Pleasantville : RDA Holding Co., parent company of The Reader’s Digest Association, Inc. (together with its subsidiaries and affiliated entities, “RDA”), has reported combined results for the first quarter ended March 31, 2010 compared with the prior year quarter. The results reflect the company’s fresh start accounting subsequent to its emergence from pre-arranged chapter 11 restructuring on February 19, 2010. The company also reported results for the six months ended December 31, 2009, compared with the same period of 2008.
Concurrent with emergence from chapter 11, the company changed its fiscal year-end from June 30 to December 31, effective as of December 31, 2009. March 31, 2010 financial statements reflect the first calendar quarter of the company’s new fiscal year. The company emerged from Chapter 11 as a new company as of February 19, 2010; however, to facilitate a more meaningful comparison between periods, the company has presented the combined results of the predecessor and successor companies for the first calendar quarter of 2010. For full GAAP results, please refer to the financial tables at the end of this press release.
“We emerged from the restructuring process having met our major goal – a stronger balance sheet with significantly lower debt,” said Mary Berner, President and Chief Executive Officer. “We are pleased to have achieved consolidated cash EBITDA of $177.6 million for the twelve months ended December 31, 2009, which was at the high end of our expected range of $170-$180 million. In addition, we have continued on our path to improved profitability, as demonstrated by our increase in segment operating profit to $22.6 million for the combined first quarter, which was driven by strong increases in our Lifestyle & Entertainment Direct and U.S. businesses. We were able to achieve these improved results despite challenges posed by the global recession and having operated in Chapter 11 during much of this time. As we move forward, we are mindful of the ongoing challenging macroeconomic environment and, at the same time, are focused on executing our cost, cultural and growth initiatives quickly and efficiently.”
RDA achieved cash upon emergence from Chapter 11 restructuring of $184 million, above guidance of $175 million, and cash was $189.4 million at the end of the combined first quarter.
Consolidated cash EBITDA for the last twelve months ended March 31, 2010 was $167.4 million. Revenue decreased $46.8 million, or 10.2 percent, to $413.9 million, from $460.7 million in 2009, due partly to the effect of the fair value adjustment to unearned revenue recorded as a result of the company’s emergence from bankruptcy on February 19, 2010, as well as challenging international macroeconomic headwinds and a planned rate base reduction and decrease in the frequency of issues published for Reader’s Digest magazine.
Excluding charges, segment operating profit for the combined quarter increased to $22.6 million, from $21.4 million in the first quarter of 2009.