Meredith Corporation announced that it will record a special charge of approximately $5.5 million its fiscal 2010 second quarter. That works out to approximately $3.5 million after-tax, or seven cents per share.
The charge – including severance, creative and distribution costs – is related to a repositioning of its Special Interest Media (SIM) business, a collection of primarily newsstand publications focused on home improvement and do-it-yourself projects in niche content areas such as remodeling, decorating, food and entertaining, and gardening and outdoor living.
“The recessionary economy has impacted the consumer’s ability to execute these types of projects and led to a decrease in advertising spending. As a result, we are repositioning our SIM portfolio to focus on certain home and food verticals, in particular those aligned with the Better Homes and Gardens brand. We continue to believe in the long-term viability of this business and believe this strategy will deliver substantially higher profitability going forward,” said Meredith President and Chief Executive Officer Stephen M. Lacy.
Meredith plans to produce approximately 90 SIM issues in fiscal 2011, compared to approximately 150 in fiscal 2010. Approximately 45 positions are being impacted as part of this repositioning.