Exhibit 99
Shareholder and Financial Analyst Contact: |
Jim Jacobson |
Media Contact: |
Art Slusark |
MEREDITH REPORTS STRONG SECOND QUARTER RESULTS
Company Adopts Option Expensing Early, Posts Results
in Line with Previous Guidance
DES MOINES, IA, Jan. 25, 2005-Meredith Corporation (NYSE: MDP) today reported results for the second quarter ended December 31, 2004. Net earnings were $27.7 million, or $0.54 per share. These results reflect the Company's early adoption of SFAS 123(R), the recently issued standard for option expensing. Had Meredith not adopted SFAS 123(R), net earnings would have been $28.2 million, or $0.55 per share, consistent with the Company's previous guidance.
Two factors affected the Company's second quarter results due to its adoption of SFAS 123(R):
Option expense decreased earnings by $2.3 million ($1.4 million after tax), or $0.03 per share.
A cumulative effect of the change in accounting principle increased after-tax earnings by $0.9 million, or $0.02 per share.
Earnings on an option-adjusted basis before the cumulative effect of the change in accounting principle increased 53 percent to $26.8 million, or $0.52 per share, in the second quarter of fiscal 2005 from $17.6 million, or $0.34 per share, in the prior-year second quarter.
Total Company revenues rose 5 percent to $294.6 million in the second quarter and advertising revenues increased 7 percent. Total operating costs declined slightly from the comparable quarter.
For the first six months of fiscal 2005, net earnings were $51.6 million, or $1.00 per share. Had Meredith not adopted SFAS 123(R), net earnings would have been $53.9 million, or $1.05 per share. Option expense was $5.1 million ($3.1 million after tax), or $0.07 per share, in the first six months of fiscal 2005.
Earnings on an option-adjusted basis before the cumulative effect of the change in accounting principle increased 45 percent to $50.7 million, or $0.98 per share, in the first six months of fiscal 2005 from $35 million, or $0.68 per share in the prior-year six months.
Total Company revenues grew 5 percent to $583.4 million in the first six months of fiscal 2005 and advertising revenues increased 8 percent.
Results for all current and prior-year periods in this release reflect the Company's adoption of SFAS 123(R). See Table 2 for a reconciliation of previously reported results and results restated for SFAS 123(R).
"Both of our business groups produced outstanding profit growth and margin expansion in the second quarter," said William T. Kerr, Chairman and Chief Executive Officer. "Broadcasting benefited from political advertising and improved ratings for its newscasts. We improved profit at every station in the group.
"Publishing produced double-digit profit growth despite lower advertising revenue," Kerr continued. "We maintained disciplined expense management, improved circulation profits, and grew Meredith Integrated Marketing."
OPERATING HIGHLIGHTS
Broadcasting
Broadcasting revenues increased 22 percent to $89.9 million and operating profit grew 64 percent to $32.2 million in the second quarter. EBITDA (earnings before interest, taxes, depreciation and amortization) margin increased to 42.3 percent from 34.3 percent. Meredith generated net political advertising revenues of $12.2 million in the quarter and posted a 6 percent gain in non-political advertising as well. On a comparable basis, excluding revenues from new properties, non-political advertising revenues increased 3 percent in the quarter.
KCTV, Meredith's CBS affiliate in Kansas City, posted an exceptionally strong book. Its Monday through Friday late newscast led the market for the first time in 13 years. KCTV also posted strong gains for its morning, noon and late afternoon newscasts. The station led the market in terms of sign-on to sign-off ratings.
KPTV, the Company's FOX affiliate in Portland, continued to produce one of the highest rated prime time newscasts in the country. The station was the market leader for its morning news as well.
KPHO, Meredith's CBS affiliate in Phoenix, grew audience share by at least 25 percent for its late news, its new 6:30 p.m. newscast, and its noon, 5:30 and 6 a.m. newscasts.
