Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Meredith Corp. (NYSE:MDP)

F4Q09 Earnings Call

July 29, 2009 9:30 am ET

Executives

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

Analysts

Michael Meltz – JP Morgan

Jason Bazinet – Citi

Edward Atorino – Benchmark

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Meredith Corporation fourth quarter and full year fiscal 2009 earnings call. (Operator Instructions). With that being said, I'll turn the conference now to Mr. Mike Lovell, please go ahead, sir.

Michael Lovell

Good morning everyone. Before Chief Executive Steve Lacy begins our discussion this morning, 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 today and in certain of our SEC filings.

The company undertakes no obligation to update any forward-looking statement. We will refer to non-GAAP measures, which in combination with GAAP results, provide additional analytic tools to understanding our operations. Tables that reconcile our non-GAAP measures to GAAP results are posted on Meredith's website as well.

And with that, Steve will begin the presentation.

Stephen Lacy

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 financials and provide our outlook. Following our prepared comments we'll be happy to answer any questions that you might have. Joining us for the Q&A will be Jack Griffin, President of our publishing group and Paul Karpowicz, our broadcasting group president.

Looking broadly across our businesses, the performance improvement plan we put in place a year ago at the end of fiscal 2008, has helped us navigate the recession. In step with the plan we're gaining market share, particularly in our magazine operation, growing new revenue streams, carefully managing costs and aggressively reducing debt.

Our connection to the American consumer continues to be solid and growing. We've seen notable gains in magazine subscription response rates and related profitability for many of our national brands, improvement in news ratings at our local television stations and a significant increase in traffic across our 60-plus websites.

Additionally, we continue to experience growth in businesses that are not based on advertising, including Meredith's integrated marketing, brand licensing and our video production operation. Fiscal 2009 loss per share from continuing operations was $2.28, including a $4.31 per share non-cash impairment charge and other special charges. This compares to earnings of $2.79 per share in the year-ago period.

Excluding special charges in both fiscal '09 and fiscal '08, earnings per share in '09 from continuing operations were $2.03, in line with our previously stated expectations, versus $3.13 a share last year. Revenues in fiscal 2009 were $1.41 billion, compared to $1.55 billion in fiscal '08. More details on the non-cash impairment charge and other special charges primarily related to selective workforce reductions are provided in the tables accompanying the news release issued earlier this morning.

The recession significantly impacted advertising spending by many of our clients throughout fiscal '09. Our total advertising revenues were approximately $790 million in fiscal '09, compared to $930 million in fiscal '08. However, the second half of the fiscal year provided a better story than the first half, particularly as it relates to advertising revenues for Meredith's magazines and related websites.

Advertising at these properties, anchored by strong national consumer brands, including Better Homes and Gardens, Parents and Family Circle, declined 11% in the second half, compared to a drop of 18% in the first half of fiscal 2009. Our magazine advertising performance was significantly better than the industry as a whole according to the most recently available data from Publishers Information Bureau. In fiscal 2009 we increased market share to 10.5% of PIB advertising revenue from 9.5% in the prior year.

In the fourth quarter we increased market share to 12.8% from 10.1% at the end of fiscal '08. Total company interactive advertising revenues rose 7% in the second half of fiscal '09, compared to a decline of 14% in the first half. In the fourth quarter, interactive advertising revenues rose by 12%. Broadcasting advertising revenues declined 17% in fiscal '09 as $24 million in net political advertising wasn't enough to offset lowered non-political ad revenue, particularly from the automotive industry.

In the fourth quarter, non-political advertising revenues were down 25%. This represents an improvement compared to our fiscal third quarter, when advertising revenues were down 31%. In addition, it represents an improvement during the quarter of nearly one percentage point per week after we released our earnings on April the 29th, reinforcing the trend we've seen of advertisers making buying decisions later and later.

