Exhibit 99
MEREDITH REPORTS FISCAL 2009 SECOND QUARTER EARNINGS
Second quarter results were in-line with previously stated expectations
DES MOINES, IA, (January. 22, 2009) - Meredith Corporation(NYSE: MDP), the leading media and marketing company serving American women, today reported fiscal 2009 second quarter earnings per share of $0.28, including a special charge of $0.21. Excluding the special charge, Meredith's earnings per share were $0.49, in-line with stated expectations. Second quarter revenues were $366 million. This compares to fiscal 2008 second quarter earnings per share of $0.75, and revenues of $396 million.
Meredith recorded a special charge of $16 million ($10 million after tax) in the fiscal second quarter. The charge includes the cost of a companywide workforce reduction of approximately 250 employees; the closure ofCountry Home magazine, effective with the March 2009 issue; and the relocation of the creative functions of the ReadyMade brand and Parents.com to Des Moines. Additional information on the special charge is available in Tables 1 and 2, and in Meredith's press release dated January 8, 2009.
For the first six months of fiscal 2009, earnings per share were $0.69, including the special charge. Excluding the special charge, earnings per share were $0.90. Fiscal 2009 first-half revenues were $737 million. This compares to fiscal 2008 first-half earnings per share of $1.43, and revenues of $800 million.
"Advertising revenues across our businesses continue to be significantly impacted by the recession," said Meredith President and Chief Executive Officer Stephen M. Lacy. "However, certain revenue streams not tied to advertising are growing, particularly our integrated marketing, brand licensing and video production activities. Also, even in these difficult economic times, our connection to the consumer is rock solid and strengthening. We've seen notable gains in magazine readership and circulation response rates for many of our national brands, as well as marked improvement in news ratings at our local television stations."
Meredith continues to execute its performance improvement plan, which is focused on gaining market share, growing new revenue streams and practicing aggressive expense control. Excluding the special charge and despite higher paper prices, total Meredith operating expenses declined 2.6 percent in the second fiscal quarter, and were down 2.8 percent for the first six months of fiscal 2009. Excluding acquisitions and the special charge, total company operating expenses declined 4.0 percent in the quarter, and were down 4.5 percent for the first six months of fiscal 2009.
"We possess a strong balance sheet, modest levels of debt at a low cost of funds, and adequate liquidity supported by strong operating cash flow," Lacy said. "We are continually taking steps to strengthen our solid financial position through disciplined expense and cash management. Our conservative financial practices and strong national and local brands position Meredith well for the future economic recovery."
OPERATING RESULTS
Publishing
Fiscal 2009 second quarter Publishing operating profit was $15 million. Excluding the special charge, operating profit was $28 million, compared to $45 million in the year-ago period. Revenues were $282 million, compared to $309 million in the year-ago period. Advertising revenues were $122 million, versus $153 million in the prior-year period, when advertising revenues increased 8 percent.
For the first six months of fiscal 2009, operating profit was $48 million. Excluding the special charge, operating profit was $61 million, compared to $100 million in the year-ago period. Revenues were $582 million, compared to $638 million in the year-ago period. Advertising revenues were $271 million, versus $333 million in the prior-year period, when advertising revenues increased 11 percent. Net advertising revenues per page rose approximately 1 percent in the first six months of fiscal 2009 compared to the prior-year period.
"Our consumer brands continue to demonstrate powerful and enduring appeal in print, online or via other platforms such as brand licensing," Lacy said. "Additionally, consumer response rates to our most recent direct mail activity exceeded our expectations."
Examples of Meredith's growing connection to the consumer include:
According to the fall 2008 Mediamark Research and Intelligence study, readership for Meredith's major subscription magazines held steady at a very strong 120 million. Average household incomes rose and average reader age declined compared to the prior year study. Meredith's two flagship brands -Better Homes andGardensandParents- each increased readership and median household income, while average reader age decreased for both titles.
