2014

Meredith Delivers Strong Fiscal 2013 Third Quarter And Nine Month Results

DES MOINES, Iowa, April 25, 2013 /PRNewswire/ -- Meredith Corporation (NYSE: MDP; www.meredith.com), the leading media and marketing company serving American women, today reported fiscal 2013 third quarter earnings per share of $0.65, compared to $0.47 in the prior-year period.  Excluding special items in both periods, fiscal 2013 third quarter earnings per share grew 9 percent to $0.72, compared to $0.66 in the prior-year period.  Total Company revenues rose 7 percent to $370 million.

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For the first nine months of fiscal 2013, Meredith's earnings per share were $2.00, compared to $1.65 in the prior-year period.  Excluding special items in both periods, earnings per share rose 18 percent to $2.17, compared to $1.84 in the prior-year period.  Total Company revenues increased 8 percent to $1.1 billion, including an 11 percent increase in advertising revenues.  Cash flow from operations increased 7 percent to $113 million.

"Our diversified business model delivered solid growth in revenues, operating profit and cash flow for the third quarter and first nine months of fiscal 2013," said Meredith Chairman and CEO Stephen M. Lacy.  "And we continued to demonstrate our ongoing commitment to Total Shareholder Return by raising our dividend 7 percent, our 20th straight annual dividend increase."

Lacy noted the following fiscal 2013 third quarter business highlights:

  • National Media Group advertising revenues increased 5 percent, driven by the recent acquisitions of the Allrecipes, EveryDay with Rachael Ray and FamilyFun brands.  Circulation revenues also increased, benefitting from growth at comparable titles; contributions from EveryDay with Rachael Ray and FamilyFun magazines; and a test issue of a magazine based on the Allrecipes brand. 
  • Local Media Group non-political advertising revenues were slightly lower than the prior year.  However, automotive advertising, the largest category, increased 6 percent.  Total revenues also benefitted from an increase in retransmission fees.  
  • Total Company digital advertising revenues grew 45 percent and reached a record high for a fiscal third quarter, driven by strong performance in the National Media Group. 
  • Consumer engagement strengthened across all of Meredith's media platforms.  Meredith magazine readership is at an all-time high of 116 million, while Meredith's local television station group delivered strong performance during the February ratings period.  Traffic to Meredith's websites rose approximately 40 percent to 40 million average monthly unique visitors.
  • Meredith raised its annual dividend to $1.63 per share.  Over the last decade, Meredith has grown its dividend at an average annual rate of approximately 15 percent.  Meredith also repurchased approximately 380,000 shares of its stock during the third quarter of fiscal 2013, and has repurchased 1.1 million shares in the first nine months of fiscal 2013.

Fiscal 2013 third quarter results included a special item of $5 million ($3 million after tax, or $0.07 per share) for professional fees and expenses related to a previously disclosed transaction that did not materialize.  Information on the special items in fiscal 2013 and fiscal 2012 is available in Tables 1-4 of this press release.

OPERATING GROUP DETAIL

NATIONAL MEDIA GROUP

Meredith's National Media Group includes leading national consumer media brands delivered over multiple platforms that offer clients access to 100 million unduplicated American women every month – a reach unmatched in the industry.  It also features robust brand licensing activities and innovative business-to-business marketing products and services.  

Fiscal 2013 third quarter National Media Group revenues grew 6 percent from the prior-year period to $284 million.  Operating profit was $43 million, compared to $23 million in the prior-year period, which included a net special charge of $13 million.

Fiscal 2013 third quarter operating profit growth was driven by higher advertising and circulation revenues, as well as stronger performance from brand licensing activities and Meredith Xcelerated Marketing.

Looking more closely at advertising performance for the third quarter of fiscal 2013 compared to the prior-year period:

  • Total advertising revenues grew 5 percent, driven by the recent acquisitions and Meredith's digital properties.  On a comparable basis, advertising revenues declined 3 percent, an improvement over the first half of fiscal 2013's advertising performance.
  • Digital advertising revenues grew more than 55 percent, boosted by the addition of Allrecipes.com.  On a comparable basis, digital advertising revenues grew 16 percent.
  • The food and beverage (+13%), financial services (+56%), apparel (+45%) and home (+13%) categories were stronger, and the weighted average net revenue per magazine page increased approximately 5 percent.