Along with advertising, the second element of our performance improvement plan centers on growing new revenue streams. We're encouraged by the growth that we're delivering in non-traditional and non-advertising-based businesses, and I'll address those during the operating group discussion in just a few moments.

Additionally, we completed a number of strategic investments and initiatives during fiscal '09 that further strengthen our consumer connection and offer additional ways to serve our clients across both established and emerging media platforms. I'll speak in greater detail about these initiatives as well.

Disciplined expense control and aggressive cash management are the other elements of our performance improvement plan. We successfully cut total operating cost 7% in the fourth quarter and 5% for the full fiscal year, even with a 10% increase in paper prices. Unlike most of our peers, we raised our dividend in fiscal '09, increasing it 5% in February. We also eliminated $105 million, or 22% of our debt during the year, and continue to be well-positioned to make further investments in our businesses as strategic opportunities arise.

To summarize the overview, 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. Now I'll provide more detail on our operating performance, beginning with our publishing operation.

As I mentioned earlier, the advertising environment remains challenging; however, we continue to see stabilization and delivered improvement in magazine advertising during the second half of fiscal '09 compared to the first half. Our efforts led to market share gains in the fiscal year, particularly in the second half as 10 of our 14 measured titles gained market share as measured by PIB. Eight of Meredith's 10 largest advertising categories, including food and beverage, prescription and non-prescription drugs and household supplies improved in the second half compared to the first half, again as measured by PIB.

During the fourth quarter we generated a number of sales wins. For Maybelline we created an innovative campaign to help launch its new Lip Color Sensation line. In addition to print and online components, we collaborated with the Sex in the City author and More magazine columnist, Candace Bushnell, to create a series of Webisodes that feature product placement for Maybelline's lipstick. The Webisodes will run across the Meredith Women's Network and on Maybelline's website as well.

For Unilever's Lever 2000 brand we created a multi-platform program focused on the power of the family that includes online photo content, print and also retail elements. For General Mills we created a multi-platform program, including a strong digital component promoting its brands across Meredith's media properties.

These new commitments emphasize the fact that our well-established media brands are particularly well-suited to helping clients strengthen their own connection to the individual consumer and of course sell more products at retail.

We made a number of creative investments in fiscal '09 to ensure that our brands remain relevant to readers and to advertisers alike. These include redesigns of Better Homes and Gardens, Ladies Home Journal, More, Fitness, ReadyMade and Successful Farming magazines. By the way, Successful Farming, the brand that launched the Meredith Corporation, posted its best financial results in its 100-plus year history during our fiscal 2009.

Turning to circulation, both profit contribution and related margin in our subscription activity increased in fiscal '09 once again compared to the prior year period. Total circulation revenues declined 7% as a result of fewer special interest media titles published and continued soft sales at retail; however, magazine subscription revenues declined just 2%. In the fourth quarter circulation revenues grew slightly, including a gain of 2% in subscription revenue. Direct mail response rates continued to exceed our expectations.

Looking at the publishing base interactive activities while revenues declined 5% for the full fiscal year, they were up 17% in the fourth quarter as advertisers responded positively to an initiative undertaken during the year, including the creation of the Meredith Women's Network.

It aggregates our largest online brands allowing any and all of them and their related traffic to be available to marketers and consumers alike. This network of high-quality branded content differentiates Meredith in the marketplace when compared to a number of ad networks which were created for the purpose of size and scale alone.

Our fiscal 2009 interactive initiatives included the launch of our social media site Mixingbowl.com and a new lead generation agreement with ServiceMagic. ServiceMagic connects homeowners with contractors and service providers to help complete projects that the consumers want to finish.

Consumers are responding positively as well to our interactive initiatives. Monthly unique visitors to Meredith interactive website increased more than 25% to 15 million and page views per month grew more than 20% to over 170 million in our fiscal 2009.

