SSP - Earnings call transcript Q3 2018 | The E.W. Scripps Company

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Scripps Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As reminder, today's call is being recorded. call Micheli. your the Investor VP turn Carolyn Relations, now over host, to for I'll ahead. go Please

Carolyn Micheli

Thanks, Kevin. Company's differ them everyone. call results of SEC results. Good may morning, our reminder are and The a us A that statements filings. E. outlined discussion webcast for differ. include in W. and our Factors to Scripps that third forward-looking XXXX Thanks quarter conference for actual joining cause may

can scripps.com more You information. visit for

Officer, we Lisa We'll sign disclose is Treasurer, Doug listen and Financial can to SVP, morning up you replay President Chief Media emails anytime Knutson; from Executive Lyons. information, Officer, Controller also National can and Also financial You to Local room President, of Lawlor; Adam Tomlin; receive and the this Scripps' hear Brian Chief Laura audio an call there. and this Symson. Media in

Now, here's Lisa.

Lisa Knutson

we're news. results radio lot three political Good third significant we've broken record terrific realized and morning, a advertising acquisitions, quarter. closed the our meeting, mid-term revenue, everyone. we We've announced last and we nearly delivered of for on Since strategic divestitures, our

also accelerated share and a pension an We plan. annuity plan repurchase completed purchase

by blocks our the value, create high-growth $XXX remaining These television measurement from acquisitions. of plans while to businesses, for stations -- Triton, portfolio the and that, the building long-term on leader million. in purchase Early infrastructure reviewing we our we digital announced $XX for local quarter, and with and million. audience announced separate are our services performance. Few high-growth for Cordillera improving Gray Let's weeks short-term by strategic of markets acquisition focused start is we shareholder XXth, to high-ranking broadcast the announced those XX stations TV after while $XXX Raycom buy in two from On strategy million. audio acquisitions October Communications in complementary

not done believe acquisition time, same yet. to and we've it's we few assets At been we're a been weeks busy front, adding the the On certainly portfolio. our

radio is Lotus our final of $X mid-December. We have to sale million. planned on smallest three with four expected is The in divestiture. remaining close transaction closed Communications for The about the

$XX.X in As fourth which a of quarter. are proceeds the the being collected all is million, total reminder,

to we the Tuesday with results now And on will $XXX give I'll political discuss color political election our Turning was XXXX season far, advertising the XXXX a Scripps' our XXXX. in above quarter results, a and record revenue. moment. for financial concluded more political results. level on by a third a million XX% That mid-term you in Brian

as upward less well subscriber expected revenue, due daytime original contract producing rate Pickler retransmission in an -- platform, the over-the-top base saw XX%, On on are mid-term on primarily driven a of Local at $XX for XXXX We million third presenting division, segments. our by $XX quarter third both That figure of the last at advertising political up another quarter pro QX over strong of performance up as momentum continued we our million. quarters revenue was XX% our television as and QX quarterly was beat programming In third basis the XXXX Media X% $XX the well both were million forma Ben. to on step-ups. the show as Media revenue. General Election & year, network of our the Expenses up fees, for cost as Local than increasing some

If X%. than down our expenses you expenses, more all were out of the programming back increased

million Division That includes expenses revenue to million, third beat $XX of primarily division, acquisition quarter Turning from October quarter a X, from its the million, Networks, from Media third on Media $XX driven $X.X $XX last again, million yet. XXXX. National million over best increase Katz of were the and Katz Newsy. quarter guidance. $XX once delivered $X.X Stitcher year of The National The completed nice QX was Midroll, Networks division the by segment profit million. was

incurred corporate a $X our $X restructuring, of million ongoing about to year-to-date. little Turning third costs under million we quarter in and the

to The are coming restructuring downward majority beginning charges We system charges expect remaining the year. next early of some efficiencies. trend from these implementing

are realize $XX savings Media We originally million cost than Corporate in of to annual still Local planned. on track and had quickly more our we

dividend or FCC which million. be XXth, fully operations million Newsy. million. by For expect the was which income the we $X payments the in ongoing costs, That to we $XX of totaled August related capital be also agreements to accelerated $XX Outside an of for to normal government. On includes A our some to expect buildup we rate Company common X.X cost quarter, per shares the return one-time repurchase XXXX. million share. will office third about we Year-to-date, $X repurchase run and about from XXth, made have Stitcher reimbursed, $X.XX includes expenditures into repacking On Class totaling continuing process, $XX $XX share September shares. million. our And repurchased million entered CapEx reimbursed federal It million to for repacked

