News Releases

Meredith Reports Strong Fiscal 2010 Fourth Quarter & Full Year Results
EPS increases 27 percent in fourth quarter and 10 percent for full fiscal 2010 before special items

DES MOINES, Iowa, July 29 /PRNewswire-FirstCall/ -- Meredith Corporation (NYSE: MDP), the leading media and marketing company serving American women, today reported fiscal 2010 fourth quarter earnings per share of $0.73, compared to a loss of $3.64 per share in the prior year, which included a non-cash impairment charge of $4.11 per share.  Excluding the impairment charge and other special items in both periods, fiscal 2010 fourth quarter earnings per share grew to $0.70, up 27 percent from $0.55 in the prior year.  

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Fiscal 2010 fourth quarter total revenues grew to $365 million, up 6 percent from the prior year. Advertising revenues increased to $202 million – up 7 percent from the prior year – as both National and Local Media Group advertising grew.  

Fiscal 2010 full year earnings per share from continuing operations were $2.28, compared to a loss of $2.28 per share in the prior year which included the impairment charge.  Excluding the impairment charge and other special items in both periods, fiscal 2010 earnings per share from continuing operations grew to $2.23, up 10 percent from $2.03 in the prior year.  Information on special items recorded in fiscal 2010 and fiscal 2009 is available in Tables 1-4 of this press release.

Fiscal 2010 full year total revenues were $1.39 billion, compared to $1.41 billion in the prior year. Total advertising revenues were $781 million, compared to $787 million in the prior year.  Excluding $14 million of net incremental political advertising generated in the prior year, advertising revenues grew 1 percent in fiscal 2010.  

"Fiscal 2010 marked a return to earnings growth as we strengthened our business across the board," said Meredith Chairman and Chief Executive Officer Stephen M. Lacy.  "We increased advertising market share in both magazine and television, grew the size of our consumer audiences, and generated higher sales of our licensed products at retail.  Additionally, we made important investments in new media platforms including mobile and eTablets."

Lacy also cited the following fiscal 2010 achievements resulting from disciplined expense control and careful cash management:

  • Operating costs declined by 3 percent, excluding special items.
  • Cash flow from operations rose to $192 million, compared to $181 million in the prior year.  
  • Total debt was reduced 20 percent to $300 million.
  • Meredith renewed its $150 million revolving credit facility for a three-year term.
  • The Company increased shareholder value, including an increase in its dividend for the 17th consecutive year.

Central to Meredith's strong results were performance improvement initiatives launched in fiscal 2008 – when the early signs of the economic downturn appeared – and expanded in fiscal 2009 and 2010.  In fiscal 2010, Meredith:

  • Made impressive advertising market share gains – Meredith's share of overall magazine industry advertising revenues increased to 12.3 percent – the highest in history – and up from 9.5 percent two years ago.  This marked the fifth consecutive year of magazine market share gains for Meredith.  In addition, Meredith's television stations outperformed the industry in fiscal 2010, according to Television Bureau of Advertising data.
  • Increased its connection to the consumer – Readers of Meredith's measured magazines grew to 113 million, according to recent data from Mediamark Research and Intelligence, and profitability from circulation rose.  Meredith television stations achieved higher ratings, and the daily Better television show, Meredith's nationally syndicated program, will increase its carriage to more than 80 markets reaching over 50 percent of U.S. television households starting this fall.  Unique visitors and page views across Meredith's 60 Web sites rose approximately 20 percent each.  
  • Re-engineered its core operations – Meredith made significant progress against a series of re-engineering initiatives inside its National and Local media groups in fiscal 2010, including content creation, sales, and consumer marketing.  These initiatives resulted in efficiencies and improved products.  Meredith was named Publishing Company of the Year by Ad Age for the third time in seven years, and received numerous industry accolades in fiscal 2010.
  • Invested in new media platforms – Meredith took several steps in the mobile media space, launching mobile platforms for its largest consumer brands, and joining publishing and broadcasting industry consortiums to further develop the mobile and eTablet platforms for consumers and advertisers. In early fiscal 2011, Meredith completed its acquisition of mobile marketing firm The Hyperfactory.

Meredith's performance was particularly strong in the second half of fiscal 2010, as all major businesses delivered revenue growth over the prior year.  Specifically, total advertising revenues rose 7 percent, led by 16 percent growth in non-political television advertising. Brand Licensing revenues rose 50 percent led by increased sales of Better Homes and Gardens branded products at Walmart.  Meanwhile, Meredith Integrated Marketing revenues rose 5 percent. These gains in revenues, combined with disciplined expense control, led to 26 percent growth in second half operating profit when compared to the prior year period, excluding special items.