Turning to Meredith Integrated Marketing as many of you recall we've added a number of new capabilities in recent years that allow us to pitch for a much broader range of business than ever before. Earlier this month we announced an investment in The HyperFactory, an agency that creates, executes and analyzes mobile strategies and programs for brands such as Nike, Disney and many others. Already we've teamed up with The HyperFactory on a joint pitch that has secured a new mobile marketing assignment related to Kraft's Food & Family program.

Revenues at Meredith Integrated Marketing grew 13% in fiscal '09 driven primarily by our custom publishing and digital service offering. In the fourth quarter while revenues declined 17%, due primarily to certain non-recurring programs in the prior year period, fourth quarter operating profit grew nearly 15% as Integrated Marketing improved efficiencies. We continue to view this business as an important long-term growth engine and a hedge against the month-to-month volatility in national advertising revenues.

Meredith Brand Licensing activities grew in fiscal '09 primarily as a result of our ongoing and expanding relationship with Walmart. Response to the Better Homes and Gardens line of branded products at Walmart continues to grow and be very positive.

During the fiscal year we agreed to double the number of branded SKUs to over 1,000 and extended the program to Canada. Walmart continues to support the line with a national advertising campaign that reaches millions and millions of American consumers.

Additionally Meredith and Walmart have developed a collection of interior paint colors selected by the editors of Better Homes and Gardens now available for sale under the Dutch Boy brand. These complement our home decor products as well. As a result of these and other initiatives Brand Licensing revenues grew nearly 15% in fiscal '09.

To summarize our publishing group discussion, while the advertising environment remains challenging we're encouraged by 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 contributions from new revenue streams including Integrated Marketing and our Brand Licensing activities at retail.

Now turning to our broadcasting group, the recession had a significant impact on advertising throughout fiscal 2009. Our broadcasting performance represents several factors. First, our auto advertising revenues were down approximately 45% accounting for nearly half broadcasting's non-political advertising revenue decline.

Second, the Phoenix and Las Vegas markets have been particularly impacted by the depressed housing marketplace. Historically, these markets have grown faster than the U.S. national advertised average, and in the long term we believe they'll continue to do so. Finally, as it relates to industry comparisons, we did not participate in any meaningful way as it relates to the Olympics or Super Bowl-related advertising revenues in fiscal 2009.

To combat these lower advertising revenues we're applying innovative sales strategies including creating multi-platform advertising campaigns for clients that include TV spots, Internet, our proprietary cornerstone programs and product integration as well.

Local newspapers, which are scaling back across most locations in the country, are providing us with an opportunity to grow more dominant as the main source of local news and advertising with top advertisers in each marketplace.

Similar to our publishing strategy, we're focused on increasing market share with advertisers and viewers alike, growing new revenue streams and prudently managing our costs, all tenets of our ongoing performance improvement plan.

Many of our television stations posted stronger ratings during the recently completed May sweeps. These ratings gains are key to commanding higher revenue for advertising spots into the future. Highlights include outstanding progress on our goal of capturing a larger share of morning news viewers.

For example, in Portland, Hartford and Las Vegas those stations continued their number one positions while Atlanta and Greenville each doubled their viewership and Kansas City increased its morning news viewership by 25%.

Gaining additional viewers at late news where ad rates are the highest is an important initiative. Phoenix viewership in the late news rose nearly 40%, while Greenville rose 10% during this time period. Hartford also maintained its leadership position across all ratings positions.

Our consumer connection is expanding with faster growing popularity of the Better show which is our nationally syndicated lifestyle television operation. The show produced by our in-house video production group called Meredith Video Solutions is now syndicated in more than 50 markets, including half of the nation's top 10. Revenues at Video Solutions rose more than 50% in fiscal '09 and were up about 20% in the fourth quarter.

Retransmission fees are another example of important new revenue streams, doubling in fiscal '09 and increasing nearly 75% in the fourth quarter. Meredith has now successfully agreed to new retransmission terms with all seven of the major cable operators in this marketplace. We expect retransmission fees will be more than $20 million in our fiscal 2010.

