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Edited Transcript of MDP earnings conference call or presentation 27-Apr-17 12:30pm GMT

Thomson Reuters StreetEvents

Q3 2017 Meredith Corp Earnings Call

DES MOINES Apr 28, 2017 (Thomson StreetEvents) -- Edited Transcript of Meredith Corp earnings conference call or presentation Thursday, April 27, 2017 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jonathan B. Werther

Meredith Corporation - President of National Media Group

* Joseph H. Ceryanec

Meredith Corporation - CFO

* Michael Lovell

Meredith Corporation - Director of IR

* Paul A. Karpowicz

Meredith Corporation - President of Local Media Group

* Stephen M. Lacy

Meredith Corporation - Chairman and CEO

* Thomas H. Harty

Meredith Corporation - President and COO

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Conference Call Participants

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* Barry Lewis Lucas

G. Research, LLC - Senior Analyst

* Daniel Louis Kurnos

The Benchmark Company, LLC, Research Division - Analyst

* Eric Katz

Wells Fargo Securities, LLC, Research Division - Senior Analyst

* Thomas Allen Moll

Stephens Inc., Research Division - Research Associate

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to the Fiscal Third Quarter Earnings Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

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

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Michael Lovell, Meredith Corporation - Director of IR [2]

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Good morning, and thanks, everyone, for joining us. Our call today will begin with comments from Chairman and Chief Executive Officer, Steve Lacy; President and Chief Operating Officer, Tom Harty; and Chief Financial Officer, Joe Ceryanec. Then we'll turn the call over to your questions. Also on the line today are Local Media Group President, Paul Karpowicz; and National Media Group President, Jon Werther. An archive of today's call will be available later today on our investor website.

Our remarks today will include forward-looking statements, and actual results may differ from forecasts. Some of the reasons why are described at the end of our news release that was issued earlier this morning and in some of our SEC filings.

With that, Steve will begin.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [3]

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Thank you very much, Mike, and good morning, everyone. Thanks for joining us. I hope you've had the opportunity to see our earnings release that was issued earlier today. I'm pleased to report that we remain well on track to deliver record results for fiscal 2017.

Looking at our third quarter, earnings per share on a GAAP basis were $0.87 compared to $1.79 in the prior year quarter, which included special items of $0.87 per share, primarily related to a merger termination fee that we received in that prior year period. Excluding special items, fiscal 2017 third quarter earnings per share were $0.87. That compares to $0.92 in the prior year period when we benefited from $0.05 a share of incremental high-margin political advertising from the Presidential primary season.

Total company revenues were up 1% from the prior year quarter to $425 million. I think the most noteworthy development in our third quarter was the very strong digital performance, really, across the company. Total company digital revenues increased nearly 25% to a third quarter record. Our powerful national brands really fueling the majority of that digital growth.

In our National Media Group, digital ad revenues increased more than 25%, accounting for almost 30% of total National Media Group ad revenues in the quarter. Our very strong brands, premium ad products, proprietary first-party data and technology platforms are the foundation of our strong and profitable digital business.

In our Local Media Group, digital ad revenues increased nearly 10%, reflecting the implementation of a number of new initiatives to drive local audiences to our station's digital site and increase consumer engagement. For example, we recently relaunched all of our mobile news, weather and traffic apps across the station group, yielding record app opens and unique page views in our third fiscal quarter.

As I said many times on these calls, we're firmly committed to an integrated multi-platform growth strategy. Our goal is to deliver our valuable content to consumers where and when they choose to receive it, and then, of course, aggressively monetize that audience. I'm very pleased to report that our digital business continues to be highly profitable and, of course, contributes nicely to Meredith's shareholder value.

Tom and Joe will deliver more third quarter detail in just a moment. But first, let me provide a few comments on our 9-month results for our fiscal 2017. First of all, from a financial perspective, earnings per share for that 9-month period were a record $3.20. Excluding special items, earnings per share were $2.92, also a record, and up 30% over the first 9 months of our prior fiscal 2016. Total company revenues grew 4% to a record $1.3 billion, and total advertising revenues grew 3% to $704 million.

In our Local Media Group, 9% advertising growth was driven by a very strong election cycle where we delivered a record $58 million in political advertising. In our National Media Group, we delivered growth in comparable advertising revenues as nearly 20% growth in digital advertising, offset mid-single declines in print. We're very pleased to have reached this inflection point in ad performance, with digital growth surpassing print declines.

