Quantcast
Last updated on April 17, 2014 at 14:37 EDT

Meredith Delivers Strong Fiscal 2013 Second Quarter And First Half Results

January 24, 2013

DES MOINES, Iowa, Jan. 24, 2013 /PRNewswire/ — Meredith Corporation (NYSE: MDP; www.meredith.com), the leading media and marketing company serving American women, today reported fiscal 2013 second quarter earnings per share of $0.79, including a previously announced special charge of $0.10 per share. Total Company revenues rose 10 percent to $361 million, including an 18 percent increase in advertising revenues to $217 million.

(Logo: http://photos.prnewswire.com/prnh/20090810/CG58830LOGO)

Excluding the special charge, earnings per share grew 27 percent from the prior-year period to a record $0.89, and operating profit margin increased more than a full percentage point to 18 percent. Information on the special charge is available in Tables 1 and 2 of this press release.

“Our Local Media Group delivered record-setting revenue and operating profit performance for the second quarter and the first half of fiscal 2013,” said Meredith Chairman and CEO Stephen M. Lacy. “Our digital business continued its rapid growth, and our recent acquisitions again delivered strong contributions. We once again delivered higher cash flow and returns to shareholders, and we expect to continue to do so over time.”

For the first six months of fiscal 2013, Meredith’s earnings per share were $1.34. Total Company revenues increased 9 percent to $715 million, including a 15 percent increase in advertising revenues. Excluding the special charge, earnings per share rose 22 percent from the prior-year period to $1.44.

Lacy noted the following business highlights achieved during the first half of fiscal 2013:

  • Local Media Group revenues grew nearly 30 percent to $198 million, a record high for a first half. Net political advertising revenues were a record $38 million. Operating profit grew nearly 90 percent to $72 million. Excluding the special charge, operating profit grew more than 90 percent to $74 million, and the Group’s EBITDA margin was 43 percent, both record highs for a fiscal first half.
  • National Media Group revenues grew 3 percent. Advertising revenues increased 9 percent, driven by the acquisitions of the Allrecipes.com, EveryDay with Rachael Ray and FamilyFun brands. Absent these recent acquisitions, advertising revenues were down 9 percent.
  • Total Company digital advertising revenues nearly doubled, reaching a record high for a fiscal first half. National Media Group digital advertising revenues increased more than 110 percent, while Local Media Group digital advertising revenues rose approximately 15 percent.
  • Consumer engagement strengthened across all of Meredith’s media platforms. Meredith magazine readership is at an all-time high of 116 million, while several of Meredith’s local television stations delivered strong performances during the November ratings period. Traffic to Meredith’s websites rose approximately 85 percent to 40 million average monthly unique visitors.

Meredith remains strongly committed to a Total Shareholder Return (TSR) financial strategy. Key elements of Meredith’s TSR program include: (1) A current annual dividend of $1.53 per share; (2) A $100 million share repurchase program; and (3) Ongoing strategic investments to scale the business and increase shareholder value over time.

OPERATING GROUP DETAIL

LOCAL MEDIA GROUP

Meredith’s Local Media Group – which consists of local television affiliates, many in fast-growing markets, and a video content creation unit that produces national broadcast and custom programming – delivered record performance during the second quarter and first half of fiscal 2013.

Fiscal 2013 second quarter Local Media Group operating profit grew 65 percent from the prior-year period to $45 million. Revenues rose 32 percent to $111 million. Excluding the special charge, operating profit grew 70 percent to $46 million and EBITDA margin was 47 percent. All were records for any quarter in the Group’s history.

For the first six months of fiscal 2013, Local Media Group operating profit grew nearly 90 percent from the prior-year period to $72 million. Revenues rose 29 percent to $198 million. Excluding the special charge, operating profit grew 93 percent to $74 million, and EBITDA margin was 43 percent. All were records for a first half in the Group’s history.

