Meredith Corporation
MEREDITH CORP (Form: 8-K, Received: 04/27/2017 07:36:23)



 
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): April 27 , 2017
IMAGE1A08.JPG
 
 
 
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
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company     £

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £


 





Item 2.02
Results of Operations and Financial Condition
 

On April 27, 2017, Meredith Corporation issued a news release reporting earnings for the third fiscal quarter and nine months ended March 31, 2017. That news release is attached as an exhibit.



Item 9.01
Financial Statements and Exhibits
 

 
(d)
Exhibits
 
 
 
 
 
 
99
News release issued by Meredith Corporation dated April 27, 2017, reporting financial results for the third fiscal quarter and nine months ended March 31, 2017.






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: April 27, 2017
 
 





Exhibit 99
IMAGE3A04.JPG
MEREDITH REPORTS FISCAL 2017 THIRD QUARTER AND NINE MONTH RESULTS
Record Digital Advertising Revenue Across Company Drives Third Quarter Performance
Meredith Expects Fiscal 2017 Earnings Per Share to be Highest in Company History

DES MOINES, IA (April 27, 2017) 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 — today reported fiscal 2017 third quarter and nine month results:

Fiscal 2017 third quarter earnings per share were $0.87, compared to $1.79 in the prior-year quarter which included special items of $0.87 per share primarily related to a merger termination fee received. (See Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

Excluding special items, fiscal 2017 third quarter earnings per share were $0.87, compared to $0.92 in the prior-year quarter when Meredith benefited from $0.05 per share of incremental high-margin political advertising from the Presidential primary season.

Fiscal 2017 third quarter total Company revenues grew to $425 million.

For the first nine months of fiscal 2017, earnings per share were a record $3.20, compared to $2.74 in the prior-year period. Excluding special items in both periods, earnings per share grew 30 percent to a record $2.92, up from $2.24 in the prior-year period.

For the first nine months of fiscal 2017, total Company revenues increased 4 percent to a record $1.3 billion, and total advertising revenues grew 3 percent to $704 million.

“We are pleased that continued strong execution of our multiplatform strategy — including our growing and profitable digital activities — has Meredith on track to deliver record revenue and operating profit for full-year fiscal 2017,” said Meredith Chairman and CEO Stephen M. Lacy. “Importantly, we continue to successfully execute our Total Shareholder Return strategy, including increasing our dividend for the 24th consecutive year.”

Looking at Meredith’s performance in the third quarter of fiscal 2017 compared to the prior-year quarter:

Total Company digital advertising revenues grew nearly 25 percent to a third quarter record. National Media Group digital advertising increased 27 percent and represented nearly 30 percent of its total advertising. Local Media Group digital advertising rose nearly 10 percent. Traffic across Meredith’s digital and mobile sites grew to an average of nearly 90 million unique visitors per month.

National Media Group operating profit grew nearly 20 percent to $41 million, and was up 8 percent excluding special items in the prior-year period. Total revenue increased to $283 million. Advertising revenues were off 1 percent, but increased on a comparable basis as growth in digital advertising more than offset expected print ad declines. Meredith’s National Media brands grew their reach to more than 110 million unduplicated consumers, including more than 70 percent of U.S. Millennial women.

Local Media Group revenues increased to $142 million. Growth in retransmission-related revenues offset the effects of cyclical political advertising revenues and the Super Bowl airing on Fox in February 2017, compared to CBS in 2016. Meredith’s CBS affiliates have a larger reach than its Fox affiliates.
“Meredith continues to fire on all cylinders, generating strong profits while increasing our consumer reach across multiple platforms,” said Meredith President and Chief Operating Officer Tom Harty. “This includes rapid expansion of our digital offerings to consumers and advertisers alike; launching new products such as The Magnolia Journal ; adding newscasts across our television station portfolio; and growing non-advertising sources of revenue such as retransmission fees, brand licensing and e-commerce.”

1



OPERATING GROUP DETAIL

LOCAL MEDIA GROUP

Meredith’s Local Media Group includes 17 owned and operated 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 local news and entertainment content each week. Meredith expects to continue to grow its Local Media Group organically and through strategic acquisitions.