OPERATING DETAIL

National Media Group

Fiscal 2010 fourth quarter National Media Group operating profit was $46 million, even with the prior year.  Excluding special items, fourth quarter operating profit was $48 million, even with the prior year.  Fourth quarter revenues were $288 million, up 2 percent, while fourth quarter advertising revenues were $135 million, up 1 percent.  

Fiscal 2010 full year National Media Group operating profit was $167 million, up 11 percent from the prior year.  Excluding special items, fiscal 2010 National Media Group operating profit was $175 million, up 10 percent from the prior year.  Revenues were $1.11 billion versus $1.13 billion, and advertising revenues were $526 million versus $530 million.

Looking more closely at fiscal 2010 advertising performance:

  • Eleven of Meredith's 14 measured titles grew their share of advertising revenues, according to Publishers Information Bureau (PIB).  
  • Within Meredith's 28-magazine competitive set, the Company increased its share to 39 percent, also a historical high, and up from 36 percent two years ago.
  • Meredith Interactive Media advertising revenues rose 17 percent as the primary advertising positions on the Company's major Web sites were nearly sold out in the fourth quarter.

Meredith Integrated Marketing revenues were $164 million in fiscal 2010 compared to $176 million in the prior year.  This business experienced the effects of the recession later than Meredith's advertising-driven businesses.  However, revenues rose 5 percent in the second half of fiscal 2010 from the prior year due primarily to strong new business development, including new programs with Chrysler Group LLC., Lowe's Companies Inc., SunTrust Banks Inc., Mitsubishi Motors North America Inc., and Pizza Hut Inc.

"The combination of enhanced sales and marketing strategies, business re-engineering and careful control of expenses all contributed to National Media Group 11 percent operating profit growth," Lacy said.  "We also strengthened our connection to the consumer, delivered market share gains and made investments in new digital media platforms."

Local Media Group

Fiscal 2010 fourth quarter operating profit was $21 million, compared to a loss of $292 million in the prior year period including a $295 million non-cash impairment charge.  Excluding special items, fiscal 2010 fourth quarter operating profit more than tripled.  Fourth quarter revenues were $77 million, up 23 percent from the prior year.  

Fiscal 2010 full year Local Media Group operating profit was $53 million, compared to a year-ago loss of $258 million, which included the impairment charge.  Excluding special items, fiscal 2010 Local Media Group operating profit was $52 million, up 23 percent from the prior year.   Revenues were $282 million in fiscal 2010, up 3 percent from the prior year even with $14 million less in net political advertising revenue.  

Looking more closely at fiscal 2010 non-political advertising performance:

  • Revenues grew 5 percent, led by improved performance in the automotive, professional services and restaurant categories.
  • Meredith stations in six of its 10 markets grew revenues from the prior year.  In the fiscal fourth quarter, Meredith stations in all of its markets posted revenue growth from the prior year period.
  • Meredith outperformed the industry as a whole, according to Television Bureau of Advertising data.  

"The significantly improved results in non-political advertising revenues in our Local Media business in fiscal 2010, driven largely by automotive category spending, demonstrate the appeal that broadcast television has for advertisers due to its unparalleled reach and effectiveness," Lacy said.  "There simply is no more powerful media platform that drives consumers to retail outlets than local broadcast television."

Meredith delivered a strong ratings book in the most recent May measurement period.  Of note:

  • Meredith's CBS affiliate in Hartford continues to lead the market and finished first in every newscast for the seventh consecutive ratings book.
  • Nashville was No. 1 in every evening news period for the sixth consecutive book, and Portland was No. 1 in late news.
  • Atlanta continued to gain share – reaching the No. 2 position in late news in the important 25-54 year old demographic – while Las Vegas, Phoenix and Kansas City were strong No. 2s in late news, too.

Revenues from retransmission fees rose more than 40 percent in fiscal 2010 and were up 16 percent in the fourth quarter.  Meredith Video Studios revenues were up strongly in both fiscal 2010 and in the fourth quarter.  

OTHER FINANCIAL INFORMATION

Meredith generated $192 million in cash flow from operations during fiscal 2010, up from $181 million in the prior year.  Meredith generated $52 million in cash flow from operations during the fourth quarter of fiscal 2010, up nearly 25 percent from the prior year.

Meredith's total debt was $300 million at June 30, 2010, $80 million less than at the prior fiscal year end.  Meredith's debt-to-EBITDA ratio was well under existing debt covenants at 1.3 to 1.  On June 16, Meredith renewed its $150 million revolving credit agreement.  The new three-year agreement, which can be increased to $300 million under certain circumstances, gives Meredith financing capacity if attractive investment opportunities become available.

In early July, Meredith purchased the remaining interest in mobile marketing firm The Hyperfactory.  Meredith acquired its initial interest in July 2009.  The transaction is not expected to have a material impact on Meredith's fiscal 2011 results.  

