Rodale Reports 2008 Full-Year Results

• Rodale total revenues remained flat in 2008 compared with 2007

• Revenues from all online activities increased by 18.3% over 2007, and page views and uniques for Rodale’s sites increased 78% and 52%, respectively, over last year

â Rodale print advertising revenues increased 2.4% over 2007, compared with an industry-wide decline of 7.6%, according to PIB. Advertising pages decreased by 5.2% over the same time period, compared with an industry-wide decline of 11.7%, also according to PIB

• In 2008, Rodale sold more than 1.5 million copies of Eat This, Not That! and more than 1.3 million copies of Flat Belly Diet!

• Women’s Health continued to drive growth for Rodale in 2008, ending the year with a 39.5% increase in revenues; a 12.2% increase in advertising pages, according to PIB; a 121% increase in online advertising revenues; and five new international editions

• Revenues from international operations for 2008 increased 3.4% over 2007

EMMAUS, PA, and NEW YORK, NY, January 28, 2009—Rodale Inc. reported its full year 2008 results today. Revenues for the company remained flat in 2008, compared with 2007, down 0.5%. Robust sales of Eat This, Not That! and Flat Belly Diet!, rapid growth of Women’s Health both domestically and internationally, the strength of Rodale’s international operations, and an 18.3% increase in the company’s digital activities were the primary performance drivers in 2008.

“Rodale emerged from 2008 and enters 2009 in a strong position,” said Rodale President and CEO Steven Pleshette Murphy. “Three years ago, we embarked on a strategy of investing online, integrating all of our activities by brand, and focusing on building customer relationships. Against the downturn of the economy, and the advertising industry in particular, this approach is clearly paying off. Our e-commerce business is stronger than ever, with revenues from books sold online up by 47.1% and revenues from magazine subscriptions sold online up by 15.1%. Eat This, Not That and Flat Belly Diet, which sold more than 2.8 million copies last year combined, have kept their foothold on the bestseller charts. After a record year internationally in 2008, our global expansion continues apace in 2009, with planned launches in dynamic emerging markets. In the digital arena, we are seeing significant increases in revenues and traffic across our sites and anticipate that new products, such as mobile applications and social networking features, will continue the momentum in 2009. Our success on all of these fronts, along with the sustained strength of our direct-to-consumer marketing organization, drove growth across our brands — a remarkable achievement given the current climate — and will position us well for this challenging year.”

Revenues for all of Rodale’s digital initiatives, including its magazine-branded sites, online premium services (e.g., www.BiggestLoserClub.com and www.FlatBellyDiet.com), and sales of magazines, books, and DVDs through online channels, increased 18.3%, compared with 2007. Revenues for online premium services increased 20.8%. Revenues from books sold online increased 47.1%, while revenues from online magazine subscriptions increased 15.1%.

Online advertising revenues for Rodale’s magazines increased 1.9%, compared with 2007. Print advertising revenues increased 2.4% over 2007, while revenues industry-wide saw a 7.6% decline, according to PIB. Advertising pages for Rodale magazines were down 5.2% from 2007, while pages industry-wide were down 11.7%, also according to PIB. Rodale is number one among the top 10 publishers in terms of advertising page growth for 2008.

The following summary includes revenue growth for each of Rodale’s brands and lines of business, compared with the same period last year. Brand revenue growth calculations take into account the full range of activities associated with each brand, including domestic and international editions of the print magazine and companion Web sites, special publications, events, and branded online properties, books, and DVDs.

Revenues for the Men’s Health brand increased 4.6% over 2007, with its growth driven in part by strong sales of Eat This, Not That!—the sixth bestselling nonfiction book of 2008, according to Nielsen—by Men’s Health Editor-in-Chief David Zinczenko and Associate Editor Matt Goulding. Magazine advertising revenues decreased by 6.3% and advertising pages were down 11.5%, compared with 2007, according to PIB. Advertising revenues for www.MensHealth.com increased 16.2% over last year, and page views and uniques were up by 97% and 54%, respectively.