Looking more closely at performance for the first half of fiscal 2013 compared to the prior-year period:

  • Net political advertising revenues were a record $38 million. Performance was particularly strong at Meredith’s stations in Las Vegas, Hartford and Phoenix.
  • Non-political advertising revenues were down slightly, as record demand for political advertising prior to the November 6 elections displaced non-political advertising. However, non-political advertising revenues rose 3 percent for the period following the election.
  • Automotive, Meredith’s largest non-political advertising category, rose 10 percent.
  • Other revenues and operating expenses both increased, due primarily to growth in retransmission revenues from cable and satellite television operators, and programming fees paid to affiliated networks.
  • Meredith successfully renewed long-term affiliation agreements with CBS Corp. and Fox Broadcasting Co.

Meredith’s connection with viewers also strengthened in the important November ratings period, and its stations in Hartford, Portland, Las Vegas and Saginaw maintained their market leadership in news.

“We continued to excel at our goal of delivering compelling content to viewers across broadcast, digital and mobile media platforms,” said Local Media Group President Paul Karpowicz. “At the same time, we did a great job monetizing the strength of our audience, as local over-the-air television once again demonstrated its unique ability to build brands and deliver unmatched results for advertising clients.”

NATIONAL MEDIA GROUP

Meredith’s National Media Group includes leading national consumer media brands delivered over multiple platforms that offer clients access to 100 million unduplicated American women every month – a reach unmatched in the industry. It also features brand licensing activities and business-to-business marketing products and services. Meredith continues to execute on a series of strategic initiatives including growing its market share of magazine advertising; expanding its digital footprint; and increasing revenues not dependent on advertising.

Fiscal 2013 second quarter National Media Group revenues grew 2 percent compared to the prior-year period to $249 million. Operating profit was $22 million, compared to $36 million. Excluding the special charge, operating profit was $28 million.

For the first six months of fiscal 2013, National Media Group revenues grew 3 percent compared to the prior-year period to $516 million. Operating profit was $52 million, compared to $72 million. Excluding the special charge, operating profit was $57 million.

Operating profit declines in both periods were due primarily to lower advertising revenues at comparable magazine titles, investments in digital and circulation initiatives, and weaker performance at Meredith Xcelerated Marketing.

Looking more closely at advertising performance for the first half of fiscal 2013 compared to the prior-year period:

  • Total advertising revenues grew 9 percent compared to the year-ago period. Excluding recent acquisitions, total advertising revenues declined 9 percent.
  • The food and beverage, retail, and media and entertainment categories were stronger in Meredith’s titles. The direct response and financial categories were weaker.
  • Meredith’s share of total magazine advertising revenues grew to 11.0 percent from 10.3 percent, according to the most recent data by Publishers Information Bureau. The average net revenue per magazine page also rose 2 percent.
  • Digital advertising revenues grew more than 110 percent, boosted by the addition of Allrecipes.com. Excluding recent acquisitions, digital advertising revenues grew almost 15 percent.

The Meredith Sales Guarantee demonstrates quantitatively that advertising in Meredith magazines increases retail sales. Currently, 13 consumer brands are participating in the program.

Circulation revenues grew 9 percent in the first half of fiscal 2013 compared to the prior-year period, and were down 2 percent excluding the recent acquisitions. Meredith generated more than 2 million digital orders for print magazine subscriptions in the first half of fiscal 2013, up nearly 60 percent from what was generated in the prior-year period.

Meredith’s connection to consumers strengthened as well. Readership for Meredith’s magazines stands at a record 116 million, according to the most recent data from Mediamark Research and Intelligence. Digital traffic more than doubled to nearly 35 million average unique visitors in the first half of fiscal 2013, driven primarily by the acquisition of Allrecipes.com – along with aggressive digital marketing initiatives.

“We continue to develop multi-platform capabilities for our consumers and clients, deliver innovative sales programs – such as the Meredith Sales Guarantee – and grow the scale of our digital properties,” said National Media Group President Tom Harty. “As a result, we are growing our consumer connection; increasing our advertising market share; and our digital activities are performing at record levels.”

Other revenues were $121 million in the first half of fiscal 2013, compared to $141 million in the prior-year period. This was due primarily to performance at Meredith Xcelerated Marketing which, as previously communicated, experienced reductions in programs from certain clients in calendar 2012. However, the pipeline for new business is strong, and Meredith expects growth for Meredith Xcelerated Marketing in calendar 2013 when compared to the prior year. Notably, Meredith Xcelerated Marketing recently secured several new accounts – including United Healthcare and Bank of America – along with expansions of its significant business with Chrysler.

