UNITED STATES
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) May 13, 2019
THE E.W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
Ohio | 0-16914 | 31-1223339 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer 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 or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Class A Common Stock, par value $0.01 per share | SSP | NASDAQ Global Select Market |
THE E.W. SCRIPPS COMPANY
INDEX TO CURRENT REPORT ON FORM 8-K
Item No. | Page | |
8.01 | Other Events | 3 |
9.01 | Financial Statements and Exhibits | 3 |
2
Item 8.01 Other Events
On May 1, 2019, we closed on the transaction with Cordillera Communications, LLC to acquire 15 television stations for $521 million. Effective January 1, 2019, we acquired the Waco, Texas ABC affiliate and Tallahassee, Florida ABC affiliate from Raycom Media for $55 million.
Due to the effect that these 2019 television station acquisitions have on our Local Media segment, and to provide meaningful period over period comparisons, we are providing supplemental non-GAAP (Generally Accepted Accounting Principles) information to present certain financial information on an adjusted combined basis. The adjusted combined financial results have been compiled by adding, as of the earliest period presented, the acquired Waco, Tallahassee and Cordillera television stations’ historical revenue, employee compensation and benefits, programming and other expenses to Scripps’ historical revenue, employee compensation and benefits, programming and other expenses captions historically reported within our Local Media segment. These historical results are adjusted for certain intercompany adjustments and other impacts that would result from the companies operating under the ownership of Scripps.
Refer to Exhibit 99.1 for presentation of Local Media segment financial information on an adjusted combined basis for the first quarter 2019 and the quarterly periods of 2018.
Item 9.01 Financial Statements and Exhibits
Exhibit Number | Description of Item | |
Local Media segment financial information on an adjusted combined basis for the first quarter 2019 and the quarterly periods of 2018 | ||
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE E.W. SCRIPPS COMPANY | ||
BY: | /s/ Douglas F. Lyons | |
Douglas F. Lyons | ||
Senior Vice President, Controller and Treasurer | ||
(Principal Accounting Officer) | ||
Dated: May 13, 2019
4
Exhibit 99.1
ADJUSTED COMBINED SUPPLEMENTAL INFORMATION
Due to the effect that the 2019 television station acquisitions have on our Local Media segment, and to provide meaningful period over period comparisons, we are providing this supplemental non-GAAP (Generally Accepted Accounting Principles) information to present certain financial results on an adjusted combined basis. The adjusted combined financial results have been compiled by adding, as of the earliest period presented, the acquired Waco, Texas; Tallahassee, Florida; and Cordillera television stations’ historical revenue, employee compensation and benefits, programming and other expenses to Scripps’ historical revenue, employee compensation and benefits, programming and other expenses captions historically reported within our Local Media segment. These historical results are adjusted for certain intercompany adjustments and other impacts that would result from the companies operating under the ownership of Scripps.
Management uses the adjusted combined non-GAAP supplemental information for purposes of evaluating the performance of the Local Media segment. The company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the company’s businesses through the eyes of management, facilitating comparison of Local Media results across historical periods and providing a focus on the underlying ongoing operating performance of the segment.
The company uses the adjusted combined non-GAAP supplemental information to supplement the financial information presented on Scripps GAAP historical basis. This non-GAAP supplemental information is not to be considered in isolation from, or as a substitute for, the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.
The adjusted combined financial results contained in the following supplemental information is for informational purposes only. These results do not necessarily reflect what the historical results of Scripps would have been if the acquisitions of the Waco, Tallahassee and Cordillera broadcast operations had occurred on January 1, 2018. Nor is this information necessarily indicative of the future results of operations of the combined entities.
The adjusted combined financial information is not pro forma information prepared in accordance with Article 11 of SEC regulation S-X, and the preparation of information in accordance with Article 11 would result in a significantly different presentation.