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 consolidated statements of earnings (loss).

OUTLOOK

Meredith expects fiscal 2011 full year earnings per share will range from $2.40 to $2.75.  Looking more closely at full year fiscal 2011:

  • Meredith continues to face a volatile advertising environment impacted by the uncertain economic climate.  
  • The Company expects high-single-digit increases in both paper prices and postage rates.
  • Meredith expects investment spending of approximately $5-$6 million related to development of the eTablet platform, including the Next Issue Media industry consortium.  
  • The Company expects to benefit from an estimated $25 to $30 million of net political advertising revenues at its television stations, with the majority being booked in the second quarter of fiscal 2011.  Meredith generated $9 million of net political advertising in fiscal 2010.

Meredith expects fiscal 2011 first quarter earnings per share to range from $0.47 to $0.52.  Looking more closely at the first quarter of fiscal 2011:

  • Total Company advertising revenue is expected to increase 6-7 percent over the prior year period.
  • Local Media Group non-political advertising revenue pacings, which are a snapshot in time and change frequently, are currently up in the mid-to-high teens.  Depending on the strength of political advertising and its related impact on total advertising inventory, non-political pacings may moderate as the quarter progresses.
  • National Media Group advertising revenues are expected to be flat to down slightly on higher nets per page as the Company cycles against its strongest quarter of industry over-performance.

A number of uncertainties remain that may affect Meredith's outlook as stated in this press release for the first fiscal quarter and full year of 2011. These uncertainties are referenced below under "Safe Harbor" and in certain SEC filings.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on July 29, 2010, at 11:00 a.m. EDT to discuss fourth quarter and full year fiscal 2010 results.  A live webcast will be accessible to the public on the Company's Web site, www.meredith.com, and a replay will be available for one week. A transcript will be available within 48 hours after the call at www.meredith.com.

RATIONALE FOR USE AND ACCESS TO NON-GAAP MEASURES

Management uses and presents GAAP and non-GAAP results to evaluate and communicate the performance of the Company. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA is a common supplemental measure of performance used by investors and financial analysts. Management believes that EBITDA provides an additional analytical tool to clarify the Company's results from core operations and delineate underlying trends. Meredith does not use EBITDA as a measure of liquidity or funds available for management's discretionary use because it includes certain contractual and non-discretionary expenditures.

Results excluding the special items recorded in fiscal 2010 and 2009 are also supplemental non-GAAP financial measures.  Management believes these items are not reflective of Meredith's ongoing business activities.  While results excluding the special items are not a substitute for reported earnings results under GAAP, management believes this information is useful as an aid in better understanding Meredith's current performance, performance trends and financial condition.   Reconciliations of non-GAAP to GAAP measures are included in the attached tables.  The attached consolidated financial statements and reconciliation tables will be made available at www.meredith.com.

SAFE HARBOR

This release contains certain forward-looking statements that are subject to risks and uncertainties.  These statements are based on management's current knowledge and estimates of factors affecting the Company and its operations.  Statements in this announcement that are forward-looking include, but are not limited to, the statements regarding broadcasting pacings, publishing advertising revenues, paper and postage costs and investment spending, along with the Company's earnings per share outlook for the first fiscal quarter and full year fiscal 2011.

Actual results may differ materially from those currently anticipated.  Factors that could adversely affect future results include, but are not limited to, downturns in national and/or local economies; a softening of the domestic advertising market; world, national or local events that could disrupt broadcast television; increased consolidation among major advertisers or other events depressing the level of advertising spending; the unexpected loss or insolvency of one or more major clients; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicated programming or other costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company's industries; unexpected changes in interest rates; and the consequences of acquisitions and/or dispositions.  The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT MEREDITH CORPORATION

Meredith Corporation (NYSE:MDP; www.meredith.com) is the leading media and marketing company serving American women.  Meredith combines well-known national brands – including Better Homes and Gardens, Parents, Ladies' Home Journal, Family Circle, American Baby, Fitness and More – with local television brands in fast-growing markets.  Meredith is the industry leader in creating content in key consumer interest areas such as home, family, health and wellness and self-development.  Meredith uses multiple distribution platforms – including print, television, online, mobile and video – to give consumers content they desire and to deliver the messages of its marketing partners.  Additionally, Meredith uses its many assets to create powerful custom marketing solutions for many of the nation's top brands and companies.  Meredith has significantly added to its capabilities in this area through the acquisition of cutting-edge companies in areas such as digital, mobile, word-of-mouth, social and database marketing.

