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News Releases

Meredith Reports Record Fiscal 2017 Revenue And Earnings

Robust Digital and Political Advertising Revenues Drive Performance

Strong Cash Flow Fuels Ongoing Execution of Total Shareholder Return Strategy

Jul 27, 2017
7:30am

DES MOINES, Iowa, July 27, 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 110 million American women every month — reported today record fiscal 2017 full year and fourth quarter results.

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. (PRNewsFoto/Meredith Corporation) (PRNewsfoto/Meredith Corporation)

"We delivered record revenue and profit in fiscal 2017 as we continue to aggressively execute our multi-platform growth strategies, including rapid expansion of our highly profitable digital activities," said Meredith Chairman and CEO Stephen M. Lacy.  "Additionally, we delivered strong cash flow and higher profit margins.  This enabled us to continue successful execution of our Total Shareholder Return (TSR) strategy."

Fiscal 2017 financial highlights, compared to the prior year, included:

  • Earnings per share were $4.16, compared to $0.75.
  • Excluding special items in both periods, earnings per share grew to $4.00, an increase of more than 20 percent. (See Tables 1-5 for supplemental disclosures regarding non-GAAP financial measures.)
  • Operating profit margin grew to 18 percent.
  • Total Company revenues grew 4 percent to a record $1.7 billion, and total advertising revenues grew 2 percent to $934 million.

"We expanded our audience across media platforms and launched new products to strengthen our competitive position with Millennial consumers and advertisers wanting to reach them," said Meredith President and COO Tom Harty. "We continued to deliver double-digit gains in digital advertising revenue, which offset print declines on a comparable basis.  Additionally, we generated a record $63 million of political advertising revenues and increased net retransmission contribution."

Fiscal 2017 fourth quarter earnings per share were $0.95, compared to a loss of $2.03 per share in the prior-year period.  Excluding special items in both periods, earnings per share were $1.07, compared to $1.08 in the prior-year period.  Fourth quarter fiscal 2017 total Company revenues increased to $445 million.

FISCAL 2017 FULL-YEAR REVIEW

Meredith continued to aggressively execute a series of well-defined strategic initiatives in fiscal 2017 to generate growth in revenue and operating profit, and increase shareholder value over time.  These included:

  • Increasing Meredith's powerful consumer connection - Consumer engagement expanded across Meredith's media platforms, including magazine readership, digital and mobile traffic and sales of branded product at retail.
  • Rapidly growing digital, mobile, video and social platforms - Total Company digital advertising revenues grew 20 percent. National Media Group digital advertising increased more than 20 percent and represented more than 30 percent of its total advertising. Local Media Group digital advertising rose more than 15 percent. Traffic across Meredith's digital properties averaged 86 million unique visitors per month, an increase of 8 percent over the prior year.
  • Generating record political advertising revenues - Meredith's television stations generated $63 million of political advertising revenues, an increase of 43 percent compared to the fiscal 2015 election cycle.
  • Expanding Meredith's media portfolio:
    • In its Local Media Group, Meredith acquired Peachtree TV (WPCH) in Atlanta, the nation's 10th largest market. With WPCH, Meredith created its fifth owned-and-operated duopoly. To further strengthen its competitive position, Meredith added newscasts in Atlanta, Phoenix, Portland, Nashville, Greenville and Flint/Saginaw.
    • In its National Media Group, Meredith launched The Magnolia Journal, an extension of Joanna and Chip Gaines' popular Magnolia brand. It quickly became the strongest-selling newsstand title in Meredith's recent history and is currently selling more than 900,000 copies of each issue.
  • Successful renewal of key strategic agreements:
    • In its Local Media Group, Meredith renewed its CBS affiliation agreements for its stations in Atlanta, Phoenix, Kansas City and Flint/Saginaw into fiscal 2021. It also extended its FOX agreements in Portland, Las Vegas, Greenville, Mobile and Springfield into fiscal 2019.
    • In its National Media Group, 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 a very well-received EatingWell line of frozen entrées and a Shape line of apparel for women.
  • Successful execution of its TSR strategy - Meredith generated TSR of 18 percent in Fiscal 2017. Meredith increased its dividend by 5.1 percent to $2.08 per share on an annualized basis, its 24th consecutive year of dividend growth. The dividend is currently yielding approximately 3.5 percent.

