Meredith Reports Fiscal 2021 Fourth Quarter And Full Year Results

“We delivered strong operational performance in fiscal 2021 despite the many challenges presented by the COVID-19 pandemic, ending the year in a stronger financial and competitive position than when we started,” said Meredith Chairman and Chief Executive Officer Tom Harty. “From a strategic standpoint, fiscal 2021 was transformative. Our digital businesses are delivering record performance, and our agreed sale of the Local Media Group significantly strengthens our financial position.”

Revenues grew to $3.0 billion, up 5 percent. Earnings from continuing operations were $307 million, compared to a loss of $209 million. Adjusted EBITDA was $683 million, compared to $548 million.

Key accomplishments included:
*Digital advertising revenues surpassing magazine for the first time in Meredith’s history. Digital advertising grew 31 percent. Additionally, Meredith’s licensing and digital and other consumer driven revenues grew 27 percent and 25 percent, respectively.
*$254 million debt reduction, enabled by record Cash Flow from Operations and Free Cash Flow. Debt reduction was enabled by total company revenue performance along with proactive actions to enhance Meredith’s financial flexibility.
*Agreeing to sell Meredith’s Local Media Group for $2.825 billion, representing a 10x valuation. The transaction, which also includes spinning Meredith’s National Media Group, comprising digital and magazine, out to shareholders, is expected to advance the company’s financial priorities including reducing net debt, improving financial flexibility, optimizing capital allocation to high-potential opportunities, and providing returns to shareholders.

Fiscal 2021 fourth quarter revenues grew 17 percent to $718 million. Key highlights included:
*80 percent increase in digital advertising revenues, driving 26 percent growth in total National Media Group advertising related revenues. Meredith continues to benefit from its proprietary technology platform that brings together strong content and trusted brands, unique taxonomy, and first party data.
*19 percent increase in licensing/digital and other consumer driven revenues. Performance was driven by Apple News+, strong sales of Better Homes & Gardens-branded products at Walmart, and performance marketing via retail partners, including Walmart, Amazon, and Target.
*50 percent increase in non-political spot advertising and a 5 percent increase in retransmission revenues. Non-political spot advertising growth was driven primarily by professional services, automotive, and gaming categories, while retransmission was driven primarily by renewals and annual escalation.
*7 percent increase in combined newsstand and subscription revenues. Newsstand performance was driven by more titles published and stronger consumer demand as the channel recovers from COVID-19-related declines. Subscription performance benefited from strong growth in solicitation channels that drive high lifetime subscriber value, including owned and operated digital properties, paid search, direct mail, and renewal campaigns.

Earnings from continuing operations were $37 million, compared to $6 million. Results included $18 million of special items, primarily transaction costs, compared to $6 million. Adjusted EBITDA was $124 million, compared to $80 million, reflecting strong digital, non-political advertising, and consumer revenue growth and positive cost leverage, partially offset by lower magazine advertising revenues.

“We concluded the year with a strong fourth quarter performance as our digital business again delivered record results, including digital advertising revenues that surpassed magazine advertising for the third consecutive quarter, coupled with another quarter of licensing and digital consumer related growth,” Harty said. “Looking ahead, we believe Meredith is well-positioned for growth through the combination of our broad audience engagement and trusted brands across media platforms, our proprietary digital platform, and a stronger balance sheet we expect will enable future digital and consumer investments and capital returns to shareholders.”
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