Meredith Delivers 20% Growth In Fiscal 2014 Fourth Quarter Net Earnings Fiscal 2014 Featured Television Station Expansions in Phoenix, St. Louis and Springfield Markets

Continued Successful Execution of Total Shareholder Return Strategy including 6% Dividend Increase

DES MOINES, Iowa, July 31, 2014 /PRNewswire/ -- Meredith Corporation (NYSE: MDP; www.meredith.com) today reported fiscal 2014 fourth quarter net earnings increased 20 percent, and earnings per share rose 19 percent to $0.89 from $0.75 in the prior-year period.  Excluding special items, fiscal 2014 fourth quarter earnings per share were $0.88 (See Tables 1-4).  Revenues increased to $391 million.

"Our Local Media Group delivered another quarter of record performance," said Meredith Chairman and Chief Executive Officer Stephen M. Lacy.  "We were particularly pleased with the performance of KMOV in St. Louis in its first full quarter under Meredith's ownership.  We also completed the acquisition of KTVK in Phoenix, and announced an agreement to purchase WGGB, the ABC affiliate in Springfield, Mass.

Lacy noted the following business highlights during the fourth quarter of fiscal 2014 when compared to the prior-year period:

  • Local Media Group revenues increased 20 percent to $111 million, and EBITDA grew 20 percent to $41 million (excluding special items), both records for a fiscal fourth quarter. Growth was driven by strong performance from Meredith television stations in Phoenix, Las Vegas and Greenville; the addition of KMOV in St. Louis; record digital/mobile advertising revenues; and higher retransmission-related revenues and profit.
  • National Media Group operating profit margins strengthened, driven by higher magazine advertising rates, increased contribution from circulation activities, and a 6 percent decrease in operating expenses. Operating profit was even with the prior year.
  • Consumer engagement grew across all of Meredith's media platforms. Total traffic to Company websites grew to an average of more than 60 million unique visitors per month, a record high. Meredith magazine readership stands at an impressive 110 million. Also, Meredith's television stations increased local programming hours and delivered a strong May ratings book.

FISCAL 2014 REVIEW

Fiscal 2014 earnings per share were $2.50, compared to $2.74 in the prior year.  Excluding special items in both years, fiscal 2014 earnings per share were $2.80, compared to $2.91 (See Tables 1-4).  Meredith recorded $34 million less of political advertising revenues in fiscal 2014 than in the prior year, as expected in an off-election year.  Total revenues were $1.5 billion, even with the prior year.

"In fiscal 2014, we added great new television stations to our Local Media Group portfolio; executed a number of initiatives to strengthen and grow our National Media Group including the launch of Allrecipes magazine; and increased our dividend and expanded our share repurchase program," Lacy said.  "We aggressively executed on our Total Shareholder Return Strategy by deploying capital in high cash flow businesses and grew the amount of cash returned to our shareholders."

Fiscal 2014 highlights included:

  • Significant expansion of Meredith's television footprint including:
    • KTVK, an independent station in Phoenix, the nation's 12th largest television market.  This transaction closed on June 19, 2014.  KTVK produces more hours of local news than any station in the market.  Meredith now has a duopoly in Phoenix as it also owns KPHO, the CBS affiliate.
    • KMOV, the CBS affiliate in St. Louis, the nation's 21st largest television market.  This transaction closed on February 28, 2014, and the station has been successfully integrated into Meredith's operations.  KMOV consistently wins the important late news rating book. Meredith now operates the two largest CBS affiliates in Missouri, the other being KCTV in Kansas City.
    • WGGB, the ABC affiliate in Springfield, Mass.  This transaction is expected to close in the first quarter of fiscal 2015.  WGGB is also the Fox affiliate, airing it on a digital tier. This would be another duopoly for Meredith, as it currently owns WSHM, the CBS affiliate.
  • Portfolio and marketplace enhancements by Meredith's National Media Group – Meredith successfully extended the Allrecipes brand to the magazine platform in what Media Industry Newsletter called the "Hottest Launch of the Year."  It also successfully integrated the Parenting and Baby Talk brands it acquired from Bonnier in late fiscal 2013.  Meredith announced the Spring 2015 launch of Parents Latina, a magazine designed to serve English-speaking Hispanic moms.  Additionally, Meredith was named "Advertisers' Favorite Media Company" for the second time in four years by Advertiser Perceptions, which annually surveys thousands of leading advertising agencies and marketers.  Google won in the prior year.
  • Rapid growth in Meredith's digital, mobile, video and social platforms – Meredith grew its digital audience to more than 60 million monthly unique visitors, according to the most recent data from comScore.  Highlights included expansion of its video library to more than 15,000 searchable videos; and strengthening the presence of Meredith brands across social media platforms such as Facebook and Pinterest.  Better Homes and Gardens achieved 2 million followers on Facebook, making it the most popular brand among its peers on that platform.
  • Strong performance from Meredith's non-advertising-related activities:
    • Meredith's Local Media Group delivered significant growth in retransmission-related revenues, and has contractual agreements for its network affiliations in place through the next two to four years.
    • In Meredith's National Media Group, brand licensing delivered excellent performance driven by strong sales of Better Homes and Gardens branded products at Walmart stores across the U.S., along with expansion of the Better Homes and Gardens real estate network.  Meredith Xcelerated Marketing grew operating profit (excluding special items) by solidifying business with its Top 10 clients, including expansions with Chrysler, Mercer, Allergan and Kia.
  • Successful execution of Meredith's Total Shareholder Return strategy – Meredith increased its dividend 6 percent to $1.73 on an annualized basis, a yield of approximately 4 percent.  The Company repurchased 1.6 million shares of its stock and authorized an additional $100 million for its share repurchase program.

