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READER'S DIGEST REPORTS RECORD REVENUES, PROFITS FOR FISCAL 1993 THIRD QUARTER AND NINE MONTHS

 -- Announces New Stock Repurchase Program of Up to 3 Million
 Class A Nonvoting Shares --
 PLEASANTVILLE, N.Y., May 4 /PRNewswire/ -- The Reader's Digest Association, Inc. (NYSE: RDA, RDB) today reported record worldwide revenues and profits for the fiscal third quarter and nine-month period ended March 31, 1993, and announced a new program to repurchase up to 3 million shares of Class A nonvoting common stock.
 The company achieved these third quarter results:
 Third quarter ended March 31, 1993 1992 Percent
 Revenues $737.6 $718.6 +3
 Operating profit 137.6 134.3 +2
 Net income 95.5 90.6 +5
 Earnings per common share $ .80 $ .75 +7
 (All figures in millions of dollars, except per share amounts)
 "Our worldwide performance in the third quarter should lead us to a ninth consecutive year of record profits in fiscal 1993," said George V. Grune, Reader's Digest Chairman of the Board and Chief Executive Officer.
 For the third quarter, total company revenues grew 3 percent and would have risen about 8 percent without the impact of changes in foreign currency exchange rates. International revenues rose 10 percent, and would have risen about 19 percent without the foreign currency impact.
 U.S. revenues declined 6 percent for the quarter due to lower sales in the U.S. Books and Home Entertainment Division (books, music and video products).
 "This quarter's lower results stem from an increasing number of product offerings in a relatively short time frame," Grune said. "Our testing indicates that these offerings could have been better implemented.
 "Our experience in other markets tells us it could take 12 to 24 months for our U.S. Books and Home Entertainment Division to return to historic growth patterns because this is a long lead-time business," he said. "However, we have very rigid cost control measures throughout the company that will hold costs at current levels in some areas and reduce costs in others.
 "We believe our cost controls will give us the leverage to maintain our company's earnings growth while we get the U.S. Books and Home Entertainment Division back on track. This interruption in the division's growth should not prevent us from reporting another good year in fiscal 1994."
 Grune said the quarter was notable for the continued strong advertising sales for Reader's Digest magazine and the company's special interest magazine group. "Our U.S. magazines are doing extremely well and we are seeing a rebound in our advertising," he said. "And our special interest magazines are heading toward profitability right on plan."
 The stock repurchase program, approved by the Reader's Digest board of directors, authorizes the company to acquire nonvoting common shares from time to time in open market transactions. This is the company's second such program since it became public more than three years ago. The first, announced in February 1992, also consisted of 3 million nonvoting shares. Reader's Digest currently has approximately 97 million shares of Class A nonvoting common stock outstanding.
 For the nine-month period ended March 31, 1993, the company achieved these results:
 Nine-month period ended March 31, 1993 1992 Percent
 Revenues $2,224.3 $2,008.6 +11
 Operating profit 331.9 300.1 +11
 Net income 235.5 208.2 +13
 Earnings per common share $1.97 $1.73 +14
 (All figures in millions of dollars, except per share amounts)
 Total company revenues for the nine months would have risen about 10 percent without the impact of changes in foreign currency exchange rates. International revenues rose 19 percent for the nine-month period, and would have increased about 17 percent without the foreign currency impact. U.S. revenues for the nine-month period increased slightly.
 Reader's Digest reported the following results for each of its three major business segments during the third quarter and nine-month period ended March 31, 1993:
 -- Reader's Digest magazine revenues rose 2 percent (7 percent without the impact of changes in foreign currency exchange rates) to $173.5 million for the quarter, and 6 percent (6 percent without currency impact) to $538.3 million for the nine-month period. The increases came from higher subscription prices and U.S. advertising revenues. Profits exceeded those of last year for the third quarter and for the nine-month period.
 -- Revenues for books and home entertainment products (Condensed Books, series and general interest books, music and video products) rose 3 percent (8 percent without currency impact) to $527.6 million for the quarter and 13 percent (12 percent without currency impact) to $1.53 billion for the nine-month period. Profits for the Books and Home Entertainment segment declined slightly in the quarter, but were above last year for the nine-month period.