OTHER FINANCIAL INFORMATION

Consistent with its Total Shareholder Return strategy, Meredith repurchased 750,000 shares of Company stock in the first half of fiscal 2013. At December 31, 2012, $62 million remained under the current repurchase authorization.

Total debt was $365 million at December 31, 2012. Meredith’s debt-to-EBITDA ratio was 1.5 to 1 for the 12 months ended December 31, 2012, and the weighted average interest rate was 3.5 percent at December 31, 2012.

Fiscal 2013 first half total Company expenses increased 9 percent; however they declined 1 percent excluding the recent acquisitions, reflecting ongoing cost-management initiatives.

Cash flow from operations increased in the first half of fiscal 2013 compared to the prior-year period, and totaled approximately $195 million for the 12 months ended December 31, 2012.

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.

OUTLOOK

Meredith expects fiscal 2013 third quarter earnings per share to range from $0.65 to $0.70. Looking more closely at the third quarter of fiscal 2013 compared to the year-ago period:

  • Total Local Media Group revenues are expected to increase in the high-single digits. Non-political advertising revenues are expected to be flat to up slightly.
  • National Media Group advertising revenues are expected to be up in the mid-single digits including recent acquisitions, and down in the low-single digits on a comparable basis.

Meredith also reconfirms its original full fiscal year 2013 earnings per share expectation of $2.60 to $2.95, excluding the special charge.

A number of uncertainties remain that may affect Meredith’s outlook as stated in this press release for the third quarter and full year fiscal 2013. These and other uncertainties are referenced below under “Safe Harbor” and in certain filings with the U.S. Securities and Exchange Commission.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on January 24, 2013 at 11 a.m. ET to discuss fiscal 2013 second quarter results. A live webcast will be accessible to the public on the Company’s website, www.meredith.com, and a replay will be available for two weeks. A transcript will be available within 48 hours of the call at www.meredith.com.

RATIONALE FOR USE AND ACCESS TO NON-GAAP RESULTS

Management uses and presents GAAP and non-GAAP results to evaluate and communicate the performance of the Company. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA is a common supplemental measure 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. Meredith does not use EBITDA as a measure of liquidity or funds available for management’s discretionary use because they include certain contractual and non-discretionary expenditures.

Results excluding recent acquisitions (Allrecipes.com, EveryDay with Rachael Ray and FamilyFun) and the special charge recorded in the second quarter of fiscal 2013 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 better understanding Meredith’s current performance, performance trends and financial condition. Reconciliations of non-GAAP to GAAP measures are attached to this press release and will be made available at 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 the Company and its operations. Statements in this announcement that are forward-looking include, but are not limited to, the statements regarding advertising revenues, along with the Company’s revenue and earnings per share outlook for the third quarter and full year fiscal 2013.

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, 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; www.meredith.com) is the leading media and marketing company serving American women. Meredith features multiple well-known national brands – including Better Homes and Gardens, Parents, Family Circle, Allrecipes.com, Ladies’ Home Journal, Fitness, More, American Baby, EveryDay with Rachael Ray and FamilyFun – along 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, food, health and wellness and self-development. Meredith uses multiple distribution platforms – including print, television, digital, mobile, tablets, and video – to give consumers content they desire and to deliver the messages of its advertising and marketing partners.

Additionally, Meredith uses its many assets to create powerful custom marketing solutions for many of the nation’s top brands and companies. Meredith Xcelerated Marketing has significantly added to its capabilities in recent years through the acquisition of cutting-edge companies in digital, mobile, social, healthcare, database, and international marketing.

A hallmark of Meredith’s business model and financial profile is its ability to consistently generate substantial free cash flow by leveraging the strength of its multi-platform portfolio. Meredith is committed to increasing Total Shareholder Return through dividend payments, share repurchases and strategic business investments. Meredith has paid a dividend for 65 straight years and increased its dividend for 19 consecutive years. Meredith currently pays an annual dividend of $1.53 per share, resulting in a dividend yield of approximately 5 percent.

