Meredith Reports Fiscal 2021 First Quarter Results

“We are off to an encouraging start to fiscal 2021, with 15 percent growth in national digital advertising to a record high, and a 43 percent increase in local political spot advertising from the prior cycle two years ago,” said Meredith President and Chief Executive Officer Tom Harty. “While the COVID-19 pandemic continues to impact total Company revenues, sequentially our year-over-year performance has continued to recover. Our efforts to enhance financial flexibility and control costs have produced tangible results as demonstrated by our growth in operating profit and free cash flow. We anticipate these improvements will continue benefiting shareholders as macroeconomic conditions continue to improve and enable us to more meaningfully shift our focus to deleveraging and other long-term initiatives.”

Record Digital Advertising and Political Drives Profit Growth
Fiscal 2021 first quarter revenues were $694 million, down 4 percent from the prior-year period. Declines due to COVID-19 and previously announced magazine portfolio adjustments were partially offset by record first quarter revenue performance for National Media Group digital advertising and Local Media Group political revenues.

Fiscal 2021 first quarter earnings from continuing operations more than tripled to $42 million from $12 million in the prior-year period. Adjusted EBITDA grew 17 percent to $143 million due primarily to digital advertising and political revenue growth.

Fiscal 2021 first quarter cash flow from operations was $79 million, compared to a use of $14 million in the prior-year period, and free cash flow was $70 million, compared to a use of $29 million in the prior-year period, as Meredith benefited from political revenues, effective working capital improvements, lower compensation-related items, and lower restructuring payments.

Meredith had cash and cash equivalents of $201 million as of September 30, 2020, up from $132 million at June 30, 2020, and zero drawn on its $350 million revolving credit facility.

Meredith’s portfolio of national media brands – including industry leading PEOPLE, Allrecipes and Better Homes & Gardens – collectively serve more than 120 million American women. Consumers count on Meredith’s brands to deliver trusted information and inspiration while marketers are attracted by Meredith’s leadership reach in the entertainment, food, parenting, home, travel and health categories. Most of Meredith’s local media brands – located in large, fast-growing markets such as Phoenix, Portland and Las Vegas – are consistently ranked No. 1 or No. 2 in news viewership in their markets.

Meredith continues to evolve its portfolio and capabilities, including strategic investments over the long term in its digital platform, to drive stronger consumer engagement and higher returns for its clients. Highlights from the first quarter of fiscal 2021 include:
*The launch of Meredith’s Data Studio, which offers advertising solutions that harness the Company’s proprietary first-party data and predictive insights to help inform its clients’ marketing, product and business strategies. The Data Studio is one of the enhanced features of Meredith’s new digital platform.
*Advancement of Meredith’s video and audio strategies. Meredith announced new podcasts from its PEOPLE and InStyle brands. Video views to Meredith’s owned and operated properties grew by 9 percent compared to the prior-year period.
*A 16 percent increase in total sessions for Meredith’s National Media Group sites from the prior-year period, driven in part by strong performance from Meredith’s entertainment and food sites, particularly and
*Strong growth from Meredith’s brand licensing and ecommerce activities including Apple News+, along with digital couponing, content and affiliate commerce. These activities helped drive 21 percent growth in licensing and digital and other consumer driven revenues from the prior-year period.
*The launch of Meredith’s PEOPLE television show, which is the No. 1 new program of the 2020 season. Meredith recently announced a nationwide distribution agreement with Sony Pictures Television. Meredith debuted the PEOPLE show in September in each of its 12 local broadcast markets, and PEOPLE TV, its over-the-top media service. The PEOPLE show’s success provides a clear example of a strong Meredith brand being monetized across additional channels.

“Our readers and advertisers recognize the strength and durability of our portfolio of brands and businesses, which have become even more relevant as consumers continue to seek high quality content they can trust,” Harty said. “Advertisers want safe, reliable and high-performing digital platforms where they can reach those consumers. Digital media is evolving today in ways that favor Meredith’s extensive reach and first-party capabilities. Importantly, we continue to identify opportunities to benefit from consumer related revenue streams, empowered by our audience reach of more than 190 million engaged consumers, including nearly 95 percent of adult women in the United States.”
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