 -- Special interest magazine revenues (American Health, New Choices for Retirement Living, The Family Handyman and Travel Holiday in the United States, and Moneywise in the United Kingdom) were $20.8 million for the quarter, or 12 percent (14 percent without currency impact) greater than the comparable period a year earlier. For the nine-month period, revenues were $58.7 million, or 13 percent (13 percent without currency impact) higher than the same period for fiscal 1992. The increases came from improved advertising sales and higher subscription revenues. Operating performance continued to improve in this segment.
 Reader's Digest is a global publisher of magazines, books and home entertainment products, and one of the world's leading direct mail marketers. Global headquarters is in Pleasantville, N.Y.
 THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
 Consolidated Condensed Statements of Income
 Three-month, Nine-month, and Twelve-month periods ended
 March 31, 1993 and 1992
 (in thousands, except per share data, unaudited)
 Three-month Nine-month
 period ended period ended
 March 31, March 31,
 1993 1992 1993 1992
 Revenues $737,617(A) $718,635 $2,224,280(C) $2,008,556
 Cost of sales,
 fulfillment and
 distribution
 expense 282,334 281,664(G) 843,581 772,053(G)
 Promotion,
 selling and
 administrative
 expense 317,733 302,700(G) 1,048,767 936,385(G)
 600,067 584,364 1,892,348 1,708,438
 Operating
 profit 137,550(A) 134,271 331,932(C) 300,118
 Other income,
 net 17,741(B) 13,101 50,931(D) 38,391
 Income before
 provision for
 income taxes 155,291 147,372 382,863 338,509
 Provision for
 income taxes 59,787 56,738 147,402 130,326
 Net income $95,504 $90,634 $235,461 $208,183
 Earnings per
 common share $ 0.80 $ 0.75 $ 1.97 $ 1.73
 Dividends per
 common share $ 0.30 $ 0.20 $ 0.85 $ 0.55
 Average common
 shares out-
 standing 118,523 119,927 119,149 119,779
 THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
 Consolidated Condensed Statements of Income
 Three-month, Nine-month, and Twelve-month periods ended
 March 31, 1993 and 1992
 (In thousands, except per share data, unaudited)
 Twelve-month period ended
 March 31, 1993 1992
 Revenues $2,829,682(E) $2,543,285
 Cost of sales,
 fulfillment and
 distribution expense 1,086,644 1,001,841(G)
 Promotion, selling and
 administrative expense 1,381,010 1,219,019(G)
 2,467,654 2,220,860
 Operating profit 362,028(E) 322,425
 Other income, net 63,437(F) 51,963
 Income before provision
 for income taxes 425,465 374,388
 Provision for income taxes 163,804 144,138
 Net income $261,661 $230,250
 Earnings per common share $ 2.19 $ 1.91
 Dividends per common share $ 1.10 $ 0.70
 Average common shares
 outstanding 119,335 119,702
 (A) Revenues and operating profit increased 3 percent and 2 percent, respectively, for the quarter ended March 31, 1993. Without the effect of changes in foreign currency exchange rates, revenues and operating profit both would have increased about 8 percent.
 (B) Other income, net includes the effect of foreign exchange ($1.7 million income in both fiscal 1993 and fiscal 1992) and gains on the sales of certain investments ($9.1 million in fiscal 1993 compared with $2.5 million in fiscal 1992). Excluding the combined effect of foreign exchange and gains on the sales of certain investments, earnings per share would have increased about 7 percent.
 (C) Revenues and operating profit both increased 11 percent for the nine-month period ended March 31, 1993. Without the effect of changes in foreign currency exchange rates, revenues would have increased about 10 percent and operating profit would have increased about 9 percent.
 (D) Other income, net includes the effect of foreign exchange ($1.2 million expense in fiscal 1993 compared with $6.8 million expense in fiscal 1992) and gains on the sales of certain investments ($22.1 million in fiscal 1993 compared with $15.5 million in fiscal 1992). Excluding the combined effect of foreign exchange and gains on the sales of certain investments, earnings per share would have increased about 8 percent.