LOCAL MEDIA GROUP OPERATING DETAIL

Meredith's Local Media Group includes 15 owned or operated television stations reaching 10 percent of U.S. households.  Meredith's portfolio is concentrated in large, fast-growing markets, including seven stations among the nation's Top 25 and 13 in the Top 50. Meredith's stations produce approximately 525 hours of local news and entertainment content each week. Meredith expects to continue to grow its Local Media Group both organically and through strategic acquisitions.

Fiscal 2014 fourth quarter Local Media Group operating profit was $25 million ($32 million excluding special items, a record for a fiscal fourth quarter), compared to $28 million in the prior-year period (See Tables 1-4).  Revenues rose 20 percent to $111 million

Fiscal 2014 Local Media Group operating profit was $113 million ($122 million excluding special items, a record for a non-political year), compared to $124 million ($126 million excluding special items) in the prior year (See Tables 1-4).  Total Local Media Group revenues rose 7 percent to a record $403 million

Looking more closely at fiscal 2014 performance before special items:

  • Non-political advertising revenues grew 8 percent to $291 million.  Digital advertising revenues grew more than 15 percent to record levels, driven by increased traffic across the desktop and video platforms, the launch of new mobile apps, and the addition of KMOV.
  • Other revenues and operating expenses both increased, due primarily to growth in retransmission revenues from cable and satellite television operators, and higher programming fees paid to affiliated networks.
  • EBITDA grew to a record $151 million, and EBITDA margin was 38 percent. 

Meredith's connection with viewers also strengthened in fiscal 2014.  Looking at the May 2014 rating book for the key 25-54 age group, Meredith stations in:

  • Portland, St. Louis and Las Vegas were ranked #1 in late news, while Nashville, Greenville and Saginaw were ranked second;
  • Portland, Hartford and Las Vegas were #1 in morning news, and Saginaw was ranked second;
  • Hartford and Las Vegas were #1 in evening news, and St. Louis and Saginaw were second; and
  • Nashville was #1 in sign-on to sign-off; and St. Louis, Kansas City and Saginaw were second.

Daytime Emmy Award-nominated The Better Show, the daily syndicated program produced by Meredith Video Studios, was renewed for an eighth season.  It's currently available in 80 percent of U.S. television households.

"We delivered record revenues and operating profit for a non-political year," said Local Media Group President Paul Karpowicz.  "We're excited to add KTVK in Phoenix and KMOV in St. Louis to the Meredith portfolio, and look forward to having WGGB in Springfield join our group.  The addition of these stations – along with increasing retransmission revenues, growing non-political advertising, rising digital advertising and the upcoming political advertising cycle – point to a strong fiscal 2015 for our business."

NATIONAL MEDIA GROUP OPERATING DETAIL

Meredith's National Media Group reaches 100 million unduplicated American women, including 60 percent of millennial women.  Meredith is a leader at creating content across media platforms and life stages in key consumer interest areas such as food, home, parenthood and health.  The National Media Group also features robust brand licensing activities and innovative business-to-business marketing services.  Meredith expects to continue to grow its National Media Group organically and through strategic acquisitions.

