Readers Digest is a multi-brand and multi-platform media and direct marketing company that reaches 145 million customers worldwide through a combination of print, digital and DRTV product offerings. Products include books, music, video, advertising, and 86 separate magazines, with offices in 45 countries and customers in 79 countries representing 30 trusted brands.
In 2010, Readers Digest re-emerged from a 2009 bankruptcy filing, effective February 2010. In February 2010, the UK subsidiary of RD filed for administration, and RD relinquished control and consequentially deconsolidated it. In January 2010, RD sold CompassLearning, its educational software division. However, in early 2013 Reader’s Digest is once again restructuring its debt and in the process has filed for bankruptcy.
According to a 2012 company report, books account for 36.5% of RDA’s revenues, with to 32.8% coming from magazine subscriptions and newsstand sales, 10.5 % from music and videos, and 9.2% from magazine advertising.
For this ranking, only publishing revenues are included. The company's reporting was broken down by category in recent filings, and revenue from magazines is excluded here.
Key Company Developments in 2012 & 2013
Financial:
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Ownership, Mergers & Acquisition, Internal Organization:
After several weak quarter results, Reader’s Digest filed for bankruptcy in early 2013 for the second time in the last four years. RD will convert roughly 465 million USD to equity, leaving the company with approximately 100 million USD in debt when it emerges from bankruptcy, which it anticipates in about six months.
Staff at Reader’s Digest's U.K. business book division are among the 95 employees who have been laid off.
For this ranking, revenues reported from the first three quarters of 2012 are supplemented with fourth quarter estimates based on previous years.
International:
Of the 78 countries RDA operates in, the most significant by revenue are Australia, Germany, and France, with 78.9% of RDA’s combined international revenue from books, music, videos, and nonpublished product sales and 21.1% from magazines, website circulation, and advertising. For the year ending December 31, 2011, Europe generated net revenue and operating income of 568.8 million USD and 27.5 million USD, respectively, and Asia Pacific & Latin America generated net revenue and operating income of 245.6 million USD and $15.5 million USD, respectively.
Outside of North America, RDA is selling books in 33 countries, music products in 34 countries and video products in 30 countries. Select Editions, RDA’s largest open-ended reading series, appears in 17 languages and is sold in 31 countries. Other reading series and illustrated series are also marketed internationally. Reading series books are published in five languages and sold in 13 countries outside of North America, while illustrated series books are published in seven languages and sold in 16 countries.
Digital:
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Bestselling Authors & Titles:
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Key points for analysis & conclusions:
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Earlier Developments:
2011:
With RDA’s re-emergence effective February 2010, and various re-organization measures implemented, earnings cannot be directly compared between its current activities and those of the predeeding company.
Book publishing has been merged internally with home entertainment, and for 2011, in that new combination, "Books, home entertainment and non-published products revenue generated $867.2 or 58.0% of total revenue, consisting of $476.9 in our Europe segment, $224.5 in our North America segment and $165.8 in our APLA segment,” according to RDA report and SEC filings.
Another report for the first 3 quarters of 2011 stated that books alone represented 36.5% of revenues, which would amount to roughly 530 million USD.
On September 12, 2011, Robert Guth was appointed as President and CEO. Mr. Guth is also a member of the Board. Also, effective September 12, 2011, Thomas Williams agreed to resign as President and CEO, as well as a director, of the Company.
The sales of Allrecipes.com and Weekly Reader businesses were completed in the first quarter of 2012.
After filing for bankruptcy in 2009 and reemerging in early 2010, RDA is consolidating and restructuring, in pursuit of becoming a multi-platform cross media venture with increased profitability and greater share of digital revenues.
2009:
In summer 2009, Readers Digest had announced an operational loss of $560.6 million in the preceding nine months, and chose to file for bankruptcy under Chapter 11, which it successfully moved out of in February 2010 after financial restructuring and cutting its debt by 75%. In the meantime, the company raised $525 million in bond refinancing. (This does not however affect Reader’s Digest U.K.
After the turnaround, Reader’s Digest issued a press released with Mary Berner, then President and Chief Executive Officer saying "This is a very important day for our company, and emerging with a de-levered balance sheet and a strong new capital structure is a significant step forward as we continue to transform RDA into a global media and marketing leader."
In January 2009, RD announced to cut about 8% of its workforce. In March 2008, media reports expected RD to file for bankruptcy, based on estimates of 2.1 billion $ of debt after the take over of RD by Ripplewood Holdings in March 2007 for 2.6 billion USD. But these reports have been denied by RD’s management.
2007:
RD was acquired by Ripplewood in 2007. A new company structure was introduced, making previous revenue figures of the Global Ranking inconsistent with the reported revenues for fiscal year 2008 (ending June 30, 2008). Only revenues from book publishing were referenced the current Global Ranking as they have been specified in RD’s SEC filing. In the previous ranking, all activities of Reader’s Digest (namely RD North America, RD International and Consumer Business Services) were included, as all these services seem to be highly integrated with the RD core business of publishing.
An investor group led by Ripplewood Holdings completed its $1.6 billion acquisition of the firm in 2007, in a transaction with an aggregate value of $2.4 billion. The investor group also includes the J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp., and Magnetar Capital. Ripplewood Holdings, LLC is an American private equity firm based in New York that manages more than $10 billion in capital. Ripplewood was founded by its current CEO, Tim Collins. The company's main interests range from telecommunications to banking to entertainment.
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