Meredith Corporation and Subsidiaries








Consolidated Statements of Earnings (Loss) (Unaudited)

















Three Months


Twelve Months

Period Ended June 30,

2010


2009


2010


2009

(In thousands except per share data)








Revenues








Advertising

$ 202,382


$  189,316


$  781,236


$  787,207

Circulation

70,794


69,723


282,480


280,809

All other

91,941


86,810


324,014


340,781

Total revenues

365,117


345,849


1,387,730


1,408,797

Operating expenses








Production, distribution, and editorial

136,263


154,977


574,784


646,595

Selling, general, and administrative

161,366


138,696


589,664


560,219

Depreciation and amortization

10,365


10,236


40,898


42,582

Impairment charge

-


294,529


-


294,529

Total operating expenses

307,994


598,438


1,205,346


1,543,925

Earnings (loss) from operations

57,123


(252,589)


182,384


(135,128)

Interest income

26


308


51


656

Interest expense

(3,847)


(5,079)


(18,584)


(20,777)

Earnings (loss) from continuing operations before income taxes

53,302


(257,360)


163,851


(155,249)

Income taxes

(19,933)


93,508


(59,888)


52,742

Earnings (loss) from continuing operations

33,369


(163,852)


103,963


(102,507)

Income (loss) from discontinued operations, net of taxes

-


160


-


(4,577)

Net earnings (loss)

$   33,369


$ (163,692)


$  103,963


$ (107,084)









Basic earnings (loss) per share








Earnings (loss) from continuing operations

$       0.74


$       (3.64)


$        2.30


$       (2.28)

Discontinued operations

-


-


-


(0.10)

Basic earnings (loss) per share

$       0.74


$       (3.64)


$        2.30


$       (2.38)

Basic average shares outstanding

45,381


45,016


45,289


45,042









Diluted earnings (loss) per share








Earnings (loss) from continuing operations

$       0.73


$       (3.64)


$        2.28


$       (2.28)

Discontinued operations

-


-


-


(0.10)

Diluted earnings (loss) per share

$       0.73


$       (3.64)


$        2.28


$       (2.38)

Diluted average shares outstanding

45,774


45,016


45,544


45,042









Dividends paid per share

$     0.230


$      0.225


$      0.910


$      0.880



Meredith Corporation and Subsidiaries








Segment Information (Unaudited)



















Three Months


Twelve Months

Period Ended June 30,

2010


2009


2010


2009

(In thousands)








Revenues








National media group








Advertising

$ 134,520


$  133,528


$    526,490


$    530,155

Circulation

70,794


69,723


282,480


280,809

Other revenues

82,690


80,115


296,398


323,297

Total national media group

288,004


283,366


1,105,368


1,134,261

Local media group








Non-political advertising

63,969


55,390


245,501


233,533

Political advertising

3,893


398


9,245


23,519

Other revenues

9,251


6,695


27,616


17,484

Total local media group

77,113


62,483


282,362


274,536

Total revenues

$ 365,117


$  345,849


$ 1,387,730


$ 1,408,797










Operating profit (loss)








National media group

$   46,191


$    45,948


$    167,423


$    151,017

Local media group

20,619


(292,147)


52,910


(257,774)

Unallocated corporate

(9,687)


(6,390)


(37,949)


(28,371)

Income (loss) from operations

$   57,123


$ (252,589)


$    182,384


$  (135,128)










Depreciation and amortization








National media group

$     3,563


$      3,590


$      14,406


$      15,433

Local media group

6,257


6,193


24,417


25,181

Unallocated corporate

545


453


2,075


1,968

Total depreciation and amortization

$   10,365


$    10,236


$      40,898


$      42,582










EBITDA(1)








National media group

$   49,754


$    49,538


$    181,829


$    166,450

Local media group

26,876


(285,954)


77,327


(232,593)

Unallocated corporate

(9,142)


(5,937)


(35,874)


(26,403)

Total EBITDA(1)

$   67,488


$ (242,353)


$    223,282


$    (92,546)










Adjusted EBITDA(2)








National media group

$   49,754


$    49,538


$    181,829


$    166,450

Local media group

26,876


8,575


77,327


61,936

Unallocated corporate

(9,142)


(5,937)


(35,874)


(26,403)

Total adjusted EBITDA(2)

$   67,488


$    52,176


$    223,282


$    201,983










1 EBITDA is earnings (loss) from continuing operations before interest, taxes, depreciation, and amortization.










2 Adjusted EBITDA is earnings (loss) from continuing operations before interest, taxes, depreciation, amortization,
  and impairment charge.



