DES MOINES, Iowa, July 28, 2016 /PRNewswire/ -- Meredith
Corporation (NYSE:MDP) (meredith.com) - the leading media and
marketing company with local television brands in large,
fast-growing markets and national brands serving more than 100
million American women - today reported fiscal 2016 full-year
earnings of $0.75 per share,
including a net charge of $2.55 per
share resulting from non-cash impairment charges and other special
items.
Excluding these special items, earnings per share were
$3.30, at the high end of previously
stated expectations. Total Company revenues increased 3
percent to a record $1.65
billion. (See Tables
1-4 for supplemental disclosures regarding non-GAAP financial
measures.)
"In fiscal 2016, we delivered very strong performance,
generating the highest revenue in Company history and offsetting
the expected cyclical drop in political advertising," said Meredith
Chairman and CEO Stephen M.
Lacy. "We have fully integrated recent strategic
acquisitions across our businesses - including television stations,
national media brands and digital technology platforms - and they
are meaningfully contributing to shareholder value.
Additionally, we continued to execute our Total Shareholder Return
strategy by raising our dividend more than 8 percent, and we
strengthened our balance sheet by paying down $100 million of debt.
"Looking ahead to fiscal 2017, we expect to generate record
full-year earnings of $3.50 to $3.80
per share," Lacy continued. "Earnings growth is expected to be
driven by a diverse range of business activities, including a
robust political advertising cycle, higher retransmission
contribution and strong digital advertising growth across the
Company."
Fourth quarter fiscal 2016 loss was $2.03 per share, compared to earnings of
$0.94 per share in the prior-year
period. Excluding special items in the fourth quarter of
fiscal 2016, earnings per share grew 15 percent to $1.08. Total Company revenues increased to
$436 million - a fiscal
fourth-quarter record.
Meredith recorded special items in the fourth quarter of fiscal
2016 of $168 million comprised
primarily of non-cash impairment of goodwill and other intangible
assets related to acquisitions that were made in its National Media
Group primarily between 2002 and 2008. These impairments are
non-cash charges to earnings; do not affect Meredith's liquidity,
cash flows from operating activities or debt covenants; and do not
have an impact on Meredith's future operations.
FISCAL 2016 FULL-YEAR REVIEW
Meredith continued to aggressively execute a series
of well-defined strategic initiatives in fiscal
2016 to generate growth in revenue, operating profit and free cash
flow - and increase shareholder value over time. Highlights
included:
- Expanding audiences across platforms and increasing
Meredith's reach to Millennial women:
- Meredith magazine readership grew to a record 127 million,
according to the Spring 2016 GfK Mediamark Research &
Intelligence Report.
- Meredith's digital traffic increased to more than 80 million
monthly unique visitors.
- Meredith's reach to U.S. Millennial women grew to 72 percent,
up 9 percent from the prior year.
- Meredith's multi-channel reach among American women hit an
all-time high of 102 million. Additionally, Meredith's
database has grown to 125 million American consumers.
- Nine of Meredith's television stations ranked No. 1 or No. 2 in
late news, and eight stations ranked No. 1 or No. 2 in morning
news, in the May 2016 rating book
data compiled by Nielsen.
- Growing magazine, digital and non-political television
advertising revenues:
- National Media Group advertising revenues grew 6 percent,
including a 16 percent increase in digital advertising
revenues.
- Digital advertising revenues grew to 26 percent of total
National Media Group advertising revenues.
- Meredith increased its share of magazine advertising in its
competitive set to a record 41 percent.
- Local Media Group non-political advertising revenues grew 5
percent, including a 13 percent increase in digital advertising
revenues.
- Increasing revenues from businesses that are not dependent
on traditional advertising: Meredith's brand licensing
activities delivered record performance, led by strong sales of
Better Homes and Gardens branded products at Walmart stores across
the U.S., walmart.com, and an emerging presence in Mexico and China. Based on sales
transactions, Meredith's brand licensing activities are ranked No.
2 in the world, according to License!Global magazine.
Additionally, Meredith delivered growth in retransmission consent
fees and contribution, renewing contracts with providers reaching
40 percent of its audience in fiscal 2016.
- Continuing strong execution of its Total Shareholder Return
2.0 strategy: Meredith increased its dividend by 8 percent to
$1.98 per share on an annualized
basis. Meredith has paid a dividend for 69 straight years and
increased it for 23 consecutive years, and the dividend is
currently yielding approximately 3.5 percent. Also, Meredith has an
ongoing share repurchase program with $84
million remaining under current authorizations.
OPERATING GROUP DETAIL
LOCAL MEDIA GROUP
Meredith's Local Media Group includes 17 owned or operated
television stations reaching 11 percent of U.S. households.
