8-K: E.W. Scripps Announces Preliminary Q2 2025 Results and $650 Million Senior Notes Offering

The E.W. Scripps Company released preliminary unaudited financial results for Q2 2025, indicating a shift to a net loss and lower revenues, alongside a new $650 million senior secured notes offering to refinance existing debt.

Summary

• Preliminary estimated unaudited financial results for the three months ended June 30, 2025, were provided to potential investors in connection with a Notes Offering.
• Total operating revenues for Q2 2025 are estimated to be between $538.5 million and $541.7 million, a decrease from $573.629 million in Q2 2024.
• The company expects a net loss ranging from $38.355 million to $33.559 million for Q2 2025, compared to a net income of $1.429 million in Q2 2024.
• Adjusted EBITDA for Q2 2025 is estimated between $87.277 million and $90.464 million, down from $99.960 million in Q2 2024.
• Unlevered Free Cash Flow is estimated between $74.877 million and $78.564 million for Q2 2025, comparable to $76.400 million in Q2 2024.
• Local Media segment profit is estimated between $54.8 million and $56.8 million for Q2 2025, a significant decline from $88.1 million in Q2 2024.
• Scripps Networks segment profit is estimated between $55.0 million and $57.0 million for Q2 2025, a substantial increase from $37.7 million in Q2 2024.
• Scripps Networks segment profit margin is estimated to exceed 27% in Q2 2025, over 900 basis points higher than Q2 2024, with estimated expenses decreasing 12%.
• The company intends to offer $650 million of new senior secured second lien notes due 2030 in a private offering.
• Proceeds from the new notes offering will be used to redeem all outstanding 5.875% Senior Notes due 2027 and pre-pay a portion of the term loan B-2 facility due 2028.
• A conditional notice of redemption was issued for the 5.875% Senior Notes due 2027, with redemption set for August 6, 2025, subject to the completion of the new financing.
• L8QA Consolidated EBITDA as of March 31, 2025, was updated to $541.1 million, including a $34.6 million adjustment related to shutting down Scripps News' over-the-air broadcast in Q4 2024.
• Cash and cash equivalents are estimated at $31.660 million as of June 30, 2025, up from $26.651 million as of June 30, 2024.
• Long-term debt is estimated at $2,623.704 million as of June 30, 2025, down from $2,869.304 million as of June 30, 2024.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While the company is proactively managing its debt and the Scripps Networks segment shows strong performance and cost control, the overall preliminary financial results indicate a significant decline in total revenue, a shift to a net loss, and lower Adjusted EBITDA compared to the prior year, particularly in the Local Media segment. The mixed signals balance out to a cautious outlook.

Positives

• Scripps Networks segment profit is estimated to significantly increase to $55.0 million $57.0 million in Q2 2025, up from $37.7 million in Q2 2024.
• Scripps Networks segment profit margin is estimated to exceed 27% in Q2 2025, representing an improvement of over 900 basis points compared to Q2 2024.
• Scripps Networks estimated expenses decreased by 12% in Q2 2025 compared to Q2 2024, indicating effective cost management.
• The company's estimated cash and cash equivalents as of June 30, 2025, are higher at $31.660 million compared to $26.651 million as of June 30, 2024.
• Estimated long-term debt as of June 30, 2025, is lower at $2,623.704 million compared to $2,869.304 million as of June 30, 2024, reflecting debt reduction efforts.
• The proposed $650 million notes offering aims to refinance existing debt, including the 5.875% Senior Notes due 2027, potentially improving the company's debt maturity profile.

Negatives

• Preliminary estimated total operating revenues for Q2 2025 are lower, ranging from $538.5 million to $541.7 million, compared to $573.629 million in Q2 2024.
• The company expects a net loss for Q2 2025, estimated between $38.355 million and $33.559 million, a significant decline from a net income of $1.429 million in Q2 2024.
• Preliminary estimated Adjusted EBITDA for Q2 2025 is lower, ranging from $87.277 million to $90.464 million, compared to $99.960 million in Q2 2024.
• Local Media segment profit is estimated to significantly decrease to $54.8 million $56.8 million in Q2 2025, down from $88.1 million in Q2 2024.
• Political revenues are estimated to be significantly lower at $3.0 million $3.2 million for Q2 2025, compared to $29.5 million in Q2 2024.
• The preliminary estimated financial results are unaudited and subject to material adjustments upon completion of the full financial statement review.

Risks

• Changes in advertising demand.
• Fragmentation of audiences.
• Loss of affiliation agreements.
• Loss of distribution revenue.
• Increase in programming costs.
• Changes in law and regulation.
• The company's ability to identify and consummate strategic transactions.
• The controlled ownership structure of the company.
• The company's ability to manage its outstanding debt obligations.

Future Outlook

The company provided preliminary estimated financial results for Q2 2025 and announced a notes offering intended to manage its outstanding debt obligations by redeeming existing notes and pre-paying a portion of a term loan. Forward-looking statements indicate management's current beliefs and expectations regarding future operating results and financial condition, subject to inherent risks and uncertainties.

Management Comments

• Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of our business and provides greater transparency into our results of operations.
• Management believes that Unlevered Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash before taking into account capital expenditures.

Industry Context

The media industry continues to face challenges from audience fragmentation and shifts in advertising demand, as evidenced by the decline in core and political advertising revenues. However, the strong performance of Scripps Networks, particularly with growth in connected TV revenue and tight expense management, suggests successful adaptation to evolving media consumption habits and a focus on digital growth areas. The debt refinancing initiative reflects a broader industry trend of companies optimizing capital structures in response to market conditions and strategic needs.

Comparison to Industry Standards

• NA

Stakeholder Impact

• Shareholders: Impacted by preliminary financial results showing a net loss and lower revenues, but also by proactive debt management which could improve long-term financial stability.
• Creditors: Existing 2027 noteholders will have their notes redeemed, while new investors will acquire the new senior secured second lien notes.
• Employees: The adjustment related to shutting down Scripps News' over-the-air broadcast in Q4 2024 indicates potential operational restructuring impacting employees in that division.

Next Steps

• Completion of the $650 million senior secured second lien notes offering.
• Redemption of all outstanding 5.875% Senior Notes due 2027 on August 6, 2025, subject to financing conditions.
• Pre-payment of a portion of the existing outstanding borrowings under the term loan B-2 facility due 2028.
• Completion of the review of financial statements for the three months ended June 30, 2025.

Key Dates

Recommendation

The filing presents a mixed financial picture. While the company is taking proactive steps to manage its debt structure through the new notes offering and redemption, which is a positive for long-term stability, the preliminary Q2 2025 financial results show a significant decline in overall revenue and a shift from net income to a net loss. The strong performance of Scripps Networks is encouraging, but it does not fully offset the weakness in Local Media and the overall top-line and bottom-line declines. A seasoned investor would likely 'hold' to observe the impact of the debt refinancing on interest expenses and to see if the positive trends in Scripps Networks can offset the broader revenue and profit challenges in subsequent quarters, especially given the preliminary nature of these results.

Keywords

Media, Broadcasting, Television, Advertising, SEC Filing, Financial Results, Debt Offering, Notes Redemption, Scripps Networks, Local Media, EBITDA, Unlevered Free Cash Flow