After a difficult first quarter, Simon & Schuster showed marked improved in the second period ended June 30, with revenue increasing 5%, to $189.7 million, and adjusted operating income jumping to $15.2 million from $8.3 million in last year’s second quarter. CEO Carolyn Reidy attributed the big gain in earnings to earlier cost cutting measures--the company had a small restructuring charge of $200,000 in the last quarter compared to $2.2 million in the 2009 quarter--improved operating efficiencies “and good books.”
Among the hardcovers doing well in the second quarter were Laura Bush’s Spoken from the Heart, Women Food and God by Geneen Ruth, which is up to 1.2 million copies in print, and Glenn Beck’s novel, Overton Window. Overall, the adult segment had a 4.5% sales increase, while sales in the children’s division were flat. International sales rose 7%, led by a 18% increase in the U.K. Sales of e-book rose of course, up about 94% compared to last year’s second quarter and sales rose each month, Reidy reported. She said digital sales made up about 8% of adult sales and stuck to her forecast made earlier this year that digital could represent 10% of adult sales for all of 2010.
Reidy said S&S continues to study whether e-books merely replace print sales or add to print totals. Before drawing any conclusions, Reidy said S&S wants to see titles go through a full life cycle--hardcover and a paperback reprint--before determining if combined units of print and digital are rising or falling. The company’s new enhanced e-book, Nixonland, has gotten off to a good start, and while S&S is looking to do more titles in the format, the company will evaluate enhanced e-books “on a project by project basis. They aren’t inexpensive to do,” Reidy observed.
Reidy was more optimistic about the remainder of the year than she was three months ago. The publisher has a strong list led by The Power, Rhonda Byrne’s followup to her blockbuster The Secret. Power goes on sale Aug. 17 with a 1 million copy first printing. Laura Ingraham’s The Obama Diaries has already hit bestseller lists and a new Bob Woodward title is set for September. The children’s list is also solid, and includes a new Olivia title, Olivia Goes to Venice due out in September. While the market has had an uptick in the last few months, Reidy said she his “more encouraged by our books than the marketplace.”
For the first half of 2010 sales were still down slightly, dipping to $341.4 million from $343 million, but earnings rose to $17.2 million from $6.2 million.