EX-99.1 10 d498503dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

MEREDITH CORPORATION ANNOUNCES COMPLETION OF TIME INC. ACQUISITION

AND REPORTS FISCAL 2018 SECOND QUARTER AND FIRST HALF RESULTS

DES MOINES, IA (January 31, 2018) – Meredith Corporation (NYSE: MDP; meredith.com) announced today it has completed its acquisition of Time Inc., and that February 1, 2018, will be the first day of operations for the combined company. Time Inc. shareholders received $18.50 per share in an all-cash transaction valued at $2.8 billion originally announced on November 26, 2017.

Meredith also announced fiscal 2018 second quarter and first half results today. The details are included later in this release.

“With this acquisition, we are creating a premier media and marketing company serving 200 million American consumers that’s positioned for growth across industry-leading digital, television, print, video, mobile, and social platforms,” said Meredith Corporation Chairman and CEO Stephen M. Lacy. “The combined portfolio joins the rich content-creation capabilities of many of the media industry’s strongest national brands with a powerful local television business that is generating record earnings.”

“I want to welcome our new employees to Meredith,” said Meredith President and Chief Operating Officer Tom Harty. “Together, we are eager to start serving consumers and advertisers alike with trusted, premium multi-platform content and innovative marketing solutions. Since our announcement, teams from Meredith and Time have been developing an integration plan that has positioned us to hit the ground running. We look forward to delivering on our pledge to achieve the identified synergies and grow shareholder value.”

Key Strategic and Financial Benefits of the Time Inc. Acquisition:

 

  •   Creates an unparalleled portfolio of national media brands with greater scale and efficiency – Combined, Meredith’s brands now have a readership of more than 135 million and paid circulation of nearly 60 million, with leading positions in entertainment, food, lifestyle, news and sports, parenting, and home content creation, as well as enhanced positions in the beauty, fashion, and luxury advertising categories.

 

  •   Continues the strong and growing contribution from Meredith’s Local Media Group – Meredith’s portfolio of 17 high-performing television stations in 12 markets is a consistent generator of strong cash flow. Meredith’s stations — which reach 11 percent of U.S. television households — are primarily Big 4 network affiliates located in fast-growing markets.

 

  •   Advances Meredith’s digital position by adding significant scale – Meredith is now a Top 10 digital media company with approximately 170 million monthly unique visitors in the U.S., over 10 billion annual video views, and nearly $700 million in annualized digital advertising revenues. Meredith is well-positioned to benefit from fast-growing advertising platforms, including native, video, shopper marketing, programmatic and social. It now operates the No. 1 premium content digital network for American consumers with unmatched reach to Millennials, including 85 percent of U.S. Millennial women.

 

  •   Provides consumer revenue diversification and growth – Meredith expects to increase consumer revenue from diversified streams, including bundled circulation activities that leverage its reach to nearly 60 million individual magazine subscribers; brand licensing; and e-commerce.

 

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  •   Enhances financial strength and flexibility – Meredith expects the acquisition will be accretive to free cash flow in the first full year of operations. Meredith anticipates generating annual cost synergies at the high end of its previously stated range of $400 million to $500 million in the first two full years of combined operations. Meredith has an excellent track record of achieving cost synergies with prior acquisitions, and is confident in its ability to optimize the cost structure of the combined business.

 

  •   Increases Total Shareholder Return – Meredith remains committed to delivering top-third Total Shareholder Return. On January 27, 2018, Meredith raised its annual dividend 4.8 percent to $2.18 per share, the 25th straight year it has raised its dividend. Meredith has now paid a dividend for 71 consecutive years.

“This portfolio of media assets offers advertisers and marketers unparalleled reach to American consumers,” Harty said. “In particular, we are creating a powerful digital media business that enhances Meredith’s leadership position in reaching Millennials.”