During the second quarter Meredith began operating KSMO-TV, the WB affiliate in Kansas City, MO, under a joint sales agreement. This transaction positions the Company to serve advertisers via two television stations in the market-a leading CBS affiliate and one serving a younger WB audience.
For the first six months of fiscal 2005, broadcasting revenues grew 17 percent to $163.2 million and operating profit rose 57 percent to $46.4 million. EBITDA margin increased to 35.4 percent from 29.2 percent. The Company generated $18.6 million in net political advertising and grew non-political advertising revenues 5 percent. On a comparable basis, excluding revenues from new properties, non-political advertising revenues increased 2 percent.
Publishing
Publishing operating profit rose 13 percent to $24.8 million on a 1 percent decline in revenues to $204.7 million in the second quarter. Operating profit margin increased to 12.1 percent from 10.6 percent. This performance was the result of higher net yield per advertising page, increased circulation profit, growth in Meredith Integrated Marketing and disciplined expense management, partially offset by lower magazine advertising revenue.
Consistent with the Company's prior guidance, publishing advertising revenues declined 5 percent but the net yield per advertising page increased in the low single digits in the quarter. Lower advertising results in the home, pharmaceutical and retail categories were partially offset by gains in direct response, cosmetics and remedies. This performance also reflects difficult comparisons with the second quarter of fiscal 2004, in which comparable publishing advertising revenues grew 19 percent.
Despite decreases in advertising revenue at the Company's two largest magazines,Better Homes and Gardens andLadies' Home Journal,these titlesincreased their combined share of advertising revenue in the women's service field more than one percentage point to 44.9 percent for the 12 months ended with the December 2004 issues, according to Publisher's Information Bureau.
The Company increased circulation profit in the quarter. "Our long-term direct-to-publisher circulation strategy continues to produce meaningful profit contribution and distinguishes us from other magazine publishers," Kerr said.
Meredith Integrated Marketing posted strong revenue and operating profit growth in the second quarter. The Company expects Meredith Integrated Marketing to post strong revenue and profit growth for the full fiscal year.
For the first six months of fiscal 2005, publishing operating profit rose 16 percent to $62.6 million and revenues grew 2 percent to $420.2 million. Opera ting profit margin increased to 14.9 percent from 13.1 percent. Total publishing advertising revenues grew 2 percent.
OTHER FINANCIAL INFORMATION
To date in fiscal 2005, the Company has repurchased more than 1.2 million shares. For all of fiscal 2004, the Company repurchased approximately 750,000 shares.
Net interest expense declined to $4.9million in the second quarter of fiscal 2005 compared with $5.7 million in the prior-year second quarter. Total debt was $300 million at December 31, 2004. Capital expenditures were $5.6 million in the second quarter and $9.8 million in the first six months of fiscal 2005.
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 statement of earnings.
OUTLOOK
Expensing options will reduce earnings per share approximately $0.14 for all of fiscal 2005. Given this accounting adjustment, the Company anticipates option-adjusted earnings per share will approximate $2.50 in fiscal 2005.
For the third quarter of fiscal 2005, Broadcast pacings, which are a snapshot in time and change frequently, are currently running up in the low single digits.
The Company expects the Publishing Group to grow operating profit in the mid to high single digits in the third quarter due to strong results from its integrated marketing operations, increased circulation profit, and prudent cost management. Publishing advertising revenues are expected to be down in the low single digits, reflecting the uncertain advertising climate.
Expensing options will reduce earnings per share approximately $0.04 in each of the third and fourth quarters of fiscal 2005. Given this accounting adjustment, the Company anticipates option-adjusted earnings per share will be in the range of $0.67 to $0.69 in the third quarter of fiscal 2005.
CONFERENCE CALL WEBCAST
Meredith will host a conference call on January 25, 2005 at 11:00 a.m. EST (10:00 a.m. CST) to discuss fiscal second quarter results. A live webcast will be accessible to the public on the Company's web sitewww.meredith.com.
