Exhibit 99.1
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MEREDITH CORPORATION REPORTS
FISCAL 2001 SECOND QUARTER RESULTS
DES MOINES, Iowa - (January 31, 2001) - Meredith Corporation (NYSE: MDP) today
reported earnings for the fiscal year 2001 second quarter ended December 31,
2000, of $24.0 million, or 47 cents per share, in line with the First Call
consensus estimate. This compares to $25.5 million, or 48 cents per share, in
the second quarter of fiscal 2000.
For the first half of fiscal 2001, Meredith earnings were $40.5 million, or 79
cents per share. This compares to net earnings of $43.5 million, or 82 cents
per share, in the first half of fiscal 2000.
Revenues for the second quarter of fiscal 2001 were $260.9 million, versus
comparable revenues of $256.3 million for the prior year quarter. The fiscal
2000 revenues are adjusted for discontinued magazine titles. Reported revenues
for the second quarter of fiscal 2000 were $266.1 million.
For the first half of fiscal 2001, Meredith revenues were $510.9 million,
versus comparable revenues of $508.6 million for the first half of the previous
year. For the first half of fiscal 2000 reported revenues were $526.5 million.
During the second quarter, Publishing results were affected by softness in
advertising demand, higher paper prices and Interactive Media investments, said
Meredith Corporation Chairman and Chief Executive Officer William T. Kerr.
While overall Broadcasting revenues increased 3 percent due in part to $10.8
million in political advertising, operating profits were slightly lower because
of continued spending in enhancing news and sales. "Looking ahead to our third
quarter and the rest of the 2001 fiscal year, we are facing a weakening and
volatile advertising market," Kerr said. "This will impact earnings for the
third quarter and the full fiscal year."
Assuming current advertising trends continue through the rest of the fiscal
year, Meredith's full-year earnings could be approximately 5 to 10 percent
below the previous year's earnings per share of $1.71, excluding non-recurring
items. Because of the timing of interactive and circulation investments, the
earnings impact is expected to be greater in the third quarter of fiscal 2001
than in the fourth.
Kerr said Meredith has already taken several steps to spur revenue growth and
reduce costs to offset the slowdown in advertising. He noted that Meredith's
total operating costs were 2 percent lower for the first half of the fiscal
year compared to the prior year.
"While we are facing a difficult environment, we will continue to enhance our
core franchises and will work to build shareholder value," Kerr said. "We have
many strengths which provide the foundation for our continued success,
including our great franchise of well-established brands, growth in
non-advertising revenues, a group of television stations in some of the
country's fastest growing markets, and a strong balance sheet."
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OPERATING RESULTS
PUBLISHING
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Second quarter Publishing operating profit was $29.7 million, compared to $33.1
million for the prior-year quarter. Publishing revenues were $182.3 million,
versus comparable revenues of $180.2 million in the second quarter of fiscal
2000. Reported prior-year second quarter publishing revenues were $190.0
million.
For the first half of fiscal 2001, publishing operating profit was $58.1
million, compared to $61.5 million for the prior-year period. Publishing
revenues for the first half of 2001 were $367.1 million, versus comparable
revenues of $365.7 million for the prior-year period. Reported revenues for
the first half of fiscal 2000 were $383.7 million.
Publishing revenues were impacted by a continued reduction in advertising
spending by packaged-goods manufacturers, along with a slowdown in advertising
by automobile makers and direct-response companies. In addition, there was a
significant decline in dot-com advertising.
"In the second quarter, the advertising softness primarily affected our larger
magazines, Better Homes and Gardens and Ladies' Home Journal," Kerr said.
"Nonetheless, Better Homes and Gardens maintained its clear advertising revenue
leadership position in the Women's Service field for both the quarter and
calendar year 2000. Additionally, we continued to see growth in our mid-sized
titles, including Traditional Home, Country Home and Midwest Living. However,
our mid-sized publications are beginning to feel the effects of a slower
advertising climate in the third quarter."
Interactive Media
Although included in the Publishing segment, Meredith reports results for its
Interactive Media operations because of the company's ongoing expansion and
acceleration of Internet-related efforts.
Fiscal 2001 second quarter Interactive Media revenues were $1.5 million versus
$755,000 in the prior-year quarter. Interactive Media operating losses were
$1.9 million, versus $1.1 million in fiscal 2000. For the first half of fiscal
year 2001, Interactive revenues were $2.6 million versus $1.1 million for the
first half of fiscal 2000. Operating losses were $3.8 million for the first
half of the fiscal year, compared to $2.5 million for the first half of fiscal
2000.
During the first six months of fiscal 2001, the company generated more
subscriptions online than it did in all of 2000. Kerr said obtaining magazine
subscriptions on the Internet is a priority for Meredith because of the
potential for significant savings in the cost of subscription acquisitions.
The company also reported strong gains in Internet page views, in unique
visitors and in the number of registrations on its Web sites.
BROADCASTING
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Broadcasting Group operating profit for the fiscal 2001 second quarter was
$21.5 million, versus $21.8 million recorded in the prior-year second quarter.
Second quarter Broadcasting Group revenues were $78.6 million, compared to
$76.2 million in fiscal 2000.
