Meredith Reports Fiscal 2021 First Quarter Results

DES MOINES, Iowa, Nov. 5, 2020 /PRNewswire/ -- Meredith Corporation (NYSE: MDP; Meredith.com) today reported fiscal 2021 first quarter results as summarized below:

"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.

Portfolio and Capabilities Continue to Evolve to Meet Consumer, Client Opportunity

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 PEOPLE.com and Allrecipes.com.
• 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, PEOPLE.com 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."

CONFERENCE CALL PRESENTATION SLIDES AND WEBCAST

Meredith will post a presentation containing further detail on fiscal 2021 first quarter results to the investor relations section of Meredith.com at approximately 7:00 a.m. EST. Additionally, Meredith will host a conference call on November 5, 2020, at 8:00 a.m. EST to discuss fiscal 2021 first quarter results. A webcast will be accessible to the public on the Company's website, and a replay will be available for two weeks. A transcript will be available within 48 hours of the call at Meredith.com.

RATIONALE FOR USE AND ACCESS TO NON-GAAP RESULTS

Management uses and presents GAAP and non-GAAP results to evaluate and communicate its performance. Non-GAAP measures should not be construed as alternatives to GAAP measures. Free cash flow, earnings from continuing operations before special items, operating profit before special items, adjusted EBITDA, adjusted EBITDA margin, and comparable results are common supplemental measures of performance used by investors and financial analysts.

Management believes that free cash flow, earnings from continuing operations before special items, operating profit before special items, adjusted EBITDA, adjusted EBITDA margin, and comparable results provide additional analytical tools. Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures. This metric has been included as a measure of the Company's liquidity and ability to fund its operations. Earnings from continuing operations before special items and operating profit before special items remove the impact of special items on earnings from continuing operations and operating profit. Adjusted EBITDA is defined as earnings from continuing operations before interest expense, income taxes, depreciation, amortization and special items. These special items have been removed as they have been deemed to be non-operational in nature. Comparable results remove the impact of portfolio changes in our magazine business to facilitate year-over-year comparisons. Management does not use adjusted EBITDA as a measure of liquidity or funds available for management's discretionary use because it excludes certain contractual and nondiscretionary expenditures.

Results before special items are supplemental non-GAAP financial measures. While these adjusted results are not a substitute for reported results under GAAP, management believes this information is useful as an aid to further understand Meredith's current performance, performance trends and financial condition. Reconciliations of GAAP to non-GAAP measures are attached to this press release and available at Meredith.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These statements are based on management's current knowledge and estimates of factors affecting the Company and its operations. Statements in this release that are forward-looking include, but are not limited to, statements related to PEOPLE TV's distribution and the Company's anticipated 2021 fiscal year cash generation and liquidity. Forward-looking statements can be identified by words such as may, should, expects, provides, anticipates, assumes, can, will, meets, could, likely, intends, might, predicts, seeks, would, believes, estimates, plans, continues, guidance or outlook, or variations of these words or similar expressions.

Actual results may differ materially from those currently anticipated. Factors that could adversely affect future results include, but are not limited to, market conditions, including the availability of debt capital and the terms upon which such debt can be secured, if at all; the impact of the COVID-19 pandemic on the Company, its customers and its suppliers; downturns in global, national and/or local economies; a softening of the domestic advertising market; world, national or local events that could disrupt broadcast television; increased consolidation among major advertisers or other events depressing the level of advertising spending; the unexpected loss or insolvency of one or more major clients or vendors; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicated programming or other costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company's industries; increases in interest rates; the consequences of acquisitions and/or dispositions; the Company's ability to comply with the terms of its debt financing; and the risk factors contained in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC"), which is available on the SEC's website at www.sec.gov, and the Company's other filings with the SEC. Such risk factors may be amplified by the COVID-19 pandemic and its potential impact on the Company's business and the global economy. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT MEREDITH CORPORATION

Meredith Corporation has been committed to service journalism for 119 years. Today, Meredith uses multiple distribution platforms – including broadcast television, print, digital, mobile and video – to provide consumers with content they desire and to deliver the messages of its advertising and marketing partners.

Meredith's National Media Group brands serve more than 190 million unduplicated American consumers, including 120 million women and 90 percent of U.S. millennial women. Meredith is a leader in creating content across media platforms and life stages in key consumer interest areas such as entertainment, food, lifestyle, parenting and home. Meredith's leading national brands include PEOPLE, Better Homes & Gardens, InStyle, Allrecipes, REAL SIMPLE, SHAPE, Southern Living and Martha Stewart Living. Meredith also features robust brand licensing activities including more than 3,000 SKUs of branded products at 4,000 Walmart stores across the U.S. and at walmart.com. Meredith's National Media Group also includes leading affinity marketer Synapse, and The Foundry, the Company's state-of-the-art creative lab and content studio.

Meredith's Local Media Group includes 17 television stations reaching 11 percent of U.S. households and 30 million viewers. Meredith's portfolio is concentrated in large, fast-growing markets, with seven stations in the nation's Top 25 markets – including Atlanta, Phoenix, St. Louis and Portland – and 13 in the Top 50. Meredith's stations produce 745 hours of local news and entertainment content each week, and operate leading local digital destinations. Meredith also owns MNI Targeted Media, which delivers targeted advertising solutions to more than 1,200 clients on a local, regional and national level.

SOURCE Meredith Corporation

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http://www.meredith.com

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