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Reader’s Digest Revenue, EBITDA Fall Double Digits in First Quarter 2011

Company blames loss on decline of Ab Circle Pro sales, fewer magazine issues.



Stefanie Botelho By Stefanie Botelho
05/16/2011

The Reader’s Digest Association (RDA) shared its first quarter results this morning, and fallen revenues show that the company is still nursing its wounds since emerging from bankruptcy in February 2010.

Overall revenue for the first quarter of 2011 was $326 million, down from $413.9 million in the first quarter of 2010 (revenue from Feb. 20 to March 31 2010—after RDA emerged from bankruptcy—was $156.2 million).

Revenue for the Reader’s Digest Community – which includes Reader’s Digest, Reader’s Digest Best You, RD Large Print and RD Select Editions - dropped 7 percent from $44.1 million to $40.8 million; the RDA Lifestyles Communities - a group of 10 titles including Every Day With Rachael Ray and Taste of Home - also experienced a fall, down 18 percent to $73.6 million.

RDA cites the sale and/or closure of unprofitable product lines, fewer magazine and book series renewals, fewer newsstand special issue and one less issue of Simple and Delicious magazine as revenue hindrances in the first quarter.

However, the Weekly Reader segment was up 83 percent to $5.5 million in the first quarter of 2011.

Consolidated EBITDA fell from $9.5 million in first quarter 2010 to first quarter negative $25.2 million in first quarter 2011.

RDA CEO Tom Williams (who replaced former RDA CEO Mary Berner on April 25) says, “Our first quarter results are generally in line with our plans which included a significant increase in our marketing spending. We expect that this investment will have a positive impact on our EBITDA in the second half of the year, and that our full year 2011 consolidated EBITDA will be $175-$185 million. We also anticipate that this spending will set the stage for modest revenue growth in 2012.”

Stefanie Botelho By Stefanie Botelho
05/16/2011







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