Meredith's portfolio is concentrated in large, fast-growing
markets, including seven stations in the nation's Top 25 and 13 in
Top 50 markets. Meredith's stations produce more than 660
hours of local news and entertainment content each week.
Meredith expects to continue to grow its Local Media Group
organically and through strategic acquisitions.
Fiscal 2016 Local Media Group operating profit was $158 million, compared to $163 million in the prior year. Excluding
special items in both years, fiscal 2016 operating profit was
$159 million, compared to
$169 million in the prior year.
Fiscal 2016 revenues increased 3 percent to $548 million, despite $31
million less of high-margin political advertising revenues
compared to the prior year. (See
Tables 1-4 for supplemental disclosures regarding non-GAAP
financial measures.)
"We delivered strong performance for an off-election year in
fiscal 2016," said Meredith Local Media Group President
Paul Karpowicz. "Looking to the
first half of fiscal 2017, we expect to generate significant
revenue and operating profit growth, driven primarily by stronger
advertising. I'm also excited about our continued strength in
local news across the group, along with a new local digital
audience initiative that is driving traffic to our station
websites, creating new sales opportunities and generating
incremental digital advertising revenues."
Looking more closely at fiscal 2016 performance compared to the
prior year:
- Non-political advertising revenues increased 5 percent to
$374 million. Results were led by the
addition of television stations WALA in Mobile-Pensacola and WGGB
in Springfield, Mass., and strong
performance from existing stations WGCL in Atlanta, KMOV in St.
Louis and KCTV in Kansas
City.
- Political advertising revenues were $13
million, with Meredith generating significant revenues from
stations in Nevada, Missouri and Connecticut.
- Digital advertising revenues increased 13 percent as a series
of growth strategies continued to drive higher advertising rates
across the group's digital businesses.
- Other revenues and operating expenses increased, due primarily
to growth in retransmission revenues from cable and satellite
television operators and higher programming fees paid to affiliated
networks.
Turning to ratings, Meredith stations in Portland, Hartford, Greenville, Las
Vegas and Saginaw ranked No. 1 in late news in the coveted
adults 25-54 demographic in the May
2016 rating book. Additionally, Meredith stations in
Phoenix, Portland, Hartford, Mobile and Saginaw ranked No. 1 in
morning news.
Fiscal 2016 fourth-quarter Local Media Group operating profit
increased 7 percent to a record $43
million. Excluding special items in the fourth quarter
of fiscal 2016, operating profit increased 10 percent to
$44 million. Revenues increased
9 percent to a record $141
million.
NATIONAL MEDIA GROUP
Meredith's National Media Group reaches more than 100 million
unduplicated American women, and nearly 75 percent of U.S.
millennial women. Meredith is a leader in creating content
across media platforms and life stages in key consumer interest
areas such as food, home, parenthood and health. It 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 2016 National Media Group operating loss was $18 million, compared to an operating profit of
$123 million in the prior year.
Excluding special items in both years, fiscal 2016 operating profit
grew 10 percent to $150 million from
$137 million in the prior year.
Revenues increased 4 percent to $1.10
billion. (See Tables
1-4 for supplemental disclosures regarding non-GAAP financial
measures.)
"We increased advertising and circulation revenues in fiscal
2016, reflecting the ongoing appeal of our brands to adult women of
all ages," said Meredith National Media
Group President Tom Harty. "Additionally, we grew
our digital reach to 80 million monthly unique visitors, and
digital represented a record 26 percent of our ad revenues.
In fiscal 2017, we're expecting to see continued double-digit
growth in digital advertising."
Looking more closely at fiscal 2016 performance compared to the
prior year:
- Total advertising revenues increased 6 percent to $527 million, led by the recently acquired Shape
and Martha Stewart brands, as well as strong performance by the
Allrecipes and EatingWell brands. The prescription drug, household
supplies and food categories were particularly strong.
- Print advertising increased 3 percent, led by Shape and Martha
Stewart, as well as strong performance by Allrecipes and
EatingWell.
- Digital advertising revenues increased 16 percent. Growth
was led by Shape; native and engagement-based advertising platform
Selectable Media; as well as the Better Homes and Gardens, Parents
and Allrecipes brands.
- Circulation revenues increased 5 percent to $329 million, reflecting the ongoing strength of
Meredith's 30 million subscriber base. Growth was led by
Martha Stewart and Shape, as well as strong performance by
EatingWell and Allrecipes - which both recently increased their
rate bases. Additionally, Meredith continues to invest in
strategies to increase contribution from circulation activities,
including expanding the number of subscriptions that renew
automatically.
- Brand licensing revenues continued to increase, 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 and at walmart.com. Recently, Meredith renewed its
licensing relationships with Walmart and FTD Companies for programs
under the Better Homes and Gardens brand; expanded its Better Homes
and Gardens-branded Real Estate program with Realogy; and formed
new licensing relationships based on the Allrecipes, EatingWell and
Shape brands.
