Reader's Digest Association

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A quiet year in Pleasantville? Not exactly. RDA bought Reiman Publications for $760 million, shuttered its flagging mature-audience title New Choices (which had undergone many changes in title, frequency and direction over the years), and reorganized its stock structure so that the control of the company no longer resided with the trusts to which founder Dewitt and Lilah Wallace bequeathed their shares. And there was much noise made by dissident institutional shareholder Highfields Capital, which strongly objected to the Reiman deal, among other management moves. RDA stock remains mired in the $10 range, and the Reiman acquisition will take some digesting. This is a company at which Chairman-CEO Thomas O. Ryder in 2000 promised serious growth-like posting profits of between $500 million and $600 million on $4 billion in revenue in 2004-and has stumbled badly from the path toward achieving those goals. For the fiscal year ended June 30, the company posted operating profits of $158 million on revenue of $2.4 billion. The economy and post-Sept. 11 fallout didn't help, but those who doubted Mr. Ryder's promises when he first came aboard have thus far had their worries confirmed.

Rating: 2 stars

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American Woodworker

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