Meredith Third Quarter Net Earnings Per Share Rise 5 Percent

Meredith Third Quarter Net Earnings Per Share Rise 5 Percent

Core Earnings Per Share Increase 10 Percent

DES MOINES, Iowa, April 22 /PRNewswire-FirstCall/ -- Meredith Corporation (NYSE:MDP) , one of America's leading media and marketing companies, today reported fiscal 2008 third quarter net earnings per share of $0.97, compared to $0.92 per share in the prior-year quarter. Earnings per share from continuing operations were $0.98. Total revenues were $401 million, approximately even with the prior-year quarter.

Core earnings per share were also $0.98, an increase of 10 percent compared to the prior-year quarter. Core earnings per share exclude discontinued operations for fiscal 2008 and fiscal 2007, and a one-time tax benefit in the third quarter of fiscal 2007. Core earnings are reconciled to net earnings in Table 1.

For the first nine months of fiscal 2008, net earnings per share increased 6 percent to $2.40. Core earnings per share increased 7 percent to $2.39. Total revenues increased to $1.2 billion, while advertising revenues were $724 million.

"We were pleased to deliver increased earnings per share in our third quarter and year-to-date periods," said Meredith President and CEO Stephen M. Lacy. "Our strategy to grow non-advertising sources of revenue such as Meredith Integrated Marketing -- along with disciplined expense management -- offset softer advertising demand across our businesses."

   OPERATING DETAIL    Publishing  

Fiscal third quarter Publishing operating profit was $65 million and revenues were $323 million, both approximately even with the prior-year quarter.

After an exceptionally strong first half of fiscal 2008 -- when Publishing advertising revenues grew more than 10 percent -- in the third quarter Publishing experienced weakness in the home, pharmaceuticals and direct response advertising categories, partially offset by significant growth in food, Meredith's largest advertising category. Publishing advertising revenues were $155 million, compared to $161 million in the prior-year quarter. A strong increase in net advertising revenue per page partially offset lower page volume.

Circulation contribution and margin increased in the quarter, reflecting the strength of Meredith's consumer appeal and subscription operations. Circulation revenues declined, as expected, due primarily to the ongoing transition of Parents, Family Circle and Fitness magazines to the Meredith direct-to-publisher model.

Meredith's brands continue to demonstrate powerful consumer connection, as evidenced by growth in readership. According to recent data from Mediamark Research and Intelligence, readership across all of Meredith's titles is currently 140 million -- up from 83 million 10 years ago. This increase can be attributed to organic growth, acquisitions and launches of new brands.

"The vibrancy of our consumer brands has led to several important licensing relationships with market leaders such as Wal-Mart Stores Inc., Realogy Corp. and Universal Furniture," Lacy said. "These relationships further extend Meredith's brands to categories including home products, real estate and furniture."

Third quarter revenues at Meredith Integrated Marketing rose nearly 50 percent and operating profit rose more than 150 percent. Results included increased contributions from three marketing acquisitions over the last year: Genex, New Media Strategies and Directive. On a comparable basis, revenues rose over 30 percent and operating profit more than doubled due to continued growth at Meredith's custom publishing activities.

Publishing's retail book operation was impacted by weak sales, and higher than anticipated returns due primarily to inventory reductions at key retailers. The recently formed Meredith Retail operation is focusing on content, distribution and cost-reduction initiatives to strengthen financial performance.

For the first nine months of fiscal 2008, Publishing operating profit increased 12 percent to $165 million. Operating profit margin was 17.1 percent, up from 15.9 percent during the prior-year period. Publishing revenues increased 4 percent to $962 million, and Publishing advertising revenues increased 6 percent to $488 million.

Broadcasting

Fiscal third quarter Broadcasting operating profit was $19 million, compared to $21 million in the prior-year quarter. Revenues were $78 million, down slightly from the prior-year quarter.

During the quarter, growth in online, video, retransmission and political revenues offset weakness in spot television advertising, particularly in the automotive, retail and telecommunications categories.