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For the first half of fiscal 2001, Broadcasting operating profit was $31.6
million, compared to $35.3 million for the prior-year period. Broadcasting
revenues for the first half of 2001 were $143.8 million, compared to $142.8
million for the prior-year period.
"In Broadcasting, advertising revenues were higher, in part, because of
significant political advertising at our stations in Kansas City, Flint/Saginaw
and Hartford," Kerr said. "However, there was an industry-wide slowdown in
demand for television advertising following the election, with softness in
automobiles, retail, and telecommunications."
OTHER
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Meredith repurchased approximately 230,000 shares of stock in the second
quarter in conjunction with the company's ongoing share repurchase program,
comparable to the prior-year second quarter. In the first half of fiscal 2001,
the company repurchased approximately 677,000 shares, compared to 405,000
shares in the first half of fiscal 2000. As announced earlier this week, the
Meredith Board of Directors authorized the company to purchase an additional 2
million shares, putting the current authorization at approximately 3 million
shares.
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.
Note: All earnings per share figures in the text of this release are diluted.
Basic and diluted earnings per share can be found on the attached income
statement.
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 Steve Lacy and Controller Tom
Ferree will discuss second-quarter results and respond to questions. A live
Webcast of the call and a copy of the text will be accessible to the public on
the company's web site, www.meredith.com. The Webcast will remain there until
the company releases third-quarter earnings on April 30, 2001.
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MEREDITH CORPORATION
FISCAL 2001 SECOND 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 before nonrecurring items and discontinued operations.
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Fiscal Year
-------- -------- -------- -------- -----------
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 .47
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Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
Three Months Six Months
Ended December 31 Ended December 31
------------------- -------------------
2000 1999 2000 1999
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(In thousands except per share)
Revenues (less returns and allowances):
Advertising $153,169 $157,882 $302,194 $314,653
Circulation 63,336 68,530 127,850 137,817
All other 44,383 39,717 80,866 74,063
-------- -------- -------- --------
Total revenues 260,888 266,129 510,910 526,533
-------- -------- -------- --------
Operating costs and expenses:
Production, distribution and edit 107,576 108,361 218,121 216,358
Selling, general & administrative 93,109 93,083 184,569 193,830
Depreciation and amortization 12,785 13,078 25,624 26,021
-------- -------- -------- --------
Total operating costs and expenses 213,470 214,522 428,314 436,209
-------- -------- -------- --------
Income from operations 47,418 51,607 82,596 90,324
Interest income 269 147 478 437
Interest expense (8,469) (9,181) (16,989) (18,049)
-------- -------- -------- --------
Earnings before income taxes 39,218 42,573 66,085 72,712
Income taxes 15,177 17,114 25,575 29,230
-------- -------- -------- --------
Net earnings $ 24,041 $ 25,459 $ 40,510 $ 43,482
======== ======== ======== ========
Basic earnings per share $ 0.48 $ 0.49 $ 0.81 $ 0.84
======== ======== ======== ========
Basic average shares outstanding 50,019 51,596 50,146 51,684
======== ======== ======== ========
Diluted earnings per share $ 0.47 $ 0.48 $ 0.79 $ 0.82
======== ======== ======== ========
Diluted average shares outstanding 51,275 53,303 51,398 53,338
======== ======== ======== ========
Dividends paid per share $ 0.080 $ 0.075 $ 0.160 $ 0.150
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Meredith Corporation and Subsidiaries
Segment Information (Unaudited)
Three Months Six Months
Ended December 31 Ended December 31
------------------- -------------------
2000 1999 2000 1999
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(In thousands)
Revenues
Publishing $182,259 $189,970 $367,144 $383,684
Broadcasting 78,629 76,159 143,766 142,849
-------- -------- -------- --------
Total revenues $260,888 $266,129 $510,910 $526,533
======== ======== ======== ========
Operating Profit
Publishing $ 29,666 $ 33,144 $ 58,076 $ 61,542
Broadcasting 21,453 21,767 31,596 35,312
Unallocated corporate expense (3,701) (3,304) (7,076) (6,530)
-------- -------- -------- --------
Segment operating profit $ 47,418 $ 51,607 $ 82,596 $ 90,324
Interest income 269 147 478 437
Interest expense (8,469) (9,181) (16,989) (18,049)
-------- -------- -------- --------
Earnings before income taxes 39,218 42,573 66,085 72,712
Income taxes 15,177 17,114 25,575 29,230
-------- -------- -------- --------
Net earnings $ 24,041 $ 25,459 $ 40,510 $ 43,482
======== ======== ======== ========
Depreciation & Amortization
Publishing $ 2,223 $ 2,879 $ 4,432 $ 5,749
Broadcasting 9,903 9,663 19,851 19,184
Unallocated corporate 659 536 1,341 1,088
-------- -------- -------- --------
Total depreciation & amortization $ 12,785 $ 13,078 $ 25,624 $ 26,021
======== ======== ======== ========
EBITDA
Publishing $ 31,889 $ 36,023 $ 62,508 $ 67,291
Broadcasting 31,356 31,430 51,447 54,496
Unallocated corporate (3,042) (2,768) (5,735) (5,442)
-------- -------- -------- --------
Total EBITDA $ 60,203 $ 64,685 $108,220 $116,345
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