Harlequin Reports Another Strong Quarter

Harlequin's parent company Torstar announced its latest quarter results yesterday morning. Here are the portions of the press release relevant to Harlequin. Direct-to-Consumer used to only mean the book clubs. However, it now includes the sale of e-books. All dollars being reported are Canadian:

Book Publishing operating profit was $22.9 million in the third quarter of 2009, up $4.2 million from $18.7 million in the third quarter of 2008, including $2.0 million from the impact of foreign exchange.

Year to date, Book Publishing operating profit was $63.1 million, up $9.9 million from $53.2 million in the first nine months of 2008, including $5.1 million from the favourable impact of foreign exchange.

Underlying results were up in North America Direct-To-Consumer and down in North America Retail for both the third quarter and year to date. Overseas was down in the quarter but up year to date.

Note that North American Retail [bookstore sales] are down but North American Direct-to-Consumer is up.

Late in the first quarter of 2009, Harlequin announced the decision to close its direct-to-consumer distribution centre in the U.K. and to outsource that function. This will result in annual savings of $0.6 million and a reduction of approximately 16 positions. Approximately $0.2 million of these savings will be realized in the fourth quarter of 2009.

I'm reading between the lines here. I think they are closing a p-book [print book] distribution center because Direct-to-Consumer is now more focussed on e-books.

Harlequin has done a terrific job of reinventing itself in the digital world. Back in February, I did a post on all the changes they've implemented. Read it here.