Traffic on Meredith's consumer Web sites rose in the second quarter of fiscal 2009 from the year-ago period. The number of unique visitors rose 25 percent to nearly 16 million and page views averaged nearly 200 million per month during the quarter. The average time spent on the sites per visitor grew to nearly 13 minutes. The total number of videos viewed during the quarter rose 17 percent to 3.2 million.
Meredith now ranks in the Top 5 of online networks dedicated to women. During the quarter, Meredith announced an investment in the Real Girls Media Network - a group of premium-branded online social communities. Also, Meredith launched MixingBowl.com - a branded social networking site for women passionate about food and recipes.
Brand licensing delivered another outstanding quarter as revenues rose 27 percent. Sales of Better Homes and Gardens-branded home products at Walmart U.S. are meeting expectations following the September 2008 launch of the program. Meredith and Walmart recently reached agreement to increase the number of products to approximately 1,000 SKUs in calendar 2009 from 550.
Internationally, Meredith completed multiple licensing agreements during the quarter that will extend theBetter Homes and Gardens,Parents, More, andDiabetic Living brands to more than 20 countries, including Italy, Mexico and Brazil.
Broadcasting
Fiscal 2009 second quarter Broadcasting operating profit was $22 million. Excluding the special charge, operating profit was $24 million, compared to $28 million in the year-ago period. Revenues were $84 million, compared to $88 million in the year-ago period. Net political revenues were $17 million, in-line with expectations, compared to $1 million in the year-ago period.
For the first six months of fiscal 2009, operating profit was $33 million. Excluding the special charge, operating profit was $35 million, compared to $41 million in the year-ago period. Revenues were $155 million, compared to $162 million in the year-ago period. Net political revenues were $23 million, in-line with expectations, compared to $3 million in the first half of fiscal 2008.
Broadcasting advertising revenues were particularly impacted by a 40 percent decline in automobile advertising - its largest category - during the second quarter of fiscal 2009. "While the automotive industry is facing unprecedented challenges, and our other advertisers are also feeling the impact of the recession, we are encouraged that our local television brands continue to resonate with our consumers," Lacy said. "Our investments in local news, combined with our online, video and retransmission initiatives, are laying an important foundation for future growth."
Meredith's television stations posted stronger ratings during the recently completed November sweeps. Highlights included market-leading performances for news programming in Portland, Hartford and Nashville, and a first-ever second-place finish in late news in Atlanta. Meredith's stations in Las Vegas, Kansas City and Greenville, SC, also had solid rating gains.
Meredith Video Solutions, the company's in-house production unit, posted strong revenue growth in the quarter. TheBettershow, Meredith's nationally syndicated lifestyle show featuring content inspired by Meredith's publishing brands, is now available in 43 markets, representing 30 percent of the country. Top 20 markets San Francisco, Cleveland and Denver recently cleared the program.
Meredith recently agreed to a new retransmission agreement with Comcast - the largest carrier of Meredith's signal with customers in eight of its 10 television markets - and also agreed to extend its successful video on demand (VOD) alliance with Comcast for Parents-branded video. Meredith has now successfully completed new retransmission agreements with six of seven major cable operators in its markets.
OTHER FINANCIAL INFORMATION
Meredith generated $83 million in cash flow from operations during the first six months of fiscal 2009. Meredith's total debt was $455 million at December 31, 2009, down $30 million from its prior fiscal year end, and its weighted average interest rate was approximately 4.4 percent as of December 31, 2008. Meredith's debt-to-EBITDA ratio was a conservative 1.7 to 1, under existing debt covenants. The company has repurchased 865,000 shares in fiscal 2009, leaving 1.5 million shares remaining under current share repurchase authorizations.
"We are well-positioned to weather the current softness in advertising and the turbulence in the financial markets, as well as make acquisitions and investments when opportunities arise," Lacy said. "We have a strong balance sheet with a low level of debt, and continue to exercise prudent cash management."
