CINCINNATI, Nov. 3, 2023
/PRNewswire/ -- 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:
- Scripps successfully completed cable and satellite carriage
agreements covering about 75% of the company's Local Media
subscriber households. The renewals also expand the number of
stations on which Scripps is paid a distribution fee, growing
revenue and expanding distribution margins.
- Scripps Sports signed a new agreement with the National Hockey
League's Arizona Coyotes to distribute its games beginning this
season with its first broadcast on Oct.
13. Scripps Sports began broadcasting the NHL's Vegas Golden
Knights on Sept. 26. Both teams are
distributed on independent Scripps stations in their home markets
and in surrounding states. Initial game ratings and advertising
demand have been strong.
- Scripps Networks' third-quarter revenue was down 8%, exceeding
guidance because of better-than-expected connected TV and direct
response revenue.
- Restructuring charges for the third quarter were nearly
$5 million, which included employee
severance-related charges, operating lease impairment charges and
reorganization consulting fees. The company is on track to realize
at least $40 million in savings
through the reorganization by the middle of 2024.
- In October, Scripps News won its first-ever National News Emmy
Award in the outstanding science, technology or environmental
coverage category for "In Real Life: Plastic Time Bomb," a
documentary news series that presented a global exploration of the
impact of microplastics on the planet and on our health.
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.
- Core advertising revenue decreased 3.1% to $142 million.
- Political revenue was $9.1
million, compared to $63.2
million in the prior-year quarter, an election year.
- Distribution revenue increased 20% to $198 million.
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.
Looking ahead
Comparisons for our segments are to the same period in
2022.
|
|
Fourth-quarter
2023
|
Local Media
revenue
|
|
Down low to mid-double
digits
|
Local Media
expense
|
|
Up mid-single
digits
|
Scripps Networks
revenue
|
|
Down in the 10%
range
|
Scripps Networks
expense
|
|
Flat
|
Shared services and
corporate
|
|
About $22
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) 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 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
September
30,
|
|
Nine Months
Ended
September
30,
|
(in thousands, except
per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
566,529
|
|
$
612,101
|
|
$
1,677,143
|
|
$
1,772,274
|
Segment, shared
services and corporate expenses
|
|
(469,076)
|
|
(466,912)
|
|
(1,395,508)
|
|
(1,380,365)
|
Acquisition and related
integration costs
|
|
—
|
|
—
|
|
—
|
|
(1,642)
|
Restructuring
costs
|
|
(4,705)
|
|
—
|
|
(29,208)
|
|
—
|
Depreciation and
amortization of intangible assets
|
|
(38,588)
|
|
(39,565)
|
|
(115,759)
|
|
(120,329)
|
Impairment of
goodwill
|
|
—
|
|
—
|
|
(686,000)
|
|
—
|
Gains (losses), net on
disposal of property and equipment
|
|
(1,066)
|
|
(1,593)
|
|
(2,320)
|
|
(5,651)
|
Operating
expenses
|
|
(513,435)
|
|
(508,070)
|
|
(2,228,795)
|
|
(1,507,987)
|
Operating income
(loss)
|
|
53,094
|
|
104,031
|
|
(551,652)
|
|
264,287
|
Interest
expense
|
|
(56,916)
|
|
(41,917)
|
|
(158,029)
|
|
(114,427)
|
Gain on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
1,234
|
Defined benefit pension
plan income
|
|
251
|
|
683
|
|
519
|
|
2,008
|
Miscellaneous,
net
|
|
1,309
|
|
(494)
|
|
131
|
|
1,269
|
Income (loss) from
operations before income taxes
|
|
(2,262)
|
|
62,303
|
|
(709,031)
|
|
154,371
|
Benefit (provision) for
income taxes
|
|
(1,391)
|
|
(16,055)
|
|
17,009
|
|
(44,018)
|
Net income
(loss)
|
|
(3,653)
|
|
46,248
|
|
(692,022)
|
|
110,353
|
Preferred stock
dividends
|
|
(12,576)
|
|
(12,576)
|
|
(37,729)
|
|
(37,729)
|
Net income (loss)
attributable to the shareholders of The E.W.