Financing Highlights:

To finance the transaction, Meredith secured the following:

 

  •   $1.8 billion of senior secured term loans (Term Loan B) maturing in 2025 and priced at LIBOR plus 3.00 percent

 

  •   $1.4 billion of senior unsecured notes maturing in 2026 and priced at 6.875 percent

 

  •   $350 million of a five-year senior secured revolving credit facility that is currently undrawn  

 

  •   $650 million investment from a private equity firm

These proceeds were used to finance the acquisition, refinance existing debt and pay transaction costs.

MEREDITH REPORTS FISCAL 2018 SECOND QUARTER AND FIRST HALF RESULTS

Meredith today reported fiscal 2018 second quarter earnings per share were $3.49, compared to $1.58 per share in the prior-year period. Fiscal 2018 second quarter results included the following special items:

 

  •   A benefit of $2.92 per share related to changes to the U.S. corporate income tax rate

 

  •   Transaction expenses of $0.23 per share related to Meredith’s acquisition of Time Inc.

 

  •   A charge of $0.34 per share related to the impairment of a trademark and a realignment in Meredith’s National Media Group

Excluding these special items, fiscal 2018 second quarter earnings per share were $1.14. This compares to earnings per share excluding special items of $1.30 in the prior-year period. As expected in an off-election year, Meredith recorded $38 million, or $0.52 per share, less of high-margin incremental political advertising revenues in the second quarter of fiscal 2018 than in the prior year. (See Tables 1-4 for supplemental disclosures regarding non-GAAP financial measures.)

“We were quite pleased to report record earnings per share for a non-political second quarter and first half, driven by strong growth in non-political advertising revenue in our Local Media Group, along with record digital performance and solid expense discipline in our National Media Group,” said Lacy.

 

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Looking more closely at Meredith’s fiscal 2018 second quarter results compared to the prior-year period:

 

  •   Local Media Group revenues were $170 million. Non-political advertising revenues grew 13 percent to $104 million, driven by strong performance in the Phoenix, Atlanta and Las Vegas markets. Other revenues increased 25 percent, primarily due to growth in retransmission revenues. Operating profit was $51 million, a record for a non-political second quarter.

 

  •   National Media Group revenues were $247 million. Operating profit was $12 million, compared to $47 million. Excluding special items in both periods, operating profit increased 2 percent to $35 million, driven primarily by lower operating expenses in Meredith’s magazine business, along with revenue growth from its digital and circulation activities.

 

  •   Total Company digital advertising revenues were a record for any fiscal quarter. Traffic across Meredith’s digital properties averaged 89 million monthly unique visitors. Digital advertising revenues accounted for 44 percent of the National Media Group’s advertising revenues.

 

  •   Total revenues were $418 million, compared to $443 million in the prior-year period, reflecting the absence of $38 million of political advertising revenue.

Fiscal 2018 first half earnings per share were $4.23, or $1.83 excluding special items. In comparison, prior-year earnings per share were $2.33, or $2.05 excluding special items. Meredith recorded $53 million, or $0.72 per share, less of high-margin incremental political advertising revenues in the first half of fiscal 2018 than in the prior year, as expected in an off-election year. Total company revenues were $810 million, compared to $843 million in the prior-year period.

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. All fiscal 2018 second quarter and first half comparisons are against the comparable prior-year period unless otherwise stated.

IMPACT OF TAX REFORM

The “Tax Cuts and Jobs Act of 2017” (the Act) was signed into law on December 22, 2017. The Act reduces the federal corporate tax rate from 35 percent to 21 percent effective for taxable years beginning on or after January 1, 2018. Meredith will have a blended federal rate of 28 percent retroactive to the beginning of its fiscal 2018.

The reduced rate resulted in an adjustment to lower fiscal 2018 first quarter tax expense by $4 million. Meredith recorded this adjustment in its fiscal 2018 second quarter. In addition, absent the Act, Meredith estimates that second quarter tax expense on second quarter earnings would have been $4 million higher.

Also as a result of the Act, Meredith remeasured its deferred tax assets, deferred tax liabilities, and tax reserves during its second fiscal quarter, resulting in a net tax benefit of $133 million that Meredith reported as a special item.