Fiscal 2017 third quarter Local Media Group operating profit was $41 million, and EBITDA was $50 million. Revenues increased to $142 million. ( See Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

For the first nine months of fiscal 2017, Local Media Group operating profit grew 45 percent to $169 million. Excluding special items in both periods, operating profit grew 48 percent to $171 million and EBITDA grew 37 percent to $197 million. Revenues increased 17 percent to $478 million, including $58 million of political advertising. All represent fiscal first nine month records. Operating profit margin was 35 percent and EBITDA margin was 41 percent.

Looking more closely at fiscal 2017 third quarter performance compared to the prior-year quarter:

Non-political advertising revenues were $84 million, compared to $91 million. Results reflect the Super Bowl airing on Fox in February 2017 compared to CBS in the prior year. Meredith has a larger footprint and reach with its CBS affiliates — which include Top 30 markets Atlanta, Phoenix, St. Louis and Hartford — compared to its FOX affiliates.

Digital advertising revenues grew nearly 10 percent, as innovative growth strategies continue to drive stronger performance. Meredith recently relaunched all of the mobile news, weather and traffic apps across its station group, yielding record app opens and unique page views in the quarter.

Other revenues and operating expenses increased due primarily to growth in retransmission revenues from cable and satellite television operators, partially offset by higher programming fees paid to affiliated networks.

Meredith delivered strong ratings performance in the third quarter of fiscal 2017. Eight Meredith stations ranked No. 1 or No. 2 in both morning and late news, and five stations were No. 1 from sign-on to sign-off.

On April 21, 2017, Meredith closed on its acquisition of the broadcast assets of Peachtree TV (WPCH) in Atlanta from Turner Broadcasting System, Inc.  Meredith has assisted in the day-to-day operations of Peachtree TV since 2011, including advertising sales, marketing and promotions, and technical operations.  With WPCH, Meredith creates its fifth owned-and-operated duopoly market, as Meredith also owns WGCL, the CBS affiliate in Atlanta. The acquisition will not have a material effect on Meredith’s fiscal 2017 results. 









2



NATIONAL MEDIA GROUP

Meredith’s National Media Group reaches more than 110 million unduplicated American women, 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 third quarter National Media Group operating profit grew 19 percent to $41 million compared to $35 million, or $38 million excluding special items, in the prior-year quarter. Revenues increased to $283 million. ( See Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at National Media Group fiscal 2017 third quarter performance compared to the prior-year quarter:

Total advertising revenues were $125 million, off 1 percent, but up on a comparable basis, which excludes MORE magazine. Digital advertising revenue rose 27 percent, and accounted for 28 percent of total National Media Group advertising revenues. Growth was led by native, engagement-based video, and programmatic advertising, along with shopper marketing.

Meredith’s share of total magazine advertising revenues increased to 12.1 percent from 11.0 percent, according to the most recent data from Publishers Information Bureau. Martha Stewart Living , Allrecipes and Traditional Home posted strong performance. The direct response, pets and household supplies advertising categories were growth leaders.

Circulation revenues were flat at $96 million, but were up excluding MORE magazine.

Other revenues increased 5 percent to $62 million, driven primarily by e-commerce revenue, along with Meredith Xcelerated Marketing and Brand Licensing.

Expenses declined 2 percent, and were down 1 percent excluding special items in the prior-year quarter, as Meredith continued to pursue operational efficiencies.

Meredith’s National Media Group continues to extend its reach to American consumers and further diversify its revenue streams in fiscal 2017.  For example:

Meredith’s The Magnolia Journal, an extension of Joanna and Chip Gaines' popular Magnolia brand, will officially become a subscription magazine with the May 2017 issue. It will be published quarterly and distributed nationally, with an expected ratebase of approximately one million by the fall. Launched as a newsstand only title in October 2016, it quickly became the strongest-selling newsstand title in Meredith’s recent history.

Meredith’s e-commerce initiatives continued to grow, driven by new vendor relationships and capabilities, including consumer membership programs.

For the first nine months of fiscal 2017, National Media Group operating profit was $112 million, or $100 million excluding special items. Revenues were $790 million. Advertising revenues were $385 million, compared to $390 million, but were up slightly on a comparable basis.








