The E.W. Scripps Company (SSP)
Q1 2010 Earnings Call
May 10, 2010 9:00 am ET
Richard Boehne – President & CEO
Timothy Stautberg – SVP & CFO
Mark Contreras – SVP Newspapers
Brian Lawlor – SVP Television
Tim King – VP CC & IR
Alexia Quadrani - JPMorgan
Craig Huber - Access 342
John Kornreich – Sandler Capital
Previous Statements by SSP
» The E. W. Scripps Company Q3 2009 Earnings Call Transcript
» The E. W. Scripps Company Q2 2009 Earnings Call Transcript
» The E.W. Scripps Company Q1 2009 Earnings Call Transcript
Good morning ladies and gentlemen. Welcome to The E. W. Scripps Company’s first quarter 2010 earnings report. (Operator Instructions) I would now like to turn the conference over to the Vice President, Corporate Communications, and Investor Relations, Mr. Tim King. Please go ahead.
Good morning everybody, thanks to all of you for joining us for this call. We’re going to start this morning with Timothy Stautberg, he’s the Senior Vice President, and Chief Financial Officer and he’ll discuss the first quarter financial and operational highlights. He’ll cover some non-operating data a give you a little bit more color on trends for the benefit of your second quarter and full year models.
Then you’ll hear from Richard Boehne, our President, and Chief Executive Officer. He’ll elaborate on what the recently announced sale of our licensing business means for Scripps. And then as usual we’ll open up the phone lines for your questions. We’ll be joined at that point by the operators who run our local media businesses, that would be Mark Contreras, who’s in charge of the newspaper division, and Brian Lawlor, who runs our television stations. Doug Lyons, our Controller also will be on hand for the Q&A.
Now the commentary you will 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.
If you’re unable to stick with us for the duration of the call you can access a streaming audio replay by going to www.scripps.com and clicking on the Investor Relations link at the top of the page. We’ll have it there later this afternoon and we’ll leave it there for a few weeks. If you don’t have a copy of the earnings release in front of you right now, you can use that same link to find the document and the financial tables.
So with that, I'll turn it right over to Timothy Stautberg.
Thanks Tim, and good morning everyone. The story of the first quarter at Scripps is pretty much the same story you heard from our peers earlier in earnings season. The TV business is rebounding after an unprecedented step function decline in the first half of 2009, and while newspaper remains a business that continues to be challenging, there’s plenty of evidence that conditions are improving in our markets.
Our consolidated revenues in the first quarter were down 3% compared with the first quarter of 2009. About 10 weeks ago we told you that year over year consolidated revenues in the fourth quarter of 2009 excluding political dollars in both years were down 10%. Being down 3% in the first quarter is hardly cause for celebration but you can see why we’re encouraged that the worst of the recession is behind us.
In the first quarter a year ago we announced dramatic steps to reduce our expense line. Those initiatives starting taking effect in March of last year, and have significantly helped our financial performance since then. We’ll talk more later about the expense line for the remainder of the year now that we are cycling against those reductions, but even in the first quarter of 2010 we were able to reduce our costs by more than 13% compared with the first quarter of 2009.
As a result we reported a net loss from continuing operations after tax of $0.02 per share compared with a net loss of $3.84 in the year ago period. Now there’s noise in both of those numbers particularly for the 2009 quarter when we recorded a non-cash impairment charge to write-down the carrying value of the goodwill and other intangible assets at the Scripps television stations, among other items.
The 2010 figure includes restructuring expenses related primarily to our continuing efforts to reset the newspaper model for success on the other side of the secular and cyclical challenges newspaper publishers are facing these days.
Excluding that charge we would have reported net income of $0.02 per share in the first quarter. Digging right into the results all of our TV station operators breathed a sigh of relief as this year started markedly better than 2009. A year ago our first quarter revenues were down 21% compared with 2008, which is why the return to top line growth in the fourth quarter excluding political was cause for modest celebration.
We’re pleased that we have built on that momentum in the first quarter of 2010 with revenue growth of 11% to $67 million. Importantly as the press release noted the momentum built throughout the quarter with revenues up 13% in March. During the first quarter auto advertising was up 65%, retail was up 17%, and services was up 9%.
Our previous earnings call occurred right in the middle of the Vancouver Olympics which generated a nice chunk of incremental revenue for us. Our three NBC affiliates which are in mid sized markets all finished among the top 16 NBC stations in the country in terms of share of total prime time audience during the Olympics.