We continued to execute on our Total Shareholder Return strategy, increasing our dividend in late January for the 24th consecutive year. During the fiscal third quarter, we were pleased to have been added to the S&P High Yield Dividend Aristocrats index as an acknowledgment for our consistent track record of annual dividend increases.

Second, we continue to enhance our media brands and expand our portfolio in reach. In our Local Media Group, we increased local news and entertainment programming to 700 hours weekly as we added newscast in multiple markets, including Atlanta, Phoenix and Portland. Our ratings performance remained strong with 8 of our stations consistently ranked as #1 or #2 in morning and late news.

In our National Media Group, our ongoing work to improve the reach relevance and vibrancy of our media assets continues to strengthen our audience connection. For example, our total multichannel reach among unduplicated American women now stands at an all-time high of 110 million, including more than 70% of American female millennials.

Third, as I mentioned earlier, we continue to drive rapid growth across our digital, mobile, video and social platforms. For example, company-wide traffic to our digital mobile sites has averaged nearly 90 million unique visitors so far in fiscal 2017.

Finally, our diversified revenue and profit base continues to grow with our non-advertising-related businesses. For example, our Local Media Group delivered significant growth in retransmission revenues by renegotiating rates with the MVPDs for a large portion of our subscriber households.

In our National Media Group, we renewed our industry-leading licensing agreement with Walmart, grew our Better Homes and Gardens Real Estate program which Realogy, and launched new licensing programs for EatingWell, SHAPE and Allrecipes.

For the second year in a row, we ranked as the world's second largest licensor, behind only Disney, according to License! Global Magazine. Our e-commerce initiatives continue to grow as well, driven by new vendor relationships and capabilities, including consumer membership programs.

With that overview, I'll turn the discussion over to President and Chief Operating Officer, Tom Harty, for more on our fiscal third quarter performance.

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Thomas H. Harty, Meredith Corporation - President and COO [4]

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Thanks, Steve, good morning, everyone. Let's begin our discussion with our Local Media Group. Fiscal 2017 third quarter operating profit was $41 million, and EBITDA was $50 million. Revenues increased to $142 million.

As Steve reported, from a revenue standpoint, growth in retransmission-related revenues offset the effects of cyclical political advertising revenue and the Super Bowl. Digital advertising revenues grew nearly 10% from the prior year quarter as innovative growth strategies continue to drive stronger performance across our station group.

Political advertising was $4 million less than the prior year quarter as we were cycling against Presidential primary dollars. Nonpolitical advertising revenues decreased to $84 million, due primarily to the Super Bowl airing on FOX during the quarter compared to airing on CBS a year ago. We have a much larger footprint and reach with our CBS affiliates, which include top 30 markets Atlanta, Phoenix, St. Louis and Hartford, compared to our FOX affiliates.

On April 21, we closed on our acquisition of the broadcast assets of Peach TV (sic) [Peachtree TV] , WPCH, in Atlanta from the Turner Broadcasting System, Inc. We have assisted in the day-to-day operations of Peachtree TV since 2011, including advertising sales, marketing and promotions, and technical operations. With WPCH, we have created our fifth owned-and-operated duopoly market, as we also own WGCL, the CBS affiliate in Atlanta. The acquisition will not have a material effect on our fiscal 2017 results.

Finally, during the quarter, we renewed the CBS affiliations in 4 of our markets, including Atlanta and Phoenix, our 2 largest, as well as Kansas City and [Flynn] . All 7 of our CBS affiliations are now in place into the year 2020, and we are pleased with the terms and conditions of these new agreements.

Turning to the National Media Group. Fiscal 2017 third quarter operating profit grew 19% to $41 million and was up high single digits, excluding special items. Revenues increased to $283 million.

Looking more closely at fiscal 2017 third quarter performance compared to the prior year quarter. Total advertising revenues were off 1%, but up on a comparable basis, which excludes MORE magazine. This performance was driven by strong 27% growth in digital advertising, which offset declines in print advertising.

Digital advertising accounted for 28% of total National Media Group advertising and was fueled by growth in native, engagement-based video, and programmatic advertising, along with shopper marketing. Our magazines grew their share of total industry advertising to 12.1% from 11%, according to the most recent data from Publishing Information Bureau (sic) [Publishers Information Bureau] . Martha Stewart Living, Allrecipes and Traditional Home posted strong performance. The direct response, pets and household supply advertising categories were growth leaders.

Circulation revenues were flat at $96 million, but were up excluding MORE magazine. Other revenues increased 5% to $62 million, driven primarily by e-commerce revenue, along with Meredith Xcelerated Marketing and Brand Licensing. Finally, expenses declined 2% and were down 1%, excluding special items in the prior year quarter, as we continue to pursue operational efficiencies.