3



OTHER FINANCIAL INFORMATION

Total debt was $631 million and the weighted average interest rate was 2.9 percent, with $350 million effectively fixed at low rates. Meredith’s debt-to-EBITDA ratio for the trailing 12 months was 1.7 to 1 (as defined in Meredith’s credit agreements). All metrics are as of March 31, 2017.

Meredith continues to focus on its successful Total Shareholder Return strategy. Key elements include:

Ongoing dividend increases - Meredith raised its regular stock dividend by 5.1 percent to $2.08 on an annualized basis on January 28, 2017. This marked the 24 th straight year of dividend increases for Meredith, which has paid an annual dividend for 70 consecutive years.

Strategic investments to scale the business and increase shareholder value - Meredith has invested approximately $1 billion to acquire leading broadcast, digital and print properties in the last few years.

Share repurchases - Meredith’s ongoing share repurchase program has $70 million remaining under current authorizations as of March 31, 2017.

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 third quarter comparisons are against the comparable prior-year period unless otherwise stated.


OUTLOOK

For full-year fiscal 2017, Meredith continues to expect record earnings per share of $4.13 to $4.18 on a GAAP basis, and record earnings per share of $3.85 to $3.90 excluding special items recorded in fiscal 2017. ( See Tables 1-6 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at the fourth quarter of fiscal 2017 compared to the prior-year quarter, Meredith expects:

Total Local Media Group revenues to be up mid-single digits.

Total National Media Group revenues to be down slightly.

Total Company revenues to be up slightly.

Fiscal 2017 fourth quarter earnings per share to range from $0.93 to $0.98.


CONFERENCE CALL WEBCAST

Meredith will host a conference call on April 27, 2017, at 8:30 a.m. EDT to discuss fiscal 2017 third 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

4



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 fourth quarter and full-year fiscal 2017.

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 owned and operated 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., Bank of America, WebMD, Volkswagen and NBCUniversal.

-- # # # # --
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


5



Meredith Corporation and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)

 
Three Months
 
Nine Months
Periods ended March 31,
2017
 
2016
 
2017
 
2016
(In thousands except per share data)
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
Advertising
$
210,747

 
$
222,402

 
$
703,765

 
$
682,643

Circulation
96,322

 
96,619

 
231,795

 
235,145

All other
118,351

 
103,750

 
332,381

 
296,062

Total revenues
425,420

 
422,771

 
1,267,941

 
1,213,850

Operating expenses
 
 
 
 
 
 
 
Production, distribution, and editorial
149,908

 
156,739

 
448,761

 
460,982

Selling, general, and administrative
192,180

 
183,045

 
537,816

 
534,567

Depreciation and amortization
13,304

 
14,613

 
40,749

 
44,679

Merger termination fee net of merger-related costs

 
(59,664
)
 

 
(43,541
)
Total operating expenses
355,392

 
294,733

 
1,027,326

 
996,687

Income from operations
70,028

 
128,038

 
240,615

 
217,163

Interest expense, net
(4,581
)
 
(5,104
)
 
(14,009
)
 
(15,682
)
Earnings before income taxes
65,447

 
122,934

 
226,606

 
201,481

Income taxes
(25,666
)
 
(42,030
)
 
(81,047
)
 
(77,029
)
Net earnings
$
39,781

 
$
80,904

 
$
145,559

 
$
124,452

 
 
 
 
 
 
 
 
Basic earnings per share
$
0.89

 
$
1.81

 
$
3.26

 
$
2.79

Basic average shares outstanding
44,684

 
44,617

 
44,584

 
44,623

 
 
 
 
 
 
 
 
Diluted earnings per share
$
0.87

 
$
1.79

 
$
3.20

 
$
2.74

Diluted average shares outstanding
45,556

 
45,298

 
45,424

 
45,344

 
 
 
 
 
 
 
 
Dividends paid per share
$
0.5200

 
$
0.4950

 
$
1.5100

 
$
1.4100




6



Meredith Corporation and Subsidiaries
Segment Information (Unaudited)

 
Three Months
 
Nine Months
Periods ended March 31,
2017
 
2016
 
2017
 
2016
(In thousands)
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
National media
 
 
 
 
 
 
 
Advertising
$
124,584

 
$
125,845

 
$
385,039

 
$
390,301

Circulation
96,322

 
96,619

 
231,795

 
235,145

Other revenues
62,445

 
59,379

 
173,155

 
181,123

Total national media
283,351

 
281,843

 
789,989

 
806,569

Local media
 
 
 