1
Local Media segment Adjusted Combined segment profit
2019 | 2018 | |||||||||||||||||||||||
(in thousands) | Q1 | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||
Segment operating revenues: | ||||||||||||||||||||||||
Core advertising | $ | 136,662 | $ | 143,022 | $ | 148,188 | $ | 133,521 | $ | 141,914 | $ | 566,645 | ||||||||||||
Political | 1,112 | 3,137 | 21,678 | 54,733 | 109,704 | 189,252 | ||||||||||||||||||
Retransmission | 96,046 | 83,372 | 86,748 | 91,446 | 90,929 | 352,495 | ||||||||||||||||||
Other revenue | 4,214 | 3,186 | 3,504 | 3,517 | 3,047 | 13,254 | ||||||||||||||||||
Total operating revenues | 238,034 | 232,717 | 260,118 | 283,217 | 345,594 | 1,121,646 | ||||||||||||||||||
Segment costs and expenses: | ||||||||||||||||||||||||
Employee compensation and benefits | 87,863 | 88,498 | 85,660 | 86,309 | 90,548 | 351,015 | ||||||||||||||||||
Programming | 68,728 | 61,824 | 61,815 | 65,564 | 64,584 | 253,787 | ||||||||||||||||||
Impairment of programming assets | — | — | — | — | 8,920 | 8,920 | ||||||||||||||||||
Other expenses | 38,178 | 38,950 | 41,670 | 41,414 | 48,815 | 170,849 | ||||||||||||||||||
Total costs and expenses | 194,769 | 189,272 | 189,145 | 193,287 | 212,867 | 784,571 | ||||||||||||||||||
Segment profit | $ | 43,265 | $ | 43,445 | $ | 70,973 | $ | 89,930 | $ | 132,727 | $ | 337,075 | ||||||||||||
Non-GAAP reconciliation
Below is a reconciliation of Scripps historical reported revenue and segment profit for its Local Media segment to the adjusted combined revenue and adjusted combined segment profit for the Local Media segment with the 2019 television station acquisitions.
2019 | 2018 | |||||||||||||||||||||||
(in thousands) | Q1 | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||
Local Media operating revenues, as reported | $ | 203,387 | $ | 192,059 | $ | 213,248 | $ | 230,734 | $ | 281,439 | $ | 917,480 | ||||||||||||
Waco/Tallahassee TV stations acquisition | — | 6,068 | 6,174 | 6,190 | 6,805 | 25,237 | ||||||||||||||||||
Cordillera TV stations acquisition | 35,480 | 35,166 | 41,283 | 46,884 | 57,942 | 181,275 | ||||||||||||||||||
Other revenue adjustments (1) | (833 | ) | (576 | ) | (587 | ) | (591 | ) | (592 | ) | (2,346 | ) | ||||||||||||
Local Media adjusted combined operating revenues | $ | 238,034 | $ | 232,717 | $ | 260,118 | $ | 283,217 | $ | 345,594 | $ | 1,121,646 | ||||||||||||
2019 | 2018 | |||||||||||||||||||||||
(in thousands) | Q1 | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||
Local Media segment profit, as reported | $ | 34,173 | $ | 31,619 | $ | 53,368 | $ | 67,416 | $ | 98,716 | $ | 251,119 | ||||||||||||
Waco/Tallahassee TV stations acquisition | — | 1,770 | 1,905 | 1,893 | 2,265 | 7,833 | ||||||||||||||||||
Cordillera TV stations acquisition | 7,925 | 8,632 | 14,287 | 19,212 | 30,338 | 72,469 | ||||||||||||||||||
Other revenue adjustments (1) | (833 | ) | (576 | ) | (587 | ) | (591 | ) | (592 | ) | (2,346 | ) | ||||||||||||
Acquisition synergies | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 8,000 | ||||||||||||||||||
Local Media adjusted combined segment profit | $ | 43,265 | $ | 43,445 | $ | 70,973 | $ | 89,930 | $ | 132,727 | $ | 337,075 | ||||||||||||
(1) Primarily reflects reduced retransmission revenue from CW affiliates under Scripps retransmission agreements in effect during each period.
2