RATIONALE FOR USE AND ACCESS TO NON-GAAP MEASURES
Non-GAAP measures such as EBITDA and results excluding SFAS 123(R) should be construed not as alternative measures of, but as supplemental information regarding, the Company's net earnings and income from operations as defined under GAAP.
Management uses and presents GAAP and non-GAAP results to evaluate and communicate the performance of the Company. Because of EBITDA's focus on results from operations before depreciation and amortization, management believes that EBITDA provides an additional analytical tool to clarify the Company's results from core operations and delineate underlying trends. EBITDA is a common alternative measure of performance used by investors and financial analysts. Meredith does not use EBITDA as a measure of liquidity, nor is EBITDA necessarily indicative of funds available for management's discretionary use. Because the Company has changed its accounting policy regarding expensing options, management believes that its results including and excluding this change are meaningful to understand the Company's performance.
Reconciliations of GAAP to non-GAAP measures are included in Table 1. The attached financial statements and reconciliation tables will be made available on the Company's web site. Interested parties should go tohttp://www.meredith.com/investors/index.html and click on "GAAP-Non-GAAP Reconciliation" in the navigation bar on the left side of the page.
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's operations. Statements in this announcement that are forward-looking include, but are not limited to, the statements regarding broadcast pacings and publishing advertising revenues for the third quarter of fiscal 2005, along with the Company's earnings per share outlook for the third quarter of fiscal 2005 and the full fiscal year.
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 of one or more major clients; changes in consumer reading, purchase, and/or television viewing patterns; unanticipated increases in paper, postage, printing or syndicated programming 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 any acquisitions and/or dispositions. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.
ABOUT MEREDITH CORPORATION
Meredith Corporation (www.meredith.com) is one of the nation's leading media and marketing companies with businesses centering on magazine and book publishing, television broadcasting, integrated marketing and interactive media. The Meredith Publishing Group, the country's foremost home and family authority, features 18 magazine brands includingBetter Homes and Gardens,Ladies' Home JournalandAmerican Baby and approximately 150 special interest publications. Meredith owns or operates 14 television stations including properties in top-25 markets such as Atlanta, Phoenix and Portland, and an AM radio station.
Meredith has approximately 350 books in print and has established marketing relationships with some of America's leading companies including The Home Depot, DIRECTV, DaimlerChrysler, Wal-Mart and Carnival Cruise Lines. Meredith's consumer database, which contains approximately 75 million names, is one of the largest domestic databases among media companies and enables magazine and television advertisers to target marketing campaigns precisely. Additionally, Meredith has an extensive Internet presence that includes 26 web sites and strategic alliances with leading Internet destinations.
