The E.W. Scripps Company CEO Discusses Q3 2010 Results - Earnings Call Transcript
The E.W. Scripps Company (
)
Q3 2010 Earnings Call
November 02, 2010 09:00 am ET
Executives
Tim King - VP of IR
Tim Stautberg - SVP/CFO & Treasurer
Rich Boehne - President and CEO
Mark Contreras - SVP/Newspapers
Analysts
Craig Huber - Access 342
Edward Atorino - Benchmark
Alexia Quadrani - JPMorgan
Presentation
Operator
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The E. W. Scripps Company Q2 2009 Earnings Call Transcript
Ladies and gentlemen, thank you for standing-by. Welcome to The E. W. Scripps Company's third quarter earnings report. At this time all participant lines are in a listen-only mode. Later there will be an opportunity for your questions; instructions will be given at that time. (Operator Instructions). As a reminder, today's conference call is being recorded. Digitized replay will be given at the conclusion of today's call.
And I'd now like to turn the conference over to Tim King, Vice President of Investor Relations. Please go ahead, sir
Tim King
Thanks, Leah. Good morning, everyone, and thanks to everyone for joining us on the call. We are going to start this morning with Tim Stautberg; he is the Senior Vice President and Chief Financial Officer. He will discuss the third quarter financial and operational highlights, cover some non- operating data, and give you a little more color on trends for the benefit of your fourth-quarter models.
Then you'll hear from Rich Boehne, our President, and Chief Executive Officer. He'll talk more about the recent announcement regarding our new bank agreement and our share repurchase authorization and what those developments signal about our businesses for the long-term. Then as usual we'll open up the phone lines for a Q&A that will include Mark Contreras, who runs the newspaper division, Brian Lawlor, who is in-charge of our TV stations and Doug Lyons, our Controller.
Now the commentary you'll hear from our executives this morning may contain certain forward-looking statements and actual results for future periods may differ from those predicted. On page 11 of the 2009 Form 10-K, you can read some of the factors that may cause results to differ from what you're about to hear.
As a reminder, you can access a streaming audio replay of this call by going to www.scripps.com and clicking on the Investor Relations link at the top of the page. It will be active later this afternoon and we'll leave it there for a few weeks.
So with that, I'll turn it right over to Tim Stautberg.
Tim Stautberg
Thanks Tim and good morning everyone. I would like to start by wishing everyone a happy election day or as we call it in the Scripps TV station group, Christmas in November. This is a bittersweet day for us. The end of a political season that started nearly a year ago, flowed but continued to gain in intensity up to and including today.
The political ads helped our TV station group report a year-over-year revenue gain in excess of 30% during the third quarter which puts our performance among the best of the publicly traded peer group. The strength of our TV station sales effort contributed to the second consecutive quarter of consolidated revenue improvement. It was encouraging in the second quarter to report that our total revenues rose 5%. The first time that consolidated revenue improved since the spin-off of Scripps Networks Interactive in June of 2008. In the third quarter we stretched that figure to a year-over-year consolidated revenue improvement of 8.6%. Our consolidated costs increased during the period as well, but at a pace of less than 3%.
In the third quarter, the company reported a slight loss from continuing operations before taxes of $34,000 compared with a loss of $6.9 million in the 2009 quarter. Income from continuing operations net of tax was $5.4 million or $0.08 per share compared with a loss from continuing operations of $5.7 million or $0.11 per share in the 2009 quarter. Now the tax benefit in 2010 was affected by an adjustment to the company's estimated reserve for uncertain tax positions based upon the settlement of examinations of certain state and local tax returns during the quarter.
Let's turn now to the operations by starting with the TV stations which continued their momentum by reporting a year-over-year revenue increase in the quarter for more than 30%. You would expect September revenues to be strong due to the influx of political labs that traditionally start after Labor Day. But the sales performance was strong throughout the quarter. All three months were marked by revenue gains in excess of 25% with total local and national spot revenue excluding political up double digits for the quarter reflecting the general health of non-political categories that have rebounded from the 2009 lows.
Aside from political ads, automotive advertising led the way as it has all year. The category was up 70% as automakers provided marketing mussel to support their offerings and local dealers continue to find our stations to be effective partners for selling cars and trucks. Those of you close to the power descript story know that most of our retrans concept rights are tied up for years to comes and agreements reached before we (inaudible). This means there is great upside in the long run as old contracts were off and new deals were negotiated in the coming years. But it also means our currently trans bucket is much smaller then it appears with revenue in the third quarter of $3 million or 66% higher then a year ago.
Another small growing piece of the pie and mobile revenue on the TV station side which searched 35% in the September quarter. Year-over-year expenses in the TV division were up about 7% we kept them on fully cost essentially flat in the third quarter with overall cost rose sue impart to an accrual for expected payments to ABC for its programming.
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