 
 
 
 
Non-political advertising
84,481

 
90,939

 
260,623

 
283,806

Political advertising
1,682

 
5,618

 
58,103

 
8,536

Other revenues
55,906

 
44,371

 
159,226

 
114,939

Total local media
142,069

 
140,928

 
477,952

 
407,281

Total revenues
$
425,420

 
$
422,771

 
$
1,267,941

 
$
1,213,850

 
 
 
 
 
 
 
 
Operating profit
 
 
 
 
 
 
 
National media
$
41,314

 
$
34,781

 
$
112,182

 
$
91,167

Local media
41,164

 
46,150

 
168,601

 
115,918

Unallocated corporate
(12,450
)
 
47,107

 
(40,168
)
 
10,078

Income from operations
$
70,028

 
$
128,038

 
$
240,615

 
$
217,163

 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
 
 
 
 
 
National media
$
4,516

 
$
4,663

 
$
13,364

 
$
14,061

Local media
8,439

 
9,425

 
26,294

 
29,019

Unallocated corporate
349

 
525

 
1,091

 
1,599

Total depreciation and amortization
$
13,304

 
$
14,613

 
$
40,749

 
$
44,679

 
 
 
 
 
 
 
 
EBITDA   1
 
 
 
 
 
 
 
National media
$
45,830

 
$
39,444

 
$
125,546

 
$
105,228

Local media
49,603

 
55,575

 
194,895

 
144,937

Unallocated corporate
(12,101
)
 
47,632

 
(39,077
)
 
11,677

Total EBITDA   1
$
83,332

 
$
142,651

 
$
281,364

 
$
261,842


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


7



Meredith Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)

Assets
March 31, 2017
 
June 30,
2016
(In thousands)
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
27,357

 
$
24,970

Accounts receivable, net
275,546

 
273,927

Inventories
25,702

 
20,678

Current portion of subscription acquisition costs
136,732

 
133,338

Current portion of broadcast rights
7,366

 
4,220

Other current assets
22,206

 
24,023

Total current assets
494,909

 
481,156

Property, plant, and equipment
537,488

 
530,052

Less accumulated depreciation
(356,989
)
 
(339,099
)
Net property, plant, and equipment
180,499

 
190,953

Subscription acquisition costs
82,086

 
95,960

Broadcast rights
4,320

 
4,565

Other assets
56,106

 
57,151

Intangible assets, net
908,287

 
913,877

Goodwill
895,429

 
883,129

Total assets
$
2,621,636

 
$
2,626,791

 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
Current liabilities
 
 
 
Current portion of long-term debt
$
62,500

 
$
75,000

Current portion of long-term broadcast rights payable
8,106

 
4,649

Accounts payable
75,732

 
82,107

Accrued expenses and other liabilities
119,729

 
116,777

Current portion of unearned subscription revenues
198,747

 
199,359

Total current liabilities
464,814

 
477,892

Long-term debt
568,714

 
618,506

Long-term broadcast rights payable
5,095

 
5,524

Unearned subscription revenues
111,456

 
128,534

Deferred income taxes
372,544

 
336,346

Other noncurrent liabilities
126,315

 
170,946

Total liabilities
1,648,938

 
1,737,748

Shareholders’ equity
 
 
 
Common stock
39,439

 
39,272

Class B stock
5,151

 
5,284

Additional paid-in capital
54,790

 
54,282

Retained earnings
895,879

 
818,706

Accumulated other comprehensive loss
(22,561
)
 
(28,501
)
Total shareholders’ equity
972,698

 
889,043

Total liabilities and shareholders’ equity
$
2,621,636

 
$
2,626,791


8



Meredith Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine months ended March 31,
2017
 
2016
(In thousands)
 
 
 
Net cash provided by operating activities
$
177,988

 
$
173,620

 
 
 
 
Cash flows from investing activities
 
 
 
Acquisitions of and investments in businesses
(13,859
)
 
(8,186
)
Additions to property, plant, and equipment
(16,193
)
 
(13,385
)
Proceeds from disposition of assets

 
1,767

Net cash used in investing activities
(30,052
)
 
(19,804
)
 
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from issuance of long-term debt
300,000

