E.W. Scripps Company’s revenues were $197 million, down 10.4% from $220 million in Q4, which benefited from record political advertising on the TV side. Excluding political advertising from both periods, consolidated revenues increased 1% YOY.
Operating expenses in Q4 included $2.8 million of investment banking, legal and other fees associated with its buy of nine TV stations in Indianapolis, Denver and San Diegofrom McGraw-Hill and restructuring costs of $3.4 million. Restructuring costs primarily include costs associated with a reduction-in-force at Scripps newspapers in December, and continuing efforts to simplify and standardize advertising and circulation systems and processes. The company began implementing the advertising and circulation systems in Q1 2012. Total operating expenses were $180 million, unchanged from the prior year.
Income from continuing operations, net of tax, was $6.1 million, or 11 cents per share in Q4, compared with income from continuing operations, net of tax, of $23.7 million, or 37 cents per share, in the year-ago quarter.
Rich Boehne, Scripps CEO, said Q4 was a nice launching pad for opportunities they see coming in 2012. He also noted revenues in this quarter were a bit better than guidance: “We got a lot of ugly work out of the way in 2011, setting ourselves up for what we believe will be a very successful future. We entered this year a very different, newly-restaged company with stronger growth prospects and improving results from our current businesses. We ended last year by expanding our television footprint, adding a total of nine additional TV stations…that was an opportunistic deal for the McGraw-Hill stations at a very attractive price. Plus, it moves our cash flow mix more toward TV and digital.”
He added, “Now that’s not to say we don’t like or believe in the economic opportunities offered by printed media—we do. But a heavier reliance on electronic delivery platforms gives us the opportunities to grow while we’re re-vamping the business model for printed newspapers.”
Total revenue from the company’s TV stations in Q4 was $84.7 million – a 16% decrease compared with $101 million in the year-ago period, and an 11.4% increase when political advertising is excluded from the 2011 and 2010 totals. Revenue from retransmission consents increased 30% YOY to $3.9 million.
Boehne noted total revenue performance was a 15% increase from the same period in 2009–the previous Q4 in a non-election year.
Ad revenue broken down by category was:
•Local, up 14% to $49.4 million
•National, flat at $23.2 million
•Political was $3.5 million, compared with $28.1 million in the Q4 2010
Digital revenue rose 21% year over year to $2.7 million in Q4. In 2011, Scripps moved to dramatically step up our launch of digital products. “By combining all of our resources into one organization, we’re taking better advantage of scale to launch develop and launch high-quality paid and free services for smartphones and tablets as well as for desktops and tablets,” said Boehne. “We unleashed a number of these new apps during the holidays while shoppers were loading up their new devices. Our team is rapidly rolling out new mobile services for the basics—like news, weather and traffic.”
New businesses added in 2011 included investments in two TV programming ventures—a media content exchange company called eByline and 519 Games.
Expenses for the TV station group declined 2.1% in Q4 to $62.3 million. The discontinuation of Oprah on four of the company’s stations fueled a 23% reduction in programming costs. The television segment profit in Q4 was $22.3 million, compared with $7.5 million in the Q3 of 2011 and $37.3 million in the year-ago quarter.
Total revenue from Scripps newspapers fell 3.3% YOY to $110 million in Q4 of 2011. It was the third consecutive quarter that the YOY decline moderated compared with the previous quarter. Revenue in Q3 2011 was down 4.4% from the year-ago quarter.
The expense for newsprint and press supplies increased 9.5% in the quarter. Q4 profit in the newspaper division was $9.6 million, compared with segment profit of $14.7 million in Q4 2010.
FY revenue from continuing operations in 2011 was $729 million, compared with $777 million in 2010. Also FY 2011, Scripps reported a loss from continuing operations, net of tax, of $15.7 million, or 27 cents per share, compared with net income from continuing operations of $28.9 million, or 45 cents per share, in 2010. Excluding a third-quarter charge for impairment of long-lived assets at four of the company’s newspapers, the net loss would have been 17 cents per share in 2011.
For Q1 2012, Scripps expects:
•Reported television revenues to be up more than 40%; excluding the newly acquired television stations, revenues should be up in the low double digits
•Reported television expenses to be up approximately 30%; excluding the newly acquired stations, expenses should be down in the low-single digits
•Newspaper revenues to be down in the low- to mid-single digits
•Newspaper expenses to be down in the mid-single digits