Meredith Corporation and Subsidiaries | |||||||||||||||
Consolidated Statements of Earnings - Unaudited | |||||||||||||||
Three Months | Six Months | ||||||||||||||
Ended December 31 | Percent | Ended December 31 | Percent | ||||||||||||
2004 | Restated | 2004 | Restated | ||||||||||||
(In thousands except per share data) | |||||||||||||||
Revenues | |||||||||||||||
Advertising | $ | 176,421 | $ | 164,532 | 7.2 % | $ | 357,012 | $ | 329,399 | 8.4 % | |||||
Circulation | 55,861 | 59,520 | (6.1)% | 114,087 | 120,151 | (5.0)% | |||||||||
All other | 62,271 | 56,327 | 10.6 % | 112,317 | 103,499 | 8.5 % | |||||||||
Total revenues | 294,553 | 280,379 | 5.1 % | 583,416 | 553,049 | 5.5 % | |||||||||
Operating costs and expenses | |||||||||||||||
Production, distribution and editorial | 123,413 | 121,719 | 1.4 % | 252,589 | 244,770 | 3.2 % | |||||||||
Selling, general and administrative | 113,693 | 115,489 | (1.6)% | 220,976 | 222,072 | (0.5)% | |||||||||
Depreciation and amortization | 8,746 | 8,848 | (1.2)% | 17,177 | 17,552 | (2.1)% | |||||||||
Total operating costs and expenses | 245,852 | 246,056 | (0.1)% | 490,742 | 484,394 | 1.3 % | |||||||||
Income from operations | 48,701 | 34,323 | 41.9% | 92,674 | 68,655 | 35.0 % | |||||||||
Interest income | 223 | 35 | 537.1% | 440 | 84 | 423.8 % | |||||||||
Interest expense | (5,170 | ) | (5,713 | ) | (9.5)% | (10,342 | ) | (11,561 | ) | (10.5)% | |||||
Earnings before income taxes and cumulative | |||||||||||||||
effect of change in accounting principle | 43,754 | 28,645 | 52.7 % | 82,772 | 57,178 | 44.8 % | |||||||||
Income taxes | 16,932 | 11,088 | 52.7 % | 32,033 | 22,131 | 44.7 % | |||||||||
Earnings before cumulative effect of | |||||||||||||||
change in accounting principle | $ | 26,822 | $ | 17,557 | 52.8 % | $ | 50,739 | $ | 35,047 | 44.8 % | |||||
Cumulative effect of change in accounting | |||||||||||||||
principle, net of taxes | 893 | - | NM | 893 | - | NM | |||||||||
Net earnings | $ | 27,715 | $ | 17,557 | 57.9 % | $ | 51,632 | $ | 35,047 | 47.3 % | |||||
Basic earnings per share | |||||||||||||||
Before cumulative effect of change in | $ | 0.54 | $ | 0.35 | 54.3 % | $ | 1.01 | $ | 0.70 | 44.3 % | |||||
Cumulative effect of change in accounting | 0.02 | - | NM | 0.02 | - | NM | |||||||||
Net basic earnings per share | $ | 0.56 | $ | 0.35 | 60.0 % | $ | 1.03 | $ | 0.70 | 47.1 % | |||||
Basic average shares outstanding | 49,912 | 50,137 | (0.4)% | 50,090 | 50,158 | (0.1)% | |||||||||
Diluted earnings per share | |||||||||||||||
Before cumulative effect of change in | $ | 0.52 | $ | 0.34 | 52.9 % | $ | 0.98 | $ | 0.68 | 44.1 % | |||||
Cumulative effect of change in accounting | 0.02 | - | NM | 0.02 | - | NM | |||||||||
Net diluted earnings per share | $ | 0.54 | $ | 0.34 | 58.8 % | $ | 1.00 | $ | 0.68 | 47.1 % | |||||
Diluted average shares outstanding | 51,469 | 51,850 | (0.7)% | 51,667 | 51,828 | (0.3)% | |||||||||
Dividends paid per share | $ | 0.120 | $ | 0.095 | 26.3 % | $ | 0.240 | $ | 0.190 | 26.3 % | |||||
NM-Not meaningful | |||||||||||||||
Meredith Corporation and Subsidiaries | |||||||||||||||
Segment Information (Unaudited) | |||||||||||||||
Three Months | Percent | Six Months | Percent | ||||||||||||
|
| 2004 |
|
| Restated |
|
|
| 2004 |
|
| Restated |
| ||
(In thousands) |
|
|
|
|
|
|
|
| |||||||
Revenues | |||||||||||||||