Meredith's television stations continued to enhance their competitive position among adults 25-54 in the February ratings book. Nashville (+59 percent), Flint/Saginaw (+28 percent), Las Vegas (+23 percent) and Greenville (+14 percent) all posted strong share growth in morning news. In addition, five stations -- led by Greenville (+33 percent) and Las Vegas (+24 percent) -- increased overall sign-on to sign-off ratings.

Broadcasting online revenues increased nearly 50 percent during the quarter. Average unique visitors rose four-fold to 8 million per month, reflecting enhanced technology, content, promotions and sales-related activities. More than 1.3 million videos were streamed on Broadcasting's sites each month during the quarter.

"Better, an hour-long daily lifestyle television program produced by Meredith Video Solutions that runs across our station group, is off to a strong start," Lacy said. "The show builds on expertise from Meredith's expansive brand portfolio across the home, shelter and parenthood categories. It is currently in syndication to three non-Meredith stations, and 18 additional non-Meredith stations are scheduled to begin airing the show later in calendar 2008."

For the first nine months of fiscal 2008, Broadcasting operating profit was $60 million versus $79 million in the prior-year period. Revenues were $240 million compared to $264 million, reflecting the cyclical decline in political advertising. Net political revenues for the first nine months of fiscal 2008 were $29 million less than the prior-year period.

OTHER FINANCIAL INFORMATION

Meredith generated more than $50 million in free cash flow during the third fiscal quarter of 2008. Meredith repurchased approximately 1 million shares in the quarter as part of its ongoing share repurchase program, more than triple the 280,000 shares repurchased in the prior-year quarter. For the first nine months of fiscal 2008, Meredith repurchased approximately 2.4 million shares, compared to 1.1 million shares in all of fiscal 2007. Meredith has 1.2 million shares remaining under its current share repurchase authorization.

Unallocated corporate expenses decreased in the quarter, due primarily to lower management incentive accruals and employee benefit costs.

Total debt was $445 million as of March 31, 2008, versus $475 million as of June 30, 2007. The weighted average interest rate was 4.8 percent on March 31, 2008.

Meredith increased its quarterly dividend 16 percent to 21-1/2 cents per share during the fiscal third quarter. Meredith has paid a dividend for 61 consecutive years and has increased its dividend for 15 consecutive years.

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 consolidated statements of earnings.

OUTLOOK

Looking at the balance of fiscal 2008, Meredith is facing a weaker economy and related advertising demand.

Fourth quarter Publishing advertising revenues and Broadcast pacings are currently down in the low double digits, compared to the prior-year quarter. Meredith anticipates a 6 percent increase in paper prices and a 3 percent increase in postage rates, both effective in May 2008.

For the full fiscal year ending June 30, 2008, Meredith now expects to report earnings per share of $3.15 to $3.20, compared to $3.31 reported for fiscal 2007.

"I think it is important to note that our fundamentals are strong with great brands, outstanding customer connections, expanding online and video platforms, sound growth strategies, top-notch employees and management, and a solid track record of increasing shareholder value over time," Lacy said. "Our strategy is to capitalize on these strengths, carefully manage expenses, and work aggressively to increase market share. We have successfully employed this strategy during past times of economic weakness and down advertising cycles, enabling Meredith to emerge in a stronger and more competitive position."

A number of uncertainties remain that may affect Meredith's outlook as stated in this press release for results in the fourth quarter and full fiscal year. These include overall advertising volatility; the performance of Meredith's retail businesses; the amount of political advertising revenues generated at its broadcast television stations; and paper prices and postal rates. These and other uncertainties are referenced below under "Safe Harbor" and in certain SEC filings.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on April 22, 2008, at 11 a.m. EDT (10 a.m. CDT) to discuss fiscal third quarter results. A live webcast will be accessible to the public on http://www.meredith.com/, and a replay will be available for one week after the call. A transcript will be available within 48 hours following the call on http://www.meredith.com/.