To wrap up my comments about the National Media Group, we are excited about the performance of The Magnolia Journal. Launched as a newsstand-only title in October 2016, this extension of the Joanna and Chip Gaines' popular Magnolia brand is becoming a subscription magazine with the May 2017 issue. We expect it will be published quarterly and will have a rate base of 1 million by the October 2017 issue.

Now I'll turn it over to Joe for a look at the company-wide financial highlights and details on our outlook.

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Joseph H. Ceryanec, Meredith Corporation - CFO [5]

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Thanks, Tom, good morning, everybody. Looking at our fiscal 2017 year-to-date metrics. Cash flow from operations grew to $178 million. At March 31, total debt was $631 million, and the weighted average interest rate was 2.9%, with roughly $350 million effectively fixed at low rates. Our debt-to-EBITDA ratio, as defined in our credit agreements, for the trailing 12 months ended March 31 was 1.7:1.

We continue to focus on our Total Shareholder Return strategy. Key elements include: one, ongoing dividend increases. And as Steve mentioned, we raised our regular stock dividend by 5.1% to $2.08 on an annualized basis. We've paid an annual dividend for 70 consecutive years and have raised it for 24 straight. We continue to make strategic investments to scale the business and increase shareholder value. Over the last few years, we've invested approximately $1 billion in leading broadcast, digital and print properties. And finally, we are opportunistically repurchasing our stock. Our ongoing share repurchase program has $70 million remaining under current authorization as of March 31, 2017.

Now turning to our outlook. For the full fiscal year 2017, we continue to expect record earnings per share of $4.13 to $4.18 on a GAAP basis and record earnings per share of $3.85 to $3.90, excluding special items recorded in fiscal 2017.

Looking more closely at our fourth quarter of fiscal 2017 compared to the prior year, we expect Local Media Group revenues to be up mid-single digits, Total National Media Group revenues to be down slightly and total company revenues to be up slightly. We expect fiscal fourth quarter earnings per share to range from $0.93 to $0.98.

Now let me close with what we continue to believe as a compelling investment thesis for Meredith Corporation. The diverse businesses that we own and operate consistently deliver strong free cash flow, driven by: one, a great group of television stations in large and fast-growing markets; two, trusted national media brands with an unrivaled reach to American women, particularly our growing reach to millennial women; a profitable and growing digital business; vibrant and growing brand licensing activities that are based on our very strong national media brands; and a strong and proven management team with a very successful record of generating growing free cash flow and shareholder value over time.

And finally, as we've consistently stated, we continue to explore opportunities to add attractive print, broadcast and, of course, digital brands to our media portfolio. We have a consistent track record of being very disciplined acquirers. But like any other public company, we will not comment on market rumors or market speculation. We're here this morning to discuss our financial results in the quarter and for the first 9 months and, of course, our outlook for the fiscal fourth quarter. And I would ask that you focus your questions on these topics.

So with that, we'd be happy to open it up for any questions that you might have.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Kyle Evans from Stephens.

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Thomas Allen Moll, Stephens Inc., Research Division - Research Associate [2]

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This is Tommy in for Kyle. Well, on the LMG side, in the press release, you called out future growth through M&A. And I just wondered if you could give us any sense of what the pipeline looks like and what type of deals would be at the top of your priority list.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [3]

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So I'll start, and then I'll ask Paul to add to that. As I'm sure you know, there's a lot going on in the marketplace right now with a number of proposed changes, and I guess I'll broadly call the regulatory environment. And of course, with the incentive auction being over, we anticipate that those opportunities will really continue to expand. We have been very successful before picking up stations and especially when there have been major transactions come together where there are overlaps to come in sort of in a secondary manner and pick up some wonderful properties, like we did in St. Louis and our second station in Phoenix and others. So we are involved in every single thing that comes up in the marketplace. And we always get an opportunity for a look-see, if you will, and we are very, very interested. Paul, you might -- you've been at the conference, you might add to that. And you should also restate our criteria in what's of interest to us.