Board's Life initiation million our purchased liabilities part shareholders. group transferring contract the returning a to to our Xth, of And annuity MassMutual on Insurance. of commitment Our of a to capital $XX Company is dividend continued November last winter pension

year. mid-term was totaled million pension and in debt $XX We conclusion $XX of fourth the settlement in net XXth, our of $XXX will million September one-time, we $XXX more $XXX had charge this million, and non-cash quarter of and at our million On elections, on million recognize a than the between hand. cash cash

a stations, at of the XX pro forma Scripps Cordillera, about stations, early projected of acquisitions on planned radio our and leverage be as as time stations to X.X trailing close XXXX. times. ratio well That's Cordillera the divestiture the following that and quarters basis TV in the Raycom Finally, eight Triton the

results. Brian here's Local Media our discuss Now, to

Brian Lawlor

the different we just very Thanks, Lisa. a In station we'll a today. few looking than Good one at morning, everybody. portfolio months, television Scripps' own that's be

is closed years, these XX with bought recent acquisitions, When a plan period XX and Looking stations stations stations. TV stations Scripps our markets portfolio. television Cordillera emerge on only we're addition Communications acquiring stronger in country, with long-term across and station this consistent five two the repositioning more from back of from durable owned stretching Raycom of we our stations. XX The to XX

We will rank the Number own X station third a markets. in our of

XX increase affiliations. Texas consist markets And stations where FOX we will Scripps up two all We number XX the political diversify deeper will far brands. seven for NBC our well footprint new year. than of XX% And X in stations, speaking will Texas further of also bolstering nine in the benefiting Cordillera Number strong California the will Kentucky, political, Christi ABC ABC we $XX Florida community advertising affiliate with performance Corpus this be The the of of brought existing stations, important Florida, of operate us Colorado, our a and operate as affiliations. experts. local Tallahassee. as and CBS the portfolio and stations not will CW ad new The reach nice with network and of very our stations, Louisiana, state. the households the two we'll footprint. politically sales revenue to from strong Denver. of already own and the fast-growing time, station in the first this million We'll in important Scripps' stations we our an start affiliate addition states the Colorado pick in we a In giving of in more guidance will addition a be on Waco Montana station Tallahassee, Springs, the ABC And of in in will from in political political political our With station ABC stations

the television new portfolio. performance the margin improve to our broadcast importantly, cash stations strategies flow our More and of will advance operating profile,

very bring fold. these the are to We pleased into stations

the big news to Turning quarter. for the other

election sales, Our us unique to opportunity. this maximize approach to positioned political year's perfectly

That's million in year, during took over $XX.X just XX% And XX% we fourth increase that the beat of against For XXXX's full quarter easily mid-term's XXXX our we an total, in revenue. quarter, in $XXX took for QX of election. advertising higher we also not and year. political fourth brushed the election our XXXX% than did pro the up past Presidential the general million forma we election

all that our U.S. Senate hot the races. of large of As number contested races competitiveness We a XX the the it's Governor's markets. stayed about and competitive in races throughout country, we the XX the Of had footprint say, and the tightly had always across season. election Scripps

go dollars down We the coming were very big XXXX million fourth Keep in in money dozen short also a over in the our all races through than had of going $XX.X lot quarter from and House XX states. million did core a highly amount competitive is footprint pipeline more our And saw in advertising and $XX the valid states. in mind, a of X time. U.S. We XX%. of initiatives

