Meredith Corporation (NYSE:MDP) Q2 2015 Earnings Conference Call - Final Transcript

Jan 28, 2015 • 11:00 am ET

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Meredith Corporation (NYSE:MDP) Q2 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Ladies and gentlemen, thank you for standing by, and welcome to the Meredith Corporation Fiscal 2015 Second Quarter Earnings Call. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session; instructions will be given at that time. (Operator Instructions) As a reminder, today's conference is being recorded. Now I would like to turn the conference over to Mike Lovell. Please go ahead.

Executive
Michael Lovell

Hi, good morning, and thanks everyone for joining us. Our call this morning will begin with comments from Chairman and CEO, Steve Lacy; and CFO, Joe Ceryanec, and then we'll turn the call over to questions. Also on the line this morning as usual is National Media Group President, Tom Harty; and Local Media Group President, Paul Karpowicz. An archive of today's discussion will be available later today on our investor website and the transcript will follow that.

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

Executive
Stephen M. Lacy

Thank you very much, Mike, and good morning everyone. I hope you had the opportunity to see our news release issued earlier today that details our results. I'm pleased to report a strong second quarter and first half of our fiscal 2015. Excluding special charges, we increased earnings per share by 45% in the quarter when compared to the prior year period. Total revenues grew by 13% and total advertising revenues were up 25%.

Results were led by our Local Media Group, which delivered all-time record performance across the board, in revenue, operating profit and EBITDA. This included political-related advertising revenues of $29 million in the quarter and $42 million overall for the election cycle; both were records.

Our National Media Group delivered an operating profit increase of 7% and operating margin strengthened. Results were driven by higher advertising revenues, stronger performance from Meredith Xcelerated Marketing and a 4% decrease in operating expenses. Total company digital advertising revenues grew by 45% to a fiscal second quarter record, driven by both recent acquisitions and organic growth. National Media Group digital advertising revenues increased nearly 45%, while Local Media Group digital advertising revenues increased more than 50%.

Consumer engagement strengthened across our media platforms during the quarter. Our television stations delivered strong November ratings book; our National Media Group grew its total audience; and traffic increased across our digital and our mobile sites.

Finally, our diverse and multi-platform business model continued to generate strong and sustainable cash flow. We generated $74 million of operating cash flow during the first half of fiscal 2015, that's more than a 20% increase over the prior year amount. We remain committed to our Total Shareholder Return strategy, key elements of which include our current annual dividend of $1.73 per share, a $100 million share repurchase program and ongoing strategic investments to scale our business and