Publishing | $ | 204,663 | $ | 206,855 | (1.1)% | $ | 420,241 | $ | 413,526 | 1.6 % | |||||
Broadcasting: | |||||||||||||||
Non-political advertising | 76,119 | 71,539 | 6.4 % | 141,583 | 135,446 | 4.5 % | |||||||||
Political advertising | 12,201 | 445 | NM | 18,579 | 794 | NM | |||||||||
Other revenues |
| 1,570 |
|
| 1,540 |
| 1.9 % |
|
| 3,013 |
|
| 3,283 |
| (8.2)% |
Total broadcasting |
| 89,890 |
|
| 73,524 |
| 22.3 % |
|
| 163,175 |
|
| 139,523 |
| 17.0 % |
Total revenues | $ | 294,553 |
| $ | 280,379 |
| 5.1 % |
| $ | 583,416 |
| $ | 553,049 |
| 5.5 % |
|
|
|
|
|
|
|
|
| |||||||
Operating Profit | |||||||||||||||
Publishing | $ | 24,817 | $ | 21,951 | 13.1 % | $ | 62,640 | $ | 54,232 | 15.5 % | |||||
Broadcasting | 32,186 | 19,596 | 64.2 % | 46,439 | 29,603 | 56.9 % | |||||||||
Unallocated corporate |
| (8,302 | ) |
| (7,224 | ) | (14.9)% |
|
| (16,405 | ) |
| (15,180 | ) | (8.1)% |
Income from operations |
| 48,701 |
|
| 34,323 |
| 41.9 % |
|
| 92,674 |
|
| 68,655 |
| 35.0 % |
|
|
|
|
|
|
|
|
| |||||||
Depreciation & amortization | |||||||||||||||
Publishing | $ | 2,416 | $ | 2,588 | (6.6)% | $ | 4,761 | $ | 5,107 | (6.8)% | |||||
Broadcasting | 5,822 | 5,607 | 3.8 % | 11,315 | 11,120 | 1.8 % | |||||||||
Unallocated corporate |
| 508 |
|
| 653 |
| (22.2)% |
|
| 1,101 |
|
| 1,325 |
| (16.9)% |
Total depreciation & amortization | $ | 8,746 |
| $ | 8,848 |
| (1.2)% |
| $ | 17,177 |
| $ | 17,552 |
| (2.1)% |
|
|
|
|
|
|
|
|
| |||||||
EBITDA | |||||||||||||||
Publishing | $ | 27,233 | $ | 24,539 | 11.0 % | $ | 67,401 | $ | 59,339 | 13.6 % | |||||
Broadcasting | 38,008 | 25,203 | 50.8 % | 57,754 | 40,723 | 41.8 % | |||||||||
Unallocated corporate |
| (7,794 | ) |
| (6,571 | ) | (18.6)% |
|
| (15,304 | ) |
| (13,855 | ) | (10.5)% |
Total EBITDA | $ | 57,447 |
| $ | 43,171 |
| 33.1 % |
| $ | 109,851 |
| $ | 86,207 |
| 27.4 % |
NM-Not meaningful |
|
|
|
|
|
|
|
|
| ||||||
Meredith Corporation and Subsidiaries | ||||||||
Condensed Consolidated Balance Sheets - Unaudited | ||||||||
Assets | December 31 | Restated | ||||||
(In thousands) | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 25,656 | $ | 58,723 | ||||
| Accounts receivable, net | 178,306 | 164,876 | ||||||
Other current assets | 106,519 | 90,415 | ||||||
Total current assets | 310,481 | 314,014 | ||||||
Property, plant and equipment, net | 194,788 | 195,799 | ||||||
Other assets | 95,744 | 90,843 | ||||||
Intangibles, net | 709,859 | 673,968 | ||||||
Goodwill | 196,383 | 191,303 | ||||||
Total assets | $ | 1,507,255 | $ | 1,465,927 | ||||
Liabilities and Shareholders' Equity | December 31 | Restated | ||||||
(In thousands) | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | 125,000 | $ | 75,000 | ||||
Accounts payable and accruals | 148,711 | 143,632 | ||||||
Other current liabilities | 161,368 | 152,118 | ||||||
Total current liabilities | 435,079 | 370,750 | ||||||
Long-term debt | 175,000 | 225,000 | ||||||
Other noncurrent liabilities | 275,866 | 260,252 | ||||||
Total liabilities | 885,945 | 856,002 | ||||||
Shareholders' equity | ||||||||
Common stock | 40,321 | 40,802 | ||||||
Class B stock | 9,659 | 9,683 | ||||||
Other shareholders' equity | 571,330 | 559,440 | ||||||
Total shareholders' equity | 621,310 | 609,925 | ||||||
Total liabilities and shareholders' equity | $ | 1,507,255 | $ | 1,465,927 | ||||
Meredith Corporation and Subsidiaries | Table 1 |
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.
