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READER'S DIGEST REPORTS RECORD SECOND QUARTER RESULTS

 PLEASANTVILLE, N.Y., Feb. 4 /PRNewswire/ -- The Reader's Digest Association, Inc. (NYSE: RDA, RDB) today reported these record results for the fiscal second quarter ended December 31, 1992:
 Second quarter ended December 31, 1992 1991 %
 Revenues $806.7 $712.4 +13
 Operating profit 104.6 92.5 +13
 Net income 71.4 62.8 +14
 Earnings per common share $ .60 $ .52 +15
 (All figures in millions of dollars, except per share amounts)
 "Our record second quarter results are on target with our expectations overall and demonstrate that we are on our way to another good year in fiscal 1993," said George V. Grune, Reader's Digest chairman of the board and chief executive officer.
 Revenues were up in each of the company's three major business segments, Grune said, and improved advertising sales for the U.S. Reader's Digest and the company's special interest magazines contributed to overall revenue gains.
 While higher foreign currency exchange rates contributed to second quarter and six-month revenue and profit gains, Grune noted that at current lower foreign exchange rates, those benefits would be largely offset by the end of the fiscal year.
 International revenues rose 17 percent for the quarter. The impact on international revenues from changes in foreign currency exchange rates was minimal in the second quarter.
 U.S. revenues increased 9 percent for the quarter, with strong advertising sales. Sales of U.S. books and home entertainment products were lower than anticipated.
 Grune noted that the company paid a quarterly dividend of 30 cents per common share on November 2. This represented a 20 percent increase over the 25 cents previously paid and a doubling of the quarterly dividend in just over a year. He added that through December 31, 1992, Reader's Digest had bought 1.4 million shares of the company's nonvoting common stock under a program announced last March to repurchase up to 3 million shares.
 For the six-month period ended December 31, 1992, The Reader's Digest Association, Inc. reported these results:
 Six months ended December 31, 1992 1991 %
 Revenues $1,486.7 $1,289.9 +15
 Operating profit 194.4 165.8 +17
 Net income 140.0 117.5 +19
 Earnings per common share $1.17 $ .98 +19
 (All figures in millions of dollars, except per share amounts)
 International revenues rose 24 percent for the six-month period and U.S. revenues increased 5 percent. Excluding currency gains, international revenues would have increased about 17 percent.
 Reader's Digest reported these results for each of its three major business segments during the second quarter and six-month periods ended December 31, 1992:
 -- Revenues for Reader's Digest magazine rose to $189.8 million for the quarter, an increase of 7 percent over the same period a year earlier. The magazine's six-month revenues climbed 8 percent to $364.7 million. Increases came from improvements in U.S. advertising revenues and higher subscription prices. The six-month results for this segment also benefited from the favorable impact of higher foreign currency exchange rates.
 -- Revenues for books and home entertainment products (consisting of Condensed Books, series and general interest books, music and video products) rose to $526.1 million, an increase of 18 percent compared with the second quarter of fiscal 1992. Six-month revenues climbed 20 percent to $1.0 billion. Revenues rose across all product lines in the segment primarily from higher unit sales. Year-to-date revenues also benefited from the favorable impact of higher foreign currency exchange rates.
 -- Special interest magazines (four publications in the United States and one in the United Kingdom) reported second quarter revenues of $21.6 million, a 10 percent increase compared with the same period a year ago. Six-month revenues rose 13 percent to $37.9 million. The increases came from improved advertising sales and higher subscription revenues. Operating performance continued to improve for all five titles 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, Six-month, and Twelve-month periods
 ended December 31, 1992 and 1991
 Three-month Six-month
 (in thousands, period ended period ended
 except per December 31, December 31,
 share data) 1992 1991 1992 1991
 (unaudited)
 Revenues $806,700(A) $712,397 $1,486,663(C) $1,289,921
 Cost of sales,
