Exhibit 99.1
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MEREDITH CORPORATION REPORTS
FISCAL 2001 THIRD QUARTER RESULTS
DES MOINES, Iowa - (May 2, 2001) - Meredith Corporation (NYSE: MDP) today
reported earnings for the fiscal year 2001 third quarter ended March 31, 2001,
of $18.9 million, or 37 cents per share, meeting the First Call consensus
estimate. This compares to $24.8 million, or 47 cents per share, in the third
quarter of fiscal 2000.
For the first nine months of fiscal 2001, Meredith earnings were $59.4 million,
or $1.16 per share. This compares to net earnings of $68.3 million, or $1.29
per share, in the first nine months of fiscal 2000.
Revenues for the third quarter of fiscal 2001 were $272.3 million, versus
comparable revenues of $280.1 million for the prior year quarter. The fiscal
2000 revenues were adjusted for discontinued magazine titles. Reported
revenues for the third quarter of fiscal 2000 were $286.9 million.
For the first nine months of fiscal 2001, Meredith revenues were $783.2
million, versus comparable revenues of $788.7 million for the prior-year
period. For the first nine months of fiscal 2000 reported revenues were $813.5
million.
"Third quarter results across the company were affected by a weakening economy
that translated into an erosion of advertising demand," said Meredith
Corporation Chairman and CEO William T. Kerr. "In response, in the fiscal 2001
third quarter and year-to-date periods we reduced costs by 2 percent compared
to the prior-year periods. We achieved these overall cost reductions despite
continued higher paper prices, a January postal increase, continued interactive
media and circulation spending and Broadcasting Group sales and news
investments."
Kerr said that revenues for WGCL in Atlanta increased by 29 percent in the
third quarter. As a result, dilution from the acquisition was six cents, an
improvement of two cents per share over the same quarter last year.
Kerr added that it is difficult to predict the duration of this advertising
downturn. Consistent with previous guidance, he said that the company's
full-year earnings could be approximately 5 to 10 percent below the previous
year's earnings per share of $1.71, excluding nonrecurring items.
OPERATING RESULTS
PUBLISHING
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Third quarter Publishing operating profit was $39.9 million, compared to $46.4
million for the prior-year quarter. Publishing revenues were $213.4 million,
versus comparable revenues of $217.5 million in the third quarter of fiscal
2000. Reported prior-year third quarter publishing revenues, which include
discontinued titles, were $224.4 million.
For the first nine months of fiscal 2001, publishing operating profit was $98.0
million, compared to $108.0 million for the prior-year period. Publishing
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revenues for the first nine months of 2001 were $580.5 million, versus
comparable revenues of $583.3 million for the prior-year period. Reported
revenues for the first nine months of fiscal 2000 were $608.1 million.
Publishing revenues were impacted by a continued reduction in advertising
spending across most categories and magazines. "In the third quarter, our
strongest performance was reported by Meredith Integrated Marketing. Also, the
Better Homes and Gardens Creative Collection (the crafts group) turned in
strong results. Most of the revenues from these operations are not related to
advertising, which explains their strength in light of the current advertising
environment."
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 third quarter Interactive Media revenues were $1.8 million versus
$1.2 million in the prior-year quarter. Interactive Media operating losses
were $1.4 million, versus $0.7 million in fiscal 2000. For the first nine
months of fiscal year 2001, Interactive revenues were $4.4 million versus $2.3
million for the first nine months of fiscal 2000. Operating losses were $5.2
million for the first nine months of the fiscal year, compared to $3.3 million
for the same period of fiscal 2000.
In the third quarter, Meredith's online subscription orders grew more than 130
percent versus the prior-year period. Kerr said this effort is a priority
because of the potential for significant savings. "We're on track to meet our
goal of generating 1.5 million gross magazine subscriptions from the Internet
by the end of fiscal 2003," he said. 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 third quarter was $3.3
million, versus $8.0 million recorded in the prior-year third quarter. Third
quarter Broadcasting Group revenues were $58.9 million, compared to $62.6
million in fiscal 2000.
For the first nine months of fiscal 2001, Broadcasting operating profit was
$34.9 million, compared to $43.4 million for the prior-year period.
Broadcasting revenues for the first nine months of 2001 were $202.7 million,
compared to $205.4 million for the prior-year period.
