A Closer Look at Rodale's Balance Sheet

Times are tough in the publishing business, no doubt. But are they really so tough that Rodale Inc., home of Men's Health and The South Beach Diet, limped by with a mere $25 million in profit last year on $625 million in revenue -- a paltry 4 percent margin?

Those are the numbers cited in a BusinessWeek story about the Emmaus, Pa.-based publisher, and they were the same ones quoted to me by a source who's generally well-versed in Rodale's operations. But a Rodale spokeswoman disputes them.

"We are a privately held company, and, as such, we don't disclose profits," says the spokeswoman. "However, the profit number reported by BusinessWeek is incorrect."

How incorrect? Hard to say, exactly, but a separate source with knowledge of the situation says Rodale's book division -- which includes both trade and direct-marketed titles -- generated more than $20 million in profit on its own, on $186 million in revenue. And it scored a new hit at the very end of the year with Eat This, Not That by David Zinczenko, which debuted in December and already has 500,000 copies in print.

Meanwhile, the magazine division achieved a 15 percent increase in ad pages, the biggest percentage gain among any of the 10 biggest publishers.

Of course, you also have to factor in the losses sustained by the Rodale's two start-ups, Best Life and Women's Health. Source No. 1 says Best LIfe lost between $6 million and $8 million in 2007. At a company the size of Time Inc. or Hearst, that would be a drop in the bucket -- but BusinessWeek's point is that Rodale is not such a company.