Fiscal 2016 fourth-quarter National Media Group operating loss
was $109 million, compared to profit
of $44 million in fiscal 2015.
Excluding special items in fiscal 2016, fourth quarter operating
profit grew 17 percent to $52
million. Revenues were $295
million.
OTHER FINANCIAL INFORMATION
Cash flow from operations grew 18 percent to $227 million in fiscal 2016. Total debt was
$695 million, down $100 million from a year ago, and the weighted
average interest rate was 2.7 percent, with $400 million effectively fixed at low
rates. Meredith's debt-to-EBITDA ratio for the trailing 12
months was 2.3 to 1 (as defined in Meredith's credit
agreements). All metrics are as of June 30, 2016.
Meredith continues to focus on its successful Total Shareholder
Return program. Key elements include:
- An annualized dividend of $1.98
per share that's yielding approximately 3.5 percent based on
yesterday's closing price. Meredith has paid dividends for 69
consecutive years and increased them for 23 years straight.
- An ongoing share repurchase program with $84 million remaining under current
authorizations.
- Strategic 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 2016 fourth-quarter and full-year
comparisons are against the comparable prior-year period unless
otherwise stated.
OUTLOOK
Meredith expects full year fiscal 2017 earnings per share to
range from $3.50 to $3.80. In
fiscal 2017, Meredith expects a total of $40
million to $50 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 2017
compared to the prior-year period, Meredith expects:
- Total Company revenues to be up in the mid-single digits.
- Total Local Media Group revenues to be up approximately 20
percent. Approximately one-third of total fiscal 2017 political
advertising revenues are expected to be recorded in the first
fiscal quarter.
- Total National Media Group revenues to be down in the
low-single digits.
Meredith expects fiscal 2017 first-quarter earnings per share to
range from $0.70 to $0.75, compared
to $0.24, or $0.52 before special items, recorded in the
prior-year period. (See Table 5 for supplemental
disclosures regarding non-GAAP financial measures.)
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 2017. These and other uncertainties are
referenced below under "Cautionary Statement Regarding
Forward-Looking Statements" and in certain filings with the U.S.
Securities and Exchange Commission.
CONFERENCE CALL WEBCAST
Meredith will host a conference call on July 28, 2016, at 11 a.m.
EDT to discuss fiscal 2016 results. A live webcast
will be accessible to the public on the Company's website,
meredith.com, and a replay will be available for two weeks. A
transcript will be available within 48 hours of the call at
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,
adjusted EBITDA, EBITDA margin and adjusted 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. Adjusted
EBITDA is defined as EBITDA before special items.
Results excluding 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 further 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 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 2017.
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; 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 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 17 owned or operated
television stations reaching 11 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, St.
Louis and Portland - and 13
in Top 50 markets. Meredith's stations produce over 660 hours of
local news and entertainment content each week, and operate leading
local digital destinations.
Meredith's National Media Group reaches more than 100 million
unduplicated women every month, including nearly 75 percent of U.S.
Millennial women. Meredith is the leader in creating and
distributing content across platforms in key consumer interest
areas such as food, home, parenting and health through well-known
brands such as Better Homes and Gardens, Allrecipes, Parents and
Shape. Meredith also features robust brand licensing
activities, including more than 3,000 SKUs of branded products at
4,000 Walmart stores across the U.S. and at walmart.com.
Meredith Xcelerated Marketing is an award-winning, strategic and
creative agency that provides fully integrated marketing solutions
for many of the world's top brands, including Kraft, Lowe's, TGI
Friday's and NBC Universal.
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 $1.98 per share yields
approximately 3.5 percent. Meredith has paid a dividend for
69 straight years and increased it for 23 consecutive years.