Because advertising to the along, advertisers was So, in economy. last day, yes, closely TV our up our our significant That's revenue the been dollars. our corresponds drive to and for the quarter margins. third performance. we've national heck inventory that a Main there local total said ad displacement of working quarter. all have the local we're over help Street meantime, our In was manage At of ad of maximize the we dollars political end exchanging and third with teams XX% sales a maintain partnerships the

business the to serving quarter fourth getting forward needs of local to national of of Now important the and we're advertisers. looking and the our the rest back

Finally, the I about Networks. want to Katz talk

rest hitting quarter to their Laura Katz, National strong division and XXXX. continues discuss advertisers Laff. the They our Bounce, performance. the over expected quality surpassed And QX expand Escape Katz of once continue consumer rates, its XX% brands; to here's again, growth attract audience expectations. Media of During Grit, to and now, distribution new to and growth exceed the revenue

Laura Tomlin

Good Brian. everyone. Thanks, morning,

significantly the through expand our portfolio we television and division. diversifying our we station improve growing National Media revenue operating and the As are local simultaneously margins, Company

long-term growth on division is emerging will in while drive that the Company. on These As a for reminder, businesses and operating scale, growth marketplaces. capitalizing near-term businesses focused value this

capitalizing consumers Katz, measurement major is the fits In the Newsy. Pandora. to of maintain. including and good way digital we NPR, monthly. advertising to National XX% its to into with States that will be fees listen is itself, audio Americans clear, not plan -- on programming. listening are many of and infrastructure the which recurring services revenue Triton operating publishers. has measurement significantly long-term segment to and rather and still audio media along and margins, music newest Spotify is changing alone, United tied iHeart, infrastructure The our of services. the It other businesses to to To leader Media Triton contracts strategy, streams perfectly contribute audio spoken-word the from acquisition, Stitcher publishers, our and charges profitability audio audience for Our it digital business in Triton, national brings Triton very Triton

acquisition close expect We end to on of the before the this of year. Triton

to Turning our financial quarter third results.

now year the we have strong podcast division's business. more revenue the link as to release, Newsy. growth market XXX% partners our Stitcher, our and large listener-focused to overall chain. firm, our and Katz, we value Stitcher the content a our profitability. the performance growth of entirety In rep network, In the These continues rebranding has agreements content brand premium our podcast you year-over-year exceed increased advertisers. also umbrella of is to Oprah, the At key business, business includes Stitcher the podcast Stitcher quarter. contributed every as as and addition revenue the a XX% sell at third a growth underwent at general the their ownership well app. during to throughout course, strong renew and case businesses than expectations in Stitcher missed growth such press of a subscription with for That continued name the in represents of

sales general podcast more helping Stitcher this the major revenue advertising. of our market advertisers quarter is a effectiveness from was fact, than half and In ad brands from of renewals. these podcast that came brand of understand quarter to

on a number fronts. Turning forward to are we moving of Newsy,

over-the-top these and out of this We our viewers news on of platforms cable such in are consumers OTT. drivers the ability on end revenue Meanwhile, of XX The to Amazon our growth by target revenue platforms our one as our drive as year. in overall on is growth to significant households Fire. target Roku continues ads specific to million of closing seek the younger

To viewers, station, number local its key voter an allowing make the was for nation, this Newsy TV with audience regions platforms. live reporters the coverage with election races. were was had Tuesday XX all network. updates Scripps young for and to a Included hours share coverage moment in milestone its of live its Finally, on Newsy informed, from Newsy important at day many sentiment that a sure objectively of in

incumbent Newsy company focus issues providing build to so to journalism, our with to committed fair understand it's perspective, Like Adam. a now, trust As them. audiences. continues the uncompromising teams, local reporting, us to context intelligent, that and upon and news better most they here's matter viewers And our with can on

