Meredith Reports Fiscal 2014 Third Quarter And Nine Month Results Local Media Group Delivers Record Revenues and Operating Profit for a Fiscal Third Quarter

DES MOINES, Iowa, April 24, 2014 /PRNewswire/ -- Meredith Corporation (NYSE: MDP; www.meredith.com) today reported fiscal 2014 third quarter earnings per share of $0.41, compared to $0.65 in the prior-year period.  Total company revenues were $367 million, compared to $370 millionExcluding special items in both periods, fiscal 2014 third quarter earnings per share were $0.70, compared to $0.72 in the prior-year quarter (See Tables 1 - 4).

"Growth in retransmission, circulation, and brand licensing revenues partially offset a difficult ad environment for Meredith and our media industry peers," said Meredith Chairman and Chief Executive Officer Stephen M. Lacy.  "However, our advertising outlook is significantly better for the fourth quarter of fiscal 2014, with expected gains in our television and digital businesses, and improving magazine advertising trends."

Fiscal 2014 third quarter results include special items of $13 million after tax, or $0.29 per share.  The special items include transaction-related expenses resulting from previously announced agreements to purchase broadcast assets; selected workforce reductions, including those associated with transitioning Ladies' Home Journal to a special interest publication and closing the Company's sales force training practice; and certain other non-cash items.  Prior-year third quarter earnings per share included a special item of $3 million after tax, or $0.07 per share, for professional fees and expenses related to a transaction that didn't materialize. 

Lacy noted the following fiscal 2014 third quarter highlights compared to the prior-year period:

  • Local Media Group revenues increased 14 percent to $98 million, and operating profit grew 11 percent to $27 million, both records for a fiscal third quarter. Growth was driven by increased retransmission-related revenues and strong performance from Meredith television stations in Nashville, Phoenix and Las Vegas.
  • Meredith began its ownership of KMOV-TV in St. Louis, the newest addition to its broadcasting portfolio. The CBS affiliate has tremendous news and advertising sales momentum.
  • National Media Group non-advertising business performance was strong, as circulation and brand licensing revenues each grew in the mid-single-digits. Growth was driven by the launch of Allrecipes magazine and initiatives to grow its rate base, along with continued strong sales of Better Homes and Gardens' licensed products at Walmart. This performance partially offset a weak advertising environment.
  • Meredith continued to demonstrate its commitment to Total Shareholder Return, increasing its dividend 6 percent to $1.73 on an annualized basis, a yield of approximately 4 percent. Additionally, Meredith repurchased 200,000 shares of its stock in the third quarter, and has repurchased 1.4 million shares in the first nine months of fiscal 2014.

Fiscal 2014 nine month earnings per share were $1.61, compared to $2.00 in the prior-year period.  Excluding special items in both periods, fiscal 2014 nine month earnings per share were $1.92, compared to $2.17 (See Tables 1 - 4).   Meredith recorded $37 million, or $0.49 per share, less of political advertising revenues in the first nine months of fiscal 2014, as expected in an off-election year.  Total revenues were approximately even at $1.1 billion for both periods.

OPERATING GROUP DETAIL

NATIONAL MEDIA GROUP

Meredith's National Media Group includes leading national consumer media brands delivered over multiple platforms, offering 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 services.

Fiscal 2014 third quarter National Media Group operating profit was $14 million ($33 million excluding special items), compared to $43 million.  Revenues were $270 million, compared to $284 million.

Looking more closely at performance in the third quarter of fiscal 2014 compared to the prior-year period:

  • Total advertising revenues were $112 million, compared to $129 million. The food, beauty and financial services categories were weaker, while the pets, non-prescription drug and entertainment categories were stronger. Meredith also expanded its innovative Meredith Sales Guarantee program to digital platforms.
  • Meredith grew its share of magazine advertising revenues in its competitive set by one share point to 40 percent, according to the most recent data from Publishers Information Bureau.
  • Circulation revenues grew 5 percent to $96 million, due primarily to the launch of Allrecipes magazine and initiatives to grow its rate base, along with strong performance from Meredith's parenthood brands and Better Homes and Gardens.
  • Brand Licensing revenues grew 6 percent, led by continued strong sales of over 3,000 SKU's of Better Homes and Gardens' licensed products at more than 4,000 Walmart stores nationwide.