OPERATING GROUP DETAIL

LOCAL MEDIA GROUP

Meredith's Local Media Group includes 17 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 highly profitable local news and entertainment content each week.  Meredith expects to continue to grow its Local Media Group organically and through strategic acquisitions.

Fiscal 2017 Local Media Group operating profit grew 36 percent to $215 million and EBITDA increased 27 percent to $250 million, compared to the prior year.  Revenues increased 15 percent to $630 million.  All represented record highs. (See Tables 1-5 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at fiscal 2017 performance compared to the prior year:

  • Total advertising revenues grew 7 percent to a record $414 million, driven by strong demand for political advertising.
  • Political advertising revenues were $63 million, with Meredith generating significant revenues from stations in the Las Vegas, St. Louis, Phoenix, Kansas City and Atlanta markets.
  • Non-political advertising revenues were $352 million, compared to $374 million, due primarily to political advertising displacement, the Super Bowl moving to FOX from CBS and the Summer Olympic games on NBC.
  • Digital advertising revenues grew more than 15 percent. Meredith relaunched all of the mobile news, weather and traffic apps across its station group, yielding record app opens and unique page views.
  • Other revenues and operating expenses increased, primarily due to growth in retransmission revenues from cable and satellite television operators, partially offset by higher programming fees paid to affiliated networks.

Turning to ratings, Meredith delivered strong performance during the May rating period.  Meredith stations in 10 of its 12 markets ranked No. 1 or No. 2 in morning or late news, and Meredith stations in six of its markets were No. 1 or No. 2 from sign-on to sign-off.

Fiscal 2017 fourth quarter Local Media Group operating profit grew 9 percent to $46 million and EBITDA grew 6 percent to $55 million, compared to the prior-year period.  Revenues increased 8 percent to $152 million.

NATIONAL MEDIA GROUP

Meredith's National Media Group reaches more than 110 million unduplicated American women every month, including more than 70 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 National Media Group operating profit was $147 million, compared to a loss of $18 million in the prior year.  Excluding special items in both years, operating profit was $142 million, compared to $150 million.  Revenues were $1.1 billion.  (See Tables 1-5 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at fiscal 2017 performance compared to the prior year:

  • Total advertising revenues were $520 million, off 1 percent, but up slightly on a comparable basis, which excludes MORE and Siempre Mujer magazines.
  • Digital advertising revenue grew more than 20 percent, and accounted for more than 30 percent of total National Media Group advertising revenues. Growth was led by highly profitable native, engagement-based video, and programmatic advertising, along with shopper marketing.
  • Meredith's share of total magazine advertising revenues increased to 13.3 percent from 12.0 percent, according to the most recent data from Publishers Information Bureau. The Better Homes & Gardens, Family Circle, Martha Stewart and Midwest Living brands were particularly strong, while the food, media and entertainment, household supplies and beauty advertising categories were growth leaders.
  • Circulation revenues were $322 million, off 2 percent, but flat on a comparable basis.
  • Expenses declined 16 percent, and were down 1 percent excluding special items in both periods as Meredith continued to pursue operational efficiencies.

Fiscal 2017 fourth quarter National Media Group operating profit was $34 million, compared to a loss of $109 million in the prior-year period.  Excluding special items in both periods, fiscal 2017 fourth quarter operating profit was $43 million compared to $52 million.  Total revenues were $293 million and advertising revenues were $135 million.

OTHER FINANCIAL INFORMATION

Cash flow from operations was $219 million.  Total debt was $698 million and the weighted average interest rate was 2.8 percent, with $350 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 June 30, 2017.

Meredith continues to focus on its successful TSR strategy.  Key elements include:

  • Ongoing dividend increases - Meredith raised its regular stock dividend by 5.1 percent to $2.08 on an annualized basis in January 2017. This marked the 24th straight year of dividend increases for Meredith, which has paid an annual dividend for 70 consecutive years.
  • Strategic investments to scale the business and increase shareholder value - Meredith has invested approximately $1 billion to acquire leading broadcast, digital and print properties in the last several years.
  • Share repurchases - Meredith's ongoing share repurchase program has $68 million remaining under current authorizations as of June 30, 2017.

