SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
Date of report (Date of earliest event reported) October 9, 1997
THE E. W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
Ohio 33-43989 31-1223339
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
312 Walnut Street
Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 977-3000
Not Applicable
(Former name, former address and former fiscal year, if
changed since last report.)
THE E. W. SCRIPPS COMPANY
INDEX TO CURRENT REPORT ON FORM 8-K DATED OCTOBER 9, 1997
Item No. Page
5. Other Events 3
ITEM 5. OTHER EVENTS
The E. W. Scripps Company's third-quarter income from
continuing operations moved up 16 percent to $27.4
million, 34 cents per share, from $23.7 million, 29
cents per share, in the year-ago quarter, excluding an
unusual gain from 1997's results.
On August 24, Scripps traded its newspapers in Monterey
and San Luis Obispo, Calif., for Knight-Ridder's paper
in Boulder, Colo. The disposition of the two California
papers resulted in an after-tax gain to Scripps of
$11.1 million, or 14 cents per share.
Consolidated operating cash flow (operating income
before depreciation and amortization), excluding
divested operations, increased 10 percent to $67
million in the third quarter, and operating income
moved up 12 percent to $49.4 million.
Home & Garden Television, the company's wholly owned
cable network, had a modest effect on third-quarter
results, reducing net income by $1 million, or
1 cent per share, compared to $3.3 million, 4 cents per
share, in the year-ago quarter. Now in its 34th month
since launch, HGTV reaches 31 million U.S. homes and
has commitments for carriage to an additional 4 million
homes.
"Home & Garden Television's advertising growth
continues to exceed our expectations, which translates
into lower than expected hits to our bottom line," said
William R. Burleigh, president and chief executive
officer. "In the newspaper and television markets, the
demand for advertising space and time continues to be
strong.
"In the coming weeks, we expect to complete the
purchase of six local newspapers, as well as the
expansion of our cable network operations through
acquisition of the controlling interest in The Food
Network. These are key steps in our long-term plan for
building shareholder value," Burleigh said.
As previously announced, Scripps will spend a total of
approximately $700 million to acquire six newspapers in
Texas and South Carolina from Harte-Hanks
Communications and 58 percent interest in The Food
Network from Belo Communications.
NEWSPAPER RESULTS
(Excluding divested operations in Monterey, San Luis
Obispo and El Paso; including the Boulder Daily Camera
since Aug. 24, 1997.)
Operating cash flow increased 9.7 percent to $44.4
million. Newsprint costs increased 4.2 percent to $29.5
million. Newsprint prices were 7 percent lower, but the
difference was more than offset by an 11 percent
increase in usage. Year-over-year newsprint costs are
expected to increase approximately 15 percent in the
fourth quarter.
Total newspaper revenues moved up 9.8 percent to $169
million. Assuming the Boulder newspaper had been owned
for the full quarter in both years, revenues would have
increased 8.1 percent. On that same pro forma basis,
advertising revenues increased 8.1 percent to $128
million. Broken down by category:
Local retail increased 4.6 percent to $49 million;
Classified increased 11 percent to $56.9 million;
National increased 12 percent to $5.3 million;
Preprint increased 5.9 percent to $16 million.
Circulation revenues were unchanged at $30.6 million.
TELEVISION RESULTS
Revenues, at $76.9 million, were up 3.5 percent over
the year-ago quarter. Local advertising grew 6.2
percent and national grew 12.9 percent, together more
than offsetting the sharp decline in political
advertising, which totaled only $400,000 compared to $4
million in the third quarter last year.
Cash operating costs rose 6.9 percent and operating
cash flow decreased 2.7 percent to $25.7 million.
ENTERTAINMENT RESULTS
Revenues for the division moved up 22 percent to $33.5
million and operating cash flow was $900,000, compared
to a loss of $1.7 million in the year-ago quarter.
At Home & Garden Television, revenues jumped from $5.4
million last year to $13.5 million and cash operating
losses were $900,000, compared to
$4.9 million last year.
The network can be seen on cable television systems in
all 50 states and is available to subscribers of
DIRECTV, EchoStar and C-Band satellite packages.
Internationally, HGTV/Canada will launch Oct. 17
through a partnership with Atlantis Communications of
Toronto. Additionally, HGTV's programming can be seen
on host networks in Australia and Japan, and in Europe
on NBC's Superchannel.
At United Media, licensing revenues decreased 4.7
percent in the quarter to $12.5 million.
YEAR-TO-DATE RESULTS
(Excluding unusual items.)
Net income improved 28 percent to $96 million, $1.19
per share, from $75.1 million, 93 cents per share, in
the first nine months of 1996.
Consolidated operating cash flow rose 20 percent to
$226 million, excluding divested operations.
The E. W. Scripps Company operates nine television
stations; newspapers in 14 markets; a licensor and
syndicator of news features and comics; two television
production companies; and a 24-hour cable network. The
company has also announced agreements to acquire the
newspaper properties of Harte-Hanks Communications,
Inc. and Belo Communication's interest in The Food
Network.