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.
OUTLOOK
Most of Meredith's advertising clients continue to experience a difficult economic environment. The resulting weakness will impact Meredith's revenues for the remainder of fiscal 2009.
While it's too early to predict an improving trend, fiscal 2009 third quarter Publishing advertising revenues are currently down nearly 15 percent, compared to a decline of nearly 20 percent in the first half of fiscal 2009. Additionally, fiscal third quarter paper prices are moderating compared to the first half. Still, paper prices are expected to be approximately 7 percent higher than the third quarter of fiscal 2008.
Broadcasting advertising pacings are currently down nearly 40 percent, driven by a 75 percent decline in automotive pacings.
Meredith's average tax rate is expected to be approximately 36 percent in the third quarter, and 40 percent for the full fiscal 2009.
Currently, Meredith expects third quarter earnings per share to range from approximately $0.55 to $0.60. Full year earnings per share are expected to range from $2.00 to $2.25, excluding the special charge taken in the fiscal second quarter.
A number of uncertainties remain that may affect our outlook for results in the third quarter and full fiscal year as stated in this press release. These include overall advertising volatility; the performance of the company's retail businesses; and paper prices and postal rates. These and other uncertainties are referenced below under "Safe Harbor" and in certain of the company's SEC filings.
CONFERENCE CALL WEBCAST
Meredith will host a conference call on January 22, 2009, at 11 a.m. EST (10 a.m. CST) to discuss fiscal second quarter 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 after the call. A transcript will be available within 48 hours following the conference call atwww.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 and free cash flow are common supplemental measures of performance used by investors and financial analysts. Management believes that EBITDA and free cash flow provide additional analytical tools to clarify the company's results from core operations and delineate underlying trends. Meredith does not use EBITDA or free cash flow as a measure of liquidity or funds available for management's discretionary use because they include certain contractual and non-discretionary expenditures.
Results excluding the special charge recorded in the second quarter of fiscal 2009 are also supplemental non-GAAP financial measures. Management believes the special charge is not reflective of Meredith's ongoing business activities. While results excluding the special charge 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's operations. Statements in this announcement that are forward-looking include, but are not limited to, the statements regarding broadcasting pacings and publishing advertising revenues, along with the company's earnings per share outlook for the third quarter and all of fiscal 2009.
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 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 the consequences of acquisitions and/or dispositions. The company undertakes no obligation to upd ate 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 then 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. The goals of these programs are to increase consumer loyalty and produce repeated consumer interaction. In the last two years, Me redith has significantly added to its capabilities in this area through the acquisition of cutting-edge companies in areas such as online, word-of-mouth and database marketing. Headquartered in Des Moines, Meredith has a nationwide workforce of approximately 3,500 employees.
