before income taxes | 14,281 | 18,420 | 7,229 | 22,513 | ||||||||||||
Provision for income taxes | (5,736 | ) | (6,932 | ) | (623 | ) | (6,137 | ) | ||||||||
Net income | $ | 8,545 | $ | 11,488 | $ | 6,606 | $ | 16,376 | ||||||||
Net income per basic share of common stock | $ | 0.10 | $ | 0.14 | $ | 0.08 | $ | 0.19 | ||||||||
Weighted average basic shares outstanding | 82,302 | 83,773 | 82,191 | 83,869 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||
Segment operating revenues: | ||||||||||||||||||||||
Television | $ | 193,304 | $ | 191,745 | 0.8 | % | $ | 373,102 | $ | 371,649 | 0.4 | % | ||||||||||
Radio | 17,246 | 18,183 | (5.2 | )% | 31,242 | 32,786 | (4.7 | )% | ||||||||||||||
Digital | 19,349 | 15,207 | 27.2 | % | 34,706 | 27,533 | 26.1 | % | ||||||||||||||
Other | 1,921 | 2,682 | (28.4 | )% | 3,771 | 5,347 | (29.5 | )% | ||||||||||||||
Total operating revenues | $ | 231,820 | $ | 227,817 | 1.8 | % | $ | 442,821 | $ | 437,315 | 1.3 | % | ||||||||||
Segment profit (loss): | ||||||||||||||||||||||
Television | $ | 49,785 | $ | 53,298 | (6.6 | )% | $ | 84,500 | $ | 94,985 | (11.0 | )% | ||||||||||
Radio | 2,909 | 3,903 | (25.5 | )% | 4,517 | 6,046 | (25.3 | )% | ||||||||||||||
Digital | (4,199 | ) | (4,715 | ) | (10.9 | )% | (10,376 | ) | (7,848 | ) | 32.2 | % | ||||||||||
Other | (1,763 | ) | (1,045 | ) | 68.7 | % | (1,445 | ) | (152 | ) | 850.7 | % | ||||||||||
Shared services and corporate | (10,966 | ) | (9,874 | ) | 11.1 | % | (25,130 | ) | (24,166 | ) | 4.0 | % | ||||||||||
Acquisition and related integration costs | — | — | — | (578 | ) | |||||||||||||||||
Depreciation and amortization | (14,649 | ) | (14,786 | ) | (29,373 | ) | (29,197 | ) | ||||||||||||||
(Losses) gains, net on disposal of property and equipment | (224 | ) | (22 | ) | (311 | ) | (18 | ) | ||||||||||||||
Interest expense | (8,248 | ) | (4,432 | ) | (12,443 | ) | (9,011 | ) | ||||||||||||||
Defined benefit pension plans | (3,467 | ) | (3,449 | ) | (6,934 | ) | (6,899 | ) | ||||||||||||||
Miscellaneous, net | 5,103 | (458 | ) | 4,224 | (649 | ) | ||||||||||||||||
Income from operations before income taxes | $ | 14,281 | $ | 18,420 | $ | 7,229 | $ | 22,513 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||
Segment operating revenues: | ||||||||||||||||||||||
Local | $ | 85,432 | $ | 88,812 | (3.8 | )% | $ | 163,003 | $ | 169,069 | (3.6 | )% | ||||||||||
National | 35,708 | 37,904 | (5.8 | )% | 66,724 | 71,349 | (6.5 | )% | ||||||||||||||
Political | 2,525 | 8,449 | (70.1 | )% | 3,566 | 17,709 | (79.9 | )% | ||||||||||||||
Retransmission | 66,059 | 53,433 | 23.6 | % | 132,270 | 107,047 | 23.6 | % | ||||||||||||||
Other | 3,580 | 3,147 | 13.8 | % | 7,539 | 6,475 | 16.4 | % | ||||||||||||||
Total operating revenues | 193,304 | 191,745 | 0.8 | % | 373,102 | 371,649 | 0.4 | % | ||||||||||||||
Segment costs and expenses: | ||||||||||||||||||||||
Employee compensation and benefits | 64,755 | 63,593 | 1.8 | % | 131,642 | 129,360 | 1.8 | % | ||||||||||||||
Programs and program licenses | 44,835 | 40,573 | 10.5 | % | 89,983 | 80,052 | 12.4 | % | ||||||||||||||
Other expenses | 33,929 | 34,281 | (1.0 | )% | 66,977 | 67,252 | (0.4 | )% | ||||||||||||||
Total costs and expenses | 143,519 | 138,447 | 3.7 | % | 288,602 | 276,664 | 4.3 | % | ||||||||||||||
Segment profit | $ | 49,785 | $ | 53,298 | (6.6 | )% | $ | 84,500 | $ | 94,985 | (11.0 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||
