Exhibit 99.1
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MEREDITH CORPORATION REPORTS
FISCAL 2001 FIRST QUARTER RESULTS
Company Meets First Call Consensus Earnings Per Share Estimate
DES MOINES, Iowa -- (October 17, 2000) -- Meredith Corporation (NYSE: MDP)
today reported earnings for the fiscal 2001 first quarter ended September 30,
2000, of $16.5 million or 32 cents per share, in line with the current First
Call consensus estimate. This compares to $18.0 million or 34 cents per share
in the prior-year first quarter.
First quarter company revenues were $250.0 million versus comparable revenues
of $252.2 million in the prior-year period. The comparable fiscal 2000
revenues are adjusted for discontinued magazine titles. Reported company
revenues for the prior-year first quarter were $260.4 million.
"We have been focused on controlling our operating expenses in anticipation of
a difficult quarter," said Kerr, who noted that first quarter operating costs
declined by 3 percent or $6.8 million versus the prior-year period. "However,
the key to building long-term shareholder value is profitable revenue growth.
Our commitment to this is demonstrated by our recently announced circulation,
Internet and marketing initiatives. We believe these steps are crucial in
delivering the strong financial performance we have achieved historically."
OPERATING RESULTS
PUBLISHING
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First quarter Publishing operating profit was even with the prior-year quarter
at $28.4 million. Publishing revenues were $184.9 million versus comparable
revenues of $185.5 million in the fiscal 2000 first quarter. The
prior-year comparable revenues have been adjusted for discontinued titles
including Cross Stitch & Needlework, Crayola Kids and Decorative Woodcrafts.
Reported prior-year first quarter publishing revenues were $193.7 million.
While advertising and circulation revenues declined from the prior year, other
publishing revenues increased 7 percent due to growth in the book publishing
and integrated marketing operations.
"Reduced advertising spending by packaged-goods companies impacted the
first-quarter results, primarily at Better Homes and Gardens and Ladies' Home
Journal magazines. Pages for all of our other magazines increased 9 percent
for the quarter, but that was not enough to offset the decline in our two
largest publications," said Kerr. "Because of our diligent cost-control
efforts, we were able to maintain our operating profit at the prior-year
level."
Interactive Media
Fiscal 2001 first quarter interactive media revenues were $1.1 million versus
$300,000 in the prior-year quarter. Operating losses were ($1.9 million),
versus ($1.5 million) in fiscal 2000.
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The number of registrations generated by Meredith Web sites continues to grow
at a rapid pace. By the end of the fiscal 2001 first quarter, the company had
surpassed the 1 million mark. Page views for all Meredith sites grew 60
percent and unique visitors grew 40 percent for the fiscal 2001 first quarter
versus the same period last year. The company also generated 153 percent more
subscriptions online. Kerr said this demonstrates the potential for
significant success related to the company's Internet investments over time.
BROADCASTING
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Broadcasting Group operating profit for the fiscal 2001 first quarter was $10.1
million, compared to $13.5 million in the prior-year first quarter. First
quarter Broadcasting Group revenues were $65.1 million, compared to $66.7
million in fiscal 2000.
Total company earnings for the fiscal 2001 first quarter include dilution of 9
cents per share from the March 1, 1999, acquisition of the Atlanta CBS
affiliate. In fiscal 2000, dilution related to the acquisition was 8 cents for
the first quarter.
Meredith's television stations reported mixed results for the quarter. Strong
operating profit and revenue growth was reported by KCTV (CBS) in Kansas City;
WNEM (CBS) in Flint/Saginaw, Mich.; and KFXO (FOX) in Bend, Ore. WGCL (CBS) in
Atlanta also showed revenue growth, which was offset by continued investment
spending. Stations reporting quarter-over-quarter operating profit and revenue
declines included KPHO (CBS) in Phoenix; WOFL (FOX) in Orlando; WSMV (NBC) in
Nashville; KPDX (FOX) in Portland, Ore.; and WFSB (CBS) in Hartford, Conn.
"Looking at our group as a whole, we did not significantly benefit from two key
revenue-generating opportunities in the quarter - political spending and the
Summer Olympics," Kerr said. "Regarding political advertising, most of the
spending was in battleground states and, as a result, only our Kansas City and
Flint/Saginaw stations benefited to any real degree. With the Olympics, we own
just one NBC station (Nashville), and many clients curbed spending rather than
advertise opposite the Olympics. Also, the timing of the Olympics pushed the
start of network fall programming into the second quarter, delaying some
advertising spending across the industry.
"We are actively pursuing strategies to improve the internal performance of our
Broadcasting Group," Kerr continued. "These include growing revenues and
margins through concentration on sales enhancements, news expansions and
improvements, and cost control initiatives."
