Blame it on political comps: The E.W. Scripps Co.’s Q4 television station revenue was $115 million, a decrease of $36.7 million from Q4 2012 or a drop of 24.2%. Core local and national television advertising revenue rose 17% vs. Q3, however, rebounding and growing in the near absence of political spending compared to 2012. Retransmission fees from cable and satellite providers was up 42%.
Newspapers saw a 5% rise in subscription revenue, the second consecutive quarterly increase, from print and digital subscription bundles along with targeted price increases.
Scripps announced acquisitions in late 2013 and early 2014. The acquisition of Newsy, a digital video news service, for $35 million in cash, closed in January. In February, Scripps reached agreement to acquire the ABC affiliate in Buffalo and a MyNetworkTV affiliate in Detroit from Granite Broadcasting Corp. for $110 million in cash.
Said Scripps Chairman, President and CEO Rich Boehne: “Our growing television operations finished 2013 strong, rebuilding their core local and national advertising categories in the off year for political spending and delivering strong growth in retransmission revenue. We expect our core business to grow again in 2014, and with the expected strength in political advertising in the second half, television is set up for a good year.”
Costs and expenses for segments, shared services and corporate decreased 3.8% to $188 million compared to the year-ago quarter. In Q4, the company incurred a $3 million non-cash charge for losses related to certain investments and a $4.6 million non-cash charge to write off loan fees related to the debt refinancing, which are included in miscellaneous expenses.
Also in the fourth quarter of 2013, the company reported income from operations before income taxes of $7.1 million compared to $40.5 million in the year-ago quarter.
Net income attributable to Scripps was $7.9 million, or 14 cents per share, for the 2013 quarter compared to $27.2 million, or 47 cents per share, in the fourth quarter of 2012. The tax expense for the 2012 quarter includes $1.8 million, or 3 cents per share, in favorable adjustments to the company’s tax reserves.
For television, ad revenue broken down by category was:
Local, up 15% to $63 million
National, up 22% to $31.6 million
Political, $2.1 million compared to $56.9 million in the 2012 quarter
Retransmission fees, up 42% to $11.2 million
Digital revenue increased 7.9% to $4.7 million.
Revenue from newspapers was $103 million in the fourth quarter of 2013, down 1.8% from the year-ago quarter. The continued decline in advertising and marketing services revenue was partially offset by an increase in subscription revenue.
Year-to-date results
Revenue was $817 million in 2013 compared to $903 million in 2012. Political advertising declined $102 million year over year.
The company reported an $8.6 million loss from operations before income taxes in 2013, compared to income from operations before income taxes of $56.9 million in 2012. In 2013, the company incurred a $4.5 million non-cash charge for losses related to certain investments and a $4.6 million non-cash charge to write off loan fees related to the debt refinancing. The prior-year period included acquisition-integration costs of $5.8 million, primarily a non-cash charge to terminate an agreement with the previous national sales representation firm of four stations acquired from McGraw Hill.
In 2013, costs and expenses for segments, shared services and corporate were $742 million, a decrease of $14.4 million compared to 2012. Included in 2013 expenses is $18 million of incremental expenses to grow digital operations.
The 2013 net loss attributable to Scripps was $474,000, or 1 cent per share, compared to net income of $40.2 million, or 70 cents per share, in 2012. The current-year tax benefit includes $3.1 million, or 5 cents per share, in favorable adjustments to the company’s tax reserves, while the prior-year tax expense includes $5.5 million, or 10 cents per share, in favorable adjustments to the reserves. The write off of investments and loan fees reduced the current-year earnings per share by approximately 10 cents. Acquisition-integration costs reduced the prior-year earnings per share by approximately 6 cents.