RATIONALE FOR USE AND ACCESS TO NON-GAAP MEASURES

Management uses and presents GAAP and non-GAAP results to evaluate and communicate Meredith's performance. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA and free cash flow are common supplemental measures of performance used by investors and financial analysts. Management believes that EBITDA and free cash flow provide additional analytical tools to clarify Meredith's results from core operations and delineate underlying trends. Meredith does not use EBITDA or free cash flow as a measure of liquidity or funds available for management's discretionary use as they include certain contractual and non-discretionary expenditures.

Core earnings and core earnings per share are supplemental non-GAAP financial measures that exclude certain one-time items that are not expected to recur and are not reflective of Meredith's core business activities. While core earnings and core earnings per share are not a substitute for reported earnings 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 included in the attached tables. The attached consolidated financial statements and reconciliation tables will be made available at http://www.meredith.com/investors/index.html. Please click on "Non-GAAP/GAAP Reconciliation."

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 Meredith's operations. Statements in this announcement that are forward-looking include, but are not limited to, the statements regarding broadcasting pacings and publishing advertising revenues, along with Meredith's earnings per share outlook for the fourth quarter and all of fiscal 2008. 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; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing or syndicated programming costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting Meredith's industries; unexpected changes in interest rates; and the consequences of acquisitions and/or dispositions. Meredith 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:) (NYSE:http://www.meredith.com) is one of America's premier media and marketing companies. Meredith combines well-known national brands -- including Better Homes and Gardens, Parents, Ladies' Home Journal, Family Circle, American Baby, Fitness and More -- with local television brands in fast growing markets. Meredith is the industry leader in creating content in key consumer interest areas such as home, family, health and wellness and self-development. Meredith then uses multiple distribution platforms -- including print, television, online, mobile and video -- to give consumers content they desire and to deliver the messages of its marketing partners. Additionally, Meredith uses its many assets to create powerful custom marketing solutions for many of the nation's top brands and companies. The goals of these programs are to increase consumer loyalty and produce repeated consumer interaction. In the last two years, Meredith has significantly added to its capabilities in this area through the acquisition of cutting-edge companies in areas such as online, word-of-mouth and database marketing. Meredith employs approximately 3,000 people throughout the United States, including approximately 1,000 in Des Moines and 750 in New York City. Meredith's 2007 annual revenues were $1.6 billion.