Adam Symson

be Thanks, you the which we performing to to recognized done been cutting. effective A company And we well, to pretty efficient, Laura, performance stronger profile, for doing some the needed operating long-term margin since a Companywide ago, it more set be to good -- table changes, we've To Scripps for a everybody. short-term while at busy be necessary also we refocusing improving included that. the our done more laid growth. out We reorganized by plan been higher media and local Company needed just urgency. here then, morning with told and year and it's the work create and cost

heard, just of annuitize you plan earlier and term better As we we refinanced existing at this our the B rates. our loan year, pension portion

and and television covering the that we face. it radio media the we subsequently I'm in And review depth of I'll expand purpose and business committed television to markets. local business. stations scale intensive of to adding an our fit the exit all local will XX assets, XX our acquisitions announced Following to our portfolio blue to say until moved of more

to near-term recently first, our segment, announced We national of addition the Katz markets, in into value creation, committed while are performance we fast-growing our new through improving as most the our so to investments and long-term as continued we've the our are expanding acquisition Networks Triton. of and with

million XXXX We our segment expansion. expect revenue with by continued more than margin National to of generate $XXX

repurchase year, initiated consistency return moves to our policies. these regular we And that of capital paying of dividend an share dividends, program of speaking this and bring All executed greater quarterly now dividends. are earlier accelerated to

questions. on this, we're relevant as see all now, done there's we're expect is my Even we're better-performing we be be going ready realizing our to journalism from more results, to for do. company. operator, media of tangible one away path we you'll and hope take that there say If more thing stronger, to I and do work what to a And is

Operator

go Craig First the is you. Thank Huber ahead. [Operator Huber, question from Instructions] of line Research. Please

Craig Huber

earlier the Yes, us, auto. missed part on hear. few curious it a tough I but know be can morning. to out just particularly I of the of the good you minutes call, with here, I Brian, update crowding guess, on your thoughts would it's

doing trending the it's themes how well? the also pay think as election TV here your after I are after and advertising election

Brian Lawlor

morning, It's Craig. Hey, Brian. good

our a quarter Third talking quarter of categories. million, of political reporting all obviously, then advertising $XX fourth $XX and our it about performance obviously, had million impact over on major

really any it's apples-to-apples So to hard analysis. kind do of

past, so a for seen consistent out, not that's kind building. quarter, the points see then lot but so in maybe we write, quarter bad. I to what fourth all we've the crowding good Third guess, still is quarter And of what was of with considering

was by December. October political, so than there. was down in obviously, November good influenced auto and it's down So a in bit down less But that less heavily

were really pace the million $XX that ended we political right political for mid-day quarter. But consistent I ads displacement, course, we with pacing back maximize opportunity the and as TV to significant we advertisers, really And think get Tuesday our that. seize soon those as So building. we means, on see to we regular that's of ready in with last Again overall the for of weeks see fourth building. quarter but five had

write, with quarter, early be so I have work December, again, still hopefully, and to look So building, as we business toward a healthy. that's we in lot as and we to of it's especially categories, the forth. will work auto come a quarter see other But and we deals year-end

Craig Huber

advertising, the overall the advertising flat, December, down bookings for on look versus like year think you a as up, ago? it you Do is Brian, TV at

Brian Lawlor

ago. I think last was coming fourth election in I with ago, think and soft two years of then year. off quarter line year they're it's a relatively it Craig, where kind of

political, it's surpass we probably telling think or the in us because just again, of be be So the that. behind should a even but are able to bit that little line trends I

Craig Huber

And this discount? also XX% then Brian, the we'll you what're while here, thoughts with timing the have FCC and deal your of on the updated cap change ownership UHF potentially

Brian Lawlor

wish not that I good the gave little knew getting point. ruling that I'm and there rule happens UHF the do that's the the belief to was changed FCC I think back that. is Once go a rule was it take to, at it ruling, that something discount XX% that prior happened, it's FCC on that a the is court I not going a probably answer. Yes, change XX%, time ready the on sure that that that they My to to this look. cap increasing somewhere my didn't they question. to some settle I bit, I'm think year, that do the and in this FCC important national and like rush, understanding I think are sure

I to the see don't to to month meeting I they're on really on agenda see think there. FCC at hard docket I -- timing. it, be it's don't going know I wait looking what like if Every is their but the out you,

Craig Huber

also, you stuff. can't more do that lot now more -- control? here guys for at of you feel for I is it here? go and you the wasn't take mean, prior the the a to lot obviously think mean do here, guys your mean a then the you maybe a management on stuff cost cost I go have And doing cutting to focus there's you up Okay. picked Company I much right --

