Circ Profits Drive Hoffman Media to Fast Growth
Cooking with Paula Deen publisher grows revenue 65 percent in three years.
It’s no secret that managing a magazine publishing business is no easy feat, especially since the recession that rocked the economy hit in late 2008. But despite the massive hurdles, some companies are more than managing to stay afloat.
This week, Inc. magazine released its annual list of the 5,000 fastest-growing privately-held companies in the U.S. In the media category, Penthouse publisher the FriendFinder Networks ranked number one among magazine publishers on the list. In addition to the magazine, FriendFinder is known best for its sexually-oriented online social networks.
Coming in second among magazine publishing companies this year is Birmingham, Alabama-based Hoffman Media, the publisher of 11 magazines including Cooking with Paula Deen (the company ranked #38 in the media category and #3,102 overall). According to Inc., Hoffman increased its revenues 65 percent from $25 million in 2006 to $41.3 million in 2009. Revenues were up 5 percent last year compared to 2008. Meanwhile, EBITDA jumped 35 percent.
“The company is highly focused on circulation profitability, so we have never been in the business of growing rate base to abnormal and unhealthy levels just to gain additional advertising revenues,” says Eric Hoffman, executive vice president and COO. Hoffman says the company drives close to 80 percent of its revenues from subscriptions and newsstand sales.
Headed by president and CEO (and FOLIO: 40 inductee) Phyllis Hoffman DePiano, Hoffman Media launched in the early 1980s with titles including Cross Stitch, Southern Lady and Tea Time. After launching 725,000-circ Cooking with Paula Deen in 2005, Hoffman Media struck up a joint-venture with Hearst in 2007 to relaunch Victoria magazine (paid circ base of 250,000), and launched Sandra Lee Semi-Homemade (also carries a paid circ of 250,000), a bimonthly title, last year. (Paula Deen and Sandra Lee are both hosts on the Food Network.)
Hoffman says the company plans to bump Sandra Lee Semi-Homemade to a 300,000+ circ by mid-2011. And while he declined to offer any specific figures, Hoffman says the company was “on budget” through the first half in terms of revenue and expects to post “double digit” growth through the end of the year.
“We believe that if we deliver premium content at a premium price, and let each title grow into its natural circulation level then our business will develop stronger and more stable earnings over time,” Hoffman says.
|Hoffman Media Revenue Breakdown|
|Events, ancillary products||10%|