Meredith Reports Fiscal 2021 Third Quarter And Nine Month Results

Meredith Corporation (NYSE: MDP; today reported fiscal 2021 third quarter and first nine month results as summarized below. All financial results refer to fiscal 2021 third quarter and the comparable prior-year period unless otherwise stated.

“Our National Media digital business again delivered record revenue performance, including digital advertising revenues that surpassed magazine advertising for the second consecutive quarter, along with another quarter of growth in licensing and digital consumer related revenues,” said Meredith Chairman and Chief Executive Officer Tom Harty. “Our mature media performance was mixed as Local Media non-political spot advertising revenues exceeded our estimates, while magazine advertising revenues were adversely impacted by clients that continue to be affected by the pandemic and resulting uncertainty. Our plan and efforts to enhance financial flexibility and manage costs continue producing tangible results including debt redemption of $251 million and Free Cash Flow of $68 million.”

Fiscal 2021 third quarter revenues declined 5 percent to $665 million. Key performance indicators included:
*21 percent increase in National Media Group digital advertising revenues. Sessions grew 17 percent, led by PEOPLE, Allrecipes, Southern Living, and Martha Stewart. Meredith continues benefiting from its proprietary technology platform that brings together content, unique taxonomy, and first party data.
*31 percent increase in National Media Group 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.
*6 percent increase in non-political spot advertising and retransmission revenues. Non-political spot advertising growth was the first since the start of the COVID-19 pandemic, and was driven primarily by the professional services, gaming, and home categories.
*19 percent decline in combined magazine advertising, subscription, and newsstand revenues. Advertising performance was impacted primarily by lower than expected performance in the food & beverage and prescription drug categories. Subscription revenue performance reflects a stable 36 million rate base and Meredith’s ongoing strategy to engage subscribers directly. This strategy reduces revenue and increases profitability by fostering a stronger and more profitable relationship with subscribers, including the opportunity for rate increases over time. Newsstand performance was impacted primarily by lower demand and fewer issues published.

Earnings from continuing operations were $79 million, compared to a loss of $289 million. Fiscal 2021 third quarter results included a net gain from special items of $53 million, driven primarily by the Travel + Leisure brand sale partially offset by debt redemption costs during the quarter. Fiscal 2020 third quarter net special items of $332 million were primarily related to non-cash impairments of goodwill and intangible assets at the onset of COVID-19.

Adjusted EBITDA was $112 million, compared to $152 million. The lower adjusted EBITDA reflects a full quarter of COVID-19 pandemic impact compared to a partial quarter impact, resulting in lower mature magazine advertising and newsstand revenues, partially offset by strong growth in digital advertising, digital and other consumer driven, and licensing revenues.

Cash flows from operations and Free Cash Flow were $76 million and $68 million, respectively, compared to $111 million and $100 million, driven primarily by lower adjusted EBITDA.

Fiscal 2021 first nine month revenues grew 1 percent to $2.3 billion compared to the prior year nine month period. Earnings from continuing operations were $270 million, compared to a loss of $215 million. Adjusted EBITDA was $559 million, compared to $468 million, reflecting record political and strong growth in digital advertising revenues that surpassed magazine advertising revenues.

Net debt reduction remains Meredith’s No. 1 priority. Meredith had cash and cash equivalents of $231 million as of March 31, 2021, reflecting $251 million of debt redemption since December 31, 2020. Net debt was $2.6 billion and Meredith maintained a zero balance on its $350 million revolving credit facility at March 31, 2021.

“As the economy continues to rebound, we see fiscal 2021 fourth quarter revenue and adjusted EBITDA growth led by digital and non-political spot advertising, along with stabilizing magazine performance,” Harty said. “We expect full year fiscal 2021 National Media Group digital advertising revenues to surpass magazine advertising for the first time in our history. This important milestone reflects our evolution as a dynamic media company with the proven ability to engage audiences across a diverse set of platforms.”
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