Circulation revenues were higher in the third quarter of fiscal 2013 due to growth from existing, or comparable, titles; and the addition of EveryDay with Rachael Ray, FamilyFun, and the Allrecipes test magazine.

Digital traffic rose by more than 45 percent in the third quarter of fiscal 2013, driven by the acquisition of Allrecipes and aggressive digital marketing initiatives.  In addition, Meredith generated 3.8 million digital orders for print magazine subscriptions during the first nine months of fiscal 2013, an increase of 75 percent over what was generated in the prior-year period, and is on pace to acquire more online subscriptions in fiscal 2013 than in the last two fiscal years combined.

"We are realizing the benefit of our recent acquisitions, which we've now fully integrated into our creative and sales structures," said National Media Group President Tom Harty.  "We also continue to leverage our expertise across media platforms – as demonstrated by our very successful test issue of a print magazine for the Allrecipes brand, the introduction of new mobile apps, and a significant increase in video content creation."

Other revenues were $64 million in the third quarter of fiscal 2013, compared to $68 million in the prior-year period.  This was due primarily to lower sales of books and timing of revenues from Meredith's consumer events activities, partially offset by revenue gains from Meredith's brand licensing activities.  

Meredith Xcelerated Marketing operating profit grew in the third quarter of fiscal 2013 from the prior-year period, representing an improvement over fiscal 2013 first half results.  MXM has renewed all its major clients for calendar 2013, and its new business pipeline continues to be strong.  MXM landed several new accounts – including AT&T and Samsung – along with business expansions with existing clients such as Church & Dwight and Allergan.  Meredith expects these new and expanded programs will translate into growth for MXM in calendar 2013 compared to the prior year.

For the first nine months of fiscal 2013, National Media Group revenues grew 4 percent from the prior-year period to $801 million.  Operating profit was $95 million in both periods.  Excluding special items in both periods, operating profit for the first nine months of fiscal 2013 was $100 million, compared to $109 million in the prior-year period, due primarily to lower advertising revenues at comparable magazine titles. 

LOCAL MEDIA GROUP

Meredith's Local Media Group consists of leading local television stations, many in fast-growing markets, and a video content creation unit that produces national broadcast and custom programming.

Fiscal 2013 third quarter Local Media Group revenues rose 10 percent to $85 million.  Operating profit was $24 million, compared to $23 million in the prior-year period which included a special item of $1 million.  

Looking more closely at performance for the third quarter of fiscal 2013 compared to the prior-year period:

  • Non-political advertising revenues were $66 million, slightly lower than the prior-year period.  The automotive (+6 percent), retail (+20 percent) and furnishings (+9 percent) categories were stronger. 
  • Political revenues were $1.5 million less, as expected in a non-political period.
  • Other revenues and operating expenses both increased, due primarily to growth in retransmission revenues from cable and satellite television operators, and programming fees paid to affiliated networks. 

Meredith's connection with viewers also strengthened in the important February ratings period, and its stations in Phoenix, Hartford, Kansas City and Saginaw were No. 1 in their markets from sign-on to sign-off.

Digital traffic rose 8 percent, driven by initiatives to improve content and search engine optimization, as well as continued focus on mobile apps aimed at news, sports and weather-related information.

Meredith Video Studios significantly expanded the reach of its daily syndicated The Better Show through an agreement with Crown Media Family Networks to distribute the program on the Hallmark Channel beginning in September 2013.  The agreement gives the program its first national cable distribution platform as the Hallmark Channel is available in nearly 90 million homes.  In addition, The Better Show was renewed for a seventh season in syndication.             

"We're pleased to have delivered another quarter of revenue and operating profit growth," said Local Media Group President Paul Karpowicz.  "Additionally, we set the stage for additional growth in revenues from The Better Show by securing national distribution via the Hallmark Channel."

For the first nine months of fiscal 2013, Local Media Group operating profit was $96 million, compared to $61 million in the prior-year period.  Excluding special items in both periods, operating profit grew 58 percent to a record $98 million.  EBITDA margin for the first nine months of fiscal 2013 was a record 40 percent.  Revenues rose 23 percent to $284 million, including $38 million of net political advertising revenues.

