Meredith Local Media Group up 20% in fiscal Q4


MeredithMeredith reported fiscal Q4 2014 net earnings increased 20%, and earnings per share rose 19% to $0.89 from $0.75 in the prior-year period.  Excluding special items, fiscal 2014 Q4 earnings per share were $0.88.  Revenues increased to $391 million.

“Our Local Media Group delivered another quarter of record performance,” said Meredith Chairman and CEO Stephen Lacy.  “We were particularly pleased with the performance of KMOV in St. Louis in its first full quarter under Meredith’s ownership.  We also completed the acquisition of KTVK in Phoenix, and announced an agreement to purchase WGGB, the ABC affiliate in Springfield, Mass.”

Lacy noted the following highlights for the quarter:

–Local Media Group revenues increased 20% to $111 million, and EBITDA grew 20% to $41 million (excluding special items), both records for a fiscal fourth quarter. Growth was driven by strong performance from Meredith television stations in Phoenix, Las Vegas and Greenville; the addition of KMOV in St. Louis; record digital/mobile ad revenues; and higher retransmission-related revenues and profit.

–National Media Group operating profit margins strengthened, driven by higher magazine advertising rates, increased contribution from circulation activities, and a 6% decrease in operating expenses. Operating profit was even with the prior year.

–Consumer engagement grew across all of Meredith’s media platforms. Total traffic to Company websites grew to an average of more than 60 million unique visitors per month, a record high. Meredith magazine readership stands at 110 million. Meredith’s television stations increased local programming hours and delivered a strong May ratings book.

Fiscal 2014 earnings per share were $2.50, compared to $2.74 in the prior year.  Excluding special items in both years, fiscal 2014 earnings per share were $2.80, compared to $2.91.  Meredith recorded $34 million less of political advertising revenues in fiscal 2014 than in the prior year, as expected in an off-election year.  Total revenues were $1.5 billion, even with the prior year.

“In fiscal 2014, we added great new television stations to our Local Media Group portfolio; executed a number of initiatives to strengthen and grow our National Media Group including the launch of Allrecipes magazine; and increased our dividend and expanded our share repurchase program,” Lacy said.  “We aggressively executed on our Total Shareholder Return Strategy by deploying capital in high cash flow businesses and grew the amount of cash returned to our shareholders.”

Fiscal 2014 highlights:

Significant expansion of Meredith’s television footprint including:

–KTVK, an independent station in Phoenix, the nation’s 12th largest television market.  This transaction closed on June 19, 2014.  KTVK produces more hours of local news than any station in the market.  Meredith now has a duopoly in Phoenix as it also owns KPHO, the CBS affiliate.

–The KMOV (CBS) transaction closed on 2/28, and the station has been successfully integrated into Meredith’s operations.  KMOV consistently wins the important late news rating book. Meredith now operates the two largest CBS affiliates in Missouri, the other being KCTV in Kansas City.

–WGGB, the ABC affiliate in Springfield, Mass.  This transaction is expected to close in the first quarter of fiscal 2015.  WGGB is also the Fox affiliate, airing it on a digital tier. This would be another duopoly for Meredith, as it currently owns WSHM, the CBS affiliate.

Meredith grew its digital audience to more than 60 million monthly unique visitors, according to the most recent data from comScore.  Highlights included expansion of its video library to more than 15,000 searchable videos; and strengthening the presence of Meredith brands across social media platforms such as Facebook and Pinterest.  Better Homes and Gardens achieved 2 million followers on Facebook, making it the most popular brand among its peers on that platform.

Meredith’s Local Media Group delivered significant growth in retransmission-related revenues, and has contractual agreements for its network affiliations in place through the next two to four years.

In Meredith’s National Media Group, brand licensing delivered excellent performance driven by strong sales of Better Homes and Gardens branded products at Walmart stores across the U.S., along with expansion of the Better Homes and Gardens real estate network.  Meredith Xcelerated Marketing grew operating profit (excluding special items) by solidifying business with its Top 10 clients, including expansions with Chrysler, Mercer, Allergan and Kia.

Successful execution of Meredith’s Total Shareholder Return strategy – Meredith increased its dividend 6% to $1.73 on an annualized basis, a yield of approximately 4%.  The Company repurchased 1.6 million shares of its stock and authorized an additional $100 million for its share repurchase program.


Meredith expects full year fiscal 2015 earnings per share to range from $3.00 to $3.25.  In fiscal 2015, Meredith expects a total of $28 million to $33 million of political advertising revenues at its television stations, with the majority being booked in the second fiscal quarter.

Looking more closely at the first quarter of fiscal 2015 compared to the prior-year period:

–Total company revenues are expected to be up mid-single digits.

–Total Local Media Group revenues are expected to be up 35 to 40%.  Approximately one-third of total fiscal 2015 political advertising –revenues are expected to be recorded in the first fiscal quarter.

Total National Media Group revenues are expected to be down mid-single digits.

–Meredith expects fiscal 2015 first quarter earnings per share to range from $0.60 to $0.65, compared to $0.53 in the prior-year period.

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Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.