Meredith Corporation F3Q09 (Qtr End 03/31/09) Earnings Call Transcript

| About: Meredith Corporation (MDP)

Meredith Corporation (NYSE:MDP)

F3Q09 Earnings Call

April 29, 2009 9:30 am ET


Stephen Lacy - Chief Executive Officer and President and Executive Director

Joseph Ceryanec - Chief Financial Officer and Vice President

Jack Griffin – President, Publishing Group

Paul Karpowicz – President, Broadcasting Group

Michael Lovell - Director of Investor Relations


Jason Bazinet - Citi

Edward Atorino - Benchmark

Michael Meltz - JP Morgan


Ladies and gentleman, thank you for standing by and welcome to the Meredith Corporation third quarter earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. (Operator Instructions)

I would now like to turn the conference over to our host, Mr. Mike Lovell. Please go ahead.

Michael Lovell

Good morning everyone. Before Chief Executive Officer Steve Lacy begins our presentation today, I’ll take care of a few housekeeping items. In our remarks today, we will include statements that are considered forward-looking within the meaning of Federal Securities Laws.

The forward-looking statements are based on management’s current knowledge and expectations and are subject to certain risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. A description of certain of those risks and uncertainties can be found in our earnings release issued this morning and in certain of our SEC filings. The company undertakes no obligation to update any forward-looking statements.

We will refer to non-GAAP measures which in combination with GAAP results provide additional analytic tools to understand our operations. Tables that reconcile non-GAAP measures to GAAP results are posted on Meredith’s website as well.

With that Steve will begin the presentation.

Stephen Lacy

Thank you very much Mike and good morning everyone. Today I’ll start with some thoughts on the current business environment, describe how Meredith is responding and provide more detail on our operating performance.

Joe Ceryanec, our Chief Financial Officer will go into greater depth on our financial and discuss our outlook. Then we’ll be happy to answer any questions that you might have. Joining us this morning for the Q-&-A will be Jack Griffin, Publishing Group President and Paul Karpowicz, Broadcasting Group President.

Looking broadly across our businesses the performance improvement plan we put in place at the end of our fiscal 2008 is making a measurable impact on our results. This plan emphasizes gaining market share, growing new revenue streams and aggressively reducing cost and debt.

Additionally our connection to the American consumer continues to be rock solid. We’ve seen notable gains in magazine leadership, description response rate and related profitability for many of our national brands; mark the improvement in news ratings at our local television stations and a significant increase in traffic across our web operations.

Fiscal third quarter earnings per share were $0.56 matching our previously stated expectations. Revenues were $338 million. For the first nine months of fiscal ‘09 earnings per share were $1.46 excluding a special charge recorded in the second quarter and revenues were $1.1 billion. This compares to earnings per share of $2.40 and revenues of $1.2 billion in the year ago period.

I’m particularly pleased with our market share gains and cost reduction initiatives. Our magazines and television stations are outperforming their respective industries according to the most recently available advertising data. Our total operating costs declined more than 6% in the quarter even with 7% increase in paper prices over the prior year period.

During the first nine months of fiscal ‘09 our operating cost declined 3% occluding a 14% increase in paper prices, digging a bit deeper if you exclude the special charge and acquisitions, Meredith’s operating cost declined 5% or more than $50 million in the first nine months of fiscal ‘09 compared to the prior year period.

Unlike many of our peers we raised our dividend during the third quarter, increasing it 5% in February. We’ll eliminate approximately $100 million or 20% of our debt by the end of fiscal 2009.

We continue to be well positioned to make further investments in our business as strategic opportunities arise. Looking more closely at the advertising environment, the recession continued to impact our results in the third quarter, although it’s not affecting our businesses equally.

In our publishing operation anchored by strong national consumer brands including Better Homes and Gardens, Parents, and Family Circle, advertising revenues declined 12%. That’s an improvement over the two preceding quarters of fiscal ‘09, which start decreases of 17% and 19% respectively.

Also our magazine advertising performance was significantly better than the industry as reported by Publishers Information Bureau. In the first calendar quarter we increased market share to 11.1% of PIB ad revenue from 9.4% in the prior year.

In our Broadcasting business, advertising revenues were down 31%. While a significant drop this represents an improvement during the quarter of about one point per week since our prior earnings call on January 22nd and reflects the trend that we’ve seen of advertisers making their buying decisions later and later.