Fiscal 2014 fourth quarter National Media Group operating profit was $43 million, even with the prior-year period.  Revenues were $280 million.  Fiscal 2014 National Media Group operating profit was $113 million ($133 million excluding special items), compared to $138 million ($144 million excluding special items) in the prior-year period (See Tables 1-4).  Revenues were $1.1 billion.

Looking more closely at fiscal 2014 performance:

  • Total advertising revenues were $483 million. Weighted average net revenue per magazine page increased approximately 2 percent. Meredith grew its share of magazine advertising revenues in its competitive set to more than 38 percent, according to the most recent data from Publishers Information Bureau. Digital advertising revenues accounted for 16 percent of total National Media Group advertising revenues.
  • Circulation revenues grew 2 percent to $327 million, driven by the launch of Allrecipes magazine and initiatives to grow the new title's rate base, along with strong performance from Meredith's parenthood and Hispanic brands. In addition, Meredith continued to develop its digital consumer marketing activities, increasing digital orders for print magazine subscriptions nearly 20 percent to 7 million. Digital orders now account for 40 percent of all Meredith magazine subscriptions.
  • Brand Licensing revenues increased 10 percent, led by continued strong sales of more than 3,000 SKUs of Better Homes and Gardens licensed products at more than 4,000 Walmart stores nationwide. The Better Homes and Gardens-branded real estate program with Realogy now features 8,300 agents in 26 states. Meredith's brand licensing activities were recently ranked No. 3 in the world based on sales transactions by Global License! alongside licensing giants Disney and Hasbro.
  • Meredith Xcelerated Marketing grew operating profit (excluding special items) by solidifying business with its Top 10 clients, including significant expansions with Chrysler, Mercer, Allergan and Kia.

Meredith's consumer engagement continued to grow in fiscal 2014.  Readership for Meredith's subscription titles grew 5 percent in fiscal 2014 and median reader income rose, according to the most recent data from Mediamark Research and Intelligence.  Digital traffic averaged more than 50 million unique visitors in Fiscal 2014, according to comScore, and Allrecipes.com continues to lead in the Food category. 

"We are pleased to have successfully grown non-advertising sources of revenue in fiscal 2014, particularly our very robust brand licensing arrangements," said National Media Group President Tom Harty.  "While the advertising environment is challenging, we are increasing our share of magazine advertising revenues; strengthening our digital business; and proving that advertising in Meredith brands delivers exceptional returns through our Meredith Sales Guarantee program."

OTHER FINANCIAL INFORMATION

Consistent with its Total Shareholder Return (TSR) strategy, Meredith repurchased 1.6 million shares of its stock in fiscal 2014.  At June 30, 2014, $108 million remained under the current repurchase authorization.  Total debt was $715 million at June 30, 2014, and the weighted average interest rate was 2.3 percent.  Meredith's debt-to-EBITDA ratio for the 12 months ended June 30, 2014, was 2.7 to 1.

Key elements of Meredith's TSR strategy are (1) An annual dividend of $1.73 per share, which reflects a 6 percent increase in the annual dividend over the prior year and a 70 percent increase since Meredith launched its TSR strategy in October 2011; (2) A renewed $100 million share repurchase program; and (3) Ongoing investments to scale the business and increase shareholder value.

All earnings per share figures in the text of this release are diluted.  Both basic and diluted earnings per share can be found in the attached Condensed Consolidated Statements of Earnings.  All fiscal 2014 and fourth quarter comparisons are against the comparable prior-year periods.

OUTLOOK

Meredith expects full year fiscal 2015 earnings per share to range from $3.00 to $3.25.  In fiscal 2015, Meredith expects a total of $28 million to $33 million of political advertising revenues at its television stations, with the majority being booked in the second fiscal quarter.

Looking more closely at the first quarter of fiscal 2015 compared to the prior-year period:

  • Total company revenues are expected to be up mid-single digits.
  • Total Local Media Group revenues are expected to be up 35 to 40 percent.  Approximately one-third of total fiscal 2015 political advertising revenues are expected to be recorded in the first fiscal quarter.
  • Total National Media Group revenues are expected to be down mid-single digits.
  • Meredith expects fiscal 2015 first quarter earnings per share to range from $0.60 to $0.65, compared to $0.53 in the prior-year period.

