Scripps Networks Interactive's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Scripps Networks Interactive (SNI)

Q1 2012 Earnings Call

May 03, 2012 10:00 am ET


Mark W. Kroeger - Senior Vice President of Corporate Communications and Investor Relations

Kenneth W. Lowe - Chairman, Chief Executive Officer, President and Chairman of Executive Committee

Joseph G. NeCastro - Chief Administrative Officer, Chief Financial Officer and Principal Accounting Officer

Lori A. Hickok - Executive Vice President of Finance

John F. Lansing - President of Scripps Networks LLC


Anthony J. DiClemente - Barclays Capital, Research Division

Douglas D. Mitchelson - Deutsche Bank AG, Research Division

Alexia S. Quadrani - JP Morgan Chase & Co, Research Division

Eric O. Handler - MKM Partners LLC, Research Division

Michael C. Morris - Davenport & Company, LLC, Research Division

Alan S. Gould - Evercore Partners Inc., Research Division

John Janedis - UBS Investment Bank, Research Division

Michael Nathanson - Nomura Securities Co. Ltd., Research Division

Benjamin Mogil - Stifel, Nicolaus & Co., Inc., Research Division

Benjamin Swinburne - Morgan Stanley, Research Division

David Bank - RBC Capital Markets, LLC, Research Division

Vasily Karasyov - Susquehanna Financial Group, LLLP, Research Division

Frank Poerio

Matthew J. Harrigan - Wunderlich Securities Inc., Research Division

Michael Corty - Morningstar Inc., Research Division

Tuna N. Amobi - S&P Equity Research



Ladies and gentlemen, thank you for standing by. Welcome to the first quarter 2012 earnings call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to our host, Senior Vice President of Investor Relations and Corporate Communications, Mr. Mark Kroeger. Please go ahead, sir.

Mark W. Kroeger

Thank you, Dave, and good morning, all, and thanks for joining us. We'll start the conference call today with comments from Ken Lowe, our Chairman, President and CEO; and Joe NeCastro, Chief Financial and Administrative Officer. Our prepared remarks should take about 20 minutes, then we'll open it up for questions. Also on the call is John Lansing, President of the Scripps Networks' Operating Division; and Lori Hickok, Executive Vice President of Finance.

Let me remind you, if you prefer to listen in via the Internet, go to our website, click on Investor Relations and find the microphone icon on the landing page. Additionally on the page, under the microphone icon, you'll find our first quarter earnings presentation materials that we'll be referring to during the prepared remarks portion of our call. An audio archive will be available on the site later today and we'll leave it there for 2 weeks so you can access it at your convenience.

Our discussion this morning will contain certain forward-looking statements. Actual results may differ from those predicted, and some of the factors that may cause results to differ are set forth in our publicly filed documents, including our Form 10-K.

And with that, I'll turn it over to Ken.

Kenneth W. Lowe

All right, Mark, thank you, and good morning, all. As always, we really appreciate your interest in Scripps Networks Interactive. We just completed a terrific quarter. double-digit growth in advertising revenue, double-digit growth in affiliate fee revenue, double-digit growth in advertising sales on our interactive platforms and double-digit growth in earnings from our key partnerships and the list goes on. All driven by the remarkable power of our lifestyle brands to engage consumers in the deeply meaningful content categories of home, food and travel. Fans incorporate our brands literally into their daily lives, we influence the foods they eat, the homes they live in and the places they travel to, and we're reaching those media consumers around the world by the millions across multiple platforms, television, via the Internet, mobile apps and our successful magazines. That high level of engagement is rare for television networks and that's why our brands are must buys for advertisers and must carries for distribution partners.

Our brands are really ubiquitous, authoritative and consumers rely on us for valuable information and inspiration. In a world about lifestyle, it's what we do, and based on our consistently strong operating results, let's say we do it pretty well.

Our investment in quality, original programming and our commitment to stay on brand is clearly delivering a return and creating value for our shareholders. We've introduced more new series, specials and episodes of breakout hits across all of our networks and the results have been outstanding. Let's review how we're performing by content category, starting with food.

We just delivered the highest rated quarter in Food Network's history with prime time viewing, among adults 25-54, up a very solid 13%. Food ranked ninth among all ad-supported cable networks in the demo and better yet, it ranked fifth for attracting women viewers in the same age group.

Fan favorites like Diners, Drive-Ins & Dives, Chopped, Iron Chef America, Restaurant Impossible, proved their enduring popularity and some of our newer shows performed equally as well, if not better. We are off to a very good start in January with the success of Rachael vs. Guy Celebrity Cookoff, followed by the third successful season of Worst Cooks in America, and we think we found another breakout hit with the Restaurant Stakeout featuring New York Restaurateur Willie Degel.

Now Willie's a no-nonsense and a bit unorthodox approach to fixing troubled restaurants is really proving to make some good and fascinating television. Trust me, he is no wallflower, but it's a great show, I hope you get a chance to check it out. Restaurant Stakeout.

The second quarter at Food Network promises to be just as a strong as the first. In fact, we finished our best April ever. We're already having great success with Chopped All-Stars on Sunday nights and just a few weeks, Food Network Star returns, this time with a surprising new twist, you'll have to tune in to find out what it is. All are powerful programming franchises that stand up very well in the face of some pretty intense competition.

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