Meredith Corporation Reports Fiscal 2016 First Quarter Results

Meredith Corporation Reports Fiscal 2016 First Quarter Results

Total Company Revenues Increase; Digital Advertising Revenues Set Record

DES MOINES, Iowa, Oct. 29, 2015 /PRNewswire/ -- Meredith Corporation (NYSE:MDP) (www.meredith.com), the leading media and marketing company serving more than 100 million unduplicated American women and over 60 percent of U.S. millennial women, today reported fiscal 2016 first quarter results:


-- Earnings per share were $0.24, including special items related primarily
to transaction expenses resulting from Meredith's merger agreement with
Media General, Inc.
-- Excluding special items, earnings per share were $0.52. This compares to
earnings per share of $0.65 in the prior-year period. Meredith recorded
$11 million - or $0.15 of earnings per share - less of political
advertising revenues in the first quarter of fiscal 2016 than in the
prior-year period, as expected in an off-election year. (See Table 1 for
supplemental disclosures regarding non-GAAP financial measures.)
-- Total revenues rose 4 percent to $385 million.
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"Strong digital performance and contributions from our recent acquisitions in both businesses - along with solid non-political advertising in our Local Media Group - partially offset the absence of political advertising in the quarter," said Meredith Chairman and CEO Stephen M. Lacy. "Looking ahead to our second quarter of fiscal 2016, we're pleased to see much stronger advertising demand for our National Media Group brands - which we now expect will be up more than 15 percent and produce strong operating profit growth for the Group."

Looking at Meredith's performance in the first quarter of fiscal 2016 compared to the prior year:


-- Local Media Group total revenues increased to $126 million. Growth was
driven primarily by the addition of television stations WALA in
Mobile-Pensacola and WGGB in Springfield, Mass., and higher
retransmission consent fees. Non-political advertising revenues
increased 12 percent.
-- National Media Group total revenues increased 5 percent, led by the
additions of the Martha Stewart and Shape media properties, and growth
from digital advertising and brand licensing. Total advertising revenues
increased 2 percent.
-- Total Company digital advertising revenues grew 40 percent, driven by
recent acquisitions and organic growth.
On September 8, 2015, Meredith announced a definitive agreement to merge with Media General to create Meredith Media General, a powerful multiplatform and diversified media company with television stations reaching 30 percent of U.S. households; a digital audience of more than 200 million monthly unique visitors; magazine readership of more than 110 million; a Top 3 global licensing program; and a leading content-driven digital marketing services business. The transaction is expected to close by June 30, 2016.

"We are excited about the opportunity to create a powerful new media company with significant operations on both the local and national level," Lacy said. "This merger will create a strong and efficient company positioned to realize the significant earnings and cash flow potential of local broadcasting; leverage the unparalleled reach and rich content-creation capabilities of Meredith's national brands; and capture the rapidly developing growth potential of the digital media space. It also positions Meredith Media General to deliver enhanced total shareholder return and participate in future industry consolidation."

OPERATING GROUP DETAIL

LOCAL MEDIA GROUP

Meredith's Local Media Group includes 17 owned or operated television stations reaching 11 percent of U.S. households. Meredith's portfolio is concentrated in large, fast-growing markets, including seven stations in the nation's Top 25 and 13 in Top 50 markets. Meredith's stations produce approximately 650 hours of local news and entertainment content each week.

Fiscal 2016 first quarter Local Media Group revenues increased 1 percent to $126 million. Operating profit was $29 million ($28 million before special items), compared to $36 million in the prior-year period. Meredith recorded $11 million less of political advertising revenues in the first quarter of fiscal 2016 than in the prior-year period. (See Table 1 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at fiscal 2016 first quarter performance compared to the prior year:


-- Non-political advertising revenues grew 12 percent to $89 million.
Results were led by the addition of stations in Mobile-Pensacola and
Springfield, and growth in the professional services, retail and
restaurants categories.
-- Other revenues and operating expenses increased, due primarily to growth
in retransmission revenues from cable and satellite television operators
and higher programming fees paid to affiliated networks, along with
increases from recent acquisitions.
Meredith continued to increase its deep connection with local viewers through expansions of local programming. In Phoenix, Meredith now operates one of the largest local news operations in the U.S., producing more than 100 hours of local news per week. In St. Louis, KMOV added two newscasts to expand its commitment to the local community. Meredith also launched a community-wide campaign,