Total revenue at Reader's’ Digest fell 19% in the second quarter ended June 30, to $436.5 million, but the company did manage to improve EBITDA (earnings before interest, taxes, depreciation and amortization) to $76.8 million from $71.4 million. Revenue includes results from its U.K. operations, which have been “deconsolidated.” During the quarter, the company, which emerged from bankruptcy earlier this year, eliminated 10% of its global workforce and CEO Mary Berner said she expects to see the financial benefits of those cuts in the second half of the year. RD expects to save $34 million on an annual basis as a result of the job reductions.
In breaking down sales by product line, book sales fell 8%, to $147 million in the quarter, while music/video sales declined 16%, to $70 million. RD said the decline in these “legacy products” was due primarily to lower response rates, especially in its international direct marketing units. RD said sales of digital products have doubled in the last year and are expected to double again by 2012. The company did not provide additional information on what percentage of sales digital now represents of total revenue
