McGraw-Hill Ryerson Limited
TSX : MHR

McGraw-Hill Ryerson Limited

July 29, 2011 16:00 ET

McGraw-Hill Ryerson Reports Second Quarter Results

WHITBY, ONTARIO--(Marketwire - July 29, 2011) - McGraw-Hill Ryerson Limited (TSX:MHR) -

Attention: Business/Financial Editors:

Three Months to June 30, 2011 ($000) 2011 2010
Sales, less returns $ 16,182 $ 15,617
Other 399 478
Rental 146 147
Total revenue $ 16,727 $ 16,242
Net Income $ 545 $ 437
Net Income per share $ 0.27 $ 0.22
Six Months to June 30, 2011 ($000)
Sales, less returns $ 24,548 $ 23,839
Other 576 655
Rental 297 282
Total revenue $ 25,421 $ 24,776
Net Loss $ (1,647 ) $ (2,200 )
Net Loss per share $ (0.82 ) $ (1.10 )
Summary

For the second quarter in 2011, increased sales drove net income of $0.5 million, compared to net income of $0.4 million in the second quarter of last year. As sales are more heavily weighted to the second half of the year and expenses are more evenly distributed over the course of the year, the Company generally reports a net loss in the first half of each year. For the first half of 2011, the reported net loss is $1.6 million, compared to a net loss of $2.2 million in the first half of 2010.

Three Months Ended June 30, 2011

Total revenue for the second quarter increased by 3.0% to $16.7 million in 2011 compared to $16.2 million in 2010, driven by an increase in sales in the School Division.

The Higher Education Division sales decreased $1.1 million over the second quarter of 2010 to $7.8 million as a result of customers ordering later in 2011 compared to last year. Digital and custom products continue to be a growth area for this Division.

The School Division sales increased 34.6% to $7.1 million in the second quarter of 2011, from $5.2 million in the corresponding quarter of 2010. This increase was principally the result of increased sales to the western provinces, particularly of the recently-published Pre-Calculus 11 text.

Operating expenses increased slightly to $7.8 million during the second quarter of 2011 from $7.6 million in the comparative period of the prior year.

Income before tax was $0.8 million compared to $0.7 million in the second quarter last year, mainly the result of the increase in sales.

Six Months Ended June 30, 2011

Total revenue for the first six months increased by 2.6% to $25.4 million in 2011 compared to $24.8 million in 2010, driven by an increase in sales in the School Division.

The Higher Education Division sales decreased $1.0 million compared to the first half of 2010 to $11.9 million. This decrease is the result of customers delaying orders until closer to the beginning of the school year. Digital and custom products continue to be a growth area for this Division.

The School Division sales increased 25.2% to $10.2 million in the first half of 2011, from $8.1 million in the corresponding period of 2010. This increase was mainly driven by increased sales to the western provinces, particularly of the recently-published Grade 11 Pre-Calculus text.

Sales in the Professional Division decreased by $0.4 million in the first half of 2011 to $2.4 million, from $2.8 million in the comparative period of the prior year. This decrease was caused mainly by increased returns from several retailers. Also, sales of print products have declined industry-wide this year as consumers continue to migrate to e-book offerings.

Cost of goods sold decreased to $8.3 million from $9.1 million last year. Margins (Gross Profit as a percentage of Sales revenue) improved for both locally-produced products (as a result of lower printing costs) as well as imported products.

Year to date loss before income tax was $2.1 million, compared to a loss of $3.1 million in the corresponding period of last year. This variance was mainly caused by the increase in sales.

Notice to Reader

The attached financial statements have been prepared by management of McGraw-Hill Ryerson Limited. The financial statements for the three and six month periods ended June 30, 2010 and 2011 have not been reviewed by the auditors of McGraw-Hill Ryerson Limited.

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. Revenue in 2010 was $81 million. Additional information is available at http://www.mcgrawhill.ca.

Contact Information

  • McGraw-Hill Ryerson Limited
    Gordon Dyer
    Executive Vice-President and Chief Financial Officer
    (905) 430-5032
    www.mcgrawhill.ca