Shareholder/Financial Analyst Contact: | Media Contact: |
Consolidated Statements of Earnings (Unaudited) | |||||||||||
|
|
|
|
| |||||||
| Three Months |
|
| Six Months |
| ||||||
Period Ended December 31, |
| 2008 |
| 2007 |
|
|
| 2008 |
| 2007 |
|
(In thousands except per share data) | |||||||||||
Revenues | |||||||||||
Advertising | $ | 204,213 | $ | 239,256 | $ | 419,749 | $ | 493,591 | |||
Circulation | 69,274 | 72,959 | 143,296 | 153,245 | |||||||
All other | 92,753 | 84,030 |
| 173,633 | 153,482 | ||||||
Total revenues |
| 366,240 |
| 396,245 |
|
| 736,678 |
| 800,318 |
| |
Operating expenses |
| ||||||||||
Production, distribution, and editorial | 165,744 | 166,122 | 338,956 | 341,830 | |||||||
Selling, general, and administrative | 161,735 | 153,046 | 310,658 | 308,616 | |||||||
Depreciation and amortization | 10,778 | 12,025 |
| 21,636 | 24,143 | ||||||
Total operating expenses |
| 338,257 |
| 331,193 |
|
| 671,250 |
| 674,589 |
| |
Income from operations | 27,983 | 65,052 |
| 65,428 | 125,729 | ||||||
Interest income | 107 | 296 | 227 | 648 | |||||||
Interest expense |
| (5,353) |
| (5,734) |
|
| (10,787) |
| (11,897) |
| |
Earnings from continuing | 22,737 | 59,614 |
| 54,868 | 114,480 |
| |||||
Income taxes |
| 10,194 |
| 24,401 |
|
| 23,688 |
| 45,799 |
| |
Earnings from continuing operations | 12,543 | 35,213 |
| 31,180 | 68,681 | ||||||
Income from discontinued operations, | - | 846 | - | 748 | |||||||
Net earnings | $ | 12,543 | $ | 36,059 |
| $ | 31,180 | $ | 69,429 |
| |
Basic earnings per share | |||||||||||
Earnings from continuing operations | $ | 0.28 | $ | 0.74 | $ | 0.69 | $ | 1.44 | |||
Discontinued operations | - | 0.02 |
| - | 0.02 |
| |||||
Basic earnings per share | $ | 0.28 | $ | 0.76 |
| $ | 0.69 | $ | 1.46 |
| |
Basic average shares outstanding |
| 44,951 |
| 47,287 |
|
| 45,096 |
| 47,541 |
| |
| |||||||||||
Diluted earnings per share | |||||||||||
Earnings from continuing operations | $ | 0.28 | $ | 0.73 | $ | 0.69 | $ | 1.41 | |||
Discontinued operations | - | 0.02 |
| - | 0.02 |
| |||||
Diluted earnings per share | $ | 0.28 | $ | 0.75 |
| $ | 0.69 | $ | 1.43 |
| |
Diluted average shares outstanding |
| 45,072 |
| 48,325 |
|
| 45,219 |
| 48,576 |
| |
|
| ||||||||||
Dividends paid per share | $ | 0.215 | $ | 0.185 |
|
| $ | 0.430 | $ | 0.370 |
|
Meredith Corporation and Subsidiaries | |||||||||||
Segment Information (Unaudited) | |||||||||||
| |||||||||||
| Three Months |
|
| Six Months |
| ||||||
Period Ended December 31, |
| 2008 |
| 2007 |
|
|
| 2008 |
| 2007 |
|
(In thousands) | |||||||||||
Revenues | |||||||||||
Publishing | $ | 281,864 | $ | 308,608 | $ | 581,899 | $ | 638,130 | |||
Broadcasting | |||||||||||
Non-political advertising | 64,717 | 85,168 | 126,365 | 157,660 | |||||||
Political advertising | 17,005 | 1,436 | 22,876 | 2,508 | |||||||
Other revenues | 2,654 | 1,033 |
| 5,538 | 2,020 |
| |||||
Total broadcasting |
| 84,376 |
| 87,637 |
|
| 154,779 |
| 162,188 |
| |
Total revenues | $ | 366,240 | $ | 396,245 |
| $ | 736,678 | $ | 800,318 |
| |
|
| ||||||||||
Operating profits | |||||||||||
Publishing | $ | 15,241 | $ | 44,512 | $ | 48,425 | $ | 99,945 | |||