Meredith's connection with consumers strengthened during the third quarter of fiscal 2014. Meredith's monthly magazine audience was an impressive 116 million, and average household income of Meredith's audience grew over the prior-year period, according to the most current data from Mediamark Research and Intelligence.

Digital traffic averaged 51 million unique visitors, a record for a fiscal third quarter.  The Meredith Women's Network is now No. 1 in comScore's Lifestyle category, the first time Meredith has topped the rankings.  In addition, Allrecipes continues to lead in comScore's Food category.  Meredith generated 4.6 million digital orders for print magazine subscriptions during the first nine months of fiscal 2014, an increase of nearly 20 percent compared to the prior year.

"Growth in circulation and brand licensing revenues, as well as digital traffic again demonstrated the strong relationships our brands have with individual consumers," said National Media Group President Tom Harty.  "We grew market share among our competitive set in a challenging advertising environment, and we continued to attract new participants to the Meredith Sales Guarantee program."

Fiscal 2014 first nine month National Media Group operating profit was $70 million, compared to $95 million in the prior-year period.  Excluding special items in both periods, operating profit was $90 million, compared to $100 million.  Revenues were $786 million, compared to $801 million.

LOCAL MEDIA GROUP

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

Fiscal 2014 third quarter Local Media Group operating profit was $27 million ($28 million excluding special items), compared to $24 million in the prior-year period, and EBITDA margin was 35 percent in the current period.  Revenues increased 14 percent to $98 million.  

Looking more closely at performance in the third quarter of fiscal 2014 compared to the prior-year period:

  • Non-political advertising revenues grew 6 percent to $70 million. Results reflect strength from the restaurant, home and retail categories, along with one month of operations of KMOV.
  • Digital advertising revenues grew 27 percent, driven by increased traffic across the desktop and video platforms, the launch of new mobile apps and one month of operations of KMOV.
  • Other revenues and operating expenses both increased, due primarily to growth in retransmission revenues from subscription television operators and programming fees paid to affiliated networks.

On December 23, 2013, Meredith announced agreements to purchase the broadcast assets of KTVK and KASW in Phoenix, and KMOV in St. Louis.  The St. Louis transaction closed on February 28, 2014, and Meredith anticipates the Phoenix transactions will close in the fourth quarter of fiscal 2014.    

Meredith's connection with viewers strengthened in the third quarter of fiscal 2014.  Nearly all of Meredith's stations grew morning news viewership during the most recent February ratings period, with Hartford, Saginaw, Portland and Las Vegas leading their markets.  St. Louis, Portland and Las Vegas were No. 1 in late news, while Hartford and Saginaw were No. 1 in sign-on to sign-off.

The Better Show, the daily syndicated program produced by Meredith Video Studios, was renewed for an eighth season in syndication.  It's currently available in 160 markets across the United States, and also airs in 90 million homes on the Hallmark Channel.

"We're pleased to deliver another quarter of record operating results," said Local Media Group President Paul Karpowicz.  "We're excited to have KMOV in St. Louis as part of the Meredith portfolio.  KMOV's addition – along with improving non-political advertising, growth in digital advertising and an anticipated robust political advertising cycle – point to a strong calendar 2014 for our business."

Fiscal 2014 first nine month Local Media Group operating profit was $88 million, compared to $96 million in the prior-year period.  Excluding special items in both periods, operating profit was $91 million, compared to $98 million, and EBITDA margin was 38 percent in the current period.  Revenues increased 3 percent to $292 million.  Meredith recorded $37 million less of political advertising revenues in the first nine months of fiscal 2014, as expected in an off-election year. 

OTHER FINANCIAL INFORMATION

Consistent with its Total Shareholder Return strategy, Meredith repurchased more than 1.4 million shares of its stock in the first nine months of fiscal 2014.  At March 31, 2014, $16 million remained under the current repurchase authorization.  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 launching its TSR strategy in October 2011; (2) A $100 million share repurchase program; and (3) Ongoing investments to scale the business and increase shareholder value.

Total debt was $525 million at March 31, 2014, and the weighted average interest rate was 2.6 percent.  Meredith's debt-to-EBITDA ratio for the 12 months ended March 31, 2014, was 2.0 to 1.

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 third quarter and first nine month comparisons are against the prior-year periods.