Kerr said that -- like the rest of the industry -- Meredith is still
experiencing reduced demand for television advertising, especially in national
advertising revenues. "For the third quarter and the year-to-date, our
national revenues were particularly weak, especially in the automotive and
retail categories. Local revenues increased for the quarter."
OTHER
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Meredith repurchased 424,000 shares in the third quarter in conjunction with
its ongoing share repurchase program. In the first nine months of fiscal 2001,
the company repurchased approximately 1.1 million shares.
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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, 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 markets 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 Internet
destinations such as the Microsoft Network (MSN) 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 third-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 fourth-quarter earnings in August 2001.
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MEREDITH CORPORATION
FISCAL 2001 THIRD 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 .37
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Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
Three Months Nine Months
Ended March 31 Ended March 31
------------------- -------------------
2001 2000 2001 2000
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(In thousands except per share)
Revenues (less returns and allowances):
Advertising $157,459 $172,478 $459,653 $487,131
Circulation 69,106 70,273 196,956 208,090
All other 45,742 44,192 126,608 118,255
-------- -------- -------- --------
Total revenues 272,307 286,943 783,217 813,476
-------- -------- -------- --------
Operating costs and expenses:
Production, distribution and edit 122,843 121,830 340,964 339,620
Selling, general & administrative 97,905 102,357 282,474 294,755
Depreciation and amortization 12,847 13,000 38,471 39,021
-------- -------- -------- --------
Total operating costs and expenses 233,595 237,187 661,909 673,396
-------- -------- -------- --------
Income from operations 38,712 49,756 121,308 140,080
Interest income 199 399 677 836
Interest expense (8,103) (8,657) (25,092) (26,706)
-------- -------- -------- --------
Earnings before income taxes 30,808 41,498 96,893 114,210
Income taxes 11,924 16,682 37,499 45,912
-------- -------- -------- --------
Net earnings $ 18,884 $ 24,816 $ 59,394 $ 68,298
======== ======== ======== ========
Basic earnings per share $ 0.38 $ 0.48 $ 1.19 $ 1.32
======== ======== ======== ========
Basic average shares outstanding 49,881 51,275 50,058 51,548
======== ======== ======== ========
Diluted earnings per share $ 0.37 $ 0.47 $ 1.16 $ 1.29
======== ======== ======== ========
Diluted average shares outstanding 51,369 52,621 51,389 53,099
======== ======== ======== ========
Dividends paid per share $ 0.085 $ 0.080 $ 0.245 $ 0.230
======== ======== ======== ========
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Meredith Corporation and Subsidiaries
Segment Information (Unaudited)
Three Months Nine Months
Ended March 31 Ended March 31
------------------- -------------------
2001 2000 2001 2000
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(In thousands)
Revenues
Publishing $213,385 $224,393 $580,529 $608,077
Broadcasting 58,922 62,550 202,688 205,399
-------- -------- -------- --------
Total revenues $272,307 $286,943 $783,217 $813,476
======== ======== ======== ========
Operating Profit
Publishing $ 39,879 $ 46,416 $ 97,955 $107,958
Broadcasting 3,272 8,046 34,868 43,358
Unallocated corporate expense (4,439) (4,706) (11,515) (11,236)
-------- -------- -------- --------
Segment operating profit $ 38,712 $ 49,756 $121,308 $140,080
Interest income 199 399 677 836
Interest expense (8,103) (8,657) (25,092) (26,706)
-------- -------- -------- --------
Earnings before income taxes 30,808 41,498 96,893 114,210
Income taxes 11,924 16,682 37,499 45,912
-------- -------- -------- --------
Net earnings $ 18,884 $ 24,816 $ 59,394 $ 68,298
======== ======== ======== ========
Depreciation & Amortization
Publishing $ 2,247 $ 2,889 $ 6,679 $ 8,638
Broadcasting 10,038 9,594 29,889 28,778
Unallocated corporate 562 517 1,903 1,605
-------- -------- -------- --------
Total depreciation & amortization $ 12,847 $ 13,000 $ 38,471 $ 39,021
======== ======== ======== ========
EBITDA
Publishing $ 42,126 $ 49,305 $104,634 $116,596
Broadcasting 13,310 17,640 64,757 72,136
Unallocated corporate (3,877) (4,189) (9,612) (9,631)
-------- -------- -------- --------
Total EBITDA $ 51,559 $ 62,756 $159,779 $179,101
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