To summarize our 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 for advertisers to reach the American consumer.

We're encouraged by rating gains at our stations and our ability to grow new revenue streams from video content creation and retransmission fees. With that operational overview, I'll turn the discussion to Chief Financial Officer, Joe Ceryanec.

Joseph Ceryanec

As Steve noted, key elements of our performance improvement plan focus on reducing costs, managing cash and aggressively reducing our debt. Excluding the special charges, publishing operating costs declined 8% in the fourth quarter and were down 5% in fiscal 2009 despite the 10% increase in paper prices we experienced.

Broadcast operating costs, also excluding special charges, decreased 5% in the fourth quarter and were down 3% for fiscal 2009 overall. Our initiative to consolidate the back office functions such as traffic master control and research into centralized hubs in Atlanta and Phoenix is on track and we expect to be fully completed in early calendar 2010.

We're also implementing other newsroom efficiencies such as hiring reporters who can shoot and edit their own stories and formatting some newscasts with single anchors.

As a result of our annual testing of intangibles, we took a $295 million charge related to broadcasting, FCC licenses and goodwill. This impairment charge is a non-cash charge to earnings, does not affect our liquidity, cash flow from operations and debt covenants, and does not have an impact on our future operations.

During the fourth quarter, we generated $42 million in cash flow from operations which brought our annual total to over $180 million. During fiscal 2009, we reduced our debt by $105 million, which represented a 22% reduction from our prior fiscal year so that total debt was $380 million at the end of 2009.

After year end, on July 13th, we closed on a new $75 million private placement with a leading life insurance company. That private placement consists of $50 million due July 2013 and $25 million due July 2014, which gives us a nice steady repayment stream on our term notes.

The proceeds were used to pay down our revolving credit facilities, thus resulting in no net incremental debt. This also provides us with additional liquidity should attractive investment opportunities arise in the future.

Including the new private placement, the weighted average interest rate on all of our debt stands at about 5.4%. Our debt-to-EBITDA ratio was well within existing debt covenants at 1.8:1. We also continued to returned cash to shareholders during 2009 and increased our dividend by 5%. We're one of the few media companies with the financial strength to increase our dividend in the current economic environment.

So even in these difficult times, we continue to strengthen our balance sheet and during the upcoming year, we'll continue to focus on aggressive cash and expense management across the company. We continue to be well positioned to weather the current softness in the advertising and general market and are extremely well positioned to capitalize on opportunities as they arise.

Now looking ahead, as we look into fiscal 2010, we expect that our advertising clients will continue to be impacted by the recession. In publishing, with two of the three magazines closed, fiscal 2010 first quarter ad revenues are expected to be down in the mid-single digits.

In broadcasting, with nine weeks left in the first quarter of fiscal 2010, advertising pacings are down 25%. By comparison, in the fourth quarter of fiscal 2009 with nine weeks left, pacings were down 32% and we ended down 25%, as Steve noted, picking up approximately 1% per week.

Looking at the rest of fiscal 2010, we expect continued improvements in magazine broadcasts, non-political advertising revenues, with moderating declines in the first half of our fiscal turning to modest growth in the second half of our fiscal.

In addition, we will be cycling against $24 million of net political advertising revenues that were recorded in the first half of our fiscal 2009. Many of the operating expense savings we accomplished in fiscal 2009 have carried into 2010 but will be partially offset by approximately $10 million of additional pension expenses due to the market performance of our pension assets.

We expect our average tax rate to be approximately 43% in our first quarter but average out to about 40.5% for full fiscal 2010. We expect our fiscal first quarter earnings to range from $0.30 to 35% and full fiscal 2010 earnings to range from $1.60 to $2.00.

Obviously, a number of uncertainties remain that may affect our outlook and the first quarter and full fiscal 2010. These include national economic conditions, advertising volatility, the performance of our retail business, paper prices and postal rates. And these and many other uncertainties are referenced in our Safe Harbor section in our press release that we released earlier this morning.