Broadcasting | 22,329 | 27,564 | 33,025 | 41,141 | |||||||
Unallocated corporate | (9,587) | (7,024) |
| (16,022) | (15,357) |
| |||||
Income from operations | $ | 27,983 | $ | 65,052 |
| $ | 65,428 | $ | 125,729 |
| |
|
| ||||||||||
Depreciation and amortization | |||||||||||
Publishing | $ | 4,230 | $ | 5,305 | $ | 8,058 | $ | 10,505 | |||
Broadcasting | 6,448 | 6,329 | 12,517 | 12,707 | |||||||
Unallocated corporate | 100 | 391 |
| 1,061 | 931 |
| |||||
Total depreciation and amortization | $ | 10,778 | $ | 12,025 |
| $ | 21,636 | $ | 24,143 |
| |
|
| ||||||||||
EBITDA | |||||||||||
Publishing | $ | 19,471 | $ | 49,817 | $ | 56,483 | $ | 110,450 | |||
Broadcasting | 28,777 | 33,893 | 45,542 | 53,848 | |||||||
Unallocated corporate | (9,487) | (6,633) |
| (14,961) | (14,426) |
| |||||
Total EBITDA | $ | 38,761 | $ | 77,077 |
|
| $ | 87,064 | $ | 149,872 |
|
|
| ||||||||||
Meredith Corporation and Subsidiaries | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
Assets | December 31, 2008 | June 30, | ||||||
(In thousands) | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 33,359 | $ | 37,644 | ||||
Accounts receivable, net | 217,091 | 230,978 | ||||||
Inventories | 40,659 | 44,085 | ||||||
Current portion of subscription acquisition costs | 60,988 | 59,939 | ||||||
Current portion of broadcast rights | 17,391 | 10,779 | ||||||
Other current assets | 20,500 | 19,665 | ||||||
Total current assets | 389,988 | 403,090 | ||||||
Property, plant, and equipment | 457,469 | 446,935 | ||||||
Less accumulated depreciation | (258,292 | ) | (247,147 | ) | ||||
Net property, plant, and equipment | 199,177 | 199,788 | ||||||
Subscription acquisition costs | 60,588 | 60,958 | ||||||
Broadcast rights | 6,816 | 7,826 | ||||||
Other assets | 73,653 | 74,472 | ||||||
Intangible assets, net | 777,309 | 781,154 | ||||||
Goodwill | 531,256 | 532,332 | ||||||
Total assets | $ | 2,038,787 | $ | 2,059,620 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | 130,000 | $ | 75,000 | ||||
Current portion of long-term broadcast rights payable | 18,702 | 11,141 | ||||||
Accounts payable | 67,174 | 79,028 | ||||||
Accrued expenses and other liabilities | 101,589 | 102,707 | ||||||
Current portion of unearned subscription revenues | 177,263 | 175,261 | ||||||
Total current liabilities | 494,728 | 443,137 | ||||||
Long-term debt | 325,000 | 410,000 | ||||||
Long-term broadcast rights payable | 15,512 | 17,186 | ||||||
Unearned subscription revenues | 160,124 | 157,872 | ||||||
Deferred income taxes | 153,303 | 139,598 | ||||||
Other noncurrent liabilities | 107,215 | 103,972 | ||||||
Total liabilities | 1,255,882 | 1,271,765 | ||||||
Shareholders' equity | ||||||||
Common stock | 35,795 | 36,295 | ||||||
Class B stock | 9,161 | 9,181 | ||||||
Additional paid-in capital | 50,365 | 52,693 | ||||||
Retained earnings | 699,948 | 701,205 | ||||||
Accumulated other comprehensive loss | (12,364 | ) | (11,519 | ) | ||||
Total shareholders' equity | 782,905 | 787,855 | ||||||
Total liabilities and shareholders' equity | $ | 2,038,787 | $ | 2,059,620 | ||||
Meredith Corporation and Subsidiaries | |||||||
Six Months Ended December 31, |
| 2008 |
|
| 2007 | ||
(In thousands) |
|
| |||||
