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Meredith Fiscal 4Q TV Revenues Drop 21 Percent

DESMOINES, IOWA: Shares of Meredith Corp. slipped this morning on the company’s reported loss of $3.64 a share for its fiscal fourth quarter and $2.28 for its fiscal year ending June 30. Meredith (NYSE: MDP) went from around $30 Tuesday to $26.52 by mid-day Wednesday.

Meredith’s combined results took a hit from two special charges--$185 million on broadcast spectrum licenses and goodwill, and $3.4 million on severance related to the centralization of TV station functions. Both figures are after taxes. Without the charges, 4Q09 earnings per share would have been 55 cents; full-year EPS, $2.03.

Revenues for Meredith’s 12 TV stations and single AM radio station came in at $62 million for the three months ending June 30. The year-ago total was $79 million, a difference of 21 percent--pretty much in line with results across the industry. (See “Broadcast Revenues Stable at Double-digit Drop,” July 28, 2009.)

The 4Q operating loss was $292 million, compared to a profit of $18 million a year ago. Excluding charges, the stations would have posted a 4Q09 profit of $6 million.

For the full year, the broadcast segment generated $275 million compared to $319 million for fiscal 2008. Operating loss for FY2009 was $258 million, inclusive of special charges, compared to a profit of $78 million for FY2008. Excluding charges, the group would have posted a FY2009 profit of $43 million.

Meredith said the depressed auto market had a significant impact on the broadcast results. Auto ad revenues were down nearly 45 percent in fiscal 2009, and more than 55 percent in the fourth quarter.

“Despite the current advertising weakness, television remains the most powerful and efficient way for advertisers to reach American consumers,” Meredith President and CEO Stephen Lacy said. “To combat lower advertising revenues, we are pursuing multiplatform marketing solutions for clients similar to our publishing business, have reorganized our national sales activities and are centralizing certain functions. We are encouraged by continued growth in our consumer connection, higher revenues at Meredith Video Solutions and increased retransmission fees.”

Retrans fees doubled in FY2009 and increased 75 percent in 4Q. Video Solutions revenues increased 50 percent for the full year and 20 percent in 4Q09.

Combined FY2009 revenues for the broadcast and publishing divisions were $1.41 billion compared to $1.55 billion the year before; 4Q09 revenues totaled $346 million compared to $376 million a year earlier.

Meredith made a $100 million debt payment on June 30 2009, reducing its total debt balance to $380 million, a 22 percent reduction from the end of FY2008. As a result, Meredith entered a new $75 million private debt placement from a “leading life insurance company” on July 13, it said. The proceeds were used to pay down Meredith’s revolving credit facilities.
-- Deborah D. McAdams

Previous TVB coverage of Meredith:
May 15, 2009:Meredith Declares Dividend
Meredith Corp. declared a dividend Wednesday of 22.5 cents a share, payable June 15 to shareholders of record May 29. The company said it has paid a dividend for 62 consecutive years and has increased it for 16.

January 21, 2009: “Meredith 2Q Station Revenue Down 20 Percent”
The company’s 12 TV stations generated $84 million in the quarter compared to $88 million a year ago. Operating profit was $22 million compared to $28 million a year ago. Political advertising contributed $17 million to the results compared to $1 million last year.

November 24, 2008: “Meredith TV Station Earnings Down”
The 12 Meredith Corp. (NYSE: MDP) stations generated $70 million in revenue for the company’s first quarter of fiscal 2009, ending Sept. 30, 2008; compared to $75 million a year ago. Operating profit was $11 million, compared to $14 million one year ago, and EBITDA was $17 million, compared to $20 million last year.