E.w. Scripps Company (the) · NASDAQ:SSP
E.w. Scripps Company (the) — Debt Investor Presentation (August 2017)
29 slides from E.w. Scripps Company (the)'s debt investor presentation, Aug 8, 2017
Slide 1: Lender Presentation August 8, 2017
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 LENDER PRESENTATION AUGUST 8, 2017 Exhibit 99.1
Slide 2: Safe Harbor / Disclosures
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 1 This presentation contains forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to b
Slide 3: Scripps Acquires Fast-Growing, Target-Audience Broadcast Networks
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 2 •On August 1st, 2017, The E.W. Scripps Company (“Scripps”, “SSP”, or the “Company”) announced that it had reached an agreement to acquire Bounce Media, LLC and Katz Broadcasting Holdings, LLC (together “Katz”) for $
Slide 4: Acquisition Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 ACQUISITION OVERVIEW
Slide 5: What Scripps Is Acquiring and Why
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 • National reach through leading fast-growing, target-audience broadcast networks • Over-the-air ecosystem is evolving and growing. 22% of adults 18 to 34 watch TV OTA • Over-the-air is integrating with over-the-top s
Slide 6: Overview of the Networks
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 $88 $129 5 $ in millions 2015 2016 Historical Katz Revenue OVERVIEW OF THE NETWORKS • Bounce is the 5th ranked network among African-Americans in primetime, targeting adults 18-34 and features original dramas, comedie
Slide 7: Content Distribution and Monetization
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 Essentially 100% Advertising Revenue Model 6 CONTENT DISTRIBUTION AND MONETIZATION How is Revenue Generated? Antennas transmit multiple channels that can be distributed multiple ways Channel 7.2 Channel 7.1 Channel 7.
Slide 8: E.W. Scripps Company Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 E.W. SCRIPPS COMPANY OVERVIEW
Slide 9: Scripps Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 8 • Scripps is a leading media enterprise with interests in television and radio broadcasting as well as local and national digital media brands • The three reporting segments are Television, Radio and Digital • Prese
Slide 10: Coast-to-Coast Portfolio of Television, Radio & Digital Brands
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 9 Wichita, KS Radio 4 FM, 1 AM Springfield, MO Radio 4 FM, 1 AM Knoxville, TN Radio 4 FM Scripps Washington News Bureau & Political Sales Office Green Bay-Appleton, WI WGBA, WACY Indianapolis WRTV Baltimore WMAR Cleve
Slide 11: Rebuilding Scripps for Growth
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 REBUILDING SCRIPPS FOR GROWTH 10 2008 Complete separation of Scripps Networks Interactive 2010 Divest “Peanuts” and licensing 2012 Launch original programming unit, two access shows 2014 Buy Newsy Buy Granite Stations
Slide 12: Television Segment Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 11 • Scripps owns or operates 33 television stations in 24 markets across the U.S. • The Company reaches nearly one in five U.S. television households • Affiliations with all of the “Big Four” networks • Second larges
Slide 13: Broadcast Peer Landscape
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 12 Source: Company filings, company websites for non-public companies and BIA Investing in Television Market Report, 2017 1st Edition Note: Pro forma for all announced and closed transactions 1 Prior to any potential
Slide 14: Retrans Has Strong Potential in Upcoming Renewals
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 $36 $36 $54 $53 $53 $61 $66 $66 Gross Retransmission Revenue $213M Network and MVPD Renewals L8QA Q2 2017 gross retrans revenue $ in millions 4 stations 1 station 10 stations 5 stations 2 stations 1 station 19% of sub
Slide 15: Political Advertising Revenue and 2018 Footprint
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 $82 $83 $144 $75 $101 2016 saw the second-highest-grossing election season ever • Local broadcast TV spending for all candidates, excluding presidential, was up 5% from 2012 • Candidates, the national parties and outs
Slide 16: Radio Segment Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 • Scripps owns 34 radio stations in eight markets • The Company operates 28 FM stations and 6 AM stations • In five markets, Scripps operates both television and radio stations • Multiple properties in the same market
Slide 17: Digital Segment Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 16 • Scripps’ digital segment provides locally branded news content and information across 27 television and radio markets on multiple digital platforms • Local brands consist of the local TV and radio station website
Slide 18: Scripps Is Building Strong Local and National Digital Brands
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 LOCAL NATIONAL 2017E revenue split 17 SCRIPPS IS BUILDING STRONG LOCAL AND NATIONAL DIGITAL BRANDS • By millennials for millennials • Terrific content for an OTT news audience • Purchased: January 2014, $35 million •
Slide 19: Key Credit Highlights
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 KEY CREDIT HIGHLIGHTS
Slide 20: Scripps Credit Highlights
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 19 National portfolio of television, radio and digital brands provides diversified revenue sources Leading television stations positioned in large, NFL-sized markets Continued growth of retransmission revenue One of t
Slide 21: Scripps Is Diversified Across Revenue Streams and Markets
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 20 Scripps Markets Revenue by Segment PF L8QA Q2 2017 Total Revenue: $1,018 million SCRIPPS IS DIVERSIFIED ACROSS REVENUE STREAMS AND MARKETS TV Only 19 Markets TV/Radio Overlap 5 Markets Radio Only 3 Markets 27 Telev
Slide 22: Industry-Leading Balance Sheet
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 21 (Pro Forma L8QA 6/30/17) Closing Period 6/30/2017 6/30/2017 3/31/2017 3/31/2017 3/31/2017 Market Cap $1,648 $3,172 $1,090 $4,569 $3,218 Note: Market data as of 8/1/17; Net leverage stats for public peers based on 2
Slide 23: Experienced Management Team
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 22 Management Overview • The current leadership team has led the Company’s transformation from 13 newspapers and 10 TV stations to 33 TV stations, 34 radio stations and valuable local and national digital businesses o
Slide 24: Financial Overview
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 FINANCIAL OVERVIEW
Slide 25: Pro Forma Financial Performance
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 $88 $177 $139 107 196 153 5 10 12 $112 $206 $165 13% 19% 16% 777 943 890 88 129 128 $865 $1,072 $1,018 Note: 2015 financials based on adjusted combined historical results as if the acquisition of Journal Communication
Slide 26: Strong Balance Sheet and Cash Flow Generation
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 25 STRONG BALANCE SHEET AND CASH FLOW GENERATION Capitalization LTM Q2’17 Free Cash Flow Bridge • Cash Balance1: $105 million • Total Debt1: $661 million • Net Leverage1: 3.4x • Liquidity2: $230 million 1 Pro forma fo
Slide 27: Appendix
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 APPENDIX
Slide 28: Selected Statement of Operations
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 27 SELECTED STATEMENT OF OPERATIONS ($ in Millions) Fiscal Year Ending December 31, L8QA 2015 2016 Q2 2017A Operating Revenues Advertising $598 $681 $637 Retransmission 147 221 213 Other 32 42 40 Total Operating Reven
Slide 29: EBITDA and Adjusted EBITDA Definitions
R 44 G 66 B 120 R 187 G 8 B 38 R 138 G 205 B 34 R 86 G 151 B 202 R 127 G 127 B 127 “EBITDA" is defined by us as net earnings before income taxes, interest expense and depreciation, amortization and impairment of goodwill and intangibles. "Adjusted EBITDA" is defined by us as EBITDA, losses(gains), n
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