Our Broadcasting performance in the quarter was largely due to two factors. First auto advertising revenues were down about 55% accounting for more than half of Broadcasting’s total revenue decline and second the Phoenix and Las Vegas markets have been particularly impacted by the depressed housing situation. Historically these markets have grown faster than the U.S. national average and in the long-term we believe they’ll continue to do so.

While the advertising market is difficult we continue to be encouraged by the growth we’re seeing in our non-traditional and non-advertising based businesses. I’ll provide some detail around those activities in just a few moments. The relevance of our brand and their connection to the consumer continues to grow across multiple media platforms.

We possess media assets of scale that are valuable to advertisers and marketers do like. Including our consumer database and its broad reach to $85 million unduplicated American consumers. Our performance improvement plan is working, we continue to view it as a blueprint for our success. We’re confident that Meredith will emerge from the current recession faster than many of our peers and in a stronger competitive position.

Now I’ll provide more detail on our operating performance beginning with the Publishing segment. As I mentioned the advertising environment remains challenging, but we’re seeing stabilization and some improvement in magazine advertising compared to the first half of fiscal ‘09 and we expect this trend to continue into the fourth quarter as well. Third quarter advertising performance in seven of our ten largest categories continue to improve compared to the first half of the year.

Additionally, prescription and non-prescription drugs, and household supplies increased in the third quarter. To maximize advertising revenue we’re aggressively pursuing market share. Seven of Meredith’s nine measured titles gain share against their competitive steps in the first calendar quarter of ‘09 compared to or according to PIB.

Better Homes and Gardens, Family Circle, Ladies’ Home Journal and more, each increased share among women’s titles, also Traditional Home and Fitness gained share in their respective fields.

Additionally Family Circle was named to Adweek Hot List of the top ten magazines for the second consecutive year. This list recognizes top performers and cited Family Circle’s strong connection with its readers and highly relevant editorial content within the women’s life style and service category.

As many of you are aware, the bulk of our advertising sales in the publishing area fall into two broad areas. Corporate sales were we generally deal with the media buying agency and the more strategic initiatives, which we call Meredith 360 or we tend to deal directly with the corporate client.

These groups are helping Meredith gain share by emphasizing our broad reach and value that the portfolio offers to marketers. Well, also selling customized messages that we can promote across our multiple media platforms. During the third quarter, we generated a number of sales wins that will favorably impact future results.

These programs include developing a campaign for Church & Dwight highlighting its Arm & Hammer product line that includes print advertising, on-line programs, custom video produced by Meredith Video Solution and creative services provided by Meredith. Again it shows Meredith to develop a campaign highlighting its court site yogurt product.

In addition to developing the creative elements of the program, we’ll be conducting a recipe contest using the Better Homes and Gardens test kitchens along with magazine and on-line advertising. We also won a major program for AstraZeneca during the third quarter. These commitments emphasize the fact that our well established media brands are particularly well suited to helping clients strengthen their own connection to the consumer and of course sell more products at retail.

We also increased advertising revenues 7% across our consumer website in the third quarter. As clients responded positively to the launch of the Meredith Women’s Network. The network combines our largest site including Better Homes and Gardens and Parents with the Real Girls Network into a single entity that’s of course marketed to our advertisers. This network of high quality branded content differentiates Meredith in the market place from the Ad Networks, which were created for the purpose of size alone.

Turning now to circulation, both profit contribution and related margin in our subscription activities increased in the quarter. Total circulation revenues declined 12% as a result of fewer Special Interest Media titles published and continued soft retail sales. Magazine subscription revenues declined just 1%.

As I mentioned earlier, our consumer connection is rock solid as our brands provide practical solutions and advice that’s extremely relevant in the current economic environment. We’re pleased to have strengthened that connection during the third quarter across many media platforms.

Direct mail response rate to our subscription offers have exceeded our expectation. Monthly unique visitors on our publishing based website increased to approximately $15 million and page views per month averaged about $170 million, an increase of more than 25% compared to the prior year.

Response to the Better Homes and Gardens lines, our branded Home Products in Wall-Mart stores continues to be very positive. Wall-Mart is supporting the lines with a multiple media national advertising campaign thus reaching millions and millions of consumers. We’ll nearly double the size of the U.S. program to about 1,000 SKUs in calendar ‘09 and the program will be extended to Canada as well.

