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WHITBY, ONTARIO -- (Marketwire) -- 02/15/13 -- McGraw-Hill Ryerson (TSX: MHR) -
Attention: Business/Financial Editors
Three Months to December 31 ($000)(unaudited) This Year Year AgoSales, less returns $ 18,931 $ 20,086Other 3,130 527Rental 182 134 -------------- --------------Total Revenue $ 22,243 $ 20,747Net Income 4,440 2,645Net Income per share $ 2.22 $ 1.32Twelve Months to December 31 ($000)(unaudited)Sales, less returns $ 72,258 $ 78,953Other 4,283 2,496Rental 541 583 -------------- --------------Total Revenue $ 77,082 $ 82,032Net Income 8,145 8,757Net Income per share $ 4.08 $ 4.39
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.