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 full year and fourth-quarter comparisons are against the comparable prior-year period unless otherwise stated.

OUTLOOK

Meredith expects full year fiscal 2018 earnings per share to range from $3.20 to $3.50.  Meredith will be cycling against a record $63 million (or $0.85 per share) in political advertising revenues recorded by its Local Media Group in fiscal 2017.

Looking more closely at the first quarter of fiscal 2018 compared to the prior-year quarter, Meredith expects:

  • Total Company revenues to be flat to up slightly.
  • National Media Group revenues to be flat to up slightly.
  • Local Media Group revenues to be flat to down slightly.
  • Meredith expects fiscal 2018 first quarter earnings per share to range from $0.60 to $0.65. Meredith will be cycling against $16 million (or $0.22 per share) in political advertising revenues recorded in the prior-year period.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on July 27, 2017, at 8:30 a.m. EDT to discuss fiscal 2017 and fourth 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 first quarter and full-year fiscal 2018.

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 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 110 million unduplicated women every month, including more than 70 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., Benjamin Moore, Allergan, TGIFridays and WebMD.

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)



Three Months


Twelve Months

Periods ended June 30,

2017


2016


2017


2016

(In thousands except per share data)








Revenues








Advertising

$

230,388



$

231,559



$

934,153



$

914,202


Circulation

90,164



93,454



321,959



328,599


All other

124,868



110,765



457,249



406,827


Total revenues

445,420



435,778



1,713,361



1,649,628


Operating expenses








Production, distribution, and editorial

154,224



150,890



602,985



611,872


Selling, general, and administrative

203,372



195,507



741,188



730,074


Depreciation and amortization

13,143



14,473



53,892



59,152


Impairment of goodwill and other long-lived assets

6,173



161,462



6,173



161,462


Merger termination fee net of merger-related costs







(43,541)


Total operating expenses

376,912



522,332



1,404,238



1,519,019


Income (loss) from operations

68,508



(86,554)



309,123



130,609


Interest expense, net

(4,780)



(4,720)



(18,789)



(20,402)


Earnings (loss) before income taxes

63,728



(91,274)



290,334



110,207


Income tax benefit (expense)

(20,359)



759



(101,406)



(76,270)


Net earnings (loss)

$

43,369



$

(90,515)



$

188,928



$

33,937










Basic earnings (loss) per share

$

0.97



$

(2.03)



$

4.23



$

0.76


Basic average shares outstanding

44,716



44,556



44,617



44,606










Diluted earnings (loss) per share

$

0.95



$

(2.03)



$

4.16



$

0.75


Diluted average shares outstanding

45,533



44,556



45,447



45,357










Dividends paid per share

$

0.5200



$

0.4950



$

2.0300



$

1.9050


 

Meredith Corporation and Subsidiaries

Segment Information (Unaudited)



Three Months


Twelve Months

Periods ended June 30,

2017


2016


2017


2016

(In thousands)








Revenues








National media








Advertising

$

135,095



$

136,750



$

520,134



$

527,051


Circulation

90,164



93,454



321,959



328,599


Other revenues

67,952



64,410



241,107



245,533


  Total national media

293,211



294,614



1,083,200



1,101,183


Local media








Non-political advertising

90,883



90,298



351,506



374,104


Political advertising

4,410



4,511



62,513



13,047


Other revenues

56,916



46,355



216,142



161,294


  Total local media

152,209



141,164



630,161



548,445


Total revenues

$

445,420



$

435,778



$

1,713,361



$

1,649,628










Operating profit (loss)








National media

$

34,359



$

(108,860)



$

146,541



$

(17,693)


Local media

46,319



42,563



214,920



158,481


Unallocated corporate

(12,170)



(20,257)



(52,338)



(10,179)


Income (loss) from operations

$

68,508



$

(86,554)



$

309,123



$

130,609










Depreciation and amortization








National media

$

4,191



$

4,637



$

17,555



$

18,698


Local media

8,524



9,313



34,818



38,332


Unallocated corporate

428



523



1,519



2,122


Total depreciation and amortization

$

13,143



$

14,473



$

53,892



$

59,152










EBITDA 1








National media

$

38,550



$

(104,223)



