Form 8-K Meredith Corporation
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 25, 2012 MEREDITH CORPORATION (Exact name of registrant as specified in its charter) Iowa 1-5128 42-0410230 (State or other jurisdiction of incorporation or organization) (Commission file number) (I.R.S. Employer Identification No.) 1716 Locust Street, Des Moines, Iowa 50309-3023 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (515) 284-3000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On April 25, 2012, Meredith Corporation issued a news release reporting earnings for the third fiscal quarter and nine months ended March 31, 2012. That news release is attached as an exhibit. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99 News release issued by Meredith Corporation dated April 25, 2012, reporting financial results for the third fiscal quarter and nine months ended March 31, 2012. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MEREDITH CORPORATION Registrant /s/ Joseph Ceryanec Joseph Ceryanec Vice President - Chief Financial Officer (Principal Financial and Accounting Officer) Date: April 25, 2012 INDEX TO EXHIBITS Exhibit Number Item 99 News release issued by Meredith Corporation dated April 25, 2012, reporting financial results for the third fiscal quarter and nine months ended March 31, 2012. Exhibit 99 MEREDITH CORPORATION REPORTS FISCAL 2012 THIRD QUARTER RESULTS Local Media Posts Record 3 rd Quarter Profit; Current Dividend Yield Approximately 5% DES MOINES, IA (April 25, 2012) - Meredith Corporation (NYSE: MDP) , the leading media and marketing company serving American women, today reported fiscal 2012 third quarter earnings per share of $0.47, including a special charge of $0.19 per share. Excluding the special charge, earnings per share were $0.66, in-line with Meredith's previously stated expectations. Revenues increased to $346 million. These results compare to fiscal 2011 third quarter earnings per share of $0.67 and revenues of $339 million. “We are very pleased with the ongoing strong performance of our local television business, and encouraged by improving national media advertising trends as calendar 2012 progresses,” said Meredith Chairman and CEO Stephen M. Lacy. “We continue to accelerate the execution of digital and video initiatives across our businesses, including expanding our tablet offerings, introducing new mobile apps, and increasing original video programming.” Lacy noted several business highlights achieved during the quarter: • Local Media Group non-political advertising revenues grew 5 percent, the 10 th consecutive quarter of year- over-year growth. Operating profit grew more than 70 percent to $23 million, a record for a fiscal third quarter and, combined with a 4 percent decrease in expenses, produced a strong 37 percent EBITDA margin. • National Media Group advertising revenues grew 2 percent and circulation revenues increased 15 percent. Growth was fueled by the recent acquisitions of Allrecipes.com, EveryDay with Rachael Ray and FamilyFun. Excluding the recent acquisitions, advertising revenues were down 7 percent and circulation revenues grew 3 percent. • Digital advertising revenues in both the National and Local media groups rose 70 percent. Growth in the National Media Group was driven equally by existing Meredith Women's Network websites and the addition of Allrecipes.com. • Consumer engagement remained strong across the Company. Meredith magazine readership increased to a record 115 million, and Meredith's local television station group produced a strong February ratings book. Additionally, Meredith delivered record website traffic across its digital activities, including more than 40 million unique visitors in March, reflecting the inclusion of Allrecipes.com. To realize the full value of recent acquisitions and as part of an ongoing process to improve its operations, Meredith recorded a special charge in the third quarter of fiscal 2012 with two primary components: • $2.5 million ($1.5 million after tax, or $0.03 per share) related to transaction costs associated with its $175 million acquisition of Allrecipes.com, the world's largest digital food brand. • $12.2 million ($7.1 million after tax, or $0.16 per share) related primarily to business realignments in the National Media Group following a series of recent acquisitions, including selected workforce reductions and vacated lease space. The purpose of this realignment is to optimize performance; achieve cost efficiencies; and accelerate go-to-market strategies across multiple platforms, including print, video, digital, mobile and social. “The media and marketing landscape continues to evolve, and we are aligning our businesses - which we've substantially augmented through a series of strategic acquisitions and initiatives - to best serve our consumers and customers on whatever platform they choose,” Lacy said. “We've led the way among media companies at creating a true multiplatform business, and we fully intend to realize the maximum financial potential of our expanded portfolio as part of our commitment to Total Shareholder Return.” Key elements to Meredith's Total Shareholder Return financial strategy include (1) A current annual dividend of $1.53 per share, which is currently yielding approximately 5 percent; (2) A $100 million share repurchase program; and (3) Ongoing strategic investments to drive incremental revenue and profit growth over time. For the first nine months of fiscal 2012, earnings per share were $1.65. Excluding the special charge recorded in the third quarter, earnings per share were $1.84. These results compare to earnings per share of $2.12 in the first nine months of fiscal 2011, when Meredith recorded $31 million, or $0.42 per share, more political advertising revenues. Total revenues were $1 billion in both periods. OPERATING DETAIL LOCAL MEDIA GROUP Fiscal 2012 third quarter Local Media Group operating profit was a record $23 million, compared to $13 million in the year-ago period, an increase of 71 percent. Total revenues increased 10 percent to $78 million, compared to $71 million. Expenses declined 4 percent, helping drive a group EBITDA margin of 37 percent. Looking more closely at non-political advertising performance in the third quarter of fiscal 2012 compared to the year- ago period: • Revenues rose 5 percent to $67 million, the 10 th -straight quarter of year-over-year improvement. Growth was strongest at Meredith's stations in Las Vegas (FOX), Phoenix (CBS) and Nashville (NBC). • Automotive advertising category revenues grew 4 percent, on top of 13 percent growth in the year-ago period. Professional services, the second-largest category, grew 11 percent. • Digital advertising revenues increased 70 percent, driven by enhanced sales initiatives and product offerings. Meredith's television stations delivered very strong year-over-year ratings growth during the most recent February measurement period in the important adults ages 25 to 54 demographic. Of note: • WFSB (CBS Hartford) enhanced its No. 1 ranking in all news periods and day parts, and is once again well- positioned to capture substantial political advertising dollars. • KCTV (CBS Kansas City) delivered growth in afternoon, evening and late news. • KPHO (CBS Phoenix) delivered double-digit ratings growth in morning, afternoon and evening news. • KVVU (FOX Las Vegas) and WHNS (FOX Greenville, SC) both delivered double-digit ratings growth in morning and late news. Other revenues grew nearly 40 percent in the third quarter of fiscal 2012, driven primarily by Meredith's management of Peachtree TV (WPCH-TV) in Atlanta, which began on March 28, 2011. Meredith Video Studios, producer of the nationally-syndicated The Better Show, also contributed to the revenue gains. “Our Local Media group is doing an excellent job of increasing ratings and translating them into advertising revenues, consistently ranking us among the leading station groups in advertising revenue gains,” said Meredith Local Media Group President Paul Karpowicz. “Additionally, we are augmenting results with revenues from Meredith Video Studios, operation of Turner's Peachtree TV in Atlanta, and retransmission consent fees from subscription television operators.” For the first nine months of fiscal 2012, Local Media Group operating profit was $61 million and revenues were $232 million. These results compare to operating profit of $69 million and revenues of $244 million in the year-ago period. Meredith recorded $31 million less of political advertising revenues in the first nine months of fiscal 2012 than in the year-ago period, which is expected in an off-election year.