 
167,500

Repayments of long-term debt
(361,250
)
 
(259,375
)
Dividends paid
(68,386
)
 
(63,735
)
Purchases of Company stock
(51,128
)
 
(13,390
)
Proceeds from common stock issued
37,925

 
8,253

Payment of acquisition related contingent consideration
(8,000
)
 
(800
)
Excess tax benefits from share-based payments
6,755

 
2,303

Other
(1,465
)
 
(156
)
Net cash used in financing activities
(145,549
)
 
(159,400
)
Net increase (decrease) in cash and cash equivalents
2,387

 
(5,584
)
Cash and cash equivalents at beginning of period
24,970

 
22,833

Cash and cash equivalents at end of period
$
27,357

 
$
17,249




9



Table 1
Meredith Corporation and Subsidiaries
Supplemental Disclosures Regarding Non-GAAP Financial Measures

Special Items - The following tables show results of operations excluding special items and as reported with the difference being 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.

Note that there were no special items in the three months ended March 31, 2017.
Nine months ended March 31, 2017
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands except per share data)
 
 
 
 
Operating profit
$
112,182

$
168,601

$
(40,168
)
$
240,615

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)
$
99,694

$
170,724

$
(39,730
)
$
230,688

 
 
 
 
 
Diluted earnings per share
$
3.20

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)
$
2.92



10



Table 2
Meredith Corporation and Subsidiaries
Supplemental Disclosures Regarding Non-GAAP Financial Measures

Special Items - The following tables show results of operations excluding special items and as reported with the difference being 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.

Three months ended March 31, 2016
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands except per share data)
 
 
 
 
Operating profit
$
34,781

$
46,150

$
47,107

$
128,038

Special items
 
 
 
 
Merger termination fee net of merger-related costs


(59,664
)
(59,664
)
Severance and related benefit costs
3,021



3,021

Write-down of impaired assets
535



535

Other
66



66

Total special items
3,622


(59,664
)
(56,042
)
Operating profit excluding special items (non-GAAP)
$
38,403

$
46,150

$
(12,557
)
$
71,996

 
 
 
 
 
Diluted earnings per share
$
1.79

Per share impact of special items
 
Per share impact of current tax deductibility of prior quarters’ merger costs
(0.10
)
Per share impact of special items of $56,042 ($34,466 after tax)
(0.77
)
Total per share impact of special items
(0.87
)
Earnings per share excluding special items (non-GAAP)
$
0.92

 
 
 
 
 
 
 
 
 
 
Nine months ended March 31, 2016
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands except per share data)
 
 
 
 
Operating profit
$
91,167

$
115,918

$
10,078

$
217,163

Special items
 
 
 
 
Merger termination fee net of merger-related costs


(43,541
)
(43,541
)
Severance and related benefit costs
7,269

132


7,401

Reversal of previously accrued restructuring costs
(514
)
(1,070
)

(1,584
)
Write-down of impaired assets
535



535

Other
66



66

Total special items
7,356

(938
)
(43,541
)
(37,123
)
Operating profit excluding special items (non-GAAP)
$
98,523

$
114,980

$
(33,463
)
$
180,040

 
 
 
 
 
Diluted earnings per share
$
2.74

Per share impact of special items
 
Per share impact of current tax deductibility of prior quarters’ merger costs
(0.10
)
Per share impact of special items of $37,123 ($18,133 after tax)
(0.40
)
Total per share impact of special items
(0.50
)
Earnings per share excluding special items (non-GAAP)
$
2.24



11



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 tables, 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 tables, 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 March 31, 2017
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands)
 
 
 
 
Revenues
$
283,351

$
142,069

$

$
425,420

 
 
 
 
 
Net earnings
$
39,781

Net interest expense
4,581

Income taxes
25,666

Operating profit
$
41,314

$
41,164

$
(12,450
)
70,028

Depreciation and amortization
4,516

8,439

349

13,304

EBITDA
$
45,830

$
49,603

$
(12,101
)
$
83,332

 
 
 
 
 
Segment EBITDA margin
16.2
%
34.9
%
 
 




12



Table 3 continued

Nine months ended March 31, 2017
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands)
 
 
 
 
Revenues
$
789,989

$
477,952

$

$
1,267,941

 
 