Segment operating revenues: | ||||||||||||||||||||||
Advertising | $ | 16,551 | $ | 17,568 | (5.8 | )% | $ | 30,011 | $ | 31,690 | (5.3 | )% | ||||||||||
Other | 695 | 615 | 13.0 | % | 1,231 | 1,096 | 12.3 | % | ||||||||||||||
Total operating revenues | 17,246 | 18,183 | (5.2 | )% | 31,242 | 32,786 | (4.7 | )% | ||||||||||||||
Segment costs and expenses: | ||||||||||||||||||||||
Employee compensation and benefits | 7,168 | 7,059 | 1.5 | % | 14,546 | 14,350 | 1.4 | % | ||||||||||||||
Programs | 3,006 | 2,930 | 2.6 | % | 4,229 | 4,019 | 5.2 | % | ||||||||||||||
Other expenses | 4,163 | 4,291 | (3.0 | )% | 7,950 | 8,371 | (5.0 | )% | ||||||||||||||
Total costs and expenses | 14,337 | 14,280 | 0.4 | % | 26,725 | 26,740 | (0.1 | )% | ||||||||||||||
Segment profit | $ | 2,909 | $ | 3,903 | (25.5 | )% | $ | 4,517 | $ | 6,046 | (25.3 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||
Total operating revenues | $ | 19,349 | $ | 15,207 | 27.2 | % | $ | 34,706 | $ | 27,533 | 26.1 | % | ||||||||||
Segment costs and expenses: | ||||||||||||||||||||||
Employee compensation and benefits | 13,043 | 11,757 | 10.9 | % | 26,355 | 21,634 | 21.8 | % | ||||||||||||||
Other expenses | 10,505 | 8,165 | 28.7 | % | 18,727 | 13,747 | 36.2 | % | ||||||||||||||
Total costs and expenses | 23,548 | 19,922 | 18.2 | % | 45,082 | 35,381 | 27.4 | % | ||||||||||||||
Segment loss | $ | (4,199 | ) | $ | (4,715 | ) | (10.9 | )% | $ | (10,376 | ) | $ | (7,848 | ) | 32.2 | % |
(in thousands) | As of June 30, 2017 | As of December 31, 2016 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 149,649 | $ | 134,352 | ||||
Other current assets | 230,408 | 211,543 | ||||||
Total current assets | 380,057 | 345,895 | ||||||
Investments | 13,520 | 14,221 | ||||||
Property and equipment | 252,044 | 260,731 | ||||||
Goodwill | 616,780 | 616,780 | ||||||
Other intangible assets | 456,666 | 467,896 | ||||||
Deferred income taxes | 9,538 | 9,075 | ||||||
Miscellaneous | 12,776 | 13,775 | ||||||
TOTAL ASSETS | $ | 1,741,381 | $ | 1,728,373 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 25,701 | $ | 26,670 | ||||
Customer deposits and unearned revenue | 4,789 | 7,122 | ||||||
Current portion of long-term debt | 2,656 | 6,571 | ||||||
Accrued expenses and other current liabilities | 65,881 | 63,768 | ||||||
Total current liabilities | 99,027 | 104,131 | ||||||
Long-term debt (less current portion) | 395,599 | 386,614 | ||||||
Other liabilities (less current portion) | 289,206 | 291,693 | ||||||
Total equity | 957,549 | 945,935 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 1,741,381 | $ | 1,728,373 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator (for basic and diluted earnings per share) | ||||||||||||||||
Net income | $ | 8,545 | $ | 11,488 | $ | 6,606 | $ | 16,376 | ||||||||
Less income allocated to RSUs | (116 | ) | (159 | ) | (96 | ) | (203 | ) | ||||||||
Numerator for basic and diluted earnings per share | $ | 8,429 | $ | 11,329 | $ | 6,510 | $ | 16,173 | ||||||||
Denominator | ||||||||||||||||
Basic weighted-average shares outstanding | 82,302 | 83,773 | 82,191 | 83,869 | ||||||||||||
Effective of dilutive securities: | ||||||||||||||||
Stock options held by employees and directors | 163 | 278 | 198 | 315 | ||||||||||||
Diluted weighted-average shares outstanding | 82,465 | 84,051 | 82,389 | 84,184 |
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