Meredith
Corporation and Subsidiaries
|
Condensed
Consolidated Statements of Earnings (Unaudited)
|
|
|
Three
Months
|
|
Twelve
Months
|
Years ended June
30,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
(In thousands
except per share data)
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Advertising
|
$
|
231,559
|
|
|
$
|
231,085
|
|
|
$
|
914,202
|
|
|
$
|
896,548
|
|
Circulation
|
93,454
|
|
|
92,295
|
|
|
328,599
|
|
|
313,685
|
|
All other
|
110,765
|
|
|
102,528
|
|
|
406,827
|
|
|
383,943
|
|
Total
revenues
|
435,778
|
|
|
425,908
|
|
|
1,649,628
|
|
|
1,594,176
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Production,
distribution, and editorial
|
150,890
|
|
|
162,323
|
|
|
611,872
|
|
|
598,941
|
|
Selling, general, and
administrative
|
195,507
|
|
|
174,176
|
|
|
730,074
|
|
|
695,319
|
|
Depreciation and
amortization
|
14,473
|
|
|
16,117
|
|
|
59,152
|
|
|
56,546
|
|
Impairment of
goodwill and other long-lived assets
|
161,462
|
|
|
—
|
|
|
161,462
|
|
|
1,258
|
|
Merger termination
fee net of merger-related costs
|
—
|
|
|
—
|
|
|
(43,541)
|
|
|
—
|
|
Total operating
expenses
|
522,332
|
|
|
352,616
|
|
|
1,519,019
|
|
|
1,352,064
|
|
Income (loss) from
operations
|
(86,554)
|
|
|
73,292
|
|
|
130,609
|
|
|
242,112
|
|
Interest expense,
net
|
(4,720)
|
|
|
(5,146)
|
|
|
(20,402)
|
|
|
(19,352)
|
|
Earnings (loss)
before income taxes
|
(91,274)
|
|
|
68,146
|
|
|
110,207
|
|
|
222,760
|
|
Income tax benefit
(expense)
|
759
|
|
|
(25,567)
|
|
|
(76,270)
|
|
|
(85,969)
|
|
Net earnings
(loss)
|
$
|
(90,515)
|
|
|
$
|
42,579
|
|
|
$
|
33,937
|
|
|
$
|
136,791
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
(2.03)
|
|
|
$
|
0.95
|
|
|
$
|
0.76
|
|
|
$
|
3.07
|
|
Basic average shares
outstanding
|
44,556
|
|
|
44,596
|
|
|
44,606
|
|
|
44,522
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
(2.03)
|
|
|
$
|
0.94
|
|
|
$
|
0.75
|
|
|
$
|
3.02
|
|
Diluted average
shares outstanding
|
44,556
|
|
|
45,416
|
|
|
45,357
|
|
|
45,323
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
0.4950
|
|
|
$
|
0.4575
|
|
|
$
|
1.9050
|
|
|
$
|
1.7800
|
|
Meredith
Corporation and Subsidiaries
|
Segment
Information (Unaudited)
|
|
|
Three
Months
|
|
Twelve
Months
|
Years ended June
30,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
(In
thousands)
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
National
media
|
|
|
|
|
|
|
|
Advertising
|
$
|
136,750
|
|
|
$
|
136,219
|
|
|
$
|
527,051
|
|
|
$
|
496,204
|
|
Circulation
|
93,454
|
|
|
92,295
|
|
|
328,599
|
|
|
313,685
|
|
Other
revenues
|
64,410
|
|
|
67,333
|
|
|
245,533
|
|
|
249,963
|
|
Total national
media
|
294,614
|
|
|
295,847
|
|
|
1,101,183
|
|
|
1,059,852
|
|
Local
media
|
|
|
|
|
|
|
|
Non-political
advertising
|
90,298
|
|
|
93,633
|
|
|
374,104
|
|
|
356,547
|
|
Political
advertising
|
4,511
|
|
|
1,233
|
|
|
13,047
|
|
|
43,797
|
|
Other
revenues
|
46,355
|
|
|
35,195
|
|
|
161,294
|
|
|
133,980
|
|
Total local
media
|
141,164
|
|
|
130,061
|
|
|
548,445
|
|
|
534,324
|
|
Total
revenues
|
$
|
435,778
|
|
|
$
|
425,908
|
|
|
$
|
1,649,628
|
|
|
$
|
1,594,176
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
|
|
|
|
|
|
|
National
media
|
$
|
(108,860)
|
|
|
$
|
44,219
|
|
|
$
|
(17,693)
|
|
|
$
|
122,681
|
|
Local
media
|
42,563
|
|
|
39,959
|
|
|
158,481
|
|
|
162,677
|
|
Unallocated
corporate
|
(20,257)
|
|
|
(10,886)
|
|
|
(10,179)
|
|
|
(43,246)
|
|
Income (loss) from
operations
|
$
|
(86,554)
|
|
|
$
|
73,292
|
|
|
$
|
130,609
|
|
|
$
|
242,112
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
National
media
|
$
|
4,637
|
|
|
$
|
5,705
|
|
|
$
|
18,698
|
|
|
$
|
17,186
|
|
Local
media
|
9,313
|
|
|
9,853
|
|
|
38,332
|
|
|
37,521
|
|
Unallocated
corporate
|
523
|
|
|
559
|
|
|
2,122
|
|
|
1,839
|
|
Total depreciation
and amortization
|
$
|
14,473
|
|
|
$
|
16,117
|
|
|
$
|
59,152
|
|
|
$
|
56,546
|
|
|
|
|
|
|
|
|
|
EBITDA 1
|
|
|
|
|
|
|
|
National
media
|
$
|
(104,223)
|
|
|
$
|
49,924
|
|
|
$
|
1,005
|
|
|
$
|
139,867
|
|
Local
media
|
51,876
|
|
|
49,812
|
|
|
196,813
|
|
|
200,198
|
|
Unallocated
corporate
|
(19,734)
|
|
|
(10,327)
|
|
|
(8,057)
|
|
|
(41,407)
|
|
Total EBITDA
1
|
$
|
(72,081)
|
|
|
$
|
89,409
|
|
|
$
|
189,761
|
|
|
$
|
298,658
|
|
|
1
EBITDA is net earnings (loss) before interest, taxes,
depreciation, and amortization.