OTHER FINANCIAL INFORMATION

Consistent with its Total Shareholder Return strategy, Meredith repurchased 1.1 million shares of its stock in the first nine months of fiscal 2013.  At March 31, 2013, $47 million remained under the current repurchase authorization.

Total debt was $355 million at March 31, 2013, and the weighted average interest rate was 3.6 percent.  Meredith's debt-to-EBITDA ratio for the 12 months ended March 31, 2013, was 1.4 to 1. 

Cash flow from operations increased 7 percent in the first nine months of fiscal 2013 compared to the prior-year period, and totaled approximately $190 million for the 12 months ended March 31, 2013. 

Corporate expenses increased $9 million in the third quarter of fiscal 2013 compared to the prior-year period due primarily to the special item related to professional fees and expenses from the previously disclosed strategic transaction that did not materialize; contributions to the Meredith Foundation; and higher health care expenses and incentive compensation accruals.

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. 

OUTLOOK

Looking more closely at the fourth quarter of fiscal 2013 compared to the prior-year period:

  • National Media Group advertising revenues are expected to be flat to down slightly. 
  • Total Local Media Group revenues are expected to increase in the mid-single digits.  Non-political advertising revenues are expected to be flat to up slightly.  Additionally, the Local Media Group will be cycling against $3 million in net political advertising revenues recorded in the fourth quarter of fiscal 2012.

Meredith expects fiscal 2013 fourth quarter earnings per share to range from $0.68 to $0.73.  When added to the $2.17 generated in the first nine months, Meredith expects fiscal 2013 full year earnings per share to be toward the upper end of the original $2.60 to $2.95 range established at the beginning of fiscal 2013.  All amounts are before special items.

A number of uncertainties remain that may affect Meredith's outlook as stated in this press release for the fourth quarter and full year fiscal 2013.  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 April 25, 2013 at 11 a.m. EDT to discuss fiscal 2013 third quarter 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 is a common supplemental measure 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. Meredith does not use EBITDA as a measure of liquidity or funds available for management's discretionary use because they include certain contractual and non-discretionary expenditures.

Results on a comparable basis, as well as those excluding the special items recorded in fiscal 2013 and 2012, 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 will be made 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 statements regarding advertising revenues, along with the Company's revenue and earnings per share outlook for the fourth quarter and full year fiscal 2013.

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; 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) is the leading media and marketing company serving American women.  Meredith features multiple well-known national brands – including Better Homes and Gardens, Parents, Family Circle, Allrecipes, Ladies' Home Journal, Fitness, More, American Baby, EveryDay with Rachael Ray and FamilyFun – along with local television brands in fast-growing markets.  Meredith is the industry leader in creating content in key consumer interest areas such as home, family, food, health and wellness and self-development. Meredith uses multiple distribution platforms – including print, television, digital, mobile, tablets, and video – to give consumers content they desire and to deliver the messages of its advertising and marketing partners.

Additionally, Meredith uses its many assets to create powerful custom marketing solutions for many of the nation's top brands and companies. Meredith Xcelerated Marketing has significantly added to its capabilities in recent years through the acquisition of cutting-edge companies in digital, mobile, social, healthcare, database, and international marketing. 

A hallmark of Meredith's business model and financial profile is its ability to consistently generate substantial free cash flow by leveraging the strength of its multi-platform portfolio.  Meredith is committed to increasing Total Shareholder Return through dividend payments, share repurchases and strategic business investments.  Meredith has paid a dividend for 66 straight years and increased its dividend for 20 consecutive years.  Meredith currently pays an annual dividend of $1.63 per share, resulting in a dividend yield of approximately 4 percent.

 

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)










Three Months


Nine Months

Periods ended March 31, 

2013


2012


2013


2012

(In thousands except per share data)








Revenues








Advertising 

$   195,243


$   191,472


$   619,459


$   559,425

Circulation

91,458


76,331


234,345


206,822

All other

82,914


77,710


230,563


235,892

  Total revenues

369,615


345,513


1,084,367


1,002,139

Operating expenses








Production, distribution, and editorial

141,605


136,454


416,333


401,757

Selling, general, and administrative

166,873


159,352


481,245


437,257

Depreciation and amortization

11,091


11,407


33,985


31,744

  Total operating expenses

319,569


307,213


931,563


870,758

Income from operations

50,046


38,300


152,804


131,381

Interest expense, net

(3,228)


