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DES MOINES, Iowa, April 28, 2016 /PRNewswire/ -- Meredith Corporation (NYSE:MDP) (www.meredith.com) - the leading media and marketing company with local television brands in large, fast-growing markets and national brands serving 100 million American women - today reported strong fiscal 2016 third quarter results:

• Earnings per share were $1.79, compared to $0.56 in the prior-year period.
• Excluding special items in both periods, earnings per share increased 30 percent to $0.92, compared to $0.71 in the prior-year period.
• Fiscal 2016 third-quarter special items were related primarily to $60 million received from the termination of Meredith's merger agreement with Media General, Inc. (See Tables 1-4 for supplemental disclosures regarding non-GAAP financial measures.)
• Total Company revenues increased 6 percent to $423 million.

"We delivered an exceptionally strong quarter - generating total advertising growth of 8 percent - as both our local and national business units performed well," said Meredith Chairman and CEO Stephen M. Lacy.  "We grew total company revenues 6 percent - and combined with diligent expense management - meaningfully increased our operating profit margin.  Additionally, we continued to return significant cash to our shareholders, raising our dividend over 8 percent to $1.98 per share on an annualized basis, further bolstering our commitment to Total Shareholder Return and our strong investment thesis."

Looking closer at Meredith's fiscal 2016 third quarter compared to the prior-year period, excluding special items:

• Local Media Group operating profit grew nearly 45 percent and revenues increased 15 percent, both setting records for a fiscal third quarter. EBITDA margin increased to 39 percent. Growth was driven by a 10 percent increase in advertising revenues - boosted by strong political advertising in early primary states - and higher retransmission consent fees.
• National Media Group operating profit grew 14 percent, as revenues and operating profit margin both increased. Performance was driven by 7 percent growth in advertising revenues, led by the prescription drug, food and beauty categories. Circulation revenues also increased.
• Total Company digital advertising revenues grew 11 percent to a fiscal third-quarter record. Performance was driven primarily by the Better Homes and Gardens, Parents and Allrecipes brands in the National Media Group, and higher advertising rates in the Local Media Group.

For the first nine months of fiscal 2016, earnings per share were $2.74, compared to $2.08 in the prior year.  Excluding special items in both periods, earnings per share were $2.24, compared to $2.36 in the prior year.  As expected in an off-election year, Meredith recorded $34 million, or $0.46 per share, less of high-margin, incremental political advertising revenues in the first nine months of fiscal 2016 than in the prior-year period.  Total revenues grew 4 percent to $1.2 billion.

OPERATING GROUP DETAIL

LOCAL MEDIA GROUP

Meredith's Local Media Group includes 17 owned or operated television stations reaching 11 percent of U.S. households.  Meredith's portfolio is concentrated in large, fast-growing markets, including seven stations in the nation's Top 25 and 13 in Top 50 markets.  Meredith's stations produce over 650 hours of local news and entertainment content each week.  Meredith expects to continue to grow its Local Media Group organically and through strategic acquisitions.

Fiscal 2016 third quarter Local Media Group operating profit grew 47 percent to $46 million from $31 million in the prior-year period ($32 million excluding special items).  Total Local Media Group revenues increased 15 percent to $141 million.  (See Tables 1-4 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at fiscal 2016 third-quarter performance compared to the prior year:

• Total advertising revenues increased 10 percent.
• Non-political advertising revenues grew 4 percent to $91 million. Results were led by growth in the automotive, gaming and entertainment categories.
• Political advertising revenues were $6 million. In particular, Meredith stations generated significant revenues from presidential primaries in Missouri, Nevada and South Carolina.
• Digital advertising revenues grew more than 15 percent as a series of growth strategies continue to drive higher advertising rates across the group's digital businesses.
• Other revenues and operating expenses increased, due primarily to growth in retransmission revenues from cable and satellite television operators and higher programming fees paid to affiliated networks.

Meredith continued to demonstrate its strong connection with viewers during the February ratings period, as eight of its stations ranked No. 1 or No. 2 in morning news, and nine stations were No. 1 or No. 2 in late news.

"We delivered an excellent third quarter, growing non-political advertising and delivering strong political advertising, as well as benefitting from growth in net retransmission contribution," said Meredith Local Media Group President Paul Karpowicz.  "Looking to the balance of calendar 2016, we expect to deliver significant revenues from the strong political advertising environment and our recent retransmission agreements."

For the first nine months of fiscal 2016, Local Media Group operating profit was $116 million, compared to $123 million in the prior-year period.  Excluding special items in both periods, operating profit was $115 million, compared to $129 million.  As expected in an off-election year, Meredith recorded $34 million less of high-margin, incremental political advertising revenues in the first nine months of fiscal 2016 than in the prior-year period.  Total Local Media Group revenues were $407 million, compared to $404 million in the prior-year period.

NATIONAL MEDIA GROUP

Meredith's National Media Group reaches 100 million unduplicated American women, and nearly 75 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 food, home, parenthood and health.  It also features robust brand licensing activities and innovative business-to-business marketing services.  Meredith expects to continue to grow its National Media Group organically and through strategic acquisitions.

Fiscal 2016 third quarter National Media Group operating profit was $35 million, compared to $23 million in the prior-year period.  Excluding special items, operating profit grew 14 percent to $38 million.   Revenues increased to $282 million from $275 million.  (See Tables 1-4 for supplemental disclosures regarding non-GAAP financial measures.)

