CINCINNATI, Feb. 23,
2024 /PRNewswire/ -- The E.W. Scripps Company
(NASDAQ: SSP) delivered $616 million
in revenue for the fourth quarter of 2023. Loss attributable to the
shareholders of Scripps was $268
million or $3.17 per share. A
non-cash goodwill impairment charge and restructuring costs for the
quarter accounted for $3.15 of the
per-share loss.
Business notes:
- Scripps Sports is part of a historic media rights agreement
with the National Women's Soccer League and will nationally
broadcast 50 games on Saturday nights in a weekly double-header on
ION. Scripps is joining CBS, ESPN and Amazon as exclusive U.S.
distributors of NWSL soccer for four seasons beginning in March.
Scripps also begins season two with the Women's National Basketball
Association Friday nights on ION in May.
- Fourth-quarter Local Media core advertising revenue came in up
1% from the prior year, driven in part by incremental revenue from
two new National Hockey League deals that launched in the quarter.
The company expects advertising revenue related to the two NHL
deals will add at least 3 percentage points to core advertising in
2024.
- Scripps Networks' fourth-quarter revenue was down 7%, exceeding
guidance because of better-than-expected connected TV, general
market and direct response revenue.
- Restructuring charges for the fourth quarter were just over
$9 million, primarily related to
employee severance-related charges. The company is on track to
realize more than $40 million in
annualized savings by the middle of 2024.
- A slower than previously anticipated recovery in the national
television advertising market and related impact to the financial
outlook for Scripps Networks led the company to record a
$266 million non-cash goodwill
impairment charge in the fourth quarter.
From Scripps President and CEO Adam Symson:
"Our fourth-quarter results reflect improvement in the
advertising marketplace, both at the core local level and
nationally. In Local Media, we saw our five top categories end the
quarter higher than Q4 2022, with particular strength in auto, home
improvement and services. Distribution revenue from cable,
satellite and virtual providers was up 22% in the fourth
quarter.
"In the Scripps Networks segment, our better-than-expected Q4
results came from the build-back of direct response advertising on
our linear streams, aligned with lower inflation and positive
consumer spending trends. In addition, we continue to meaningfully
grow our networks' connected TV revenue and distribution, including
launching ION on Pluto. Fourth-quarter CTV revenue was up 33% after
factoring out the programmatic product we are sunsetting.
"These positive trends in Local Media and Scripps Networks have
continued into the first quarter. Our top four local core
categories – services, auto, retail and home improvement – are all
up in February. On the networks side, the weak upfront season last
year left us with less of a revenue foundation than usual for the
first quarter. However, direct response advertising has held steady
in Q1, and connected TV revenue is building and on track to grow
more than 40% for the full year, minus the programmatic
product.
"Our advertising revenue results and large distribution
ecosystem, combined with our cost-savings initiatives, lay the
groundwork for short-term operating performance improvement and
firm financial footing as we execute on strategies for future
growth. We are planning for a near-term media landscape where
consumers combine a variety of connected TV services with free,
over-the-air viewing that best serves their desire to watch live
sports, news and television entertainment events. We also are
moving aggressively ahead with datacasting business models and
expect to take in first dollars this year. We are carving out a
valuable and durable niche in the chaos around us."
Operating results
Total fourth-quarter company revenue was $616 million, a decrease of 9.6% or $65.2 million from the prior-year quarter, which
held a midterm election. Costs and expenses for segments, shared
services and corporate were $503
million, up from $477 million
in the year-ago quarter.
Loss attributable to the shareholders of Scripps was
$268 million or $3.17 per share. Pre-tax costs for the quarter
included a non-cash goodwill impairment charge for Scripps Networks
of $266 million as well as a
$9.4 million restructuring charge,
increasing the loss attributable to the shareholders by
$3.15 per share. In the prior-year
quarter, income attributable to the shareholders was $73 million or 84
cents per share and included a $7.4
million pre-tax gain on extinguishment of debt from the
redemption of senior notes, which increased income attributable to
the shareholders by 7 cents per
share.
Fourth-quarter 2023 results by segment compared to
prior-period amounts:
Local Media
Revenue was $381
million, down 12% from the prior-year quarter.
