CINCINNATI – The E.W. Scripps Company (NASDAQ: SSP) delivered $567 million in revenue and $97.5 million in segment profit for the third quarter of 2023. Loss attributable to the shareholders of Scripps was $16.2 million or 19 cents per share. Restructuring costs for the quarter accounted for 4 cents of the per-share loss.
Business notes:
From Scripps President and CEO Adam Symson:
“This was a big year for Scripps in testing the strength of the local broadcast distribution revenue ecosystem, and we are exceedingly pleased with the results. In renewing the majority of our legacy cable and satellite households, we not only smoothly and successfully created new agreements but realized new value, including by expanding the number of stations on which we are paid. Credit for this goes in part to our Scripps Sports local strategy, and as we sign additional rights agreements, we expect to partner with distributors and receive payment for delivering live sports to their customers. Clearly, the linear distribution ecosystem continues to support growth in distribution revenue as well as expanded margins.
“We are creating new value with our existing Scripps Networks brands through distribution on connected television services including YouTubeTV, Roku, Fubo, Pluto, Samsung TV Plus and Vizio WatchFree. Scripps has quickly grown to be one of the leading programmers in the ad-supported streaming marketplace. Excluding our low-margin programmatic product we are sunsetting, CTV revenue was up 75% year over year, and we expect to reach nearly $100 million this year.
“As we look ahead to 2024, we anticipate a number of drivers to catalyze free cash flow growth, including further significant growth in our networks’ CTV revenue, the annualization of this year’s local distribution deals, the continued expansion of our Scripps Sports strategy and the return of a strong advertising marketplace, including a robust political cycle.”
Operating results
Total third-quarter company revenue was $567 million, a decrease of 7.4% or $45.6 million from the prior-year quarter, which held a midterm election. Costs and expenses for segments, shared services and corporate were $469 million, almost flat from the year-ago quarter.
Loss attributable to the shareholders of Scripps was $16.2 million or 19 cents per share. The pre-tax costs for the quarter included $4.7 million in restructuring costs. In the prior-year quarter, income attributable to shareholders was $33.7 million or 38 cents per share.
Third-quarter 2023 results by segment compared to prior-period amounts:
Local Media
Revenue was $353 million, down 6.7% from the prior-year quarter.
Segment expenses decreased slightly from the prior-year quarter at $278 million, reflecting lower audience ratings services costs.
Segment profit was $74.9 million, compared to $99.6 million in the year-ago quarter.
Scripps Networks
Revenue was $215 million, down 8.5% from the prior-year quarter. Segment expenses were $166 million, up 1.4% from the prior-year quarter because of higher programming costs and distribution fees.
Segment profit was $49.7 million, compared to $72 million in the year-ago quarter.
Financial condition
On Sept. 30, cash and cash equivalents totaled $15.9 million, and total debt was $3 billion.
During the first nine months of 2023, we made mandatory principal payments of $13.2 million on our term loans.
On July 31, the company entered into the Eighth Amendment to the Third Amended Restated Credit Agreement, increasing our revolver borrowing capacity by $185 million to $585 million. We used borrowings on the revolver to pay down the remaining $283 million balance of our term loan maturing in 2024.
Preferred stock dividends paid to date in 2023 are $36 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.
Year-to-date operating results
The following comparisons are to the period ending Sept. 30, 2022:
In 2023, revenue was $1.7 billion, which compares to revenue of $1.8 billion in 2022. Political revenue was $16.5 million, compared to $96.5 million in the prior year.
Costs and expenses for segments, shared services and corporate of $1.4 billion remained relatively flat compared to a year ago. Higher employee costs and distribution fees were mostly offset by lower audience ratings services costs and advertising and promotion expenditures.
Loss attributable to the shareholders of Scripps was $730 million or $8.67 per share. The pre-tax costs for the 2023 period included a non-cash goodwill impairment charge for Scripps Networks of $686 million as well as $29.2 million of restructuring charges, increasing the loss attributable to shareholders by $8.21 per share. In the prior year, income attributable to shareholders was $72.6 million or 80 cents per share. Pre-tax costs for the prior year included $1.6 million of acquisition and related integration costs as well as a $1.2 million gain on extinguishment of debt for the redemption of senior notes.
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 today. To access the live webcast, visit Scripps – Investor Information and find the link under “upcoming events.”
To access the conference call by telephone, dial (844) 291-6360 (U.S.) or (234) 720-6993 (international) and give the access code 6559182 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 Nov. 3 until midnight Dec. 3. 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 8665205.
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 Scripps – Investor Information 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]
About Scripps
The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As one of the nation’s largest local TV broadcasters, Scripps serves communities with quality, objective local journalism and operates a portfolio of more than 60 stations in 40+ markets. Scripps reaches households across the U.S. with national news outlets Scripps News and Court TV and popular entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery and Laff. Scripps is the nation’s largest holder of broadcast spectrum. Scripps is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps’ long-time motto is: “Give light and the people will find their own way.”