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

                                              Three Months        Six Months
                                              ------------        ----------
     Periods
     ended
     December
     31,                                                    2012               2011      2012      2011
     --------                                               ----               ----      ----      ----
    (In
     thousands
     except
     per
     share
     data)
    Revenues
    Advertising                                         $217,094           $183,636  $424,216  $367,953
    Circulation                                           67,398             63,902   142,887   130,491
    All
     other                                                76,103             81,179   147,649   158,182
     Total
     revenues                                            360,595            328,717   714,752   656,626
     --------                                            -------            -------   -------   -------
     Operating
     expenses
     Production,
     distribution,
     and
     editorial                                           134,117            128,412   274,728   265,303
     Selling,
     general,
     and
     administrative                                      158,058            134,940   314,372   277,905
     Depreciation
     and
     amortization                                         10,967             10,505    22,894    20,337
     Total
     operating
     expenses                                            303,142            273,857   611,994   563,545
     ---------                                           -------            -------   -------   -------
     Income
     from
     operations                                           57,453             54,860   102,758    93,081
     Interest
     expense,
     net                                                  (3,316)            (2,897)   (7,002)   (5,616)
     --------                                             ------             ------    ------    ------
     Earnings
     before
     income
     taxes                                                54,137             51,963    95,756    87,465
     Income
     taxes                                               (18,566)           (20,369)  (35,330)  (34,244)
     ------                                              -------            -------   -------   -------
    Net
     earnings                                            $35,571            $31,594   $60,426   $53,221
    ---------                                            -------            -------   -------   -------

     Basic
     earnings
     per
     share                                                 $0.80              $0.70     $1.36     $1.18
     --------                                              -----              -----     -----     -----
     Basic
     average
     shares
     outstanding                                          44,409             44,838    44,451    44,923
     -----------                                          ------             ------    ------    ------

     Diluted
     earnings
     per
     share                                                 $0.79              $0.70     $1.34     $1.18
     --------                                              -----              -----     -----     -----
     Diluted
     average
     shares
     outstanding                                          44,936             45,044    44,989    45,115
     -----------                                          ------             ------    ------    ------

     Dividends
     paid
     per
     share                                               $0.3825            $0.3825   $0.7650   $0.6375
     ---------                                           -------            -------   -------   -------

    Meredith Corporation and Subsidiaries
    Segment Information (Unaudited)

                                              Three Months                        Six Months
                                              ------------                        ----------
     Periods
     ended
     December
     31,                                      2012                  2011                  2012      2011
     --------                                 ----                  ----                  ----      ----
    (In thousands)
    Revenues
    National media
    Advertising                           $120,133              $107,180              $252,797  $231,637
    Circulation                             67,398                63,902               142,887   130,491
     Other
     revenues                               61,905                73,233               120,722   140,799
     Total
     national
     media                                 249,436               244,315               516,406   502,927
     --------                              -------               -------               -------   -------
    Local media
     Non-
     political
     advertising                            71,255                75,382               133,501   134,659
     Political
     advertising                            25,706                 1,074                37,918     1,657
     Other
     revenues                               14,198                 7,946                26,927    17,383
     Total
     local
     media                                 111,159                84,402               198,346   153,699
     -----                                 -------                ------               -------   -------
     Total
     revenues                             $360,595              $328,717              $714,752  $656,626
     --------                             --------              --------              --------  --------

    Operating profit
     National
     media                                 $22,177               $35,797               $51,601   $71,801
     Local
     media                                  44,711                27,156                72,355    38,213
     Unallocated
     corporate                              (9,435)               (8,093)              (21,198)  (16,933)
     Income
     from
     operations                            $57,453               $54,860              $102,758   $93,081
     ----------                            -------               -------              --------   -------

    Depreciation and
     amortization
     National
     media                                  $4,475                $3,832                $9,865    $7,193
     Local
     media                                   6,070                 6,175                12,172    12,164
     Unallocated
     corporate                                 422                   498                   857       980
     Total
     depreciation
     and
     amortization                          $10,967               $10,505               $22,894   $20,337
     ------------                          -------               -------               -------   -------

