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): May 10, 2019 |
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 | ||
Former name or former address, if changed since last report: Not applicable |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common Stock, par value $1 | MDP | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits | ||
News release issued by Meredith Corporation dated May 10, 2019, reporting financial results for the third fiscal quarter and nine months ended March 31, 2019. |
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 | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) | ||
Date: May 10, 2019 |
• | Total Company revenues from continuing operations grew 14 percent to $743 million. |
• | Total advertising related and consumer related revenues rose in the double-digits. |
• | Earnings from continuing operations, which includes special items in both periods, were $28 million, compared to a loss of $95 million. Meredith recorded $15 million of net after-tax special items in the third quarter of fiscal 2019, primarily related to restructuring and integration costs. Results in the prior-year period reflected $128 million of net after-tax special items, primarily comprised of restructuring, transaction, and financing costs related to its acquisition of Time Inc. Earnings per share from continuing operations were $0.20 compared to a loss per share of $2.41. |
• | Excluding special items in both periods, earnings from continuing operations increased 29 percent to $43 million compared to $33 million, and earnings per share increased to $0.52 from $0.45. (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.) |
• | Adjusted EBITDA grew 43 percent to $160 million compared to $112 million. Adjusted earnings per share increased to $1.52 from $1.11. (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.) |
• | Delivering 17 percent growth in National Media Group advertising related revenues. On a comparable basis, advertising related revenues were down in the mid-single digits year-over-year, compared to down in the low double-digits year-over-year in the second quarter of fiscal 2019. This performance is in-line with Meredith’s historical and expected performance and was driven by brands in both the legacy Meredith and Time Inc. portfolios. |
• | Growing Local Media Group non-political advertising spot revenues by 6 percent. This was driven primarily by Meredith’s television stations in the Atlanta, Kansas City, Phoenix and Las Vegas markets. |
• | Increasing revenues from consumer related sources by 28 percent. This was driven by strong newsstand and affinity marketing performance in Meredith’s National Media Group, along with favorable renewal of retransmission consent agreements in Meredith’s Local Media Group. |
• | Total Company revenues from continuing operations rose 63 percent to $2.4 billion. |
• | Total advertising related revenues rose 67 percent to $1.3 billion, and consumer related revenues rose more than 75 percent to $1.0 billion. |
• | Earnings from continuing operations, including special items in both periods, were $131 million compared to $97 million. Earnings per share from continuing operations were $1.59 compared to $1.85. Meredith recorded a net after-tax charge of $32 million related to special items in the first nine months of fiscal 2019. The prior year results reflected a net after-tax charge of $20 million related to special items. |