Three Months ended December 31 | |||||||||||||
| 2004 |
| |||||||||||
| Publishing | Broadcasting |
| Unallocated Corporate | Total |
| |||||||
(In thousands) |
|
|
|
|
| ||||||||
Revenues | $ | 204,663 | $ | 89,890 |
| $ | - |
| $ | 294,553 |
| ||
Operating profit | $ | 24,817 | $ | 32,186 |
| $ | (8,302 | ) | $ | 48,701 |
| ||
Depreciation and amortization |
| 2,416 |
| 5,822 |
|
| 508 |
|
| 8,746 |
| ||
EBITDA | $ | 27,233 | $ | 38,008 |
| $ | (7,794 | ) |
| 57,447 |
| ||
Less: |
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
| (8,746 | ) | ||||||||||
Net interest expense |
| (4,947 | ) | ||||||||||
Income taxes |
|
|
|
|
|
|
|
|
| (16,932 | ) | ||
Earnings before cumulative effect |
|
|
|
|
|
|
|
| $ | 26,822 |
| ||
Segment EBITDA margin |
| 13.3 % |
| 42.3 % |
|
|
|
|
|
|
| ||
|
| ||||||||||||
Three Months ended December 31 | |||||||||||||
| 2003 - Restated |
| |||||||||||
| Publishing | Broadcasting |
| Unallocated Corporate | Total |
| |||||||
(In thousands) |
|
|
|
|
|
|
|
|
|
|
| ||
Revenues | $ | 206,855 | $ | 73,524 |
| $ | - |
| $ | 280,379 |
| ||
Operating profit | $ | 21,951 | $ | 19,596 |
| $ | (7,224 | ) | $ | 34,323 |
| ||
Depreciation and amortization |
| 2,588 |
| 5,607 |
|
| 653 |
|
| 8,848 |
| ||
EBITDA | $ | 24,539 | $ | 25,203 |
| $ | (6,571 | ) |
| 43,171 |
| ||
Less: |
|
|
|
|
|
|
|
|
|
|
| ||
Depreciation and amortization |
|
|
|
|
|
|
|
|
| (8,848 | ) | ||
Net interest expense |
|
|
|
|
|
|
|
|
| (5,678 | ) | ||
Income taxes |
|
|
|
|
|
|
|
|
| (11,088 | ) | ||
Net earnings |
|
|
|
|
|
|
|
| $ | 17,557 |
| ||
Segment EBITDA margin |
| 11.9 % |
| 34.3 % |
|
|
|
|
|
|
| ||
Meredith Corporation and Subsidiaries | Table 1(continued) |
Six Months ended December 31 | |||||||||||||
| 2004 |
| |||||||||||
| Publishing | Broadcasting |
| Unallocated Corporate | Total |
| |||||||
(In thousands) |
|
|
|
|
|
|
|
|
|
|
| ||
Revenues | $ | 420,241 | $ | 163,175 |
| $ | - |
| $ | 583,416 |
| ||
Operating profit | $ | 62,640 | $ | 46,439 |
| $ | (16,405 | ) | $ | 92,674 |
| ||
Depreciation and amortization |
| 4,761 |
| 11,315 |
|
| 1,101 |
|
| 17,177 |
| ||
EBITDA | $ | 67,401 | $ | 57,754 |
| $ | (15,304 | ) |
| 109,851 |
| ||
Less: |
|
|
|
|
|
|
|
|
|
|
| ||
Depreciation and amortization |
|
|
|
|
|
|
|
|
| (17,177 | ) | ||
Net interest expense |
|
|
|
|
|
|
|
|
| (9,902 | ) | ||
Income taxes |
|
|
|
|
|
|
|
|
| (32,033 | ) | ||
Earnings before cumulative effect |
|
|
|
|
|
|
|
| $ | 50,739 |
| ||
Segment EBITDA margin |
| 16.0 % |
| 35.4 % |
|
|
|
|
|
|
| ||
|
|
| |||||||||||
| |||||||||||||
Six Months ended December 31 | |||||||||||||
| 2003 - Restated |
| |||||||||||
| Publishing | Broadcasting |
