Company also provides business update, including fourth-quarter fiscal 2008
DES MOINES, Iowa, June 5 /PRNewswire-FirstCall/ -- Meredith Corporation
(NYSE: MDP), one of America's leading media and marketing companies, announced
today it has acquired Big Communications, a leading healthcare marketing
communications firm. Additionally, the company provided a business update,
and announced it will take an approximate $16 million after-tax special charge
in the fourth quarter of fiscal 2008 related primarily to a repositioning of
its book operations and selected reductions in force.
The acquisition of Big Communications further enhances the depth and
breadth of Meredith Integrated Marketing, the company's business unit that
provides leading companies with custom online and offline marketing services.
It also provides Meredith with another entry point to the health category, an
area the company has targeted for strategic expansion.
Big Communications develops custom healthcare communications for over 20
of the world's leading pharmaceutical, biotech and managed care companies.
Its innovative marketing and communications programs are delivered via a
variety of channels that include print, digital and mobile, and are aimed at
pharmaceutical sales forces, caregivers, medical professionals and patients.
Big Communications will operate as a division of Meredith Integrated
Marketing, whose stable of leading edge customer relationship management
providers includes O'Grady Meyers, Genex, New Media Strategies and Directive.
"Big Communications' innovative and creative solutions in healthcare
marketing communications -- along with its ability to provide cutting-edge
programs for a diverse range of healthcare sales, medical professionals and
patients -- further enriches our diverse assets and client offerings," said
Meredith President and CEO Stephen M. Lacy. "Additionally, we are now in a
position to offer Big's clients Meredith's full array of content expertise,
digital assets and marketing services."
Founded in 1994, Big Communications has been recognized for creative work
and client solutions. With over 100 employees, Big Communications has received
numerous honors for innovative work and performance including the Inc. 500
Fastest Growing Privately Held Companies in the U.S., and the Promo 100
Fastest Growing Promotional Marketing Companies. It will continue to be based
"We believe there is an incredible synergy between Meredith Integrated
Marketing and our company in how we approach and deliver client-based
solutions across media channels," said Big Communications founder and CEO Lisa
Stern. "Together, we can create unprecedented and innovative solutions that
build brands, increase ROI, and improve healthcare outcomes."
Terms were not disclosed. The acquisition will be accretive to earnings,
and will not have a material effect on Meredith's financial performance in
fiscal 2008 or fiscal 2009.
The acquisition of Big Communications is the latest in a number of recent
strategic investments Meredith has made that have helped the company broaden
its audiences; enhance its online and video content creation expertise; expand
its distribution platforms; and increase its sales and marketing capabilities.
These have included the creation of digital and video content libraries;
significant enhancement of online activities; acquisition of leading-edge
interactive marketing firms; expansion of Hispanic market activities; and the
creation of Meredith Video Solutions.
Business Update/Special Charge
Since Meredith last provided a business update on April 23, 2008, fiscal
2008 fourth-quarter Publishing advertising revenues have weakened slightly
(now down in the mid-teens) while Broadcasting advertising pacings have
strengthened slightly (now down in the high single digits).
Additionally, softer retail sales and higher than expected returns have
further impacted the performance of Meredith's retail book operations. The
current weak retail environment has been noted in recent earnings reports from
chain book stores and large home improvement centers, where a significant
portion of Meredith's products are sold.
In the past year, Meredith has taken a number of steps to strategically
reposition its book operations in the current retail marketplace, including
exiting products such as children's books and non-core authored titles.
Today, Meredith announced it is further focusing the scope of its book
operations on titles with the Better Homes and Gardens imprint, as well as
certain other licensed brands. These titles fall more within Meredith's core
content areas of cooking, gardening, building and remodeling.
This repositioning represents the bulk of an approximate $16 million
after-tax special charge Meredith will take in its fiscal 2008 fourth quarter.
It includes adjusting certain book royalties, art and editorial, and inventory
accounts, as well as severance for eliminated positions in book and elsewhere
in the company. In total, Meredith will eliminate approximately 60 currently
filled and 60 open positions.
Given the underperformance of its book operations, Meredith now expects
fiscal 2008 earnings per share to be at the lower end of the $3.15 to $3.20
range articulated on April 23. This excludes an estimated EPS impact of
approximately $0.33 for the special charge noted above.
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 the company's operations.
Statements in this announcement that are forward-looking include, but are not
limited to the company's earnings per share outlook for 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 the company's industries; unexpected changes
in interest rates; and the consequence of acquisitions and/or dispositions.
The company undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events, or
About Meredith Corporation
Meredith Corporation (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 3,600 people throughout the United States and
fiscal 2007 annual revenues were $1.6 billion.
SOURCE Meredith Corporation 06/05/2008
CONTACT: Art Slusark of Meredith Corporation, +1-515-284-3404,
Web site: http://www.meredith.com