• | Excluding special items in both periods, earnings from continuing operations increased 40 percent to $163 million compared to $117 million, and earnings per share from continuing operations were $2.31 compared to $2.28. |
• | Adjusted EBITDA more than doubled to $533 million compared to $262 million. Adjusted earnings per share increased to $5.43 compared to $3.34. |
• | Improving the advertising performance of the acquired Time Inc. properties to Meredith’s historical levels. Meredith has implemented its proven strategies, standards and discipline across the legacy Time Inc. portfolio to improve performance, including aligning it with Meredith’s successful sales structure. As a result, Meredith met its advertising performance goal in the third quarter of fiscal 2019, and anticipates further improvement in comparable year-over-year advertising revenue in the fourth quarter of fiscal 2019. |
• | Aggressively growing revenue and raising the profit margins of the acquired Time Inc. digital properties. Meredith is leveraging the increased scale of its combined digital portfolio to enhance sales initiatives. Meredith is now well-positioned to benefit from fast-growing advertising platforms, including native, video, shopper marketing, programmatic and social. During the third quarter of fiscal 2019, Meredith’s comparable year-over-year digital advertising revenue increased, and Meredith anticipates further year-over-year improvement in the fourth quarter of fiscal 2019. |
• | Accelerating the growth of high-margin consumer related revenues by leveraging its expanded brand portfolio. This includes cross-promoting brands to increase revenue and lower subscription acquisition costs; leveraging affinity marketer Synapse; continuing to grow Meredith’s brand licensing business; and expanding e-commerce activities. Meredith recently announced its participation in Apple News+, a new subscription service that brings together more than 300 popular magazines, leading newspapers and digital publishers into a beautiful, convenient and curated experience. During the third quarter of fiscal 2019, consumer related revenues accounted for nearly 50 percent of total National Media Group revenues. |
• | Divesting media assets not core to Meredith’s business. Meredith has realized proceeds of $340 million in fiscal 2019 from the sale of non-core assets. Meredith anticipates agreements to sell the Sports Illustrated brand and its 60 percent equity investment in Viant to be finalized in the near future. These brands and businesses have different target audiences and advertising bases than the rest of the portfolio, and Meredith believes each is better suited for success with a new owner. |
• | Delivering at least $550 million of annualized cost synergies by the end of fiscal 2020. Meredith has realized approximately $320 million of annualized cost synergies related to its acquisition of Time Inc. through March 31, 2019. It expects an incremental $60 million in its fiscal 2019 fourth quarter, and an additional $170 million in its fiscal 2020. |
• | Total advertising related revenues grew 4 percent to $101 million, as growth in non-political advertising revenue and the addition of MNI Targeted Media offset expected declines in every-other-year political advertising revenues. |
• | Non-political advertising spot revenues grew 6 percent to $80 million. This was driven primarily by strong performance from Meredith’s CBS affiliated television stations, which benefited from the broadcast of the Super Bowl during the third quarter of fiscal 2019. Meredith delivered growth in seven of the top 10 advertising categories, with performance led by the professional services, media and furnishings categories. |