(3,283)


(10,230)


(8,899)

  Earnings before income taxes

46,818


35,017


142,574


122,482

Income taxes

(17,397)


(13,848)


(52,727)


(48,092)

Net earnings

$     29,421


$     21,169


$     89,847


$     74,390









Basic earnings per share

$         0.66


$         0.47


$         2.02


$         1.66

Basic average shares outstanding

44,404


44,800


44,436


44,882









Diluted earnings per share

$         0.65


$         0.47


$         2.00


$         1.65

Diluted average shares outstanding

45,079


45,296


45,021


45,141









Dividends paid per share

$     0.4075


$     0.3825


$     1.1725


$     1.0200

 

 

 

Meredith Corporation and Subsidiaries 

Segment Information (Unaudited)










Three Months


Nine Months

Periods ended March 31, 

2013


2012


2013


2012

(In thousands)








Revenues








National media








   Advertising

$ 128,770


$ 122,977


$   381,567


$   354,614

   Circulation

91,458


76,331


234,345


206,822

   Other revenues

64,000


68,295


184,722


209,094

  Total national media

284,228


267,603


800,634


770,530

Local media








   Non-political advertising

66,118


66,652


199,619


201,311

   Political advertising

355


1,843


38,273


3,500

   Other revenues

18,914


9,415


45,841


26,798

  Total local media

85,387


77,910


283,733


231,609

Total revenues

$ 369,615


$ 345,513


$ 1,084,367


$ 1,002,139









Operating profit








National media

$  42,991


$  23,330


$     94,592


$     95,131

Local media

24,085


22,654


96,440


60,867

Unallocated corporate 

(17,030)


(7,684)


(38,228)


(24,617)

Income from operations

$  50,046


$  38,300


$   152,804


$   131,381









Depreciation and amortization








National media

$    4,593


$    4,615


$     14,458


$     11,808

Local media

6,093


6,299


18,265


18,463

Unallocated corporate 

405


493


1,262


1,473

Total depreciation and amortization

$  11,091


$  11,407


$     33,985


$     31,744









EBITDA1








National media

$  47,584


$  27,945


$   109,050


$   106,939

Local media

30,178


28,953


114,705


79,330

Unallocated corporate 

(16,625)


(7,191)


(36,966)


(23,144)

Total EBITDA1

$  61,137


$  49,707


$   186,789


$   163,125









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

 

 

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)






 March 31, 


 June 30, 

Assets

2013


2012

(In thousands)




Current assets




Cash and cash equivalents

$      24,490


$     25,820

Accounts receivable, net

226,522


215,526

Inventories

26,094


22,559

Current portion of subscription acquisition costs

98,268


75,446

Current portion of broadcast rights

4,942


3,408

Other current assets

19,038


16,677

Total current assets

399,354


359,436

Property, plant, and equipment

461,922


455,271

Less accumulated depreciation

(274,200)


(260,967)

Net property, plant, and equipment

187,722


194,304

Subscription acquisition costs

94,293


75,368

Broadcast rights

4,127


943

Other assets

67,694


66,858

Intangible assets, net

578,922


586,263

Goodwill

732,662


733,127

Total assets

$  2,064,774


$ 2,016,299





Liabilities and Shareholders' Equity




Current liabilities




Current portion of long-term debt

$      50,000


$   105,000

Current portion of long-term broadcast rights payable

7,261


6,752

Accounts payable

58,660


72,911

Accrued expenses and other liabilities

117,188


117,071

Current portion of unearned subscription revenues

195,368


180,852

Total current liabilities

428,477


482,586

Long-term debt

305,000


275,000

Long-term broadcast rights payable

5,814


3,695

Unearned subscription revenues

149,257


141,408

Deferred income taxes

231,873


204,054

Other noncurrent liabilities

112,678


112,111

Total liabilities

1,233,099


1,218,854

Shareholders' equity




Common stock

36,144


35,791

Class B stock

8,340


8,716

Additional paid-in capital

48,769


53,275

Retained earnings

760,320


722,778

Accumulated other comprehensive loss

(21,898)


(23,115)

Total shareholders' equity

831,675


797,445

Total liabilities and shareholders' equity

$  2,064,774


$ 2,016,299

 

 

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)









Nine months ended March 31, 

2013


2012

(In thousands)




