07 November 2016

Full release with financial tables here.

Third Quarter 2016 Financial Highlights:

  • Consolidated operating revenues of $803.1 million, a 3.5% increase;
  • U.S. Networks' advertising revenues of $477.5 million, a 6.6% increase;
  • Consolidated net income per diluted share attributable to SNI of $1.12, a 16.8% increase; and
  • Consolidated adjusted net income(1) per diluted share of $1.26, a 13.5% increase.

KNOXVILLE, Tenn., Nov. 07, 2016 (GLOBE NEWSWIRE) -- Scripps Networks Interactive, Inc. (Nasdaq:SNI) today reported third quarter 2016 operating results.

Consolidated operating revenues increased 3.5% during the quarter. Consolidated operating income declined 4.8%, and consolidated adjusted segment profit(1) fell 2.1% compared with the prior-year period, as anticipated. The U.S. Networks segment continued to benefit from a strong advertising market.

Ratings grew across five of the six U.S. networks during the third quarter of 2016, despite coverage of the Olympics and the U.S. election. HGTV saw its highest-rated third quarter ever in all key demographics. Travel Channel completed its fourth consecutive quarter of year-over-year ratings growth. Cooking Channel and DIY Network each delivered their best-rated quarters ever, while Great American Country saw its highest-rated third quarter since 2007. Food Network continued to perform well with millennials, earning a top 10 ranking for the quarter among ad-supported networks.

TVN, Poland's leading multi-platform media business, realized mid-single digit revenue growth in local currency for the third quarter compared with the prior-year. In addition, TVN Group was the only major network group in Poland to increase their market share during the quarter, achieving a 23% share against a strong competitive environment that included the Olympics and soccer broadcasts. Ratings at TVN Group improved 3.0% year-over-year with its target audience.

"Scripps Networks Interactive delivered solid revenue growth at both our U.S. and international business segments, helping drive a double-digit improvement in net income," said Kenneth W. Lowe, president, chairman and CEO. "Our successful strategy to focus on our differentiated lifestyle brands in the home, food and travel genres continues to pay off. Our popular networks are available on more platforms and reaching more new audiences than before, positioning the company for continued growth."

Third Quarter Consolidated Results
Consolidated operating revenues for the third quarter were $803.1 million, an increase of 3.5% compared with the prior-year period. Consolidated advertising revenues were $556.4 million, an increase of 5.4%, and consolidated distribution revenues were $221.7 million, a decrease of 1.4%, compared with the prior-year period.

Third quarter consolidated operating income was $257.9 million, a decrease of 4.8% from the prior-year period. Consolidated adjusted segment profit(1) was $317.6 million, a decrease of 2.1%. The year-over-year decline in both consolidated operating income and consolidated adjusted segment profit(1) was primarily due to the expected timing of programming premieres leading to the growth in programming expenses for the U.S. Networks. Programming expense growth is expected to slow in the fourth quarter of 2016 due to the shift in show premieres.

Third quarter consolidated net income attributable to Scripps Networks Interactive was $146.0 million, or $1.12 per diluted share, compared with $124.6 million, or $0.96 per diluted share, in the same period of the prior year. Third quarter consolidated adjusted net income(1) increased 13.8% to $163.9 million, and consolidated adjusted diluted earnings per share(1) increased 13.5% to $1.26. The improvement in consolidated adjusted diluted earnings per share(1) during the third quarter was primarily due to the growth in operating revenues along with gains realized on foreign currency transactions and lower interest expense, partially offset by lower equity in earnings of affiliates, primarily a result of the sale of the company's investment in Fox Sports South in the first quarter 2016.