Looking more closely at fiscal 2016 third-quarter performance compared to the prior year:

• Total advertising revenues grew 7 percent to $126 million, led by growth at the Shape, Allrecipes and EatingWell brands. The prescription drug, food and beauty categories were particularly strong.
• Digital advertising revenues grew 10 percent, led by the Better Homes and Gardens, Parents and Allrecipes brands.
• Circulation revenues increased to $97 million, reflecting the ongoing strength of Meredith's 30 million subscriber base. Meredith continues to invest in strategies to increase contribution from circulation activities, including expanding the number of subscriptions that renew automatically.

Meredith's consumer engagement remains very strong.  According to the latest Magazine Media 360 Brand Audience Report, Allrecipes and Better Homes and Gardens rank among the Top Five brands in total audience size.  Fit Pregnancy & Baby, EatingWell and Siempre Mujer are among the 10 fastest-growing brands in audience size.

"We're pleased to have delivered growth in both advertising and circulation revenues, reflecting the ongoing appeal of our brands to both Baby Boom and Millennial women," said Meredith National Media Group President Tom Harty.  "Looking ahead to the balance of fiscal 2016, we expect continued growth in advertising, operating profit and margins."

For the first nine months of fiscal 2016, National Media Group operating profit was $91 million, compared to $78 million in the prior-year period.  Excluding special items in both periods, operating profit increased 6 percent to $99 million.  Revenues increased 6 percent to $807 million.

OTHER FINANCIAL INFORMATION

Total debt was $703 million, and the weighted average interest rate was 2.7 percent, with $400 million effectively fixed at low rates.  Meredith's debt-to-EBITDA ratio for the trailing 12 months was 2.3 to 1 (as defined in Meredith's credit agreements).  All metrics are as of March 31, 2016.

Meredith continues to focus on its successful Total Shareholder Return program.  Key elements include:

• An annualized dividend of $1.98 per share that's yielding approximately 4 percent based on yesterday's closing price. Meredith has paid dividends for 69 consecutive years and increased them for 23 years straight.
• An ongoing share repurchase program with $89 million remaining under current authorizations.
• Strategic investments to scale the business and increase shareholder value.

All earnings per share figures in the text of this release are diluted.  Both basic and diluted earnings per share can be found in the attached Condensed Consolidated Statements of Earnings.  All fiscal 2016 third-quarter comparisons are against the comparable prior-year period unless otherwise stated.

OUTLOOK

Looking at the fourth quarter of fiscal 2016 compared to the prior-year period, Meredith expects:

• Total Company revenues to be up in the low- to mid-single digits.
• Total Local Media Group revenues to be up in the mid- to high-single digits.
• Total National Media Group revenues to be flat to up slightly.
• Earnings per share to range from $1.01 to $1.06.

When adding 2016 fourth quarter expected results to the $2.24 (before special items) generated in the first nine months, Meredith expects fiscal 2016 full year earnings per share to range from $3.25 to $3.30, an increase from the original fiscal 2016 guidance range of $2.90 to $3.25 that Meredith provided on July 30, 2015.

A number of uncertainties remain that may affect Meredith's outlook as stated in this press release for the fourth quarter and full year fiscal 2016.  These and other uncertainties are referenced below under "Cautionary Statement Regarding Forward-Looking Statements" and in certain filings with the U.S. Securities and Exchange Commission.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on April 28, 2016, at 11 a.m. EDT to discuss fiscal 2016 third-quarter results.  A live webcast will be accessible to the public on the Company's website, www.meredith.com, and a replay will be available for two weeks.  A transcript will be available within 48 hours of the call at www.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.  EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin are common supplemental measures of performance used by investors and financial analysts.  Management believes that EBITDA provides an additional analytical tool to clarify the Company's results from core operations and delineate underlying trends.  Management does not use EBITDA as a measure of liquidity or funds available for management's discretionary use because it includes certain contractual and non-discretionary expenditures.  Adjusted EBITDA is defined as EBITDA before special items.

Results excluding 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 in better understanding Meredith's current performance, performance trends and financial condition.  Reconciliations of non-GAAP to GAAP measures are attached to this press release and available at www.meredith.com.

SAFE HARBOR

This release contains certain forward-looking statements 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, the Company's revenue and earnings-per-share outlook for fourth-quarter and full-year fiscal 2016.

Actual results may differ materially from those currently anticipated.  Factors that could adversely affect future results include, but are not limited to, downturns in 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; and the consequences of acquisitions and/or dispositions.  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 (NYSE: MDP; www.meredith.com) has been committed to service journalism for more than 110 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 Local Media Group includes 17 owned or operated television stations reaching 11 percent of U.S. households. Meredith's portfolio is concentrated in large, fast-growing markets, with seven stations in the nation's Top 25 - including Atlanta, Phoenix, St. Louis and Portland - and 13 in Top 50 markets. Meredith's stations produce over 650 hours of local news and entertainment content each week, and operate leading local digital destinations.

Meredith's National Media Group reaches 100 million unduplicated women every month, including nearly 75 percent of U.S. millennial women. Meredith is the leader in creating and distributing content across platforms in key consumer interest areas such as food, home, parenting and health through well-known brands such as Better Homes and Gardens, Allrecipes, Parents and Shape.  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. Meredith Xcelerated Marketing is a leader at developing and delivering custom content and customer relationship marketing programs for many of the world's top brands, including Kraft, Lowe's and NBC Universal.

Meredith's balanced portfolio consistently generates substantial free cash flow, and the Company is committed to growing Total Shareholder Return through dividend payments, share repurchases and strategic business investments.  Meredith's current annualized dividend of $1.98 per share yields approximately 4 percent.  Meredith has paid a dividend for 69 straight years and increased it for 23 consecutive years.

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SOURCE Meredith Corporation