The Reader’s Digest Association Inc. reported a fourth-quarter net loss of $3 million, an $18 million improvement over last year’s results. But revenue remained flat at $545 million, compared with $544 million for the same period last year.
The North America Books and Home Entertainment unit experienced a 6% decline in sales to $142 million. The U.S. portion of the business suffered a 23% drop in sales, which the direct marketer and publisher attributed to drastically reduced mail volume and the elimination of unprofitable product lines. The total loss for the unit fell to $1 million, compared with $6 million last year.
The purchase of Reiman Publications Inc. added revenue of $31 million, resulting in a 12% boost in U.S. magazine sales to $134 million. Without Reiman, sales in the category would have been down because of lower advertising and circulation revenue, and the closing of Walking and New Choices magazines.
International revenue fell 2% to $269 million primarily because of lower sales in Latin America.
The Pleasantville, NY company took a special charge of $34 million in the fourth quarter ended June 30 due to the Reiman acquisition and other events.
Revenue for the total year is expected to hit $2.5 billion.
Looking forward to 2003, CEO Thomas O. Ryder said in a statement that the firm expects “reduced losses at U.S. BHE; a full-year of contribution from Reiman; and flat results for International, partially offset by modest declines at U.S. Reader’s Digest magazine, lower pension income and higher compensation-related expenses.”
Recently, the firm has reduced its reliance on sweepstakes. The publisher has converted most of its acquisition mailings to non-sweeps, and is working on eliminating them in renewals. By year’s end, sweeps will be featured in only 10% of the firm’s mailings. (DIRECT, July, 2002).
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