A number of uncertainties remain that may affect Meredith's outlook as stated in this press release for the first quarter and full year fiscal 2015.  These and other uncertainties are referenced below under "Safe Harbor" and in certain filings with the U.S. Securities and Exchange Commission. 

CONFERENCE CALL WEBCAST

Meredith will host a conference call on July 31, 2014 at 11 a.m. EDT to discuss fiscal 2014 fourth quarter and full year results.  A live webcast will be accessible to the public on the Company's website, www.meredith.com, and a replay will be available for two weeks.  A transcript will be available within 48 hours of the call at www.meredith.com.

RATIONALE FOR USE AND ACCESS TO NON-GAAP RESULTS

Management uses and presents GAAP and non-GAAP results to evaluate and communicate its performance. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA and EBITDA margin are common supplemental measures of performance used by investors and financial analysts. Management believes that EBITDA provides an additional analytical tool to clarify the Company's results from core operations and delineate underlying trends. Management does not use EBITDA as a measure of liquidity or funds available for management's discretionary use because it includes certain contractual and non-discretionary expenditures.

Results excluding the special items are supplemental non-GAAP financial measures.  While these adjusted results are not a substitute for reported results under GAAP, management believes this information is useful as an aid in better understanding Meredith's current performance, performance trends and financial condition.  Reconciliations of non-GAAP to GAAP measures are attached to this press release and available at www.meredith.com.

SAFE HARBOR

This release contains certain forward-looking statements that are subject to risks and uncertainties.  These statements are based on management's current knowledge and estimates of factors affecting the Company and its operations.  Statements in this release that are forward-looking include, but are not limited to, the Company's revenue and earnings per share outlook for first quarter and full year fiscal 2015.

Actual results may differ materially from those currently anticipated.  Factors that could adversely affect future results include, but are not limited to, downturns in national and/or local economies; a softening of the domestic advertising market; world, national or local events that could disrupt broadcast television; increased consolidation among major advertisers or other events depressing the level of advertising spending; the unexpected loss or insolvency of one or more major clients or vendors; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicated programming or other costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company's industries; increases in interest rates; and the consequences of acquisitions and/or dispositions.  The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT MEREDITH CORPORATION

Meredith Corporation (NYSE: MDP; www.meredith.com) has been committed to service journalism for more than 110 years.  Today, Meredith uses multiple distribution platforms – including broadcast television, print, digital, mobile, tablets and video – to provide consumers with content they desire and to deliver the messages of its advertising and marketing partners. 

Meredith's Local Media Group includes 15 owned or operated television stations reaching 10 percent of U.S. households.  Meredith's portfolio is concentrated in large, fast-growing markets, with seven stations in the nation's Top 25 – including Atlanta, Phoenix and Portland – and 13 in Top 50 markets. Meredith's stations produce approximately 525 hours of local news and entertainment content each week, and operate leading local digital destinations.  Additionally, Meredith Video Studios produces The Better Show, a syndicated daily lifestyle television program reaching 80 percent of U.S. TV households.

Meredith's National Media Group reaches 100 million unduplicated American women, including 60 percent of millennial women.  Meredith is the leader in creating content across media platforms in key consumer interest areas such as food, home, parenthood and health through well-known brands such as Better Homes and Gardens, Parents and Allrecipes.  The National Media Group features robust brand licensing activities, including over 3,000 SKUs of branded products at 4,000 Walmart stores across the U.S.  Meredith Xcelerated Marketing is a leader at developing and delivering custom content and customer relationship marketing programs for many of the world's top brands, including Kraft, Lowe's and Chrysler.

Meredith's balanced portfolio consistently generates substantial free cash flow, and the Company is committed to growing Total Shareholder Return through dividend payments, share repurchases and strategic business investments.  Meredith's current annualized dividend of $1.73 per share yields approximately 4 percent.  Meredith has paid a dividend for 67 straight years and increased it for 21 consecutive years.