- Core advertising revenue increased 1% to $166 million.
- Political revenue was $16.4
million, compared to $106
million in the prior-year quarter, an election year.
- Distribution revenue increased 22% to $196 million.
Segment expenses increased 4.8% to $295
million. Programming costs in 2023 reflect additional
expense attributed to the new Vegas Golden Knights and Arizona
Coyotes sports rights agreements.
Segment profit was $85.7 million,
compared to $152 million in the
year-ago quarter.
Scripps Networks
Revenue was $230 million, down 7.1%
from the prior-year quarter. Segment expenses were $166 million, down 1.2%, reflecting a decrease in
costs from the programmatic product we are sunsetting.
Segment profit was $64.3 million,
compared to $80 million in the
year-ago quarter.
Financial condition
On Dec. 31, cash and cash equivalents
totaled $35.3 million, and total debt
was $3 billion.
During 2023, we made mandatory principal payments of
$17.1 million on our term loans.
On July 31, the company amended
its credit facility to increase 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 in 2023 were $48 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. In February 2024, we notified the preferred share
holder of our intent to not declare the first-quarter 2024
dividend. We currently 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.
Year-to-date operating results
The following
comparisons are to the period ending Dec.
31, 2023:
Total 2023 company revenue was $2.3
billion, which compares to revenue of $2.5 billion in 2022. Political revenue was
$33.5 million, compared to
$208 million in the prior year, an
election year.
Costs and expenses for segments, shared services and corporate
of $1.9 billion remained relatively
flat compared to a year ago.
Loss attributable to the shareholders of Scripps was
$998 million or $11.84 per share. Pre-tax costs for the 2023
period included a non-cash goodwill impairment charge for Scripps
Networks of $952 million as well as
$38.6 million of restructuring
charges, increasing the loss attributable to the shareholders by
$11.36 per share. In the prior year,
income attributable to the shareholders was $146 million or $1.62 per share. Pre-tax costs for the prior year
included $1.6 million of acquisition
and related integration costs as well as an $8.6 million gain on extinguishment of debt for
the redemption of senior notes. These items increased income
attributable to the shareholders by 6
cents per share.
Looking ahead
Comparisons for our segments are to the same period in
2023.
|
|
First-quarter
2024
|
Local Media
revenue
|
|
Up low teens
percent
|
Local Media
expense
|
|
Up about 10%
|
Scripps Networks
revenue
|
|
Flat to down
low-single-digit percent
|
Scripps Networks
expense
|
|
Down low-single-digit
percent
|
Shared services and
corporate
|
|
About $24
million
|
|
|
|
|
|
Full-year
2024
|
Interest
paid
|
|
$200-$210
million
|
Capital
expenditures
|
|
$70-$80
million
|
Taxes
paid
|
|
$50-$60
million
|
Depreciation and
amortization
|
|
$150-$160
million
|
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 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 5890648 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 Feb. 23
until midnight March 24. 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
4751031.
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,
michael.perry@scripps.com
Investor contact: Carolyn
Micheli, The E.W. Scripps Company, (513) 977-3732,
carolyn.micheli@scripps.com
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."
