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News Releases

Meredith Delivers Record Fiscal 2017 2nd Quarter And 1st Half Results

Political and Digital Advertising Across the Enterprise Drive Strong Earnings Per Share Growth

Meredith Expects Fiscal 2017 Earnings Per Share to be Highest in Company History

Jan 25, 2017
7:30am

DES MOINES, Iowa, Jan. 25, 2017 /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 record fiscal 2017 second quarter earnings of $1.58 per share, compared to $0.72 in the prior-year period.  Total Company revenues increased 9 percent to $443 million, and total advertising revenues increased 11 percent to $267 million, both representing all-time quarterly highs.

Meredith introduces an updated market positioning and logo that reflect the strength of Meredith's national and local consumer media brands as well as its expanded portfolio of marketing solutions.

Excluding special items in both periods, fiscal 2017 second quarter earnings per share grew 63 percent to a record $1.30 from $0.80 in the prior-year period.  (See Other Financial Information later in this release for a description of fiscal 2017 second quarter special items and Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

"We continued our record-setting performance in the second quarter and first half of fiscal 2017, driven by record political advertising revenues at our television stations and double-digit growth in digital ad revenues in both the national and local businesses," said Meredith Chairman and CEO Stephen M. Lacy.  "We continue to expect to deliver record full fiscal year 2017 revenue and earnings performance, driven by aggressive execution of our strategic growth initiatives."

Looking at Meredith's performance in the second quarter of fiscal 2017 compared to the prior year:

  • Local Media Group revenues increased 31 percent to $183 million, operating profit grew 90 percent to $77 million, and EBITDA increased over 70 percent to $86 million, all quarterly record highs. Growth was led by a 27 percent increase in total advertising revenues, including $40 million of political advertising revenues. Retransmission revenues also grew strongly.
  • Total Company digital advertising revenues grew 16 percent to a quarterly record high. Traffic across Meredith's digital and mobile sites grew to an average of nearly 90 million unique visitors per month, and video views jumped 13 percent.
  • National Media Group operating profit grew and profit margin expanded, driven by strong growth in digital advertising revenues. Digital advertising revenues grew 16 percent and represented nearly 40 percent of total National Media Group advertising. Total advertising revenues were off 2 percent, but even on a comparable basis.
  • Consumer engagement in key target demographics expanded across Meredith's media platforms. Meredith's National Media brands grew their reach to more than 100 million unduplicated American women, including nearly 75 percent of U.S. Millennial women. Meredith magazine readership currently stands at an impressive 125 million, and Meredith's television stations delivered a strong November rating book.

Fiscal 2017 first half earnings per share were a record $2.33, compared to $0.96 in the prior-year period.  Excluding special items, fiscal 2017 first half earnings per share grew 55 percent to a record $2.05, up from $1.32 in the prior-year period.  Total company revenues increased 7 percent to $843 million, and total advertising revenues grew 7 percent to $493 million, both records.

"Our results in calendar 2016 reflect the strength of our diversified media business," said Meredith President and COO Tom Harty.  "In our Local Media Group, we generated a record $67 million of political ad revenues and increased net retransmission contribution.  In our National Media Group, we delivered growth in ad revenues as double-digit gains in digital advertising outpaced slight declines in magazine advertising.  Importantly, we renewed our industry leading Better Homes & Gardens licensing program at Walmart stores nationwide."

OPERATING GROUP DETAIL

LOCAL MEDIA GROUP

Meredith's Local Media Group includes 17 owned or operated television stations reaching 11 percent of households.  Meredith's portfolio is concentrated in large, fast-growing markets, including seven stations in the nation's Top 25 markets and 13 in the Top 50.  Meredith's stations produce 700 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 2017 second quarter Local Media Group operating profit grew 90 percent to $77 million, up from $40 million in the prior-year period.   EBITDA grew 71 percent to $86 million.  Profit margin was 42 percent and EBITDA margin was 47 percent.  Revenues increased 31 percent to $183 million.

