BrandDirect Debt Continues Toll on RMH

Share this article:
Despite a 38 percent revenue increase, RMH Teleservices reported a $6 million loss yesterday for its fiscal second-quarter 2002, which it blamed on a write-off of unpaid debt from longtime client BrandDirect Marketing.


In the quarter, RMH Teleservices sustained a $7.1 million charge due to BrandDirect, a membership club marketer that went out of business after agreeing to pay $13 million in fines to settle lawsuits from Connecticut and Washington. RMH Teleservices said it has increased its allowance for other "doubtful" clients in the same sector as BrandDirect, which also contributed to the loss.


In the fiscal third quarter of 2001, RMH Teleservices also reported record revenue but an overall loss that it attributed to BrandDirect's nonpayment of debt.


The agency also incurred a $1.1 million charge in the quarter from its efforts to prepare for its expanded contract with AEGON Direct Marketing Services. The company expects to pay another $2.1 million in the second half of its fiscal 2002 to cover additional hiring and training needs for the expanded contract.


For the second quarter, which ended March 31, RMH Teleservices, Newtown Square, PA, reported revenue of $59.2 million. Income from inbound teleservices grew to 48 percent of all revenue, up from 45 percent in the first quarter, the company said.


RMH Teleservices projects revenue to remain flat in the third quarter but rise in the fourth. Projected overall fiscal 2002 revenue is $250 million and $275 million.


Share this article:
You must be a registered member of Direct Marketing News to post a comment.

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

App of the Week: CardsApp

App of the Week: CardsApp

The app lets users select loyalty cards on their phone or smartwatch to display QR codes at check out time.

Rakuten Marketing Moves to a Unified Platform

Rakuten Marketing Moves to a Unified Platform

Omni experience consolidates all channel offerings into a single platform and dashboard to provide better management of the customer funnel.

Hawk Search Widens its Global Reach

Hawk Search Widens its Global Reach

Hawk Search's solution offers support for more than twice as many languages as other site search providers, according to the company.