Net cash provided by operating activities

$ 113,302


$ 105,638





Cash flows from investing activities




   Acquisitions of businesses 

(7,410)


(243,897)

   Additions to property, plant, and equipment 

(18,854)


(30,739)

   Other

-


(781)

Net cash used in investing activities 

(26,264)


(275,417)





Cash flows from financing activities




   Proceeds from issuance of long-term debt

65,000


295,000

   Repayments of long-term debt 

(90,000)


(70,000)

   Purchases of Company stock 

(39,908)


(16,584)

   Dividends paid 

(52,305)


(45,892)

   Proceeds from common stock issued 

26,357


4,502

   Excess tax benefits from share-based payments 

3,258


346

   Other

(770)


(640)

Net cash provided by (used in) financing activities 

(88,368)


166,732

Net decrease in cash and cash equivalents 

(1,330)


(3,047)

Cash and cash equivalents at beginning of period

25,820


27,721

Cash and cash equivalents at end of period

$  24,490


$  24,674

 

 


Meredith Corporation and Subsidiaries

Table 1

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 March 31, 2013

Three Months 


Nine Months 


Excluding
Special
Items


Special
Items


As Reported


Excluding
Special
Items


Special
Items


As Reported

(In thousands except per share data)












Revenues












Advertising 

$ 195,243


$        -


$ 195,243


$ 619,459


$        -


$ 619,459

Circulation

91,458


-


91,458


234,345


-


234,345

All other

82,914


-


82,914


230,563


-


230,563

   Total revenues

369,615


-


369,615


1,084,367


-


1,084,367

Operating expenses












Production, distribution, and editorial

141,605


-


141,605


416,333


-


416,333

Selling, general, and administrative

161,778


5,095

(a)

166,873


469,107


12,138

(b)

481,245

Depreciation and amortization

11,091


-


11,091


33,985


-


33,985

   Total operating expenses

314,474


5,095


319,569


919,425


12,138


931,563

Income from operations

55,141


(5,095)


50,046


164,942


(12,138)


152,804

Interest expense, net

(3,228)


-


(3,228)


(10,230)


-


(10,230)

   Earnings before income taxes

51,913


(5,095)


46,818


154,712


(12,138)


142,574

Income taxes

(19,359)


1,962


(17,397)


(57,401)


4,674


(52,727)

Net earnings

$   32,554


$(3,133)


$  29,421


$   97,311


$(7,464)


$   89,847













Basic earnings per share

$       0.73


$  (0.07)


$      0.66


$       2.19


$  (0.17)


$       2.02

Basic average shares outstanding

44,404


44,404


44,404


44,436


44,436


44,436













Diluted earnings per share

$       0.72


$  (0.07)


$      0.65


$      2.17


$  (0.17)


$      2.00

Diluted average shares outstanding

45,079


45,079


45,079


45,021


45,021


45,021














(a)

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

(b)

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

 

 

 


Meredith Corporation and Subsidiaries 



Table 2

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 March 31, 2013

Three Months 


Nine Months 


Excluding
Special
Items


Special
Items


As Reported


Excluding
Special
Items


Special
Items


As Reported

(In thousands)












Revenues












National media group












     Advertising

$ 128,770


$        -


$ 128,770


$   381,567


$          -


$   381,567

     Circulation

91,458


-


91,458


234,345


-


234,345

     Other revenues

64,000


-


64,000


184,722


-


184,722

      Total national media group

284,228


-


284,228


800,634


-


800,634

Local media group












     Non-political advertising

66,118


-


66,118


199,619


-


199,619

     Political advertising

355


-


355


38,273


-


38,273

     Other revenues

18,914


-


18,914


45,841


-


45,841

      Total local media group

85,387


-


85,387


283,733


-


283,733

Total revenues

$ 369,615


$        -


$ 369,615


$ 1,084,367


$          -


$ 1,084,367













Operating profit












National media group

$   42,991


$        -


$  42,991


$   100,140


$  (5,548)

(a)

$     94,592

Local media group

24,085


-


24,085


97,935


(1,495)

(b)

96,440

Unallocated corporate 

(11,935)


(5,095)

(c)

(17,030)


(33,133)


(5,095)

(c)

(38,228)

Income from operations

$   55,141


$(5,095)


$  50,046


$   164,942


$(12,138)