Looking more closely at fiscal 2017 second quarter performance:

  • Total advertising revenues increased 27 percent, driven by strong political and digital advertising performance. Highlights included:
    • Political advertising revenues were $40 million, up 37 percent from the last political cycle in the second quarter of fiscal 2015. Political spending was particularly robust in the Las Vegas, St. Louis, Phoenix and Kansas City markets, primarily due to very competitive "down-ballot" races.
    • Non-political advertising revenues were $92 million, reflecting political crowd-out, especially in the above-mentioned markets. Excluding those markets, non-political advertising revenues were down low-single digits.
    • Digital advertising revenues grew 18 percent compared to the prior-year period, as innovative growth strategies continue to drive higher digital sales across Meredith's station group.
  • Other revenues and operating expenses increased compared to the prior-year period, due primarily to growth in retransmission revenues from cable and satellite television operators, partially offset by higher programming fees paid to affiliated networks.

Meredith delivered strong performance in the November 2016 rating book.  Nine Meredith stations ranked number one or two in late news, while seven stations ranked number one or two in morning news.

To further strengthen its competitive position, in fiscal 2017 Meredith has launched additional newscasts in the Atlanta, Phoenix, Portland, Nashville, Greenville and Flint/Saginaw markets.  These initiatives increased Meredith's total local news and entertainment programming hours to 700 per week.  Additionally, Meredith continues to implement a local audience development initiative designed to increase Millennial audience engagement with its stations on social and digital platforms.

Fiscal 2017 first half Local Media Group operating profit grew 83 percent to $127 million, up from $70 million in the prior-year period.  EBITDA grew 63 percent to $145 million.  Profit margin was 38 percent and EBITDA margin was 43 percent.  Revenues increased 26 percent to $336 million, including $56 million of political advertising.  All represent fiscal first-half records.

NATIONAL MEDIA GROUP

Meredith's National Media Group reaches more than 100 million unduplicated American women, including 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, parenting and lifestyle.  It also features robust brand licensing activities and innovative business-to-business marketing solutions provided by Meredith Xcelerated Marketing.  Meredith expects to continue to grow its National Media Group organically and through strategic acquisitions.

Fiscal 2017 second quarter National Media Group operating profit was $47 million, or $34 million excluding special items.  That compares to $34 million in the prior-year period.  Revenues were $259 million, compared to $267 million in the prior-year period.  (See Other Financial Information later in this release for a description of fiscal 2017 second quarter special items and Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at National Media Group fiscal 2017 second quarter performance compared to the prior-year period:

  • Total advertising revenues declined slightly to $135 million, but were even on a comparable basis, which excludes MORE magazine.
  • Digital advertising revenue rose 16 percent, and accounted for 38 percent of total National Media Group advertising revenues. Growth was led by the Allrecipes, Parents and Shape brands.
  • Meredith's share of total magazine advertising revenues increased to 13.8 percent from 12.5 percent, according to the most recent data from Publishers Information Bureau. The Family Circle, Allrecipes and EatingWell brands posted strong performance. The beauty, pets and direct response advertising categories were growth leaders.
  • Circulation revenues increased slightly to $67 million, driven by an increase in newsstand revenues that was led by a strong debut of The Magnolia Journal, Meredith's quarterly lifestyle magazine based on Joanna and Chip Gaines' popular Magnolia brand.
  • Expenses declined 9 percent, and were down 3 percent excluding special items, compared to the prior-year period, as Meredith continued to pursue operational efficiencies.

Meredith's National Media Group continues to extend its reach to American consumers and further diversify its revenue streams in fiscal 2017.  For example:

  • Meredith renewed its licensing program with Walmart. This program features more than 3,000 SKUs of Better Homes & Gardens branded products at 5,000 Walmart stores and on Walmart.com. In addition, Meredith launched several new brand licensing programs, including an EatingWell line of frozen foods; SHAPE fitness apparel; and Allrecipes cooking utensils.
  • Meredith grew the reach and impact of its Allrecipes brand, the world's largest in food media. Traffic increased 13 percent to an average of more than 55 million monthly unique visitors. Meredith introduced a new national broadcast television series based on the Allrecipes brand, and increased the ratebase of Allrecipes magazine to 1.35 million, up from 500,000 when it launched three years ago.