Scripps Company
|
|
$
(16,229)
|
|
$
33,672
|
|
$ (729,751)
|
|
$
72,624
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
diluted share of common stock
attributable to the shareholders of The E.W. Scripps
Company:
|
|
$
(0.19)
|
|
$
0.38
|
|
$
(8.67)
|
|
$
0.80
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
84,433
|
|
85,324
|
|
84,162
|
|
88,197
|
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 structures, as well as the basis
on which 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,
telecommunications companies, satellite carriers and over-the-top
virtual MVPDs.
Our Scripps Networks segment includes national news
outlets Court TV and Scripps News (formerly Newsy), 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,
restricted cash, 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 the operating results of our
business segments is as follows:
|
|
Three Months
Ended
September
30,
|
|
|
|
Nine Months
Ended
September
30,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Media
|
|
$ 353,061
|
|
$ 378,438
|
|
(6.7) %
|
|
$
1,017,203
|
|
$
1,060,918
|
|
(4.1) %
|
Scripps
Networks
|
|
215,393
|
|
235,401
|
|
(8.5) %
|
|
663,095
|
|
713,398
|
|
(7.1) %
|
Other
|
|
2,620
|
|
2,594
|
|
1.0 %
|
|
10,149
|
|
10,638
|
|
(4.6) %
|
Intersegment
eliminations
|
|
(4,545)
|
|
(4,332)
|
|
4.9 %
|
|
(13,304)
|
|
(12,680)
|
|
4.9 %
|
Total operating
revenues
|
|
$ 566,529
|
|
$ 612,101
|
|
(7.4) %
|
|
$
1,677,143
|
|
$
1,772,274
|
|
(5.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Media
|
|
$
74,865
|
|
$
99,607
|
|
(24.8) %
|
|
$ 201,725
|
|
$ 234,742
|
|
(14.1) %
|
Scripps
Networks
|
|
49,661
|
|
71,984
|
|
(31.0) %
|
|
161,530
|
|
230,357
|
|
(29.9) %
|
Other
|
|
(6,263)
|
|
(6,791)
|
|
(7.8) %
|
|
(14,074)
|
|
(12,253)
|
|
14.9 %
|
Shared services and
corporate
|
|
(20,810)
|
|
(19,611)
|
|
6.1 %
|
|
(67,546)
|
|
(60,937)
|
|
10.8 %
|
Acquisition and related
integration costs
|
|
—
|
|
—
|
|
|
|
—
|
|
(1,642)
|
|
|
Restructuring
costs
|
|
(4,705)
|
|
—
|
|
|
|
(29,208)
|
|
—
|
|
|
Depreciation and
amortization of
intangible assets
|
|
(38,588)
|
|
(39,565)
|
|
|
|
(115,759)
|
|
(120,329)
|
|
|
Impairment of
goodwill
|
|
—
|
|
—
|
|
|
|
(686,000)
|
|
—
|
|
|
Gains (losses), net on
disposal of property
and equipment
|
|
(1,066)
|
|
(1,593)
|
|
|
|
(2,320)
|
|
(5,651)
|
|
|
Interest
expense
|
|
(56,916)
|
|
(41,917)
|
|
|
|
(158,029)
|
|
(114,427)
|
|
|
Gain on extinguishment
of debt
|
|
—
|
|
—
|
|
|
|
—
|
|
1,234
|
|
|
Defined benefit pension
plan income
|
|
251
|
|
683
|
|
|
|
519
|
|
2,008
|
|
|
Miscellaneous,
net
|
|
1,309
|
|
(494)
|
|
|
|
131
|
|
1,269
|
|
|
Income (loss) from
operations before
income taxes
|
|
$
(2,262)
|
|
$
62,303
|
|
|
|
$
(709,031)
|
|
$ 154,371
|
|
|
Operating results for our Local Media segment were as
follows:
|
|
Three Months
Ended
September