Turning now to Meredith’s integrated marketing. Operating profits increased 10% during the third quarter driven by our traditional custom publishing activities and our newer digital service offering. These new capabilities added through a series of recent acquisitions, allow us to pitch for a much broader range of business than ever before.

Revenues in integrated marketing typically come from the client’s marketing budget, assignments are worth millions of dollars and they tend to span several years. This business has proven to be an important long term hedge against the month-to-month volatility of advertising revenues.

Meredith’s integrated marketing is holding it’s own in a challenging business environment. We experienced some program reductions in the third quarter and have seen less new business activity. However, we did have some notable new program commitments during the quarter in the pharmaceutical and the financial services area.

To summarize our Publishing Group discussion, well the advertising environment remains challenging we’re encouraged by the market share gains and improving quarter-over-quarter revenue trends that we’re delivering. Our consumer connection is stronger than ever and we continue to achieve significant contribution for new revenue streams including integrated marketing and brand licensing. At the same time, we successfully implemented efficiency measures that are leading to meaningful cost reduction.

Now turning to the Broadcasting Group. The recessionary economy had a significant impact on advertising in the third quarter of fiscal ‘09. The largest declines were in automotive, traditionally the number one category for local broadcasters. Auto advertising was off about 55%.

Most other top ten ad categories also experienced double digit declines. Notable exceptions were travel related advertising, which although small more than doubled and education related advertising, which increased modestly. Broadcasting ad revenues were also impacted by the weak markets in Phoenix and Las Vegas, which I mentioned a few moments ago.

Similar to publishing, we’re seeing success from the implementation of our performance improvement plan across the broadcasting activity. Our connection to the consumer is strong and growing. Most of our television stations posted stronger ratings during the recently completed March sweep.

Highlights include viewership gains in late news across most stations including Phoenix, Greenville, Atlanta, Hartford, Las Vegas and Kansas City. Viewership gains during the morning news in Atlanta, Kansas City, Las Vegas and Greenville and our powerhouse Hartford CBS affiliate continued its market leadership across all news periods and our Nashville NBC affiliate ranked number one in all three evening newscasts. These ratings gained our key to commanding higher revenues for advertising spots into the future.

Our consumer connection is also reflected in the fast growing popularity are better, our nationally syndicated lifestyle television show. The show produced by Meredith Video Solutions are in-house video production group, as syndication agreements now in more than 50 markets. It includes half of the nation’s top ten such as Houston, Dallas and Atlanta.

Our business model for video solutions includes multiple revenue streams such as traditional 30-second spots syndication fees and product integration. As many as eight minutes of the better show can be localized and include local product integration as well as sponsorships for news and local entertainment features.

During the third fiscal quarter Meredith Video Solutions integrated messaging from State Farm Insurance as part of a series of customized videos that focused on child-care topics including installing a car seat, visiting the doctor and baby proofing your home. The Welcome Home Baby program was recently highlighted in a story by Ad Age and also included other custom content in English and Spanish distributed across prince on-line and ad consumer event.

Another example of growth in new revenue streams is retransmission fees, which more than doubled in the third quarter to $5 million. Meredith has now successfully completed new retransmission agreements with six of the seven major cable operators in our market. We expect retransmission fees will be at least $20 million in fiscal 2010.

Broadcasting operating cost declined 5% during the third quarter, to reduce expenses even further and improve efficiency or implementing a plan to centralize certain functions including master control, traffic and research across the group.

To summarize the Broadcasting discussion the television industry is experiencing one of the most difficult advertising environments in its history. However, we continue to believe that television remains the most powerful and efficient way to reach American consumers.

We are encouraged by the ratings gains in our station and our ability to grow new revenue streams from retransmission fees and video content creation. We are aggressively reducing cost including the centralization activities, I mentioned a moment ago, which will be fully implemented in mid-fiscal 2010.

With that operational overview, I’ll turn the discussion to Joe Ceryanec, our Chief Financial Officer.

Joseph Ceryanec

Thanks, Steve and good morning everybody. As Steve noted, we continue to emphasize our performance improvement plan, which is focused on gaining market share, growing our revenue and aggressively reducing cost and debt.

As we’ve been discussing for the last several quarters, we have placed significant emphasize on managing our cost and expenditures. Operating cost at our publishing unit declined approximately 7% in the third fiscal quarter despite 7% higher paper prices and we’re down 4% for the first nine months of fiscal 2009.

