CINCINNATI – The E.W. Scripps Company (NASDAQ: SSP) delivered $561 million in revenue for the first quarter of 2024. Loss attributable to the shareholders of Scripps was $12.8 million or 15 cents per share. Operating results for the quarter include a pre-tax investment gain of $18.1 million and $5 million of restructuring costs.
Business notes:
From Scripps President and CEO Adam Symson:
“In the first quarter, we were pleased to deliver strong operating results that exceeded our expectations due to our close expense management. Local political is coming on strong. We also are seeing green shoots in the national direct response advertising marketplace while scatter market pricing improved in Q1 2024 over Q1 2023.
“The company is sharply focused on our No.1 priority of bringing down our debt levels and leverage to a more comfortable place by year’s end. We are optimistic about the sale of a major asset, the Bounce TV network, as well as some non-strategic real estate assets. We expect to benefit from robust political advertising, the early signs of recovery in parts of the national advertising marketplace, and our expected increase in revenue from the stability we’ve seen in the pay TV ecosystem. With careful expense management, we are committed and confident this will be a significant year toward our goal.
“We decided to explore a sale of Bounce after receiving significant inbound interest from potential strategic buyers. We have thoroughly enjoyed owning Bounce since we acquired it in 2017, and we know the network plays a special role in Black communities. Under Scripps’ stewardship, the network has doubled its revenue and continues to see unparalleled audience growth. For the first quarter, Bounce was up 14% on linear platforms while most other linear viewership was down. At this point, we believe a strategic buyer could catalyze Bounce’s growth even more.
“We are pleased to see political advertising strengthening, leading us to raise our full-year guidance range to $240 million-$270 million, with the higher end of that range now above our 2020 results. Strong spending is coming from Montana and Ohio, where U.S. Senators John Tester and Sherrod Brown are defending their seats against Republican National Committee spending. The controversial ballot measure in Florida also provided upside to our guidance range. We’ll know in the coming months how many of the six other states with Scripps markets, including Arizona, will have similar measures on their November ballots. Those prospective ballot issues are not yet factored into our updated guidance.”
Operating results
Total first-quarter company revenue was $561 million, an increase of 6.4% or $33.7 million from the prior-year quarter. Costs and expenses for segments, shared services and corporate were $474 million, up from $455 million in the year-ago quarter.
Loss attributable to the shareholders of Scripps was $12.8 million or 15 cents per share. The current-year quarter included an $18.1 million investment gain and $5 million in restructuring costs. When taken together, these items decreased the loss attributable to shareholders by 12 cents per share. In the prior-year quarter, the loss attributable to shareholders was $31.1 million or 37 cents per share and included $16.5 million in restructuring costs, increasing the loss attributable to shareholders by 15 cents per share.
First-quarter 2024 results by segment compared to prior-period amounts:
Local Media
Revenue was $353 million, up 13% from the prior-year quarter.
Segment expenses increased 8% to $287 million. Segment expenses in 2024 reflect additional programming expense and production costs associated with the sports rights agreements and airing of games for the National Hockey League’s Vegas Golden Knights and Arizona Coyotes.
Segment profit was $65.6 million, compared to $45.8 million in the year-ago quarter.
Scripps Networks
Revenue was $209 million, down 3.3% from the prior-year quarter. Segment expenses were $160 million, down 3.2%, reflecting a decrease in costs from the programmatic product we began to sunset in the second quarter of 2023.
Segment profit was $49.7 million, compared to $51.5 million in the year-ago quarter.
Financial condition
On March 31, cash and cash equivalents totaled $30.2 million, and total debt was $2.9 billion.
During the first quarter of 2024, we reduced the outstanding balance on our revolving credit facility by $40 million and made mandatory principal payments of $3.9 million on our term loans.
We did not declare or provide payment for the first-quarter 2024 preferred stock dividend. We have sufficient liquidity to pay the scheduled dividends on the preferred shares; however, this action provides us better flexibility for accelerating deleveraging and maximizing the paydown of our traditional bank debt. The dividend rate on the preferred shares, which compounds quarterly, increased to 9% per annum and will remain at that rate. At March 31, aggregated undeclared and unpaid cumulative dividends totaled $13.5 million. Under the terms of Berkshire Hathaway’s preferred equity investment in Scripps, we are prohibited from paying dividends on or repurchasing our common shares until all preferred shares are redeemed.
Looking ahead
Comparisons for our segments are to the same period in 2023.
Conference call
The senior management of The E.W. Scripps Company will discuss the company’s quarterly results during a telephone conference call at 9:30 a.m. Eastern, tomorrow, May 10. To access the live webcast, visit http://ir.scripps.com and find the link under “upcoming events.”
To access the conference call by telephone, dial (844) 867-6169 (U.S.) or (409) 207-6975 (international) and give the access code 4832960 approximately five minutes before the start of the call. Investors and analysts will need the name of the call (Scripps earnings call) to be granted access. The public is granted access to the conference call on a listen-only basis.
A replay line will be open from 12:30 p.m. Eastern time May 10 until midnight June 11. The domestic number to access the replay is (866) 207-1041 and the international number is (402) 970-0847. The access code for both numbers is 7110746.
A replay of the conference call will be archived and available online for an extended period of time following the call. To access the audio replay, visit http://ir.scripps.com/ approximately four hours after the call, and the link can be found on that page under “audio/video links.”
Forward-looking statements
This document contains certain forward-looking statements related to the company’s 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. Such forward-looking statements are made as of the date of this document and should be evaluated with the understanding of their inherent uncertainty. A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the company’s Form 10-K, on file with the SEC, in the section titled “Risk Factors.” The company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date such statements are made.
Media contact: Michael Perry, The E.W. Scripps Company, (513) 259-4718, [email protected]
Investor contact: Carolyn Micheli, The E.W. Scripps Company, (513) 977-3732, [email protected]