OUTLOOK

Meredith is temporarily altering its outlook practices due to the following factors:

 

  •   The ongoing review of the combined Company’s media portfolio, following today’s closing of its acquisition of Time Inc.

 

  •   The impact of tax reform on the combined company

 

  •   The timing of the identified synergies

 

  •   Evaluation of Time Inc.’s balance sheet as part of the purchase accounting process, including performing fair value calculations

 

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Meredith expects to resolve these items and provide a more definitive outlook, including expectations for revenue and profit for the balance of its fiscal 2018, when it reports fiscal 2018 third quarter results in late April.

Meredith expects to return to its traditional guidance methodology in July when it reports full year fiscal 2018 results and updates expectations for its fiscal 2019.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on January 31, 2018, at 4:30 pm EST to discuss the closing and integration of the Time Inc. acquisition and fiscal 2018 second quarter results. A live webcast will be accessible to the public on the Company’s website, and a replay will be available for two weeks. A transcript will be available within 48 hours of the call at meredith.com.

 

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RATIONALE FOR USE AND ACCESS TO NON-GAAP RESULTS

Management uses and presents GAAP and non-GAAP results to evaluate and communicate its performance. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin are common supplemental measures of performance used by investors and financial analysts. Management believes that EBITDA provides an additional analytical tool to clarify the Company’s results from core operations and delineate underlying trends. Management does not use EBITDA as a measure of liquidity or funds available for management’s discretionary use because it excludes certain contractual and non-discretionary expenditures. Adjusted EBITDA is defined as EBITDA excluding special items.

Results excluding special items are supplemental non-GAAP financial measures. While these adjusted results are not a substitute for reported results under GAAP, management believes this information is useful as an aid in further understanding Meredith’s current performance, performance trends and financial condition. Reconciliations of GAAP to non-GAAP measures are attached to this press release and available at meredith.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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 and its operations. Statements in this release that are forward-looking include, but are not limited to, the expected benefits of the acquisition of Time Inc., including the expected synergies from the transaction and the combined company’s prospects for growth and increasing shareholder value.

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 or vendors; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicated programming or other costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company’s industries; increases in interest rates; the consequences of acquisitions and/or dispositions; the risks associated with the Company’s recent acquisition of Time Inc., including: (1) litigation challenging the acquisition; (2) the Company’s ability to retain key personnel; (3) competitive responses to the acquisition; (4) unexpected costs, charges or expenses resulting from the acquisition; (5) adverse reactions or changes to business relationships resulting from the acquisition; (6) the Company’s ability to realize the benefits of the acquisition of Time Inc.; (7) delays, challenges and expenses associated with integrating the businesses; and (8) the Company’s ability to comply with the terms of the debt and equity financings entered into in connection with the acquisition; and the risk factors contained in the Company’s most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, which are available on the SEC’s website at www.sec.gov. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT MEREDITH CORPORATION

Meredith Corporation (NYSE: MDP; meredith.com) has been committed to service journalism for more than 115 years. Today, Meredith uses multiple distribution platforms — including broadcast television, print, digital, mobile and video — to provide consumers with content they desire and to deliver the messages of its advertising and marketing partners.

 

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Meredith’s National Media Group reaches nearly 200 million unduplicated American consumers every month, including 85 percent of U.S. Millennial women. Meredith is a leader in creating content across media platforms and life stages in key consumer interest areas such as entertainment, food, lifestyle, home, parenting, beauty, fashion, news and sports. Meredith also features robust brand licensing activities including more than 3,000 SKUs of branded products at 5,000 Walmart stores across the U.S. and at walmart.com, as well as innovative business-to-business marketing solutions provided by Meredith Xcelerated Marketing.

Meredith’s Local Media Group includes 17 television stations reaching more than 11 percent of U.S. households. Meredith’s portfolio is concentrated in large, fast-growing markets, with seven stations in the nation’s Top 25 and 13 in Top 50 markets. Meredith’s stations produce more than 700 hours of local news and entertainment content each week, and operate leading local digital destinations.

