Reader's Digest Association Announces Fourth Quarter Results
NEW YORK, N.Y., March 3, 2011 - RDA Holding Co., parent company of The Reader's Digest Association, Inc. (together with its subsidiaries and affiliated entities, "RDA"), today reported results for the fourth quarter and twelve months ended December 31, 2010.
Mary G. Berner, President and Chief Executive Officer, commented, "We are pleased to announce that a year after our successful emergence from Chapter 11, pursuant to our strategic plan, we have delivered on a number of fronts. We achieved consolidated EBITDA of $175 million in 2010, hitting the high end of our guidance, and generated strong pro forma Free Cash Flow of $86 million. We enjoyed sizeable gains in advertising in our U.S. lifestyle communities, the result of our concerted effort to make advertisers aware of the strengths of our affinity groups, and which also reflect continued progress towards our goal of growing the percentage of revenue from digital sources. We also continue to see progress in our European operations and are encouraged by those results."
"While it is too soon to declare that we have reached an inflection point in our business in terms of revenue growth, the performance through much of our business suggests that we are on track to achieve profitable revenue growth in 2012."
Fourth Quarter 2010 Highlights and Year-End Summary Results
Revenue was $521.8 million in the fourth quarter of 2010 compared with $620.4 million in the fourth quarter of 2009. Excluding the deconsolidation impact of RDA UK of $27.4 million, the negative net change in fair value amortization of $23.6 million and foreign exchange translation of $7.4 million, the decline in revenue was $40.2 million, or 6.8%, and was largely due to the expected decline in sales of the Ab Circle Pro; the closure or sale of unprofitable or marginally profitable product lines; softness in certain international markets and lower mail quantities; and the planned rate base reduction of Reader's Digest magazine in the U.S. This decline was partially offset by non-cash adjustments for undeliverable or suspended subscriptions, incremental revenue associated with two special magazine issues, and significant improvement in advertising revenue across several of our brands in the U.S.