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Paul A. Karpowicz, Meredith Corporation - President of Local Media Group [4]

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Sure. I'm currently out at NAB, and that seems to be the topic of discussion is the potential deregulatory environment that the FCC -- the current FCC is talking about. But really, we have been very disciplined relative to our acquisition strategy. And traditionally and I think on the go-forward basis, we will continue to be very disciplined. We pretty much look at the top 60 markets, primarily Big 4 affiliates, ABC, NBC, CBS and FOX. We're always looking for opportunities with second stations to add to our existing stations in market, and a good example of what we just did was Peach TV (sic) [Peachtree TV] . So that's really the guidelines. So that's really the criteria that we have used as we look at opportunities. We are probably not one of those buyers who will buy bulk stations just for the sake of adding scale, but we will continue to be very selective in the markets that we'll go into.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [5]

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Tommy, does that help with your question?

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Thomas Allen Moll, Stephens Inc., Research Division - Research Associate [6]

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Yes, very much. And if I could ask a quick follow-up on LMG. You mentioned in the release some strong ratings across the station portfolio. I wondered, are the stats that you gave us with 8 stations, #1 or #2 in morning and late news and 5 #1 from sign-on to sign off, are those numbers moving up versus some recent quarters? And then in Phoenix, I think we're about to lap over some weakness from last year. How are things looking there?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [7]

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So your question is, are those ratings that we delineated, would that be better than where we were a year ago or better than the prior quarter? And I don't have that exact data, but I'm pretty sure the answer is yes, then we can check on that. And Paul, why don't you give an update on Phoenix? Or I guess we would say things are stabilizing and really starting to move in the right direction again?

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Paul A. Karpowicz, Meredith Corporation - President of Local Media Group [8]

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Yes, I think almost better than stabilizing that with our combination of 2 very strong stations there, KTVK, a very strong news independent, we do a tremendous amount of news programming on that station; and KPHO, I think that's a market where we can say that we have seen some significant growth. And that market, we're very excited about because it does appear that we've moved into a much stronger position there. And across the board, we're seeing some nice increases. But again, with -- as many stations as we have, you're always going to see some ebbs and flows. But overall, I would say the arrow was pointed in a positive direction pretty much across the group.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [9]

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Does that help, Tommy?

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Thomas Allen Moll, Stephens Inc., Research Division - Research Associate [10]

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You bet.

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Operator [11]

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Your next question comes from the line of Dan Kurnos from Benchmark Company.

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Daniel Louis Kurnos, The Benchmark Company, LLC, Research Division - Analyst [12]

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So just a couple of things from me. I just want to kind of follow up on Tommy's questions, just on local quickly. Can you just break out -- I guess maybe, Paul, just a general core pacing, your local guide is pretty strong, and then just some category color. And then, Steve, higher level and also maybe for Paul as well, just considering the potential for the in-market concentration, ownership relaxation of those rules, how are you guys thinking about going after duopolies now? Are you going to take more of a longer-term strategy, wait-and-see if it gets enacted? And then relative to the other buckets, whether it be digital or print, how do you think about the opportunity there from a synergistic or a long-term perspective?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [13]

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So let's take them again in the order that you asked, I think if I wrote them down right, Dan. So pacing down low to mid-single digits, and from a category perspective, the good news is that automotive is always our lead category, and it's in fact pacing up kind of in the low single-digit range and sort of leading the charge. They always bounce around a little bit, but that's the most important one. Food and home are also pacing ahead. And then weaker at the moment would be professional services and fast food restaurants. Okay? Does that answer that first of your questions?

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Daniel Louis Kurnos, The Benchmark Company, LLC, Research Division - Analyst [14]

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Yes. And then on the in-market and sort of the high-level M&A question?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [15]

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Paul, do you want to take a shot at that one?

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Paul A. Karpowicz, Meredith Corporation - President of Local Media Group [16]

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Sure. I think the way we have to look at in-market stations is pretty much look at what is available to us now relative to what the rules are today. But as there's been a lot of discussion relative to the deregulatory environment, whether there will be an allowance going forward for 2 Big 4 affiliates in a market, the voice test may change in some markets. And these are all things that the FCC is saying they're going to consider. But I think today and in the near term, we just have to pursue those things that are available to us under the current and existing rules, such as the Peach TV (sic) [Peachtree TV] . But I think we're always going to continue to be on the lookout for other opportunities as they become available.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [17]

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Okay?

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Daniel Louis Kurnos, The Benchmark Company, LLC, Research Division - Analyst [18]

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Yes. And could I just ask one more, Steve, on digital side. Could you just maybe -- I know we talked a little bit about this after your -- the pre-announcement. Could you just give us a little bit more color on the digital strength, particularly in national? Can you just talk about the balance of whether you're getting -- either seeing CPM increases versus volume in clicks? And how much of it is coming from either ad channel optimization versus inventory improvement?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [19]

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Jon Werther, would you like to give a little bit more color on our really great digital story, which we love to talk about?