— # # # # —

 

Shareholder/Financial Analyst Contact:    Media Contact:
Mike Lovell    Art Slusark
Director of Investor Relations    Chief Communications Officer
Phone: (515) 284-3622    Phone: (515) 284-3404
E-mail: Mike.Lovell@meredith.com    E-mail: Art.Slusark@meredith.com

 

6

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)

 

     Three Months     Six Months  

Periods ended December 31,

    2017     2016     2017     2016  
(In thousands except per share data)                         

Revenues

         

Advertising

    $ 231,815     $ 267,129     $ 441,064     $ 493,018  

Circulation

      67,672       66,805       136,599       135,473  

All other

      118,211       108,708       232,806       214,030  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      417,698       442,642       810,469       842,521  
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating expenses

         

Production, distribution, and editorial

      158,746       148,625       314,548       298,853  

Selling, general, and administrative

      189,384       170,643       357,005       345,636  

Depreciation and amortization

      12,458       13,549       25,008       27,445  

Impairment of long-lived assets

      19,765       —         19,765       —    
  

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

      380,353       332,817       716,326       671,934  
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

      37,345       109,825       94,143       170,587  

Interest expense, net

      (5,171 )      (4,679 )      (10,249 )      (9,428 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Earnings before income taxes

      32,174       105,146       83,894       161,159  

Income tax benefit (expense)

      127,134       (33,341 )      108,855       (55,381 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

    $ 159,308     $ 71,805     $ 192,749     $ 105,778  
  

 

 

    

 

 

    

 

 

    

 

 

  

Basic earnings per share

    $ 3.55     $ 1.61     $ 4.30     $ 2.38  
  

 

 

    

 

 

    

 

 

    

 

 

  

Basic average shares outstanding

      44,857       44,511       44,818       44,535  
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted earnings per share

    $ 3.49     $ 1.58     $ 4.23     $ 2.33  
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted average shares outstanding

      45,601       45,378       45,603       45,385  
  

 

 

    

 

 

    

 

 

    

 

 

  

Dividends paid per share

    $ 0.520     $ 0.495     $ 1.040     $ 0.990  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

7

Meredith Corporation and Subsidiaries

Segment Information (Unaudited)

 

     Three Months     Six Months  

Periods ended December 31,

    2017     2016     2017     2016  
(In thousands)                         

Revenues

         

National media

         

Advertising

    $ 125,770     $ 135,103     $ 245,853     $ 260,455  

Circulation

      67,672       66,805       136,599       135,473  

Other revenues

      53,999       57,437       103,949       110,710  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total national media

      247,441       259,345       486,401       506,638  
  

 

 

    

 

 

    

 

 

    

 

 

  

Local media

         

Non-political advertising

      103,951       91,958       191,736       176,142  

Political advertising

      2,094       40,068       3,475       56,421  

Other revenues

      64,212       51,271       128,857       103,320  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total local media

      170,257       183,297       324,068       335,883  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 417,698     $ 442,642     $ 810,469     $ 842,521  
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating profit

         

National media

    $ 12,247     $ 46,757     $ 40,503     $ 70,868  

Local media

      50,515       76,815       91,457       127,437  

Unallocated corporate

      (25,417 )      (13,747 )      (37,817 )      (27,718 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

    $ 37,345     $ 109,825     $ 94,143     $ 170,587  
  

 

 

    

 

 

    

 

 

    

 

 

  

Depreciation and amortization

         

National media

    $ 3,789     $ 4,330     $ 7,776     $ 8,848  

Local media

      7,886       8,865       15,824       17,855  

Unallocated corporate

      783       354       1,408       742  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total depreciation and amortization

    $ 12,458     $ 13,549     $ 25,008     $ 27,445  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA 1

         

National media

    $ 16,036     $ 51,087     $ 48,279     $ 79,716  

Local media

      58,401       85,680       107,281       145,292  

Unallocated corporate

      (24,634 )      (13,393 )      (36,409 )      (26,976 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total EBITDA 1