THE E.W. SCRIPPS
COMPANY
|
RESULTS OF
OPERATIONS
|
|
|
|
Three Months
Ended
December 31,
|
|
Years Ended December
31,
|
(in thousands, except
per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$ 615,769
|
|
$ 680,941
|
|
$
2,292,912
|
|
$
2,453,215
|
Segment, shared
services and corporate expenses
|
|
(502,585)
|
|
(476,565)
|
|
(1,898,093)
|
|
(1,856,930)
|
Acquisition and related
integration costs
|
|
—
|
|
—
|
|
—
|
|
(1,642)
|
Restructuring
costs
|
|
(9,404)
|
|
—
|
|
(38,612)
|
|
—
|
Depreciation and
amortization of intangible assets
|
|
(39,346)
|
|
(40,104)
|
|
(155,105)
|
|
(160,433)
|
Impairment of
goodwill
|
|
(266,000)
|
|
—
|
|
(952,000)
|
|
—
|
Gains (losses), net on
disposal of property and equipment
|
|
(24)
|
|
(215)
|
|
(2,344)
|
|
(5,866)
|
Operating
expenses
|
|
(817,359)
|
|
(516,884)
|
|
(3,046,154)
|
|
(2,024,871)
|
Operating income
(loss)
|
|
(201,590)
|
|
164,057
|
|
(753,242)
|
|
428,344
|
Interest
expense
|
|
(55,483)
|
|
(46,703)
|
|
(213,512)
|
|
(161,130)
|
Gain on extinguishment
of debt
|
|
—
|
|
7,355
|
|
—
|
|
8,589
|
Defined benefit pension
plan income
|
|
131
|
|
605
|
|
650
|
|
2,613
|
Miscellaneous,
net
|
|
(1,538)
|
|
(3,222)
|
|
(1,407)
|
|
(1,953)
|
Income (loss) from
operations before income taxes
|
|
(258,480)
|
|
122,092
|
|
(967,511)
|
|
276,463
|
Benefit (provision) for
income taxes
|
|
2,718
|
|
(36,543)
|
|
19,727
|
|
(80,561)
|
Net income
(loss)
|
|
(255,762)
|
|
85,549
|
|
(947,784)
|
|
195,902
|
Preferred stock
dividends
|
|
(12,576)
|
|
(12,576)
|
|
(50,305)
|
|
(50,305)
|
Net income (loss)
attributable to the shareholders of The E.W.
Scripps Company
|
|
$
(268,338)
|
|
$
72,973
|
|
$
(998,089)
|
|
$ 145,597
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
diluted share of common stock attributable
to the shareholders of The E.W. Scripps Company
|
|
$
(3.17)
|
|
$
0.84
|
|
$
(11.84)
|
|
$
1.62
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average shares outstanding
|
|
84,574
|
|
84,792
|
|
84,266
|
|
87,346
|
|
See notes to results
of operations.
|
Notes to Results of Operations
1. SEGMENT INFORMATION
We determine our business segments based upon our management and
internal reporting structure, as well as the basis that our chief
operating decision maker makes resource allocation decisions.
Our Local Media segment includes more than 60 local television
stations and their related digital operations. It is comprised of
18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four
FOX affiliates. We also have seven CW affiliates - four on full
power stations and three on multicast; seven independent stations
and 10 additional low power stations. Our Local Media segment earns
revenue primarily from the sale of advertising to local, national
and political advertisers and retransmission fees received from
cable operators, telecommunication companies, satellite carriers
and over-the-top virtual MVPDs.
Our Scripps Networks segment includes national news outlets
Scripps News and Court TV as well as popular entertainment brands
ION, Bounce, Defy TV, Grit, ION Mystery and Laff. The Scripps
Networks reach nearly every U.S. television home through free
over-the-air broadcast, cable/satellite, connected TV and digital
distribution. These operations earn revenue primarily through the
sale of advertising.
Our respective business segment results reflect the impact of
intercompany carriage agreements between our local broadcast
television stations and our national networks. We also allocate a
portion of certain corporate costs and expenses, including
accounting, human resources, employee benefit and information
technology to our business segments. These intercompany agreements
and allocations are generally amounts agreed upon by management,
which may differ from an arms-length amount.
The other segment caption aggregates our operating segments that
are too small to report separately. Costs for centrally provided
services and certain corporate costs that are not allocated to the
business segments are included in shared services and corporate
costs. These unallocated corporate costs would also include the
costs associated with being a public company. Corporate assets are
primarily cash and cash equivalents, property and equipment
primarily used for corporate purposes and deferred income
taxes.
Our chief operating decision maker evaluates the operating
performance of our business segments and makes decisions about the
allocation of resources to our business segments using a measure
called segment profit. Segment profit excludes interest, defined
benefit pension plan amounts, income taxes, depreciation and
amortization, impairment charges, divested operating units,
restructuring activities, investment results and certain other
items that are included in net income (loss) determined in
accordance with accounting principles generally accepted in
the United States of America.
