The 10-year licensing agreement between Meredith and MSLO was announced last October and took effect in November.
In a statement about the report, CEO Dan Dienst described the company as more efficient and “asset-light.” The majority of revenues are out of the merchandising group.
First-quarter revenues for the publishing division dropped from US$19.5m in 2014 to $5.7m in 2015, again reflecting the shift in publishing business and management from MSLO to Meredith. Operating expenses dropped 65 per cent, with the group recording an operating loss of $2.1m.
Looking longer-term, Dienst said in the earnings call that the Meredith deal is expected to drive publishing group profitability and that it was not solely a way to take costs out of the operation.
First-quarter results provide some visibility into the group’s run rate, he says, adding, “This was not just an exercise in cost avoidance, as noble an endeavour as that may have been for a business that bled for years. We’re hoping and expecting that as we build this traffic pipeline and creating this content, that we’ll start to see that profit share come through on the print side or the revenue share come through on the digital side.”
Those upsides will become most evident during the company’s busy holiday season in the fourth quarter, he said.
Total company revenues for the quarter were about $17m, down from $33.3m same period last year.
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