McGraw-Hill Ryerson Reports 2012 Annual Results
(firmenpresse) - WHITBY, ONTARIO -- (Marketwire) -- 02/15/13 -- McGraw-Hill Ryerson (TSX: MHR) -
Attention: Business/Financial Editors
Annual Results
The Company's sales revenue, less returns, decreased by 8.5% in 2012, with sales of $72.3 million, compared to $79.0 million in 2011.
The Higher Education Division experienced a decrease in overall revenue of 6.4% compared to 2011, driven by a decline in sales of print partially offset by strong growth in digital solutions. Higher Education continued its industry leadership in the technology-enabled evolution of education with the success of McGraw-Hill Connect™, the eBook and online homework solution, and the LearnSmart Advantage™ suite of adaptive learning solutions. Industry-wide sales in this sector declined 2.3% according to the Canadian Publishers' Council data.(1)
The School Division's sales decreased by 9.7% compared to the previous year. The decline in revenue from the Canadian publishing program is a function of non-repeating 2011 sole source contracts and industry-wide sales declines, the result of slow release of new curriculum and funding in Ontario. Industry sales declined by 6.7% relative to 2011 (based on Canadian Education Resource Council data).(2)
Professional Division sales declined by 21.8% in 2012 compared to 2011. The decline in sales was partly the result of on-going transition to e-book sales, with lower unit revenue, and to particularly high returns in some print product categories. Digital sales again grew strongly in 2012, and are expected to continue to perform well as market demand shifts from print to digital content.
Cost of goods sold decreased to $26.8 million in 2012, from $29.5 million in 2011. Margins on sales improved as a result of a change in product mix compared to last year.
Operating expenses remained consistent at $30.2 million in 2012. There were reductions in promotion and compensation expenses that were offset by a restructuring charge of $1.1 million. This restructuring will improve the expense base of the company to better suit our growing focus on digital learning solutions.
Amortization expenses for pre-publication costs decreased to $8.5 million in 2012 compared to $9.0 million in 2011. The decrease is attributable to the delay in government curriculum revisions for the School publishing program. Depreciation expense for capital assets decreased slightly to $0.8 million from $0.9 million in 2011.
Finance income decreased by $0.1 million, driven by lower average cash balances in 2012 compared to 2011. Finance costs in 2012, consisting mainly of banking charges, increased by $0.1 million.
Net income decreased to $8.1 million from $8.8 million last year, mainly driven by the sales decrease.
Cash and cash equivalents decreased to $15.1 million as of December 31, 2012 from $41.9 million in 2011, which is mainly a result of the special dividend payments made during the year. Total dividend payments were $40.3 million in 2012 compared to $12.2 million in 2011. Excluding special dividends, cash and cash equivalents balances increased by $1.2 million in 2012 compared to 2011.
Q4 Results
Most of the Company's sales revenue is seasonal, based on the education industry's school terms for the School and Higher Education divisions. As a result, the Company earns a significant amount of its total sales revenue in the third and fourth quarters of each year.
In the fourth quarter of 2012, total revenue increased 7.2% compared to the prior quarter, caused mainly by one-time retroactive copyright income. Higher Education sales increased to $15.0 million from $14.9 million. School division sales decreased $0.6 million, compared to the fourth quarter of 2011, to $2.6 million. Professional sales decreased $0.7 million from $2.0 million in 2011 as a result of the softening in consumer demand this year. Net income increased by $1.8 million in the fourth quarter compared to the corresponding quarter in 2011, mainly driven by the revenue increase.
The accompanying financial statements should be read in conjunction with the "Notes to Financial Statements" included in McGraw-Hill Ryerson's Annual Report.
In business since 1944, McGraw-Hill Ryerson Limited is a leading Canadian publisher of educational resources, and information products and services for lifelong learning and enjoyment. Total revenue in 2012 was $77 million. Additional information is available at .
(1) McGraw-Hill Ryerson does not publish in all segments of this sector.
(2) Ibid.
Contacts:
McGraw-Hill Ryerson Limited
Brenda Arseneault
Vice President and Chief Financial Officer
(905) 430-5223
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Datum: 15.02.2013 - 15:00 Uhr
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