Information regarding our business segments is as follows:
|
|
Three Months
Ended
December 31,
|
|
|
|
Years Ended December
31,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Media
|
|
$
381,027
|
|
$
433,439
|
|
(12.1) %
|
|
$
1,398,230
|
|
$
1,494,357
|
|
(6.4) %
|
Scripps
Networks
|
|
230,139
|
|
247,844
|
|
(7.1) %
|
|
893,234
|
|
961,242
|
|
(7.1) %
|
Other
|
|
9,248
|
|
3,990
|
|
|
|
19,397
|
|
14,628
|
|
32.6 %
|
Intersegment
eliminations
|
|
(4,645)
|
|
(4,332)
|
|
7.2 %
|
|
(17,949)
|
|
(17,012)
|
|
5.5 %
|
Total operating
revenues
|
|
$
615,769
|
|
$
680,941
|
|
(9.6) %
|
|
$
2,292,912
|
|
$
2,453,215
|
|
(6.5) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Media
|
|
$ 85,714
|
|
$
151,627
|
|
(43.5) %
|
|
$ 287,439
|
|
$ 386,369
|
|
(25.6) %
|
Scripps
Networks
|
|
64,255
|
|
79,979
|
|
(19.7) %
|
|
225,785
|
|
310,336
|
|
(27.2) %
|
Other
|
|
(12,377)
|
|
(5,887)
|
|
|
|
(26,451)
|
|
(18,140)
|
|
45.8 %
|
Shared services and
corporate
|
|
(24,408)
|
|
(21,343)
|
|
14.4 %
|
|
(91,954)
|
|
(82,280)
|
|
11.8 %
|
Acquisition and related
integration costs
|
|
—
|
|
—
|
|
|
|
—
|
|
(1,642)
|
|
|
Restructuring
costs
|
|
(9,404)
|
|
—
|
|
|
|
(38,612)
|
|
—
|
|
|
Depreciation and
amortization of intangible
assets
|
|
(39,346)
|
|
(40,104)
|
|
|
|
(155,105)
|
|
(160,433)
|
|
|
Impairment of
goodwill
|
|
(266,000)
|
|
—
|
|
|
|
(952,000)
|
|
—
|
|
|
Gains (losses), net on
disposal of property
and equipment
|
|
(24)
|
|
(215)
|
|
|
|
(2,344)
|
|
(5,866)
|
|
|
Interest
expense
|
|
(55,483)
|
|
(46,703)
|
|
|
|
(213,512)
|
|
(161,130)
|
|
|
Gain on extinguishment
of debt
|
|
—
|
|
7,355
|
|
|
|
—
|
|
8,589
|
|
|
Defined benefit pension
plan income
|
|
131
|
|
605
|
|
|
|
650
|
|
2,613
|
|
|
Miscellaneous,
net
|
|
(1,538)
|
|
(3,222)
|
|
|
|
(1,407)
|
|
(1,953)
|
|
|
Income (loss) from
operations before income
taxes
|
|
$
(258,480)
|
|
$
122,092
|
|
|
|
$
(967,511)
|
|
$ 276,463
|
|
|
Operating results for our Local Media segment were as
follows:
|
|
Three Months
Ended
December 31,
|
|
|
|
Years Ended December
31,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
advertising
|
|
$ 165,767
|
|
$ 164,188
|
|
1.0 %
|
|
$ 598,824
|
|
$ 626,095
|
|
(4.4) %
|
Political
|
|
16,412
|
|
105,559
|
|
(84.5) %
|
|
32,913
|
|
198,519
|
|
(83.4) %
|
Distribution
|
|
195,780
|
|
160,049
|
|
22.3 %
|
|
752,329
|
|
655,499
|
|
14.8 %
|
Other
|
|
3,068
|
|
3,643
|
|
(15.8) %
|
|
14,164
|
|
14,244
|
|
(0.6) %
|
Total operating
revenues
|
|
381,027
|
|
433,439
|
|
(12.1) %
|
|
1,398,230
|
|
1,494,357
|
|
(6.4) %
|
Segment costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
110,168
|
|
109,529
|
|
0.6 %
|
|
435,916
|
|
425,840
|
|
2.4 %
|
Programming
|
|
132,829
|
|
120,279
|
|
10.4 %
|
|
493,578
|
|
481,712
|
|
2.5 %
|
Other
expenses
|
|
52,316
|
|
52,004
|
|
0.6 %
|
|
181,297
|
|
200,436
|
|
(9.5) %
|
Total costs and
expenses
|
|
295,313
|
|
281,812
|
|
4.8 %
|
|
1,110,791
|
|
1,107,988
|
|
0.3 %
|
Segment
profit
|
|
$
85,714
|
|
$ 151,627
|
|
(43.5) %
|
|
$ 287,439
|
|
$ 386,369
|
|
(25.6) %
|
Operating results for Scripps Networks segment were as
follows:
|
|
Three Months
Ended
December 31,
|
|
|
|
Years Ended December
31,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
|
$ 230,139
|
|
$ 247,844
|
|
(7.1) %
|
|
$ 893,234
|
|
$ 961,242
|
|
(7.1) %
|
Segment costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
30,286
|
|
30,533
|
|
(0.8) %
|
|
124,669
|
|
120,202
|
|
3.7 %
|