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)






Three Months


Twelve Months

Periods ended June 30,

2014


2013


2014


2013

(In thousands except per share data)








Revenues








Advertising

$

204,138



$

204,231



$

778,391



$

823,690


Circulation

87,669



87,878



327,214



322,223


All other

98,987



94,864



363,103



325,427


Total revenues

390,794



386,973



1,468,708



1,471,340


Operating expenses








Production, distribution, and editorial

149,265



144,725



567,024



561,058


Selling, general, and administrative

167,442



172,853



655,241



654,098


Depreciation and amortization

13,510



11,365



59,928



45,350


Total operating expenses

330,217



328,943



1,282,193



1,260,506


Income from operations

60,577



58,030



186,515



210,834


Interest expense, net

(3,500)



(3,200)



(12,176)



(13,430)


Earnings before income taxes

57,077



54,830



174,339



197,404


Income taxes

(16,632)



(21,027)



(60,798)



(73,754)


Net earnings

$

40,445



$

33,803



$

113,541



$

123,650










Basic earnings per share

$

0.91



$

0.76



$

2.54



$

2.78


Basic average shares outstanding

44,551



44,512



44,636



44,455










Diluted earnings per share

$

0.89



$

0.75



$

2.50



$

2.74


Diluted average shares outstanding

45,250



45,193



45,410



45,085










Dividends paid per share

$

0.4325



$

0.4075



$

1.6800



$

1.5800



 

Meredith Corporation and Subsidiaries

Segment Information (Unaudited)






Three Months


Twelve Months

Periods ended June 30,

2014


2013


2014


2013

(In thousands)








Revenues








National media








Advertising

$

122,734



$

134,264



$

482,808



$

515,831


Circulation

87,669



87,878



327,214



322,223


Other revenues

69,222



72,419



255,876



257,141


Total national media

279,625



294,561



1,065,898



1,095,195


Local media








Non-political advertising

78,280



69,242



290,698



268,861


Political advertising

3,124



725



4,885



38,998


Other revenues

29,765



22,445



107,227



68,286


Total local media

111,169



92,412



402,810



376,145


Total revenues

$

390,794



$

386,973



$

1,468,708



$

1,471,340










Operating profit








National media

$

43,353



$

43,393



$

113,113



$

137,985


Local media

25,463



27,676



113,060



124,116


Unallocated corporate

(8,239)



(13,039)



(39,658)



(51,267)


Income from operations

$

60,577



$

58,030



$

186,515



$

210,834










Depreciation and amortization








National media

$

4,100



$

4,741



$

29,455



$

19,199


Local media

8,974



6,206



28,815



24,471


Unallocated corporate

436



418



1,658



1,680


Total depreciation and amortization

$

13,510



$

11,365



$

59,928



$

45,350










EBITDA 1








National media

$

47,453



$

48,134



$

142,568



$

157,184


Local media

34,437



33,882



141,875



148,587


Unallocated corporate

(7,803)



(12,621)



(38,000)



(49,587)


Total EBITDA 1

$

74,087



$

69,395



$

246,443



$

256,184



 


1 EBITDA is net earnings before interest, taxes, depreciation, and amortization.


 

Meredith Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)





Assets

June 30,

2014


June 30,

2013

(In thousands)





Current assets





Cash and cash equivalents


$

36,587



$

27,674


Accounts receivable, net


257,644



232,305


Inventories


24,008



28,386


Current portion of subscription acquisition costs


96,893



97,982


Current portion of broadcast rights


4,551



2,831


Assets held for sale


32,900




Other current assets


17,429



18,514


Total current assets


470,012



407,692


Property, plant, and equipment


501,216



464,255


Less accumulated depreciation


(296,168)



(277,938)


Net property, plant, and equipment


205,048



186,317


Subscription acquisition costs


101,533



99,433


Broadcast rights


3,114



3,634


Other assets


86,935



69,848


Intangible assets, net


835,531



584,281


Goodwill


841,627



788,854


Total assets


$

2,543,800



$

2,140,059







Liabilities and Shareholders' Equity





Current liabilities





Current portion of long-term debt


$

87,500



$

50,000


Current portion of long-term broadcast rights payable


4,511



4,089


Accounts payable


81,402



78,458


Accrued expenses and other liabilities


136,047



132,676


Current portion of unearned subscription revenues


173,643



191,448


Total current liabilities


483,103



456,671


Long-term debt


627,500



300,000


Long-term broadcast rights payable


4,327



5,096


Unearned subscription revenues


151,533



163,809


Deferred income taxes


277,477



247,487


Other noncurrent liabilities


108,208



112,700


Total liabilities


1,652,148



1,285,763


Shareholders' equity





Common stock


36,776



36,242


Class B stock


7,700



8,324


Additional paid-in capital


41,884



50,170


Retained earnings


814,050



775,901


Accumulated other comprehensive loss


(8,758)



(16,341)


Total shareholders' equity


891,652



854,296


Total liabilities and shareholders' equity


$

2,543,800



$

2,140,059



 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)





