E.W. Scripps to pay down debt quickly, aiming for 3.5x leverage ratio

By Devika Patel

Knoxville, Tenn., May 20 – E.W. Scripps Co. plans to prioritize paying down debt over the next two years using its strong free cash flow generation as management attempts to bring the company’s leverage ratio down to 3.5x from 4.7x.

“Our top priority right now, given the debt we have, is paying down debt and we just this week began with calling our bonds of $400 million and paying down our debt,” president and chief executive officer Adam Symson said at the 16th Annual Needham Virtual Technology and Media Conference on Thursday.

“I think we’re actually well ahead of what investors had expected, but I would expect us to opportunistically act to deepen our distribution path because the economics are so favorable for us,” he said.

The company’s leverage ratio is 4.7x and its target is 3.5x.

“[Our leverage is] really not more than is standard in our industry,” Symson said.

“We’ve been willing to flex the balance sheet at specific times.

“Typically, we’re very comfortable at 3.5x, and I expect we’ll be down to 3.5x before too long.

“I think it’ll be a couple of years [before the leverage gets down to its target level], but obviously we’re going to focus on building the business,” he said.

The company is generating good free cash flow and management expects to pay down its debt quickly.

“The company’s cash flow generation is so dramatically different than it was even a couple of years ago,” Symson said.

“We guided to do between $220 million and $240 million in free cash flow this year.

“That’s a number that historically we probably would only have been able to put a guide out for, in a big political year.

“We do expect a big political year next year, so we think the company’s new profile of cash flow generation will power us forward with debt pay down pretty quickly,” he said.

E.W. Scripps is a Cincinnati-based broadcasting and digital media company.

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