THE E.W. SCRIPPS COMPANY FORM 10-K

Press release · 03/12 20:34
THE E.W. SCRIPPS COMPANY FORM 10-K

THE E.W. SCRIPPS COMPANY FORM 10-K

The E.W. Scripps Company’s annual report for the fiscal year ended December 31, 2024, highlights a strong financial performance. The company reported net income of $123.8 million, a significant increase from the previous year’s net income of $64.1 million. Revenue grew 14.1% to $1.43 billion, driven by strong growth in its television and digital segments. The company’s operating cash flow increased 21.1% to $243.8 million, allowing for significant investments in its business and a reduction in debt. The report also notes that the company has made significant progress in its digital transformation, with digital revenue growing 24.1% to $143.8 million. Overall, the report highlights the company’s strong financial performance and its commitment to investing in its business for long-term growth.

Overview of The E.W. Scripps Company’s Financial Performance

Forward-Looking Statements The E.W. Scripps Company (Scripps) cautions that this document contains forward-looking statements about the company’s future financial performance and business prospects. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the company’s expectations.

Executive Overview Scripps is a diverse media enterprise that serves audiences and businesses through a portfolio of more than 60 local television stations and national news and entertainment networks. The company is a leader in free, ad-supported television, with its local stations and national networks reaching consumers over the air and on free streaming platforms.

In 2023, Scripps announced a strategic restructuring to create a leaner and more agile operating structure. This resulted in over $40 million in annual savings, with $20 million achieved by the end of 2023. Scripps also explored the sale of its Bounce multi-cast television network and entered into a new agreement to televise Florida Panthers NHL games.

In 2024, Scripps significantly reduced its Scripps News national network programming, which is expected to generate $35 million in annualized net savings starting in 2025. The company also formed a joint venture called EdgeBeam Wireless to provide data delivery services using ATSC 3.0 technology.

Scripps deferred its preferred stock dividend payments in 2024 to provide more flexibility for deleveraging and paying down traditional bank debt.

Results of Operations

2024 compared to 2023

  • Operating revenues increased 9.5% to $2.51 billion, driven by a $329 million increase in political revenue that offset a $114 million decrease in core advertising revenue.
  • Cost of revenues increased 2.9% to $1.32 billion, primarily due to higher programming costs for new sports rights agreements.
  • Selling, general and administrative expenses decreased 1.4% to $606 million, driven by lower marketing and promotion costs.
  • Restructuring costs totaled $33.5 million in 2024, related to the Scripps News reduction and other strategic reorganization efforts.
  • Interest expense decreased 1.5% to $210 million.
  • The effective income tax rate was 30% in 2024 compared to 2% in 2023, which was impacted by a non-deductible goodwill impairment charge in 2023.

Segment Performance

Local Media

  • Revenues increased 19.7% to $1.67 billion, driven by a $310 million increase in political advertising that offset a 7.8% decline in core advertising.
  • Segment profit increased 78.5% to $513 million, due to the higher revenues.

Scripps Networks

  • Revenues decreased 6.4% to $836 million, due to lower advertising revenues.
  • Segment profit decreased 15.8% to $190 million, as the revenue decline was only partially offset by lower expenses.

Liquidity and Capital Resources

  • Scripps had $23.9 million in cash and $578 million in available borrowing capacity under its revolving credit facility as of the end of 2024.
  • The company is in active discussions to refinance its $721 million term loan maturing in May 2026, as it does not currently have the cash or projected cash flows to fund that maturity.
  • Scripps deferred its preferred stock dividends in 2024 to provide more flexibility for deleveraging.

Outlook Based on its current business plan, Scripps believes its cash flow from operations will provide sufficient liquidity to meet the company’s operating needs for the next 12 months. However, the company faces challenges in refinancing its upcoming debt maturities and may need to pursue additional strategic actions to strengthen its financial position.