Scripps 4Q95 net income rose 13 percent
Tue, August 26, 1997 by Rich Boehne
CINCINNATI, Ohio – The E.W. Scripps Company’s fourth-quarter net income increased 13 percent to $40.5 million, 51 cents per share, from $35.8 million, 45 cents per share, in the year-ago quarter, excluding unusual items in 1994.For the full year 1995, net income moved up 13 percent to $133 million, $1.67 per share, from $118 million, $1.54 per share, in 1994, also excluding the prior year’s unusual items.Results for both 1995 and 1994 were adversely affected by the launch of Home & Garden Television (HGTV). Start-up costs for HGTV reduced 1995’s net income by $10.7 million, 13 cents per share, which was $6.1 million, or 7 cents per share, more than its effect in 1994. Consolidated operating cash flow (operating income before depreciation and amortization) moved up 15 percent to $105 million in the fourth quarter and 4.4 percent to $367 million in the full year. Revenues increased 7.7 percent to $1.31 billion."Last year was one of the most pivotal in the history of this company," said Lawrence A. Leser, chairman and chief executive officer. "We decided to leave the cable business through a deal that will deliver tremendous value to our shareholders. At the same time, we began building new value through Home & Garden Television and our other entertainment ventures."Our TV station group was adversely affected by the turmoil of new network affiliations in four large markets, the launch of local news programming in three markets, and the near absence of political advertising. Our newspapers did a good job of overcoming sky-high paper prices by controlling other costs and generating additional revenues."Looking ahead to the 'new Scripps company,' following completion of the cable deal, we will be a well-diversified media enterprise, eager for new opportunities to create value for our shareholders," Leser said. (More ...)Fourth-quarter results excluding cable TV and other divested operating units and unusual itemsThe Company announced on Oct. 29 that it had reached a definitive agreement that will result in its cable television systems being owned by the Comcast Corporation through a tax-free transaction valued at $1.575 billion, or $19.68 per Scripps share. The transaction, which includes 800,000 subscribers, is expected to close later this year.Beginning with the fourth quarter of 1995, cable television is being presented as a discontinued operation in the Company’s financial statements.Excluding cable, Scripps earned $29.4 million, 37 cents per share. Operating cash flow moved up 11 percent to $73.0 million.Newspapers:Operating cash flow increased 23 percent to $46.1 million. Total newspaper revenues, benefiting from an extra Sunday in 1995, moved up 6.7 percent to $172 million.Advertising revenues increased 6.3 percent to $125 million. Broken down by category:· Local retail increased 2.1 percent to $56.0 million;· Classified increased 10 percent to $43.5 million;· National increased 10 percent to $4.3 million;· Preprint increased 10 percent to $21.1 million.Circulation revenues increased 11 percent to $32.1 million.Broadcast television:Revenues, at $83.5 million, were down 2.6 percent compared to the year-ago quarter. The growth of national and local advertising slowed and political advertising, which contributed $9.2 million last year, totaled just $2.4 million in 1995.Total cash expenses decreased slightly despite additional costs for local news programming in the Company’s three former FOX markets. Those stations now are affiliated with major networks (KNXV in Phoenix and WFTS in Tampa with ABC; KSHB in Kansas City with NBC) and have successfully launched extensive schedules of local news programming, which required substantial additions to staff.Operating cash flow decreased 4.7 percent to $36.2 million.Entertainment:Cash operating losses were $5.6 million due to start-up costs for two owned and operated programming ventures – Scripps Howard Productions and Home & Garden Television – and one programming investment, TV Food Network.Cash flow improved substantially at United Media, the Company’s licensing and syndication subsidiary.At HGTV, cash expenses exceeded revenue by $6.5 million in the fourth quarter. Based on HGTV’s first-year success, the Company plans to accelerate spending on marketing and programming. Expenses could exceed revenue by up to $25 million in 1996. The Company projects its total HGTV investment, including capital expenditures and operating expenses, to be as much as $75 million before the venture reaches break-even sometime in late 1997.Full-year results excluding cable TVand other divested operating units and unusual itemsNet income was $93.6 million, or $1.17 per share. Operating cash flow decreased slightly to $248 million. By division, operating cash flow was :· Newspapers, up 4.6 percent to $162 million;· Broadcast television, down 2.5 percent to $113 million.The entertainment division had cash operating losses of $11.3 million including start-up costs of $16.3 million for HGTV.Fourth quarter & full year cable TV resultsOperating cash flow in the fourth quarter jumped 26 percent to $32 million. Revenues moved up 8.9 percent to $71.6 million. For the full year, operating cash flow was up 18 percent to $119 million. Revenues improved 9.4 percent to $279 million.The number of basic subscribers increased by 27,200, or 3.7 percent, in the 12 months ended Dec. 31 for a total of 766,400 subscribers. The Company added 34,000 subscribers on Jan. 5 when it completed the purchase of cable systems in the Knoxville/Chattanooga region from Mid-Tennessee CATV, L.P. Those systems will be included in the Comcast transaction.