Scripps posts 1Q results; revenue of $198.7m is down 4.1% from 1Q2012

TV revenue down $2.7m, papers down 4.7%; company to roll out paywalls for its newspaper websites in 11 of 13 markets this quarter

The E.W. Scripps Company today reported operating results for the first quarter of 2013.

The company, which owns and operates The Courier & Press in Evansville, The Gleaner in Henderson and Indianapolis ABC affiliate WRTV, reported consolidated revenues of $198.7 million, down 4.1 percent or $8.5 million. More than half of the decline was due to the near-absence of political advertising revenue in 2013.

Scripps' TV revenue for the quarter was $96.9 million, down $2.7 million from the first quarter of 2012. In the newspaper segment, revenue was $99.5 million, down 4.7% from the first quarter of 2012.

The declines were not unexpected; with 2013 being a non-election year, political revenues have dried up. In addition, Scripps is continuing to expand its digital operations and continue the conversion in its newspaper markets to "bundled subscriptions" (read: website paywalls).

"Following record-setting profit performance in 2012, we launched into 2013 determined to substantially upgrade our digital revenue platforms, launch a series of new local digital products, and rebuild our newspaper business models around bundled subscriptions for digital and print audiences," said Rich Boehne, Scripps' president, chairman and CEO.

"In the first quarter, which is our seasonally smallest revenue period, results were complicated by an expected absence of political advertising and difficult-to-predict advertising patterns coming out of 2012. These tough year-over-year revenue comparisons caused by cyclical political advertising will continue through the balance of 2013.

"In newspaper markets, we have begun converting audiences to bundled subscriptions for news products that demonstrate the value of the services we provide on smartphones, tablets, desktops and laptops, in addition to the printed page. The early results are encouraging, and we anticipate converting 11 of our 13 newspaper markets this quarter.

"The acceleration of our digital operations, led by the deployment of focused digital advertising sales forces across the country, continues unabated. Where we have the new sales structure in place in the television division, digital revenue growth is substantially higher than the 23 percent we reported across the group in the first quarter. The local sales force expansion, along with the release of new and upgraded locally branded products, will continue this year."

Costs and expenses for segments, shared services and corporate were $187.6 million, which represents a 1.1 percent decline year over year. Excluding the costs to grow our digital operations, costs and expenses declined 2.7 percent.

The Company reported a loss from operations before income taxes of $7.6 million in the first quarter of 2013 compared with a loss of $7.4 million in the first quarter of 2012. The prior-year quarter 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 the acquired stations.

The loss from operations, net of tax, was $2.7 million, or 5 cents per share, in the 2013 quarter, compared with a loss from operations, net of tax, of $4.4 million, or 8 cents per share, in the year-ago quarter (2 cents per share excluding the non-cash charge).


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