|
Meredith
Corporation and Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
Assets
|
June 30,
2016
|
|
June 30,
2015
|
(In
thousands)
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
24,970
|
|
|
$
|
22,833
|
|
Accounts receivable,
net
|
273,927
|
|
|
284,646
|
|
Inventories
|
20,678
|
|
|
24,681
|
|
Current portion of
subscription acquisition costs
|
133,338
|
|
|
122,350
|
|
Current portion of
broadcast rights
|
4,220
|
|
|
4,516
|
|
Other current
assets
|
24,023
|
|
|
23,505
|
|
Total current
assets
|
481,156
|
|
|
482,531
|
|
Property, plant, and
equipment
|
530,052
|
|
|
527,622
|
|
Less accumulated
depreciation
|
(339,099)
|
|
|
(313,886)
|
|
Net property, plant,
and equipment
|
190,953
|
|
|
213,736
|
|
Subscription
acquisition costs
|
95,960
|
|
|
103,842
|
|
Broadcast
rights
|
4,565
|
|
|
1,795
|
|
Other
assets
|
58,645
|
|
|
67,750
|
|
Intangible assets,
net
|
913,877
|
|
|
972,382
|
|
Goodwill
|
883,129
|
|
|
1,001,246
|
|
Total
assets
|
$
|
2,628,285
|
|
|
$
|
2,843,282
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of
long-term debt
|
$
|
75,000
|
|
|
$
|
62,500
|
|
Current portion of
long-term broadcast rights payable
|
4,649
|
|
|
4,776
|
|
Accounts
payable
|
82,107
|
|
|
93,944
|
|
Accrued expenses and
other liabilities
|
116,777
|
|
|
163,655
|
|
Current portion of
unearned subscription revenues
|
199,359
|
|
|
206,126
|
|
Total current
liabilities
|
477,892
|
|
|
531,001
|
|
Long-term
debt
|
620,000
|
|
|
732,500
|
|
Long-term broadcast
rights payable
|
5,524
|
|
|
2,998
|
|
Unearned subscription
revenues
|
128,534
|
|
|
151,221
|
|
Deferred income
taxes
|
336,346
|
|
|
311,645
|
|
Other noncurrent
liabilities
|
170,946
|
|
|
162,067
|
|
Total
liabilities
|
1,739,242
|
|
|
1,891,432
|
|
Shareholders'
equity
|
|
|
|
Common
stock
|
39,272
|
|
|
37,657
|
|
Class B
stock
|
5,284
|
|
|
6,963
|
|
Additional paid-in
capital
|
54,282
|
|
|
49,019
|
|
Retained
earnings
|
818,706
|
|
|
870,859
|
|
Accumulated other
comprehensive loss
|
(28,501)
|
|
|
(12,648)
|
|
Total
shareholders' equity
|
889,043
|
|
|
951,850
|
|
Total liabilities
and shareholders' equity
|
$
|
2,628,285
|
|
|
$
|
2,843,282
|
|
Meredith
Corporation and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
Twelve months
ended June 30,
|
2016
|
|
2015
|
(In
thousands)
|
|
|
|
Net cash provided
by operating activities
|
$
|
226,597
|
|
|
$
|
192,347
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Acquisitions of and
investments in businesses
|
(8,186)
|
|
|
(257,030)
|
|
Additions to
property, plant, and equipment
|
(25,035)
|
|
|
(33,245)
|
|
Proceeds from
disposition of assets
|
1,767
|
|
|
83,434
|
|
Net cash used in
investing activities
|
(31,454)
|
|
|
(206,841)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
issuance of long-term debt
|
167,500
|
|
|
470,000
|
|
Repayments of
long-term debt
|
(267,500)
|
|
|
(390,000)
|
|
Dividends
paid
|
(86,090)
|
|
|
(79,982)
|
|
Purchases of Company
stock
|
(31,080)
|
|
|
(46,764)
|
|
Proceeds from common
stock issued
|
20,879
|
|
|
41,251
|
|
Excess tax benefits
from share-based payments
|
4,241
|
|
|
6,471
|
|
Other
|
(956)
|
|
|
(236)
|
|
Net cash provided by
(used in) financing activities
|
(193,006)
|
|
|
740
|
|
Net increase
(decrease) in cash and cash equivalents
|
2,137
|
|
|
(13,754)
|
|
Cash and cash
equivalents at beginning of year
|
22,833
|
|
|
36,587
|
|
Cash and cash
equivalents at end of year
|
$
|
24,970
|
|
|
$
|
22,833
|
|
Table
1
|
Meredith
Corporation and Subsidiaries
|
Supplemental
Disclosures Regarding Non-GAAP Financial Measures
|
|
Special
Items - The following tables show 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.