Years ended June 30,

2014


2013

(In thousands)




Net cash provided by operating activities

$

178,090



$

189,087






Cash flows from investing activities




Acquisitions of and investments in businesses

(417,461)



(50,190)


Additions to property, plant, and equipment

(24,822)



(25,969)


Net cash used in investing activities

(442,283)



(76,159)






Cash flows from financing activities




Proceeds from issuance of long-term debt

666,000



175,000


Repayments of long-term debt

(301,000)



(205,000)


Purchases of Company stock

(78,226)



(54,734)


Dividends paid

(75,392)



(70,527)


Proceeds from common stock issued

58,885



39,519


Excess tax benefits from share-based payments

4,855



5,438


Other

(2,016)



(770)


Net cash provided by (used in) financing activities

273,106



(111,074)


Net increase in cash and cash equivalents

8,913



1,854


Cash and cash equivalents at beginning of year

27,674



25,820


Cash and cash equivalents at end of year

$

36,587



$

27,674



 

Table 1

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.


Periods Ended June 30, 2014

Three Months


Twelve Months


Excluding Special Items


Special Items


As Reported


Excluding

Special Items


Special Items


As Reported

(In thousands except per share data)












Revenues












Advertising

$

204,138



$



$

204,138



$

778,391



$



$

778,391


Circulation

87,669





87,669



327,214





327,214


All other

98,987





98,987



363,103





363,103


Total revenues

390,794





390,794



1,468,708





1,468,708


Operating expenses












Production, distribution, and editorial

149,265





149,265



566,779



245


(c)

567,024


Selling, general, and administrative

161,347



6,095


(a)

167,442



638,057



17,184


(d)

655,241


Depreciation and amortization

13,510





13,510



48,726



11,202


(e)

59,928


Total operating expenses

324,122



6,095



330,217



1,253,562



28,631



1,282,193


Income from operations

66,672



(6,095)



60,577



215,146



(28,631)



186,515


Interest expense, net

(3,500)





(3,500)



(11,540)



(636)


(f)

(12,176)


Earnings before income taxes

63,172



(6,095)



57,077



203,606



(29,267)



174,339


Income taxes

(23,269)



6,637


(b)

(16,632)



(76,357)



15,559


(g)

(60,798)


Net earnings

$

39,903



$

542



$

40,445



$

127,249



$

(13,708)



$

113,541














Basic earnings per share

$

0.90



$

0.01



$

0.91



$

2.85



$

(0.31)



$

2.54


Basic average shares outstanding

44,551



44,551



44,551



44,636



44,636



44,636














Diluted earnings per share

$

0.88



$

0.01



$

0.89



$

2.80



$

(0.30)



$

2.50


Diluted average shares outstanding

45,250



45,250



45,250



45,410



45,410



45,410



 


(a) Severance costs of $3.4 million, acquisition transaction costs of $2.4 million and other accruals of $0.3 million

(b) Tax benefit from realignment of international operations of $4.3 million and tax benefit on restructuring and acquisition transaction charges of

$2.3 million

(c) Write-down of art and manuscript inventory

(d) Severance costs of $11.9 million, acquisition transaction costs of $5.5 million, and accrued costs of $1.1 million partially offset by a $1.3 million

reduction in previously accrued restructuring charges

(e) Write-down of Ladies' Home Journal trademark of $9.3 million and write-down of medical sales force training business assets of $1.9 million

(f) Write-off of deferred financing costs related to refinancing of revolving credit agreement

(g) Tax benefit on restructuring and acquisition transaction charges of $11.3 million and tax benefit from realignment of international operations of

$4.3 million


 

Table 2

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.


Periods Ended June 30, 2014

Three Months


Twelve Months


Excluding Special Items


Special Items


As Reported


Excluding

Special Items


Special Items


As Reported

(In thousands)












Revenues












National media












Advertising

$

122,734



$



$

122,734



$

482,808



$



$

482,808


Circulation

87,669





87,669



327,214





327,214


Other revenues

69,222





69,222



255,876





255,876


Total national media

279,625





279,625



1,065,898





1,065,898


Local media












Non-political advertising

78,280





78,280



290,698





290,698


Political advertising

3,124





3,124



4,885





4,885


Other revenues

29,765





29,765



107,227





107,227


Total local media

111,169





111,169



402,810





402,810


Total revenues

$

390,794



$



$

390,794



$

1,468,708



$



$

1,468,708














Operating profit












National media

$

43,353



$



$

43,353



$

132,880



$

(19,767)