Meredith Corporation and Subsidiaries




Condensed Consolidated Balance Sheets (Unaudited)









June 30,


June 30,

Assets

2010


2009

(In thousands)




Current assets




Cash and cash equivalents

$      48,574


$      27,910

Accounts receivable, net

223,630


192,367

Inventories

26,807


28,151

Current portion of subscription acquisition costs

57,917


60,017

Current portion of broadcast rights

5,423


8,297

Other current assets

19,076


23,398

Total current assets

381,427


340,140

Property, plant, and equipment

450,966


444,904

Less accumulated depreciation

(263,964)


(253,597)

Net property, plant, and equipment

187,002


191,307

Subscription acquisition costs

55,228


63,444

Broadcast rights

2,977


4,545

Other assets

59,138


45,907

Intangible assets, net

552,210


561,581

Goodwill

489,334


462,379

Total assets

$ 1,727,316


$ 1,669,303





Liabilities and Shareholders' Equity




Current liabilities




Current portion of long-term debt

$      50,000


$                -

Current portion of long-term broadcast rights payable

9,892


10,560

Accounts payable

109,897


86,381

Accrued expenses and other liabilities

109,225


81,544

Current portion of unearned subscription revenues

159,292


170,731

Total current liabilities

438,306


349,216

Long-term debt

250,000


380,000

Long-term broadcast rights payable

8,961


11,851

Unearned subscription revenues

130,699


148,393

Deferred income taxes

114,240


64,322

Other noncurrent liabilities

96,765


106,138

Total liabilities

1,038,971


1,059,920

Shareholders' equity




Common stock

36,329


35,934

Class B stock

9,086


9,133

Additional paid-in capital

66,311


53,938

Retained earnings

604,624


542,006

Accumulated other comprehensive loss

(28,005)


(31,628)

Total shareholders' equity

688,345


609,383

Total liabilities and shareholders' equity

$ 1,727,316


$ 1,669,303



Meredith Corporation and Subsidiaries




Condensed Consolidated Statements of Cash Flows (Unaudited)












Twelve Months Ended June 30,

2010


2009

(In thousands)




Net cash provided by operating activities

$ 191,651


$ 180,920





Cash flows from investing activities




Acquisitions of businesses

(27,505)


(6,218)

Additions to property, plant, and equipment

(24,721)


(23,475)

Proceeds from dispositions of assets

-


636

Net cash used in investing activities

(52,226)


(29,057)





Cash flows from financing activities




Proceeds from issuance of long-term debt

160,000


145,000

Repayments of long-term debt

(240,000)


(250,000)

Purchases of Company stock

(6,274)


(21,801)

Dividends paid

(41,345)


(39,730)

Proceeds from common stock issued

9,573


4,278

Excess tax benefits from share-based payments

606


906

Other

(1,321)


(250)

Net cash used in financing activities

(118,761)


(161,597)

Net increase (decrease) in cash and cash equivalents

20,664


(9,734)

Cash and cash equivalents at beginning of year

27,910


37,644

Cash and cash equivalents at end of year

$   48,574


$   27,910



Meredith Corporation and Subsidiaries                                                               Table 1

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.













Period Ended June 30, 2010

Three Months


Twelve Months


Excluding
Special
Items


Special
Items


As
Reported


Excluding
Special
Items


Special
Items


As
Reported

(In thousands except per share data)












Revenues












Advertising

$ 202,382


$         -


$      202,382


$  781,236


$         -


$      781,236

Circulation

70,794


-


70,794


282,480


-


282,480

All other

91,941


-


91,941


324,014


-


324,014

Total revenues

365,117


-


365,117


1,387,730


-


1,387,730

Operating expenses












Production, distribution, and editorial

136,263


-


136,263


573,337


1,447

(a)

574,784

Selling, general, and administrative

160,478


888

(b)

161,366


584,391


5,273

(c)

589,664

Depreciation and amortization

10,365


-


10,365


40,898


-


40,898

Total operating expenses

307,106


888


307,994


1,198,626


6,720


1,205,346

Income from operations

58,011


(888)


57,123


189,104


(6,720)


182,384

Interest income

26


-


26


51


-


51

Interest expense

(3,847)


-


(3,847)


(18,584)


-


(18,584)

Earnings before income taxes

54,190


(888)


53,302


170,571


(6,720)


163,851

Income taxes

(21,956)


2,023

(d)

(19,933)


(69,079)


9,191

(e)

(59,888)

Net earnings

$   32,234


$ 1,135


$        33,369


$  101,492


$ 2,471


$      103,963













Basic earnings per share

$       0.71


$   0.03


$            0.74


$        2.24


$   0.06


$            2.30

Basic average shares outstanding

45,381


45,381


45,381


45,289


45,289


45,289













Diluted earnings  per share

$       0.70


$   0.03


$            0.73


$        2.23


$   0.05


$            2.28

Diluted average shares outstanding

45,774


45,774


45,774


45,544


45,544


45,544













(a) Write-down of art and manuscript inventory resulting from the repositioning of certain national media group operations

(b) Reversal of restructuring charges for severance costs offset by the impairment of an investment

(c) Severance costs, write-down of subscription acquisition costs, and the impairment of an investment partially offset by the reversal of restructuring charges

(d)  Resolution of tax contingencies net of additional tax expense related to the reversal of restructuring charges

(e) Tax benefit as a result of state and local legislation, the resolution of tax contingencies, and the tax benefit of net restructuring charges



Meredith Corporation and Subsidiaries                                                                      Table 2

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.