Net cash provided by operating activities | $ | 83,028 |
| $ | 142,919 | ||
Cash flows from investing activities | |||||||
Acquisitions of businesses | (5,195) | (1,920) | |||||
Additions to property, plant, and equipment | (15,185) | (10,210) | |||||
Proceeds from dispositions of assets | 636 | - | |||||
Net cash used in investing activities |
| (19,744) |
|
| (12,130) | ||
Cash flows from financing activities | |||||||
Proceeds from issuance of long-term debt | 120,000 | 90,000 | |||||
Repayments of long-term debt | (150,000) | (145,000) | |||||
Purchases of Company stock | (21,562) | (77,482) | |||||
Dividends paid | (19,430) | (17,607) | |||||
Proceeds from common stock issued | 2,457 | 9,442 | |||||
Excess tax benefits from share-based payments | 966 | 360 | |||||
Net cash used in financing activities |
| (67,569) |
|
| (140,287) | ||
Net decrease in cash and cash equivalents | (4,285) | (9,498) | |||||
Cash and cash equivalents at beginning of period |
| 37,644 |
|
| 39,220 | ||
Cash and cash equivalents at end of period | $ | 33,359 |
| $ | 29,722 | ||
Meredith Corporation and Subsidiaries | Table 1 | ||||||||||||
Supplemental Disclosures Regarding Non-GAAP Financial Measures (Unaudited) | |||||||||||||
Special Charge- During the second quarter of fiscal 2009, Meredith recorded aspecial charge which relates primarily to the cost of a companywide workforce reduction of approximately 250 employees; the closure ofCountry Home magazine, effective with the March 2009 issue; and the relocation of the creative functions of the ReadyMade brand and Parents.com to Des Moines. Please see Meredith's press release dated January 8, 2009, for additional information relating to the special charge. | |||||||||||||
The following table shows results of operations excluding the special charge and as reported with the difference being the special charge. Results of operations excluding the special charge are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release. | |||||||||||||
|
| ||||||||||||
Period Ended December 31, 2008 | Three Months |
| Six Months | ||||||||||
|
| Excluding Special Charge |
| Special Charge |
| As Reported |
|
| Excluding Special Charge |
| Special Charge |
| As Reported |
(In thousands except per share data) |
|
| |||||||||||
Revenues |
| ||||||||||||
Advertising | $ | 204,213 | $ | - | $ | 204,213 | $ | 419,749 | $ | - | $ | 419,749 | |
Circulation | 69,274 | - | 69,274 | 143,296 | - | 143,296 | |||||||
All other | 92,753 | - |
| 92,753 | 173,633 | - |
| 173,633 | |||||
Total revenues |
| 366,240 |
| - |
| 366,240 |
| 736,678 |
| - |
| 736,678 | |
Operating expenses |
|
| |||||||||||
Production, distribution, and editorial | 165,115 | 629 | (a) | 165,744 | 338,327 | 629 | (a) | 338,956 | |||||
Selling, general, and administrative | 146,569 | 15,166 | (b) | 161,735 | 295,492 | 15,166 | (b) | 310,658 | |||||
Depreciation and amortization | 10,778 | - |
| 10,778 | 21,636 | - |
| 21,636 | |||||
Total operating expenses |
| 322,462 |
| 15,795 |
| 338,257 |
| 655,455 |
| 15,795 |
| 671,250 | |
Income from operations | 43,778 | (15,795) |
| 27,983 | 81,223 | (15,795) |
| 65,428 | |||||
Interest income | 107 | - | 107 | 227 | - | 227 | |||||||