OTHER
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The company's first quarter results reflect a lower income tax rate that is
expected to remain in effect for the balance of the fiscal year.
Meredith repurchased 448,000 shares of stock in the first quarter in
conjunction with the company's ongoing share repurchase program, versus 172,000
shares in the prior-year first quarter. Meredith repurchased 1.7 million shares
in fiscal 2000. Nearly 1.4 million shares are currently authorized for
repurchase.
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ABOUT MEREDITH CORPORATION
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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, and interactive and integrated marketing.
The Meredith Publishing Group includes more than 20 magazine brands, including
Better Homes and Gardens and Ladies' Home Journal, and more than 100 special
interest publications. Meredith owns 12 television stations -- including
properties in top 25 markets such as Atlanta, Phoenix, Orlando and Portland --
and produces original television programming based on its strong brands.
Meredith has nearly 300 books in print and has established marketing
relationships with some of America's leading companies, including The Home
Depot, Kraft Foods and Nestle USA. Meredith's consumer database, which contains
more than 60 million names, is the largest domestic database among media
companies and enables magazine and television advertisers to precisely target
marketing campaigns. Additionally, Meredith has an extensive Internet presence,
including 26 web sites, strategic alliances with leading specialty Internet
destinations and branded anchor tenant positions on America Online.
Meredith Corporation will host a conference call at 11:00 a.m. eastern time
today. Chairman and Chief Executive Officer William Kerr, Chief Financial
Officer Suku Radia, Publishing Group President/Senior Vice President Chris
Little and Controller Tom Ferree will discuss first-quarter results and respond
to questions. A live webcast of the call will be accessible to the public on
the company's web site, www.meredith.com. The webcast will remain there until
the company releases second-quarter earnings on January 23, 2001.
MEREDITH CORPORATION
FISCAL 2001 FIRST QUARTER
EARNINGS PER SHARE AT A GLANCE
(Note: All figures are adjusted for stock splits)
The chart below depicts comparable quarterly and fiscal year diluted earnings
per share (EPS) before nonrecurring items and discontinued operations.
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Fiscal Year
-------- -------- -------- -------- -----------
F1993 .06 .09 .10 .10 .35
F1994 .08 .13 .16 .13 .50
F1995 .14 .19 .18 .20 .71
F1996 .17 .22 .24 .28 .91
F1997 .22 .31 .33 .36 1.22
F1998 .27 .40 .37 .42 1.46
F1999 .32 .47 .41 .44 1.64
F2000 .34 .48 .47 .42 1.71
F2001 .32
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Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
Three Months
Ended September 30
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2000 1999
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(In thousands except per share)
Revenues(less returns and allowances):
Advertising $149,025 $156,771
Circulation 64,514 69,287
All other 36,483 34,346
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Total revenues 250,022 260,404
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Operating costs and expenses:
Production, distribution and edit 110,545 107,997
Selling, general & administrative 91,460 100,747
Depreciation and amortization 12,839 12,943
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Total operating costs and expenses 214,844 221,687
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Income from operations 35,178 38,717
Interest income 209 290
Interest expense (8,520) (8,868)
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Earnings before income taxes 26,867 30,139
Income taxes 10,398 12,116
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Net earnings $ 16,469 $ 18,023
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Basic earnings per share $ 0.33 $ 0.35
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Basic average shares outstanding 50,272 51,773
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Diluted earnings per share $ 0.32 $ 0.34
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Diluted average shares outstanding 51,522 53,373
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Dividends paid per share $ 0.080 $ 0.075
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Meredith Corporation and Subsidiaries
Segment Information (Unaudited)
Three Months
Ended September 30
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2000 1999
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(In thousands)
Revenues
Publishing $184,885 $193,714
Broadcasting 65,137 66,690
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Total revenues $250,022 $260,404
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Operating Profit
Publishing $ 28,410 $ 28,398
Broadcasting 10,143 13,545
Unallocated corporate expense (3,375) (3,226)
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Income from operations 35,178 38,717
Interest income 209 290
Interest expense (8,520) (8,868)
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Earnings before income taxes 26,867 30,139
Income taxes 10,398 12,116
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Net earnings $ 16,469 $ 18,023
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Depreciation & Amortization
Publishing $ 2,209 $ 2,870
Broadcasting 9,948 9,521
Unallocated corporate 682 552
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Total depreciation & amortization $ 12,839 $ 12,943
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EBITDA
Publishing $ 30,619 $ 31,268
Broadcasting 20,091 23,066
Unallocated corporate (2,693) (2,674)
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Total EBITDA $ 48,017 $ 51,660
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