 fulfillment and
 distribution expense
 302,271 264,274(E) 561,247 490,389(E)
 Promotion,
 selling and
 administrative expense
 399,785 355,634(E) 731,034 633,685(E)
 702,056 619,908 1,292,281 1,124,074
 Operating profit
 104,644(A) 92,489 194,382(C) 165,847
 Other income, net
 11,382(B) 9,602 33,190(D) 25,290
 Income before
 provision for
 income taxes
 116,026 102,091 227,572 191,137
 Provision for
 income taxes
 44,670 39,294 87,615 73,588
 Net income $71,356 $62,797 $139,957 $117,549
 Earnings per
 common share
 $ 0.60 $ 0.52 $ 1.17 $ 0.98
 Dividends per
 common share
 $ 0.30 $ 0.20 $ 0.55 $ 0.35
 Average common
 shares outstanding
 119,299 119,875 119,470 119,711
 Twelve-month
 (in thousands, Period ended
 except per December 31,
 share data) 1992 1991
 (unaudited)
 Revenues $2,810,700 $2,465,205
 Cost of sales,
 fulfillment and
 distribution expense 1,085,974 970,973(e)
 Promotion,
 selling and
 administrative expense 1,365,977 1,184,889(e)
 2,451,951 2,155,862
 Operating profit 358,749 309,343
 Other income, net 58,797 51,097
 Income before
 provision for
 income taxes 417,546 360,440
 Provision for
 income taxes 160,755 139,622
 Net income $256,791 $220,818
 Earnings per
 common share $ 2.14 $ 1.84
 Dividends per
 common share $ 1.00 $ 0.65
 Average common
 shares outstanding 119,685 119,579
 (A) Revenues and operating profit both increased 13% for the quarter ended December 31, 1992. Without the effect of changes in foreign currency exchange rates, revenues would have increased about 13% and operating profit would have increased about 12%.
 (B) Other income, net includes the effect of foreign exchange ($2.1 million expense in fiscal 1993 compared with $8.5 million expense in fiscal 1992) and gains on the sales of certain investments ($1.6 million in fiscal 1993 compared with $8.6 million in fiscal 1992). Excluding the effect of foreign exchange and gains on the sales of certain investments, earnings per share would have increased about 15%.
 (C) Revenues and operating profit increased 15% and 17%, respectively, for the six-month period ended December 31, 1992. Without the effect of changes in foreign currency exchange rates, revenues would have increased about 11% and operating profit would have increased about 10%.
 (D) Other income, net includes the effect of foreign exchange ($2.9 million expense in fiscal 1993 compared with $8.4 million expense in fiscal 1992) and gains on the sales of certain investments ($13.0 million in fiscal 1993 compared with $12.9 million in fiscal 1992). Excluding the effect of foreign exchange and gains on the sales of certain investments, earnings per share would have increased about 9%.
 (E) 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, Six-month and Twelve-month
 periods ended December 31, 1992 and 1991
 Three-month Six-month
 period ended period ended
 (in thousands) December 31, December 31,
 (unaudited) 1992 1991 1992 1991
 BUSINESS SEGMENTS
 Reader's Digest magazine
 $189,832 $177,709 $364,738 $336,601
 Books and home
 entertainment products
 526,053 446,674 1,001,308 835,926
 Special interest
 magazines 21,586 19,632 37,887 33,579
 Other operations 69,229 68,382 82,730 83,815
 Total company $806,700 $712,397 $1,486,663 $1,289,921
 GEOGRAPHIC AREAS
 United States $349,109 $321,658 $603,685 $576,209
 International (1) 457,591 390,739 882,978 713,712
 Total company $806,700 $712,397 $1,486,663 $1,289,921
 Twelve-month
 period ended
 (in thousands) December 31,
 (unaudited) 1992 1991
 BUSINESS SEGMENTS
 Reader's Digest magazine $713,181 $663,343
 Books and home
 entertainment products 1,910,151 1,611,827
 Special interest
 magazines 79,779 73,771
 Other operations 107,589 116,264
 Total company $2,810,700 $2,465,205
 GEOGRAPHIC AREAS
 United States $1,170,501 $1,081,526
 International (1) 1,640,199 1,383,679
 Total company $2,810,700 $2,465,205
 (1) International revenues increased 17% in the quarter ended December 31, 1992 and increased 24% in the six-month period ended December 31, 1992. Without the effect of changes in foreign currency exchange rates, international revenues would have increased about 17% in the quarter and in the six-month period ended December 31, 1992.
 -0- 2/4/93
 /CONTACT: David Fluhrer of Reader's Digest, 914-241-5010, home, 516-379-9454/
 (RDA)


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

PS -- NY014 -- 2743 02/04/93 08:07 EST
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