Men’s Health ended the year strong, with a groundbreaking interview and photo shoot with President Obama appearing in the November 2008 20th anniversary issue. Capell’s Circulation Report also recognized the magazine as the #1 Best Performer in Circulation 2008, the fifth time in its history the magazine has received top ranking. The January/February 2008 issue of Men’s Health sold 750,560 copies on the newsstand, the most in the history of the magazine, despite raising its cover price from $4.50 to $4.99. In 2008, Editor-in-Chief David Zinczenko was honored with Adweek’s Editor of the Year Award for 2008, and the magazine was ranked #3 on Adweek‘s Media Brand Leaders list.

The Prevention brand saw a 6.5% increase in revenues over 2007, most notably from the strong sales of the New York Times bestseller Flat Belly Diet! by Prevention Editor-in-Chief Liz Vaccariello with Cynthia Sass, MPD, RD. The magazine saw a 7.8% decrease in advertising revenues, compared with last year, and advertising pages were down 12.4% over the same period, according to PIB. The magazine’s Web site, www.Prevention.com, ended the year flat in online advertising revenues, compared with 2007, while page views and unique visitors increased by 62% and 44%, respectively.

Articles, slide shows, and recipes featuring Flat Belly Diet!, which ranked #1 in AOL’s 2008 Year End Hot Searches in both health and diet categories, were major drivers of traffic to Prevention.com. In October, the Web site recorded its largest traffic month in its history, due in part to strong interest in Prevention online newsletters and reaction to Flat Belly Diet! in the media. Prevention‘s Cook!, a new food-focused mini-brand that launched January 2009 (online and in magazine), generated a 45% food and beverage advertising revenue boost in the magazine’s February 2009 issue.

The Women’s Health brand recorded a 39.5% increase in revenues, compared with 2007, and continues to perform exceedingly well on the newsstand, online, and internationally. The magazine ended the year up 60.7% in advertising revenues and 12.2% in pages, according to PIB, marking the ninth highest percent increase of all PIB measured magazines. Advertising revenues for www.WomensHealthMag.com increased 121% and page views and unique visitors grew by 158% and 108%, respectively. The Web site had a record October, with an increase of 345% in page views from October 2007.

Women’s Health received several industry honors in 2008, including a #2 ranking on Advertising Age‘s annual A-List and a #1 ranking on Adweek‘s annual “10 Under 50” Hot List, which recognizes 10 magazines with under $50 million in PIB revenue for outstanding performance in circulation, advertising, and overall buzz within the industry. The magazine was also given the #2 spot on Capell’s Circulation Report‘s Best Performers in Circulation 2008 list. Interest in Women’s Health globally resulted in the launch of five international editions in 2008 in Argentina, Brazil, Latin America, New Zealand, and Turkey.

The Best Life brand recorded a 9.6% increase in revenues, compared with 2007. Advertising revenues and pages for the magazine were up 22.8% and 6.6%, respectively, according to PIB. Advertising revenues for www.BestLifeOnline.com were flat, compared with 2007, and page views and unique visitors grew by 95% and 61%, respectively.

For the second year in a row, Best Life was named to Adweek‘s “Top 10 under 50” Hot List, earning the #2 spot on the list. The magazine was also given an honorable mention by Capell’s Circulation Report due to its impressive newsstand gains in 2008.

The Runner’s World Media Group, which includes Runner’s World and Running Times, reported a 1.9% increase in revenues, compared with 2007. Runner’s World magazine finished the year down 0.8% in advertising revenues and down 6.3% in pages, according to PIB. Advertising revenues for www.RunnersWorld.com decreased by 15.6%, while page views and unique visitors to the site jumped by 57% and 59%, respectively.

