Excerpts from our annual report
PUBLISHING
Operations
We publish a variety
of subscription and newsstand-only magazines focusing on our expertise in the home and
family market.
Meredith Corporation
was founded as as magazine publishing business, and today Publishing represents 55 percent
of our operating profit and 76 percent of our revenues. We publish 21 subscription
magazines, more than 100 special interest publications and numerous custom publications.
Our flagship is Better Homes and Gardens magazine.
We have 290 book
titles in print, most of which carry the Better Homes and Gardens trademark. We
also publish books for The Home Depot and Ortho®. Meredith books focus on
cooking, gardening, woodworking, crafts, building/home repair, decorating, travel and
health. We sell our books primarily through retail distribution channels.
Meredith Integrated
Marketing builds and manages marketing partnerships with many of the country's most
respected organizations.
Through our brand
licensing operation, Wal-Mart sells Better Homes and Gardens labeled premium
gardening products at its more than 2,000 stores nationwide.
On July 27, 1998,
Meredith Corporation sold the net assets of the Better Homes and Gardens Real
Estate Service to GMAC Home Services, Inc., a subsidiary of GMAC Financial Services.
Effective in fiscal 1999, we have licensed GMAC Home Services, Inc., to use the Better
Homes and Gardens trademark in conjunction with residential real estate marketing.
1998
Performance
Publishing Group operating profit and revenues increased to
record levels for the fiscal year. Operating profit grew by 16 percent to $98.1 million
from $84.2 million. Revenues were up 10 percent to $770.6 million from $698.8 million in
fiscal 1997.
Note: Prior years' amounts have
been restated to conform to current year presentation.
Outlook
Our Publishing
Group's strategy for operating profit and revenue growth involves expansion of our
business base through four principal avenues:
• Capturing additional
advertising dollars in growth categories such as financial services, luxury goods and
technology;
• Continuing our strong
magazine launch record by developing one or two new titles each year;
• Adding major new marketing
partners and expanding existing relationships; and
• Seeking appropriate brand
extension opportunities.
BROADCASTING
Operations
We own and operate
11 television broadcast properties in many of the nation's fastest-growing markets. Seven
of our stations are in the top 35 markets. Broadcasting represents 45 percent of company
operating profit and 24 percent of our revenues. Our Broadcasting Group includes six FOX
affiliates, four CBS affiliates and one NBC affiliate.
Our FOX affiliates
serve:
• Orlando/Daytona
Beach/Melbourne, Fla.;
• Portland, Ore.;
• Greenville,
S.C./Spartanburg, S.C./Asheville, N.C.;
• Las Vegas, Nev.;
• Ocala/Gainesville, Fla.; and
• Bend, Ore.
Our CBS affiliates
serve:
• Phoenix, Ariz.;
• Hartford/New Haven, Conn.;
• Kansas City, Mo.; and
• Flint/Saginaw/Bay City,
Mich.
Our NBC affiliate
serves Nashville, Tenn.
On August 24,
1998, we announced our plan to acquire WGNX-TV, the Atlanta CBS affiliate. We expect the
transaction to close in early calendar 1999.
1998
Performance
Fiscal year
Broadcasting Group operating profit increased 37 percent to $80.1 million from $58.5
million in the prior year. Fiscal 1998 revenues grew 53 percent to $239.3 million from
$156.4 million in fiscal 1997. Excluding the four stations acquired in the first quarter
of fiscal 1998, the Broadcasting Group still achieved record operating profit and revenues
for the fiscal year.
Outlook
Our Broadcasting
Group will drive operating profit and revenue growth by pursuing the following objectives:
• Strengthening our sales and
marketing capabilities and resources;
• Implementing focused
marketing programs that leverage Meredith Corporation's consumer database and publishing
assets on behalf of viewers and advertisers;
• Improving our competitive
position by strengthening and expanding our local news programming and creating a trusted,
memorable and appealing brand identity for each local television station; and
• Pursuing compatible,
profitable acquisition opportunities at reasonable prices.
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