Period Ended June 30, 2010

Three Months


Twelve Months


Excluding
Special
Items


Special
Items


As
Reported


Excluding
Special
Items


Special
Items


As
Reported

(In thousands)












Revenues












National media group












Advertising

$ 134,520


$          -


$      134,520


$        526,490


$                    -


$      526,490

Circulation

70,794


-


70,794


282,480


-


282,480

Other revenues

82,690


-


82,690


296,398


-


296,398

Total national media group

288,004


-


288,004


1,105,368


-


1,105,368

Local media group












Non-political advertising

63,969


-


63,969


245,501


-


245,501

Political advertising

3,893


-


3,893


9,245


-


9,245

Other revenues

9,251


-


9,251


27,616


-


27,616

Total local media group

77,113


-


77,113


282,362


-


282,362

Total revenues

$ 365,117


$          -


$      365,117


$     1,387,730


$                    -


$   1,387,730













Operating profit












National media group

$   47,542


$ (1,351)

(a)

$        46,191


$        174,606


$          (7,183)

(b)

$      167,423

Local media group

20,156


463

(c)

20,619


52,447


463

(c)

52,910

Unallocated corporate

(9,687)


-


(9,687)


(37,949)


-


(37,949)

Income from operations

$   58,011


$    (888)


$        57,123


$        189,104


$          (6,720)


$      182,384













Depreciation and amortization












National media group

$     3,563


$          -


$          3,563


$          14,406


$                    -


$        14,406

Local media group

6,257


-


6,257


24,417


-


24,417

Unallocated corporate

545


-


545


2,075


-


2,075

Total depreciation and amortization

$   10,365


$          -


$        10,365


$          40,898


$                    -


$        40,898













EBITDA(1)












National media group

$   51,105


$ (1,351)

(a)

$        49,754


$        189,012


$          (7,183)

(b)

$      181,829

Local media group

26,413


463

(c)

26,876


76,864


463

(c)

77,327

Unallocated corporate

(9,142)


-


(9,142)


(35,874)


-


(35,874)

Total EBITDA(1)

$   68,376


$    (888)


$        67,488


$        230,002


$          (6,720)


$      223,282













1 EBITDA is earnings from continuing operations before interest, taxes, depreciation, and amortization.













(a) Reversal of restructuring charges for severance costs offset by the impairment of an investment

(b) Severance costs, write-down of art and manuscript inventory and subscription acquisition costs, and the impairment of an investment partially
     offset by the reversal of restructuring charges

(c) Reversal of restructuring charges for severance costs



Meredith Corporation and Subsidiaries                                                                     Table 3

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.













Period Ended June 30, 2009

Three Months


Twelve Months


Excluding
Special
Items


Special
Items


As
Reported


Excluding
Special
Items


Special
Items


As
Reported

(In thousands except per share data)












Revenues












Advertising

$ 189,316


$              -


$      189,316


$  787,207


$              -


$      787,207

Circulation

69,723


-


69,723


280,809


-


280,809

All other

86,810


-


86,810


340,781


-


340,781

Total revenues

345,849


-


345,849


1,408,797


-


1,408,797

Operating expenses












Production, distribution, and editorial

154,977


-


154,977


646,595


-


646,595

Selling, general, and administrative

133,171


5,525

(a)

138,696


545,661


14,558

(a)

560,219

Depreciation and amortization

10,236


-


10,236


42,582


-


42,582

Impairment charge

-


294,529

(b)

294,529


-


294,529

(b)

294,529

Total operating expenses

298,384


300,054


598,438


1,234,838


309,087


1,543,925

Income (loss) from operations

47,465


(300,054)


(252,589)


173,959


(309,087)


(135,128)

Interest income

308


-


308


656


-


656

Interest expense

(5,079)


-


(5,079)


(20,777)


-


(20,777)

Earnings (loss) before income taxes

42,694


(300,054)


(257,360)


153,838


(309,087)


(155,249)

Income taxes

(18,047)


111,555

(c)

93,508


(62,335)


115,077

(c)

52,742

Earnings (loss) from continuing operations

24,647


(188,499)


(163,852)


91,503


(194,010)


(102,507)

Income (loss) from discontinued operations, net of taxes

160


-


160


(453)


(4,124)

(d)

(4,577)

Net earnings (loss)

$   24,807


$ (188,499)


$     (163,692)


$    91,050


$ (198,134)


$     (107,084)













Basic earnings (loss) per share












Earnings (loss) from continuing operations

$       0.55


$       (4.19)


