Scripps reports 2Q net income of 39 cents per share, excluding charge

Wed, August 27, 1997 by Rich Boehne

CINCINNATI, Ohio – The E.W. Scripps Company’s second-quarter net income from continuing operations moved up 17 percent from $27.1 million (34 cents per share) last year to $31.7 million (39 cents per share) this year, excluding an unusual charge.The current year results exclude a $2.6 million (3 cents per share) after-tax charge against earnings related to the Cincinnati newspaper operation. (See newspaper section for more detail.)Including the unusual charge, second-quarter net income increased 7.3 percent to $29.1 million (36 cents per share)."We showed some impressive results in the second quarter," said William R. Burleigh, president and chief executive officer. "Our television stations turned strong ratings into increased revenue and our newspapers continued to find additional advertising dollars while carefully managing their costs."Viewers across the country are putting out the welcome mat for Home & Garden Television. Subscriber growth and advertising revenue so far this year are running well ahead of our expectations."The Company’s consolidated operating income from continuing operations increased 13 percent to $58.4 million, excluding the unusual charge, and operating cash flow (operating income plus depreciation and amortization) grew 11 percent to $75.4 million.Second-quarter operating results (excluding cable television)Later this year the Company expects to complete a merger of its cable television division with Comcast Corporation. In return for the cable systems, Scripps shareholders will receive, through a tax-free transaction, approximately $1.6 billion in Comcast stock.The deal was announced on Oct. 29, 1995. Since the fourth quarter of 1995 cable has been presented as a discontinued operation in the Company’s financial statements.Newspapers (includes Vero Beach Press Journal since May 9): Operating cash flow from newspapers increased 1.1 percent to $44.2 million, excluding a charge of approximately $4 million for the Company’s share of certain costs to restructure portions of the distribution system at Cincinnati’s joint operating agency. Through a joint operating agreement, all business functions of the Scripps-owned Cincinnati Post are handled by Gannett’s Cincinnati Enquirer. The total restructuring costs will include conversion expenses such as additional temporary circulation management personnel, additional rent, marketing, termination of relationships with newspaper distributors, and distribution system improvements.Newsprint costs increased 13 percent, to $33.2 million, compared to a 27 percent increase in the first quarter of this year. Newsprint usage in the second quarter declined 2.8 percent. Total newspaper revenues were $167 million, up 3.6 percent.Advertising revenue increased 3.8 percent to $121 million. Broken down by category:· Local retail increased 1.9 percent to $49.6 million;· Classified increased 7.8 percent to $50.2 million;· National increased 7.4 percent to $4.8 million;· Preprint decreased 2.6 percent to $16.2 million.Circulation revenues moved up 3 percent to $32.1 million.Broadcast television:Operating cash flow jumped 17 percent to $36.8 million on an 11 percent rise in revenues to $85.2 million.Strong ratings for local news programming and a rising flow of political advertising in advance of the presidential election lifted revenues in the second quarter. Political advertising alone totaled $1.7 million compared to $310,000 in the year-ago period.Entertainment:Revenues for the division rose 19 percent to $25.1 million and cash operating losses were reduced to $1.3 million from $3.1 million in the year-ago quarter.At Home & Garden Television, revenues more than doubled year-over-year and cash operating losses declined 13 percent to $2.7 million.HGTV now has 17.1 million subscribers under contract, up 32 percent since the beginning of the year. The network is carried by more than 700 cable systems in 49 states. HGTV’s programming also is distributed across Canada on LifeNetwork, and is available to subscribers of DIRECTV, EchoStar, and C-Band satellite packages.At United Media, licensing revenues grew 1.1 percent in the quarter to $12.2 million, despite the unfavorable trend in exchange rates between the US dollar and the Japanese yen. More than 40 percent of the Company’s licensing revenue is generated through Japan. Domestic licensing continues to benefit from the growing popularity of the DILBERT characters.Year-to-date results (excluding cable television)Net income improved 10 percent to $51.4 million (64 cents per share) from $46.9 million (59 cents per share) in the first half of 1995, excluding the Cincinnati newspaper charge.After the charge, net income increased 4.2 percent to $48.8 million (61 cents per share).Consolidated operating cash flow rose 4.8 percent to $130 million. Operating income increased 4.3 percent to $95.9 million.Cable television resultsOperating cash flow in the second quarter increased 15 percent to $33.7 million. Revenues moved up 11 percent to $77.2 million. For the first half of the year, operating cash flow was up 15 percent to $65.1 million, and revenues were up 12 percent to $153 million.Download:2Q Income StatementsLineage Report