Fiscal 2017 first half National Media Group operating profit was $71 million, or $58 million excluding special items.  Fiscal 2017 first half revenues were $507 million compared to $525 million in the prior-year period.

OTHER FINANCIAL INFORMATION

Cash flow from operations grew to $117 million in the first six months of fiscal 2017 from $48 million in the prior-year period.  Total debt was $674 million and the weighted average interest rate was 2.8 percent, with $400 million effectively fixed at low rates.  Meredith's debt-to-EBITDA ratio for the trailing 12 months was 1.9 to 1 (as defined in Meredith's credit agreements).  All metrics are as of December 31, 2016.

Meredith continues to focus on its successful Total Shareholder Return strategy. 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 $74 million remaining under current authorizations.
  • Strategic investments to scale the business and increase shareholder value.

Fiscal 2017 second quarter special items included a reduction in a previously accrued contingent consideration payable and the resolution of certain federal and state tax matters.  These benefits were partially offset by restructuring and other charges.  (See Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

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 2017 second quarter comparisons are against the comparable prior-year period unless otherwise stated.

OUTLOOK

Including special items recorded in fiscal 2017, Meredith expects fiscal 2017 full-year earnings per share to range from $3.78 to $4.08.

Excluding special items recorded in fiscal 2017, Meredith continues to expect fiscal 2017 full-year earnings per share to range from $3.50 to $3.80, as originally communicated on July 28, 2016.

Meredith expects fiscal 2017 third quarter earnings per share to range from $0.75 to $0.80, with total revenues for each of its Local and National Media Groups flat to down slightly.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on January 25, 2017, at 8:30 a.m. EST to discuss fiscal 2017 second quarter 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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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 third 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 115 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 700 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 lifestyle through well-known brands such as Better Homes & Gardens, Allrecipes, Parents and Shape.  Meredith also features robust brand licensing activities, including more than 3,000 SKUs of branded products at 5,000 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 The Kraft Heinz Co., Bank of America, WebMD, Volkswagen and NBCUniversal.

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


Six Months

Periods ended December 31,

2016


2015


2016


2015

(In thousands except per share data)








Revenues








Advertising

$

267,129



$

241,571



$

493,018



$

460,241


Circulation

66,805



66,351



135,473



138,526


All other

108,708



98,491



214,030



192,312


Total revenues

442,642



406,413



842,521



791,079


Operating expenses








Production, distribution, and editorial

148,625



151,065



298,853



304,243


Selling, general, and administrative

170,643



176,792



345,636



351,522


Depreciation and amortization

13,549



14,986



27,445



30,066


Merger-related costs



3,457





16,123


Total operating expenses

332,817



346,300



671,934



701,954


Income from operations

109,825



60,113



170,587



89,125


Interest expense, net

(4,679)



(5,265)



(9,428)



(10,578)


Earnings before income taxes

105,146



54,848



161,159



78,547


Income taxes

(33,341)



(22,329)



(55,381)



(34,999)


Net earnings

$

71,805



$

32,519



$

105,778



$

43,548










Basic earnings per share

$

1.61



$

0.73



$

2.38



$

0.98


Basic average shares outstanding

44,511



44,640



44,535



44,626










Diluted earnings per share

$

1.58



$

0.72



$

2.33



$

0.96


Diluted average shares outstanding

45,378



45,358



45,385



45,373










Dividends paid per share

$

0.4950



$

0.4575



$

0.9900



$

0.9150


 

Meredith Corporation and Subsidiaries

Segment Information (Unaudited)



Three Months


Six Months

Periods ended December 31,

2016


2015


2016


2015

(In thousands)