    $ 49,803     $ 123,374     $ 119,151     $ 198,032  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

1  EBITDA is net earnings before interest, taxes, depreciation, and amortization.

 

8

Meredith Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

Assets

    December 31,
2017		     June 30,
2017		  
(In thousands)             

Current assets

     

Cash and cash equivalents

    $ 34,976     $ 22,287  

Accounts receivable, net

      297,388       289,052  

Inventories

      21,410       21,890  

Current portion of subscription acquisition costs

      141,155       144,896  

Current portion of broadcast rights

      16,453       7,853  

Other current assets

      31,531       19,275  
  

 

 

    

 

 

  

Total current assets

      542,913       505,253  
  

 

 

    

 

 

  

Property, plant, and equipment

      555,265       549,536  

Less accumulated depreciation

      (354,395 )      (359,670 ) 
  

 

 

    

 

 

  

Net property, plant, and equipment

      200,870       189,866  

Subscription acquisition costs

      77,384       79,740  

Broadcast rights

      23,397       21,807  

Other assets

      69,056       69,616  

Intangible assets, net

      926,809       955,883  

Goodwill

      907,558       907,458  
  

 

 

    

 

 

  

Total assets

    $ 2,747,987     $ 2,729,623  
  

 

 

    

 

 

  

Liabilities and Shareholders’ Equity

     

Current liabilities

     

Current portion of long-term debt

    $ 65,625     $ 62,500  

Current portion of long-term broadcast rights payable

      16,847       9,206  

Accounts payable

      83,919       66,598  

Accrued expenses and other liabilities

      105,087       116,907  

Current portion of unearned subscription revenues

      202,249       204,459  
  

 

 

    

 

 

  

Total current liabilities

      473,727       459,670  

Long-term debt

      631,552       635,737  

Long-term broadcast rights payable

      24,623       22,454  

Unearned subscription revenues

      107,901       106,506  

Deferred income taxes

      263,242       384,726  

Other noncurrent liabilities

      100,104       124,558  
  

 

 

    

 

 

  

Total liabilities

      1,601,149       1,733,651  
  

 

 

    

 

 

  

Shareholders’ equity

     

Common stock

      39,625       39,433  

Class B stock

      5,109       5,119  

Additional paid-in capital

      58,926       54,726  

Retained earnings

      1,060,614       915,703  

Accumulated other comprehensive loss

      (17,436 )      (19,009 ) 
  

 

 

    

 

 

  

Total shareholders’ equity

      1,146,838       995,972  
  

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 2,747,987     $ 2,729,623  
  

 

 

    

 

 

  

 

9

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

Six months ended December 31,

    2017     2016  
(In thousands)             

Net cash provided by operating activities

    $ 101,572     $ 117,281  
  

 

 

    

 

 

  

Cash flows from investing activities

     

Acquisitions of and investments in businesses

      (3,000 )      (11,819 ) 

Additions to property, plant, and equipment

      (28,809 )      (10,949 ) 

Proceeds from disposition of assets, net of cash sold

      2,193       —    
  

 

 

    

 

 

  

Net cash used in investing activities

      (29,616 )      (22,768 ) 
  

 

 

    

 

 

  

Cash flows from financing activities

     

Proceeds from issuance of long-term debt

      60,000       270,000  

Repayments of long-term debt

      (61,250 )      (288,125 ) 

Dividends paid

      (47,196 )      (44,823 ) 

Purchases of Company stock

      (24,532 )      (26,453 ) 

Proceeds from common stock issued

      17,812       16,988  

Payment of acquisition related contingent consideration

      (4,000 )      (4,000 ) 

Excess tax benefits from share-based payments

      —         2,883  

Other

      (101 )      (1,465 ) 
  

 

 

    

 

 

  

Net cash used in financing activities

      (59,267 )      (74,995 ) 
  

 

 

    

 

 

  

Net increase in cash and cash equivalents

      12,689       19,518  

Cash and cash equivalents at beginning of period

      22,287       24,970  
  

 

 

    

 

 

  

Cash and cash equivalents at end of period

    $ 34,976     $ 44,488  
  

 

 

    

 

 

  

 

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Table 1

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures

Special Items - The following tables show results of operations as reported under accounting principles generally accepted in the United States of America (GAAP) and excluding the special items. Results of operations excluding the special items are non-GAAP measures. Management’s rationale for presenting non-GAAP measures is included in the text of this earnings release.