(b)

$

113,113


Local media

31,558



(6,095)


(a)

25,463



122,230



(9,170)


(c)

113,060


Unallocated corporate

(8,239)





(8,239)



(39,964)



306


(d)

(39,658)


Income from operations

$

66,672



$

(6,095)



$

60,577



$

215,146



$

(28,631)



$

186,515














Depreciation and amortization












National media

$

4,100



$



$

4,100



$

18,253



$

11,202


(e)

$

29,455


Local media

8,974





8,974



28,815





28,815


Unallocated corporate

436





436



1,658





1,658


Total depreciation and amortization

$

13,510



$



$

13,510



$

48,726



$

11,202



$

59,928














EBITDA1












National media

$

47,453



$



$

47,453



$

151,133



$

(8,565)



$

142,568


Local media

40,532



(6,095)



34,437



151,045



(9,170)



141,875


Unallocated corporate

(7,803)





(7,803)



(38,306)



306



(38,000)


Total EBITDA1

$

80,182



$

(6,095)



$

74,087



$

263,872



$

(17,429)



$

246,443



 


1 EBITDA is net earnings before interest, taxes, depreciation, and amortization.


(a) Severance costs of $3.4 million, acquisition transaction costs of $2.4 million, and other accruals of $0.3 million

(b) Write-down of Ladies' Home Journal trademark of $9.3 million, severance costs of $8.5 million, write-down of other assets of $2.1 million, and

accrued costs of $0.8 million partially offset by a $1.0 million reduction in previously accrued restructuring charges

(c) Severance costs of $3.4 million, acquisition transaction costs of $5.5 million, and other accruals of $0.3 million

(d) Reversal of previously accrued restructuring charges

(e) Write-down of Ladies' Home Journal trademark of $9.3 million and write-down of medical sales force training business assets of $1.9 million


 

Table 3

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.


Periods Ended June 30, 2013

Three Months


Twelve Months


Excluding Special Items


Special Items


As Reported


Excluding

Special Items


Special Items


As Reported

(In thousands except per share data)












Revenues












Advertising

$

204,231



$



$

204,231



$

823,690



$



$

823,690


Circulation

87,878





87,878



322,223





322,223


All other

94,864





94,864



325,427





325,427


Total revenues

386,973





386,973



1,471,340





1,471,340


Operating expenses












Production, distribution, and editorial

144,725





144,725



561,058





561,058


Selling, general, and administrative

172,853





172,853



641,960



12,138


(a)

654,098


Depreciation and amortization

11,365





11,365



45,350





45,350


Total operating expenses

328,943





328,943



1,248,368



12,138



1,260,506


Income from operations

58,030





58,030



222,972



(12,138)



210,834


Interest expense, net

(3,200)





(3,200)



(13,430)





(13,430)


Earnings before income taxes

54,830





54,830



209,542



(12,138)



197,404


Income taxes

(21,027)





(21,027)



(78,428)



4,674



(73,754)


Net earnings

$

33,803



$



$

33,803



$

131,114



$

(7,464)



$

123,650














Basic earnings per share

$

0.76



$



$

0.76



$

2.95



$

(0.17)



$

2.78


Basic average shares outstanding

44,512



44,512



44,512



44,455



44,455



44,455














Diluted earnings per share

$

0.75



$



$

0.75



$

2.91



$

(0.17)



$

2.74


Diluted average shares outstanding

45,193



45,193



45,193



45,085



45,085



45,085



 













(a) Professional fees and expenses related to a transaction that did not materialize of $5.1 million, severance costs of $7.4 million, and vacated lease

accruals of $0.4 million partially offset by a $0.8 million reduction in previously accrued restructuring charges


 

Table 4

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.