Revenues








National media








Advertising

$

135,103



$

137,216



$

260,455



$

264,456


Circulation

66,805



66,351



135,473



138,526


Other revenues

57,437



62,960



110,710



121,744


  Total national media

259,345



266,527



506,638



524,726


Local media








Non-political advertising

91,958



103,557



176,142



192,867


Political advertising

40,068



798



56,421



2,918


Other revenues

51,271



35,531



103,320



70,568


  Total local media

183,297



139,886



335,883



266,353


Total revenues

$

442,642



$

406,413



$

842,521



$

791,079










Operating profit








National media

$

46,757



$

33,583



$

70,868



$

56,386


Local media

76,815



40,441



127,437



69,768


Unallocated corporate

(13,747)



(13,911)



(27,718)



(37,029)


Income from operations

$

109,825



$

60,113



$

170,587



$

89,125










Depreciation and amortization








National media

$

4,330



$

4,833



$

8,848



$

9,398


Local media

8,865



9,616



17,855



19,594


Unallocated corporate

354



537



742



1,074


Total depreciation and amortization

$

13,549



$

14,986



$

27,445



$

30,066










EBITDA 1








National media

$

51,087



$

38,416



$

79,716



$

65,784


Local media

85,680



50,057



145,292



89,362


Unallocated corporate

(13,393)



(13,374)



(26,976)



(35,955)


Total EBITDA 1

$

123,374



$

75,099



$

198,032



$

119,191



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

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


Assets

December 31,
2016


June 30,
 2016

(In thousands)




Current assets




Cash and cash equivalents

$

44,488



$

24,970


Accounts receivable, net

284,840



273,927


Inventories

20,009



20,678


Current portion of subscription acquisition costs

147,630



133,338


Current portion of broadcast rights

11,093



4,220


Other current assets

23,422



24,023


Total current assets

531,482



481,156


Property, plant, and equipment

536,744



530,052


Less accumulated depreciation

(352,986)



(339,099)


Net property, plant, and equipment

183,758



190,953


Subscription acquisition costs

97,939



95,960


Broadcast rights

4,610



4,565


Other assets

57,711



57,151


Intangible assets, net

913,157



913,877


Goodwill

895,389



883,129


Total assets

$

2,684,046



$

2,626,791






Liabilities and Shareholders' Equity




Current liabilities




Current portion of long-term debt

$

62,500



$

75,000


Current portion of long-term broadcast rights payable

11,956



4,649


Accounts payable

75,694



82,107


Accrued expenses and other liabilities

127,598



116,777


Current portion of unearned subscription revenues

213,648



199,359


Total current liabilities

491,396



477,892


Long-term debt

611,691



618,506


Long-term broadcast rights payable

5,528



5,524


Unearned subscription revenues

131,002



128,534


Deferred income taxes

361,278



336,346


Other noncurrent liabilities

127,266



170,946


Total liabilities

1,728,161



1,737,748


Shareholders' equity




Common stock

39,335



39,272


Class B stock

5,160



5,284


Additional paid-in capital

55,333



54,282


Retained earnings

879,661



818,706


Accumulated other comprehensive loss

(23,604)



(28,501)


Total shareholders' equity

955,885



889,043


Total liabilities and shareholders' equity

$

2,684,046



$

2,626,791


 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)


Six months ended December 31,

2016


2015

(In thousands)




Net cash provided by operating activities

$

117,281



$

47,702






Cash flows from investing activities




Acquisitions of and investments in businesses

(11,819)



(186)


Additions to property, plant, and equipment

(10,949)



(7,866)


Proceeds from disposition of assets



1,767


Net cash used in investing activities

(22,768)



(6,285)






Cash flows from financing activities




Proceeds from issuance of long-term debt

270,000



90,000


Repayments of long-term debt

(288,125)



(86,250)


Dividends paid

(44,823)



(41,362)


Purchases of Company stock

(26,453)



(6,538)


Proceeds from common stock issued

16,988



6,455


Payment of acquisition related contingent consideration

(4,000)



(288)


Excess tax benefits from share-based payments

2,883



1,706


Other

(1,465)



(114)


Net cash used in financing activities

(74,995)



(36,391)