OUTLOOK

Looking more closely at the fourth quarter of fiscal 2014 compared to the prior-year period, excluding operating results and transaction expenses related to the pending acquisition of television stations in Phoenix: 

  • Total company revenues are expected to be up low-single digits.
  • Total Local Media Group revenues are expected to be up high teens.
  • Total National Media Group revenues are expected to be down mid-single digits.
  • Meredith expects fiscal 2014 fourth quarter earnings per share to range from $0.81 to $0.86, compared to $0.75 in the prior-year period. 

When adding fourth quarter expected results to the $1.92 (before special items) generated in the first nine months, Meredith expects fiscal 2014 full year earnings per share to be approximately at the mid-point of the $2.60 to $2.95 range established at the beginning of fiscal 2014.  As a reminder, these amounts are before special items, and exclude operating results and transaction expenses related to the pending acquisition of television stations in Phoenix.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on April 24, 2014 at 11 a.m. EDT to discuss fiscal 2014 third quarter and nine month 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 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 Company's revenue and earnings per share outlook for the fourth quarter and full year fiscal 2014.

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 reaches 100 million American women every month through well-known national brands including Better Homes and Gardens, Parents, Family Circle, Allrecipes, Every Day with Rachael Ray and FamilyFun.  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 media 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.  Meredith owns or operates 14 television stations that reach more than 10 percent of U.S. television households.  Additionally, Meredith Xcelerated Marketing serves the nation's top brands and companies with deep expertise in digital, mobile, social, healthcare, analytics 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 67 straight years and increased its dividend for 21 consecutive years.  Meredith currently pays an annual dividend of $1.73 per share that yields approximately 4 percent.

 

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)










Three Months


Nine Months

Periods ended March 31, 

2014


2013


2014


2013

(In thousands except per share data)








Revenues








Advertising 

$ 182,175


$ 195,243


$ 574,253


$ 619,459

Circulation

96,078


91,458


239,545


234,345

All other

89,161


82,914


264,116


230,563

   Total revenues

367,414


369,615


1,077,914


1,084,367

Operating expenses








Production, distribution, and editorial

144,766


141,605


417,759


416,333

Selling, general, and administrative

168,386


166,873


487,799


481,245

Depreciation and amortization

23,033


11,091


46,418


33,985

   Total operating expenses

336,185


319,569


951,976


931,563

Income from operations

31,229


50,046


125,938


152,804

Interest expense, net

(3,408)


(3,228)


(8,676)


(10,230)

Earnings before income taxes

27,821


46,818


117,262


142,574

Income taxes

(9,335)


(17,397)


(44,166)


(52,727)

Net earnings

$  18,486


$  29,421


$   73,096


$   89,847









Basic earnings per share

$      0.41


$      0.66


$      1.64


$      2.02

Basic average shares outstanding

44,649


44,404


44,665


44,436









Diluted earnings per share

$      0.41


$      0.65


$      1.61


$      2.00

Diluted average shares outstanding

45,376


45,079


45,462


45,021









Dividends paid per share

$  0.4325


$  0.4075


$   1.2475


$   1.1725

 

 

Meredith Corporation and Subsidiaries 

Segment Information (Unaudited)










Three Months


Nine Months

Periods ended March 31, 

2014


2013


2014


2013

(In thousands)








Revenues








National media








   Advertising

$ 111,847


$ 128,770


$   360,074


$   381,567

   Circulation

96,078


91,458


239,545


234,345

   Other revenues

61,755


64,000


186,654


184,722

      Total national media

269,680


284,228


786,273


800,634

Local media








   Non-political advertising

69,796


66,118


212,418


199,619

   Political advertising

532


355


1,761


38,273

   Other revenues

27,406


18,914


77,462


45,841

      Total local media

97,734


85,387


291,641


283,733

Total revenues

$ 367,414


$ 369,615


$ 1,077,914


$ 1,084,367









Operating profit








National media

$  13,614


$  42,991


$     69,760


$     94,592

Local media

26,696


24,085


87,597


96,440

Unallocated corporate 

(9,081)


(17,030)


(31,419)


(38,228)

Income from operations

$  31,229


$  50,046


$   125,938


$   152,804









Depreciation and amortization








National media

$  15,622


$    4,593


$     25,355


$     14,458

Local media

7,009


6,093


19,841


18,265

Unallocated corporate 

402


405


1,222


1,262

Total depreciation and amortization

$  23,033


$  11,091


$     46,418


$     33,985









EBITDA1








National media

$  29,236


$  47,584


$     95,115


$   109,050

Local media

33,705


30,178


107,438


114,705

Unallocated corporate 

(8,679)


