Scripps first quarter operating cash flow increases 9.5 percent
Mon, April 12, 1999 by Rich Boehne
CINCINNATI, Ohio – The E. W. Scripps Company’s operating cash flow moved up 9.5 percent to $91.7 million in the first quarter of 1999. Excluding the effects of divested operations and a change in an accounting estimate, operating cash flow increased 7.4 percent.Earnings per share were 40 cents in the first quarter vs. 31 cents in the year-ago quarter. Of the 9-cent increase, 4 cents was due to changes in accounting estimates and the year-over-year swing in non-operating credits and charges. (For further explanations regarding these items, see the notes on the accompanying financial tables.) “Scripps had a solid first quarter, driven by healthy newspaper advertising and the continuing growth of our cable television networks,” said William R. Burleigh, president and chief executive officer. “Operating cash flow grew respectably and core earnings per share were up 15-plus percent.”“Robust growth at the Scripps cable television networks – Home & Garden Television and the Food Network – continues unabated,” Burleigh said. “Operating cash flow at HGTV more than doubled and Food reported positive cash flow of a half-million dollars. However, we don’t expect Food to remain cash flow positive for the full year. In the coming months we’ll be increasing our investment in the network to improve programming and further consolidate operations under the Scripps Networks banner.”“At our television stations, we’re seeing some improvement, but overall softness in broadcast advertising persists,” Burleigh said. “First quarter revenues were flat and indications are the second quarter could be flat as well.”Newspapers (excluding divested newspapers, unless otherwise noted)Operating cash flow increased 4.9 percent to $65.4 million. Newspaper group results continue to reflect the intensified effort to gain market share in the Denver market. Excluding Denver, newspaper operating cash flow increased 9.1 percent.Newsprint costs moved up 3.9 percent over the prior year, reflecting increased advertising lineage in several markets. Newsprint prices decreased approximately 5 percent during the quarter. The company anticipates that year-over-year newsprint costs will be flat in the second quarter.Advertising revenue increased 7.8 percent to $168 million. Broken down by category: Local retail increased 6.4 percent to $68.3 million. Classified increased 6.8 percent to $67.4 million. National increased 25 percent to $7.9 million. Preprint increased 9.6 percent to $23.9 million. Circulation revenues decreased 6.7 percent to $37.6 million due primarily to the continuing initiatives to increase share in the Denver market. Total revenues were $220 million, up 4 percent.Broadcast TelevisionOperating cash flow decreased 4.9 percent to $21.4 million.Revenues moved up 0.7 percent to $75.4 million. Advance advertising sales are pacing down about 2 percent for the month of April and are expected to be flat for the second quarter.Category TelevisionHome & Garden Television produced positive operating cash flow of $4.3 million vs. $1.8 million in the year-ago period.Revenues grew 63 percent to $33.1 million.Home & Garden Television now reaches 51.9 million domestic subscribers, an increase of 11.7 million in the past 12 months and up 3.5 million in the first quarter. The Food Network had revenues of $13.9 million, up 58 percent. Operating cash flow was $500,000 compared to a loss of $2.4 million in the first quarter of last year. The network reaches 39.1 million domestic subscribers, up 7.4 million in the past 12 months and up 2 million in the first quarter.Licensing and Other Media (excluding divested operations)Revenues increased 14 percent to $30.1 million. Operating cash flow increased $600,000, to $4.3 million.The E.W. Scripps Company operates 19 daily newspapers; nine network-affiliated television stations; two TV networks, Home & Garden Television and the Food Network; a TV programmer, Scripps Productions; United Media, a worldwide syndicator and licensor of news features and comics; the Scripps Howard News Service; and publishes independent Yellow Pages directories.