   Meredith Corporation and Subsidiaries   Consolidated Statements of Earnings (Unaudited)      Period Ended           Three Months                     Nine Months    March 31,       2008      2007      Change       2008      2007   Change   (In thousands    except per    share data)    Revenues   Advertising    $230,212  $238,587    (3.5)%    $723,803  $722,693    0.2 %   Circulation      87,072    91,401    (4.7)%     240,317   253,999   (5.4)%   All other        83,736    71,830    16.6 %     237,218   210,823   12.5 %     Total      revenues     401,020   401,818    (0.2)%   1,201,338 1,187,515    1.2 %   Operating    expenses   Production,   distribution,   and editorial   170,437   163,872     4.0 %     512,267   492,790    4.0 %   Selling,    general, and    administrative 140,378   148,481    (5.5)%     448,994   460,360   (2.5)%   Depreciation    and    amortization    11,856    11,285     5.1 %      35,999    33,349    7.9 %     Total      operating      expenses     322,671   323,638    (0.3)%     997,260   986,499    1.1 %   Income from    operations      78,349    78,180     0.2 %     204,078   201,016    1.5 %   Interest income     250       502   (50.2)%         898     1,172  (23.4)%   Interest expense (5,387)   (6,561)  (17.9)%     (17,284)  (21,333) (19.0)%   Earnings from    continuing    operations    before income    taxes           73,212    72,121     1.5 %     187,692   180,855    3.8 %   Income taxes     26,796    18,944    41.4 %      72,595    61,675   17.7 %     Earnings from      continuing      operations    46,416    53,177   (12.7)%     115,097   119,180   (3.4)%   Income (loss)    from discontinued    operations,    net of taxes      (332)   (7,868)     NM           416    (8,348)    NM   Net earnings    $46,084   $45,309     1.7 %    $115,513  $110,832    4.2 %    Basic earnings    per share   Earnings from    continuing    operations       $1.00     $1.10    (9.1)%       $2.43     $2.48   (2.0)%   Discontinued    operations       (0.01)    (0.16)     NM          0.01     (0.17)    NM   Basic earnings     per share       $0.99     $0.94     5.3 %       $2.44     $2.31    5.6 %   Basic average    shares    outstanding     46,672    48,170    (3.1)%      47,251    48,024   (1.6)%    Diluted earnings    per share    Earnings from    continuing    operations       $0.98     $1.08   (9.3)%        $2.39     $2.43  (1.6)%   Discontinued    operations       (0.01)    (0.16)    NM           0.01     (0.17)    NM   Diluted earnings    per share        $0.97     $0.92    5.4 %        $2.40     $2.26   6.2 %   Diluted average    shares    outstanding     47,420    49,300   (3.8)%       48,175    49,055  (1.8)%    Dividends paid    per share       $0.215    $0.185    16.2 %      $0.585    $0.505  15.8 %    NM - Not meaningful       Meredith Corporation and Subsidiaries   Segment Information (Unaudited)                            Three Months                 Nine Months   Period Ended        2008     2007    Change     2008        2007    Change    March 31,   (In thousands)   Revenues   Publishing      $323,474  $323,321    0.0 %   $961,604    $923,435   4.1 %   Broadcasting    Non-political     advertising     74,016    77,095   (4.0)%    231,676     228,120   1.6 %    Political     advertising      1,432       436  228.4 %      3,940      32,924 (88.0)%    Other revenues    2,098       966  117.2 %      4,118       3,036  35.6 %     Total      broadcasting   77,546    78,497   (1.2)%    239,734     264,080  (9.2)%   Total revenues  $401,020  $401,818   (0.2)% $1,201,338  $1,187,515   1.2 %    Operating profit   Publishing       $64,692   $64,379    0.5 %   $164,637    $146,632  12.3 %   Broadcasting      18,689    20,587   (9.2)%     59,830      79,042 (24.3)%   Unallocated    corporate        (5,032)   (6,786) (25.8)%    (20,389)    (24,658)(17.3)%   Income from    operations      $78,349   $78,180    0.2 %   $204,078    $201,016   1.5 %    Depreciation and    amortization   Publishing        $5,092    $4,701    8.3 %    $15,597     $13,869  12.5 %   Broadcasting       6,262     6,128    2.2 %     18,969      18,018   5.3 %   Unallocated    corporate           502       456   10.1 %      1,433       1,462  (2.0)%   Total    depreciation    and    amortization    $11,856   $11,285    5.1 %    $35,999     $33,349   7.9 %    EBITDA(1)   Publishing       $69,784   $69,080    1.0 %   $180,234    $160,501  12.3 %   Broadcasting      24,951    26,715   (6.6)%     78,799      97,060 (18.8)%   Unallocated    corporate        (4,530)   (6,330) (28.4)%    (18,956)    (23,196)(18.3)%   Total EBITDA(1)  $90,205   $89,465    0.8 %   $240,077    $234,365   2.4 %    (1) EBITDA is earnings from continuing operations before interest, taxes,       depreciation, and amortization.      Meredith Corporation and Subsidiaries   Condensed Consolidated Balance Sheets                                                (Unaudited)                                                March 31,          June 30,   Assets                                          2008              2007   (In thousands)   Current assets   Cash and cash equivalents                      $45,478           $39,220   Accounts receivable, net                       255,578           267,419   Inventories                                     62,968            48,836   Current portion of subscription    acquisition costs                              65,455            70,553   Current portion of broadcast rights             15,966            11,307   Other current assets                            22,377            15,305   Total current assets                           467,822           452,640   