(16,625)


(30,197)


(36,966)

Total EBITDA1

$  54,262


$  61,137


$   172,356


$   186,789









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

2014


2013

(In thousands)




Current assets




Cash and cash equivalents

$       22,121


$     27,674

Accounts receivable, net

240,846


232,305

Inventories

26,478


28,386

Current portion of subscription acquisition costs

104,081


97,982

Current portion of broadcast rights

5,523


2,831

Other current assets

19,201


18,514

Total current assets

418,250


407,692

Property, plant, and equipment

481,073


464,255

Less accumulated depreciation

(292,261)


(277,938)

Net property, plant, and equipment

188,812


186,317

Subscription acquisition costs

101,162


99,433

Broadcast rights

2,698


3,634

Other assets

74,844


69,848

Intangible assets, net

660,244


584,281

Goodwill

857,196


788,854

Total assets

$   2,303,206


$ 2,140,059





Liabilities and Shareholders' Equity




Current liabilities




Current portion of long-term debt

$       75,000


$     50,000

Current portion of long-term broadcast rights payable

5,427


4,089

Accounts payable

60,531


78,458

Accrued expenses and other liabilities

128,982


132,676

Current portion of unearned subscription revenues

189,076


191,448

Total current liabilities

459,016


456,671

Long-term debt

450,000


300,000

Long-term broadcast rights payable

3,941


5,096

Unearned subscription revenues

155,828


163,809

Deferred income taxes

258,660


247,487

Other noncurrent liabilities

107,706


112,700

Total liabilities

1,435,151


1,285,763

Shareholders' equity




Common stock

36,880


36,242

Class B stock

7,706


8,324

Additional paid-in capital

45,920


50,170

Retained earnings

792,963


775,901

Accumulated other comprehensive loss

(15,414)


(16,341)

Total shareholders' equity

868,055


854,296

Total liabilities and shareholders' equity

$   2,303,206


$ 2,140,059

 

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)









Nine months ended March 31, 

2014


2013

(In thousands)




Net cash provided by operating activities

$  91,357


$ 113,302





Cash flows from investing activities




   Acquisitions of and investments in businesses 

(188,654)


(7,410)

   Additions to property, plant, and equipment 

(16,483)


(18,854)

Net cash used in investing activities 

(205,137)


(26,264)





Cash flows from financing activities




   Proceeds from issuance of long-term debt

386,000


65,000

   Repayments of long-term debt 

(211,000)


(90,000)

   Purchases of Company stock 

(67,820)


(39,908)

   Dividends paid 

(56,034)


(52,305)

   Proceeds from common stock issued 

54,903


26,357

   Excess tax benefits from share-based payments 

4,092


3,258

   Other

(1,914)


(770)

Net cash provided by (used in) financing activities 

108,227


(88,368)

Net decrease in cash and cash equivalents 

(5,553)


(1,330)

Cash and cash equivalents at beginning of period

27,674


25,820

Cash and cash equivalents at end of period

$  22,121


$  24,490

 

 


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, 2014

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 

$ 182,175


$          -


$ 182,175


$ 574,253


$          -


$ 574,253

Circulation

96,078


-


96,078


239,545


-


239,545

All other

89,161


-


89,161


264,116


-


264,116

   Total revenues

367,414


-


367,414


1,077,914


-


1,077,914

Operating expenses












Production, distribution, and editorial

144,521


245

(a)

144,766


417,514


245

(a)

417,759

Selling, general, and administrative

158,862


9,524

(b)

168,386


476,710


11,089

(c)

487,799

Depreciation and amortization

11,831


11,202

(d)

23,033


35,216


11,202

(d)

46,418

   Total operating expenses

315,214


20,971


336,185


929,440


22,536


951,976

Income from operations

52,200


(20,971)


31,229


148,474


(22,536)


125,938

Interest expense, net

(2,772)


(636)

(e)

(3,408)


(8,040)


(636)

(e)

(8,676)

Earnings before income taxes

49,428


(21,607)


27,821


140,434


(23,172)


117,262

Income taxes

(17,654)