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Jonathan B. Werther, Meredith Corporation - President of National Media Group [20]

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Sure, Dan. I think it's really a combination of a couple of things, strength in direct sales and the strength in programmatic. And from a direct sales perspective, we've really focused on branded content and native advertising opportunities, leveraging our proprietary insights and analytics and also leveraging our proprietary technology platforms in the areas of shopper marketing and engagement-based video. And all of those are really fueling larger partnerships where we're able to capture a premium for our advertising inventory that's directly sold. Same holds true on the programmatic side. We've really had some gains driven by private marketplace deals. And we're also capturing a premium for our inventory and then obviously improving our yield on open-exchange inventory. So yes, generally speaking, we're seeing increases in what we're able to command for our advertising inventory. And part of that is the function of the improved results that we can really drive for advertisers that justify that premium. Does that answer your question?

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Daniel Louis Kurnos, The Benchmark Company, LLC, Research Division - Analyst [21]

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Yes, perfect, Jon.

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Operator [22]

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Your next question comes from the line of Eric Katz from Wells Fargo.

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Eric Katz, Wells Fargo Securities, LLC, Research Division - Senior Analyst [23]

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So with regards to M&A, should a publishing deal come to fruition, does that affect how you view M&A for broadcast? And do you see yourself as a seller in any scenario?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [24]

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Well, first of all, the good news is that in all the years that I've been here and we've been doing this, we've usually been more challenged by opportunities that met our standards, so to speak, or met our criteria or that, as Paul said, from a very disciplined acquirer perspective, that we feel comfortable with much more challenged to line up enough good opportunities than we've ever been challenged to have investment capital to make that happen. So again, we sort of at the same time look and I would say equally so at digital opportunities, especially if they add a proprietary technology or, of course, if they add scale. We look at broadcast opportunities based on the criteria that Paul said. And again, we are not a company that bulks up for the sake of bulking up. And I think you also know, Eric, we have a long history of transactions in our National Media Group, where we take a lot of cost out of the system and we do a lot better job of monetizing the assets than our predecessors. So we tend to look at all 3 of those avenues at the same time, and I think our track record has been pretty successful in making that happen.

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Eric Katz, Wells Fargo Securities, LLC, Research Division - Senior Analyst [25]

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And as far as digital, I understand some of the comments you just made. That's very helpful. I'm just wondering, since you guys are performing better than most, is there any specific areas that you feel like you're doing differently than others to drive that?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [26]

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Well, I'm going to start, and then I'm going to ask Jon to add to that again. I think it's really important, the philosophy of operating the business, and we unfortunately look at so many of these digital assets. And with all due respect to the marketplace that have really pretty incredible perceived values, but they don't make any money. And we don't like to run businesses that don't make money. So our digital activities generate an operating margin that is almost exactly the same as the National Media Group segment as a whole. I think that is very distinctive from the way most other people run those activities. I'm not quite sure why you would work so hard to run a business that doesn't make money. But that is just our starting point. And Jon, you might speak to some of the reasons that happens. But I think it's important to remember, we are selling premium content, and that's a very different positioning in the market from an ability to generate a strong CPM. But beyond my little philosophy speech, Jon, why don't you add some color to that?

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Jonathan B. Werther, Meredith Corporation - President of National Media Group [27]

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Sure. I think, really, what's been key to our success is a combination of 4 things that really anchor our strategy in digital and digital growth. And those are our branded experiences, obviously, everything starts with our brands continuing to create and roll out branded experiences that are compelling for consumers across platforms, particularly with the mobile-first or connected device-first mindset. Second is continuing to expand our audience reach against not only women, but particular key segments within the overall women audience, particularly millennial women, multicultural women, et cetera. Third is our proprietary data and the insights and analytics that, that data enables us to provide to advertisers and the agency that represent them. And then fourth are our proprietary technology platforms in areas like native shopper marketing engagement-based video, et cetera. And the combination of those 4 things together allow us to put the right content or product in front of the right consumer at the right time, whether that's a piece of flat content or video content, whether it's a marketing offering on behalf of one of our brands or our partner brands or whether it's an advertisement, and leveraging our technology platforms and our data to do so. When we do that, we are able to drive better return on ad spend for advertisers, better yield for our own inventory. We're able to capture our fair share of the value that we're creating in the marketplace. And so as we've grown our revenue, we've been able to grow our profitability by virtue of leveraging those 4 capabilities in tandem.

