Business News

McGraw-Hill Ryerson Reports Second Quarter Results

Monday 29. July 2013 - Summary The cyclical nature of the Company sales are heavily weighted towards the second half of the calendar year leading up to the beginning of the school season, while expenses are more evenly distributed over the course of the year. For the second quarter in 2013, the net loss is $0.5 million, compared to net income of $0.2 million in the second quarter of 2012.

Three Months Ended June 30, 2013
Total revenue for the second quarter decreased by 19.7% to $12.1 million in 2013 compared to $15.0 million in 2012.
The Higher Education Division sales decreased by $0.4 million to $6.5 million in the second quarter of 2013 compared to the second quarter of 2012. This decrease was mainly the result of sales orders being delayed by several bookstores as they confirm expected enrollment and delivery formats to accommodate digital options. Ordering patterns are expected to normalize through the next quarter, closer to the start of the school year.
The School Division sales decreased by $2.3 million to $4.0 million in the second quarter of 2013 from $6.3 million in the corresponding quarter of 2012 as a result of non-recurring product sales tied to final phase of curriculum changes in the Western provinces last year.
In the Professional Division, sales decreased by $0.2 million in the second quarter of 2013 to $1.0 million as a result of a decrease in orders from the campus store and wholesaler channels.
Other and rental income, representing billed freight, copyright licensing, translation fees and rental income from the tenant at the Company’s Whitby, Ontario facility, decreased in the second quarter of 2013 by 22.3% to $0.5 million from $0.6 million in the corresponding quarter of 2012. The major contributing factor to the decrease is decreased copyright licensing income.
Cost of goods sold decreased to $4.0 million in the second quarter of 2013 compared to $4.9 million for the same quarter in 2012. The decrease is consistent with the lower sales in the quarter.
Operating expenses decreased for the second quarter to $7.1 million compared to $7.8 million for the same quarter in 2012. The decrease is a result of savings in compensation expense and professional fees.
Loss before taxes was $0.7 million compared to income before taxes of $0.4 million in the second quarter last year, mainly the result of the decrease in sales.
Six Months Ended June 30, 2013
Total revenue for the first six months decreased by 13.5% to $19.9 million in 2013 compared to $23.1 million in 2012.
The Higher Education Division sales decreased by $0.2 million to $10.7 million in the first half of 2013 compared to the same period in 2012. The slight decrease can be attributed to customers shifting their orders closer to the beginning of Fall classes.
The School Division sales decreased by $2.7 million to $6.2 million in the first half of 2013 from $9.0 million in the corresponding period of 2012 as a result of non-recurring product sales tied to final phase of curriculum changes in the Western provinces last year.
In the Professional Division, sales decreased by $0.2 million in the first six months of 2013 to $2.0 million resulting from a decrease in orders from the wholesaler channel.
Other and rental income, representing billed freight, copyright licensing, translation fees and rental income from the tenant at the Company’s Whitby, Ontario facility, remained consistent in the first half of 2013 at $1.0 million when compared to the corresponding half of 2012 with freight revenue decreasing but offset by increased rental income.
Cost of goods sold decreased to $6.6 million in the second half of 2013 compared to $7.7 million for the same period in 2012. The decrease is consistent with the lower sales in the first half of the year.
Operating expenses decreased for the first half of 2013 to $13.5 million compared to $15.7 million for the same period in 2012. The decrease is a result of selling, compensation, and professional expense savings.
Year to date loss before taxes was $3.0 million compared to $3.1 million in the first half of last year. The variance was mainly a reflection of operating expense savings.