Now, I'll turn it back to Steve for a few closing comments.

Stephen Lacy

To wrap up quickly before we jump into the Q&A, we continue to believe that Meredith possesses a very solid foundation and that we are well positioned to build shareholder value over time. We have assimilated a powerful portfolio of profitable and vibrant media assets and brands.

We have a proven track record of outperforming in our respective industries and growing market share over time. We possess a strong and growing connection to the American consumer, particularly women who make the vast majority of purchasing decisions in the household.

Our 85 million-name consumer database is the largest in the media industry and helps support our circulation activities and expand our marketing services business. Our revenue mix is well balanced with approximately 55% from ad-based sources and 45% from non-advertising based businesses.

We're continuing our disciplined expense control and aggressive cash management program. We generate significant operating cash flow, have a conservative balance sheet and a modest level of debt at a low cost of funds. We're confident that we'll manage through this period and emerge in even a stronger competitive position.

So now we'll be happy to answer any questions that you might have.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Michael Meltz – JP Morgan.

Michael Meltz – JP Morgan

I have a bunch, but I'll ask three and then get back in the queue. Steve, talk a little bit about pricing. What did you see in the fourth quarter at the magazine business? What were yields and what's implicit in your guidance for Q1? What are you anticipating there?

My second question has to do with costs. Your guidance for the year, I understand it's a wide range, what specifically including the pension costs, what are you assuming as declines in cash expenses year-over-year? And then I have one follow-up.

Stephen Lacy

Jack, why don't you speak to what we're experiencing from pricing? I'll give you, Michael, the absolute number. In the fourth quarter, nets per page were down a little over a point, but there's a lot that goes on inside that mix and Jack, you might talk a bit about the environment. The actual number was down a little over 1%, Michael.

Jack Griffin

I'll try to keep it brief. It's complex. There are many factors that impact pricing. When you look at our magazines, obviously we have big ones like Better Homes and Gardens that have very high rates per page and smaller ones like Midwest Living, that have lower rates per page. Steve's number is correct, just over a point decline in the fourth quarter.

Inside of that there's a lot of category volatility. For example, we're down in home double digits. Home advertising is very high yield. We're up in food advertising; food advertising is a lower yield. What we're doing, in running the business, this business is predicated on volume. We're making judicious and prudent decisions to attract volume to our magazines and pricing appropriately.

Sometimes that means giving up small pieces of rate for big pieces of volume. And I think it's fair to say that inside of our big magazines we're experiencing pricing that is a few points below what we experienced last year overall, but I think what's most important is that we are rigorous about this and we make decisions very carefully.

We make them with respect to the volume situation that I discussed earlier, and overall I think we're doing a good job. I'm pleased with the pricing performance in this kind of environment and I'm especially pleased with the volume performance.

Stephen Lacy

Thanks, Jack. And Joe, now, Michael, will speak to your cost question.

Michael Meltz – JP Morgan

Wait, wait, I don't, in terms of the September quarter, your guidance is ad revenues down by 5% to 4% to 6%, so my question, I understand that net per page, maybe not per page, this isn't the right way to think about it, I guess, because of all the moving pieces. What is the page projection that you're anticipating in that number?

Jack Griffin

I'll give you that. In our first quarter of fiscal '10, we have two of the three magazines closed, as Joe said, and we expect that the revenue shortfall, in the mid-single digits, will be roughly equivalent to the page shortfall, which means that the pricing performance in the first quarter of '10 will mirror what Steve described in the last quarter of fiscal '09, flat to down a point in its totality.

Michael Meltz – JP Morgan

And I don't think you actually gave a number, fourth quarter publishing ad revenues, are they down 10%, is that the number?

Jack Griffin

Eleven percent.

Michael Meltz – JP Morgan

Joe, do you have the cost answer?