 
 
 
Net earnings
$
145,559

Net interest expense
14,009

Income taxes
81,047

Operating profit
$
112,182

$
168,601

$
(40,168
)
240,615

Depreciation and amortization
13,364

26,294

1,091

40,749

EBITDA
125,546

194,895

(39,077
)
281,364

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
$
113,058

$
197,018

$
(38,639
)
$
271,437

 
 
 
 
 
Segment EBITDA margin
15.9
%
40.8
%
 
 
Segment adjusted EBITDA margin
14.3
%
41.2
%
 
 




13



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 tables, 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 tables, 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 March 31, 2016
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands)
 
 
 
 
Revenues
$
281,843

$
140,928

$

$
422,771

 
 
 
 
 
Net earnings
$
80,904

Net interest expense
5,104

Income taxes
42,030

Operating profit
$
34,781

$
46,150

$
47,107

128,038

Depreciation and amortization
4,663

9,425

525

14,613

EBITDA
39,444

55,575

47,632

142,651

Special items
 
 
 
 
Merger termination fee net of merger-related costs


(59,664
)
(59,664
)
Severance and related benefit costs
3,021



3,021

Write-down of impaired assets
535



535

Other
66



66

Total special items
3,622


(59,664
)
(56,042
)
Adjusted EBITDA
$
43,066

$
55,575

$
(12,032
)
$
86,609

 
 
Segment EBITDA margin
14.0
%
39.4
%
 
 
Segment adjusted EBITDA margin
15.3
%
39.4
%
 
 



14



Table 4 continued

Nine months ended March 31, 2016
National
Media
Local
Media
Unallocated Corporate
Total
(In thousands)
 
 
 
 
Revenues
$
806,569

$
407,281

$

$
1,213,850

 
 
 
 
 
Net earnings
$
124,452

Net interest expense
15,682

Income taxes
77,029

Operating profit
$
91,167

$
115,918

$
10,078

217,163

Depreciation and amortization
14,061

29,019

1,599

44,679

EBITDA
105,228

144,937

11,677

261,842

Special items
 
 
 
 
Merger termination fee net of merger-related costs


(43,541
)
(43,541
)
Severance and related benefit costs
7,269

132


7,401

Reversal of previously accrued restructuring costs
(514
)
(1,070
)

(1,584
)
Write-down of impaired assets
535



535

Other
66



66

Total special items
7,356

(938
)
(43,541
)
(37,123
)
Adjusted EBITDA
$
112,584

$
143,999

$
(31,864
)
$
224,719

 
 
 
 
 
Segment EBITDA margin
13.0
%
35.6
%
 
 
Segment adjusted EBITDA margin
14.0
%
35.4
%
 
 


15



Table 5
Meredith Corporation and Subsidiaries
Supplemental Disclosures Regarding Non-GAAP Financial Measures

Special Items - The following table shows national media operating expenses excluding special items and as reported with the difference being the special items. National media operating expenses excluding special items is a non-GAAP measure. Management’s rationale for presenting non-GAAP measures is included in the text of this earnings release.

Three months ended March 31,
2017
 
2016
 
Change
(In thousands)
 
 
 
 
 
National media operating expenses
$
242,037

 
$
247,062

 
(2
)%
Special items
 
 
 
 
 
Severance and related benefit costs

 
(3,021
)
 
 
Reversal of previously accrued restructuring costs

 
(535
)
 
 
Other

 
(66
)
 
 
Total special items

 
(3,622
)
 
 
Operating expenses excluding special items (non-GAAP)
$
242,037

 
$
243,440

 
(1
)%




Table 6
Meredith Corporation and Subsidiaries
Supplemental Disclosures Regarding Non-GAAP Financial Measures

Special Items - The following table shows projected diluted earnings per share excluding special items and as projected with the difference being the special items. Projected diluted earnings per share excluding special items is a non-GAAP measure. Management’s rationale for presenting non-GAAP measures is included in the text of this earnings release.

Year ended June 30, 2017
Low
 
High
Projected diluted earnings per share
$
4.13

 
$
4.18

Total per share impact of special items (see Table 1)
(0.28
)
 
(0.28
)
Projected diluted earnings per share excluding special items (non-GAAP)
$
3.85

 
$
3.90



16