Programming
|
|
91,141
|
|
88,495
|
|
3.0 %
|
|
360,684
|
|
342,835
|
|
5.2 %
|
Other
expenses
|
|
44,457
|
|
48,837
|
|
(9.0) %
|
|
182,096
|
|
187,869
|
|
(3.1) %
|
Total costs and
expenses
|
|
165,884
|
|
167,865
|
|
(1.2) %
|
|
667,449
|
|
650,906
|
|
2.5 %
|
Segment
profit
|
|
$
64,255
|
|
$
79,979
|
|
(19.7) %
|
|
$ 225,785
|
|
$ 310,336
|
|
(27.2) %
|
2. CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
As of
December 31,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
35,319
|
|
$
18,027
|
Other current
assets
|
|
640,774
|
|
625,914
|
Total current
assets
|
|
676,093
|
|
643,941
|
Investments
|
|
23,265
|
|
23,144
|
Property and
equipment
|
|
455,255
|
|
458,600
|
Operating lease
right-of-use assets
|
|
99,194
|
|
117,869
|
Goodwill
|
|
1,968,574
|
|
2,920,574
|
Other intangible
assets
|
|
1,727,178
|
|
1,821,254
|
Programming
|
|
449,943
|
|
427,962
|
Miscellaneous
|
|
10,618
|
|
17,661
|
TOTAL ASSETS
|
|
$
5,410,120
|
|
$
6,431,005
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
76,383
|
|
$
82,710
|
Unearned
revenue
|
|
12,181
|
|
18,183
|
Current portion of
long-term debt
|
|
15,612
|
|
18,612
|
Accrued expenses and
other current liabilities
|
|
373,643
|
|
365,500
|
Total current
liabilities
|
|
477,819
|
|
485,005
|
Long-term debt (less
current portion)
|
|
2,896,824
|
|
2,853,793
|
Other liabilities (less
current portion)
|
|
879,294
|
|
961,382
|
Total
equity
|
|
1,156,183
|
|
2,130,825
|
TOTAL LIABILITIES AND EQUITY
|
|
$
5,410,120
|
|
$
6,431,005
|
3. EARNINGS PER SHARE ("EPS")
Unvested awards of share-based payments with non-forfeitable
rights to receive dividends or dividend equivalents, such as our
RSUs, are considered participating securities for purposes of
calculating EPS. Under the two-class method, we allocate a portion
of net income to these participating securities and therefore
exclude that income from the calculation of EPS for common stock.
We do not allocate losses to the participating securities.
The following table presents information about basic and diluted
weighted-average shares outstanding:
|
|
Three Months
Ended
December 31,
|
|
Years Ended December
31,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Numerator (for basic and diluted earnings
per share)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(255,762)
|
|
$ 85,549
|
|
$
(947,784)
|
|
$ 195,902
|
Less income allocated
to RSUs
|
|
—
|
|
(1,924)
|
|
—
|
|
(3,662)
|
Less preferred stock
dividends
|
|
(12,576)
|
|
(12,576)
|
|
(50,305)
|
|
(50,305)
|
Numerator for basic and
diluted earnings per share
|
|
$
(268,338)
|
|
$ 71,049
|
|
$
(998,089)
|
|
$ 141,935
|
Denominator
|
|
|
|
|
|
|
|
|
Basic weighted-average
shares outstanding
|
|
84,574
|
|
83,455
|
|
84,266
|
|
83,220
|
Effect of dilutive
securities
|
|
—
|
|
1,337
|
|
—
|
|
4,126
|
Diluted
weighted-average shares outstanding
|
|
84,574
|
|
84,792
|
|
84,266
|
|
87,346
|
4. NON-GAAP INFORMATION
In addition to results prepared in accordance with GAAP, this
earnings release discusses free cash flow, a non-GAAP performance
measure that management and the company's Board of Directors uses
to evaluate the performance of the business. We also believe that
the non-GAAP measure provides useful information to investors by
allowing them to view our business through the eyes of management
and is a measure that is frequently used by industry analysts,
investors and lenders as a measure of valuation for broadcast
companies.