$           (3.64)


$        2.03


$       (4.31)


$           (2.28)

Discontinued operations

-


-


-


(0.01)


(0.09)


(0.10)

Basic earnings (loss) per share

$       0.55


$       (4.19)


$           (3.64)


$        2.02


$       (4.40)


$           (2.38)

Basic average shares outstanding

45,016


45,016


45,016


45,042


45,042


45,042













Diluted earnings (loss) per share












Earnings (loss) from continuing operations

$       0.55


$       (4.19)


$           (3.64)


$        2.03


$       (4.31)


$           (2.28)

Discontinued operations

-


-


-


(0.01)


(0.09)


(0.10)

Diluted earnings (loss) per share

$       0.55


$       (4.19)


$           (3.64)


$        2.02


$       (4.40)


$           (2.38)

Diluted average shares outstanding

45,016


45,016


45,016


45,042


45,042


45,042













(a) Severance expense

(b) Charge for impairment of FCC licenses and local media goodwill

(c) Tax benefit of the impairment and restructuring charges

(d) Severance expense and the write-down of art and manuscript inventory and subscription acquisition costs, net of taxes



Meredith Corporation and Subsidiaries                                                                           Table 4

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following table shows results of operations excluding special items and as reported with the difference being the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.













Period Ended June 30, 2009

Three Months


Twelve Months


Excluding
Special
Items


Special
Items


As
Reported


Excluding
Special
Items


Special
Items


As
Reported

(In thousands)












Revenues












National media group












Advertising

$ 133,528


$              -


$      133,528


$        530,155


$                    -


$      530,155

Circulation

69,723


-


69,723


280,809


-


280,809

Other revenues

80,115


-


80,115


323,297


-


323,297

Total national media group

283,366


-


283,366


1,134,261


-


1,134,261

Local media group












Non-political advertising

55,390


-


55,390


233,533


-


233,533

Political advertising

398


-


398


23,519


-


23,519

Other revenues

6,695


-


6,695


17,484


-


17,484

Total local media group

62,483


-


62,483


274,536


-


274,536

Total revenues

$ 345,849


$              -


$      345,849


$     1,408,797


$                    -


$   1,408,797













Operating profit (loss)












National media group

$   47,679


$     (1,731)

(a)

$        45,948


$        158,788


$          (7,771)

(a)

$      151,017

Local media group

6,176


(298,323)

(b)

(292,147)


42,562


(300,336)

(b)

(257,774)

Unallocated corporate

(6,390)


-


(6,390)


(27,391)


(980)

(c)

(28,371)

Income (loss) from operations

$   47,465


$ (300,054)


$     (252,589)


$        173,959


$      (309,087)


$     (135,128)













Depreciation and amortization












National media group

$     3,590


$              -


$          3,590


$          15,433


$                    -


$        15,433

Local media group

6,193


-


6,193


25,181


-


25,181

Unallocated corporate

453


-


453


1,968


-


1,968

Total depreciation and amortization

$   10,236


$              -


$        10,236


$          42,582


$                    -


$        42,582













EBITDA(1)












National media group

$   51,269


$     (1,731)

(a)

$        49,538


$        174,221


$          (7,771)

(a)

$      166,450

Local media group

12,369


(298,323)

(b)

(285,954)


67,743


(300,336)

(b)

(232,593)

Unallocated corporate

(5,937)


-


(5,937)


(25,423)


(980)

(c)

(26,403)

Total EBITDA(1)

$   57,701


$ (300,054)


$     (242,353)


$        216,541


$      (309,087)


$       (92,546)













1 EBITDA is earnings (loss) from continuing operations before interest, taxes, depreciation, and amortization.













(a) Severance expense for national media operations

(b) Impairment of FCC licenses and goodwill, write-down of assets due to consolidation of certain local media operations, and severance expense for
     local media operations

(c) Severance expense for corporate personnel



Meredith Corporation and Subsidiaries                                                                   Table 5

Supplemental Disclosures Regarding Non-GAAP Financial Measures


EBITDA

Consolidated EBITDA, which is reconciled to earnings (loss) from continuing operations in the following tables, is defined as earnings (loss) from continuing operations before interest, taxes, depreciation, and amortization.

Segment EBITDA is a measure of segment earnings (loss) before depreciation and amortization.