| Unallocated Corporate | Total |
| |||||||
(In thousands) |
|
|
|
|
|
|
|
|
|
|
| ||
Revenues | $ | 413,526 | $ | 139,523 |
| $ | - |
| $ | 553,049 |
| ||
Operating profit | $ | 54,232 | $ | 29,603 |
| $ | (15,180 | ) | $ | 68,655 |
| ||
Depreciation and amortization |
| 5,107 |
| 11,120 |
|
| 1,325 |
|
| 17,552 |
| ||
EBITDA | $ | 59,339 | $ | 40,723 |
|
| (13,855 | ) |
| 86,207 |
| ||
Less: |
|
|
|
|
|
|
|
|
|
|
| ||
Depreciation and amortization |
|
|
|
|
|
|
|
|
| (17,552 | ) | ||
Net interest expense |
|
|
|
|
|
|
|
|
| (11,477 | ) | ||
Income taxes |
|
|
|
|
|
|
|
|
| (22,131 | ) | ||
Net earnings |
|
|
|
|
|
|
|
| $ | 35,047 |
| ||
Segment EBITDA margin |
| 14.3 % |
| 29.2 % |
|
|
|
|
|
|
| ||
Meredith Corporation and Subsidiaries | Table 2 |
Meredith adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, SFAS 123(R) effective October 1, 2004 using the modified retrospective application. As a result all quarters of fiscal 2004 and the first quarter of fiscal 2005 have been restated to include share-based compensation expense in accordance with SFAS 123(R). The following provides the effect of the adoption on earnings and earnings per share:
Three Months | Six Months |
| ||||||||||
|
| 2004 |
|
| Restated |
|
| 2004 |
|
| Restated |
|
(In thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
| |
Net earnings before adoption | $ | 28,231 |
| $ | 19,437 |
| $ | 53,855 |
| $ | 38,487 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
SFAS 123(R)expense |
| (2,298 | ) |
| (3,068 | ) |
| (5,083 | ) |
| (5,613 | ) |
Tax benefit |
| 889 |
|
| 1,188 |
|
| 1,967 |
|
| 2,173 |
|
Net expense |
| (1,409 | ) |
| (1,880 | ) |
| (3,116 | ) |
| (3,440 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |
Earnings before cumulative effect | $ | 26,822 |
| $ | 17,557 |
| $ | 50,739 |
| $ | 35,047 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic earnings per share before cumulative |
|
|
|
|
|
|
|
|
|
|
| |
Before adoption | $ | 0.57 |
| $ | 0.39 |
| $ | 1.08 |
| $ | 0.77 |
|
SFAS 123(R) effect |
| (0.03 | ) |
| (0.04 | ) |
| (0.07 | ) |
| (0.07 | ) |
After adoption | $ | 0.54 |
| $ | 0.35 |
| $ | 1.01 |
| $ | 0.70 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic average shares outstanding |
| 49,912 |
|
| 50,137 |
|
| 50,090 |
|
| 50,158 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Diluted earnings per share before cumulative |
|
|
|
|
|
|
|
|
|
|
| |
Before adoption | $ | 0.55 |
| $ | 0.38 |
| $ | 1.05 |
| $ | 0.75 |
|
SFAS 123(R) effect |
| (0.03 | ) |
| (0.04 | ) |
| (0.07 | ) |
| (0.07 | ) |
After adoption | $ | 0.52 |
| $ | 0.34 |
| $ | 0.98 |
| $ | 0.68 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Diluted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