 

Three months ended December 31, 2017

    National
Media		     Local
Media		      Unallocated
Corporate		     Total  
(In thousands except per share data)                          

Operating profit

    $ 12,247     $ 50,515      $ (25,417 )    $ 37,345  

Special items

          

Transaction costs

      —         —          12,059       12,059  

Write-down of impaired assets

      19,765       —          —         19,765  

Severance and related benefit costs

      2,956       —          —         2,956  

Reversal of previously accrued restructuring costs

      (242 )      —          —         (242 ) 

Other

      125       —          —         125  
  

 

 

    

 

 

     

 

 

    

 

 

  

Total special items

      22,604       —          12,059       34,663  
  

 

 

    

 

 

     

 

 

    

 

 

  

Operating profit excluding special items (non-GAAP)

    $ 34,851     $ 50,515      $ (13,358 )    $ 72,008  
  

 

 

    

 

 

     

 

 

    

 

 

  

Diluted earnings per share

 

   $ 3.49  

Per share impact of special items

 

Per share impact of remeasurement of deferred tax assets and liabilities

 

     (2.92 ) 

Per share impact of special items of $34,663 ($25,802 after tax)

 

     0.57  
 

 

 

  

Total per share impact of special items

 

     (2.35 ) 
 

 

 

  

Earnings per share excluding special items (non-GAAP)

 

   $ 1.14  
 

 

 

  

 

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Six months ended December 31, 2017

    National
Media		     Local
Media		      Unallocated
Corporate		     Total  
(In thousands except per share data)                          

Operating profit

    $ 40,503     $ 91,457      $ (37,817 )    $ 94,143  

Special items

          

Transaction costs

      —         —          12,059       12,059  

Write-down of impaired assets

      19,765       —          —         19,765  

Severance and related benefit costs

      2,956       —          —         2,956  

Gain on sale of Family Circle Cup Tennis Center

      (3,282 )      —          —         (3,282 ) 

Reversal of previously accrued restructuring costs

      (242 )      —          —         (242 ) 

Other

      125       —          —         125  
  

 

 

    

 

 

     

 

 

    

 

 

  

Total special items

      19,322       —          12,059       31,381  
  

 

 

    

 

 

     

 

 

    

 

 

  

Operating profit excluding special items (non-GAAP)

    $ 59,825     $ 91,457      $ (25,758 )    $ 125,524  
  

 

 

    

 

 

     

 

 

    

 

 

  

Diluted earnings per share

           $ 4.23  

Per share impact of special items

          

Per share impact of remeasurement of deferred tax assets and liabilities

             (2.92 ) 

Per share impact of special items of $31,381 ($23,784 after tax)

             0.52  
         

 

 

  

Total per share impact of special items

             (2.40 ) 
         

 

 

  

Earnings per share excluding special items (non-GAAP)

           $ 1.83  
         

 

 

  

 

12

Table 2

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures

Special Items - The following tables show results of operations as reported under (GAAP) and excluding the special items. Results of operations excluding special items are non-GAAP measures. Management’s rationale for presenting non-GAAP measures is included in the text of this earnings release.