    EBITDA(1)
     National
     media                                 $26,652               $39,629               $61,466   $78,994
     Local
     media                                  50,781                33,331                84,527    50,377
     Unallocated
     corporate                              (9,013)               (7,595)              (20,341)  (15,953)
     Total
     EBITDA(1)                             $68,420               $65,365              $125,652  $113,418
     ---------                             -------               -------              --------  --------

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

    Meredith Corporation and Subsidiaries
    Condensed Consolidated Balance Sheets (Unaudited)

                                                      December 31,           June 30,
    Assets                                                             2012               2012
    ------                                                             ----               ----
    (In thousands)
    Current assets
    Cash and cash
     equivalents                                                    $24,714            $25,820
    Accounts
     receivable, net                                                222,772            215,526
    Inventories                                                      24,937             22,559
    Current portion
     of subscription
     acquisition
     costs                                                           89,436             75,446
    Current portion
     of broadcast
     rights                                                           6,753              3,408
    Other current
     assets                                                          21,084             16,677
    Total current
     assets                                                         389,696            359,436
    -------------                                                   -------            -------
    Property, plant,
     and equipment                                                  458,673            455,271
    Less accumulated
     depreciation                                                  (268,081)          (260,967)
    ----------------                                               --------           --------
    Net property,
     plant, and
     equipment                                                      190,592            194,304
    Subscription
     acquisition
     costs                                                           90,989             75,368
    Broadcast rights                                                  2,711                943
    Other assets                                                     66,813             66,858
    Intangible
     assets, net                                                    581,922            586,263
    Goodwill                                                        733,208            733,127
    Total assets                                                 $2,055,931         $2,016,299
    ------------                                                 ----------         ----------

    Liabilities and
     Shareholders'
     Equity
    ---------------
    Current
     liabilities
    Current portion
     of long-term
     debt                                                           $50,000           $105,000
    Current portion
     of long-term
     broadcast rights
     payable                                                          9,619              6,752
    Accounts payable                                                 48,048             72,911
    Accrued expenses
     and other
     liabilities                                                    131,864            117,071
    Current portion
     of unearned
     subscription
     revenues                                                       190,997            180,852
    ---------------                                                 -------            -------
    Total current
     liabilities                                                    430,528            482,586
    Long-term debt                                                  315,000            275,000
    Long-term
     broadcast rights
     payable                                                          4,468              3,695
    Unearned
     subscription
     revenues                                                       155,640            141,408
    Deferred income
     taxes                                                          223,534            204,054
    Other noncurrent
     liabilities                                                    109,409            112,111
    Total liabilities                                             1,238,579          1,218,854
    -----------------                                             ---------          ---------
    Shareholders'
     equity
    Common stock                                                     36,018             35,791
    Class B stock                                                     8,348              8,716
    Additional paid-
     in capital                                                      47,176             53,275
    Retained earnings                                               748,197            722,778
    Accumulated other
     comprehensive
     loss                                                           (22,387)           (23,115)
    Total
     shareholders'
     equity                                                         817,352            797,445
    --------------                                                  -------            -------
    Total liabilities
     and
     shareholders'
     equity                                                      $2,055,931         $2,016,299
    -----------------                                            ----------         ----------

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

    Six months ended December 31,                        2012      2011
    -----------------------------                        ----      ----
    (In thousands)
    Net cash provided by operating
     activities                                       $80,383   $68,747
    ------------------------------                    -------   -------

    Cash flows from investing
     activities
    Acquisitions of businesses                         (6,047)  (55,548)
    Additions to property, plant,
     and equipment                                    (13,659)  (26,621)
    Other                                                   -    (1,563)
    Net cash used in investing
     activities                                       (19,706)  (83,732)
    --------------------------                        -------   -------

    Cash flows from financing
     activities
    Proceeds from issuance of long-
     term debt                                         40,000    85,000
    Repayments of long-term debt                      (55,000)  (30,000)
    Dividends paid                                    (34,129)  (28,722)
    Purchases of Company stock                        (25,471)  (15,311)
    Proceeds from common stock
     issued                                            12,067     2,332
    Excess tax benefits from share-
     based payments                                     1,519        83
    Other                                                (769)        -
    Net cash provided by (used in)
     financing activities                             (61,783)   13,382
    ------------------------------                    -------    ------
    Net decrease in cash and cash
     equivalents                                       (1,106)   (1,603)
    Cash and cash equivalents at
     beginning of period                               25,820    27,721
    ----------------------------                       ------    ------
    Cash and cash equivalents at end
     of period                                        $24,714   $26,118
    --------------------------------                  -------   -------

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

    Special Items - The following table shows 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.

