Total sales for the third quarter were $1.2 billion, flat with the prior year period. Comparable store sales increased 1.1%, reflecting the Company’s best quarterly performance in several years. The consolidated third quarter operating profit was $79.2 million, as compared to the prior year operating loss of $34.9 million. Third quarter results include asset impairment charges of $22.1 million, and non-recurring professional fees of $5.1 million. The prior year quarter included asset impairment charges of $135.4 million, and severance charges of $10.7 million. Excluding these charges, third quarter adjusted EBITDA was $133.0 million, as compared to $139.5 million last year. Adjusted EBITDA decreased $6.5 million due to the increased marketing and promotional spend. Click read more below for additional detail.
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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 paid subscription base of over 40 million—and 17 local television stations in fast-growing markets—today reported fiscal 2019 second quarter results. Compared to the prior year period:
•Total Company revenues from continuing operations more than doubled to $854 million.
•Total advertising related and consumer related revenues each also more than doubled to $489 million, and $337 million, respectively.
•Earnings from continuing operations, which includes special items in both periods, were $87 million compared to $159 million. The prior year results reflected a benefit of $133 million from the passage of the “Tax Cuts and Jobs Act of 2017” in December 2017. Earnings per share from continuing operations were $1.43 compared to $3.49. Meredith recorded a net after-tax charge of $5 million related to special items in the second quarter of fiscal 2019.
•Excluding special items in both periods, earnings from continuing operations increased to $92 million compared to $52 million, and earnings per share increased to $1.53 compared to $1.14. (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.)
•Adjusted EBITDA more than doubled to $231 million compared to $85 million. Adjusted earnings per share increased to $2.55 compared to $1.34. (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.)
NATIONAL MEDIA GROUP DETAIL
Fiscal 2019 second quarter National Media Group operating profit was $45 million. Excluding special items, operating profit was $69 million and adjusted EBITDA grew to $131 million. Revenues rose by nearly 140 percent to $591 million. Results exclude discontinued operations (TIME, FORTUNE, Sports Illustrated, MONEY and Viant). (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.)
Meredith is pursuing the following strategies with a goal of successfully integrating its acquisition of Time Inc. and maximizing the value of the combined media portfolio:
• Improving the advertising performance of the acquired Time Inc. properties to Meredith’s historical levels. Meredith is implementing its proven strategies, standards and discipline across the legacy Time Inc. portfolio to improve performance, including aligning it with Meredith’s successful sales structure. Meredith delivered improved sequential comparable advertising revenue performance in the second quarter of fiscal 2019. The Company expects significant improvement in comparable advertising revenue in the third quarter and through the balance of fiscal 2019.
• Aggressively growing revenue and raising the profit margins of the acquired Time Inc. digital properties. Meredith is leveraging the increased scale of its combined digital portfolio to enhance sales initiatives. Meredith is now well-positioned to benefit from fast-growing advertising platforms, including native, video, shopper marketing, programmatic and social. The Company expects revenue and margin growth in fiscal 2019 compared to the prior year.
• Accelerating the growth of high-margin consumer related revenue by leveraging its expanded brand portfolio. This includes cross-promoting brands to increase revenue and lower subscription acquisition costs; leveraging affinity marketer Synapse; continuing to grow Meredith’s brand licensing business; and expanding e-commerce activities. Meredith recently renewed its licensing program with Walmart through fiscal 2021. This program features more than 3,000 SKUs of Better Homes & Gardens branded products at 4,000 Walmart stores across the U.S. and at Walmart.com, Jet.com and Hayneedle.com. During the second quarter of fiscal 2019, consumer related revenues accounted for 44 percent of total National Media Group revenues.
• Divesting media assets not core to Meredith’s business. Meredith closed on the sale of the TIME media brand on October 31, 2018, for $190 million in cash. Meredith closed on the sale of the FORTUNE media brand on December 21, 2018, for $150 million in cash. Meredith anticipates agreements to sell the Sports Illustrated and MONEY brands, along with its 60 percent equity investment in Viant, to be finalized in fiscal 2019. These brands and businesses have different target audiences and advertising bases than the rest of the portfolio, and Meredith believes each is better suited for success with a new owner.
• Delivering at least $550 million of annualized cost synergies within the first two full years of combined operations. The Company has identified these synergies and is on track with its plan.
Fiscal 2019 first half National Media Group operating profit was $63 million. Excluding special items, operating profit was $100 million and adjusted EBITDA grew to $218 million. Revenues rose by more than 130 percent to $1.1 billion.
more detail at: https://ir.meredith.com/news-releases/press-release-details/2019/Meredith-Reports-Fiscal-2019-Second-Quarter-And-First-Half-Results-And-Issues-Early-Calendar-2019-Advertising-Outlook/default.aspx