|
|
Three months ended
June 30, 2016
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In thousands
except per share data)
|
|
|
|
|
Operating profit
excluding special items (non-GAAP)
|
$
|
51,646
|
|
$
|
43,791
|
|
$
|
(14,215)
|
|
$
|
81,222
|
|
Special
items
|
|
|
|
|
Write-down of
impaired assets
|
(155,823)
|
|
—
|
|
(5,639)
|
|
(161,462)
|
|
Pension settlement
charge
|
(3,294)
|
|
(1,889)
|
|
(403)
|
|
(5,586)
|
|
Severance and related
benefit costs
|
(2,032)
|
|
(360)
|
|
—
|
|
(2,392)
|
|
Reversal of
previously accrued restructuring costs
|
643
|
|
1,021
|
|
—
|
|
1,664
|
|
Total special
items
|
(160,506)
|
|
(1,228)
|
|
(6,042)
|
|
(167,776)
|
|
Operating profit
(loss)
|
$
|
(108,860)
|
|
$
|
42,563
|
|
$
|
(20,257)
|
|
$
|
(86,554)
|
|
|
|
|
|
|
Earnings per share
excluding special items (non-GAAP)
|
$
|
1.08
|
|
Per share impact of
special items
|
(3.11)
|
|
Diluted loss per
share
|
$
|
(2.03)
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended June 30, 2016
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In thousands
except per share data)
|
|
|
|
|
Operating profit
excluding special items (non-GAAP)
|
$
|
150,169
|
|
$
|
158,771
|
|
$
|
(47,678)
|
|
$
|
261,262
|
|
Special
items
|
|
|
|
|
Write-down of
impaired assets
|
(155,823)
|
|
—
|
|
(5,639)
|
|
(161,462)
|
|
Merger termination
fee net of merger-related costs
|
—
|
|
—
|
|
43,541
|
|
43,541
|
|
Severance and related
benefits costs
|
(9,301)
|
|
(492)
|
|
—
|
|
(9,793)
|
|
Pension settlement
charge
|
(3,294)
|
|
(1,889)
|
|
(403)
|
|
(5,586)
|
|
Reversal of
previously accrued restructuring costs
|
1,157
|
|
2,091
|
|
—
|
|
3,248
|
|
Other
|
(601)
|
|
—
|
|
—
|
|
(601)
|
|
Total special
items
|
(167,862)
|
|
(290)
|
|
37,499
|
|
(130,653)
|
|
Operating profit
(loss)
|
$
|
(17,693)
|
|
$
|
158,481
|
|
$
|
(10,179)
|
|
$
|
130,609
|
|
|
|
|
|
|
Earnings per share
excluding special items (non-GAAP)
|
$
|
3.30
|
|
Per share impact of
special items
|
(2.55)
|
|
Diluted earnings
per share
|
$
|
0.75
|
|
Table
2
|
Meredith
Corporation and Subsidiaries
|
Supplemental
Disclosures Regarding Non-GAAP Financial Measures
|
|
Special
Items - The following table shows diluted earnings per
share excluding special items and as reported with the difference
being the special items. Diluted earnings per share excluding
special items is a non-GAAP measure. Management's rationale for
presenting non-GAAP measures is included in the text of this
earnings release.
|
|
There were no special
items for the three months ended June 30, 2015. Special items
for the twelve-months ended June 30, 2015, are detailed
below.
|
|
Twelve months
ended June 30, 2015
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In thousands
except per share data)
|
|
|
|
|
Operating profit
excluding special items (non-GAAP)
|
$
|
136,860
|
|
$
|
168,722
|
|
$
|
(42,740)
|
|
$
|
262,842
|
|
Special
items
|
|
|
|
|
Severance and related
benefit costs
|
(11,853)
|
|
(2,311)
|
|
(506)
|
|
(14,670)
|
|
Write-down of
impaired assets
|
(1,692)
|
|
(1,259)
|
|
—
|
|
(2,951)
|
|
Acquisition and
disposal transaction costs
|
(564)
|
|
(2,284)
|
|
—
|
|
(2,848)
|
|
Other
|
(70)
|
|
(191)
|
|
—
|
|
(261)
|
|
Total special
items
|
(14,179)
|
|
(6,045)
|
|
(506)
|
|
(20,730)
|
|
Operating
profit
|
$
|
122,681
|
|
$
|
162,677
|
|
$
|
(43,246)
|
|
$
|
242,112
|
|
|
|
|
|
|
Earnings per share
excluding special items (non-GAAP)
|
$
|
3.30
|
|
Per share impact of
special items
|
(0.28)
|
|
Diluted earnings
per share
|
$
|
3.02
|
|
Table
3
|
Meredith
Corporation and Subsidiaries
|
Supplemental
Disclosures Regarding Non-GAAP Financial Measures
|
|
EBITDA
|
Consolidated EBITDA,
which is reconciled to net earnings (loss) in the following tables,
is defined as net earnings (loss) before interest, taxes,
depreciation, and amortization.