    Periods Ended
     December 31, 2012                                 Three Months                                                             Six Months
    ------------------                                 ------------                                                             ----------
                                           Excluding Special Items                      Special Items                              As Reported                        Excluding Special Items                     Special Items            As Reported
                                           -----------------------                      -------------                              -----------                        -----------------------                     -------------            -----------
    (In thousands except per share data)
    Revenues
    Advertising                                             $217,094                            $         -                                   $217,094                                 $424,216                           $         -                 $424,216
    Circulation                                               67,398                                      -                                     67,398                                  142,887                                     -                  142,887
    All other                                                 76,103                                      -                                     76,103                                  147,649                                     -                  147,649
    Total revenues                                           360,595                                      -                                    360,595                                  714,752                                     -                  714,752
    --------------                                           -------                                    ---                                    -------                                  -------                                   ---                  -------
    Operating expenses
    Production,
     distribution, and
     editorial                                               134,117                                      -                                    134,117                                  274,728                                     -                  274,728
    Selling, general,
     and administrative                                      151,015                                  7,043  (a)                               158,058                                  307,329                                 7,043  (a)             314,372
    Depreciation and
     amortization                                             10,967                                      -                                     10,967                                   22,894                                     -                   22,894

    Total operating
     expenses                                                296,099                                  7,043                                    303,142                                  604,951                                 7,043                  611,994
    ---------------                                          -------                                  -----                                    -------                                  -------                                 -----                  -------
    Income from
     operations                                               64,496                                 (7,043)                                    57,453                                  109,801                                (7,043)                 102,758
    Interest expense,
     net                                                      (3,316)                                     -                                     (3,316)                                  (7,002)                                    -                   (7,002)
    -----------------                                         ------                                    ---                                     ------                                   ------                                   ---                   ------
    Earnings before
     income taxes                                             61,180                                 (7,043)                                    54,137                                  102,799                                (7,043)                  95,756
    Income taxes                                             (21,278)                                 2,712                                    (18,566)                                 (38,042)                                2,712                  (35,330)
    ------------                                             -------                                  -----                                    -------                                  -------                                 -----                  -------
    Net earnings                                             $39,902                                $(4,331)                                   $35,571                                  $64,757                               $(4,331)                 $60,426
    ------------                                             -------                                -------                                    -------                                  -------                               -------                  -------

    Basic earnings per
     share                                                     $0.90                                 $(0.10)                                     $0.80                                    $1.46                                $(0.10)                   $1.36
    ------------------
    Basic average
     shares outstanding                                       44,409                                 44,409                                     44,409                                   44,451                                44,451                   44,451
    -------------------                                       ------                                 ------                                     ------                                   ------                                ------                   ------

    Diluted earnings
     per share                                                 $0.89                                 $(0.10)                                     $0.79                                    $1.44                                $(0.10)                   $1.34
    ----------------
    Diluted average
     shares outstanding                                       44,936                                 44,936                                     44,936                                   44,989                                44,989                   44,989
    -------------------                                       ------                                 ------                                     ------                                   ------                                ------                   ------
    (a)            Severance costs of $7.4 million
                   and vacated lease accruals of
                   $0.4 million partially offset
                   by a $0.8 million reduction in
                   previously accrued
                   restructuring charges

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

    Special Items - The following table shows 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.