Interest expense |
| (5,353) |
| - |
| (5,353) | (10,787) |
| - |
| (10,787) | ||
Earnings before income taxes | 38,532 | (15,795) |
| 22,737 | 70,663 | (15,795) |
| 54,868 | |||||
Income taxes |
| 16,354 |
| (6,160) |
| 10,194 |
| 29,848 |
| (6,160) |
| 23,688 | |
Net earnings | $ | 22,178 | $ | (9,635) | $ | 12,543 | $ | 40,815 | $ | (9,635) | $ | 31,180 | |
|
| ||||||||||||
Basic earnings per share | $ | 0.49 | $ | (0.21) | $ | 0.28 | $ | 0.91 | $ | (0.21) | $ | 0.69 | |
Basic average shares outstanding |
| 44,951 |
| 44,951 |
| 44,951 |
| 45,096 |
| 45,096 |
| 45,096 | |
|
| ||||||||||||
Diluted earnings per share | $ | 0.49 | $ | (0.21) | $ | 0.28 |
| $ | 0.90 | $ | (0.21) | $ | 0.69 |
Diluted average shares outstanding |
| 45,072 |
| 45,072 |
| 45,072 |
|
| 45,219 |
| 45,219 |
| 45,219 |
|
| ||||||||||||
Notes | |||||||||||||
(a) Write-down of art and manuscript inventory | |||||||||||||
(b) Severance expense and write-down of subscription acquisition costs | |||||||||||||
Meredith Corporation and Subsidiaries | Table 2 | ||||||||||||
Supplemental Disclosures Regarding Non-GAAP Financial Measures (Unaudited) | |||||||||||||
The following table shows results of operations excluding the special charge and as reported with the difference being the special charge. Results of operations excluding the special charge are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release. | |||||||||||||
|
| ||||||||||||
Period Ended December 31, 2008 | Three Months |
| Six Months | ||||||||||
|
| Excluding Special Charge |
| Special Charge |
| As Reported |
|
| Excluding Special Charge |
| Special Charge |
| As Reported |
(In thousands) |
|
|
|
|
|
| |||||||
Revenues |
|
| |||||||||||
Publishing | $ | 281,864 | $ | - | $ | 281,864 | $ | 581,899 | $ | - | $ | 581,899 | |
Broadcasting | |||||||||||||
Non-political advertising | 64,717 | - | 64,717 | 126,365 | - | 126,365 | |||||||
Political advertising | 17,005 | - | 17,005 | 22,876 | - | 22,876 | |||||||
Other revenues |
| 2,654 |
| - |
| 2,654 |
| 5,538 |
| - |
| 5,538 | |
Total broadcasting |
| 84,376 |
| - |
| 84,376 |
| 154,779 |
| - |
| 154,779 | |
Total revenues | $ | 366,240 | $ | - | $ | 366,240 | $ | 736,678 | $ | - | $ | 736,678 | |
|
|
|
|
|
| ||||||||
Operating profit | |||||||||||||
Publishing | $ | 28,043 | $ | (12,802) | (a) $ | 15,241 | $ | 61,227 | $ | (12,802) | (a) $ | 48,425 | |
Broadcasting | 24,342 | (2,013) | (b) | 22,329 | 35,038 | (2,013) | (b) | 33,025 | |||||
Unallocated corporate |
| (8,607) |
| (980) | (9,587) |
| (15,042) |
| (980) | (16,022) | |||
Income from operations | $ | 43,778 | $ | (15,795) | |||||||||
$
27,983
$
81,223
$
(15,795)
$
65,428
Depreciation and amortization
Publishing
$
4,230
$
-
$
4,230
$
8,058
$
-
$
8,058
Broadcasting
6,448
-
6,448
12,517
-
12,517
Unallocated corporate
100
-
100
1,061
-
1,061
Total depreciation and amortization
$
10,778
$
-
$
10,778
$
21,636
$
-
$
21,636
EBITDA1
Publishing
$
32,273
$
(12,802)
$
19,471
$
69,285
$
(12,802)
$
56,483
Broadcasting
30,790
(2,013)
28,777
47,555
(2,013)
45,542
Unallocated corporate
(8,507)
(980)
(9,487)
(13,981)
(980)
(14,961)
Total EBITDA1
$
54,556
$
(15,795)
$
38,761
$
102,859
$
(15,795)