Property, plant, and equipment                 441,784           445,846   Less accumulated depreciation                 (247,657)         (239,820)   Net property, plant, and equipment             194,127           206,026   Subscription acquisition costs                  61,968            66,309   Broadcast rights                                 9,854             9,309   Other assets                                    96,874           101,178   Intangibles assets, net                        784,586           794,996   Goodwill                                       508,651           459,493   Total assets                                $2,123,882        $2,089,951    Liabilities and Shareholders' Equity   Current liabilities   Current portion of long-term debt             $125,000          $100,000   Current portion of long-term    broadcast rights payable                       16,506            12,069   Accounts payable                               101,071            78,156   Accrued expenses and other    liabilities                                   130,635           105,359   Current portion of unearned    subscription revenues                         184,891           191,445   Total current liabilities                      558,103           487,029   Long-term debt                                 320,000           375,000   Long-term broadcast rights payable              19,143            18,584   Unearned subscription revenues                 165,216           167,873   Deferred income taxes                          148,496           166,597   Other noncurrent liabilities                    96,682            41,667   Total liabilities                            1,307,640         1,256,750   Shareholders' equity   Common stock                                    37,049            38,970   Class B stock                                    9,218             9,262   Additional paid-in capital                      63,216            58,945   Retained earnings                              715,347           727,628   Accumulated other comprehensive    income (loss)                                    (822)            2,499   Unearned compensation                           (7,766)           (4,103)   Total shareholders' equity                     816,242           833,201   Total liabilities and shareholders'    equity                                     $2,123,882        $2,089,951      Meredith Corporation and Subsidiaries   Condensed Consolidated Statements of Cash Flows (Unaudited)     Nine Months Ended March 31,                     2008              2007   (In thousands)   Net cash provided by operating    activities                                   $206,371          $170,450    Cash flows from investing activities     Acquisitions of businesses                   (16,525)          (15,456)     Additions to property, plant, and      equipment                                   (15,412)          (29,014)   Net cash used in investing activities          (31,937)          (44,470)    Cash flows from financing activities     Proceeds from issuance of long-term      debt                                        120,000           115,000     Repayments of long-term debt                (150,000)         (180,000)     Purchases of Company stock                  (123,827)          (48,372)     Proceeds from common stock issued             13,218            29,486     Dividends paid                               (27,659)          (24,312)     Excess tax benefits from share-based      payments                                        205             2,264     Other                                           (113)                -   Net cash used in financing activities         (168,176)         (105,934)   Net increase in cash and cash    equivalents                                     6,258            20,046   Cash and cash equivalents at    beginning of period                            39,220            30,713   Cash and cash equivalents at end of    period                                        $45,478           $50,759      Meredith Corporation and Subsidiaries                              Table 1   Supplemental Disclosures Regarding Non-GAAP Financial Measures    CORE EARNINGS   Core earnings, which is reconciled to net earnings in the following table,   is defined as net earnings adjusted for certain one time items.                                             Three Months       Nine Months   Period Ended March 31,                  2008     2007      2008      2007   (In thousands)   Core earnings                        $46,416  $43,776  $115,097  $109,779   Discontinued operations, net of tax     (332)  (7,868)      416    (8,348)   Tax settlement(1)                          -    9,401         -     9,401   Net earnings                         $46,084  $45,309  $115,513  $110,832     CORE EARNINGS PER SHARE   Core earnings per share, which is reconciled to diluted earnings per   share in the following table, is  defined as diluted earnings per   share adjusted for certain one time items.                                             Three Months       Nine Months   Period Ended March 31,                  2008     2007      2008      2007   Core earnings per share                $0.98    $0.89     $2.39     $2.24   Discontinued operations, net of tax    (0.01)   (0.16)     0.01     (0.17)   Tax settlement 1                           -     0.19         -      0.19   Diluted earnings per share             $0.97    $0.92     $2.40     $2.26     (1) An income tax benefit of $9.4 million was recognized in the third       quarter of fiscal 2007 for the reversal of previously recorded taxes.       