In 2008, RunnersWorld.com received a National Magazine Award for General Excellence Online. David Willey, Editor-in-Chief of Runner’s World and Executive Editor of Running Times, was elected president of the American Society of Magazine Editors. The Runner’s World Training Log and blogs surrounding the major marathons were strong drivers of traffic to the Web site, which recorded a record-breaking traffic month in August, with a 70% increase in page views from August 2007 due to a content partnership with NBCOlympics.com to cover the Beijing games. In June, Editor-at-Large Amby Burfoot was inducted into the Distance Running Hall of Fame.

Revenues for the Cycling Group brand, which includes Bicycling and Mountain Bike, decreased 13.8%, compared with 2007. Advertising revenues for Bicycling magazine were down 1.3%, compared with last year, while pages decreased 8.2%, according to PIB. Advertising revenues for www.Bicycling.com decreased 13.5%, compared with last year, while page views and unique visitors were up 23% and 35%, respectively. The decline in revenues was due in part to lower revenue from Cycling branded books.

In 2008, Bicycling.com partnered with the Wall Street Journal online, which featured a daily Bicycling dispatch on the Tour de France and drove record traffic to the site in July. The magazine won a National Magazine Award for Best Interactive Feature for its GPS Rides Tool and received the Best Mobile Strategy award by the Magazine Publishers of America for the same feature. The Web site earned a 2008 MIN Best of the Web Award in the Special Online Coverage category for its 2007 coverage of the Tour de France, and, for the third year in a row, Bicycling was named to Adweek‘s “Top 10 under 50” Hot List.

Organic Gardening saw a 7.5% increase in revenues over 2007. Advertising revenues and pages were up 27.1% and 1.6%, respectively, compared with 2007, according to PIB. Advertising revenues for www.OrganicGardening.com increased 75% over 2007, and traffic to the site increased as well, with 2008 page views and unique visitors up 53% and 8%, respectively.

In 2008, Organic Gardening was recognized with an honorable mention on Capell’s Circulation Report‘s Best Performers in Circulation list. The magazine recently announced that it will increase its rate base to 260,000 from 235,000, effective with the February/March 2009 issue.

Rodale Books saw a 3.5% increase across both trade and direct channels, with eight books making multiple bestseller lists in 2008. Since hitting the shelves in December 2007, Eat This, Not That! has sold more than 1.5 million copies. Subsequent titles in the franchise, Eat This, Not That! For Kids and Eat This, Not That! Supermarket Survival Guide, have sold more than 575,000 and 596,000 copies, respectively. Flat Belly Diet! reached #2 on the New York Times bestseller list and sold more than 1.3 million copies across trade and direct channels. The Biggest Loser franchise has more than one million copies in print, with The Biggest Loser Family Cookbook, the most recent title published in late 2008, currently #8 on the New York Times bestseller list. Force of Nature by Laird Hamilton, released in October 2008, hit the Los Angeles Times and San Francisco Chronicle bestseller lists. The South Beach Diet Supercharged, which was released in April 2008, was a bestseller for 20 weeks.

Revenues for Rodale’s Direct Response Marketing (DRM) group decreased 1.9%, compared with last year, which can be attributed to a decrease in direct mail volume across all products as a result of Rodale’s transitioning from offline to online direct channels.

Rodale International launched 11 new international editions in 2008 in countries including France, Brazil, Indonesia, Russia, New Zealand, Argentina, and Turkey. International growth was driven in large part by the heightened interest in health and wellness around the world and the strong performance of Women’s Health globally. Revenues from all Rodale International operations increased 3.4% over 2007. Several international editions, including Men’s Health Brazil, Women’s Health Australia, and Best Life South Africa, garnered industry awards in 2008. Rodale International will continue to expand globally in 2009 and will look to deepen the relationships between its global editions and customers through brand extensions and newly branded products.

Rodale Custom Publishing took home more than 46 awards in 2008 across the Magnum Opus Awards, APEX Awards, and Custom Publishing Council’s fifth annual Pearl Awards, three of the publishing industry’s major competitions. At the Pearl Awards, Rodale took home 13 first-place gold awards, five silver awards, and four bronze awards—the most received by one company that evening. The awards received represented a variety of categories, including editorial, design, and strategy, across print and digital formats.

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