Meredith Reports Fiscal 2019 Third Quarter Results

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 third quarter results. Compared to the prior-year period:
•Total Company revenues from continuing operations grew 14 percent to $743 million.
•Total advertising related and consumer related revenues rose in the double-digits.
•Earnings from continuing operations, which includes special items in both periods, were $28 million, compared to a loss of $95 million. Meredith recorded $15 million of net after-tax special items in the third quarter of fiscal 2019, primarily related to restructuring and integration costs. Results in the prior-year period reflected $128 million of net after-tax special items, primarily comprised of restructuring, transaction, and financing costs related to its acquisition of Time Inc. Earnings per share from continuing operations were $0.20 compared to a loss per share of $2.41.
•Excluding special items in both periods, earnings from continuing operations increased 29 percent to $43 million compared to $33 million, and earnings per share increased to $0.52 from $0.45. (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.)
•Adjusted EBITDA grew 43 percent to $160 million compared to $112 million. Adjusted earnings per share increased to $1.52 from $1.11. (See Tables 1-3 for supplemental disclosures regarding non-GAAP financial measures.)

“We delivered improved advertising performance, along with growth in consumer related revenues in both our National and Local media groups in the third quarter of fiscal 2019,” said Meredith Corporation President and Chief Executive Officer Tom Harty. “Our National Media Group generated significantly improved print advertising results, which on a comparable basis are now in-line with Meredith’s historical trends. In addition, we delivered revenue growth across our consumer related activities including subscription, newsstand, affinity marketing and e-commerce. Finally, we continued our strong commitment to Total Shareholder Return, including increasing our dividend by 5.5 percent and strengthening our balance sheet by paying down $700 million of debt.”

Harty continued: “Looking to the fourth quarter, we see revenue trends pacing ahead of our expectations, including continued improvement in National Media Group advertising revenues. At the same time, we are making strategic investments in our portfolio and capabilities, including new digital platforms, more robust video production and initiatives to grow consumer related revenues such as Apple News+, subscription acquisition, and our e-commerce activities. We remain focused on successfully integrating our acquisition of Time and have already delivered on a majority of the stated synergies.

“As a result, we believe it will take longer than originally anticipated to achieve the remainder of the synergies due to investment spending to grow the business; retaining certain employees longer than anticipated to ensure business continuity; and operating the Assets Held for Sale longer than expected. However we remain confident we will achieve our $550 million cost synergy goal by the end of fiscal 2020,” Harty concluded.

Fiscal 2019 third quarter accomplishments include:
•Delivering 17 percent growth in National Media Group advertising related revenues. On a comparable basis, advertising related revenues were down in the mid-single digits year-over-year, compared to down in the low double-digits year-over-year in the second quarter of fiscal 2019. This performance is in-line with Meredith’s historical and expected performance and was driven by brands in both the legacy Meredith and Time Inc. portfolios.
•Growing Local Media Group non-political advertising spot revenues by 6 percent. This was driven primarily by Meredith’s television stations in the Atlanta, Kansas City, Phoenix and Las Vegas markets.
•Increasing revenues from consumer related sources by 28 percent. This was driven by strong newsstand and affinity marketing performance in Meredith’s National Media Group, along with favorable renewal of retransmission consent agreements in Meredith’s Local Media Group.

Looking more closely at Meredith’s fiscal 2019 nine-month results compared to the prior-year period:
•Total Company revenues from continuing operations rose 63 percent to $2.4 billion.
•Total advertising related revenues rose 67 percent to $1.3 billion, and consumer related revenues rose more than 75 percent to $1.0 billion.
•Earnings from continuing operations, including special items in both periods, were $131 million compared to $97 million. Earnings per share from continuing operations were $1.59 compared to $1.85. Meredith recorded a net after-tax charge of $32 million related to special items in the first nine months of fiscal 2019. The prior year results reflected a net after-tax charge of $20 million related to special items.
•Excluding special items in both periods, earnings from continuing operations increased 40 percent to $163 million compared to $117 million, and earnings per share from continuing operations were $2.31 compared to $2.28.
•Adjusted EBITDA more than doubled to $533 million compared to $262 million. Adjusted earnings per share increased to $5.43 compared to $3.34.
more detail at: https://ir.meredith.com/news-releases/press-release-details/2019/Meredith-Reports-Fiscal-2019-Third-Quarter-Results/default.aspx

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