Business News
McGraw-Hill Ryerson Reports Third Quarter Results
Monday 01. November 2010 - Summary Our revenues are typically more heavily weighted towards the second half of the calendar year leading up to beginning of the school season. In the third quarter, McGraw-Hill Ryerson's revenues generally exceed the total of the first two quarters combined. Sales and net income in the third quarter this year were below that of prior year's third quarter.
Three Months Ended September 30, 2010
The total revenue of $34.8 million in 2010 was lower than the $38.2 million earned in the third quarter of 2009. The Company reported declines in all three divisions’ sales for the quarter.
The Higher Education Division reported sales of $24.1 million, a decrease of 8.7% compared to the same period in the prior year of $26.3 million. The variance was mainly a result of a decrease in sales of imported titles. Industry-wide sales of imported products were down by 4.8% during these three months.
The School Division reported sales of $7.7 million, an 11.8% decrease from the $8.7 million reported in 2009. This was mainly caused by lower ordering in several key provinces. Industry-wide spending was down in Alberta, British Columbia and Ontario.
The Professional Division sales of $1.9 million were down compared to the prior year’s $2.4 million in the third quarter. This was a result of lower print sales of Trade titles to a major account, as well as lower sales of Medical titles.
Income before tax was $9.6 million compared to $10.8 million in the third quarter last year. This variance was mainly the result of lower sales.
Nine Months Ended September 30, 2010
Total revenue of $59.5 million decreased by 8.2% compared to of $64.8 million for the same period in the prior year. On a year-to-date basis, each of the Company’s three divisions reported a sales decline compared to 2009.
The Higher Education Division sales of $37.0 million decreased 4.5% compared with the $38.7 million in 2009. This sales decrease was mainly the result of a decrease in sales of imported products. In addition, because of the increase in revenue related to digital product offerings, a larger amount of revenue is being deferred and will be recognized in subsequent quarters. After nine months, industry-wide sales, as reported by the Canadian Publishers Council (CPC), showed a 1% decrease compared to 2009.
School Division sales decreased 16% to $15.8 million compared to $18.8 million in 2009. This was mainly caused by conservative ordering in Manitoba and Ontario as well as the ongoing impact of reduced orders from Alberta. Industry-wide spending was down 30% in Alberta, 11% in British Columbia and 12% in Ontario (according to results released by the Canadian Educational Resources Council) reflecting market challenges in these key provinces.
Professional sales decreased to $4.8 million from $5.5 million. This was the result of lower sales to many independent bookstores and campus bookstores. By product line, the most significant declines were seen in Consumer title (Health, Self-Help, Sports) areas where McGraw-Hill Companies has de-emphasized its publishing program.
Year to date income before tax was $6.6 million, compared to $8.3 million for the same period last year. This decrease in income was mainly caused by the sales decline.