$

164,096



$

1,005


Local media

54,843



51,876



249,738



196,813


Unallocated corporate

(11,742)



(19,734)



(50,819)



(8,057)


Total EBITDA 1

$

81,651



$

(72,081)



$

363,015



$

189,761



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

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


Assets

June 30, 2017


June 30, 2016

(In thousands)




Current assets




Cash and cash equivalents

$

22,287



$

24,970


Accounts receivable, net

289,052



273,927


Inventories

21,890



20,678


Current portion of subscription acquisition costs

144,896



133,338


Current portion of broadcast rights

7,853



4,220


Other current assets

19,275



24,023


Total current assets

505,253



481,156


Property, plant, and equipment

549,536



530,052


Less accumulated depreciation

(359,670)



(339,099)


Net property, plant, and equipment

189,866



190,953


Subscription acquisition costs

79,740



95,960


Broadcast rights

21,807



4,565


Other assets

69,616



57,151


Intangible assets, net

955,883



913,877


Goodwill

907,458



883,129


Total assets

$

2,729,623



$

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

9,206



4,649


Accounts payable

66,598



82,107


Accrued expenses and other liabilities

116,907



116,777


Current portion of unearned subscription revenues

204,459



199,359


Total current liabilities

459,670



477,892


Long-term debt

635,737



618,506


Long-term broadcast rights payable

22,454



5,524


Unearned subscription revenues

106,506



128,534


Deferred income taxes

384,726



336,346


Other noncurrent liabilities

124,558



170,946


Total liabilities

1,733,651



1,737,748


Shareholders' equity




Common stock

39,433



39,272


Class B stock

5,119



5,284


Additional paid-in capital

54,726



54,282


Retained earnings

915,703



818,706


Accumulated other comprehensive loss

(19,009)



(28,501)


Total shareholders' equity

995,972



889,043


Total liabilities and shareholders' equity

$

2,729,623



$

2,626,791


 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)


Years ended June 30,

2017


2016

(In thousands)




Net cash provided by operating activities

$

219,346



$

226,597






Cash flows from investing activities




Acquisitions of and investments in businesses

(84,400)



(8,186)


Additions to property, plant, and equipment

(34,785)



(25,035)


Proceeds from disposition of assets

1,500



1,767


Net cash used in investing activities

(117,685)



(31,454)






Cash flows from financing activities




Proceeds from issuance of long-term debt

380,000



167,500


Repayments of long-term debt

(374,375)



(267,500)


Dividends paid

(91,931)



(86,090)


Purchases of Company stock

(53,399)



(31,080)


Proceeds from common stock issued

38,061



20,879


Payment of acquisition related contingent consideration

(8,000)



(800)


Excess tax benefits from share-based payments

6,765



4,241


Other

(1,465)



(156)


Net cash used in financing activities

(104,344)



(193,006)


Net increase (decrease) in cash and cash equivalents

(2,683)



2,137


Cash and cash equivalents at beginning of year

24,970



22,833


Cash and cash equivalents at end of year

$

22,287



$

24,970


 

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, 2017

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit

$

34,359


$

46,319


$

(12,170)


$

68,508


Special items





Write-down of contingent consideration payable

(390)




(390)


Severance and related benefit costs

3,052


1,233



4,285


Write-down of impaired assets

7,194




7,194


Reversal of previously accrued restructuring costs

(1,536)



(387)


(1,923)


Total special items

8,320


1,233


(387)


9,166


Operating profit excluding special items (non-GAAP)

$

42,679


$

47,552


$

(12,557)


$

77,674







Diluted earnings per share

$

0.95


Per share impact of special items

0.12


Earnings per share excluding special items (non-GAAP)

$

1.07












Twelve months ended June 30, 2017

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit

$

146,541


$

214,920


$

(52,338)


$

309,123


Special items





Write-down of contingent consideration payable

(19,970)




(19,970)


Severance and related benefit costs

9,747


1,678


438


11,863


Write-down of impaired assets

7,194


1,678



8,872


Reversal of previously accrued restructuring costs

(1,536)



(387)


(1,923)


Other

397




397


Total special items

(4,168)


3,356


51


(761)


Operating profit excluding special items (non-GAAP)