Broadcasting operating cost declined at 5% during the third quarter and we expect further savings from Broadcasting as our centralized centralization plan has rolled out across this group. We generated $56 million in cash flow from operations during the third quarter and $139 million for the first nine months. We had cash and cash equivalents of $74 million at March 31st up over $41 million from last quarter end.

Our total debt was $455 million at the end of the third quarter, which is down $30 million from the beginning of our fiscal year. So with our debt balance down $30 million from the beginning of the year and cash of over $70 million at March 31st we are well positioned to reduce our debt at the end of fiscal 2009 by $100 million, which is a 20% reduction.

The weighted average interest rate under debt was approximately 4.5% at the end of the quarter and our debt-to-EBITDA ratio was well under existing debt covenants at conservative 1.9 to 1.

As Steve noted, we raised our dividend almost 5% during the third quarter, this is in sharp contrast to many other publicly traded companies, we have reduced their dividends or eliminated them entirely. Our dividend yield is currently over 5% based on our closing share price at March 31st, 2009.

As Steve also noted, we have a strong balance sheet, low debt levels and we continue to reduce our debt. We continue to exercise aggressive expense and cash management across the company and believe we are well positioned to weather the current softness and advertising and general turbulence in the markets.

Now turning into our fourth quarter and full fiscal year. As we’ve said many times most of Meredith’s advertising clients continued to be impacted by the recession. In Publishing, with two of the quarters three magazine issues closed. Fiscal 2009 fourth quarter advertising revenues are expected to be down approximately 12% and Broadcast with nine weeks left in the fourth fiscal quarter of 2009.

Advertising pacings are down 32%. In the third quarter of fiscal 2009, with nine weeks left to go pacings were down 40% and as Steve noted we saw about 1% in improvement over the last nine weeks of the third quarter.

Currently Meredith expects fiscal fourth quarter earnings per share at a range from $0.52 to $0.57 per share. Full year fiscal 2009 earnings per share from continuing operations are expected to range from $2 to $2.05 and excluding the special charge taken in our fiscal second quarter. Our average tax rate is expected to be approximately 40% in the fourth quarter and for full fiscal 2009.

A number of uncertainties remained that may affect our outlook results in the fourth quarter and full fiscal year as stated in our press release. These included overall advertising volatility performance of the company’s retail businesses and paper prices and postal rates. Fees and other uncertainties are referenced below under the Safe Harbor and in certain of our SEC filings.

With that I’d like to turn it back to Steve for closing comments.

Stephen Lacy

To wrap up quickly before the Q&A, we believe that Meredith possess a very strong foundation that’s well positioned to build shareholder value overtime. We have assimilated a powerful portfolio of profitable and vibrant media assets and brands.

We have a true proven track record of outperforming our respective industries and growing market share. We possess a strong and growing connection to the American consumer, particularly women who make the vast majority of purchasing decisions in the household. This is proven through increasing leadership, viewership and online traffic.

Our revenue mix is well balanced approximately 55% from ad based sources and 45% from non-advertising sources. Many of these non-advertising sources including brand licensing in video production are experiencing rapid growth and possess more upside potential.

We are continuing our aggressive expense in cash management program. We generate significant operating cash flow, have a conservative balance sheet and a modest level of debt at a low cost to funds.

As mentioned a couple of times this morning, we intend to eliminate more than 20% of our debt by the end of fiscal ’09. We are confident that we’ll manage through this period and emerge an even stronger and more competitive company.

Now, we’ll be happy to answer any questions that you might have.

Question-And-Answer Session


(Operator Instructions) Your first question comes from the line of Jason Bazinet - Citi.

Jason Bazinet - Citi

I just have one question on the EBIT margins. I think year-to-date your EBIT margins are running about 11%. When I go back to the last recession sort of the ’01, ’02 time frame, you should have hit similar levels about 11% operating income margins in ’01 and ’02.

I guess my question is, I know it’s sort of tough to prognosticate on the future, but is your sense that we probably stay at these level of operating income margins for another year or are you seeing enough signs in terms of the ad environment or your cost cutting that we may see some improvement as you look out of the next 12 to 18 months? Thanks.

Stephen Lacy

Jason, this is Steve, thanks for your question. I think the key to how those margins are going to play out have everything to do with how quickly we see some improvements in the advertising environment. We’re trying to message this morning that we are seeing some stabilization and some improvement compared earlier in the year in our magazine operation in particular, but not really up tick.