 

13

Three months ended December 31, 2016

    National
Media		     Local
Media		      Unallocated
Corporate		     Total  
(In thousands except per share data)                          

Operating profit

    $ 46,757     $ 76,815      $ (13,747 )    $ 109,825  

Special items

          

Write-down of contingent consideration payable

      (19,580 )      —          —         (19,580 ) 

Severance and related benefit costs

      6,695       445        438       7,578  

Write-down of impaired assets

      —         1,678        —         1,678  

Other

      397       —          —         397  
  

 

 

    

 

 

     

 

 

    

 

 

  

Total special items

      (12,488 )      2,123        438       (9,927 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

Operating profit excluding special items (non-GAAP)

    $ 34,269     $ 78,938      $ (13,309 )    $ 99,898  
  

 

 

    

 

 

     

 

 

    

 

 

  

Diluted earnings per share

           $ 1.58  

Per share impact of special items

          

Per share impact of the resolution of certain federal and state tax matters

             (0.15 ) 

Per share impact of special items of $9,927 ($6,105 after tax)

             (0.13 ) 
         

 

 

  

Total per share impact of special items

             (0.28 ) 
         

 

 

  

Earnings per share excluding special items (non-GAAP)

           $ 1.30  
         

 

 

  

Six Months Ended December 31, 2016

    National
Media		     Local
Media		      Unallocated
Corporate		     Total  
(In thousands except per share data)                          

Operating profit

    $ 70,868     $ 127,437      $ (27,718 )    $ 170,587  

Special items

          

Write-down of contingent consideration payable

      (19,580 )      —          —         (19,580 ) 

Severance and related benefit costs

      6,695       445        438       7,578  

Write-down of impaired assets

      —         1,678        —         1,678  

Other

      397       —          —         397  
  

 

 

    

 

 

     

 

 

    

 

 

  

Total special items

      (12,488 )      2,123        438       (9,927 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

Operating profit excluding special items (non-GAAP)

    $ 58,380     $ 129,560      $ (27,280 )    $ 160,660  
  

 

 

    

 

 

     

 

 

    

 

 

  

Diluted earnings per share

           $ 2.33  

Per share impact of special items

          

Per share impact of the resolution of certain federal and state tax matters

             (0.15 ) 

Per share impact of special items of $9,927 ($6,105 after tax)

             (0.13 ) 
         

 

 

  

Total per share impact of special items

             (0.28 ) 
         

 

 

  

Earnings per share excluding special items (non-GAAP)

           $ 2.05  
         

 

 

  

 

14

Table 3

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures

EBITDA

Consolidated EBITDA, which is reconciled to net earnings in the following table, 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.

Adjusted EBITDA

Consolidated adjusted EBITDA, which is reconciled to net earnings in the following table, is defined as net earnings before interest, taxes, depreciation, amortization, and special items.

Segment adjusted EBITDA is a measure of segment earnings before depreciation, amortization, and special items.

Segment adjusted EBITDA margin is defined as segment adjusted EBITDA divided by segment revenues.

 

Three months ended December 31, 2017

    National
Media		     Local
Media		     Unallocated
Corporate		     Total  
(In thousands)                         

Revenues

    $ 247,441     $ 170,257     $ —       $ 417,698  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

 

   $ 159,308  

Net interest expense

 

     5,171  

Income tax benefit

 

     (127,134 ) 
 

 

 

  

Operating profit

    $ 12,247     $ 50,515     $ (25,417 )      37,345  

Depreciation and amortization

      3,789       7,886       783       12,458  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

      16,036       58,401       (24,634 )      49,803  
  

 

 

    

 

 

    

 

 

    

 

 

  

Special items

         

Transaction costs

      —         —         12,059       12,059  

Write-down of impaired assets

      19,765       —         —         19,765  

Severance and related benefit costs

      2,956       —         —         2,956  

Reversal of previously accrued restructuring costs

      (242 )      —         —         (242 ) 

Other

      125       —         —         125  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total special items

      22,604       —         12,059       34,663  
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 38,640     $ 58,401     $ (12,575 )    $ 84,466  
  

 

 

    

 

 

    

 

 

    

 

 

  

Segment EBITDA margin

      6.5 %      34.3 %     
  

 

 

    

 

 

      

Segment adjusted EBITDA margin

      15.6 %      34.3 %     
  

 

 

    

 

 

      

 

15

Six Months Ended December 31, 2017

    National
Media		     Local
Media		     Unallocated
Corporate		     Total  
(In thousands)                         

