Ohio | 0-16914 | 31-1223339 | ||
(State or other jurisdiction of incorporation) | (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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Class A Common Stock, par value $0.01 per share | SSP | NASDAQ Global Select Market |
Item No. | Page | |
2.02 | Results of Operations and Financial Condition | 3 |
9.01 | Financial Statements and Exhibits | 3 |
Exhibit Number | Description of Item | |
Press Release dated May 10, 2019 |
THE E.W. SCRIPPS COMPANY | ||
BY: | /s/ Douglas F. Lyons | |
Douglas F. Lyons | ||
Senior Vice President, Controller and Treasurer | ||
(Principal Accounting Officer) |
May 10, 2019 |
• | Scripps outperformed first-quarter company segment profit expectations, driven by overperformance in National Media and higher-than-expected retransmission revenue. |
• | Scripps has obtained a new $765 million term loan B to fund the Cordillera acquisition and part of the Nexstar transaction. The loan was upsized by $250 million due to strong demand and favorable pricing of LIBOR plus 275 basis points. |
• | On March 20, Scripps announced the acquisition of eight television stations in seven markets being divested as part of the Nexstar acquisition of Tribune. |
• | On May 1, Scripps closed on the acquisition of 15 television stations in 10 markets from Cordillera Communications. |
• | Incorporating Cordillera, the company expects retransmission revenue of about $370 million in 2019. |
• | Upon the close of the Nexstar transaction, Scripps will be the fourth-largest independent local broadcaster, with 60 television stations in 42 markets reaching 30% of U.S. television households. |
• | The Katz networks launched the iconic trial coverage and true-crime journalism network Court TV on May 8 and expects to be in more than 80% of U.S. television households by year-end. |
• | Next-generation national news network Newsy grew revenue 130%, largely due to growth in over-the-top advertising. |
• | Podcast industry leader Stitcher grew revenue 38% due to strong advertising rates and demand. |
Second - quarter 2019 | |
Local Media revenue (pro forma) | $245 million to $250 million; down low-single digits |
Local Media expense (pro forma) | $195 million to $200 million; up low-single digits |
National Media revenue | Low-to-mid $90 million range |
National Media expense | About $90 million |
Shared services and Corporate | About $14 million |
Interest expense | About $18 million |
Pension expense | About $2 million |
Capex ( excluding repack) | Mid-teens millions |
Depreciation | About $10 million |
Amortization | About $10 million |
Three Months Ended March 31, | ||||||||
(in thousands, except per share data) | 2019 | 2018 | ||||||
Operating revenues | $ | 292,163 | $ | 254,191 | ||||
Segment, shared services and corporate expenses | (269,640 | ) | (234,875 | ) | ||||
Acquisition and related integration costs | (3,480 | ) | — | |||||
Restructuring costs | (938 | ) | (3,807 | ) | ||||
Depreciation and amortization of intangible assets | (17,792 | ) | (15,420 | ) | ||||
Gains (losses), net on disposal of property and equipment | (173 | ) | (717 | ) | ||||
Operating expenses | (292,023 | ) | (254,819 | ) | ||||
Operating income (loss) | 140 | (628 | ) | |||||
Interest expense | (8,916 | ) | (8,759 | ) | ||||
Defined benefit pension plan expense | (1,572 | ) | (1,388 | ) | ||||
Miscellaneous, net | (800 | ) | 167 | |||||
Loss from continuing operations before income taxes | (11,148 | ) | (10,608 | ) | ||||
(Provision) benefit for income taxes | 4,334 | 2,031 | ||||||
Loss from continuing operations, net of tax | (6,814 | ) | (8,577 | ) | ||||
Loss from discontinued operations, net of tax | — | (18,504 | ) | |||||
Net loss | (6,814 | ) | (27,081 | ) | ||||
Loss attributable to noncontrolling interest | — | (632 | ) | |||||
Net income (loss) attributable to shareholders of The E.W. Scripps Company | $ | (6,814 | ) | $ | (26,449 | ) | ||
Net loss per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company: | ||||||||
Loss from continuing operations | $ | (0.08 | ) | $ | (0.10 | ) | ||
Loss from discontinued operations | — | (0.23 | ) | |||||
Loss per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company | $ | (0.08 | ) | $ | (0.33 | ) | ||
Weighted average diluted shares outstanding | 80,673 | 81,554 |
Three Months Ended March 31, | |||||||||||
(in thousands) | 2019 | 2018 | Change | ||||||||
Segment operating revenues: | |||||||||||
Local Media | $ | 203,387 | $ | 192,059 | 5.9 | % | |||||
National Media | 87,317 | 60,721 | 43.8 | % | |||||||
Other | 1,459 | 1,411 | 3.4 | % | |||||||