|
Segment EBITDA is a
measure of segment earnings (loss) before depreciation and
amortization.
|
Segment EBITDA margin
is defined as segment EBITDA divided by segment
revenues.
|
|
Adjusted
EBITDA
|
Consolidated adjusted
EBITDA, which is reconciled to net earnings (loss) in the following
tables, is defined as net earnings (loss) before interest, taxes,
depreciation, amortization, and special items.
|
Segment adjusted
EBITDA is a measure of segment earnings (loss) before depreciation,
amortization, and special items.
|
Segment adjusted
EBITDA margin is defined as segment adjusted EBITDA divided by
segment revenues.
|
|
Three months ended
June 30, 2016
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In
thousands)
|
|
|
|
|
Revenues
|
$
|
294,614
|
|
$
|
141,164
|
|
$
|
—
|
|
$
|
435,778
|
|
|
|
|
|
|
Operating profit
(loss)
|
$
|
(108,860)
|
|
$
|
42,563
|
|
$
|
(20,257)
|
|
$
|
(86,554)
|
|
Depreciation and
amortization
|
4,637
|
|
9,313
|
|
523
|
|
14,473
|
|
EBITDA
|
(104,223)
|
|
51,876
|
|
(19,734)
|
|
(72,081)
|
|
Special
items
|
|
|
|
|
Write-down of
impaired assets
|
155,823
|
|
—
|
|
5,639
|
|
161,462
|
|
Pension settlement
charge
|
3,294
|
|
1,889
|
|
403
|
|
5,586
|
|
Severance and related
benefit costs
|
2,032
|
|
360
|
|
—
|
|
2,392
|
|
Reversal of
previously accrued restructuring costs
|
(643)
|
|
(1,021)
|
|
—
|
|
(1,664)
|
|
Total special
items
|
160,506
|
|
1,228
|
|
6,042
|
|
167,776
|
|
Adjusted
EBITDA
|
$
|
56,283
|
|
$
|
53,104
|
|
$
|
(13,692)
|
|
95,695
|
|
Less
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
(14,473)
|
|
Special
items
|
|
|
|
(167,776)
|
|
Net interest
expense
|
|
|
|
(4,720)
|
|
Income
taxes
|
|
|
|
759
|
|
Net
loss
|
|
|
|
$
|
(90,515)
|
|
|
|
|
|
|
Segment EBITDA
margin
|
(35.4)%
|
|
36.7
|
%
|
|
|
Segment adjusted
EBITDA margin
|
19.1
|
%
|
37.6
|
%
|
|
|
|
|
Twelve months
ended June 30, 2016
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In
thousands)
|
|
|
|
|
Revenues
|
$
|
1,101,183
|
|
$
|
548,445
|
|
$
|
—
|
|
$
|
1,649,628
|
|
|
|
|
|
|
Operating profit
(loss)
|
$
|
(17,693)
|
|
$
|
158,481
|
|
$
|
(10,179)
|
|
$
|
130,609
|
|
Depreciation and
amortization
|
18,698
|
|
38,332
|
|
2,122
|
|
59,152
|
|
EBITDA
|
1,005
|
|
196,813
|
|
(8,057)
|
|
189,761
|
|
Special
items
|
|
|
|
|
Write-down of
impaired assets
|
155,823
|
|
—
|
|
5,639
|
|
161,462
|
|
Merger termination
fee net of merger-related costs
|
—
|
|
—
|
|
(43,541)
|
|
(43,541)
|
|
Severance and related
benefit costs
|
9,301
|
|
492
|
|
—
|
|
9,793
|
|
Pension settlement
charge
|
3,294
|
|
1,889
|
|
403
|
|
5,586
|
|
Reversal of
previously accrued restructuring costs
|
(1,157)
|
|
(2,091)
|
|
—
|
|
(3,248)
|
|
Other
|
601
|
|
—
|
|
—
|
|
601
|
|
Total special
items
|
167,862
|
|
290
|
|
(37,499)
|
|
130,653
|
|
Adjusted
EBITDA
|
$
|
168,867
|
|
$
|
197,103
|
|
$
|
(45,556)
|
|
320,414
|
|
Less
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
(59,152)
|
|
Special
items
|
|
|
|
(130,653)
|
|
Net interest
expense
|
|
|
|
(20,402)
|
|
Income
taxes
|
|
|
|
(76,270)
|
|
Net
earnings
|
|
|
|
$
|
33,937
|
|
|
|
|
|
|
Segment EBITDA
margin
|
0.1
|
%
|
35.9
|
%
|
|
|
Segment adjusted
EBITDA margin
|
15.3
|
%
|
35.9
|
%
|
|
|
Table
4
|
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.