Net increase in cash and cash equivalents

19,518



5,026


Cash and cash equivalents at beginning of period

24,970



22,833


Cash and cash equivalents at end of period

$

44,488



$

27,859


 

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 December 31, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit excluding special items (non-GAAP)

$

34,269


$

78,938


$

(13,309)


$

99,898


Special items





Write-down of contingent consideration payable

19,580




19,580


Severance and related benefit costs

(6,695)


(445)


(438)


(7,578)


Write-down of impaired assets


(1,678)



(1,678)


Other

(397)




(397)


Total special items

12,488


(2,123)


(438)


9,927


Operating profit

$

46,757


$

76,815


$

(13,747)


$

109,825







Earnings per share excluding special items (non-GAAP)

$

1.30


Per share impact of special items


Per share impact of the resolution of certain federal and state tax matters

0.15


Per share impact of special items of $9,927 ($6,105 after tax)

0.13


Total per share impact of special items

0.28


Diluted earnings per share

$

1.58












Six months ended December 31, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit excluding special items (non-GAAP)

$

58,380


$

129,560


$

(27,280)


$

160,660


Special items





Write-down of contingent consideration payable

19,580




19,580


Severance and related benefit costs

(6,695)


(445)


(438)


(7,578)


Write-down of impaired assets


(1,678)



(1,678)


Other

(397)




(397)


Total special items

12,488


(2,123)


(438)


9,927


Operating profit

$

70,868


$

127,437


$

(27,718)


$

170,587







Earnings per share excluding special items (non-GAAP)

$

2.05


Per share impact of special items


Per share impact of the resolution of certain federal and state tax matters

0.15


Per share impact of special items of $9,927 ($6,105 after tax)

0.13


Total per share impact of special items

0.28


Diluted earnings per share

$

2.33


 

Table 2

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 December 31, 2015

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit excluding special items (non-GAAP)

$

34,083


$

40,441


$

(10,454)


$

64,070


Special items





Merger-related costs



(3,457)


(3,457)


Severance and related benefit costs

(1,014)




(1,014)


Reversal of previously accrued restructuring costs

514




514


Total special items

(500)



(3,457)


(3,957)


Operating profit

$

33,583


$

40,441


$

(13,911)


$

60,113







Earnings per share excluding special items (non-GAAP)

$

0.80


Per share impact of special items of $3,957 ($3,764 after tax)

(0.08)


Diluted earnings per share

$

0.72












Six months ended December 31, 2015

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit excluding special items (non-GAAP)

$

60,120


$

68,830


$

(20,906)


$

108,044


Special items





Merger-related costs



(16,123)


(16,123)


Severance and related benefit costs

(4,248)


(132)



(4,380)


Reversal of previously accrued restructuring costs

514


1,070



1,584


Total special items

(3,734)


938


(16,123)


(18,919)


Operating profit

$

56,386


$

69,768


$

(37,029)


$

89,125







Earnings per share excluding special items (non-GAAP)

$

1.32


Per share impact of special items of $18,919 ($16,333 after tax)

(0.36)


Diluted earnings per share

$

0.96


 

Table 3

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 December 31, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

259,345


$

183,297


$


$

442,642







Operating profit

$

46,757


$

76,815


$

(13,747)


$

109,825


Depreciation and amortization

4,330


8,865


354


13,549


EBITDA

51,087


85,680


(13,393)


123,374


Special items





Write-down of contingent consideration payable

(19,580)




(19,580)


Severance and related benefit costs

6,695


445


438


7,578


Write-down of impaired assets


1,678



1,678


Other

397




397


Total special items

(12,488)


2,123


438


(9,927)


Adjusted EBITDA

$

38,599


$

87,803


$

(12,955)


113,447


Less





Depreciation and amortization




(13,549)


Special items




9,927


Net interest expense




(4,679)


Income taxes




(33,341)


Net earnings




$

71,805







Segment EBITDA margin

19.7

%

46.7

%



Segment adjusted EBITDA margin

14.9

%

47.9

%




Table 3 continued


Six months ended December 31, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