So, I think that’s really the key, we are obviously working very aggressively at the moment to put our arms around what kind of a range we think for fiscal 2010 and that range is pretty broad right now until we start to get even close some issues that would really affect fiscal 2010. So, I think that’s the best sense that we can provide now and obviously when we release earnings at the end of the fiscal year will provide some early thoughts on fiscal 2010.


Your next question comes from Edward Atorino - Benchmark.

Edward Atorino - Benchmark.

Could you talk about the other publishing numbers integrated marketing up, looks like a pretty good performance. What else was in there if you could talk a little bit and I think in the press release you mentioned your page rate trends? Can you talk about magazine ad rates where you are particularly versus some of the competition?

Joseph Ceryanec

I’ll take the first part of the question, which I think was what is in other revenues and what are the changes. If you look at our third quarter ’09 versus third quarter ’08 we were down about $3 million. There are a couple components in that other line that is up offset by a couple of components down.

Integrated marketing was actually up year-over-year, about $3 million and retrans was up year-over-year about that same amount. However, the book operations are in that line item and as we want that operation down and are moving that to Wiley, we are seeing revenue decline there as well. So, it’s basically integrated marketing retrans up offset or more than offset by the book in business.

Edward Atorino – Benchmark

Are you moving to Home Depot books and stuff like that, is that all going Wiley or are you keeping some of that stuff?

Joseph Ceryanec

We actually are keeping the Home Depot ourselves; I believe everything else is moving to Wiley.

Stephen Lacy

The second part of your question Ed, nets were down 1% in the publishing ad business in the third quarter compared to the prior year. So really I think pretty down is that performance considering how aggressively Jack and his team gained share during that time period.

Edward Atorino – Benchmark

Well, the PIP numbers were remarkable.


Your final question comes from Michael Meltz from JP Morgan.

Michael Meltz - JP Morgan

I got a couple of questions for you. Steve, can you talk a little bit more about magazine advertising, what exactly you’re seeing in the categories? What was food down in the quarter and is there any big change in the major categories what you’re seeing in the June quarter versus recent experience, then I have a few follow ups?

Stephen Lacy

Okay, I’ll give some data and then I think I’m going to ask Jack to talk a bit about his sense of the environment. The food category in the third quarter was down about 15% and you might remember, Michael that in the third quarter a year-ago it was the category that was up really, really aggressively.

It was up about 30% a year-ago at this time and really kind of propped up the whole segment at that point, because many of the other categories were already down. Toiletries and cosmetics up about 16%, DTC up 3%, home down 11%, direct response down 36% and non-DTC remedies up 34%. So it’s kind of a mixed bag by category and Jack you want to give a little color around that if you would like to add anything, please?

Jack Griffin

Sure, I will do that. We’re sitting here on this call having pretty much working on closing the final issues of our fourth fiscal quarter, which is the second calendar quarter for most of our competitors and I think Steve characterized it accurately that we are seeing stabilization in our advertising performance, but I think the market place continues to be very difficult.

If you look at the PIB data for magazines overall, you’ll see continuing weakness particularly with many of the weekly publications, which I think gives you the best feel for the environment. We are considerably out performing our competitive set which is about 30 titles where we think we’ve gained in PIB dollars four to five share points in calendar 2009 and Steve already talked about the two points increase in market share for Meredith versus the overall magazine industry.

I think it comes from a number of factors that we talked about so far on the call, but our titles are particularly well positioned for this kind of an economic environment where marketers and consumers are looking for brands that serve explicit purposes and that are familiar and trusted, but I think more than that our go-to-market approach with our senior leadership in our magazine business and our other components of the business.

We go-to-market with our 360 and our cross platform activities in a very aggressive and very disciplined way and think we are taking big pieces of share at both client and agency level before the deals even get done.

So, we are seeing in the second part of the fourth quarter, we’re seeing some improvement in the food category, we’re seeing stabilization in the health category. Home continues to be weak, but from the standpoint of our performance we are seeing encouraging signs with respect to stabilization being able to take big pieces of share at rates that make sense. So, we are not giving away the store to do so.

As you saw in the quarter our interactive revenue performance in the third quarter was quiet solid relative to last year and the competitive set. So, we’ve got much of our advertising revenue generation activity firing of all cylinders and we intend to continue to maintain them.