    Periods Ended
     December 31, 2012                                  Three Months                                                          Six Months
    ------------------                                  ------------                                                          ----------
                                            Excluding Special Items                    Special Items                             As Reported                        Excluding Special Items                     Special Items              As Reported
                                            -----------------------                    -------------                             -----------                        -----------------------                     -------------              -----------
    (In thousands)
    Revenues
    National media group
    Advertising                                              $120,133                          $        -                                   $120,133                                 $252,797                           $        -                    $252,797
    Circulation                                                67,398                                   -                                     67,398                                  142,887                                    -                     142,887
    Other revenues                                             61,905                                   -                                     61,905                                  120,722                                    -                     120,722
    Total national media
     group                                                    249,436                                   -                                    249,436                                  516,406                                    -                     516,406
    --------------------                                      -------                                 ---                                    -------                                  -------                                  ---                     -------
    Local media group
    Non-political
     advertising                                               71,255                                   -                                     71,255                                  133,501                                    -                     133,501
    Political
     advertising                                               25,706                                   -                                     25,706                                   37,918                                    -                      37,918
    Other revenues                                             14,198                                   -                                     14,198                                   26,927                                    -                      26,927
    Total local media
     group                                                    111,159                                   -                                    111,159                                  198,346                                    -                     198,346
    -----------------                                         -------                                 ---                                    -------                                  -------                                  ---                     -------
    Total revenues                                           $360,595                          $        -                                   $360,595                                 $714,752                         $          -                    $714,752
    --------------                                           --------                          ----------                                   --------                                 --------                         ------------                    --------

    Operating profit
    National media group                                      $27,725                             $(5,548) (a)                               $22,177                                  $57,149                              $(5,548) (a)                $51,601
    Local media group                                          46,206                              (1,495) (b)                                44,711                                   73,850                               (1,495) (b)                 72,355
    Unallocated
     corporate                                                 (9,435)                                  -                                     (9,435)                                 (21,198)                                                         (21,198)
    Income from
     operations                                               $64,496                             $(7,043)                                   $57,453                                 $109,801                              $(7,043)                   $102,758
    -----------                                               -------                             -------                                    -------                                 --------                              -------                    --------

    Depreciation and amortization
    National media group                                       $4,475                          $        -                                     $4,475                                   $9,865                           $        -                      $9,865
    Local media group                                           6,070                                   -                                      6,070                                   12,172                                    -                      12,172
    Unallocated
     corporate                                                    422                                   -                                        422                                      857                                    -                         857
    Total depreciation
     and amortization                                         $10,967                          $        -                                    $10,967                                  $22,894                          $         -                     $22,894
    ------------------                                        -------                          ----------                                    -------                                  -------                          -----------                     -------

    EBITDA(1)
    National media group                                      $32,200                             $(5,548) (a)                               $26,652                                  $67,014                              $(5,548) (a)                $61,466
    Local media group                                          52,276                              (1,495) (b)                                50,781                                   86,022                               (1,495) (b)                 84,527
    Unallocated
     corporate                                                 (9,013)                                  -                                     (9,013)                                 (20,341)                                   -                     (20,341)
    Total EBITDA(1)                                           $75,463                             $(7,043)                                   $68,420                                 $132,695                              $(7,043)                   $125,652
    --------------                                            -------                             -------                                    -------                                 --------                              -------                    --------
    1 EBITDA is net earnings before interest, taxes, depreciation,
     and amortization.

    (a)             Severance costs of $5.9 million and a vacated
                    lease accrual of $0.4 million partially offset by
                    a $0.8 million reduction in previously accrued
                    restructuring charges
    (b)            Severance costs of $1.5 million

    Meredith Corporation and Subsidiaries                                                                                                                                                                                                                                                                                   Table 3
    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.

                                           Three months ended December 31, 2012                                  Six months ended December 31, 2012
                                           ------------------------------------                                  ----------------------------------
                                                         National                             Local                    Unallocated Corporate                      Total                                     National                          Local                     Unallocated Corporate                     Total
                                                           Media                              Media                                                                                                           Media                           Media
                                                           -----                              -----                                                                                                           -----                           -----
    (In thousands)
    Revenues                                                           $249,436                        $111,159                    $              -                        $360,595                                    $516,406                        $198,346                    $              -                        $714,752
                                                                       --------                        --------                    ----------------                        --------                                    --------                        --------                    ----------------                        --------