|
|
Adjusted
EBITDA
|
Consolidated adjusted
EBITDA, which is reconciled to net earnings in the following
tables, is defined as net earnings before interest, taxes,
depreciation, amortization, and special items.
|
Segment adjusted
EBITDA is a measure of segment earnings before depreciation,
amortization, and special items.
|
Segment adjusted
EBITDA margin is defined as segment adjusted EBITDA divided by
segment revenues.
|
|
Three months ended
June 30, 2015
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In
thousands)
|
|
|
|
|
Revenues
|
$
|
295,847
|
|
$
|
130,061
|
|
$
|
—
|
|
$
|
425,908
|
|
|
|
|
|
|
Operating
profit
|
$
|
44,219
|
|
$
|
39,959
|
|
$
|
(10,886)
|
|
$
|
73,292
|
|
Depreciation and
amortization
|
5,705
|
|
9,853
|
|
559
|
|
16,117
|
|
EBITDA
|
49,924
|
|
49,812
|
|
(10,327)
|
|
89,409
|
|
Less
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
(16,117)
|
|
Net interest
expense
|
|
|
|
(5,146)
|
|
Income
taxes
|
|
|
|
(25,567)
|
|
Net
earnings
|
|
|
|
$
|
42,579
|
|
|
|
|
|
|
Segment EBITDA
margin
|
16.9
|
%
|
38.3
|
%
|
|
|
|
|
Twelve months
ended June 30, 2015
|
National
Media
|
Local
Media
|
Unallocated
Corporate
|
Total
|
(In
thousands)
|
|
|
|
|
Revenues
|
$
|
1,059,852
|
|
$
|
534,324
|
|
$
|
—
|
|
$
|
1,594,176
|
|
|
|
|
|
|
Operating
profit
|
$
|
122,681
|
|
$
|
162,677
|
|
$
|
(43,246)
|
|
$
|
242,112
|
|
Depreciation and
amortization
|
17,186
|
|
37,521
|
|
1,839
|
|
56,546
|
|
EBITDA
|
139,867
|
|
200,198
|
|
(41,407)
|
|
298,658
|
|
Special
items
|
|
|
|
|
Severance and related
benefit costs
|
11,853
|
|
2,311
|
|
506
|
|
14,670
|
|
Write-down of
impaired assets
|
1,692
|
|
1,259
|
|
—
|
|
2,951
|
|
Acquisition and
disposal transaction costs
|
564
|
|
2,284
|
|
—
|
|
2,848
|
|
Other
|
70
|
|
191
|
|
—
|
|
261
|
|
Total special
items
|
14,179
|
|
6,045
|
|
506
|
|
20,730
|
|
Adjusted
EBITDA
|
$
|
154,046
|
|
$
|
206,243
|
|
$
|
(40,901)
|
|
319,388
|
|
Less
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
(56,546)
|
|
Special
items
|
|
|
|
(20,730)
|
|
Net interest
expense
|
|
|
|
(19,352)
|
|
Income
taxes
|
|
|
|
(85,969)
|
|
Net
earnings
|
|
|
|
$
|
136,791
|
|
|
|
|
|
|
Segment EBITDA
margin
|
13.2
|
%
|
37.5
|
%
|
|
|
Segment adjusted
EBITDA margin
|
14.5
|
%
|
38.6
|
%
|
|
|
Table
5
|
Meredith
Corporation and Subsidiaries
|
Supplemental
Disclosures Regarding Non-GAAP Financial Measures
|
|
Special
Items - The following table shows diluted earnings per
share excluding special items and as reported with the difference
being the special items. Diluted earnings per share excluding
special items is a non-GAAP measure. Management's rationale for
presenting non-GAAP measures is included in the text of this
earnings release.
|
|
Three months ended
September 30, 2015
|
|
(In thousands
except per share data)
|
|
Earnings per share
excluding special items (non-GAAP)
|
$
|
0.52
|
|
Per share impact of
acquisition and transaction costs of $12,666
|
(0.25)
|
|
Per share impact of
severance costs of $3,366
|
(0.04)
|
|
Per share impact of
reversal of previously accrued restructuring costs of
$1,070
|
0.01
|
|
Diluted earnings
per share
|
$
|
0.24
|
|
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SOURCE Meredith Corporation