Joseph Ceryanec

We expect first quarter costs to continue to be down, call it mid to high single digits. As you may remember, it was mid-fiscal 2009 that we put significant cost savings in place, so we expect those trends to continue for the first half of our fiscal, and then some flattening out in the second half of our fiscal. So that for the full year, we expect to be down, call it low single digits.

Michael Meltz – JP Morgan

That's publishing?

Joseph Ceryanec

That's overall.

Michael Meltz – JP Morgan

And then publishing specifically?

Joseph Ceryanec

Publishing, I would say the trend would continue – first quarter trend will continue what we saw in the fourth quarter. Again, mid to low high single digits, if that's a term, and broadcast kind of mid-single digits in the first quarter.

Stephen Lacy

And remember, Michael, more so in publishing than in broadcasting or in corporate. As Joe mentioned, in the outlook part of the discussion where we are expecting continued declines in the first half, although moderating, and some modest gain in the second half, that of course increases costs as we buy more paper, printing and postage, when revenue goes up. And so that's the other side of what Joe made reference to in the second half of the year.

Michael Meltz – JP Morgan

And then just one last question on that, just so I'm clear, publishing costs down mid-single digits in the first half, down low single digits for the year, and broadcasting down mid-single digits for the first half, and actually up for the year? Is that what you're saying?

Joseph Ceryanec

No, I would say the first part was correct, in that we expect publishing to be down mid-single digits in the first half, but as we also said, we expect some improvement in revenue in the second half, and so we expect some of those variable costs will increase, so that we expect publishing actually, for the second half, to be flat to maybe slightly up, depending on the revenue trajectory. Broadcast we expect to be down in the first half and down low single digits in the second half.

Michael Meltz – JP Morgan

In the quarter, can you – and then I guess, Jack, if you want to talk a little bit about what you're seeing in the third quarter by category, what did you see implicit in the down 11% in the fourth quarter? Where were some of the major categories and what's better in the September quarter?

Stephen Lacy

Do you want to handle that, Jack, or do you want us to take it?

Jack Griffin

I'd be happy to take it. In the fourth quarter of fiscal '09, we saw strong performance relative to the prior year in food and beverage, beauty, which is toiletries and cosmetics and DTC. The real challenges have been, as I've said before, in the home category, which makes sense if you look at the sector and direct response has been very difficult.

So we're encouraged because, as you know, so much of our business is done in food and all throughout fiscal '09 for the first three quarters, food was down double digits and then it turned around, up again in the fourth quarter and that has maintained itself as an up category in the first quarter of fiscal 2010.

So when we look forward, we look into fiscal 2010, I think it's important to remember that it's the same calendar year, so while there's volatility overall in the business, food's strong, beauty's strong, apparel is pretty good for us, home is down and direct response is down. So hopefully, that gives you some feel for it, but obviously for us, food being up is very encouraging.

Michael Meltz – JP Morgan

In the quarter, what was the acquisition contribution to revenues, please?

Stephen Lacy

Michael, we don't have that number right at our fingertips, but we'll get back to you on that one, okay?

Operator

Our next question comes from Jason Bazinet – Citi.

Jason Bazinet – Citi

I just have one question on the share gains that you alluded to in the opening remarks? I think for the full year, 9.5 up to 10.5 and for the fourth quarter 10.1 up to 12.8; can you just elaborate a little bit on the underlying drivers of that? Do you think that's mostly category shifts that are sort of playing to your strengths or is there some other driver and do you think it's sustainable?

Stephen Lacy

Now, Jack, did you catch that question? That was on the share gain in the fourth quarter in particular.

Jack Griffin

I'd be happy to speak to the share story overall and, if you have specific questions, I'd be happy to try to address those as well. But as a general narrative what I would say that what Meredith's advertising share gains are due to are several factors, not the least of which is that our magazine brands, Better Homes and Gardens, Family Circle, Ladies Home Journal, etc. are perfectly well suited for what's happening today in the country with respect to people's values and their focus with all the economic dislocation.

