Rodale Reports Second Quarter 2007 Results

Business Wire, August 8, 2007

* Advertising pages increased by 20.6% compared to the second quarter of 2006, led primarily by Men's Health, Women's Health, and Prevention, compared to an industry-wide decline of 2%

* First half 2007 advertising pages were up 18.3% over the first half of last year while pages were down 0.7% industry-wide for the same period

* Online advertising revenues for magazine Web sites increased 117.2% in the second quarter and 108% in the first half of 2007 versus comparable periods in 2006

* Revenues for Rodale's subscription Web site business grew by 65% compared to the second quarter of 2006, led by TheBestLife.com and BiggestLoserClub.com

* Rodale Books reported a revenue increase of 29.5% compared to the second quarter of 2006 and reported 10 New York Times bestsellers in the first half of 2007

NEW YORK -- Rodale Inc., the authoritative source for trusted content in health and wellness worldwide, reported strong growth in the second quarter. Print and online advertising revenues, strong magazine performance on newsstands, and new subscription customers acquired were key drivers of the company's success. Increased online traffic, growing circulation numbers, and successful brand extensions across multiple platforms helped Rodale attract more than 3 million new customers year-to-date.

"Rodale's products and content are resonating with our audience around the world," said Rodale President and CEO Steven Pleshette Murphy. "An unprecedented number of people are seeking information to improve their health, and more and more of them are coming to us for that information. They're coming to us because Rodale - trusted for more than 70 years - continues to earn that trust every day through the integrity of our information and by delivering great content they won't see anywhere else. Now, Rodale is deepening these relationships through our strategy of making this content available across a variety of platforms, wherever and whenever our customers need it. Our extraordinary sales performance this year affirms that this strategy is working."

In addition to strong print advertising revenues, online revenues for Rodale's brands increased by 117.2% in the second quarter. The company also saw robust growth in its subscription Web site businesses compared to the second quarter of 2006. Partnerships with sites such as MSN and Yahoo!, coupled with interactive features, notably the new Men's Health video channel, helped boost site traffic, in turn driving online sales of magazine subscriptions, books, and DVDs. And year-to-date, Rodale has experienced a 105% increase in new customers acquired through digital channels compared to the same period in 2006.

In the second quarter, magazines in the U.S. saw a 20.6% growth in advertising pages, while advertising pages industry-wide declined by 2%, according to PIB. This increase was led primarily by exceptional results from Men's Health, Women's Health, and Prevention. Following a redesign and a new editorial and cover strategy implemented earlier this year, Prevention has also strengthened its newsstand performance, with single copy sales increasing 32% over the first half of 2006, as filed with the Audit Bureau of Circulations, subject to audit. Rodale's continued international expansion and brand extension efforts also contributed to the company's success.

Revenue for all of Rodale's operations from April through June 2007 increased 8.3% to $163.8 million compared to $151.3 million for the second quarter in 2006.

Among key categories, Auto advertising pages were up 34.5%, Fashion/Apparel advertising pages were up 7%, advertising pages in the Drugs/Medical category were up 40.9%, and Toiletries and Cosmetics advertising pages were up 23.9%.

Summary

The Men's Health brand overall recorded a 7.8% revenue increase in the second quarter compared to the same period last year. Magazine advertising revenues increased by 31.1% and advertising pages grew by 22.4% in the second quarter, according to PIB. Each issue this year has marked the biggest ever for its month, setting consecutive revenue records. The September issue is the largest September issue to date in advertising revenue and pages. International editions of Men's Health in Russia, Latin America, Australia, and China are performing well, and the magazine is showing significant growth in new markets like Brazil and India. Advertising revenues for menshealth.com increased by 143% in the quarter compared to the second quarter in 2006.

In its second year of publishing 10 issues, Best Life magazine experienced advertising page gains of 50.7% in the quarter and advertising revenue growth of 77.2% compared to the second quarter of 2006, according to PIB. The title has secured more than 40 new advertisers in 2007, including Ralph Lauren, Hugo Boss Selection, Cartier, Gucci, Cadillac, and Lincoln. September will be the largest issue ever in terms of advertising revenue and pages.

Prevention magazine experienced advertising page gains of 12.8% and advertising revenue growth of 20.1% compared to the second quarter of 2006, according to PIB. Following a redesign earlier this year, the magazine has continued to resonate exceptionally well with readers on newsstands, with single copy sales increasing 32% over the first half of 2006, as filed with the Audit Bureau of Circulations, subject to audit. The title has also gained momentum worldwide, with a particularly strong second quarter for Prevention India. With the April launch of two new DVDs - Slim, Strong and Firm and Fight Cellulite Fast - Prevention has released a total of 11 DVDs as part of its Prevention Fitness Systems franchise.