30,
|
|
|
|
Nine Months
Ended
September
30,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
advertising
|
|
$ 142,295
|
|
$ 146,899
|
|
(3.1) %
|
|
$ 433,057
|
|
$ 461,907
|
|
(6.2) %
|
Political
|
|
9,130
|
|
63,183
|
|
(85.5) %
|
|
16,501
|
|
92,960
|
|
(82.2) %
|
Distribution
|
|
197,842
|
|
164,742
|
|
20.1 %
|
|
556,549
|
|
495,450
|
|
12.3 %
|
Other
|
|
3,794
|
|
3,614
|
|
5.0 %
|
|
11,096
|
|
10,601
|
|
4.7 %
|
Total operating
revenues
|
|
353,061
|
|
378,438
|
|
(6.7) %
|
|
1,017,203
|
|
1,060,918
|
|
(4.1) %
|
Segment costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
109,566
|
|
106,341
|
|
3.0 %
|
|
325,748
|
|
316,311
|
|
3.0 %
|
Programming
|
|
122,923
|
|
123,983
|
|
(0.9) %
|
|
360,749
|
|
361,433
|
|
(0.2) %
|
Other
expenses
|
|
45,707
|
|
48,507
|
|
(5.8) %
|
|
128,981
|
|
148,432
|
|
(13.1) %
|
Total costs and
expenses
|
|
278,196
|
|
278,831
|
|
(0.2) %
|
|
815,478
|
|
826,176
|
|
(1.3) %
|
Segment
profit
|
|
$
74,865
|
|
$
99,607
|
|
(24.8) %
|
|
$ 201,725
|
|
$ 234,742
|
|
(14.1) %
|
Operating results for our Scripps Networks segment were as
follows:
|
|
Three Months
Ended
September
30,
|
|
|
|
Nine Months
Ended
September
30,
|
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
|
$ 215,393
|
|
$ 235,401
|
|
(8.5) %
|
|
$ 663,095
|
|
$ 713,398
|
|
(7.1) %
|
Segment costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
30,630
|
|
30,227
|
|
1.3 %
|
|
94,383
|
|
89,669
|
|
5.3 %
|
Programming
|
|
91,459
|
|
84,562
|
|
8.2 %
|
|
269,543
|
|
254,340
|
|
6.0 %
|
Other
expenses
|
|
43,643
|
|
48,628
|
|
(10.3) %
|
|
137,639
|
|
139,032
|
|
(1.0) %
|
Total costs and
expenses
|
|
165,732
|
|
163,417
|
|
1.4 %
|
|
501,565
|
|
483,041
|
|
3.8 %
|
Segment
profit
|
|
$
49,661
|
|
$
71,984
|
|
(31.0) %
|
|
$ 161,530
|
|
$ 230,357
|
|
(29.9) %
|
2. CONDENSED CONSOLIDATED BALANCE SHEETS
(in
thousands)
|
|
As
of
September
30,
2023
|
|
As of
December 31,
2022
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
15,852
|
|
$
18,027
|
Other current
assets
|
|
665,479
|
|
625,914
|
Total current
assets
|
|
681,331
|
|
643,941
|
Investments
|
|
23,268
|
|
23,144
|
Property and
equipment
|
|
450,834
|
|
458,600
|
Operating lease
right-of-use assets
|
|
103,428
|
|
117,869
|
Goodwill
|
|
2,234,574
|
|
2,920,574
|
Other intangible
assets
|
|
1,751,121
|
|
1,821,254
|
Programming
|
|
431,062
|
|
427,962
|
Miscellaneous
|
|
12,455
|
|
17,661
|
TOTAL ASSETS
|
|
$
5,688,073
|
|
$
6,431,005
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
60,424
|
|
$
82,710
|
Unearned
revenue
|
|
18,713
|
|
18,183
|
Current portion of
long-term debt
|
|
15,612
|
|
18,612
|
Accrued expenses and
other current liabilities
|
|
348,482
|
|
365,500
|
Total current
liabilities
|
|
443,231
|
|
485,005
|
Long-term debt (less
current portion)
|
|
2,908,390
|
|
2,853,793
|
Other liabilities (less
