Scripps provides 2004 financial outlook at CSFB, UBS media week conferences
Wed, December 10, 2003 by Tim Stautberg
NEW YORK – Senior managers of The E. W. Scripps Company will provide a general financial outlook for 2004 today during the Credit Suisse First Boston and UBS media conferences which are being held this week in New York. Scripps management also will discuss the company’s long-term growth strategy, which includes continued expansion of its growing portfolio of cable television networks – Home & Garden Television, Food Network, the DIY -- Do It Yourself network, and Fine Living.Participating in the Scripps presentation will be Kenneth W. Lowe, president and chief executive officer; Joseph G. NeCastro, senior vice president and chief financial officer; and Richard A. Boehne, executive vice president.The presentations will be made at 11:15 a.m. ET (CSFB) and at 1:30 p.m. ET (UBS). The audio from both presentations will be Web cast live via the Scripps Web site at www.scripps.com. The company will provide an outlook for certain revenues and expenses in 2004 for each of the company’s business segments. The financial outlook, by segment, will include: Scripps Networks Advertising revenues are expected to be up 20 to 30 percent and affiliate fee revenues are expected to increase 30 to 40 percent. The company said it anticipates continued revenue growth at its national programming services based on the strength of advanced advertising sales through the first three quarters of 2004. The level of growth for the full year, however, will depend on the strength of the quarter-to-quarter sale of uncommitted advertising time.The company said it expects programming expenses for Scripps Networks to be up 25 to 30 percent as it continues to invest in quality, original programming to drive viewership growth at its popular cable and satellite television brands. Other expenses for Scripps Networks will be up 25 to 30 percent as the company continues to build out and strengthen all four network brands and increases its investment in video-on-demand and broadband content services.The development of Fine Living, DIY and other emerging programming services will reduce segment profits by $40 to $45 million. Losses related specifically to DIY and Fine Living are expected to be down slightly from 2003.NewspapersThe company expects the slow improvement in newspaper advertising to continue into 2004. Newspaper advertising revenues are expected to be up 4 to 6 percent.Newspaper employee costs are expected to increase 5 to 6 percent. Newsprint costs are likely to rise 10 to 12 percent as newsprint producers are expected to raise prices in the coming year. Other expenses are expected to be up 4 to 6 percent reflecting a decision by the company to increase sales and marketing efforts across its newspaper group.The company is currently projecting a slight profit improvement at its newspaper in Denver, the Rocky Mountain News. The company records 50 percent of the profits generated by a joint operating agreement between the News and The Denver Post, which is owned by MediaNews Group.Broadcast television The company expects strong full-year results from its broadcast television stations based on expected political advertising during the 2004 general election campaigns. The company is expecting $30 to $35 million in political advertising revenue for the full year. The Olympics, which will air on the company’s three NBC affiliated stations, is expected to result in $2 million in incremental revenues for the year.Employee costs at the company’s television stations are expected to increase 5 to 6 percent.Shop At HomeThe company reported that it is in the process of implementing a long-term transition plan at Shop at Home Network that includes changing the mix of retail products sold on the network to more closely match the consumer and lifestyle categories targeted by HGTV, Food Network, DIY and Fine Living. Losses related to the transition at Shop at Home for 2003 are expected to be about $20 million, or 16 cents per share. Results in 2004 are expected to be similar to 2003.Other itemsThe company expects to spend $75 million to $80 million on capital projects during the year, with the largest allocation to complete construction of a production facility for the company’s newspaper operations along Florida’s Treasure Coast. The company also is completing construction of a new production facility for its Cincinnati television station, which is being relocated to make way for a new downtown convention center.The company’s tax rate currently is expected to be 40 percent in 2004.Minority interest will be $22 to $24 million compared to about $8 million in 2003 due to the increasing profitability of the Food Network.Safe Harbor statement This press release contains certain forward-looking statements related to the company’s newspaper publishing, Scripps Networks and broadcast television businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions, that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The company’s written policy on forward-looking statements can be found in its most recent forms 10K and 10Q. About Scripps Celebrating its 125th anniversary, The E.W. Scripps Company is a diverse media concern with interests in newspaper publishing, broadcast television, national television networks, interactive media and television-retailing. Scripps operates 21 daily newspapers, 10 broadcast TV stations, four cable and satellite television programming services and a home shopping network. All of the company’s media businesses provide content and advertising services via the Internet.Scripps Networks brands include Home & Garden Television, Food Network, DIY -- Do It Yourself Network and Fine Living. HGTV reaches about 84 million U.S. television households and Food Network can be seen in about 83 million households. Scripps Networks Web sites include FoodNetwork.com, HGTV.com, DIYnetwork.com and fineliving.com. Scripps Networks programming can be seen in 33 countries. The company’s home shopping subsidiary, Shop At Home Network, markets a growing range of consumer goods directly to television viewers and visitors to the Shop At Home Web site, shopathometv.com. Shop At Home reaches about 45 million full-time equivalent U.S. households.Scripps also operates Scripps Howard News Service and United Media, which is the worldwide licensing and syndication home of PEANUTS and DILBERT.