8,319


(9,335)


(53,088)


8,922


(44,166)

Net earnings

$   31,774


$(13,288)


$  18,486


$   87,346


$(14,250)


$   73,096













Basic earnings per share

$      0.71


$    (0.30)


$      0.41


$      1.96


$    (0.32)


$      1.64

Basic average shares outstanding

44,649


44,649


44,649


44,665


44,665


44,665













Diluted earnings per share

$      0.70


$    (0.29)


$      0.41


$      1.92


$    (0.31)


$      1.61

Diluted average shares outstanding

45,376


45,376


45,376


45,462


45,462


45,462













(a)

Write-down of art and manuscript inventory

(b)

Severance costs of $8.5 million, acquisition transaction costs of $1.5 million, and accrued costs of $0.8 million partially offset by a $1.3 million reduction in previously accrued restructuring charges

(c)

Severance costs of $8.5 million, acquisition transaction costs of $3.1 million, and accrued costs of $0.8 million partially offset by a $1.3 million reduction in previously accrued restructuring charges

(d)

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

(e)

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

 

 


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, 2014

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

$ 111,847


$          -


$ 111,847


$   360,074


$          -


$   360,074

   Circulation

96,078


-


96,078


239,545


-


239,545

   Other revenues

61,755


-


61,755


186,654


-


186,654

      Total national media group

269,680


-


269,680


786,273


-


786,273

Local media group












   Non-political advertising

69,796


-


69,796


212,418


-


212,418

   Political advertising

532


-


532


1,761


-


1,761

   Other revenues

27,406


-


27,406


77,462


-


77,462

      Total local media group

97,734


-


97,734


291,641


-


291,641

Total revenues

$ 367,414


$          -


$ 367,414


$ 1,077,914


$          -


$ 1,077,914













Operating profit












National media group

$   33,381


$(19,767)

(a)

$  13,614


$     89,527


$(19,767)

(a)

$     69,760

Local media group

28,206


(1,510)

(b)

26,696


90,672


(3,075)

(b)

87,597

Unallocated corporate 

(9,387)


306

(c)

(9,081)


(31,725)


306

(c)

(31,419)

Income from operations

$   52,200


$(20,971)


$  31,229


$   148,474


$(22,536)


$   125,938













Depreciation and amortization












National media group

$     4,420


$  11,202

(d)

$  15,622


$     14,153


$  11,202

(d)

$     25,355

Local media group

7,009


-


7,009


19,841


-


19,841

Unallocated corporate 

402


-


402


1,222


-


1,222

Total depreciation and amortization

$   11,831


$  11,202


$  23,033


$     35,216


$  11,202


$     46,418













EBITDA1












National media group

$   37,801


$  (8,565)


$  29,236


$   103,680


$  (8,565)


$     95,115

Local media group

35,215


(1,510)


33,705


110,513


(3,075)


107,438

Unallocated corporate 

(8,985)


306


(8,679)


(30,503)


306


(30,197)

Total EBITDA1

$   64,031


$  (9,769)


$  54,262


$   183,690


$(11,334)


$   172,356













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


(a)

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

(b)

Acquisition transaction costs

(c)

Reversal of previously accrued restructuring charges

(d)

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

 

 


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, 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 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, 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













1EBITDA 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 5

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, 2014


Nine months ended March 31, 2014


National
Media

Local
Media

Unallocated Corporate

Total


National
Media

Local
Media

Unallocated Corporate

Total

(In thousands)










Revenues

$ 269,680

$ 97,734

$              -

$ 367,414


$ 786,273

$ 291,641

$              -

$ 1,077,914











Operating profit

$  13,614

$ 26,696

$      (9,081)

$  31,229


$  69,760

$  87,597

$     (31,419)

$   125,938

Depreciation and amortization

15,622

7,009

402

23,033


25,355

19,841

1,222

46,418

EBITDA

$  29,236

$ 33,705

$      (8,679)

54,262


$  95,115

$ 107,438

$     (30,197)

172,356

Less:










Depreciation and amortization




(23,033)





(46,418)

Net interest expense




(3,408)





(8,676)

Income taxes




(9,335)





(44,166)

Net earnings




$  18,486





$     73,096











Segment EBITDA margin

10.8%

34.5%




12.1%

36.8%














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%



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SOURCE Meredith Corporation



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