Three Months Ended June 30, 2010


Twelve Months Ended June 30, 2010


National
Media

Local
Media

Unallocated
Corporate

Total


National
Media

Local
Media

Unallocated
Corporate

Total

(In thousands)










Revenues

$ 288,004

$    77,113

$                -

$  365,117


$ 1,105,368

$  282,362

$                -

$ 1,387,730











Operating profit

$   46,191

$    20,619

$       (9,687)

$    57,123


$    167,423

$    52,910

$     (37,949)

$    182,384

Depreciation and amortization

3,563

6,257

545

10,365


14,406

24,417

2,075

40,898

EBITDA

$   49,754

$    26,876

$       (9,142)

67,488


$    181,829

$    77,327

$     (35,874)

223,282

Less:










Depreciation and amortization




(10,365)





(40,898)

Net interest expense




(3,821)





(18,533)

Income taxes




(19,933)





(59,888)

Earnings from continuing operations




$    33,369





$    103,963











Segment EBITDA margin

17.3%

34.9%




16.4%

27.4%










Three Months Ended June 30, 2009


Twelve Months Ended June 30, 2009


National
Media

Local
Media

Unallocated
Corporate

Total


National
Media

Local
Media

Unallocated
Corporate

Total

(In thousands)










Revenues

$ 283,366

$    62,483

$                -

$  345,849


$ 1,134,261

$  274,536

$                -

$ 1,408,797











Operating profit (loss)

$   45,948

$ (292,147)

$       (6,390)

$ (252,589)


$    151,017

$ (257,774)

$     (28,371)

$  (135,128)

Depreciation and amortization

3,590

6,193

453

10,236


15,433

25,181

1,968

42,582

EBITDA

$   49,538

$ (285,954)

$       (5,937)

(242,353)


$    166,450

$ (232,593)

$     (26,403)

(92,546)

Less:










Depreciation and amortization




(10,236)





(42,582)

Net interest expense




(4,771)





(20,121)

Income taxes




93,508





52,742

Loss from continuing operations




$ (163,852)





$  (102,507)











Segment EBITDA margin

17.5%

-457.7%




14.7%

-84.7%
















Table 6

Adjusted EBITDA

Consolidated adjusted EBITDA, which is reconciled to earnings (loss) from continuing operations in the following tables, is defined as earnings (loss) from continuing operations before interest, taxes, depreciation, amortization, and impairment charge.

Segment adjusted EBITDA is a measure of segment earnings (loss) before depreciation, amortization, and impairment charge.



Three Months Ended June 30, 2009


Twelve Months Ended June 30, 2009


National
Media

Local
Media

Unallocated
Corporate

Total


National
Media

Local
Media

Unallocated
Corporate

Total

(In thousands)










Revenues

$ 283,366

$    62,483

$                -

$  345,849


$ 1,134,261

$  274,536

$                -

$ 1,408,797











Operating profit (loss)

$   45,948

$ (292,147)

$       (6,390)

$ (252,589)


$    151,017

$ (257,774)

$     (28,371)

$  (135,128)

Depreciation and amortization

3,590

6,193

453

10,236


15,433

25,181

1,968

42,582

Impairment charge

-

294,529

-

294,529


-

294,529

-

294,529

Adjusted EBITDA

$   49,538

$      8,575

$       (5,937)

52,176


$    166,450

$    61,936

$     (26,403)

201,983

Less:










Depreciation and amortization




(10,236)





(42,582)

Impairment charge




(294,529)





(294,529)

Net interest expense




(4,771)





(20,121)

Income taxes




93,508





52,742

Loss from continuing operations




$ (163,852)





$  (102,507)











Segment adjusted EBITDA margin

17.5%

13.7%




14.7%

22.6%





Meredith Corporation and Subsidiaries





Table 7

Supplemental Disclosures Regarding Non-GAAP Financial Measures (Unaudited)













2010


2009


Change

(In thousands)












Operating Expenses Reconciliation for the Year Ended June 30,






Operating expenses excluding special items

$ 1,198,626


$ 1,234,838


(3)%

Special items

6,720

(a)

309,087

(b)


Total operating expenses

$ 1,205,346


$ 1,543,925


(22)%







Operating Profit Reconciliation for the Six Months Ended June 30,






Operating profit excluding special items

$    114,842


$      90,825


26 %

Special items

(1,250)

(c)

(300,054)

(b)


Total operating profit

$    113,592


$  (209,229)


NM







NM - Not meaningful












(a) Write-down of art and manuscript inventory, severance costs, write-down of subscription acquisition costs, and
     the impairment of an investment partially offset by the reversal of restructuring charges

(b) Severance expense and charge for impairment of FCC licenses and local media goodwill





(c) Severance costs and the impairment of an investment partially offset by the reversal of restructuring charges





SOURCE Meredith Corporation

For further information: Shareholder/Financial Analysts, Mike Lovell, Director of Investor Relations, +1-515-284-3622, Mike.Lovell@Meredith.com, or Media, Art Slusark, Vice President/Corporate Communications, +1-515-284-3404, Art.Slusark@Meredith.com, both of Meredith Corporation
Key Media Contacts
Art Slusark
Corporate
515.284.3404
Liz Malone
Senior Publicist
212-551-7172