Scripps reports earnings per share of 57 cents
Tue, April 11, 2000 by Tim Stautberg
CINCINNATI - The E.W. Scripps CompanyЎ¦s operating cash flow increased 3 percent to $117 million in the fourth quarter. Strong results in two of the companyЎ¦s core businesses were offset by weakness in broadcast television and investment in new businesses.Earnings per share from core operations were 57 cents vs. 55 cents during the same quarter a year earlier, excluding a net 1-cent gain associated with the companyЎ¦s venture capital fund. (See footnote).Ў§Scripps enjoyed breathtaking growth from its emerging category television businesses,ЎЁ said William R. Burleigh, chairman, president and CEO of the company. Ў§Profits at Home & Garden Television quadrupled, the Food Network was profitable a year ahead of schedule and we successfully launched our newest network, Do It Yourself.ЎЁЎ§The Scripps newspapers, which operate in some of the countryЎ¦s top-performing markets, reported fourth quarter ad revenue growth of 9 percent, among the best in the industry,ЎЁ Burleigh added. Ў§In the competitive Denver market, the Denver Rocky Mountain News made important gains in circulation and overall ad volume share.ЎЁ Ў§The difficult story at Scripps has been broadcast television. A number of factors, some outside our control, have negatively affected the business,ЎЁ Burleigh said. Ў§However, this year will be better. WeЎ¦re already seeing improvement with the Super Bowl, the presidential election and the Olympics on the horizon." Ў§Looking forward to 2000 in our other businesses, we expect our cable networks to continue their strong growth. WeЎ¦ll be working to establish the DIY brand and looking for ways to expand into other categories,ЎЁ Burleigh said. Ў§Finally, we plan to step up investment in our Internet brands, focusing on developing strong local destination portals in key markets around our newspapers and television stations, and universal category sites that exploit our well-known cable television and licensing brands.ЎЁFollowing are results by operating group:Newspapers (excluding divested newspapers, unless otherwise noted)Operating cash flow increased 8 percent to $75.2 million. Newsprint costs decreased 1.5 percent over the prior year on a 16 percent decrease in newsprint prices. Newsprint cost savings were held back because of increased consumption primarily related to circulation and advertising gains in the Denver market.Newspaper advertising revenue during the fourth quarter increased 8.9 percent to $187 million. Broken down by category: „h Local retail increased 1.4 percent to $77.7 million. „h Classified increased 11 percent to $66.7 million. „h National increased 40 percent to $10.2 million. „h Preprint and other increased 16 percent to $32.5 million. Circulation revenues decreased 7 percent to $34.8 million, due primarily to the continuing initiatives to increase share in the Denver market. Total newspaper revenues were $239 million, up 5.9 percent. Broadcast Television Broadcast television operating cash flow decreased 31 percent to $27.3 million. Revenues declined 12 percent to $83.2 million. Advance broadcast television advertising sales for the first quarter indicate that total revenues will be up about 5 percent compared to the same period last year. Broadcast television operating costs during the fourth quarter increased just 2 percent. Category Television Home & Garden Television produced operating cash flow of $13.7 million vs. $3.1 million in the year-ago period. Revenues grew 77 percent to $49.9 million. Home & Garden Television now reaches 59 million domestic subscribers, an increase of 10.6 million in the past 12 months and up 1.2 million in the fourth quarter. The Food Network had revenues of $21.7 million, up 66 percent. Operating cash flow was $2 million compared to $1 million in the fourth quarter of last year. The network reaches 44.2 million domestic subscribers, up 7.1 million in the past 12 months and up 1.9 million in the fourth quarter. Start-up costs for the Do it Yourself (DIY) network were $1.5 million vs. $500,000 in the year-ago period. DIY, launched Sept. 30, is a simultaneous on-air, on-line network that provides immediate access to step-by-step instructions, in-depth demonstrations and tips for the do-it-yourself home enthusiast. Licensing and Other Media Revenues increased 22 percent to $32.8 million. Operating cash flow was $4 million vs. $2.5 million in the fourth quarter of last year. Internet The 31 Scripps Internet sites recorded 282 million page views during the fourth quarter compared to 196 million in the same period last year, an increase of 44 percent. Broken down by category, fourth quarter page views were: „h Local portals (newspapers and television stations), 68 million, up 68 percent.„h Category television (hgtv.com, foodtv.com, diynet.com), 95 million, up 47 percent.„h United Media (comics.com), 119 million, up 31 percent. For the full year, the companyЎ¦s Internet sites generated $13 million in revenue. Related costs were $19 million. The company estimates that Internet revenues for 2000 will be about $20 million and costs about $35 million. Full-year results Operating cash flow was up 5.4 percent to $400 million. Earnings per share were $1.86 vs. $1.62 in 1998. Following are results by operating group. „h Newspapers: Excluding divested newspapers, operating cash flow grew 6.7 percent to $278 million. Revenues were up 4.8 percent to $906 million. „h Broadcast Television: Revenues decreased 5.5 percent to $312 million; operating cash flow decreased 20 percent to $94.8 million. „h Category Television: Home & Garden Television revenues increased 65 percent to $158 million; operating cash flow was $31.5 million, compared to $10.3 million last year. Food Network revenues increased 60 percent to $66.6 million; operating cash flow was $3.2 million compared to an operating loss of $5.5 million in 1998. Start-up costs for DIY were $3.7 million compared to $1.5 million in 1998. „h Licensing and Other Media: Total revenues were up 16 percent to $111 million; operating cash flow increased 9.2 percent to $12.7 million. The E.W. Scripps Company operates 19 daily newspapers; nine network-affiliated television stations; three TV networks, Home & Garden Television, the Food Network and Do It Yourself; and a TV programmer, Scripps Productions. The company also operates United Media, a worldwide syndicator and licensor of news features and comics; the Scripps Howard News Service; and publishes independent Yellow Pages directories. Scripps operates 31 revenue-producing Web sites, including hgtv.com, foodtv.com, diynet.com and comics.com.