• | Consumer related revenues increased nearly 20 percent to $85 million due to growth in retransmission fees from cable and satellite television operators. These increases were partially offset by higher payments to affiliated networks. |
• | Aggressive debt paydown and management of liabilities – Long-term debt was $2.5 billion at March 31, 2019. Meredith has repaid $700 million of its debt through March 31, 2019, including $573 million of its 7-year Senior Secured Term Loan and $127 million of its senior unsecured notes. |
• | Return of capital to shareholders through consistent and ongoing dividend increases – Meredith raised its regular dividend by 5.5 percent to $2.30 on an annualized basis in February 2019. This marked the 26th straight year of dividend increases for Meredith and the 72nd consecutive year of dividend payments. Since launching its Total Shareholder Return strategy in October 2011, Meredith has increased its dividend 125 percent and delivered an average annual return of 17 percent. |
• | Share repurchases – Meredith’s ongoing share repurchase program has $50 million remaining under current authorizations as of March 31, 2019. |
• | Total Company revenues to range from $3.12 billion to $3.16 billion, compared to its original range of $3.0 billion to $3.2 billion first communicated on August 10, 2018. |
• | National Media Group revenues to range from $2.26 billion to $2.29 billion. |
• | Local Media Group revenues to range from $860 million to $870 million. |
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 |
Three Months | Nine Months | ||||||||||||||
Periods ended March 31, | 2019 | 2018 | 2019 | 2018 | |||||||||||
(In millions except per share data) | |||||||||||||||
Revenues | |||||||||||||||
Advertising related | $ | 365.6 | $ | 324.4 | $ | 1,277.2 | $ | 765.4 | |||||||
Consumer related | 359.0 | 281.4 | 1,024.5 | 582.7 | |||||||||||
Other | 18.8 | 45.2 | 79.4 | 113.4 | |||||||||||
Total revenues | 743.4 | 651.0 | 2,381.1 | 1,461.5 | |||||||||||
Operating expenses | |||||||||||||||
Production, distribution, and editorial | 284.4 | 250.4 | 873.4 | 566.5 | |||||||||||
Selling, general, and administrative | 305.8 | 294.6 | 995.3 | 639.7 | |||||||||||
Acquisition, disposition, and restructuring related activities | 16.8 | 138.8 | 61.6 | 150.4 | |||||||||||
Depreciation and amortization | 61.5 | 40.0 | 190.3 | 65.0 | |||||||||||
Impairment of long-lived assets | — | — | — | 19.8 | |||||||||||
Total operating expenses | 668.5 | 723.8 | 2,120.6 | 1,441.4 | |||||||||||
Income (loss) from operations | 74.9 | (72.8 | ) | 260.5 | 20.1 | ||||||||||
Non-operating income (expense), net | 4.1 | (7.2 | ) | 17.3 | (5.9 | ) | |||||||||
Interest expense, net | (38.4 | ) | (45.6 | ) | (130.4 | ) | (55.9 | ) | |||||||
Earnings (loss) from continuing operations before income taxes | 40.6 | (125.6 | ) | 147.4 | (41.7 | ) | |||||||||
Income tax benefit (expense) | (12.5 | ) | 30.1 | (16.3 | ) | 139.0 | |||||||||
Earnings (loss) from continuing operations | 28.1 | (95.5 | ) | 131.1 | 97.3 | ||||||||||
Loss from discontinued operations, net of income taxes | (4.4 | ) | (14.7 | ) | (71.8 | ) | (14.7 | ) | |||||||
Net earnings (loss) | $ | 23.7 | $ | (110.2 | ) | $ | 59.3 | $ | 82.6 | ||||||
Basic earnings (loss) per share attributable to common shareholders | |||||||||||||||
Continuing operations | $ | 0.20 | $ | (2.41 | ) | $ | 1.60 | $ | 1.86 | ||||||
Discontinued operations | (0.10 | ) | (0.33 | ) | (1.59 | ) | (0.32 | ) | |||||||
Basic earnings (loss) per common share | $ | 0.10 | $ | (2.74 | ) | $ | 0.01 | $ | 1.54 | ||||||
Basic average common shares outstanding | 45.3 | 45.0 | 45.3 | 44.9 | |||||||||||
Diluted earnings (loss) per share attributable to common shareholders | |||||||||||||||
Continuing operations | $ | 0.20 | $ | (2.41 | ) | $ | 1.59 | $ | 1.85 | ||||||
Discontinued operations | (0.10 | ) | (0.33 | ) | (1.58 | ) | (0.32 | ) | |||||||
Diluted earnings (loss) per common share | $ | 0.10 | $ | (2.74 | ) | $ | 0.01 | $ | 1.53 | ||||||
Diluted average common shares outstanding | 45.6 | 45.0 | 45.4 | 45.5 | |||||||||||
Dividends paid per common share | $ | 0.575 | $ | 0.545 | $ | 1.665 | $ | 1.585 |
Three Months | Nine Months | ||||||||||||||
Periods ended March 31, | 2019 | 2018 | 2019 | 2018 | |||||||||||
(In millions) | |||||||||||||||
Revenues | |||||||||||||||
National media | |||||||||||||||
Print | $ | 164.5 | $ | 151.9 | $ | 512.1 | $ | 306.8 | |||||||
Digital | 87.0 | 67.6 | 293.6 | 158.5 | |||||||||||
Third party sales | 13.4 | 7.8 | 46.6 | 7.8 | |||||||||||
Total advertising related | 264.9 | 227.3 | 852.3 | 473.1 | |||||||||||
Subscription | 177.2 | 137.4 | 503.5 | 261.2 | |||||||||||
Newsstand | 43.4 | 32.4 | 125.7 | 50.2 | |||||||||||
Affinity marketing | 24.1 | 15.4 | 70.1 | 15.4 | |||||||||||
Licensing | 19.6 | 20.0 | 66.3 | 43.4 | |||||||||||
Digital consumer driven | 10.0 | 5.3 | 26.8 | 15.3 | |||||||||||
Total consumer related | 274.3 | 210.5 | 792.4 | 385.5 | |||||||||||
Project based | 10.6 | 33.1 | 33.5 | 94.7 | |||||||||||
Other | 5.8 | 10.7 | 39.1 | 14.7 | |||||||||||
Total other | 16.4 | 43.8 | 72.6 | 109.4 | |||||||||||
Total national media | 555.6 | 481.6 | 1,717.3 | 968.0 | |||||||||||
Local media | |||||||||||||||
Non-political spot | 79.9 | 75.4 | 242.4 | 254.2 | |||||||||||
Political spot | 0.7 | 2.3 | 102.6 | 5.8 | |||||||||||
Digital | 3.7 | 3.6 | 11.6 | 11.3 | |||||||||||
Third party sales | 17.0 | 16.5 | 69.7 | 21.7 | |||||||||||
Total advertising related | 101.3 | 97.8 | 426.3 | 293.0 | |||||||||||
Consumer related | 84.7 | 70.9 | 232.1 | 197.2 | |||||||||||
Other | 2.4 | 1.4 | 6.8 | 4.0 | |||||||||||
Total local media | 188.4 | 170.1 | 665.2 | 494.2 | |||||||||||
Intersegment revenue elimination | (0.6 | ) | (0.7 | ) | (1.4 | ) | (0.7 | ) | |||||||
Total revenues | $ | 743.4 | $ | 651.0 | $ | 2,381.1 | $ | 1,461.5 |
Three Months | Nine Months | ||||||||||||||
Periods ended March 31, | 2019 | 2018 | 2019 | 2018 | |||||||||||
(In millions) | |||||||||||||||
Operating profit | |||||||||||||||
National media | $ | 53.8 | $ | 4.2 | $ | 116.6 | $ | 43.3 | |||||||
Local media | 41.6 | 38.3 | 215.7 | 128.5 | |||||||||||
Unallocated corporate | (20.5 | ) | (115.3 | ) | (71.8 | ) | (151.7 | ) | |||||||
Income (loss) from operations | $ | 74.9 | $ | (72.8 | ) | $ | 260.5 | $ | 20.1 | ||||||
Depreciation and amortization | |||||||||||||||
National media | $ | 51.3 | $ | 31.4 | $ | 158.7 | $ | 39.2 | |||||||
Local media | 9.4 | 7.8 | 27.7 | 23.6 | |||||||||||
Unallocated corporate | 0.8 | 0.8 | 3.9 | 2.2 | |||||||||||
Total depreciation and amortization | $ | 61.5 | $ | 40.0 | $ | 190.3 | $ | 65.0 | |||||||
Adjusted EBITDA 1 | |||||||||||||||
National media | $ | 120.2 | $ | 74.9 | $ | 338.2 | $ | 142.6 | |||||||
Local media | 52.2 | 47.6 | 245.8 | 154.8 | |||||||||||
Unallocated corporate | (12.4 | ) | (10.8 | ) | (50.7 | ) | (35.1 | ) | |||||||
Total Adjusted EBITDA | $ | 160.0 | $ | 111.7 | $ | 533.3 | $ | 262.3 |
1 | Adjusted EBITDA is earnings before discontinued operations, interest, taxes, depreciation, amortization, and special items. |
Assets | March 31, 2019 | June 30, 2018 | |||||
(In millions) | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 52.5 | $ | 437.6 | |||
Accounts receivable, net | 594.0 | 542.0 | |||||
Inventories | 70.5 | 44.2 | |||||
Current portion of subscription acquisition costs | 216.4 | 144.0 | |||||
Current portion of broadcast rights | 10.8 | 9.8 | |||||
Assets held-for-sale | 362.3 | 725.8 | |||||
Other current assets | 59.3 | 114.3 | |||||
Total current assets | 1,365.8 | 2,017.7 | |||||
Property, plant, and equipment, net | 435.8 | 483.8 | |||||
Subscription acquisition costs | 176.8 | 66.2 | |||||
Broadcast rights | 7.1 | 18.9 | |||||
Other assets | 276.4 | 263.3 | |||||
Intangible assets, net | 1,893.2 | 2,005.2 | |||||
Goodwill | 1,959.2 | 1,915.8 | |||||
Total assets | $ | 6,114.3 | $ | 6,770.9 | |||
Liabilities, Redeemable Convertible Preferred Stock, and Shareholders’ Equity | |||||||
Current liabilities | |||||||
Current portion of long-term debt | $ | — | $ | 17.7 | |||
Current portion of long-term broadcast rights payable | 10.3 | 8.9 | |||||
Accounts payable | 219.7 | 194.7 | |||||
Accrued expenses and other liabilities | 281.5 | 410.2 | |||||
Current portion of unearned revenues | 424.5 | 386.3 | |||||
Liabilities associated with assets held-for-sale | 187.1 | 211.1 | |||||
Total current liabilities | 1,123.1 | 1,228.9 | |||||
Long-term debt | 2,459.4 | 3,117.9 | |||||
Long-term broadcast rights payable | 9.5 | 20.8 | |||||
Unearned revenues | 229.5 | 129.2 | |||||
Deferred income taxes | 518.3 | 437.0 | |||||
Other noncurrent liabilities | 200.8 | 217.0 | |||||
Total liabilities | 4,540.6 | 5,150.8 | |||||
Redeemable convertible Series A preferred stock | 535.7 | 522.6 | |||||
Shareholders’ equity | |||||||
Common stock | 40.1 | 39.8 | |||||
Class B stock | 5.1 | 5.1 | |||||
Additional paid-in capital | 212.6 | 199.5 | |||||
Retained earnings | 817.6 | 889.8 | |||||
Accumulated other comprehensive loss | (37.4 | ) | (36.7 | ) | |||
Total shareholders’ equity | 1,038.0 | 1,097.5 | |||||
Total liabilities, redeemable convertible preferred stock, and shareholders' equity | $ | 6,114.3 | $ | 6,770.9 |
Nine months ended March 31, | 2019 | 2018 | |||||
(In millions) | |||||||
Net cash provided by operating activities | $ | 152.5 | $ | 95.1 | |||
Cash flows from investing activities | |||||||
Acquisitions of and investments in businesses, net of cash acquired | (18.3 | ) | (2,803.4 | ) | |||
Proceeds from disposition of assets, net of cash sold | 348.9 | 134.7 | |||||
Additions to property, plant, and equipment | (28.6 | ) | (41.5 | ) | |||
Other | — | 3.8 | |||||
Net cash provided by (used in) investing activities | 302.0 | (2,706.4 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from issuance of long-term debt | 80.0 | 3,260.0 | |||||
Repayments of long-term debt | (776.9 | ) | (760.6 | ) | |||
Proceeds from preferred stock, warrants, and options issued, net of issuance costs | — | 631.0 | |||||
Dividends paid | (120.9 | ) | (81.8 | ) | |||
Debt issuance costs paid | — | (70.8 | ) | ||||
Purchases of Company stock | (9.1 | ) | (28.2 | ) | |||
Proceeds from common stock issued | 3.9 | 19.0 | |||||
Payment of acquisition related contingent consideration | (19.3 | ) | (3.2 | ) | |||
Net cash provided by (used in) financing activities | (842.3 | ) | 2,965.4 | ||||
Effect of exchange rate changes on cash and cash equivalents | (0.8 | ) | — | ||||
Change in cash held-for-sale | 3.5 | (4.2 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (385.1 | ) | 349.9 | ||||
Cash and cash equivalents at beginning of period | 437.6 | 22.3 | |||||
Cash and cash equivalents at end of period | $ | 52.5 | $ | 372.2 |
Three Months | Nine Months | ||||||||||||||
Periods ended March 31, | 2019 | 2018 | 2019 | 2018 | |||||||||||
(In millions) | |||||||||||||||
Earnings (loss) from continuing operations | $ | 28.1 | $ | (95.5 | ) | $ | 131.1 | $ | 97.3 | ||||||
Special items | |||||||||||||||
Integration costs | 8.8 | — | 34.4 | — | |||||||||||
Write-down of impaired assets | — | — | — | 19.8 | |||||||||||
Transaction costs | — | 40.8 | — | 52.9 | |||||||||||
Severance and related benefit costs | 8.2 | 94.7 | 35.4 | 97.6 | |||||||||||
Gain on sale of business | — | — | (10.4 | ) | (3.3 | ) | |||||||||
Extinguishment loss | — | — | 9.8 | — | |||||||||||
Bridge facility commitment costs | — | 17.5 | — | 17.5 | |||||||||||
Loss on equity method investment | — | 12.9 | — | 12.9 | |||||||||||
Other | 2.5 | 3.9 | 5.8 | 3.8 | |||||||||||
Special items subtotal | 19.5 | 169.8 | 75.0 | 201.2 | |||||||||||
Tax benefit on special items | (5.0 | ) | (41.3 | ) | (19.2 | ) | (48.9 | ) | |||||||
Tax special items | — | — | (23.4 | ) | — | ||||||||||
Tax impact of remeasurement of deferred tax assets and liabilities | — | — | — | (133.0 | ) | ||||||||||
Net special items | 14.5 | 128.5 | 32.4 | 19.3 | |||||||||||
Earnings from continuing operations before special items (non-GAAP) | 42.6 | 33.0 | 163.5 | 116.6 | |||||||||||
Depreciation and amortization | 61.5 | 40.0 | 190.3 | 65.0 | |||||||||||
Tax impact of depreciation and amortization | (15.7 | ) | (10.2 | ) | (48.6 | ) | (16.6 | ) | |||||||
Net depreciation and amortization impact | 45.8 | 29.8 | 141.7 | 48.4 | |||||||||||
Adjusted earnings (non-GAAP) | $ | 88.4 | $ | 62.8 | $ | 305.2 | $ | 165.0 | |||||||
Diluted earnings per share attributable to common shareholders | |||||||||||||||
Continuing operations | $ | 0.20 | $ | (2.41 | ) | $ | 1.59 | $ | 1.85 | ||||||
Per share impact of net special items | 0.32 | 2.86 | 0.72 | 0.43 | |||||||||||
Earnings from continuing operations before special items (non-GAAP) | 0.52 | 0.45 | 2.31 | 2.28 | |||||||||||
Per share impact depreciation and amortization | 1.00 | 0.66 | 3.12 | 1.06 | |||||||||||
Adjusted earnings per share (non-GAAP) | $ | 1.52 | $ | 1.11 | $ | 5.43 | $ | 3.34 |
Three months ended March 31, 2019 | National Media | Local Media | Unallocated Corporate | Total | ||||||||
(In millions) | ||||||||||||
Revenues | $ | 555.6 | $ | 188.4 | ||||||||
Net earnings | $ | 23.7 | ||||||||||
Loss from discontinued operations, net of income taxes | 4.4 | |||||||||||
Earnings from continuing operations | 28.1 | |||||||||||
Income taxes | 12.5 | |||||||||||
Interest expense, net | 38.4 | |||||||||||
Non-operating income, net | (4.1 | ) | ||||||||||
Operating profit | $ | 53.8 | $ | 41.6 | $ | (20.5 | ) | 74.9 | ||||
Special items included in operating profit: | ||||||||||||
Severance and related benefit costs | 6.6 | — | 1.6 | 8.2 | ||||||||
Integration costs | 4.2 | — | 4.6 | 8.8 | ||||||||
Other | (0.1 | ) | — | 2.6 | 2.5 | |||||||
Total special items | 10.7 | — | 8.8 | 19.5 | ||||||||
Operating profit excluding special items (non-GAAP) | 64.5 | 41.6 | (11.7 | ) | 94.4 | |||||||
Non-operating income, net | 4.4 | 1.2 | (1.5 | ) | 4.1 | |||||||
Depreciation and amortization | 51.3 | 9.4 | 0.8 | 61.5 | ||||||||
Adjusted EBITDA (non-GAAP) | $ | 120.2 | $ | 52.2 | $ | (12.4 | ) | $ | 160.0 | |||
Segment operating margin | 9.7 | % | 22.1 | % | ||||||||
Segment adjusted EBITDA margin | 21.6 | % | 27.7 | % |
Three months ended March 31, 2018 | National Media | Local Media | Unallocated Corporate | Total | ||||||||
(In millions) | ||||||||||||
Revenues | $ | 481.6 | $ | 170.1 | ||||||||
Net loss | $ | (110.2 | ) | |||||||||
Loss from discontinued operations, net of income taxes | 14.7 | |||||||||||
Loss from continuing operations | (95.5 | ) | ||||||||||
Income taxes | (30.1 | ) | ||||||||||
Interest expense, net | 45.6 | |||||||||||
Non-operating expense, net | 7.2 | |||||||||||
Operating loss | $ | 4.2 | $ | 38.3 | $ | (115.3 | ) | (72.8 | ) | |||
Special items included in operating loss: | ||||||||||||
Transaction costs | — | — | 40.8 | 40.8 | ||||||||
Severance and related benefit costs | 34.8 | 0.8 | 59.1 | 94.7 | ||||||||
Other | (0.1 | ) | — | 3.4 | 3.3 | |||||||
Total special items | 34.7 | 0.8 | 103.3 | 138.8 | ||||||||
Operating profit excluding special items (non-GAAP) | 38.9 | 39.1 | (12.0 | ) | 66.0 | |||||||
Non-operating expense, net | 4.6 | 0.7 | (12.5 | ) | (7.2 | ) | ||||||
Special item included in non-operating expense - loss on equity method investment | — | — | 12.9 | 12.9 | ||||||||
Depreciation and amortization | 31.4 | 7.8 | 0.8 | 40.0 | ||||||||
Adjusted EBITDA (non-GAAP) | $ | 74.9 | $ | 47.6 | $ | (10.8 | ) | $ | 111.7 | |||
Segment operating margin | 0.9 | % | 22.5 | % | ||||||||
Segment adjusted EBITDA margin | 15.6 | % | 28.0 | % |
Nine months ended March 31, 2019 | National Media | Local Media | Unallocated Corporate | Total | ||||||||
(In millions) | ||||||||||||
Revenues | $ | 1,717.3 | $ | 665.2 | ||||||||
Net earnings | $ | 59.3 | ||||||||||
Loss from discontinued operations, net of income taxes | 71.8 | |||||||||||
Earnings from continuing operations | 131.1 | |||||||||||
Income taxes | 16.3 | |||||||||||
Interest expense, net | 130.4 | |||||||||||
Non-operating income, net | (17.3 | ) | ||||||||||
Operating profit | $ | 116.6 | $ | 215.7 | $ | (71.8 | ) | 260.5 | ||||
Special items included in operating profit: | ||||||||||||
Severance and related benefit costs | 29.1 | 1.7 | 4.6 | 35.4 | ||||||||
Integration costs | 21.2 | — | 13.2 | 34.4 | ||||||||
Gain on sale of business | (6.4 | ) | — | — | (6.4 | ) | ||||||
Other | 4.4 | (0.9 | ) | 2.3 | 5.8 | |||||||
Total special items | 48.3 | 0.8 | 20.1 | 69.2 | ||||||||
Operating profit excluding special items (non-GAAP) | 164.9 | 216.5 | (51.7 | ) | 329.7 | |||||||
Non-operating income, net | 18.6 | 1.6 | (2.9 | ) | 17.3 | |||||||
Special item included in non-operating income - gain on sale of business | (4.0 | ) | — | — | (4.0 | ) | ||||||
Depreciation and amortization | 158.7 | 27.7 | 3.9 | 190.3 | ||||||||
Adjusted EBITDA (non-GAAP) | $ | 338.2 | $ | 245.8 | $ | (50.7 | ) | $ | 533.3 | |||
Segment operating margin | 6.8 | % | 32.4 | % | ||||||||
Segment adjusted EBITDA margin | 19.7 | % | 37.0 | % |
Nine months ended March 31, 2018 | National Media | Local Media | Unallocated Corporate | Total | ||||||||
(In millions) | ||||||||||||
Revenues | $ | 968.0 | $ | 494.2 | ||||||||
Net earnings | $ | 82.6 | ||||||||||
Loss from discontinued operations, net of income taxes | 14.7 | |||||||||||
Earnings from continuing operations | 97.3 | |||||||||||
Income taxes | (139.0 | ) | ||||||||||
Interest expense, net | 55.9 | |||||||||||
Non-operating expense, net | 5.9 | |||||||||||
Operating profit | $ | 43.3 | $ | 128.5 | $ | (151.7 | ) | 20.1 | ||||
Special items included in operating profit: | ||||||||||||
Write-down of impaired assets | 19.8 | — | — | 19.8 | ||||||||
Transaction costs | — | — | 52.9 | 52.9 | ||||||||
Severance and related benefit costs | 37.7 | 0.8 | 59.1 | 97.6 | ||||||||
Gain on sale of business | (3.3 | ) | — | — | (3.3 | ) | ||||||
Other | (0.2 | ) | — | 3.4 | 3.2 | |||||||
Total special items | 54.0 | 0.8 | 115.4 | 170.2 | ||||||||
Operating profit excluding special items (non-GAAP) | 97.3 | 129.3 | (36.3 | ) | 190.3 | |||||||
Non-operating income, net | 6.1 | 1.9 | (13.9 | ) | (5.9 | ) | ||||||
Special item included in non-operating expense - loss on equity method investment | — | — | 12.9 | 12.9 | ||||||||
Depreciation and amortization | 39.2 | 23.6 | 2.2 | 65.0 | ||||||||
Adjusted EBITDA (non-GAAP) | $ | 142.6 | $ | 154.8 | $ | (35.1 | ) | $ | 262.3 | |||
Segment operating margin | 4.5 | % | 26.0 | % | ||||||||
Segment adjusted EBITDA margin | 14.7 | % | 31.3 | % |
Attributable to other instruments 1 | Attributable to common shareholders | Diluted shares | Diluted earnings per share 2 | |||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
Year ending June 30, 2019 - Low Projections | ||||||||||||||||||||
Earnings from continuing operations | $ | 172 | $ | (78 | ) | $ | 94 | 45.5 | $ | 2.07 | ||||||||||
Special items, net of tax 3 | 32 | |||||||||||||||||||
Earnings from continuing operations before special items | 204 | (78 | ) | 126 | 45.5 | 2.78 | ||||||||||||||
Depreciation and amortization, net of tax | 188 | |||||||||||||||||||
Adjusted earnings (non-GAAP) 4 | $ | 392 | (78 | ) | 314 | 45.5 | 6.92 | |||||||||||||
Year ending June 30, 2019 - High Projections | ||||||||||||||||||||
Earnings from continuing operations | $ | 180 | (77 | ) | 103 | 45.8 | 2.25 | |||||||||||||
Special items, net of tax 3 | 32 | |||||||||||||||||||
Earnings from continuing operations before special items | 212 | (77 | ) | 135 | 45.8 | 2.95 | ||||||||||||||
Depreciation and amortization, net of tax | 188 | |||||||||||||||||||
Adjusted earnings (non-GAAP) 4 | $ | 400 | (77 | ) | 323 | 45.8 | 7.07 | |||||||||||||
1 | Includes preferred stock dividends, accretion of redeemable preferred stock, dividends on other securities, and undistributed earnings allocated to other securities to the extent that these instruments are not deemed to be dilutive. | |||||||||||||||||||
2 | Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of these instruments were computed using the two-class method. | |||||||||||||||||||
3 | Special items represent those incurred in the first nine months of fiscal 2019 as shown in Table 1. Actual results may include special items that have not yet occurred and are difficult to predict with reasonable certainty at this time. | |||||||||||||||||||
4 | Adjusted earnings is defined as Earnings from continuing operations before special items, depreciation, and amortization. |
Year ending June 30, 2019 | ||||||||
Low | High | |||||||
(In millions) | ||||||||
Earnings from continuing operations | $ | 172 | $ | 180 | ||||
Special items, net of tax 1 | 32 | 32 | ||||||
Income tax expense | 76 | 78 | ||||||
Interest expense, net | 167 | 167 | ||||||
Depreciation and amortization | 253 | 253 | ||||||
Adjusted EBITDA (non-GAAP) | $ | 700 | $ | 710 | ||||
1 | Special items for the year ending June 30, 2019 represent those incurred in the first nine months of fiscal 2019, as shown in Table 1. Actual results may include special items that have not yet occurred and are difficult to predict with reasonable certainty at this time. |
(In millions) | March 31, 2019 | ||
Long-term debt | $ | 2,459.4 | |
Less: cash and cash equivalents | (52.5 | ) | |
Net debt | $ | 2,406.9 |
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