Led by a record level of political advertising revenues and the performance of acquired television stations, The E.W. Scripps Company reported operating results for the fourth quarter of 2012 that were significantly stronger than the fourth quarter of 2011, as well as the fourth quarter of the previous election year.
“Our repositioning of Scripps really paid off in the fourth quarter, and in all of 2012," said Rich Boehne, Scripps president and CEO. "Investing to expand our television portfolio and to improve our local news programming resulted in an attractive platform for political advertising and the most effective voice for election-year journalism ever staged by Scripps. We also took advantage of the election year to build out our digital product portfolio across both TV and newspaper markets, expanding audiences and attracting new revenue sources. Our investments in new digital products and services will continue in 2013, consistent with our goal to be the leader in our markets. These efforts, led by a broad deployment of more sales resources to take advantage of growing digital revenues, are good examples of creating value through internal investment.”
Consolidated revenues rose 32 percent to $260 million from $197 million in the fourth quarter of 2011. The 2012 quarter included revenue from television stations in Indianapolis, Denver, San Diego and Bakersfield that were acquired on Dec. 30, 2011. Excluding the new stations from the 2012 performance, consolidated revenues increased 14 percent year over year to $225 million.
Political advertising in the fourth quarter alone was higher than the full-year political total reported in any previous year.
Consolidated expenses for segments, shared services and corporate rose 14.3 percent to $196 million. Excluding costs associated with the new stations, expenses increased 1.6 percent to $174 million.
The revenue surge and expense discipline produced a substantial improvement in operating results. Operating income in the 2012 quarter was $45.4 million, up from $7.3 million in the fourth quarter of 2011. The year-ago quarter included $2.8 million of investment banking, legal and other fees associated with the acquisition of the television stations.
At $2.6 million, interest expense in the 2012 quarter was higher than in the prior-year quarter due to the debt used to finance the acquisition.
The provision for income taxes was $13.6 million in the fourth quarter of 2012, compared with a tax provision of less than a million dollars in the fourth quarter of 2011.
Net income in the fourth quarter of 2012 was $27.2 million, or 47 cents per share, compared with $6.3 million, or 11 cents per share, in the fourth quarter of 2011.
“In the television division,” continued Boehne, “the new stations in Denver, Indianapolis, San Diego and Bakersfield finished their first year as Scripps stations with strong revenue growth. And our decision to replace underperforming syndicated shows with internally produced programming had a positive impact in the first year. Our two newest shows – Let’s Ask America and The List – are performing well from both ratings and financial perspectives.
“Despite difficult circumstances, our newspapers performed in line with our full-year guidance for 2012 as a result of improving trends in some markets, and disciplined expense control. The papers are preparing for a move in the first half of 2013 toward a new - bundled - subscription strategy for print and digital products."
“We expect the momentum to continue in 2013, with sustained progress from our newspapers and a level of profitability at our television stations – even on a same-station basis – that will be more than 50 percent higher than in 2011, the previous non-election year.”
For the full details of the earnings release, click here.