Brian Lawlor

speak and two centralization aggressive these last of included I costs through years the helping to people, other obviously of lot of very standardization I of taking went Local period out part. We our rule, That a Craig, operation. $XX a million of can Media functions. out

So we and think think of it and about have Tallahassee in them I margins. think to efficiency expectations effectiveness we're more our the creating making bring I Obviously, are as that's that our costs I'm surpassed allowing to are with pleased our improved content, we'll here I generating don't from support which and you sure certainly Waco for to committed stations on drops at that in other a resources that, revenue all put team other But operation. benefit all that will streamlined management so to and excellent see and that. look and

Craig Huber

my updates is, think subs XXXX. I final XXXX, percent just re-trans the the question renewal on XXXX, for of in us up

Brian Lawlor

Yes, but great a couple done. most got left this I guys subs to we're but up, think three step-ups years. subs for if that over out for now Craig, were seen XXXX, about so we're of XX% XXXX, of We've I digits XX% step subs. up next of be rate mid-single the you guide In will just we you've and year, should -- in just then of on our step-ups about our have 'XX.

Lisa Knutson

include in a subs, that XXXX the just XXXX. reminder really which the And hit Comcast step-ups

Brian Lawlor

in are the year of Yes, other middle 'XXs maybe of are half the end and of at year. the the half the the

Craig Huber

think mid-single over you Roughly said. I XX%, XX% just digits in

Brian Lawlor

That's Yes. correct.

Operator

the line go of Research. Wolfe is Please question the Ryvicker, next from Marci And ahead.

Marci Ryvicker

then focus and initiatives that Triton, segment on be minute can year, how next Can XXXX the maybe spend and should your National we without in and talk margins have thinking with we both many about in in the and Triton? moving maybe pieces, also with about without so a segment, going you and --

Adam Symson

Adam. it's Marci,

continue top continue we've provided the that said in organically what haven't you we the we that of know guidance. on past pursue We Triton to to is expansion and now margin -- I layer acquisition.

is other would we The add shared. thing I recently

north segment, of to Triton our with businesses during And the we Triton, the the strategies by generate we in think organically expansion. margin million consistent of expect the XXXX. including for that able be National I expect station, that to collection to be $XXX acquisition,

Marci Ryvicker

last the out conference said on think earnings, but you had not couple in a to not then, I you Adam, call, then, you additional And count since transactions.

question, you that then opportunistic equity the if to use post to is, are I've were willing along? comment gotten, come So something

Adam Symson

Yes.

is I using to those to certainly think as more, our a continue then, count we a we've sheet flex employ. little We bit be we think would willing said So as might out. tools. Certainly well balance don't of have be ability us equity that to variety what of that one the

Marci Ryvicker

Okay do you especially at question, my anything then about levered going the XXXX? balance last sheet you times. think are X.X outside and How opportunistic, of into

Lisa Knutson

We are. Marci, Lisa. we it's where feel about good

look we Triton a blended Comcast in or to have know expect XXXX, and on the we in Cordillera close see basis You early XXXX. we to a step-ups de-lever, coming and path

really really clear did and in XXXX. some the high be see XXXX, so, to we number political in would we path so And a what from early -- -- de-lever that of

Operator

question of the is from Stephens. line next Kyle Our ahead. Please go from Evans

Kyle Evans

with Thank that in that we today could just any start National XXXX, questions. you that Maybe couldn't get line revenue gauntlet organic you that period? to down you margins time reason for with is the for on think business over the Local million where taking $XXX threw my

Adam Symson

an call. as think obviously, I margin on Look, expansion, are earlier I I said we pursuing mean,

the to any an For a growth basis. that it support really the that in requires growth. basis line. through what perspective, growth a can there a fast doing now that those mode a earlier get now, to we're expense doing investigation. continued we think Obviously, deeper us I eventually a merits right is right that's see continue Obviously, high-growth revenue happens expect are a growth the in couple outpace, stages the contributes that investment. we annual segment on to revenue outpace bottom these What to from handsomely Where run is and and fostering businesses goal, margin to of we're of quarter-by-quarter

