Excerpts from our annual report
PUBLISHING
26% Operating
Profit Increase
Operations
We publish a variety
of subscription and news-stand only magazines focusing on our expertise in the home and
family market.
Meredith Corporation
was founded as as magazine publishing business. Today Publishing represents 56 percent of
our operating profit and 79 percent of our revenues. We publish 21 subscription magazines,
41 Special Interest Publications and numerous custom publications. Our flagship is Better
Homes and Gardens magazine. Each year our stable of magazines reaches approximately
65 million people, or nearly one-third of the U.S. adult population.
We have 278 book
titles in print, most of which carry the Better Homes and Gardens trademark.
Meredith books focus on cooking, gardening, wood-working, crafts, building/home repair,
decorating travel and health. We sell our books primarily through retail distribution
channels.
We launched our
retail brand licensing efforts in 1994, when Better Homes and Gardens Garden
centers opened in all U.S. Wal-Mart stores. In 1996, Wal-Mart began selling Better
Homes and Gardens Floral & Nature Crafts branded merchandise.
1997
Performance
Fiscal 1997
publishing operating profit grew 26 percent to a record $80.6 million from $64.1 million
in the prior year. Fiscal 1997 revenues of $673.2 million were 3% lower than prior year
revenues of $695.9 million. The decrease was due to fiscal 1996 actions which included
selling the company's book clubs, closing home garden and Weekend Woodworking
magazines, reducing the rate base at Ladies' Home Journal magazine and
changing the number of issues published by Country America magazine from 10 to
six annually. Without the effect of these actions, which resulted in a more profitable
company, Publishing revenues would have increased approximately 4 percent for the fiscal
year.
Outlook
Our Publishing
Group's strategy for revenue and operating profit growth involves expansion of our
business through six principal avenues.
• Capturing additional
advertising dollars in growth categories such as financial services and technology;
• Continuing our strong
magazine launch record by developing one or two new products each year;
• Adding major new marketing
partners;
• Developing new sources of
profit based on our core competencies;
• Pursuing compatible,
profitable acquisition opportunities at reasonable prices;
• Seeking long-term brand
extension opportunities.
BROADCASTING
12% Operating
Profit Increase
Operations
Including four
television stations acquired in early fiscal 1998, we own and operate 11 broadcast
properties in many of the nation's fastest-growing markets. Seven of our stations are in
the top 35 markets. In fiscal 1997 broadcasting represented over 41 percent of our
operating profit and 18 percent of our revenues. Our Broadcasting Group currently includes
six FOX affiliates, four CBS affiliates, and one NBC affiliate. Our FOX affiliates are
located in Orlando, Fla.; Portland, Ore.; Greenville, S.C.; Las Vegas, Nev.;
Ocala/Gainesville, Fla.; and Bend, Ore. Our CBS affiliates are in Phoenix, Ariz.; Kansas
City, Mo.; Hartford/New Haven, Conn.; and Flint/Saginaw, Mich. Our NBC affiliate is
located in Nashville, Tenn.
1997
Performance
Fiscal 1997 was
another record year for our Broadcasting Group. Its operating profit increased 12 percent
year over year, to $58.5 million from $52.3 million. Broadcasting revenues grew 7 percent
for the first fiscal year, to $156.4 million from $145.9 million in the prior year.
Outlook
Our Broadcasting
Group will drive revenue and operating profit growth by pursuing the following objectives:
• Increasing advertising sales
through innovative local promotions, continued sales training and idea sharing among
stations;
• Improving our competitive
position through strong programming, news and community service.
• Pursuing compatible,
profitable acquisition opportunities at reasonable prices.
REAL ESTATE
5% Operating
Profit Increase
Operations
The Better Homes
and Gardens Real Estate Service is a franchised residential real estate network known
for providing outstanding customer service and tailored marketing programs to its member
firms. It has more than 800 member firms with nearly 26,000 sales associates in the United
States, Canada, Puerto Rico and abroad. The Real Estate Group represents approximately 3
percent of our operating and revenues.
1997
Performance
Real Estate Group
operating profit totaled $3.7 million in fiscal 1997, a 5 percent increase over fiscal
1996 results. Revenues increased slightly, to $25.6 million.
Outlook
We will grow the Better
Homes and Gardens Real Estate Service by:
• Increasing transaction fee
revenues from existing member firms through the delivery of high-value goods and services
which may help members increase home sales;
• Attracting new member firms
that will lead to increased transaction fees and product sales.
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