UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 24, 1997
Meredith Corporation
(Exact name of registrant as specified in its charter)
Iowa 1-5128 42-0410230
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1716 Locust Street, Des Moines, Iowa 50309-3023
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code 515 - 284-3000
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Item 5. Other Events.
On January 24, 1997, Meredith Corporation announced in a press release,
attached hereto as Exhibit 99.1, that it had entered into an asset purchase
agreement with First Media Television, L.P. ("First Media") to purchase First
Media's four television stations. A second press release, attached hereto as
Exhibit 99.2, was also issued on January 24, 1997, with additional information
regarding the planned acquisition. The transaction is subject to regulatory
approval and is expected to be completed in mid-calendar 1997.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press release issued by Meredith Corporation dated
January 24, 1997.
99.2 Second press release issued by Meredith Corporation dated
January 24, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MEREDITH CORPORATION
Registrant
(Larry D. Hartsook)
Larry D. Hartsook
Vice President - Finance
(Principal Financial and
Accounting Officer)
Date: January 24, 1997
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Index to Exhibits
Exhibit
Number Item
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99.1 Press release issued by Meredith Corporation dated
January 24, 1997.
99.2 Second press release issued by Meredith Corporation dated
January 24, 1997.
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Exhibit 99.1
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MEREDITH AGREES TO ACQUIRE FOUR TELEVISION STATIONS
FROM FIRST MEDIA
DES MOINES, IOWA -- (January 24, 1997) -- Meredith Corporation announced today
that, pending Federal Communications Commission approval, it will acquire all
of the television stations of First Media Television, L.P., a private company
principally owned by the Marriott family. The First Media stations are:
-- WCPX (CBS - Channel 6) in Orlando, Fla., the 22nd largest market in the
U.S.;
-- KPDX (FOX - Channel 49) in Portland, Ore.-Vancouver, Wash., the 24th
largest market;
-- KFXO (FOX - Channel 39) in Bend, Ore., a low-power companion station of
KPDX; and
-- WHNS (FOX - Channel 21) serving Greenville, S.C.-Asheville, N.C., the
nation's 35th largest market.
The cash purchase price for the assets of First Media is $435 million, which
Meredith will pay through a combination of cash and debt. Based on the
anticipated closing date of mid-calendar 1997, the acquisition will have
minimal impact on the company's fiscal 1997 earnings. The company expects the
acquisition to be dilutive to earnings per share in the subsequent two fiscal
years and accretive in the third. The transaction will be accretive to cash
flow per share and to earnings before interest, taxes, depreciation and
amortization (EBITDA) during the first full year.
Meredith President and Chief Executive Officer William T. Kerr said, "We have
consistently stated three operating strategies--increased involvement in
television broadcasting, further development of our fundamental commitment to
home and family publishing, and expansion of additional revenue and profit
streams that are consistent with our home and family heritage. Acquisition of
the First Media television stations is a major step toward fulfilling our
broadcasting growth strategy."
Kerr said, "We are enthusiastic about the value the First Media stations will
add to our company and our opportunities in these outstanding markets.
Orlando, Portland and Greenville-Asheville fit our broadcasting goal of owning
and operating stations with network and geographic diversity. Moreover, these
stations will be especially good additions to our television lineup because
they are in growth markets."
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He said, "All three markets possess the qualities of a healthy, promising
advertising environment." Positive economic indicators for all three markets
include robust economies, diversified bases of business and industry, low
unemployment, strong population growth and favorable demographics. The
Orlando, Portland, and Greenville-Asheville markets each outpace the national
growth rate for consumers' effective buying income (disposable income), retail
sales, and television revenue.
Kerr said, "We announced our eighteenth consecutive quarter of improved
comparable earnings this week, underscoring Meredith Corporation's strength and
momentum. Given our performance and our strong balance sheet, we are very
comfortable with the amount of debt required to finance this acquisition. The
relatively short-term dilution to earnings resulting from this purchase is
reasonable and justified by the shareholder value created by the acquisition."
The Meredith Broadcasting Group currently includes seven television stations in
locations across the continental United States: KPHO-TV (CBS) in Phoenix; KCTV
(CBS) in Kansas City; WSMV-TV (NBC) in Nashville; WOFL-TV (FOX) in Orlando;
KVVU-TV (FOX) in Las Vegas; WNEM-TV (CBS) in Flint-Saginaw, Mich.; and WOGX-TV
(FOX) in Ocala-Gainesville, Fla.
FCC regulations prohibit ownership of more than one television station in a
single market. Because Meredith now owns WOFL in Orlando, the company must
divest either WOFL or the soon-to-be-acquired WCPX.