506,638


$

335,883


$


$

842,521







Operating profit

$

70,868


$

127,437


$

(27,718)


$

170,587


Depreciation and amortization

8,848


17,855


742


27,445


EBITDA

79,716


145,292


(26,976)


198,032


Special items





Write-down of contingent consideration payable

(19,580)




(19,580)


Severance and related benefit costs

6,695


445


438


7,578


Write-down of impaired assets


1,678



1,678


Other

397




397


Total special items

(12,488)


2,123


438


(9,927)


Adjusted EBITDA

$

67,228


$

147,415


$

(26,538)


188,105


Less





Depreciation and amortization




(27,445)


Special items




9,927


Net interest expense




(9,428)


Income taxes




(55,381)


Net earnings




$

105,778







Segment EBITDA margin

15.7

%

43.3

%



Segment adjusted EBITDA margin

13.3

%

43.9

%








 

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 December 31, 2015

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

266,527


$

139,886


$


$

406,413







Operating profit

$

33,583


$

40,441


$

(13,911)


$

60,113


Depreciation and amortization

4,833


9,616


537


14,986


EBITDA

38,416


50,057


(13,374)


75,099


Special items





Merger-related costs



3,457


3,457


Severance and related benefit costs

1,014




1,014


Reversal of previously accrued restructuring costs

(514)




(514)


Total special items

500



3,457


3,957


Adjusted EBITDA

$

38,916


$

50,057


$

(9,917)


79,056


Less





Depreciation and amortization




(14,986)


Special items




(3,957)


Net interest expense




(5,265)


Income taxes




(22,329)


Net earnings




$

32,519







Segment EBITDA margin

14.4

%

35.8

%



Segment adjusted EBITDA margin

14.6

%

35.8

%




Table 4 continued


Six months ended December 31, 2015

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

524,726


$

266,353


$


$

791,079







Operating profit

$

56,386


$

69,768


$

(37,029)


$

89,125


Depreciation and amortization

9,398


19,594


1,074


30,066


EBITDA

65,784


89,362


(35,955)


119,191


Special items





Merger-related costs



16,123


16,123


Severance and related benefit costs

4,248


132



4,380


Reversal of previously accrued restructuring costs

(514)


(1,070)



(1,584)


Total special items

3,734


(938)


16,123


18,919


Adjusted EBITDA

$

69,518


$

88,424


$

(19,832)


138,110


Less





Depreciation and amortization




(30,066)


Special items




(18,919)


Net interest expense




(10,578)


Income taxes




(34,999)


Net earnings




$

43,548







Segment EBITDA margin

12.5

%

33.6

%



Segment adjusted EBITDA margin

13.2

%

33.2

%








 

Table 5

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows national media operating expenses excluding special items and as reported with the difference being the special items. National media operating expenses 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 December 31,

2016


2015


Change

(In thousands)






National media operating expenses






Operating expenses excluding special items (non-GAAP)

$

225,076



$

232,444



(3)%


Special items






Write-down of contingent consideration payable

(19,580)






Severance and related benefit costs

6,695



1,014




Reversal of previously accrued restructuring costs

(13)



(514)




Other

410






Total special items

(12,488)



500




National media operating expenses

$

212,588



$

232,944



(9)%


 


Table 6

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows projected diluted earnings per share excluding special items and as projected with the difference being the special items. Projected 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.


Year ended June 30, 2017

Low


High

Projected diluted earnings per share excluding special items (non-GAAP)

$

3.50



$

3.80


Total per share impact of special items (see Table 1)

0.28



0.28


Projected diluted earnings per share

$

3.78



$

4.08


 

 

SOURCE Meredith Corporation

For further information: Shareholder/Financial Analysts, Mike Lovell, Director of Investor Relations, Phone: (515) 284-3622, E-mail: Mike.Lovell@meredith.com, or Media, Art Slusark, Chief Communications Officer, Phone: (515) 284-3404, E-mail: Art.Slusark@meredith.com