Sales at Simon & Schuster rose 3%, to $189 million, in the second quarter ended June 30, but costs associated with lawsuits tied to the agency e-book pricing model led to a $10 million drop in operating income before depreciation & amortization with OIBDA falling to $9 million. As with the first quarter, growth in digital sales helped to offset slowing print sales. In the quarter, digital sales rose 44% and accounted for 21% of total revenue (about $40 million). S&S CEO Carolyn Reidy said that without the extra costs, profits would have been up "significantly" over last year's second quarter. She said much of the settlement costs have been accounted for, but acknowledged that legal fees are likely to drag on until all matters are resolved.
On the publishing front, Reidy said the U.S. had a strong quarter with all divisions up. The company's international operations, however, had a difficult period as softness across Europe impacted all S&S's operations in the region, including in the U.K. Reidy said she was pleased that declines in print were not enough to offset another solild performance by the company's digital businesses, adding that she believes the market is generally healthy.
Unlike the first quarter where a few titles drove sales, Reidy said the second period was full of solid performers: Among the titles that did well in the quarter were Cowards by Glenn Beck, The Wind Through the Keyhole by Stephen King, Mary Higgins Clark’s The Lost Years, and The Next Best Thing by Jennifer Weiner. In paperback Full Black by Brad Thor and Heartwishes by Jude Deveraux did well, while children’s titles were led by Dork Diaries #4 by Rachel Renee Russell, Between the Lines by Jodi Picoult and Samantha van Leer, and Cassandra Clare’s City of Lost Souls were among the top sellers.
For the first half of 2012, revenue was up 8%, to $365 million, but OIBDA fell to $19 million from $26 million. Reidy has made growing sales a priority for 2012 and said that although S&S faces difficult second half comparisons--last year's second half included the Steve Jobs and Jaycee Dugard blockbusters--she still thinks the company can achieve that goal.
Bookish in September
Like Penguin Group USA CEO David Shanks, her partner in the venture, said last week, Reidy told PW she is hopeful Bookish will launch before the end of September. Hachette is the third member of the Bookish group.