Gains in e-book sales were not enough to offset declines in print in the first quarter at Harlequin, parent company Torstar reported Wednesday morning. Total revenue at Harlequin fell C$8.7 million, to C$106.6 million, while EBITDA (earnings before interest, taxes, depreciation and amortization) declined C$1.5 million, to C$21.4 million. Both figures exclude the impact of foreign exchange; including foreign exchange the revenue decline was slightly higher.
In its North America operations, revenue was down C$7.9 million with declines of C$9.4 million in retail print and C$1.4 million in direct-to-consumer sales more than offsetting digital revenue growth of C$2.9 million. According to Torstar, the shift in retail sales from print to digital continued in the quarter but with a combined reduction in the number of books sold. The lower retail print sales were partially the result of fewer single title books being published in the quarter partially offset by a positive adjustment to prior year returns provisions. The decline in the direct-to-consumer revenue reflected the long-term decline in the business, Torstar said. Harlequin president and CEO Donna Hayes said Harlequin had expected digital sales to be higher in North America in the first quarter, and said the slowing growth rate appears to be in line with the overall slower growth in digital across the industry after the rapid growth of e-books' early years. The question, Hayes said, is what will happen to print sales for the remainder of the year.
Overseas revenue was down C$1.5 million with a similar trend of higher digital revenues being more than offset by lower retail print and direct-to-consumer revenues.
The combination of a rise in digital sales and the decline in print led to digital revenue accounting for 20.5% of global sales (about C$22 million) in the first quarter of 2012, up from 13.6% in 2011.
David Holland, president and CEO of Torstar, said in a statement that after a strong 2011 for Harlequin, he expects a modest decline in results for the full year.