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) August 24, 1998
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 August 24, 1998, Meredith Corporation announced in a press release, attached
hereto as Exhibit 99, that it had agreed to acquire WGNX-TV, the CBS affiliate
serving Atlanta. The planned acquisition involves the purchase of KCPQ-TV, a
FOX affiliate in Seattle currently owned by Kelly Television Co., and the
subsequent trade of KCPQ with Tribune Company for WGNX-TV in Atlanta. The
transactions are subject to regulatory approvals and are expected to be
completed early in calendar 1999.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press release issued by Meredith Corporation dated
August 24, 1998.
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
(/s/ Stephen M. Lacy)
Stephen M. Lacy
Vice President - Chief
Financial Officer
(Principal Financial and
Accounting Officer)
Date: August 26, 1998
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Index to Exhibits
Exhibit
Number Item
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99 Press release issued by Meredith Corporation dated
August 24, 1998.
Exhibit 99
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MEREDITH AGREES TO ACQUIRE ATLANTA CBS AFFILIATE WGNX-TV
DES MOINES, IA -- (August 24, 1998) -- Meredith Corporation (NYSE:MDP)
announced today it has reached an agreement to acquire Atlanta CBS affiliate
WGNX-TV from Tribune Company (NYSE:TRB). The move will give Meredith a station
in a Top 10 market, extends Meredith's U.S. household reach by 22 percent to
9.4 percent of U.S. television households, and positions Meredith as the
largest owner of CBS stations in terms of household reach other than the
network itself. The transaction, which requires regulatory approval, will give
Meredith stations in four of the five fastest-growing television markets in the
Top 25 (Atlanta, Phoenix, Orlando and Portland, Ore.).
Meredith has agreed to purchase Seattle's KCPQ-TV (FOX) from Kelly Television
Co., and trade the station to Tribune for WGNX. Meredith's cash outlay upon
completion is estimated to be $370 million, which the company anticipates
financing with a combination of bank debt and private placements. The
transactions are expected to close sometime after January 1, 1999.
"This acquisition represents a unique strategic opportunity for Meredith," said
Meredith Corporation Chairman and Chief Executive Officer William T. Kerr. "A
chance to acquire a station in a Top 10 market is rare, let alone in one of the
nation's fastest-growing television markets. In addition, WGNX offers the
potential for significant revenue share gains and operating improvements."
Atlanta, currently the nation's 10th largest television market, is expected to
move past Detroit into the No. 9 spot in the next decade. In fact, only five
markets in the Top 25 are projected to increase in rank over the next 10 years,
and Meredith will own stations in four of these markets -- Phoenix (17th
currently, 13th projected); Orlando (22nd to 19th); and Portland (24th to
22nd).
Based on a closing date of January 1, 1999, the company expects the dilution in
earnings as a result of this transaction to be less than 10 cents per share in
Meredith's fiscal 1999, which ends next June 30; to peak between 10-15 cents
per share in fiscal 2000; and decline thereafter. The transaction will be
accretive to cash flow per share and to earnings before interest, taxes,
depreciation and amortization (EBITDA) immediately.
"We are a company committed to creating shareholder value through strong growth
in earnings per share and cash flow," said Kerr. "Recently, we announced our
fifth-straight year of record earnings from continuing operations and double-
digit earnings per share growth. While this acquisition may slow our rate of
earnings growth for a year or so, we believe it will create significant
shareholder value over time."
Kerr said Meredith is committed to strengthening local news and programming at
WGNX, and to significantly improving the station's financial performance.
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"We realize that we need to make significant investments at the station in
order to reach our goals," said Kerr, citing local news expansion, programming,
sales promotion and marketing, and improved facilities as priorities. "But I
think our track record speaks for itself. We have been very successful by
giving stations the opportunity to succeed -- from both a programming and
financial perspective. I'm confident that we can excel and thrive in Atlanta,
too."
This transaction will mark Meredith's seventh television station purchase in
the past three years. Previous acquisitions included KPDX-TV (FOX, Portland,
Ore.), WFSB-TV (CBS, Hartford-New Haven), WHNS-TV (Greenville-Spartanburg-
Anderson, S.C.-Asheville, N.C.), and KFXO-LP (FOX, Bend, Ore.), all in 1997;
WOGX-TV (FOX, Ocala-Gainesville, Fla.), in 1996; and WSMV-TV (NBC, Nashville),
in 1995.
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Meredith Corporation, headquartered in Des Moines, Iowa, is one of America's
leading media and market companies. Meredith businesses center on magazine and
book publishing, television broadcasting and integrated marketing.
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 America, Midwest Living,
Traditional Home, Family Money, WOOD, Crafts Showcase, Crayola Kids, Successful
Farming, MORE, Renovation Style, Cross Stitch & Needlework, Golf for Women,
Country Gardens, Decorative Woodcrafts, American Patchwork & Quilting, the
American Park Network and more than 100 Special Interest Publications. The
Publishing Group also creates custom marketing programs through Meredith
Integrated Marketing, licenses the Better Homes and Gardens brand and publishes
books created and sold under Meredith and Ortho trademarks. Meredith's most
popular book is the red-plaid Better Homes and Gardens New Cook Book.
The Meredith Broadcasting Group includes 11 television stations in locations
across the continental United States: KPHO-TV (CBS), Phoenix, Ariz.; WOFL-TV
(FOX), Orlando, Fla.; KPDX-TV (FOX), Portland, Ore.; WFSB-TV (CBS), Hartford-
New Haven, Conn.; KCTV (CBS), Kansas City, Mo.; WSMV-TV (NBC), Nashville,
Tenn.; WHNS-TV (FOX), Greenville-Spartanburg-Anderson, S.C.-Asheville, N.C.;
WNEM-TV (CBS), Flint-Saginaw, Mich.; KVVU-TV (FOX), Las Vegas, Nev.; WOGX-TV
(FOX), Ocala-Gainesville, Fla.; and KFXO-LP (FOX), Bend, Ore.
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 station 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 market in which the station
operates; adverse changes in regulations affecting the broadcast industry
generally and the specified station; 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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