Revenue Up, EBITDA Down For Readerâ€™s Digest In Third Quarter
Core products such as Readerâ€™s Digest and Taste Of Home show solid growth.
RDA Holdings, the parent company of Reader's Digest Association, today announced third quarter revenue of $357 million, up 4.4 percent from the same period in 2010. Net loss improved from a loss of $86.8 million to a loss of $76.8 million, while EBITDA sank to a loss of $16.6 million, primarily due to declines with former RDA star Every Day With Rachael Ray, which the company sold last month.
"Much of the volatility this quarter was due to significant underperformance in two of our non-core businesses, the combined effects of which had an outsized impact on our results-our Lifestyle & Entertainment Direct segment and the Every Day With Rachael Ray title-which we have now sold," said president and CEO Robert Guth. "Outside of these two factors, our business is moving in the right direction."
While RDA's Branded Communities segment--which includes the publishing business--fell 3.7 percent to $138 million in revenue in the third quarter--"core" products such as Reader's Digest and Taste of Home showed improvement. Reader's Digest is up 10.7 percent in ad pages through September according to PIB, while RDA says digital sales now account for one third of print newsstand sales for the brand. Ad pages in Taste of Home grew 2.7 percent for the first nine months of the year, per PIB, while revenue for the Allrecipes segment grew 9.8 percent in the third quarter to $6.7 million.
The Lifestyle & Entertainment Direct group saw revenue plunge 41 percent to $18.2 million in the third quarter. RDA says the Ab Circle Pro--which was once a dark horse of profitability for the company--is at the "end of its life cycle."
For the first nine months of the year, Reader's Digest posted total revenue of $1.19 billion, up 16.8 percent from $934.5 million for the same period last year.
In September, Guth, former CEO of telecommunications company TelCove, was name president and CEO of RDA, becoming the third person this year to hold those titles, following the departure of longtime CEO Mary Berner in April and former CFO Tom Williams, who replaced Berner.
In July, The Wall Street Journal reported that Reader's Digest went on the block with an asking price of $1 billion.