Meredith Corporation (NYSE: MDP; meredith.com), the leading media and marketing company with national brands serving 175 million unduplicated Americans — including 80 percent of U.S. millennial women and a subscription base of more than 40 million — and 17 local television stations in fast-growing markets, today reported fiscal 2018 full year and fourth quarter results.
Since closing the Time Inc. acquisition on January 31, 2018, and reporting its fiscal 2018 third quarter earnings on May 10, 2018:
• Meredith reaffirmed its goals of reducing debt by $1 billion in fiscal 2019 and generating $1 billion of adjusted EBITDA in fiscal 2020.
◦Meredith plans to use its cash balance of nearly $440 million at June 30, 2018, along with proceeds from anticipated asset sales and cash generated from operations, to achieve its debt reduction goal of $1 billion in fiscal 2019. Meredith expects no tax leakage from these asset sales.
◦Meredith expects to generate adjusted EBITDA in fiscal 2019 more than double its previous record high, driven by a full year of contribution from the acquisition; election-year political advertising revenue in its Local Media Group; and ongoing cost synergies (see Fiscal 2019 Outlook for additional detail).
◦Meredith is on target to generate over $500 million in annual cost savings in the first two full years of operations following the acquisition which, combined with expected revenue performance improvement, will help Meredith achieve its goal of generating $1 billion of adjusted EBITDA in fiscal 2020.
• Meredith’s digital business generated record traffic and financial performance with its larger footprint. Companywide digital activities generated a record $350 million of high margin revenues in fiscal 2018, reflecting a broad and diverse digital footprint that includes advertising, e-commerce, and paid products and services. Traffic across Meredith’s digital properties averaged nearly 135 million monthly unique visitors in June 2018, up over 50 percent from the same month a year ago. The People/Entertainment Weekly Network generated record traffic, averaging 60 million monthly unique visitors in the fourth quarter of fiscal 2018.
• Meredith leveraged the power of its expanded portfolio to grow its high-margin consumer revenue activities. These include revenues generated from Meredith’s national media brands with their subscription base of more than 40 million; affinity marketer Synapse; a robust brand licensing business ranked as the world’s second-largest; and rapidly growing e-commerce activities. Looking ahead, Meredith expects more than 45 percent of fiscal 2019 National Media Group revenues to be generated from consumer-related sources.
• Meredith’s Local Media Group delivered $16 million in political advertising revenues in fiscal 2018, a record for a non-political year. Meredith anticipates a very strong political advertising season in fiscal 2019, potentially eclipsing the record $63 million generated in fiscal 2017, the most recent political cycle. In fact, fiscal 2019 first-quarter political advertising revenues are pacing well above the $16 million generated in the first quarter of fiscal 2017.
“We have positioned Meredith Corporation on a growth track not realizable absent this acquisition, while continuing to pay a very attractive dividend to our shareholders,” said Meredith Corporation Executive Chairman Stephen M. Lacy. “In fiscal 2018, we continued to strengthen our leading national and local media brands while adding powerful new brands such as People, InStyle, Southern Living and Real Simple, creating the most attractive portfolio in the marketplace.”
FISCAL 2018 FULL YEAR AND FOURTH QUARTER FINANCIAL RESULTS
Looking at Meredith’s fiscal 2018 results compared to the prior year:
•Total Company revenues from continuing operations grew more than 30 percent to over $2.2 billion, and total advertising revenues grew 20 percent to $1.1 billion.
•Earnings from continuing operations, including special items in both periods, were $114 million, compared to $189 million. Special items in fiscal 2018 are primarily related to transaction, restructuring and integration costs, along with the remeasurement of deferred income tax assets and liabilities due to tax reform.
•Excluding special items, earnings from continuing operations were $148 million, compared to $182 million. (See Tables 1-5 for supplemental disclosures regarding non-GAAP financial measures.)
•Adjusted EBITDA was a record $421 million, compared to $362 million, a 16 percent increase.
Looking at Meredith’s fiscal 2018 fourth quarter results compared to the prior-year quarter:
•Total Company revenues from continuing operations grew 77 percent to $788 million.
•Earnings from continuing operations, including special items in both periods, were $17 million, compared to $43 million.
•Excluding special items, earnings from continuing operations were $31 million, compared to $49 million.
•Adjusted EBITDA was $160 million, compared to $91 million, a 76 percent increase.
“Our legacy Meredith businesses continue to perform in-line with our expectations, and we are very pleased with the progress being made on integrating the acquired Time Inc. properties,” said Meredith Corporation President and CEO Tom Harty. “We expect to see meaningful improvement in advertising results for the acquired Time Inc. brands during fiscal 2019. We are on track to deliver more than $500 million of annual synergies in the first two full years of operations. These synergies are already being reflected in our results as we significantly improved adjusted EBITDA margins year-over-year in our National Media Group in the fourth quarter of fiscal 2018. We expect significant margin improvement in fiscal 2019 as well. (See Tables 4-5.)
“Given the progress made on synergy achievement and asset divestitures, we expect to achieve our goals of reducing debt by $1 billion by the end of fiscal 2019 and generating $1 billion of adjusted EBITDA in fiscal 2020, meaningfully contributing to total shareholder return,” added Harty.
more detail at: https://ir.meredith.com/news-releases/press-release-details/2018/Meredith-Reports-Fiscal-2018-Full-Year-And-Fourth-Quarter-Results/default.aspx