PR Newswire
DES MOINES, Iowa, July 27, 2017
DES MOINES, Iowa, July 27, 2017 /PRNewswire/ -- Meredith Corporation (NYSE:MDP; meredith.com) — the leading media and marketing company with local television brands in large, fast-growing markets and national brands serving more than 110 million American women every month — reported today record fiscal 2017 full year and fourth quarter results.
"We delivered record revenue and profit in fiscal 2017 as we continue to aggressively execute our multi-platform growth strategies, including rapid expansion of our highly profitable digital activities," said Meredith Chairman and CEO Stephen M. Lacy. "Additionally, we delivered strong cash flow and higher profit margins. This enabled us to continue successful execution of our Total Shareholder Return (TSR) strategy."
Fiscal 2017 financial highlights, compared to the prior year, included:
"We expanded our audience across media platforms and launched new products to strengthen our competitive position with Millennial consumers and advertisers wanting to reach them," said Meredith President and COO Tom Harty. "We continued to deliver double-digit gains in digital advertising revenue, which offset print declines on a comparable basis. Additionally, we generated a record $63 million of political advertising revenues and increased net retransmission contribution."
Fiscal 2017 fourth quarter earnings per share were $0.95, compared to a loss of $2.03 per share in the prior-year period. Excluding special items in both periods, earnings per share were $1.07, compared to $1.08 in the prior-year period. Fourth quarter fiscal 2017 total Company revenues increased to $445 million.
FISCAL 2017 FULL-YEAR REVIEW
Meredith continued to aggressively execute a series of well-defined strategic initiatives in fiscal 2017 to generate growth in revenue and operating profit, and increase shareholder value over time. These included:
OPERATING GROUP DETAIL
LOCAL MEDIA GROUP
Meredith's Local Media Group includes 17 television stations reaching 11 percent of households. Meredith's portfolio is concentrated in large, fast-growing markets, including seven stations in the nation's Top 25 markets and 13 in the Top 50. Meredith's stations produce 700 hours of highly profitable local news and entertainment content each week. Meredith expects to continue to grow its Local Media Group organically and through strategic acquisitions.
Fiscal 2017 Local Media Group operating profit grew 36 percent to $215 million and EBITDA increased 27 percent to $250 million, compared to the prior year. Revenues increased 15 percent to $630 million. All represented record highs. (See Tables 1-5 for supplemental disclosures regarding non-GAAP financial measures.)
Looking more closely at fiscal 2017 performance compared to the prior year:
Turning to ratings, Meredith delivered strong performance during the May rating period. Meredith stations in 10 of its 12 markets ranked No. 1 or No. 2 in morning or late news, and Meredith stations in six of its markets were No. 1 or No. 2 from sign-on to sign-off.
Fiscal 2017 fourth quarter Local Media Group operating profit grew 9 percent to $46 million and EBITDA grew 6 percent to $55 million, compared to the prior-year period. Revenues increased 8 percent to $152 million.
NATIONAL MEDIA GROUP
Meredith's National Media Group reaches more than 110 million unduplicated American women every month, including more than 70 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 food, home, parenting and lifestyle. It also features robust brand licensing activities and innovative business-to-business marketing solutions provided by Meredith Xcelerated Marketing. Meredith expects to continue to grow its National Media Group organically and through strategic acquisitions.
Fiscal 2017 National Media Group operating profit was $147 million, compared to a loss of $18 million in the prior year. Excluding special items in both years, operating profit was $142 million, compared to $150 million. Revenues were $1.1 billion. (See Tables 1-5 for supplemental disclosures regarding non-GAAP financial measures.)
Looking more closely at fiscal 2017 performance compared to the prior year:
Fiscal 2017 fourth quarter National Media Group operating profit was $34 million, compared to a loss of $109 million in the prior-year period. Excluding special items in both periods, fiscal 2017 fourth quarter operating profit was $43 million compared to $52 million. Total revenues were $293 million and advertising revenues were $135 million.
OTHER FINANCIAL INFORMATION
Cash flow from operations was $219 million. Total debt was $698 million and the weighted average interest rate was 2.8 percent, with $350 million effectively fixed at low rates. Meredith's debt-to-EBITDA ratio for the trailing 12 months was 1.9 to 1 (as defined in Meredith's credit agreements). All metrics are as of June 30, 2017.
Meredith continues to focus on its successful TSR strategy. Key elements include:
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 2017 full year and fourth-quarter comparisons are against the comparable prior-year period unless otherwise stated.
OUTLOOK
Meredith expects full year fiscal 2018 earnings per share to range from $3.20 to $3.50. Meredith will be cycling against a record $63 million (or $0.85 per share) in political advertising revenues recorded by its Local Media Group in fiscal 2017.
Looking more closely at the first quarter of fiscal 2018 compared to the prior-year quarter, Meredith expects:
CONFERENCE CALL WEBCAST
Meredith will host a conference call on July 27, 2017, at 8:30 a.m. EDT to discuss fiscal 2017 and fourth quarter results. A live webcast will be accessible to the public on the Company's website, meredith.com, and a replay will be available for two weeks. A transcript will be available within 48 hours of the call at meredith.com.
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 includes certain contractual and non-discretionary expenditures. Adjusted EBITDA is defined as EBITDA before 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 non-GAAP to 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 Company's revenue and earnings-per-share outlook for first quarter and full-year fiscal 2018.
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; and the consequences of acquisitions and/or dispositions. 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 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.
Meredith's Local Media Group includes 17 television stations reaching 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 — including Atlanta, Phoenix, St. Louis and Portland — and 13 in Top 50 markets. Meredith's stations produce 700 hours of local news and entertainment content each week, and operate leading local digital destinations.
Meredith's National Media Group reaches more than 110 million unduplicated women every month, including more than 70 percent of U.S. Millennial women. Meredith is the leader in creating and distributing content across platforms in key consumer interest areas such as food, home, parenting and lifestyle through well-known brands such as Better Homes & Gardens, Allrecipes, Parents and Shape. 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. Meredith Xcelerated Marketing is an award-winning, strategic and creative agency that provides fully integrated marketing solutions for many of the world's top brands, including The Kraft Heinz Co., Benjamin Moore, Allergan, TGIFridays and WebMD.
Meredith Corporation and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Earnings (Unaudited) | |||||||||||||||
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| Three Months | | Twelve Months | ||||||||||||
Periods ended June 30, | 2017 | | 2016 | | 2017 | | 2016 | ||||||||
(In thousands except per share data) | | | | | | | | ||||||||
Revenues | | | | | | | | ||||||||
Advertising | $ | 230,388 | | | $ | 231,559 | | | $ | 934,153 | | | $ | 914,202 | |
Circulation | 90,164 | | | 93,454 | | | 321,959 | | | 328,599 | | ||||
All other | 124,868 | | | 110,765 | | | 457,249 | | | 406,827 | | ||||
Total revenues | 445,420 | | | 435,778 | | | 1,713,361 | | | 1,649,628 | | ||||
Operating expenses | | | | | | | | ||||||||
Production, distribution, and editorial | 154,224 | | | 150,890 | | | 602,985 | | | 611,872 | | ||||
Selling, general, and administrative | 203,372 | | | 195,507 | | | 741,188 | | | 730,074 | | ||||
Depreciation and amortization | 13,143 | | | 14,473 | | | 53,892 | | | 59,152 | | ||||
Impairment of goodwill and other long-lived assets | 6,173 | | | 161,462 | | | 6,173 | | | 161,462 | | ||||
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