Reader’s Digest Association’s losses ballooned in the first three months of 2009 as the company dealt with declines in consumer spending and advertising.
The parent of iconic Reader’s Digest magazine revealed a $462 million net loss on revenue of $479.1 million in the quarter ended March 31. That is compared with a $53.6 million net loss on revenue of $575.1 million in the year-earlier quarter, according to a Securities and Exchange Commission filing.
For the nine months ended March 31, RDA’s net loss climbed to $652.6 million on revenue of $1.6 billion versus a net loss of $159.3 million on revenue of $1.8 billion in the comparable year-ago period.
Much of the loss reflected a $527.1 million asset impairment charge that the company took in the recent quarter. RDA said the charge resulted from the softening global market, a downgrade in RDA’s credit rating and its declining financial projections.
The company, which is owned by private equity firm Ripplewood Holdings, is exploring restructuring options as it navigates the difficult economy. Over the past year, president and CEO Mary Berner has sold off the company’s party-planning business, school fundraising business and the assets of its display marketing business. RDA laid off 8 percent of its global workforce, or about 280 people, and mandated unpaid time off for the remainder.