$

142,373


$

218,276


$

(52,287)


$

308,362







Diluted earnings per share

$

4.16


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 $761 ($468 after tax)

(0.01)


Total per share impact of special items

(0.16)


Earnings per share excluding special items (non-GAAP)

$

4.00


 

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 June 30, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit (loss)

$

(108,860)


$

42,563


$

(20,257)


$

(86,554)


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 excluding special items (non-GAAP)

$

51,646


$

43,791


$

(14,215)


$

81,222







Diluted loss per share

$

(2.03)


Per share impact of special items

3.11


Earnings per share excluding special items (non-GAAP)

$

1.08












Twelve months ended June 30, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands except per share data)





Operating profit (loss)

$

(17,693)


$

158,481


$

(10,179)


$

130,609


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


Operating profit excluding special items (non-GAAP)

$

150,169


$

158,771


$

(47,678)


$

261,262







Diluted earnings per share

$

0.75


Per share impact of special items

2.55


Earnings per share excluding special items (non-GAAP)

$

3.30


 

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 June 30, 2017

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

293,211


$

152,209


$


$

445,420







Net earnings

$

43,369


Net interest expense

4,780


Income taxes

20,359


Operating profit

$

34,359


$

46,319


$

(12,170)


68,508


Depreciation and amortization

4,191


8,524


428


13,143


EBITDA

38,550


54,843


(11,742)


81,651


Special items





Write-down of contingent consideration payable

(390)




(390)


Severance and related benefit costs

3,052


1,233



4,285


Write-down of impaired assets

7,194




7,194


Reversal of previously accrued restructuring costs

(1,536)



(387)


(1,923)


Total special items

8,320


1,233


(387)


9,166


Adjusted EBITDA

$

46,870


$

56,076


$

(12,129)


$

90,817







Segment EBITDA margin

13.1

%

36.0

%



Segment adjusted EBITDA margin

16.0

%

36.8

%



 

Table 3 continued


Twelve months ended June 30, 2017

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

1,083,200


$

630,161


$


$

1,713,361







Net earnings

$

188,928


Net interest expense

18,789


Income taxes

101,406


Operating profit

$

146,541


$

214,920


$

(52,338)


309,123


Depreciation and amortization

17,555


34,818


1,519


53,892


EBITDA

164,096


249,738


(50,819)


363,015


Special items





Write-down of contingent consideration payable

(19,970)




(19,970)


Severance and related benefit costs

9,747


1,678


438


11,863


Write-down of impaired assets

7,194


1,678



8,872


Reversal of previously accrued restructuring costs

(1,536)



(387)


(1,923)


Other

397




397


Total special items

(4,168)


3,356


51


(761)


Adjusted EBITDA

$

159,928


$

253,094


$

(50,768)


$

362,254







Segment EBITDA margin

15.1

%

39.6

%



Segment adjusted EBITDA margin

14.8

%

40.2

%



 

Table 4

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







Net loss

$

(90,515)


Net interest expense

4,720


Income taxes

(759)


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




Segment EBITDA margin

(35.4)

%

36.7

%



Segment adjusted EBITDA margin

19.1

%

37.6

%



 

Table 4 continued


Twelve months ended June 30, 2016

National

Media

Local

Media

Unallocated
Corporate

Total

(In thousands)





Revenues

$

1,101,183


$

548,445


$


$

1,649,628







Net earnings

$

33,937


Net interest expense

20,402


Income taxes

76,270


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







Segment EBITDA margin

0.1

%

35.9

%



Segment adjusted EBITDA margin

15.3

%

35.9

%



 

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.


Year ended June 30,

2017


2016


Change

(In thousands)






National media operating expenses

$

936,659



$

1,118,876



(16)%

Special items






Write-down of contingent consideration payable

19,970






Severance and related benefit costs

(9,747)



(9,301)




Write-down of impaired assets

(7,194)



(155,823)




Pension settlement charge



(3,294)




Reversal of previously accrued restructuring costs

1,536



1,157




Other

(397)



(601)




Total special items

4,168



(167,862)




Operating expenses excluding special items (non-GAAP)

$

940,827



$

951,014



(1)%

 

 

SOURCE Meredith Corporation

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