UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 8-K |
CURRENT REPORT |
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported): January 27, 2016 |
MEREDITH CORPORATION | ||
(Exact name of registrant as specified in its charter) | ||
Iowa | 1-5128 | 42-0410230 |
(State or other jurisdiction of incorporation or organization) | (Commission file number) | (I.R.S. Employer Identification No.) |
1716 Locust Street, Des Moines, Iowa | 50309-3023 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code: (515) 284-3000 | ||
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits | ||
99 | Conference call script of conversation with analysts on January 27, 2016, concerning news release of the same date which reported earnings for the second fiscal quarter and six months ended December 31, 2015. |
SIGNATURE | |||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
MEREDITH CORPORATION | ||
Registrant | ||
/s/ Joseph Ceryanec | ||
Joseph Ceryanec | ||
Vice President - Chief Financial Officer | ||
(Principal Financial and Accounting Officer) | ||
Date: January 27, 2016 |
Exhibit Number | Item | ||
99 | Conference call script of conversation with analysts on January 27, 2016, concerning news release of the same date which reported earnings for the second fiscal quarter and six months ended December 31, 2015. |
• | $60 million in cash, which is in our bank account; and |
• | An opportunity to negotiate for the purchase of certain broadcast and digital assets currently owned by Media General. |
• | We operate a highly successful television station group most importantly in large and growing markets, and are poised to capitalize on the upcoming political cycle. |
• | Our digital business is posting double-digit growth and possesses a wide range of monetization opportunities. |
• | And our diversified national media group includes brands with large followings serving over 100 million unduplicated consumers monthly; a growing high-margin brand licensing operation; and, of course, a prominent marketing services agency. |
• | Earnings per share were $0.80 compared to $1.00 in the prior-year period, both excluding special items. As a reminder, our results reflect the absence of about $0.39 per share of political advertising revenues - as expected in an off-election year. |
• | We grew operating profit in our National Media Group by nearly 30 percent on 10 percent higher revenues. Our performance was led by over 15 percent growth in ad revenue, including the additions of the Shape and Martha Stewart media properties, along with higher brand licensing related revenues. |
• | Non-political advertising revenue in our Local Media Group grew nearly 10 percent to a record $104 million. Growth was driven by the addition of television stations WALA and WGGB; along with strong performance from existing stations KCTV in Kansas City, WGCL in Atlanta, and WFSB in Hartford. Retransmission consent fees were also higher. |
• | Total Company digital advertising revenues grew more than 15 percent to a record high, driven by both recent additions and organic growth. In our National Media Group, digital advertising accounted for about a third of total National Media Group advertising revenues. |
• | We strengthened many of our existing media brands and launched some new ones. In our National Media Group, this included rate base expansions for Allrecipes and EatingWell; redesigns of Family Circle and Wood; and the premieres of Eat This!Not That! and Parents Latina. |
• | In our Local Media Group, we completed the integration of four great television stations, adding more than 30 percent to total Local Media Group revenue. Our station additions also created new duopolies in Phoenix and Springfield - meaningfully strengthening our competitive position. We also improved and expanded local news in these markets, particularly in St. Louis and Mobile. |
• | We acquired the Shape brand, the leader in the women’s active lifestyle category. We merged Fitness into Shape to create a category-killer, and increased our digital traffic by 50 percent. |
• | We also acquired the rights to operate Martha Stewart’s media properties, including Martha Stewart Living and mathastewart.com. These actions increased our share of U.S. magazine advertising revenues by 150 basis points. |
• | We acquired leading ad technology platform Selectable Media. Its powerful native and engagement-based advertising products provide us with more premium digital advertising inventory, and they are driving CPM growth across our digital business. |
• | We established a leadership position in digital shopper marketing with our acquisition of Qponix. This technology shows shoppers - particularly those using their mobile phones - where they can buy recipe ingredients right near them, including ingredients on sale. This addition immediately began generating incremental ad revenues for our food portfolio. |
• | In our Local Media Group, we continued to enhance our digital and mobile destinations, increasing monthly unique visitors by more than 12 percent in calendar 2015. We also launched a new ad tech platform allowing us to sell digital advertising across the entire station group. In its first six months, this change has doubled the amount of revenue we’re delivering locally from programmatic advertising. |
• | Our Local Media Group delivered significant growth in retransmission revenue, and is well-positioned for increased profit contribution as we enter calendar 2016. |
• | Brand Licensing delivered excellent performance, driven by strong sales of products at Walmart stores across the country. We expanded the Better Homes and Gardens real estate network through our relationship with Realogy and added promising new licensing relationships for our Shape, Allrecipes and EatingWell brands. For the second consecutive year, in calendar 2015, License!Global magazine ranked Meredith as the third-largest brand licensor in the world. |
• | Meredith Xcelerated Marketing delivered growth in operating profit as the digital marketing agency leveraged its content marketing capabilities on behalf of clients in the automotive, casual dining, consumer packaged goods, managed healthcare, and retail industries. |
• | First, Bellisio Foods will create a line of healthy frozen food entrées under our EatingWell brand that will be in national retailers in fall of 2016. |
• | Second, Apparel Bridge will create a line of women’s clothing under our Shape brand that combines performance with fashion and comfort. The collection has already been picked up by Kohls.com, DicksSportingGoods.com, Equinox gyms and several specialty stores, with more retail placements to come. |
• | We’re excited about the strength of our existing licensing programs and the growth potential for new ones. |
• | An annual dividend of $1.83 per share that’s yielding almost 5 percent. We’ve paid dividends for 68 consecutive years and have increased them for 22 years straight. |
• | An ongoing share repurchase program with $94 million remaining under current authorizations. |
• | Strategic investments to scale the business and increase shareholder value. |
• | Total Company revenues are expected to be up mid-single digits. |
• | Total National Media Group revenues are expected to be up slightly. |
• | Total Local Media Group revenues are expected to be up low-double digits. |
• | We expect fiscal 2016 third quarter earnings per share to range from $0.77 to $0.82, compared to $0.56 in the prior-year period (or $0.71 excluding special items). |
• | First, growing our existing businesses organically and rapidly expanding our digital and video capabilities. |
• | Second, continuing to pursue opportunities to add to our business portfolios. |
• | Third, increasing revenues from businesses not dependent on traditional advertising. |
• | Fourth, aggressively managing our costs; and |
• | Finally, as we’ve mentioned a couple of times this morning, continuing to execute our Total Shareholder Return Strategy, as highlighted by (1) our ongoing dividend increases and corresponding very attractive yield; (2) our share repurchases; and (3) seeking accretive acquisitions to grow our already strong free cash flow over time. |
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