    Operating profit                                                    $22,177                         $44,711                             $(9,435)                        $57,453                                     $51,601                         $72,355                            $(21,198)                       $102,758
    Depreciation and amortization                                         4,475                           6,070                                 422                          10,967                                       9,865                          12,172                                 857                          22,894
                                                                                                                                                ---                                                                                                                                             ---
    EBITDA                                                              $26,652                         $50,781                             $(9,013)                         68,420                                     $61,466                         $84,527                            $(20,341)                        125,652
                                                                        -------                         -------                             -------                                                                     -------                         -------                            --------
    Less:
    Depreciation and amortization                                                                                                                                           (10,967)                                                                                                                                        (22,894)
    Net interest expense                                                                                                                                                     (3,316)                                                                                                                                         (7,002)
    Income taxes                                                                                                                                                            (18,566)                                                                                                                                        (35,330)
    Net earnings                                                                                                                                                            $35,571                                                                                                                                         $60,426
                                                                                                                                                                            -------                                                                                                                                         -------

    Segment EBITDA margin                                                  10.7%                           45.7%                                                                                                           11.9%                           42.6%
                                                                           ----                            ----                                                                                                            ----                            ----

                                           Three months ended December 31, 2011                                  Six months ended December 31, 2011
                                           ------------------------------------                                  ----------------------------------
                                                         National                             Local                    Unallocated Corporate                      Total                                     National                          Local                     Unallocated Corporate                     Total
                                                           Media                              Media                                                                                                           Media                           Media
                                                           -----                              -----                                                                                                           -----                           -----
    (In thousands)
    Revenues                                                           $244,315                         $84,402                    $              -                        $328,717                                    $502,927                        $153,699                    $              -                        $656,626
                                                                       --------                         -------                    ----------------                        --------                                    --------                        --------                    ----------------                        --------

    Operating profit                                                    $35,797                         $27,156                             $(8,093)                        $54,860                                     $71,801                         $38,213                            $(16,933)                        $93,081
    Depreciation and amortization                                         3,832                           6,175                                 498                          10,505                                       7,193                          12,164                                 980                          20,337
                                                                                                                                                ---                                                                                                                                             ---
    EBITDA                                                              $39,629                         $33,331                             $(7,595)                         65,365                                     $78,994                         $50,377                            $(15,953)                        113,418
                                                                        -------                         -------                             -------                                                                     -------                         -------                            --------
    Less:
    Depreciation and amortization                                                                                                                                           (10,505)                                                                                                                                        (20,337)
    Net interest expense                                                                                                                                                     (2,897)                                                                                                                                         (5,616)
    Income taxes                                                                                                                                                            (20,369)                                                                                                                                        (34,244)
    Net earnings                                                                                                                                                            $31,594                                                                                                                                         $53,221
                                                                                                                                                                            -------                                                                                                                                         -------

    Segment EBITDA margin                                                  16.2%                           39.5%                                                                                                           15.7%                           32.8%
    ---------------------                                                  ----                            ----                                                                                                            ----                            ----

    Meredith Corporation and Subsidiaries                                                           Table 4
    Supplemental Disclosures Regarding Non-GAAP Financial Measures

    Six months ended
     December 31,                                      2012                     2011         Change
    ----------------                                   ----                     ----         ------

    National Media Advertising Revenues
    Excluding recent
     acquisitions (1)                              $209,429                 $229,254                    (9)%
    Recent
     acquisitions (1)                                43,368                    2,383
    Total                                          $252,797                 $231,637                     9 %
    -----                                          --------                 --------                    ---

    National Media Circulation Revenues
    Excluding recent
     acquisitions (1)                              $126,132                 $128,524                    (2)%
    Recent
     acquisitions (1)                                16,755                    1,967
    Total                                          $142,887                 $130,491                     9 %
    -----                                          --------                 --------                    ---

    National Media Digital Advertising Revenues
    Excluding recent
     acquisitions (1)                               $22,498                  $19,776                    14 %
    Recent
     acquisitions (1)                                19,859                      168
    Total                                           $42,357                  $19,944                   112 %
    -----                                           -------                  -------                   ----

    Total Company Operating Expenses
    Excluding recent
     acquisitions (1)                              $554,779                 $559,487                    (1)%
    Recent
     acquisitions (1)                                57,215                    4,058
    Total                                          $611,994                 $563,545                     9 %
    -----                                          --------                 --------                    ---

    1 Recent acquisitions represent EveryDay with Rachael Ray, FamilyFun, and Allrecipes.com

SOURCE Meredith Corporation


Source: PR Newswire