This resulted from the resolution of a tax contingency related to a       loss on the sale of stock in Craftways, a business sold in fiscal       2003. Recognition of the benefit was deferred until tax-related       contingencies were resolved.      Meredith Corporation and Subsidiaries                             Table 2   Supplemental Disclosures Regarding Non-GAAP Financial Measures    EBITDA   Consolidated EBITDA, which is reconciled to earnings from continuing   operations in the following tables, is defined as earnings from continuing   operations before interest, taxes, depreciation, and amortization.   Segment EBITDA is a measure of segment earnings before depreciation and   amortization.   Segment EBITDA margin is defined as segment EBITDA divided by segment   revenues.                                          Three Months Ended March 31, 2008                                                            Unallocated                                   Publishing   Broadcasting Corporate  Total   (In thousands)   Revenues                             $323,474  $77,546       $-  $401,020    Operating profit                      $64,692  $18,689  $(5,032)  $78,349   Depreciation and amortization           5,092    6,262      502    11,856   EBITDA                                $69,784  $24,951  $(4,530)   90,205   Less:   Depreciation and amortization                                     (11,856)   Net interest expense                                               (5,137)   Income taxes                                                      (26,796)   Earnings from continuing operations                               $46,416    Segment EBITDA margin                   21.6%    32.2%                                          Three Months Ended March 31, 2007                                                            Unallocated                                   Publishing Broadcasting   Corporate  Total   (In thousands)   Revenues                             $323,321  $78,497       $-  $401,818    Operating profit                      $64,379  $20,587  $(6,786)  $78,180   Depreciation and amortization           4,701    6,128      456    11,285   EBITDA                                $69,080  $26,715  $(6,330)   89,465   Less:   Depreciation and amortization                                     (11,285)   Net interest expense                                               (6,059)   Income taxes                                                      (18,944)   Earnings from continuing operations                               $53,177    Segment EBITDA margin                   21.4%    34.0%                                             Nine Months Ended March 31, 2008                                                         Unallocated                                 Publishing  Broadcasting  Corporate  Total   (In thousands)   Revenues                         $961,604  $239,734        $-  $1,201,338    Operating profit                 $164,637   $59,830  $(20,389)   $204,078   Depreciation and amortization      15,597    18,969     1,433      35,999   EBITDA                           $180,234   $78,799  $(18,956)    240,077   Less:   Depreciation and amortization                                     (35,999)   Net interest expense                                              (16,386)   Income taxes                                                      (72,595)   Earnings from continuing    operations                                                      $115,097    Segment EBITDA margin               18.7%     32.9%                                         Nine Months Ended March 31, 2007                                                         Unallocated                                  Publishing  Broadcasting Corporate    Total   (In thousands)   Revenues                         $923,435  $264,080        $-  $1,187,515    Operating profit                 $146,632   $79,042  $(24,658)   $201,016   Depreciation and amortization      13,869    18,018     1,462      33,349   EBITDA                           $160,501   $97,060  $(23,196)    234,365   Less:   Depreciation and amortization                                     (33,349)   Net interest expense                                              (20,161)   Income taxes                                                      (61,675)   Earnings from continuing    operations                                                      $119,180    Segment EBITDA margin               17.4%     36.8%      FREE CASH FLOW   Free cash flow, which is reconciled to earnings from continuing operations   in the following table, is defined as earnings from continuing operations   plus depreciation and amortization less capital expenditures.                                           Three Months       Nine Months   Period Ended March 31,                2008     2007      2008      2007   (In thousands)   Free cash flow                       $53,070  $54,717  $135,684  $123,515   Depreciation and amortization        (11,856) (11,285)  (35,999)  (33,349)   Capital expenditures                   5,202    9,745    15,412    29,014   Earnings from continuing operations  $46,416  $53,177  $115,097  $119,180  

First Call Analyst:
FCMN Contact:

Source: Meredith Corporation

CONTACT: Shareholder|Financial Analyst, Mike Lovell, Director of
Investor Relations, +1-515-284-3622, Mike.Lovell@Meredith.com, or Media, Art
Slusark, VP|Corporate Communications, +1-515-284-3404,
Art.Slusark@Meredith.com, both of Meredith Corporation

Web site: http://www.meredith.com/

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Profile: International Entertainment