Scripps(US:SSP)2020-11-09 03:20Financial Data and Key Metrics Changes - The company expects to generate more than $280 million in free cash flow for 2020, translating to $3.42 of free cash flow per share, exceeding pre-pandemic expectations [6][22] - Political advertising revenue reached a record $265 million for the full year 2020, a 35% increase over the previous record year, 2018 [14] - The company's income from continuing operations was $0.76 per share, with total debt at $1.9 billion and cash totaling $129 million as of September 30 [21][22] Business Line Data and Key Metrics Changes - Local Media core advertising revenue decreased by 18% due to pandemic-related advertising slowdown, but is expected to improve by 10% in Q4 compared to Q3 [15] - National Media division revenue grew 14% year-over-year to $89 million, with all three national businesses contributing to this growth [18] - Local Media segment profit was $145 million, marking the strongest third quarter profit number ever for the division [17] Market Data and Key Metrics Changes - The company expects to end the year with $581 million in retransmission revenue, despite a slight decline expected in Q4 due to a one-time catch-up payment from Dish Network [16] - The net leverage at the end of Q3 was 5.3x, down from 5.8x at the end of Q2, with expectations to end the year at 4.2x [22] Company Strategy and Development Direction - The acquisition of ION Media is expected to boost revenue to over $2.5 billion annually and double company EBITDA in the first full year of ownership, with anticipated synergies of over $500 million [10][23] - The company is focused on improving the operating performance of its local media portfolio through strategic acquisitions and execution [8] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to emerge stronger from the pandemic, citing record high-margin political dollars and solid core performance [11] - The company anticipates continued margin expansion in the National Media division, expecting to approach a 20% margin by the end of Q4 [19] Other Important Information - The company has implemented various cost-saving initiatives, resulting in a 1% decrease in Local Media expenses year-over-year [17] - The company is on track with $75 million in expense control measures, having realized about $54 million of savings year-to-date [20] Q&A Session Summary Question: Visibility into ION's third quarter results and fourth quarter outlook - Management indicated they have some visibility and are seeing strong demand trends similar to their National division [36] Question: Core advertising revenue performance in October and November - Management noted significant displacement in October but saw improvement in November, particularly in the auto and service categories [40][41] Question: Long-term outlook for net retrans growth - Management stated that successful contract renewals are driving gross retrans revenue growth over 30% on a same-station basis [45] Question: Performance of Katz and Newsy networks - Katz networks are experiencing growth, with Court TV's viewership up 120% year-over-year, while Newsy has seen significant political revenue growth due to increased demand for connected TV [99][60] Question: Long-term net-debt-to-EBITDA target ratio - Management aims for a long-term target in the mid-3s for net-debt-to-EBITDA ratio [81]