Revenues

    $ 486,401     $ 324,068     $ —       $ 810,469  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

 

   $ 192,749  

Net interest expense

 

     10,249  

Income tax benefit

 

     (108,855 ) 
 

 

 

  

Operating profit

    $ 40,503     $ 91,457     $ (37,817 )      94,143  

Depreciation and amortization

      7,776       15,824       1,408       25,008  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

      48,279       107,281       (36,409 )      119,151  
  

 

 

    

 

 

    

 

 

    

 

 

  

Special items

         

Transaction costs

      —         —         12,059       12,059  

Write-down of impaired assets

      19,765       —         —         19,765  

Severance and related benefit costs

      2,956       —         —         2,956  

Gain on sale of Family Circle Cup Tennis Center

      (3,282 )      —         —         (3,282 ) 

Reversal of previously accrued restructuring costs

      (242 )      —         —         (242 ) 

Other

      125       —         —         125  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total special items

      19,322       —         12,059       31,381  
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 67,601     $ 107,281     $ (24,350 )    $ 150,532  
  

 

 

    

 

 

    

 

 

    

 

 

  

Segment EBITDA margin

      9.9 %      33.1 %     
  

 

 

    

 

 

      

Segment adjusted EBITDA margin

      13.9 %      33.1 %     
  

 

 

    

 

 

      

 

16

Table 4

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures

EBITDA

Consolidated EBITDA, which is reconciled to net earnings in the following table, 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, 2016

    National
Media		     Local
Media		     Unallocated
Corporate		     Total  
(In thousands)                         

Revenues

    $ 259,345     $ 183,297     $ —       $ 442,642  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

 

   $ 71,805  

Net interest expense

 

     4,679  

Income taxes

 

     33,341  
 

 

 

  

Operating profit

    $ 46,757     $ 76,815     $ (13,747 )      109,825  

Depreciation and amortization

      4,330       8,865       354       13,549  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

    $ 51,087     $ 85,680     $ (13,393 )    $ 123,374  
  

 

 

    

 

 

    

 

 

    

 

 

  

Special items

         

Write-down of contingent consideration payable

      (19,580 )      —         —         (19,580 ) 

Severance and related benefit costs

      6,695       445       438       7,578  

Write-down of impaired assets

      —         1,678       —         1,678  

Other

      397       —         —         397  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total special items

      (12,488 )      2,123       438       (9,927 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 38,599     $ 87,803     $ (12,955 )    $ 113,447  
  

 

 

    

 

 

    

 

 

    

 

 

  

Segment EBITDA margin

      19.7 %      46.7 %     
  

 

 

    

 

 

      

Segment adjusted EBITDA margin

      14.9 %      47.9 %     
  

 

 

    

 

 

      

 

17

Six Months Ended December 31, 2016

    National
Media		     Local
Media		     Unallocated
Corporate		     Total  
(In thousands)                         

Revenues

    $ 506,638     $ 335,883     $ —       $ 842,521  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

 

   $ 105,778  

Net interest expense

 

     9,428  

Income taxes

 

     55,381  
 

 

 

  

Operating profit

    $ 70,868     $ 127,437     $ (27,718 )      170,587  

Depreciation and amortization

      8,848       17,855       742       27,445  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

      79,716       145,292       (26,976 )      198,032  
  

 

 

    

 

 

    

 

 

    

 

 

  

Special items

         

Write-down of contingent consideration payable

      (19,580 )      —         —         (19,580 ) 

Severance and related benefit costs

      6,695       445       438       7,578  

Write-down of impaired assets

      —         1,678       —         1,678  

Other

      397       —         —         397  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total special items

      (12,488 )      2,123       438       (9,927 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 67,228     $ 147,415     $ (26,538 )    $ 188,105  
  

 

 

    

 

 

    

 

 

    

 

 

  

Segment EBITDA margin

      15.7 %      43.3 %     
  

 

 

    

 

 

      

Segment adjusted EBITDA margin

      13.3 %      43.9 %     
  

 

 

    

 

 

      

 

18