People are looking inward. They're looking to their homes and their families, so our brands are well suited thematically. Our brands are also extremely efficient. So in this period, in this downturn, Family Circle magazine just had its biggest issue ever in the month of September in 75 years. It's a wonderful magazine. It's very efficient, and I think it's emblematic of the strength of our products.

The other two factors that I would say are underlying the share gains are that we have built very deliberately, over a long period of time, a sophisticated multi-platform approach to the marketplace. So we're selling, for example, at the Parents Network across all the platforms, including the big website, Parents.com and we've, as a company, figured out how to meet the needs of the marketplace, which is to go across platforms and deliver integrated programs.

And the last piece, I would say, is that we have a very strong corporate sales operation that's driving big pieces of share with big customers like Proctor & Gamble and Unilever. We're very focused on it. We have alignment with our team. We have a great management team and it's working in this environment, and you can see that our advertising performance is materially different than the industry overall.

Operator

Our next question comes from Edward Atorino – Benchmark.

Edward Atorino – Benchmark

You mentioned Ladies Home Journal doing well. How are the other big magazines doing relative to the group, particularly Better Homes and Family Circle? And secondly, on the other publishing, if you could give a little granularity as to integrated marketing, licensing and other revenues as a percent of total or something like that?

Stephen Lacy

Jack, why don't you take the first part? You've talked bit about Family Circle, but you might discuss Better Homes and the Journal and then Joe will give some detail on the other category that Ed is referring to. So go ahead, Jack.

Jack Griffin

Better Homes and Gardens, in the month of August, you probably saw was up almost 30%. Better Homes and Gardens, that' ad PIB, Ed. I told you about Family Circle just a minute ago, with the September issue the biggest ever. Ladies Home Journal is also performing very strongly as well.

So our big three service books are firing on all cylinders. And I think it is also noteworthy that this year we made substantial editorial and creative investments in each of those properties, so we're investing in this downturn.

Edward Atorino – Benchmark

I hear it's really showing up in Family Circle.

Jack Griffin

Family Circle's amazing and that's an amazing team there and their results speak for itself. I think that our big service books are doing very well, particularly in the environment right now. And we're looking into the fourth quarter of the calendar year like everybody else. Nobody knows what's going to happen, but we think we're very well positioned in terms of the way our books are performing, the momentum, the way they work with digital and the way we're able to sell them together.

Joseph Ceryanec

Ed, on the other, and when you look at the financial statements, you can break out the publishing other and the broadcast other, also note that last year, in the fourth quarter in 2008, we took a special charge against the book group and so I'll speak to kind of the normalized without the special charge.

Last year, total revenues, including broadcast and publishing was $92 million; this year it was $86 million. Integrated marketing is down, as we noted earlier, it was down about 17% from Q4 '08 to Q4 '09, even though it was up for the year about 12%.

And when we drilled into that, we noticed, in our fourth quarter '08, there were several large, I'll call them nonrecurring projects in last year and that included Chrysler which did not reoccur and Charming Shoppes which did not reoccur. So we did see a spike in Q4 '08 in the integrated marketing.

Licensing was flat to slightly up from this year and, when you look at the broadcast side, you will note the retrans are up quite a bit, a couple of million dollars from fourth quarter last year.

Edward Atorino – Benchmark

But so the dollar amount of licensing, integrated marketing and other, you break that out at all?

Joseph Ceryanec

We do not in the financial statement.

Edward Atorino – Benchmark

Give us some guesses?

Joseph Ceryanec

Integrated marketing for the fourth quarter was about half of total other publishing. Licensing was about $7 million out of that number, fourth quarter.

Operator

To the presenters on the call, no further questions in queue.

Stephen Lacy

Well, thank you very much for participating today and we are available all day for any of you who want to have some follow-up discussion. Thank you very much.

Operator

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Meredith Corp. F4Q09 (Qtr End 06/30/09) Earnings Call Transcript
This Transcript
All Transcripts