Total operating revenues | $ | 292,163 | $ | 254,191 | 14.9 | % | |||||
Segment profit (loss): | |||||||||||
Local Media | $ | 34,173 | $ | 31,619 | 8.1 | % | |||||
National Media | 4,941 | 2,035 | |||||||||
Other | (433 | ) | (251 | ) | 72.5 | % | |||||
Shared services and corporate | (16,158 | ) | (14,087 | ) | 14.7 | % | |||||
Acquisition and related integration costs | (3,480 | ) | — | ||||||||
Restructuring costs | (938 | ) | (3,807 | ) | |||||||
Depreciation and amortization of intangible assets | (17,792 | ) | (15,420 | ) | |||||||
Gains (losses), net on disposal of property and equipment | (173 | ) | (717 | ) | |||||||
Interest expense | (8,916 | ) | (8,759 | ) | |||||||
Defined benefit pension plan expense | (1,572 | ) | (1,388 | ) | |||||||
Miscellaneous, net | (800 | ) | 167 | ||||||||
Loss from continuing operations before income taxes | $ | (11,148 | ) | $ | (10,608 | ) |
Three Months Ended March 31, | |||||||||||
(in thousands) | 2019 | 2018 | Change | ||||||||
Segment operating revenues: | |||||||||||
Core advertising | $ | 113,404 | $ | 116,010 | (2.2 | )% | |||||
Political | 880 | 2,584 | |||||||||
Retransmission | 85,377 | 70,791 | 20.6 | % | |||||||
Other | 3,726 | 2,674 | 39.3 | % | |||||||
Total operating revenues | 203,387 | 192,059 | 5.9 | % | |||||||
Segment costs and expenses: | |||||||||||
Employee compensation and benefits | 74,911 | 74,182 | 1.0 | % | |||||||
Programming | 60,717 | 53,145 | 14.2 | % | |||||||
Other expenses | 33,586 | 33,113 | 1.4 | % | |||||||
Total costs and expenses | 169,214 | 160,440 | 5.5 | % | |||||||
Segment profit | $ | 34,173 | $ | 31,619 | 8.1 | % |
Three Months Ended March 31, | |||||||||||
(in thousands) | 2019 | 2018 | Change | ||||||||
Segment operating revenues: | |||||||||||
Katz | $ | 50,395 | $ | 42,650 | 18.2 | % | |||||
Stitcher | 15,104 | 10,985 | 37.5 | % | |||||||
Newsy | 8,378 | 3,657 | |||||||||
Triton | 10,462 | — | |||||||||
Other | 2,978 | 3,429 | (13.2 | )% | |||||||
Total operating revenues | 87,317 | 60,721 | 43.8 | % | |||||||
Segment costs and expenses: | |||||||||||
Employee compensation and benefits | 20,525 | 12,719 | 61.4 | % | |||||||
Programming | 37,418 | 30,218 | 23.8 | % | |||||||
Other expenses | 24,433 | 15,749 | 55.1 | % | |||||||
Total costs and expenses | 82,376 | 58,686 | 40.4 | % | |||||||
Segment profit | $ | 4,941 | $ | 2,035 |
(in thousands) | As of March 31, 2019 | As of December 31, 2018 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 14,402 | $ | 107,114 | ||||
Other current assets | 383,097 | 363,903 | ||||||
Total current assets | 397,499 | 471,017 | ||||||
Investments | 7,276 | 7,162 | ||||||
Property and equipment | 254,935 | 237,927 | ||||||
Operating lease right-of-use assets | 43,608 | — | ||||||
Goodwill | 852,362 | 834,013 | ||||||
Other intangible assets | 495,440 | 478,953 | ||||||
Programming (less current portion) | 95,947 | 75,333 | ||||||
Deferred income taxes | 9,857 | 9,141 | ||||||
Miscellaneous | 16,992 | 16,515 | ||||||
TOTAL ASSETS | $ | 2,173,916 | $ | 2,130,061 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 32,230 | $ | 26,919 | ||||
Unearned revenue | 8,120 | 11,459 | ||||||
Current portion of long-term debt | 3,000 | 3,000 | ||||||
Accrued expenses and other current liabilities | 154,566 | 156,681 | ||||||
Total current liabilities | 197,916 | 198,059 | ||||||
Long-term debt (less current portion) | 685,317 | 685,764 | ||||||
Other liabilities (less current portion) | 373,310 | 320,073 | ||||||
Total equity | 917,373 | 926,165 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 2,173,916 | $ | 2,130,061 |
Three Months Ended March 31, | ||||||||
(in thousands) | 2019 | 2018 | ||||||
Numerator (for basic and diluted earnings per share) | ||||||||
Loss from continuing operations, net of tax | $ | (6,814 | ) | $ | (8,577 | ) | ||
Loss attributable to noncontrolling interest | — | 632 | ||||||
Numerator for basic and diluted earnings per share from continuing operations attributable to the shareholders of The E.W. Scripps Company | $ | (6,814 | ) | $ | (7,945 | ) | ||
Denominator | ||||||||
Basic weighted-average shares outstanding | 80,673 | 81,554 | ||||||
Effective of dilutive securities: | ||||||||
Stock options and restricted stock units | — | — | ||||||
Diluted weighted-average shares outstanding | 80,673 | 81,554 | ||||||
Anti-dilutive securities (1) | 1,404 | 1,677 |
(1) | Amount outstanding at balance sheet date, before application of the treasury stock method and not weighted for period outstanding. |
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