Michael Meltz - JP Morgan

Jack, on that point in the last quarter, your yields were weaker than this quarter, it looks like you’re saying is only down per page was down 1% by year. You’re still talking about these aggressive share programs, is this where you think you can hold it going forward or I’m surprised it’s not a bit softer?

Jack Griffin

Yes, I’m not saying that we can hold it precisely, but I think we can hold it within a comfortable range and we are seeing some moderation in paper prices, which gives us some comfort that there is sort of a band of rate permission there that make sense to continue to go after share and we are very disciplined, as I think I’ve talked to you before we have a pricing group that looks at everyone of our deals and we make I think judicious decisions, both in absolute terms and in relative terms about what makes sense for the business.

We think as this year is progressing, we are continuing to take more share out of the market place and so long as the rate volume compare and balance make sense, we’re going to continue to do so and we’re confident about that.

Michael Meltz - JP Morgan

Two questions on cost for you Steve, is there an inflection point on paper coming up and walk us through your expectation there, and then the master control or hoping that you are doing in Atlanta, what should we be expecting out of broadcasting cash cost the next few quarters in terms of percentage decline. It sounds like you think the declines will accelerate going forward, I just want to make sure you understand what you are seeing there?

Stephen Lacy

Yes, let me take a short at paper and then I’ll ask Joe to give a little bit more color on Broadcasting expenses as we look down the road. I think every body remembers that the paper prices really after the strong industry performance in calendar ’07 and our performance very strong as well, that was the peak profit for the publishing activity ever in our history. Then we saw about a 25% run up in paper prices that actually got to their peak at the end of calendar ’08.

So at this point in time we’re seeing some moderation, we have had in better reduction but we’re still up in the third quarter and we think they might be down probably 2% or 3% compared to the prior year in the fourth quarter and that’s against about depending upon the volume somewhere around $150 million spend on an annual basis.

Then just to remind everybody those paper prices reset each calendar quarter, so we just have a price reduction in April and we’ll have that opportunity again obviously right around the end of the fiscal year. Joe you want to talk a bit about Broadcasting Expenses.

Joseph Ceryanec

Michael, you probably remember last earnings call we had the question about our expectations for cost for the rest of the year. I think we said we expected Broadcasting to be the expenses down in high-single digits by the end of the year.

I’ve said we would reiterate that, we were down to 5% this quarter overall we are saying that we’ve been spending time and planning to hoping its going to involve some up front capital, we have not really seen the impact of cost reduction and so we do expect that to accelerate into the fourth quarter and so we do expect on fourth quarter Broadcast expenses to be down as we said earlier high-single digits or 7% to 8% and then continuing in the next year as we continue to take cost out.

Michael Meltz - JP Morgan

I am sorry to follow on with this, but so what‘s the CapEx requirement there and just refresh our sign CapEx expectation and then Steve if your cash expenses or publishing were down I think go at 6% to 7% in the quarter with paper gone the other way do you expect to see that have a better number going forward.

Jack Griffin

I’ll take the CapEx, all in that hubing will cost us about $5 million if you looked at our third quarter CapEx it was quiet low, I think it was $3 million, $3.5 million, I think year-to-date that put us 18 if I remember right.

I think we’ve said before we expect to end the year around 25. We actually have some room in the fourth quarter and then probably some in the first quarter of next year to absorb that $5 million. On a go forward basis, the good news is because we are spending the CapEx at the two hub sites which are Phoenix and Atlanta that will save us CapEx at the other stations on a go forward basis.

Michael Meltz - JP Morgan

Okay, and that’s helpful. And the publishing cost?

Stephen Lacy

I think on balance by the time we work off the inventory that we have already on-board the price reduction that we got will probably impact us more in fiscal ’10 and so I would guess that the expense reduction level in publishing will be pretty similar on a percentage basis in the fourth quarter to the third.


(Operator Instructions) So far we have no one else queuing up.

Stephen Lacy

Well, if there are no further questions, we certainly appreciate everyone participating today and appreciate your on-going interest and investment in Meredith. Thank you very much.


Thank you. Ladies and gentlemen, this conference will be made available for reply after 10.30 a.m. Central Time today until May 6 at midnight. You may access the AT&T executive play back service at any time by dialing 1-800-475-6701 and entering the access code 994510. International participants may dial 1-320-365-3844. Again, those numbers are 1-800-475-6701 and 1-320-365-3844, access code 994510.

That does conclude our conference for today. Thank you for you participation and for using AT&T executive teleconference service. You may now disconnect.

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