$
87,064
1 EBITDA is earnings before interest, taxes, depreciation, and amortization.
Notes
(a) Write-down of art and manuscript inventory and severance expense for Publishing operations
(b) Severance expense for Broadcasting operations
(c) Severance expense for Corporate personnel
Meredith Corporation and Subsidiaries | Table 3 | ||||||||
Supplemental Disclosures Regarding Non-GAAP Financial Measures (Unaudited) | |||||||||
EBITDA | |||||||||
Consolidated EBITDA, which is reconciled to earnings from continuing operations in the following tables, is defined as earnings from continuing operations before interest, taxes, depreciation, and amortization. | |||||||||
|
|
|
|
|
|
|
|
|
|
| Three months Ended December 31, 2008 |
| Six months Ended December 31, 2008 | ||||||
|
| Unallocated |
|
|
| Unallocated |
| ||
| Publishing | Broadcasting | Corporate | Total |
| Publishing | Broadcasting | Corporate | Total |
(In thousands) |
| ||||||||
Revenues | $ 281,864 | $ 84,376 | $ - | $ 366,240 |
| $ 581,899 | $ 154,779 | $ - | $ 736,678 |
| |||||||||
Operating profit | $ 15,241 | $ 22,329 | $ (9,587) | $ 27,983 | $ 48,425 | $ 33,025 | $ (16,022) | $ 65,428 | |
Depreciation and | 4,230 | 6,448 | 100 | 10,778 |
| 8,058 | 12,517 | 1,061 | 21,636 |
EBITDA | $ 19,471 | $ 28,777 | $ (9,487) | 38,761 |
| $ 56,483 | $ 45,542 | $ (14,961) | 87,064 |
Less: |
| ||||||||
Depreciation and | (10,778) | (21,636) | |||||||
Net interest expense | (5,246) | (10,560) | |||||||
Income taxes |
|
|
| (10,194) |
|
|
|
| (23,688) |
Earnings from continuing |
|
|
| $ 12,543 |
|
|
|
| $ 31,180 |
Segment EBITDA margin | 6.9 % | 34.1 % |
|
|
| 9.7 % | 29.4 % |
|
|
|
|
|
|
|
|
|
|
|
|
| Three months Ended December 31, 2007 |
| Six months Ended December 31, 2007 | ||||||
|
| Unallocated |
|
|
|
| Unallocated |
| |
| Publishing | Broadcasting | Corporate | Total |
| Publishing | Broadcasting | Corporate | Total |
(In thousands) |
| ||||||||
Revenues | $ 308,608 | $ 87,637 | $ - | $ 396,245 |
| $ 638,130 | $ 162,188 | $ - | $ 800,318 |
|
| ||||||||
Operating profit | $ 44,512 | $ 27,564 | $ (7,024) | $ 65,052 | $ 99,945 | $ 41,141 | $ (15,357) | $ 125,729 | |
Depreciation and | 5,305 | 6,329 | 391 | 12,025 |
| 10,505 | 12,707 | 931 | 24,143 |
EBITDA | $ 49,817 | $ 33,893 | $ (6,633) | 77,077 |
| $110,450 | $ 53,848 | $ (14,426) | 149,872 |
Less: |
| ||||||||
Depreciation and | (12,025) |
| (24,143) | ||||||
Net interest expense | (5,438) | (11,249) | |||||||
Income taxes |
|
|
| (24,401) |
|
|
|
| (45,799) |
Earnings from continuing | $ 35,213 |
| $ 68,681 | ||||||
Segment EBITDA margin | 16.1 % | 38.7 % |
|
|
| 17.3 % | 33.2 % |
|
|
Table 4
FREE CASH FLOW
Free cash flow, which is reconciled to earnings from continuing operations in the following table, is defined as earnings from continuing operations plus depreciation and amortization less capital expenditures.
Three Months
Six Months
Period ended December 31,
2008
2007
2008
2007
(In thousands)
Free cash flow
$
17,744
$
41,301
$
37,631
$
82,614
Depreciation and amortization
(10,778)
(12,025)
(21,636)
(24,143)
Capital expenditures
5,577
5,937
15,185
10,210
Earnings from continuing operations
$
12,543
$
35,213
$
31,180
$
68,681