$   152,804













Depreciation and amortization












National media group

$     4,593


$        -


$    4,593


$     14,458


$          -


$     14,458

Local media group

6,093


-


6,093


18,265


-


18,265

Unallocated corporate 

405


-


405


1,262


-


1,262

Total depreciation and amortization

$   11,091


$        -


$  11,091


$     33,985


$          -


$     33,985













EBITDA1












National media group

$   47,584


$        -


$  47,584


$   114,598


$  (5,548)

(a)

$   109,050

Local media group

30,178


-


30,178


116,200


(1,495)

(b)

114,705

Unallocated corporate 

(11,530)


(5,095)

(c)

(16,625)


(31,871)


(5,095)

(c)

(36,966)

Total EBITDA1

$   66,232


$(5,095)


$  61,137


$   198,927


$(12,138)


$   186,789


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

 

 

 


Meredith Corporation and Subsidiaries





Table 3

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 March 31, 2012

Three Months 


Nine Months 


Excluding
Special
Items


Special
Items


As Reported


Excluding
Special
Items


Special
Items


As Reported

(In thousands except per share data)












Revenues












Advertising 

$ 191,472


$        -


$ 191,472


$ 559,425


$        -


$ 559,425

Circulation

76,331


-


76,331


206,822


-


206,822

All other

77,710


-


77,710


235,892


-


235,892

   Total revenues

345,513


-


345,513


1,002,139


-


1,002,139

Operating expenses












Production, distribution, and editorial

136,429


25

(a)

136,454


401,732


25

(a)

401,757

Selling, general, and administrative

144,707


14,645

(b)

159,352


422,612


14,645

(b)

437,257

Depreciation and amortization

11,407


-


11,407


31,744


-


31,744

   Total operating expenses

292,543


14,670


307,213


856,088


14,670


870,758

Income from operations

52,970


(14,670)


38,300


146,051


(14,670)


131,381

Interest expense, net

(3,283)


-


(3,283)


(8,899)


-


(8,899)

   Earnings before income taxes

49,687


(14,670)


35,017


137,152


(14,670)


122,482

Income taxes

(19,888)


6,040


(13,848)


(54,132)


6,040


(48,092)

Net earnings

$   29,799


$(8,630)


$  21,169


$   83,020


$(8,630)


$   74,390













Basic earnings per share

$        0.66


$  (0.19)


$       0.47


$        1.85


$  (0.19)


$        1.66

Basic average shares outstanding

44,800


44,800


44,800


44,882


44,882


44,882













Diluted earnings per share

$        0.66


$  (0.19)


$      0.47


$      1.84


$  (0.19)


$       1.65

Diluted average shares outstanding

45,296


45,296


45,296


45,141


45,141


45,141


(a)

Write-down of art and manuscript inventory

(b)

Severance costs of $10.0 million, Allrecipes.com acquisition costs of $2.5 million, vacated lease accruals of $2.7 million, and other net miscellaneous write-downs and accruals of $0.5 million partially offset by a $1.0 million reduction in contingent consideration payable

 

 

 


Meredith Corporation and Subsidiaries 





Table 4

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 March 31, 2012

Three Months 


Nine Months 


Excluding
Special
Items


Special
Items


As Reported


Excluding
Special
Items


Special
Items


As Reported

(In thousands)












Revenues












National media group












     Advertising

$ 122,977


$          -


$ 122,977


$   354,614


$          -


$   354,614

    Circulation

76,331


-


76,331


206,822


-


206,822

     Other revenues

68,295


-


68,295


209,094


-


209,094

      Total national media group

267,603


-


267,603


770,530


-


770,530

Local media group












     Non-political advertising

66,652


-


66,652


201,311


-


201,311

     Political advertising

1,843


-


1,843


3,500


-


3,500

     Other revenues

9,415


-


9,415


26,798


-


26,798

      Total local media group

77,910


-


77,910


231,609


-


231,609

Total revenues

$ 345,513


$          -


$ 345,513


$ 1,002,139


$          -


$ 1,002,139













Operating profit












National media group

$   36,811


$(13,481)

(a)

$  23,330


$   108,612


$(13,481)

(a)

$     95,131

Local media group

23,843


(1,189)

(b)

22,654


62,056


(1,189)

(b)