He said the need to dispose of one station presents a unique opportunity. "In
the end, we will own either WOFL or WCPX, two very fine stations in a very fine
market. Taking into account tax, market, and other considerations, our desire
is to own one of the Orlando stations and trade one of them for one or more
stations with high growth opportunities," Kerr said.
Assuming the company trades an Orlando station for a station in a market
serving at least a like number of households, Meredith's planned acquisition of
the First Media television stations will move the company's Broadcasting Group
from under five percent to nearly eight percent of U.S. households.
Meredith Corporation publishes a stable of many well-known consumer
publications including Better Homes and Gardens and Ladies' Home Journal
magazines. Kerr said, "We have one of the top magazine publishing operations
in the country. Our desire is to develop an equally important broadcasting
business. The acquisition of the First Media television stations will move us
much closer to that goal."
Meredith was founded with magazine publishing in 1902 and entered the
television broadcasting business in 1948. "We have a long history of excellent
television operations, including programming, news and community service. We
are focused on selective acquisitions in growth markets between No. 15 and No.
50 in size."
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Meredith Corporation, headquartered in Des Moines, Iowa, is one of America's
leading media and marketing companies. Meredith businesses center on magazine
and book publishing, television broadcasting, residential real estate marketing
and franchising, and brand licensing.
The Meredith Publishing Group is the country's foremost home and family
publisher. The group creates and markets magazines including Better Homes and
Gardens, Ladies' Home Journal, Country Home, Country Home Country Gardens,
Country America, Midwest Living, Traditional Home, Renovation Style, WOOD,
Family Money, American Patchwork & Quilting, Decorative Woodcrafts, Cross
Stitch & Needlework, Crafts Showcase, Floral & Nature Crafts, Successful
Farming, Mature Outlook, Crayola Kids, Golf for Women, the American Park
Network, 42 Special Interest Publications, custom publications through Meredith
Custom Publishing, and books titled under Meredith trademarks including the
popular Better Homes and Gardens New Cook Book.
The statements in this news release describing the financial impact of the
acquisition on the company are forward-looking statements. These statements
are based upon information provided by the seller and certain assumptions as to
interest rates and the future performance of the stations to be acquired. The
actual financial impact of the acquisition could differ materially from the
anticipated results. The factors that could cause actual results to differ
include lower than expected station operating results; adverse economic
conditions in the nation, regionally, and in the markets in which the stations
operate; adverse changes in regulations affecting the broadcast industry
generally and specified stations; changes in ownership of other stations; delay
in the closing of the acquisition and increased interest rates over the term of
the debt obligation.
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Exhibit 99.2
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MEREDITH OFFICIALS PROVIDE ADDITIONAL INFORMATION
ON PURCHASE OF FOUR TELEVISION STATIONS FROM FIRST MEDIA
DES MOINES, IOWA -- (January 24, 1997) -- In a conference call with investors
this afternoon, Larry Hartsook, chief financial officer of Meredith
Corporation, expanded on the potential impact of the company's purchase of four
television stations from First Media Television, L.P.
"We will experience relatively short-term earnings per share dilution," said
Hartsook. "Specifically, we believe it will be in the range of approximately
30 to 35 cents per share in fiscal 1998. We'll reduce that number by
approximately half in fiscal 1999, and we expect to be in the black in fiscal
2000." He added that all of the dilution will be from amortization of goodwill
and other intangibles.
Meredith Corporation announced this morning that, pending Federal
Communications Commission approval, it will acquire all of the television
stations of First Media, a private company principally owned by the Marriott
family. The cash purchase price for the assets is $435 million, or
approximately 13.5 times estimated calendar 1997 broadcast cash flow. The
First Media stations are WCPX (CBS), Orlando; KPDX (FOX), Portland; KFXO (FOX),
Bend, Ore.; and WHNS (FOX), Greenville, S.C.-Asheville, N.C.
Meredith Corporation, headquartered in Des Moines, Iowa, is one of America's
leading media and marketing companies. Meredith businesses center on magazine
and book publishing, television broadcasting, residential real estate marketing
and franchising, and brand licensing.
The statements in this news release describing the financial impact of the
acquisition on the company are forward-looking statements. These statements
are based upon information provided by the seller and certain assumptions as to
interest rates and the future performance of the stations to be acquired. The
actual financial impact of the acquisition could differ materially from the
anticipated results. The factors that could cause actual results to differ
include lower than expected station operating results; adverse economic
conditions in the nation, regionally, and in the markets in which the stations
operate; adverse changes in regulations affecting the broadcast industry
generally and specified stations; changes in ownership of other stations; delay
in the closing of the acquisition and increased interest rates over the term of
the debt obligation.
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