Periods Ended June 30, 2013

Three Months


Twelve Months


Excluding Special Items


Special Items


As Reported


Excluding

Special Items


Special Items


As Reported

(In thousands)












Revenues












National media












Advertising

$

134,264



$



$

134,264



$

515,831



$



$

515,831


Circulation

87,878





87,878



322,223





322,223


Other revenues

72,419





72,419



257,141





257,141


Total national media

294,561





294,561



1,095,195





1,095,195


Local media












Non-political advertising

69,242





69,242



268,861





268,861


Political advertising

725





725



38,998





38,998


Other revenues

22,445





22,445



68,286





68,286


Total local media

92,412





92,412



376,145





376,145


Total revenues

$

386,973



$



$

386,973



$

1,471,340



$



$

1,471,340














Operating profit












National media

$

43,393



$



$

43,393



$

143,533



$

(5,548)


(a)

$

137,985


Local media

27,676





27,676



125,611



(1,495)


(b)

124,116


Unallocated corporate

(13,039)





(13,039)



(46,172)



(5,095)


(c)

(51,267)


Income from operations

$

58,030



$



$

58,030



$

222,972



$

(12,138)



$

210,834














Depreciation and amortization












National media

$

4,741



$



$

4,741



$

19,199



$



$

19,199


Local media

6,206





6,206



24,471





24,471


Unallocated corporate

418





418



1,680





1,680


Total depreciation and amortization

$

11,365



$



$

11,365



$

45,350



$



$

45,350














EBITDA1












National media

$

48,134



$



$

48,134



$

162,732



$

(5,548)


(a)

$

157,184


Local media

33,882





33,882



150,082



(1,495)


(b)

148,587


Unallocated corporate

(12,621)





(12,621)



(44,492)



(5,095)


(c)

(49,587)


Total EBITDA1

$

69,395



$



$

69,395



$

268,322



$

(12,138)



$

256,184



 


1 EBITDA is net earnings before interest, taxes, depreciation, and amortization.


(a) Severance costs of $5.9 million and a vacated lease accrual of $0.4 million partially offset by a $0.8 million reduction in previously accrued

restructuring charges

(b) Severance costs

(c) Professional fees and expenses related to a transaction that did not materialize


 

Table 5

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


EBITDA

Consolidated EBITDA, which is reconciled to net earnings in the following tables, is defined as net earnings before interest, taxes, depreciation, and amortization.

Segment EBITDA is a measure of segment earnings before depreciation and amortization.

Segment EBITDA margin is defined as segment EBITDA divided by segment revenues.



Three months ended June 30, 2014


National Media


Local

Media


Unallocated Corporate


Total

(In thousands)








Revenues

$

279,625



$

111,169



$



$

390,794










Operating profit

$

43,353



$

25,463



$

(8,239)



$

60,577


Depreciation and amortization

4,100



8,974



436



13,510


EBITDA

$

47,453



$

34,437



$

(7,803)



74,087


Less:








Depreciation and amortization







(13,510)


Net interest expense







(3,500)


Income taxes







(16,632)


Net earnings







$

40,445










Segment EBITDA margin

17.0

%


31.0

%






















Three months ended June 30, 2013


National Media


Local

Media


Unallocated Corporate


Total

(In thousands)








Revenues

$

294,561



$

92,412



$



$

386,973










Operating profit

$

43,393



$

27,676



$

(13,039)



$

58,030


Depreciation and amortization

4,741



6,206



418



11,365


EBITDA

$

48,134



$

33,882



$

(12,621)



69,395


Less:








Depreciation and amortization







(11,365)


Net interest expense







(3,200)


Income taxes







(21,027)


Net earnings







$

33,803










Segment EBITDA margin

16.3

%


36.7

%






Twelve months ended June 30, 2014


National Media


Local

Media


Unallocated Corporate


Total

(In thousands)








Revenues

$

1,065,898



$

402,810



$



$

1,468,708










Operating profit

$

113,113



$

113,060



$

(39,658)



$

186,515


Depreciation and amortization

29,455



28,815



1,658



59,928


EBITDA

$

142,568



$

141,875



$

(38,000)



246,443


Less:








Depreciation and amortization







(59,928)


Net interest expense







(12,176)


Income taxes







(60,798)


Net earnings







$

113,541










Segment EBITDA margin

13.4

%


35.2

%






















Twelve months ended June 30, 2013


National Media


Local

Media


Unallocated Corporate


Total

(In thousands)








Revenues

$

1,095,195



$

376,145



$



$

1,471,340










Operating profit

$

137,985



$

124,116



$

(51,267)



$

210,834


Depreciation and amortization

19,199



24,471



1,680



45,350


EBITDA

$

157,184



$

148,587



$

(49,587)



256,184


Less:








Depreciation and amortization







(45,350)


Net interest expense







(13,430)


Income taxes







(73,754)


Net earnings







$

123,650










Segment EBITDA margin

14.4

%


39.5

%






 

SOURCE Meredith Corporation



RELATED LINKS
http://www.meredith.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.