 (E) Revenues and operating profit increased 11 percent and 12 percent respectively, for the twelve-month period ended March 31, 1993. Without the effect of changes in foreign currency exchange rates, revenues would have increased about 11% and operating profit would have increased about 12 percent.
 (F) Other income, net includes the effect of foreign exchange ($6.4 million expense in the period ended in fiscal 1993 compared with $6.1 million expense in the period ended in fiscal 1992) and gains on the sales of certain investments ($27.2 million in the period ended in fiscal 1993 compared with $16.6 million in the period ended in fiscal 1992). Excluding the combined effect of foreign exchange and gains on the sales of certain investments, earnings per share would have increased about 11 percent.
 (G) Amounts have been reclassified to conform to current year presentation.
 THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
 Revenues by Business Segments and Geographic Areas
 Three-month and Nine-month periods ended March 31, 1993 and 1992
 (in thousands, unaudited)
 Three-month period ended March 31, Variance
 1993 1992 Reported Adjusted (H)
 BUSINESS SEGMENTS
 Reader's Digest
 magazine $ 173,519 $ 169,734 2 pct. 7 pct.
 Books and home
 entertainment
 products 527,567 514,096 3 pct. 8 pct.
 Special interest
 magazines 20,845 18,529 12 pct. 14 pct.
 Other operations 15,686 16,276 (4 pct.) (1 pct.)
 Total company $ 737,617 $ 718,635 3 pct. 8 pct.
 GEOGRAPHIC AREAS
 United States $ 307,592 $ 325,977 (6 pct.) --
 International 430,025 392,658 10 pct. 19 pct.
 Total company $ 737,617 $ 718,635 3 pct. 8 pct.
 (H) Adjusted to exclude the impact of changes in foreign currency exchange rates.
 THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
 Revenues by Business Segments and Geographic Areas
 Three-month and Nine-month periods ended March 31, 1993 and 1992
 (in thousands, unaudited)
 Nine-month period ended March 31, Variance
 1993 1992 Reported Adjusted(I)
 BUSINESS SEGMENTS
 Reader's Digest
 magazine $ 538,257 $ 506,335 6 pct. 6 pct.
 Books and home
 entertainment
 products 1,528,875 1,350,022 13 pct. 12 pct.
 Special interest
 magazines 58,732 52,108 13 pct. 13 pct.
 Other operations 98,416 100,091 (2 pct.) (2 pct.)
 Total company $2,224,280 $2,008,556 11 pct. 10 pct.
 GEOGRAPHIC AREAS
 United States $ 911,277 $ 902,186 1 pct. --
 International 1,313,003 1,106,370 19 pct. 17 pct.
 Total company $2,224,280 $2,008,556 11 pct. 10 pct.
 (I) Adjusted to exclude the impact of changes in foreign currency exchange rates.
 THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
 Revenues By Business Segments and Geographic Areas
 Twelve-month periods ended March 31, 1993 and 1992
 (in thousands, unaudited)
 Twelve-month period ended March 31, Variance
 1993 1992 Reported Adjusted(J)
 BUSINESS SEGMENTS
 Reader's Digest
 magazine $ 716,966 $ 671,255 7 pct. 6 pct.
 Books and home
 entertainment
 products 1,923,622 1,686,114 14 pct. 13 pct.
 Special interest
 magazines 82,095 73,165 12 pct. 12 pct.
 Other operations 106,999 112,751 (5 pct.) (5 pct.)
 Total company $ 2,829,682 $ 2,543,285 11 pct. 11 pct.
 GEOGRAPHIC AREAS
 United States $ 1,152,116 $ 1,129,687 2 pct. --
 International 1,677,566 1,413,598 19 pct. 17 pct.
 Total company $ 2,829,682 $ 2,543,285 11 pct. 11 pct.
 (J) Adjusted to exclude the impact of changes in foreign currency exchange rates.
 -0- 5/4/93
 /CONTACT: David R. Fluhrer, work 914-241-5010, home 516-379-9454, for Readers Digest/
 (RDA, RDB)


CO: Reader's Digest Association, Inc. ST: New York IN: PUB SU: ERN

LD -- NY008 -- 4089 05/04/93 06:47 EDT
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:May 4, 1993
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