THE E. W. SCRIPPS COMPANY
(in thousands, except per share data)
Three months ended Sept. 30, Nine months ended Sept. 30,
1997 1996 % 1997 1996 %
Operating Revenues:
Newspapers $ 168,967 $ 153,882 9.8 % $ 505,389 $ 460,455 9.8 %
Broadcast television 76,905 74,325 3.5 % 236,730 230,250 2.8 %
Entertainment 33,455 27,455 21.9 % 113,107 77,274 46.4 %
Total 279,327 255,662 9.3 % 855,226 767,979 11.4 %
Divested operations (a) 6,854 9,821 27,177 29,073
Total operating revenues $ 286,181 $ 265,483 7.8 % $ 882,403 $ 797,052 10.7 %
Operating Cash Flow:
Newspapers $ 44,433 $ 40,522 9.7 % $ 144,689 $ 117,463 23.2 %
Broadcast television 25,666 26,374 (2.7)% 88,683 87,470 1.4 %
Entertainment 851 (1,670) 4,468 (4,069)
Corporate (3,932) (4,343) (11,991) (12,650)
Total 67,018 60,883 10.1 % 225,849 188,214 20.0 %
Unusual item (b) (4,000)
Divested operations (a) 580 1,618 3,523 4,656
Total operating cash flow 67,598 62,501 8.2 % 229,372 188,870 21.4 %
Depreciation and amortization 18,023 17,256 4.4 % 53,585 51,726 3.6 %
Total operating income (c) 49,575 45,245 9.6 % 175,787 137,144 28.2 %
Interest expense (2,300) (2,713) (7,350) (6,350)
Net gains and unusual items (a) 20,981 20,981
Miscellaneous, net 914 291 1,395 614
Provision for income taxes (29,668) (18,331) (80,873) (56,603)
Minority interests (924) (841) (2,760) (2,326)
Income from continuing operations 38,578 23,651 63.1 % 107,180 72,479 47.9 %
Income from discontinued operation - Scripps Cable 12,268 34,645
Net income $ 38,578 $ 35,919 $ 107,180 $ 107,124
Per Share of Common Stock:
Income from continuing operations $ .48 $ .29 $ 1.32 $ .90
Net income $ .48 $ .45 $ 1.32 $ 1.33
Weighted average common
shares outstanding 81,032 80,473 80,969 80,328
Excluding the effect of unusual items:
Income from continuing operations $ 27,431 $ 23,651 16.0 % $ 96,033 $ 75,079 27.9 %
Income from continuing operations
per share of common stock $ .34 $ .29 17.2 % $ 1.19 $ .93 28.0 %
(a) In the third quarter the Company traded its newspapers
in Monterey and San Luis Obispo, California, for the
newspaper in Boulder, Colorado. The trade resulted in
a gain of $21.0 million, $11.1 million after-tax ($.14
per share). The Company's newspaper in El Paso will
cease operations after October 11, 1997. Operating
results for the Monterey, San Luis Obispo and El Paso
newspapers are included in "divested operations."
(b) In the second quarter of 1996 the Company incurred an
unusual charge of approximately $4 million, $2.6
million after-tax ($.03 per share), the Company's share
of certain costs associated with restructuring portions
of the distribution system of the Cincinnati joint
operating agency.
(c) Operating income by segment is as follows:
(in thousands)
Three months ended Sept. 30, Nine months ended Sept. 30,
1997 1996 % 1997 1996 %
Operating Income:
Newspapers $ 34,255 $ 30,789 11.3 % $ 114,813 $ 90,303 27.1 %
Broadcast television 19,512 20,522 (4.9)% 70,359 67,999 3.5 %
Entertainment (185) (2,618) 1,337 (6,847)
Corporate (4,208) (4,581) (12,800) (13,435)
Total 49,374 44,112 11.9 % 173,709 138,020 25.9 %
Unusual item (b) (4,000)
Divested operations (a) 201 1,133 2,078 3,124
Total operating income $ 49,575 $ 45,245 9.6 % $ 175,787 $ 137,144 28.2 %
(d) Operating results for HGTV, included in the Entertainment segment,
are as follows:
(in thousands, except per share data)
Three months ended Sept 30, Nine months ended Sept 30.,
1997 1996 % 1997 1996 %
Operating revenues $ 13,497 $ 5,429 148.6 % $ 36,092 $ 15,428 133.9 %
Operating cash flow (900) (4,934) 81.8 % (4,378) (11,067) 60.4 %
Operating income (1,405) (5,335) 73.7 % (5,844) (12,207) 52.1 %
Net income effect (1,002) (3,287) 69.5 % (3,891) (7,520) 48.3 %
Net income effect per share $(.01) $(.04) 75.0 % $(.05) $(.09) 44.4 %
SIGNATURES
Pursuant to the requirements of the Securities and
Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE E. W. SCRIPPS COMPANY
Dated: October 9, 1997 By: /s/ D. J. Castellini
D. J. Castellini
Senior Vice President,
Finance & Administration