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Operator [28]

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Your next question comes from the line of Barry Lucas from Gabelli & Company.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [29]

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Maybe we could start in the print area where you've done a terrific job on the cost side. So if you exclude MORE, what would you say the core cost did in the quarter on a percentage basis? And how sustainable is that? Or what other opportunities do you have?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [30]

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I think Joe is looking in his book to give you that answer, if we've got the data, excluding MORE.

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Joseph H. Ceryanec, Meredith Corporation - CFO [31]

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Barry, I do not have MORE -- oh no, hang on, I do have MORE pulled out. Expenses x MORE would have been up 2%.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [32]

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Okay, that's helpful. And if we just switch over to TV. First, did I hear you say right, because I had to -- I guess it was Kyle's question on pacings for the -- core pacings for 4Q. Was that up or down mid-single digits on the core?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [33]

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Down.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [34]

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Down. Okay. And where is the -- at this juncture...

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [35]

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Barry, again, earlier, I said down low to mid, and then I gave some category color, yes. But it was down low to mid. Okay.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [36]

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So with the fair amount of business optimism out there, why do you think that, that business is just not doing any better, especially with auto up?

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [37]

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Yes, auto is up. Do you want to give -- you've been spending the whole week with all of our friends, Paul. I think it's pretty consistent, Barry, across the board, oftentimes not unusual after a very, very strong election cycle when we've gone back and looked at our history. But again, Paul, you might add a little color on that?

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Paul A. Karpowicz, Meredith Corporation - President of Local Media Group [38]

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Yes. I think it was -- obviously, for us, for Meredith, it was a very robust political season, and we did very well across a number of our markets, and there was significant displacement. Just a personal view is, I think, as an industry, we did a pretty good job of talking traditional advertisers out of being on the air during the political season. And just saying it's going to be so big, it's going to be enormous, it's going to be huge, and a lot of traditional advertisers just stayed out of the market. Obviously, now that the election is over, it was time to get everybody back engaged. And I think a lot of people have just been sitting out. I think there's been a degree of uncertainty about the new administration and what's going on. But you're right, the economy is good. Auto has a category continues to be strong. But some of our other categories have been a little sluggish. Fortunately, we're starting to see some improvement, see some movement there, but it was just a moment in time. And as Steve said, we've seen this before after presidential elections where it takes a little bit of time to restart and kind of get back to normal, I think.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [39]

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And obviously, Barry, we haven't finished the fourth quarter, so we're just giving you our thoughts. But there's more weakness on the national side than the local side. Local side is pacing better. And I think that makes sense as well because that is really what drives people into the car dealership on Saturday morning is the local advertising. So, local is better, national is a little weaker. And I think we feel, as Paul Karpowicz would always say, cautiously optimistic as we look forward.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [40]

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If I may, 2 more items, Steve. And one is a follow-up on Paul's comment, which I think is pretty interesting. So you did a great job convincing advertisers that last election cycle was going to be the mother of all elections, and a lot of people would be displaced...

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [41]

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Fortunately for us, it was, not everybody though.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [42]

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Right. But did you do too good a job convincing people to stay away and now maybe say, "Hey, I did okay without my TV advertising, what do we need to come back for?"

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [43]

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I mean, my consistent belief on this, Barry, is that if there's another technology created that works as well to cause the consumer to take action in the local marketplace, we might be having that sort of a conversation. But with the ongoing weakness of classified, which used to be our other big competitor in newspaper business, if you don't advertise, you don't sell cars. And that has been proven time and time again. So I understand exactly what you're saying, but I think 2 or 3 months of the new calendar year doesn't necessarily make a trend.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [44]

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Okay. Last one from me is, how much stock did you repurchase in the quarter?

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Joseph H. Ceryanec, Meredith Corporation - CFO [45]

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None out of the market, Barry. Some option exercises that we keep from diluting the market, but given as we've always said opportunistic, our stock has had a 6 handle on it for pretty much the 4 quarters. So we were not into the market buying.

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Barry Lewis Lucas, G. Research, LLC - Senior Analyst [46]

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Okay. And function of price.

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Joseph H. Ceryanec, Meredith Corporation - CFO [47]

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Correct.

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Operator [48]

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And at this time, there are no further questions.

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Stephen M. Lacy, Meredith Corporation - Chairman and CEO [49]

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So thank you all for participating. We're very excited about moving forward to finish a really great year for the Meredith Corporation, and we sincerely appreciate your continued support. Thank you.

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Operator [50]

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Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.