current portion)
|
|
919,777
|
|
961,382
|
Total equity
|
|
1,416,675
|
|
2,130,825
|
TOTAL LIABILITIES AND EQUITY
|
|
$
5,688,073
|
|
$
6,431,005
|
3. EARNINGS PER SHARE ("EPS")
Unvested awards of share-based payments with 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
September
30,
|
|
Nine Months
Ended
September
30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Numerator (for
basic and diluted earnings per share)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(3,653)
|
|
$
46,248
|
|
$
(692,022)
|
|
$ 110,353
|
Less income allocated
to RSUs
|
|
—
|
|
(885)
|
|
—
|
|
(1,831)
|
Less preferred stock
dividends
|
|
(12,576)
|
|
(12,576)
|
|
(37,729)
|
|
(37,729)
|
Numerator for basic and
diluted earnings per share
|
|
$ (16,229)
|
|
$
32,787
|
|
$
(729,751)
|
|
$
70,793
|
Denominator
|
|
|
|
|
|
|
|
|
Basic weighted-average
shares outstanding
|
|
84,433
|
|
83,360
|
|
84,162
|
|
83,141
|
Effect of dilutive
securities
|
|
—
|
|
1,964
|
|
—
|
|
5,056
|
Diluted
weighted-average shares outstanding
|
|
84,433
|
|
85,324
|
|
84,162
|
|
88,197
|
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
September
30,
|
|
Nine Months
Ended
September
30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(3,653)
|
|
$
46,248
|
|
$
(692,022)
|
|
$ 110,353
|
Provision (benefit) for
income taxes
|
|
1,391
|
|
16,055
|
|
(17,009)
|
|
44,018
|
Interest
expense
|
|
56,916
|
|
41,917
|
|
158,029
|
|
114,427
|
Gain on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
(1,234)
|
Defined benefit pension
plan income
|
|
(251)
|
|
(683)
|
|
(519)
|
|
(2,008)
|
Share-based
compensation costs
|
|
3,418
|
|
3,902
|
|
16,067
|
|
17,785
|
Depreciation
|
|
15,100
|
|
15,340
|
|
45,290
|
|
46,522
|
Amortization of
intangible assets
|
|
23,488
|
|
24,225
|
|
70,469
|
|
73,807
|
Impairment of
goodwill
|
|
—
|
|
—
|
|
686,000
|
|
—
|
Losses (gains), net on
disposal of property and equipment
|
|
1,066
|
|
1,593
|
|
2,320
|
|
5,651
|
Acquisition and related
integration costs
|
|
—
|
|
—
|
|
—
|
|
1,642
|
Restructuring
costs
|
|
4,705
|
|
—
|
|
29,208
|
|
—
|
Miscellaneous,
net
|
|
(1,309)
|
|
494
|
|
(131)
|
|
(1,269)
|
Adjusted
EBITDA
|
|
100,871
|
|
149,091
|
|
297,702
|
|
409,694
|
Capital
expenditures
|
|
(16,843)
|
|
(9,124)
|
|
(41,953)
|
|
(34,079)
|
Proceeds from FCC
Repack
|
|
—
|
|
908
|
|
—
|
|
2,650
|
Preferred stock
dividends
|
|
(12,000)
|
|
(12,000)
|
|
(36,000)
|
|
(36,000)
|
Interest
paid
|
|
(67,508)
|
|
(55,611)
|
|
(161,370)
|
|
(123,788)
|
Income taxes paid, net
of tax indemnification reimbursements
|
|
(13,042)
|
|
(9,729)
|
|
(25,932)
|
|
(56,507)
|
Mandatory contributions
to defined retirement plans
|
|
(254)
|
|
(247)
|
|
(884)
|
|
(753)
|
Free cash
flow
|
|
$
(8,776)
|
|
$
63,288
|
|
$
31,563
|
|
$ 161,217
|
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SOURCE The E.W. Scripps Company