| |
Before adoption |
| 51,283 |
|
| 51,609 |
|
| 51,471 |
|
| 51,583 |
|
SFAS 123(R) effect |
| 186 |
|
| 241 |
|
| 196 |
|
| 245 |
|
After adoption |
| 51,469 |
|
| 51,850 |
|
| 51,667 |
|
| 51,828 |
|
Meredith Corporation and Subsidiaries | Table 2(continued) |
The following provides reconciliations from the previously reported amounts for all of fiscal 2004 and the first quarter of fiscal 2005:
|
| FISCAL | ||||||||||||||||
|
| First |
|
| Second |
|
| Third |
|
| Fourth |
|
| Fiscal |
| First |
| |
(In thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Net earnings as previously reported | $ | 19,050 |
| $ | 19,437 |
| $ | 32,882 |
| $ | 39,347 |
| $ | 110,716 | $ | 25,624 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
SFAS 123(R) expense |
| (2,545 | ) |
| (3,068 | ) |
| (2,688 | ) |
| (2,722 | ) |
| (11,023 | ) | (2,785 | ) | |
Tax benefit |
| 985 |
|
| 1,188 |
|
| 1,040 |
|
| 1,053 |
|
| 4,266 | 1,078 |
| ||
Net expense |
| (1,560 | ) |
| (1,880 | ) |
| (1,648 | ) |
| (1,669 | ) |
| (6,757 | ) | (1,707 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Restated net earnings | $ | 17,490 |
| $ | 17,557 |
| $ | 31,234 |
| $ | 37,678 |
| $ | 103,959 | $ | 23,917 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
As previously reported | $ | 0.38 |
| $ | 0.39 |
| $ | 0.65 |
| $ | 0.78 |
| $ | 2.20 | $ | 0.51 |
| |
SFAS 123(R) effect |
| (0.03 | ) |
| (0.04 | ) |
| (0.03 | ) |
| (0.03 | ) |
| (0.13 | ) | (0.03 | ) | |
Restated | $ | 0.35 |
| $ | 0.35 |
| $ | 0.62 |
| $ | 0.75 |
| $ | 2.07 | $ | 0.48 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic average shares outstanding |
| 50,179 |
|
| 50,137 |
|
| 50,203 |
|
| 50,335 |
|
| 50,214 | 50,267 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
As previously reported | $ | 0.37 |
| $ | 0.38 |
| $ | 0.64 |
| $ | 0.76 |
| $ | 2.14 | $ | 0.50 |
| |
SFAS 123(R) effect |
| (0.03 | ) |
| (0.04 | ) |
| (0.04 | ) |
| (0.04 | ) |
| (0.14 | ) | (0.04 | ) | |
Restated | $ | 0.34 |
| $ | 0.34 |
| $ | 0.60 |
| $ | 0.72 |
| $ | 2.00 | $ | 0.46 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Diluted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AS previously reported |
| 51,557 |
|
| 51,609 |
|
| 51,725 |
|
| 51,865 |
|
| 51,689 | 51,658 |
| ||
SFAS 123(R) expense |
| 240 |
|
| 241 |
|
| 228 |
|
| 197 |
|
| 240 | 201 |
| ||
Restated |
| 51,797 |
|
| 51,850 |
|
| 51,953 |
|
| 52,062 |
|
| 51,929 | 51,859 |
| ||
As a result of rounding and changes in shares outstanding during the year, the sum of the four quarters' earnings per share may not necessarily equal the earnings per share for the year.