Third Quarter Segment Results

Segment Profit and Adjusted Segment Profit - Q3 2016 and 2015  
  U.S. Networks   International Networks   Corporate and Other   Consolidated  
  Three months ended   Three months ended   Three months ended   Three months ended  
  September 30,   September 30,   September 30,   September 30,  
(in thousands) 2016   2015   2016   2015   2016   2015   2016   2015  
Operating income (loss) $ 298,808   $ 306,738   $ (14,854 ) $ (5,962 ) $ (26,037 ) $ (29,780 ) $ 257,917   $ 270,996  
Depreciation   16,894     13,417     3,090     4,011     257     931     20,241     18,359  
Amortization   10,098     10,098     15,673     12,834     -     -     25,771     22,932  
Loss (gain) on disposal of property and equipment   209     28     (80 )   13     -     (1 )   129     40  
Segment profit (loss) (1) $ 326,009   $ 330,281   $ 3,829   $ 10,896   $ (25,780 ) $ (28,850 ) $ 304,058   $ 312,327  
TVN transaction and integration expenses   -     48     11,168     553     851     7,783     12,019     8,384  
Restructuring costs   -     856     -     -     -     1,932     -     2,788  
Reorganization costs   1,267     794     -     -     237     -     1,504     794  
Adjusted segment profit (loss) (1) $ 327,276   $ 331,979   $ 14,997   $ 11,449   $ (24,692 ) $ (19,135 ) $ 317,581   $ 324,293  

U.S. Networks' operating revenues for the third quarter of 2016 were $686.3 million, an increase of 3.8%. Advertising revenues for U.S. Networks were $477.5 million, an increase of 6.6%. This improvement reflects the continued strength in the U.S. advertising market for our lifestyle brands and overall ratings improvement. U.S. Networks' distribution revenues decreased by 2.5% to $194.3 million as a result of the previously disclosed rate equalization of certain distributor agreements caused by industry consolidation, and subscriber declines. These were partially offset by annual rate increases and growth in emerging distribution platforms.

U.S. Networks' operating income for the third quarter of 2016 was $298.8 million, a decrease of 2.6%. U.S. Networks' adjusted segment profit(1) was $327.3 million, a decrease of 1.4%, reflecting an increase in programming expenses due to the timing of program premieres, offsetting the increase in advertising revenues.

International Networks' operating revenues for the third quarter of 2016 were $123.2 million, an increase of 3.8% compared with the prior-year third quarter. International Networks' operating loss was $14.9 million compared with an operating loss of $6.0 million in the prior year quarter. Adjusted segment profit(1) was $15.0 million in the third quarter of 2016 compared with adjusted segment profit(1) of $11.4 million in the third quarter of 2015, reflecting the increase in operating revenues.

Corporate and Other included an operating loss of $26.0 million compared with a loss of $29.8 million in the prior-year third quarter. Corporate and Other adjusted segment loss(1) was $24.7 million, compared with an adjusted segment loss(1) of $19.1 million in the prior-year period.

(1) This earnings release includes several metrics, including consolidated segment profit, adjusted segment profit, adjusted net income, adjusted net income per diluted share and free cash flow that are not calculated in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP"). See the Non-GAAP Financial Measures section of this press release for discussion of consolidated segment profit, adjusted segment profit, adjusted net income, adjusted net income per diluted share and free cash flow and a reconciliation to their respective most comparable financial measure calculated in accordance with GAAP.

Guidance
All guidance is based on current management expectations for consolidated company performance. Based on results seen to date, the company is reiterating all of its previously issued guidance.

Conference Call Information
The senior management team of Scripps Networks Interactive will discuss the company's third quarter 2016 results during a telephone conference call at 11 a.m. ET today. Scripps Networks Interactive will offer a live webcast of the conference call. To access the webcast, visit www.scrippsnetworksinteractive.com and follow the Investors link at the top of the page. The webcast link can be found next to the microphone icon on the investor relations landing page.

To access the conference call by telephone, dial 800-230-1074 (U.S.) or 612-234-9960 (international) approximately ten minutes before the start of the call. Callers will need the name of the call, "Scripps Networks Interactive Third Quarter Earnings," and must provide their name and company affiliation. The media and general public may access the conference call on a listen-only basis.

A replay line will be open from 1 p.m. on November 7 until 11:59 p.m. ET on November 21. The domestic number to access the replay is 800-475-6701, and the international number is 320-365-3844. The access code for both numbers is 404399.

A replay of the conference call will also be available online. To access the audio replay online, visit www.scrippsnetworksinteractive.com approximately four hours after the call, choose the Investors page, then follow the Audio Archives link at the top of the Investor Relations page.

Forward-Looking Statements
This press release contains certain forward-looking statements related to the Company's businesses that are based on management's current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from the expectations expressed in forward-looking statements, including changes in advertising demand and other economic conditions as well as other reasons described in our Securities and Exchange Commission filings, including those set forth in the Risk Factors section and under the caption entitled "Forward-Looking Statements" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The Company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.

About Scripps Networks Interactive

<< Back