Scripps Networks Q1 up 32%


Scripps Networks reported strong Q1 results with, double-digit growth in advertising and affiliate fee revenue at the company’s Lifestyle Media business segment, which includes HGTV, Food Network and Travel Channel. Revenue for the quarter increased 32% to $469 million from the prior-year period. Excluding Travel Channel, which was acquired Dec. 15, 2009, the company’s consolidated revenue increased 16% to $411 million YOY.

Total revenue from the company’s Lifestyle Media business segment was $429 million, up 38% from Q1 ‘09. Excluding Travel Channel, Lifestyle Media total revenue was $371 million, up 20% YOY.

Consolidated expenses for the quarter increased 36% from the prior-year period to $294 million. The increase in expenses included:
•$15.5 million in transition costs related to the Travel Channel acquisition and integration.
•$11.0 million in marketing and legal expenses to support the company’s affiliate renewal negotiations for Food Network and HGTV.

Excluding these items and a one-time, spin-off related item in the prior-year period, consolidated expenses were up 26% YOY. The increase in expenses is attributable to the addition of the Travel Channel and the restoration of marketing budgets to support brand-building initiatives at all of the company’s television networks. The company says it had significantly held back marketing expenses in 2009 in response to the economic recession and its anticipated negative effect on ad sales.

Q1 net income attributable to Scripps Networks Interactive was $72.5 million, or 43 cents per share, compared with $60.1 million, or 37 cents per share, in the Q1 ‘09. Excluding one-time expense items, first-quarter 2010 earnings per share would have been 50 cents.

“Scripps Networks Interactive had an exceptionally good first quarter thanks to the healthier advertising marketplace, solid audience growth at our three flagship television networks and a strong, double-digit increase in affiliate revenues,” said Kenneth Lowe, CEO. “The ever-rising popularity of HGTV, Food Network and Travel Channel contributed significantly to our solid financial results for the first three months of the year.”

He added, “We’re also making good progress executing our strategic plan for 2010, which includes fully integrating Travel Channel, the debut of the new Cooking Channel during Memorial Day weekend and exporting our powerful brands across the globe. Based on what we’re experiencing in the early going, 2010 is shaping up very positively for the company and its shareholders.”

Broken down by networks:
Operating revenue at HGTV was $162 million, up 12%. HGTV now reaches 99 million U.S. subscribers compared with about 98 million at the end of the first quarter 2009.

Food Network operating revenue was $152 million, up 31%. Food Network reaches about 100 million U.S. subscribers, up from about 98 million at the end of the first quarter 2009.

Operating revenue at Travel Channel increased 7.8% to $56.9 million. Travel Channel reaches 96 million U.S. subscribers, up from about 94 million at the end of the first quarter 2009.

Revenue at DIY Network was up 22% to $18.6 million. DIY can be seen in about 53 million U.S. households, up from about 51 million households a year ago.

Fine Living Network (FLN) revenue was $13.8 million, up 18%. Fine Living reaches 57 million U.S. households vs. 55 million last year. The company expects to complete its rebranding of the Fine Living Network to the Cooking Channel by May 31.

Revenue at Great American Country (GAC) increased 5.3% to $6.4 million. Great American Country can be seen in about 59 million U.S. homes compared with about 56 million homes a year ago.

Revenue from the Lifestyle Media segment’s digital businesses, which includes its network-branded Web sites, was $18.0 million, up 15%.

Interactive Services revenue was $37.6 million compared with $45.1 million in the year-ago quarter.