Kyle Evans

drivers. contribution ad out rates and of the about distribution tease rate the of Katz, the you three as the XX% On audience independent details of Could rate, talk and of expansion kind growth variables? those growth kind release XX%

Brian Lawlor

of it's Kyle, it's them all together. Brian, working of kind

of So grown each now both They networks X% and Grit U.S. distribution, of Escape and at XX%. XX% highest a Laff the XX% is are households. is terms in Bounce over at one XX%, the year. to of X% then have

opportunity there. lift to some there's So

is that, for further some give opportunity to distribution addition and In lift. cable just some duplicative on a that, would Ratings things have visibility. satellite there continue it like and nice which to

year Laff. here the year. the So up portfolio and growth, in performing the I XX% we significant ratings, And to XX Adults upfront. growing prior now. a -- to to that fastest double-digit We is XX obviously just We our up in biggest growth all Laff really at hands rolls to XX, this is broadcast the you double-digit quality XX off but see would programming. We're got continue And were think being adults up hit came of network with revenue over be -- its compared finished the very just strong the of of we on growth up real the is last ratings that. statement, XX% had we year. up Laff XX, television, on where to network to fronts the calendar is a fronts terms we've well. grow then XX

from ABC Disney the program in Bounce, last week launched distribution. Laff had -- Improvement acquired launches Home on network. next It's the the most-watched which Scandal, have quarter. we We

There's with but kind lot September. there. fine-tuned that's the in that really things they've everything all in of space a boxes one a driving thing engine on we're SVOD Comcast that XX launched Brown growth, working happening, and together the really not Sugar it's of and built there's it's that So good

Kyle Evans

goal it's to you progressed ads early longer-term more business? of that know but response I general innings, the market, has direct since to how transitioning the acquired

Brian Lawlor

behind the larger one Again, high got equation a in of that a successfully and that ahead. are continues traditional talked any But that the has in the model audience, has continue the to has and -- way energy Grit a so -- four-year the as the Escape talked is other a the revenue, lot ones of networks is and every built Bounce runway and about share Escape of momentum move upfront, really it. there really as from of general Laff market ad Laff but the more to and advertisers, about around DR the out -- blue-chip one's that from Grit we've that's Laff, past, I part benefit advertising. networks, of distribution will on around network, gain Laff

that's as a well. of lot driving So that

Kyle Evans

-- is markets And goal XXX% just small of too kind or reached distribution to are that are matter? the you you've

Brian Lawlor

are to revenue, distribution. get don't with don't a There you revenue but I increased been things ever moving XX% XX% general upside look, advertising. drive significant you but over of to so able country so. think our we that if Yes, we many where at, -- and of mid we're to get because revenue hit said, the to fact that market just if the ratings, you deployed 'XXs, what XXX% increases kind are because increased again, exactly of of There's we've now, -- think I know we double-digit stop at plateau XX%, or

Kyle Evans

If -- years continues, three mind? it to just over years, that taking -- five call plus XX% and in where if you the let's dollars your growth from next are what rates the you

Brian Lawlor

a of Well, all national are we're new But those against don't national the that the competitive Local anywhere we all different buckets us tapping out marketplace of against dollars cable, the and coming so a coming where against syndication into cable, national Media of for it's them very of network space, are segment. we're syndication, that's National within else realize dollars none bucket competing in advertising money. so networks, who Local, national these we're against from TV,

Operator

[Operator have questions time. Instructions] further at this We no

Lisa Knutson

Kevin. Thank you very much,

You info. back the can provide call

Operator

Eastern replay that's and Ladies AM XX:XX conference today XXth, midnight. and you. Time. this We'll run starting be through November Thank gentlemen, available for will at

the dial access AT&T International the code XXX-XXX-XXXX at XXXX-XXX-XXXX XXXXXX. dial may access XXXXXX. You code may code callers executive area service with replay with the

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The E.W. Scripps Company (SSP) 9 Nov 182018 Q3 Earnings call transcript