60,867

Unallocated corporate 

(7,684)


-


(7,684)


(24,617)


-


(24,617)

Income from operations

$   52,970


$(14,670)


$  38,300


$   146,051


$(14,670)


$   131,381













Depreciation and amortization












National media group

$     4,615


$          -


$    4,615


$     11,808


$          -


$     11,808

Local media group

6,299


-


6,299


18,463


-


18,463

Unallocated corporate 

493


-


493


1,473


-


1,473

Total depreciation and amortization

$   11,407


$          -


$  11,407


$     31,744


$          -


$     31,744













EBITDA1












National media group

$   41,426


$(13,481)

(a)

$  27,945


$   120,420


$(13,481)

(a)

$   106,939

Local media group

30,142


(1,189)

(b)

28,953


80,519


(1,189)

(b)

79,330

Unallocated corporate 

(7,191)


-


(7,191)


(23,144)


-


(23,144)

Total EBITDA1

$   64,377


$(14,670)


$  49,707


$   177,795


$(14,670)


$   163,125


1

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


(a)

Severance costs of $9.9 million, Allrecipes.com acquisition costs of $2.5 million, vacated lease accruals of $1.6 million, and other net miscellaneous write-downs and accruals of $0.5 million partially offset by a $1.0 million reduction in contingent consideration payable

(b)

Severance costs of $0.1 million and a vacated lease accrual of $1.1 million

 

 

 


Meredith Corporation and Subsidiaries 



Table 5

Supplemental Disclosures Regarding Non-GAAP Financial Measures















Three months ended March 31,

2013


2012


Change







National Media Advertising Revenues






   On a comparable basis 1

$ 119,879


$ 122,977


(3)%

   Other

8,891


-



   Total 

$ 128,770


$ 122,977


5 %













National Media Digital Advertising Revenues






   On a comparable basis 1

$  13,385


$  11,588


16 %

   Other

4,731


-



   Total 

$  18,116


$  11,588


56 %








1

Results on a comparable basis include print advertising for all magazines with a corresponding issue in the prior year and current year periods and/or digital advertising revenues for all properties with results in both the prior year and current year periods

 

 

 

Meredith Corporation and Subsidiaries



Table 6

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 March 31, 2013


Nine months ended March 31, 2013


National
Media

Local
Media

Unallocated
Corporate

Total


National
Media

Local
Media

Unallocated
Corporate

Total

(In thousands)










Revenues

$ 284,228

$ 85,387

$              -

$ 369,615


$ 800,634

$ 283,733

$              -

$ 1,084,367











Operating profit

$  42,991

$ 24,085

$     (17,030)

$  50,046


$  94,592

$  96,440

$     (38,228)

$   152,804

Depreciation and amortization

4,593

6,093

405

11,091


14,458

18,265

1,262

33,985

EBITDA

$  47,584

$ 30,178

$     (16,625)

61,137


$ 109,050

$ 114,705

$     (36,966)

186,789

Less:










Depreciation and amortization




(11,091)





(33,985)

Net interest expense




(3,228)





(10,230)

Income taxes




(17,397)





(52,727)

Net earnings




$  29,421





$     89,847











Segment EBITDA margin

16.7%

35.3%




13.6%

40.4%














Three months ended March 31, 2012


Nine months ended March 31, 2012


National
Media

Local
Media

Unallocated
Corporate

Total


National
Media

Local
Media

Unallocated
Corporate

Total

(In thousands)










Revenues

$ 267,603

$ 77,910

$              -

$ 345,513


$ 770,530

$ 231,609

$              -

$ 1,002,139











Operating profit

$  23,330

$ 22,654

$      (7,684)

$  38,300


$  95,131

$  60,867

$     (24,617)

$   131,381

Depreciation and amortization

4,615

6,299

493

11,407


11,808

18,463

1,473

31,744

EBITDA

$  27,945

$ 28,953

$      (7,191)

49,707


$ 106,939

$  79,330

$     (23,144)

163,125

Less:










Depreciation and amortization




(11,407)





(31,744)

Net interest expense




(3,283)





(8,899)

Income taxes




(13,848)





(48,092)

Net earnings




$  21,169





$     74,390











Segment EBITDA margin

10.4%

37.2%




13.9%

34.3%



 

 

SOURCE Meredith Corporation



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