Scripps first-quarter net income rose 52 percent to 37 cents per share

Tue, August 26, 1997 by Rich Boehne

CINCINNATI, Ohio – The E.W. Scripps Company’s first-quarter income from continuing operations increased 52 percent to $30.0 million, 37 cents per share, from $19.7 million, 25 cents per share in the year-ago quarter.Consolidated operating cash flow (operating income before depreciation and amortization) from continuing operations increased 34 percent to $74.1 million, and operating income moved up 47 percent to $55.9 million. Results for both years were affected by Home & Garden Television, a wholly owned cable network which now reaches 25 million homes and has commitments for carriage to an additional 6 million homes. Costs for the 27-month-old network reduced net income by $1.6 million, 2 cents per share, in the first quarter of 1997, and by $2.3 million, 3 cents per share, in the year-ago quarter."Our first-quarter results were much stronger than anticipated, thanks largely to reduced newsprint costs and local markets that provided unexpectedly robust growth in newspaper advertising," said William R. Burleigh, president and chief executive officer. "In the first quarter, newspaper advertising’s rate of growth was more than twice what we had seen in the previous three quarters. "We also received a boost from the entertainment division, which is benefiting from the rapid progress of Home & Garden Television and the growing popularity of United Media's DILBERT characters."As the year progresses, however, comparisons will be more difficult due to higher newsprint prices, almost no political advertising and greater promotional spending at HGTV," said Burleigh.Interest expense was $2.6 million, up $1.2 million from last year due to additional debt associated with the May 9,1996, purchase of the Vero Beach Press Journal.NEWSPAPER RESULTS (includes the Vero Beach Press Journal in 1997)Operating cash flow increased 42 percent to $50.9 million. Newsprint costs fell 20 percent, or $6.8 million. Newsprint prices fell 32 percent but were partially offset by a 14 percent increase in usage. If newsprint remains at its current price, year-over-year costs will decrease approximately 10 percent, or $3 million, in the second quarter.Total newspaper revenues moved up 10 percent to $175 million.Advertising revenues increased 11 percent to $126 million. Broken down by category:· Local retail increased 13 percent to $54.7 million;· Classified increased 9.4 percent to $49.9 million;· National increased 33 percent to $5.6 million;· Preprint increased 3 percent to $16.0 million.About one-third of the total advertising increase was due to the addition of the Vero Beach Press Journal.Circulation revenues increased 0.7 percent to $33.8 million.TELEVISION RESULTS Revenues, at $72.7 million, were up 2.8 percent over the year-ago quarter. Local advertising grew 8.1 percent, but national was flat and political, which totaled $1.4 million in the first quarter last year, was only $100,000 in the quarter just ended. Operating cash flow increased 2.4 percent to $24.9 million.ENTERTAINMENT RESULTS(continuing operations) Revenues for the division moved up 75 percent to $43.2 million and operating cash flow was $2.1 million, compared to a loss of $700,000 in the year-ago quarter.At Home & Garden Television, revenues grew 119 percent year-over-year and cash operating losses were $2.1 million, compared to $3.4 million last year.The network is carried by more than 800 cable systems in all 50 states, and also is available to subscribers of DIRECTV, EchoStar and C-Band satellite packages. It has commitments for 31 million subscribers, more than double its total in March 1996.HGTV recently announced plans to make its programming available to homes in Europe and Japan through agreements with NBC Europe and Dentsu, Inc. At United Media, licensing revenues grew 30 percent in the quarter to $16.4 million, primarily due to the growing popularity of the DILBERT characters. (a) In the second quarter of 1996 the Company sold its equity interest in The Television Food Network, a cable programming network. (b) Operating income by segment is as follows: (c) Operating results for HGTV are as follows: