DES MOINES, Iowa, July 30 IA-Meredith-earnings
DES MOINES, Iowa, July 30 /PRNewswire-FirstCall/ -- Meredith Corporation
(NYSE: MDP), the leading media and marketing company serving American women,
today reported fiscal 2008 earnings per share of $2.83, including a special
charge of $0.34. Excluding the special charge, Meredith's earnings per share
were $3.17, in-line with prior company estimates. Fiscal 2007 earnings per
share were $3.31. Revenues in fiscal 2008 and fiscal 2007 were $1.6 billion.
Fourth quarter fiscal 2008 earnings per share were $0.41. Excluding the
special charge, earnings per share were $0.76. Fiscal 2007 fourth-quarter
earnings per share were $1.05. Fiscal 2008 fourth-quarter revenues were $385
million, compared to $428 million in the prior-year quarter.
Meredith recorded an after-tax special charge of $16 million in the
fourth fiscal quarter, related primarily to the further repositioning of its
book publishing business and selected reductions in force. Additional
information on the special charge is available in Tables 1 and 2, and in
Meredith's press release dated June 5, 2008.
After strong performance in the first half of fiscal 2008, the economic
slowdown impacted Meredith's full-year performance, most notably in the fourth
quarter. Meredith experienced lower advertising demand; a soft retail
marketplace resulting in weaker sales and higher-than-expected returns in its
book operation; and higher input costs, particularly for paper.
"We believe current economic trends are cyclical in nature and not
structural as they pertain to our industry or Meredith in particular," said
Stephen M. Lacy, Meredith's President and CEO, citing recently released data
detailing audience measurement gains for the magazine and television
industries. "We possess great brands, sound growth strategies, strong
management and a committed and talented workforce. I'm confident we will
emerge from this cycle in an even stronger and more competitive position."
Meredith is executing a three-pronged performance improvement plan to
address the current environment. Meredith's strategies include:
1. Special sales incentives and new marketing programs to maximize market
share in its core publishing and broadcasting businesses;
2. Aggressive expense management, including tight control of labor and
vendor costs; and
3. Revenue diversification initiatives to accelerate growth of new revenue
streams, many of which are not dependent on traditional advertising.
For example, in fiscal 2008 Meredith:
- Acquired two leading-edge companies -- Big Communications and
Directive -- that further expand the capabilities of Meredith
Integrated Marketing. Big Communications is a leader in business-
to-business healthcare marketing. Directive possesses expertise in
the sought-after field of database marketing.
- Expanded its brand licensing activities through an agreement with
Wal-Mart for a line of more than 500 home products that will be
available in Wal-Mart stores across the country beginning this fall.
Meredith also entered into a licensing agreement with Realogy for a
nationwide real estate franchise system that launched this month,
and expanded its successful licensing agreement with Universal
Furniture. All three programs leverage the tremendous power and
versatility of the Better Homes and Gardens brand.
- Invested in new tools and platforms across its 40+ Web sites,
including the launch of the Parents.com super-portal.
- Broadened the reach of Meredith Video Solutions -- its in-house
video creation unit -- by distributing the Better daily lifestyle
television show. Meredith also created a Parents-branded video on
demand channel for Comcast and launched Parents.tv, a broadband
video channel.
- Renegotiated several retransmission agreements for Meredith
television stations, increasing fees 50 percent over the prior year.
Additionally, Meredith returned capital to shareholders in fiscal 2008 by
repurchasing 3.2 million shares, nearly triple the amount repurchased in
fiscal 2007. Meredith also increased its quarterly dividend rate by 16
percent -- its 15th consecutive annual dividend increase.
OPERATING DETAIL
Publishing
Fiscal 2008 Publishing operating profit was $190 million. Excluding the
special charge, operating profit was $215 million. Fiscal 2007 operating
profit was $216 million. Total revenues were $1.3 billion and advertising
revenues were $641 million, both comparable with the prior fiscal year.
Fourth quarter operating profit was $26 million. Excluding the special
charge, operating profit was $50 million. Fiscal 2007 operating profit was
$70 million. Total revenues were $306 million and advertising revenues were
$153 million, compared to $345 million and $178 million, respectively, in
fiscal 2007.
While overall fiscal 2008 Publishing advertising performance was
comparable to the prior fiscal year, there was a marked contrast between the
first half, when Meredith posted strong 11 percent growth, and weaker results
in the second half, particularly in the fourth quarter.
This shift was attributed to the challenging economic environment faced by
companies that operate in Meredith's largest advertising categories - food,
prescription and non-prescription drugs, and home. Combined, advertising
pages in these categories declined more than 20 percent, accounting for about
75 percent of total fourth-quarter advertising page declines.
"These categories are staples of the American economy, and have
consistently outpaced advertising industry growth rates," Lacy said, noting
the 15 percent overall gain for Meredith in the food category in fiscal 2008.
"We're confident they will serve us well in the long-term. In addition, we
increased net advertising revenue per page in fiscal 2008, due to a very
detailed and aggressive pricing strategy."
Meredith's growing consumer connection was confirmed in the Spring 2008
Mediamark Research and Intelligence report, which is heavily used by
advertisers. Meredith titles increased their total audience by more than 4
percent. And eight of the 10 Meredith magazines measured gained total
audience, including Better Homes and Gardens, Ladies' Home Journal and
Parents.
Meredith's circulation profit contribution and related margin in its
subscription activities increased in both fiscal 2008 and the fourth quarter,
reflecting the strength of Meredith's consumer appeal. Circulation revenues
declined, as expected, due primarily to the ongoing transition of Parents,
Family Circle and Fitness magazines away from third-party sources to
Meredith's more profitable direct-to-publisher model.
Meredith Integrated Marketing delivered another outstanding year as
operating profit rose almost 75 percent to $30 million and revenues rose
nearly 50 percent to $156 million. Results included increased contributions
from three acquisitions in the last two years: Genex, New Media Strategies and
Directive. On a comparable basis, Meredith Integrated Marketing revenues rose
25 percent and operating profit rose 30 percent, due to continued growth in
custom publishing activities and strong performance from online agency O'Grady
Myers, acquired in April 2006.
Publishing's retail book operations experienced softer retail sales and
higher-than-expected returns during fiscal 2008. Meredith has taken a number
of actions to reposition its book operations, including focusing on titles
with the Better Homes and Gardens imprint and certain other licensed brands.
These steps are expected to improve financial performance going forward.
Broadcasting
Fiscal 2008 Broadcasting operating profit was $78 million. Excluding the
special charge, operating profit was $79 million. Fiscal 2007 operating
profit was $107 million, which included $33 million in net political
advertising revenues. EBITDA was $105 million, compared to $131 million in
fiscal 2007. Revenues were $319 million, compared to $348 million in fiscal
2007.
For the fourth quarter, operating profit was $18 million. Excluding the
special charge, operating profit was $19 million. Fiscal 2007 operating profit
was $28 million. EBITDA was $26 million, compared to $34 million in fiscal
2007. Revenues were $79 million, compared to $84 million in fiscal 2007.
In the first half of the fiscal year, non-political advertising revenues
increased 4 percent, driven by growth in online advertising and the categories
of professional services and telecommunications. In the second half, a
decline in automotive advertising, along with weaker performance in retail and
movies, led to a decline in non-political advertising revenues.
"In fiscal 2008 we increased our emphasis on developing non-traditional
sources of revenues such as unique sales initiatives, our station Web sites,
retransmission fees and our video creation business," Lacy said.
For example, Broadcasting online and video-related revenues increased more
than 80 percent in fiscal 2008. Average unique visitors increased more than
300 percent and page views doubled. More than 1.3 million videos were
streamed each month during the year.
Meredith Video Solutions is growing rapidly. The Better show, which
features content inspired by Meredith's publishing brands, will be carried in
more than 35 markets beginning this fall. Additionally, Comcast video on
demand customers downloaded more than 600,000 Parents TV videos in fiscal
2008.
OTHER FINANCIAL INFORMATION
Meredith generated more than $150 million in free cash flow during fiscal
2008, including nearly $20 million in the fourth quarter. Meredith
repurchased approximately 3.2 million shares in fiscal 2008, nearly triple the
1.1 million shares repurchased in fiscal 2007. Meredith has 2.7 million
shares remaining under current share repurchase authorizations.
Meredith increased its quarterly dividend rate 16 percent to 21-1/2 cents
per share in January. Meredith has paid a dividend for 61 consecutive years
and has increased its dividend for 15 consecutive years.
Despite significant increases in paper and postage costs and the special
charge, Meredith limited its increase in expenses to just 1 percent in fiscal
2008, reflecting disciplined expense management. Unallocated corporate
expenses decreased during the year, primarily due to lower employee benefit
costs and management incentives accruals.
Total debt was $485 million and the weighted average interest rate was
approximately 4.7 percent as of June 30, 2008. Meredith's debt-to-EBITDA ratio
is a conservative 1.5-to-1.
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
consolidated statements of earnings.
OUTLOOK
Many of Meredith's largest advertisers continue to face a challenging
economic environment and the resulting advertising weakness -- along with
increased paper costs -- will impact the company's performance at least
through the first half of fiscal 2009.
Currently, fiscal 2009 first-quarter Publishing advertising revenues are
down in the high-teens compared to the first quarter of fiscal 2008, when
Meredith posted 11 percent growth in Publishing advertising revenues.
Broadcasting advertising pacings are currently down in the mid-teens.
Meredith expects approximately $20 to $25 million in political advertising
revenues at its television stations in fiscal 2009, with the majority coming
in the second fiscal quarter.
Meredith expects fiscal 2009 paper prices will average approximately 25
percent higher than fiscal 2008. Meredith expects its average tax rate will
be approximately 43.5 percent in the first quarter, and 39.5 percent for full
fiscal 2009.
Currently, Meredith expects full-year fiscal 2009 earnings per share to be
in the $2.50 to $3.00 range, and first quarter earnings per share to be in the
$0.40 to $0.45 range.
A number of uncertainties remain that may affect Meredith's outlook as
stated in this press release for fiscal 2009 and the first quarter. These
include overall advertising volatility; the amount of political advertising
revenues generated at its broadcast television stations, particularly in the
first and second quarters; the performance of Meredith's retail businesses;
and paper prices and postal rates. These and other uncertainties are
referenced below under "Safe Harbor" and in certain SEC filings.
CONFERENCE CALL WEBCAST
Meredith will host a conference call on July 30, 2008, at 11 a.m. EDT (10
a.m. CDT) to discuss fiscal 2008 results. A live webcast will be accessible
to the public on http://www.meredith.com, and a replay will be available for
one week after the call. A transcript will be available within 48 hours
following the call on http://www.meredith.com.
RATIONALE FOR USE AND ACCESS TO NON-GAAP MEASURES
Management uses and presents GAAP and non-GAAP results to evaluate and
communicate Meredith's performance. Non-GAAP measures should not be construed
as alternatives to GAAP measures. EBITDA and free cash flow are common
supplemental measures of performance used by investors and financial analysts.
Management believes that EBITDA and free cash flow provide additional
analytical tools to clarify Meredith's results from core operations and
delineate underlying trends. Meredith does not use EBITDA or free cash flow as
a measure of liquidity or funds available for management's discretionary use
as they include certain contractual and non-discretionary expenditures.
Results excluding the special charge recorded in the fourth quarter of
fiscal 2008 are also supplemental non-GAAP financial measures. Management
believes the special charge is not reflective of Meredith's ongoing business
activities. While results excluding the special charge are not a substitute
for reported earnings results under GAAP, management believes this information
is useful as an aid in better understanding Meredith's current performance,
performance trends and financial condition. Reconciliations of non-GAAP to
GAAP measures are included in the attached tables. The attached consolidated
financial statements and reconciliation tables will be made available at
http://www.meredith.com.
SAFE HARBOR
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 Meredith's operations. Statements
in this announcement that are forward-looking include, but are not limited to,
the statements regarding broadcasting pacings and publishing advertising
revenues, along with Meredith's earnings per share outlook. 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; the integration of acquired
businesses; changes in consumer reading, purchasing and/or television viewing
patterns; increases in paper, postage, printing or syndicated programming
costs; changes in television network affiliation agreements; technological
developments affecting products or methods of distribution; changes in
government regulations affecting Meredith's industries; unexpected changes in
interest rates; and the consequences of acquisitions and/or dispositions.
Meredith 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: http://www.meredith.com) is the leading
media and marketing company serving American women. Meredith combines well-
known national brands -- including Better Homes and Gardens, Parents, Ladies'
Home Journal, Family Circle, American Baby, Fitness and More -- with local
television brands in fast growing markets. Meredith is the industry leader in
creating content in key consumer interest areas such as home, family, health
and wellness and self-development. Meredith then uses multiple distribution
platforms -- including print, television, online, mobile and video -- to give
consumers content they desire and to deliver the messages of its marketing
partners. Additionally, Meredith uses its many assets to create powerful
custom marketing solutions for many of the nation's top brands and companies.
The goals of these programs are to increase consumer loyalty and produce
repeated consumer interaction. In the last two years, Meredith has
significantly added to its capabilities in this area through the acquisition
of cutting-edge companies in areas such as online, word-of-mouth and database
marketing. Meredith employs approximately 3,500 people throughout the United
States. Meredith's 2008 annual revenues were $1.6 billion.
Shareholder/Financial Analyst Contact: Media Contact:
Mike Lovell Art Slusark
Director of Investor Relations VP/Corporate Communications
Phone: (515) 284.3622Phone: (515) 284.3404
E-mail: Mike.Lovell@Meredith.com E-mail: Art.Slusark@Meredith.com
Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
Three MonthsTwelve Months
Period Ended June 30, 2008 2007 2008 2007
(In thousands except per share
data)
Revenues
Advertising $227,522 $259,260 $951,325 $981,953
Circulation73,29981,707313,616335,706
All other 84,37287,503321,590298,326
Total revenues 385,193 428,470 1,586,531 1,615,985
Operating expenses
Production, distribution, and
editorial176,601 170,555688,868663,345
Selling, general, and
administrative 157,993 159,001606,987619,361
Depreciation and amortization 13,17211,681 49,171 45,030
Total operating expenses347,766 341,237 1,345,026 1,327,736
Income from operations 37,42787,233241,505288,249
Interest income 192 414 1,090 1,586
Interest expense (5,106) (5,849) (22,390) (27,182)
Earnings from continuing
operations before income taxes 32,51381,798220,205262,653
Income taxes 13,50532,148 86,100 93,823
Earnings from continuing
operations 19,00849,650134,105168,830
Income (loss) from discontinued
operations, net of taxes 151 1,864567 (6,484)
Net earnings $19,159 $51,514 $134,672 $162,346
Basic earnings per share
Earnings from continuing
operations $0.42 $1.03 $2.86 $3.51
Discontinued operations -0.04 0.01 (0.13)
Basic earnings per share$0.42 $1.07 $2.87 $3.38
Basic average shares outstanding 45,95748,120 46,928 48,048
Diluted earnings per share
Earnings from continuing
operations $0.41 $1.01 $2.82 $3.44
Discontinued operations -0.04 0.01 (0.13)
Diluted earnings per share $0.41 $1.05 $2.83 $3.31
Diluted average shares
outstanding 46,17749,259 47,585 49,108
Dividends paid per share $0.215$0.185 $0.800 $0.690
Meredith Corporation and Subsidiaries
Segment Information (Unaudited)
Three Months Twelve Months
Period Ended June 30,2008 2007 20082007
(In thousands)
Revenues
Publishing $306,322 $344,718 $1,267,926 $1,268,153
Broadcasting
Non-political advertising 73,24681,230 304,922 309,350
Political advertising 1,507 292 5,447 33,216
Other revenues 4,118 2,230 8,236 5,266
Total broadcasting 78,87183,752 318,605 347,832
Total revenues $385,193 $428,470 $1,586,531 $1,615,985
Operating profit
Publishing $25,557 $69,724$190,194$216,356
Broadcasting 18,03027,762 77,860 106,804
Unallocated corporate(6,160) (10,253)(26,549)(34,911)
Income from operations $37,427 $87,233$241,505$288,249
Depreciation and amortization
Publishing $4,794$4,845 $20,391 $18,714
Broadcasting 7,686 6,153 26,655 24,171
Unallocated corporate 692 683 2,125 2,145
Total depreciation and
amortization $13,172 $11,681 $49,171 $45,030
EBITDA(1)
Publishing $30,351 $74,569$210,585$235,070
Broadcasting 25,71633,915 104,515 130,975
Unallocated corporate(5,468) (9,570)(24,424)(32,766)
Total EBITDA(1) $50,599 $98,914$290,676$333,279
(1) EBITDA is earnings from continuing operations before interest, taxes,
depreciation, and amortization.
Meredith Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
June 30, June 30,
Assets 2008 2007
(In thousands)
Current assets
Cash and cash equivalents $37,644 $39,220
Accounts receivable, net 230,978 267,419
Inventories 44,08548,836
Current portion of subscription acquisition
costs 59,93970,553
Current portion of broadcast rights 10,77911,307
Other current assets19,66515,305
Total current assets 403,090 452,640
Property, plant, and equipment 446,935 445,846
Less accumulated depreciation (247,147) (239,820)
Net property, plant, and equipment 199,788 206,026
Subscription acquisition costs 60,95866,309
Broadcast rights 7,826 9,309
Other assets74,472 101,178
Intangibles assets, net781,154 794,996
Goodwill 532,332 459,493
Total assets$2,059,620$2,089,951
Liabilities and Shareholders' Equity
Current liabilities
Current portion of long-term debt $75,000 $100,000
Current portion of long-term broadcast rights
payable11,14112,069
Accounts payable79,02878,156
Accrued expenses and other liabilities 124,600 105,359
Current portion of unearned subscription
revenues 175,261 191,445
Total current liabilities 465,030 487,029
Long-term debt 410,000 375,000
Long-term broadcast rights payable 17,18618,584
Unearned subscription revenues 157,872 167,873
Deferred income taxes 139,598 166,597
Other noncurrent liabilities82,07941,667
Total liabilities1,271,765 1,256,750
Shareholders' equity
Common stock36,29538,970
Class B stock9,181 9,262
Additional paid-in capital 52,69354,842
Retained earnings 701,205 727,628
Accumulated other comprehensive income (loss) (11,519)2,499
Total shareholders' equity 787,855 833,201
Total liabilities and shareholders' equity $2,059,620$2,089,951
Meredith Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Twelve Months Ended June 30,2008 2007
(In thousands)
Net cash provided by operating activities $255,964 $210,522
Cash flows from investing activities
Acquisitions of businesses (73,645) (30,303)
Additions to property, plant, and equipment (29,620) (42,599)
Proceeds from disposition of assets7,855 7,658
Net cash used in investing activities (95,410) (65,244)
Cash flows from financing activities
Proceeds from issuance of long-term debt 335,000 190,000
Repayments of long-term debt(325,000) (280,000)
Purchases of Company stock (150,377) (58,710)
Proceeds from common stock issued 14,26541,673
Dividends paid (37,344) (33,248)
Excess tax benefits from share-based
payments 1,475 3,514
Other (149)-
Net cash used in financing activities (162,130) (136,771)
Net increase (decrease) in cash and cash
equivalents(1,576)8,507
Cash and cash equivalents at beginning of
year 39,22030,713
Cash and cash equivalents at end of year $37,644 $39,220
Meredith Corporation and Subsidiaries Table 1
Supplemental Disclosures Regarding Non-GAAP Financial Measures
Special Charge - During the fourth quarter of fiscal 2008, Meredith
recorded a special charge which relates primarily to further focusing the
scope of its book operations. The special charge included adjusting
certain book royalties, art and editorial, and inventory accounts, as
well as severance for eliminated positions in book and elsewhere in the
Company. Please see Meredith's press release dated June 5, 2008, for
additional information relating to the special charge.
The following table shows results of operations excluding the special
charge and as reported with the difference being the special charge.
Results of operations excluding the special charge are non-GAAP measures.
Management's rationale for presenting non-GAAP measures is included in
the text of this earnings release.
Period Ended June 30, 2008 Three Months
Excluding
Special Special
Charge Charge As Reported
(In thousands except per share data)
Revenues
Advertising$227,522 $- $227,522
Circulation 73,299 -73,299
All other93,051 (8,679)(a)84,372
Total revenues393,872 (8,679) 385,193
Operating expenses
Production, distribution, and editorial 172,115 4,486 (b) 176,601
Selling, general, and administrative144,727 13,266 (c) 157,993
Depreciation and amortization13,172 -13,172
Total operating expenses 330,014 17,752 347,766
Income from operations 63,858(26,431) 37,427
Interest income 192 - 192
Interest expense (5,106) -(5,106)
Earnings from continuing operations
before income taxes 58,944(26,431) 32,513
Income taxes 23,839(10,334) 13,505
Earnings from continuing operations35,105(16,097) 19,008
Income from discontinued operations,
net of taxes 151 - 151
Net earnings$35,256 $(16,097) $19,159
Basic earnings per share
Earnings from continuing operations $0.77 $(0.35)$0.42
Discontinued operations - - -
Basic earnings per share $0.77 $(0.35)$0.42
Basic average shares outstanding 45,957 45,95745,957
Diluted earnings per share
Earnings from continuing operations $0.76 $(0.35)$0.41
Discontinued operations - - -
Diluted earnings per share$0.76 $(0.35)$0.41
Diluted average shares outstanding 46,177 46,17746,177
Period Ended June 30, 2008Twelve Months
Excluding
SpecialSpecial
Charge ChargeAs Reported
(In thousands except per share data)
Revenues
Advertising $951,325$- $951,325
Circulation 313,616 - 313,616
All other 330,269(8,679)(a) 321,590
Total revenues1,595,210(8,679)1,586,531
Operating expenses
Production, distribution, and editorial 684,382 4,486 (b) 688,868
Selling, general, and administrative 593,72113,266 (c) 606,987
Depreciation and amortization 49,171 -49,171
Total operating expenses 1,327,27417,752 1,345,026
Income from operations267,936 (26,431) 241,505
Interest income 1,090 - 1,090
Interest expense (22,390)- (22,390)
Earnings from continuing operations
before income taxes246,636 (26,431) 220,205
Income taxes 96,434 (10,334) 86,100
Earnings from continuing operations 150,202 (16,097) 134,105
Income from discontinued operations,
net of taxes 567 - 567
Net earnings $150,769 $(16,097) $134,672
Basic earnings per share
Earnings from continuing operations $3.20$(0.34)$2.86
Discontinued operations 0.01 -0.01
Basic earnings per share$3.21$(0.34)$2.87
Basic average shares outstanding 46,92846,92846,928
Diluted earnings per share
Earnings from continuing operations $3.16$(0.34)$2.82
Discontinued operations 0.01 -0.01
Diluted earnings per share $3.17$(0.34)$2.83
Diluted average shares outstanding 47,58547,58547,585
Notes
(a) Increase in book sales return allowance
(b) Write-down of book inventory and editorial prepaid expenses
(c) Severance expense, write-down of book royalty, and bad debt reserve
for Home Interiors Group receivable
Meredith Corporation and Subsidiaries Table 2
Segment Information (Unaudited)
The following table shows results of operations excluding the special
charge and as reported with the difference being the special charge.
Results of operations excluding the special charge are non-GAAP
measures. Management's rationale for presenting non-GAAP measures is
included in the text of this earnings release.
Period Ended June 30, 2008 Three Months
Excluding
SpecialSpecial
Charge Charge As Reported
(In thousands)
Revenues
Publishing $315,001$(8,679)(a) $306,322
Broadcasting
Non-political advertising 73,246 -73,246
Political advertising 1,507 - 1,507
Other revenues 4,118 - 4,118
Total broadcasting 78,871 -78,871
Total revenues $393,872$(8,679) $385,193
Operating profit
Publishing $50,424 $(24,867)(b) $25,557
Broadcasting 19,449 (1,419)(c)18,030
Unallocated corporate(6,015) (145)(d)(6,160)
Income from operations $63,858 $(26,431) $37,427
Depreciation and amortization
Publishing $4,794 $-$4,794
Broadcasting 7,686 - 7,686
Unallocated corporate 692 - 692
Total depreciation and amortization $13,172 $- $13,172
EBITDA(1)
Publishing $55,218 $(24,867)(b) $30,351
Broadcasting 27,135 (1,419)(c)25,716
Unallocated corporate(5,323) (145)(d)(5,468)
Total EBITDA(1) $77,030 $(26,431) $50,599
Period Ended June 30, 2008 Twelve Months
Excluding
SpecialSpecial
Charge Charge As Reported
(In thousands)
Revenues
Publishing$1,276,605 $(8,679)(a) $1,267,926
Broadcasting
Non-political advertising 304,922-304,922
Political advertising 5,447- 5,447
Other revenues 8,236- 8,236
Total broadcasting 318,605-318,605
Total revenues$1,595,210 $(8,679)$1,586,531
Operating profit
Publishing $215,061 $(24,867)(b) $190,194
Broadcasting 79,279 (1,419)(c) 77,860
Unallocated corporate(26,404)(145)(d)(26,549)
Income from operations $267,936 $(26,431) $241,505
Depreciation and amortization
Publishing $20,391 $-$20,391
Broadcasting 26,655- 26,655
Unallocated corporate 2,125- 2,125
Total depreciation and amortization $49,171 $-$49,171
EBITDA(1)
Publishing $235,452 $(24,867)(b) $210,585
Broadcasting 105,934 (1,419)(c)104,515
Unallocated corporate(24,279)(145)(d)(24,424)
Total EBITDA(1) $317,107 $(26,431) $290,676
(1) EBITDA is earnings from continuing operations before interest,
taxes, depreciation, and amortization.
Notes
(a) Increase in book sales return allowance
(b) Increase in book sales return allowance; write-down of book
inventory, book royalty, and editorial prepaid expense; bad debt
reserve for Home Interiors Group receivable, and severance
expense for Publishing operations
(c) Severance expense for Broadcasting operations
(d) Severance expense for Corporate personnel
Meredith Corporation and Subsidiaries Table 3
Supplemental Disclosures Regarding Non-GAAP Financial Measures
EBITDA
Consolidated EBITDA, which is reconciled to earnings from continuing
operations in the following tables, is defined as earnings from continuing
operations 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 June 30, 2008
Unallocated
Publishing Broadcasting Corporate Total
(In thousands)
Revenues $306,322$78,871$- $385,193
Operating profit $25,557$18,030 $(6,160) $37,427
Depreciation and amortization 4,794 7,686 692 13,172
EBITDA$30,351$25,716 $(5,468)50,599
Less:
Depreciation and amortization (13,172)
Net interest expense (4,914)
Income taxes (13,505)
Earnings from continuing operations $19,008
Segment EBITDA margin9.9% 32.6%
Twelve Months Ended June 30, 2008
Unallocated
Publishing Broadcasting Corporate Total
(In thousands)
Revenues $1,267,926$318,605$- $1,586,531
Operating profit$190,194 $77,860 $(26,549) $241,505
Depreciation and amortization 20,391 26,655 2,125 49,171
EBITDA $210,585$104,515 $(24,424) 290,676
Less:
Depreciation and amortization (49,171)
Net interest expense (21,300)
Income taxes (86,100)
Earnings from continuing
operations $134,105
Segment EBITDA margin 16.6% 32.8%
Three Months Ended June 30, 2007
Unallocated
Publishing Broadcasting Corporate Total
(In thousands)
Revenues$344,718 $83,752$- $428,470
Operating profit $69,724 $27,762 $(10,253) $87,233
Depreciation and amortization 4,845 6,153 683 11,681
EBITDA $74,569 $33,915 $(9,570)98,914
Less:
Depreciation and amortization (11,681)
Net interest expense (5,435)
Income taxes (32,148)
Earnings from continuing operations $49,650
Segment EBITDA margin 21.6% 40.5%
Twelve Months Ended June 30, 2007
Unallocated
Publishing Broadcasting CorporateTotal
(In thousands)
Revenues $1,268,153$347,832$- $1,615,985
Operating profit$216,356$106,804 $(34,911) $288,249
Depreciation and
amortization 18,714 24,171 2,145 45,030
EBITDA $235,070$130,975 $(32,766) 333,279
Less:
Depreciation and
amortization (45,030)
Net interest expense (25,596)
Income taxes (93,823)
Earnings from continuing
operations $168,830
Segment EBITDA margin 18.5% 37.7%
Table 4
FREE CASH FLOW
Free cash flow, which is reconciled to earnings from continuing operations
in the following tables, is defined as earnings from continuing operations
plus depreciation and amortization less capital expenditures.
Three Months Twelve Months
Period Ended June 30, 2008 2007 2008 2007
(In thousands)
Free cash flow $17,972 $47,746 $153,656 $171,261
Depreciation and amortization(13,172) (11,681) (49,171) (45,030)
Capital expenditures 14,208 13,58529,62042,599
Earnings from continuing operations $19,008 $49,650 $134,105 $168,830
SOURCE Meredith Corporation