Free cash flow is calculated as non-GAAP Adjusted EBITDA (as
defined below), plus reimbursements received from the FCC for
repack expenditures, less capital expenditures, preferred stock
dividends, interest payments, income taxes paid (refunded) and
mandatory contributions to defined retirement plans.
Adjusted EBITDA is calculated as income (loss) from continuing
operations, net of tax, plus income tax expense (benefit),
interest expense, losses (gains) on extinguishment of debt, defined
benefit pension plan expense (income), share-based compensation
costs, depreciation, amortization of intangible assets, impairment
of goodwill, loss (gain) on business and asset disposals,
acquisition and integration costs, restructuring charges and
certain other miscellaneous items.
A reconciliation of these non-GAAP measures to the comparable
financial measure in accordance with GAAP is as follows:
|
|
Three Months
Ended
December 31,
|
|
Years Ended December
31,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(255,762)
|
|
$
85,549
|
|
$
(947,784)
|
|
$ 195,902
|
Provision (benefit) for
income taxes
|
|
(2,718)
|
|
36,543
|
|
(19,727)
|
|
80,561
|
Interest
expense
|
|
55,483
|
|
46,703
|
|
213,512
|
|
161,130
|
Gain on extinguishment
of debt
|
|
—
|
|
(7,355)
|
|
—
|
|
(8,589)
|
Defined benefit pension
plan income
|
|
(131)
|
|
(605)
|
|
(650)
|
|
(2,613)
|
Share-based
compensation costs
|
|
4,423
|
|
3,811
|
|
20,490
|
|
21,596
|
Depreciation
|
|
15,435
|
|
15,421
|
|
60,725
|
|
61,943
|
Amortization of
intangible assets
|
|
23,911
|
|
24,683
|
|
94,380
|
|
98,490
|
Impairment of
goodwill
|
|
266,000
|
|
—
|
|
952,000
|
|
—
|
Losses (gains), net on
disposal of property and equipment
|
|
24
|
|
215
|
|
2,344
|
|
5,866
|
Acquisition and related
integration costs
|
|
—
|
|
—
|
|
—
|
|
1,642
|
Restructuring
costs
|
|
9,404
|
|
—
|
|
38,612
|
|
—
|
Miscellaneous,
net
|
|
1,538
|
|
3,222
|
|
1,407
|
|
1,953
|
Adjusted
EBITDA
|
|
117,607
|
|
208,187
|
|
415,309
|
|
617,881
|
Capital
expenditures
|
|
(20,550)
|
|
(9,822)
|
|
(62,503)
|
|
(43,901)
|
Proceeds from FCC
Repack
|
|
—
|
|
20
|
|
—
|
|
2,670
|
Preferred stock
dividends
|
|
(12,000)
|
|
(12,000)
|
|
(48,000)
|
|
(48,000)
|
Interest
paid
|
|
(34,462)
|
|
(27,008)
|
|
(195,832)
|
|
(150,796)
|
Income taxes paid, net
of tax indemnification reimbursements
|
|
(5,189)
|
|
(5,066)
|
|
(31,121)
|
|
(61,573)
|
Mandatory contributions
to defined retirement plans
|
|
(277)
|
|
(788)
|
|
(1,161)
|
|
(1,541)
|
Free cash
flow
|
|
$
45,129
|
|
$ 153,523
|
|
$
76,692
|
|
$ 314,740
|
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SOURCE The E.W. Scripps Company