Interim Results
10 August 2001 - 1:34AM
UK Regulatory
RNS Number:2973I
Thomson Corporation
9 August 2001
( BW)(THOMSON-CORPORATION)(TOC.TO) Thomson Reports Second-Quarter 2001
Results
Business Editors
TORONTO--(BUSINESS WIRE)--Aug. 9, 2001--
(Unless otherwise stated, all amounts are in US dollars)
The Thomson Corporation (TSE:TOC) today reported strong
second-quarter growth in revenues and operating profit, reflecting
solid core growth and the benefit of businesses acquired in 2000.
Revenues from continuing operations, excluding disposals, were
$1.6 billion, an increase of 17% over the second quarter of 2000.
Operating profit grew 27% to $259 million.
Earnings from continuing operations were $110 million, or $0.18
per common share, for the second quarter compared to $74 million, or
$0.12 per share, in the second quarter of 2000. These earnings reflect
a one-time gain associated with the sale of Jane's Information Group
in April 2001. Excluding one-time items, earnings from continuing
operations were $84 million, or $0.13 per share, for the second
quarter of 2001, compared with earnings of $56 million, or $0.09 per
share, for the same period a year ago.
"As we stated in the first quarter, we are focused this year on
successfully integrating our recent acquisitions and leveraging our
expanded capabilities to generate growth. As our solid second-quarter
results demonstrate, we are delivering on these initiatives," stated
Richard J. Harrington, president and chief executive officer of The
Thomson Corporation. "While the slowing economy has begun to affect
some of the markets in which we do business, we continue to make good
progress in providing integrated workflow solutions to our customers
worldwide, helping drive both core revenue and EBITDA growth."
Revenues from core operations, which exclude the impact of
acquisitions completed in 2000 and the first six months of 2001, grew
6% in constant currencies during the quarter, and core EBITDA
increased 11%.
Electronic revenues accounted for 57% of revenues during the
quarter, while revenues derived from customers outside North America
accounted for 22% of sales.
Second-Quarter Business Highlights:
- Double-digit growth in Westlaw online continued to drive
core revenue gains in the Legal & Regulatory group for the
quarter. These increases were partially offset by the
effect of the slowing economy on the global trademark
search business. Strong growth in core EBITDA resulted
from overall revenue gains and leveraging initiatives
across the business. Global expansion of the Westlaw
service continued, featuring increased usage of Westlaw UK
and the launch of Westlaw ES in Spain.
- Despite belt-tightening and job cuts in global financial
markets, core revenue and EBITDA in the Financial group
grew 7% in the second quarter. The integration of last
year's acquisitions of Primark and Carson remains on track
resulting in combined product offerings and greater
operational synergies. In June, Thomson purchased the
outstanding minority shares of First Call Corporation,
allowing First Call to be fully integrated with other
products, strengthening the group's position as the market
leader in providing critical industry data, and
underscoring its ability to best service the complex
information needs of the global financial marketplace.
- The planned sale of non-core Financial businesses that was
announced on February 27, 2001 is progressing on schedule
and is on target to be completed later this year.
- The Learning group's second quarter revenue and EBITDA
growth of 12% and 24% respectively was driven by strong
core business performance. This was the result of improved
sales in the Higher Education market and expansion of
electronic products in the Library Reference market.
- The acquisition of select Harcourt businesses from Reed
Elsevier was completed on July 13, 2001.
- Growth in the Scientific & Healthcare group was driven
largely in the scientific market featuring revenue gains
at Derwent, further expansion of the Web of Science
portal, and the continued building of strategic alliances
with key partners. Overall growth in revenues, EBITDA and
operating profit for the group were offset by advertising
revenue shortfalls in healthcare magazines due to the
adverse economic environment and fewer new drug
introductions in 2001.
Six-Months Results
Revenues from continuing operations, excluding disposals, were $3
billion, an increase of 23% over the first six months of 2000.
Operating profit grew 34% to $377 million. Earnings from continuing
operations were $261 million, or $0.42 per common share, for the
six-month period compared to $32 million, or $0.05 per share, for the
first six months of 2000. Excluding one-time items, earnings from
continuing operations were $42 million, or $0.07 per share, for the
first six months of 2001, compared with earnings of $10 million, or
$0.02 per share, for the same period a year ago.
Seasonal cycles in many Thomson businesses, especially Learning,
typically result in performance for the first six months that is not
indicative of performance for the full year.
2001 Financial Outlook
The Corporation remains on track to deliver full year profit
expectations despite the more challenging market environment. EBITDA
growth, excluding Harcourt, is expected to be comparable to that
achieved in 2000 reflecting the benefits derived from leveraging
initiatives, proactive cost controls and increasing synergies from
acquired businesses. However, it is now expected that overall revenue,
excluding Harcourt, will grow about 15% versus last year.
Dividend
The directors of The Thomson Corporation today declared a dividend
of 17.5 cents per common share, the same rate of dividend as paid on
June 15, 2001. The dividend is payable on September 17, 2001 to
holders of common shares of record on August 23, 2001, other than
holders of related common shares of The Thomson Corporation PLC
(Thomson PLC) who have elected to receive the equivalent dividend of
12.3675 pence per related common share of Thomson PLC in lieu of
dividends from The Thomson Corporation.
About The Thomson Corporation
The Thomson Corporation, with 2000 revenues of approximately $6
billion, is a leading, global e-information and solutions company in
the business and professional marketplace. The Corporation's common
shares are listed on the Toronto and London stock exchanges. For more
information, visit The Thomson Corporation Internet address at
www.thomson.com.
This news release includes forward-looking statements, which are
based on the Corporation's current expectations and assumptions, and
are subject to a number of risks and uncertainties that could cause
actual results to materially differ from those anticipated. Such risks
and uncertainties include, among others, general business and economic
conditions and competitive actions.
Note: The Thomson Corporation will audio webcast a discussion of
second-quarter results beginning at 10:30 am EDT today. To participate
in the webcast, please visit www.thomson.com and click on the
appropriate link located in the Thomson News box.
-0-
*T
CONSOLIDATED STATEMENT OF EARNINGS
(millions of US dollars, except per common share data)
(unaudited)
Three months ended Six months ended
June 30 June 30
2001 2000 2001 2000
---- ---- ---- ----
Revenues 1,635 1,495 3,132 2,758
Cost of sales, selling,
marketing, general and
administrative
expenses (1,250) (1,184) (2,520) (2,283)
------- ------- ------- -------
Earnings before interest,
tax, depreciation,
amortization,
restructuring charges
and Year 2000 costs 385 311 612 475
Depreciation (111) (97) (221) (189)
------- ------- ------- -------
Operating profit before
amortization,
restructuring charges
and Year 2000 costs 274 214 391 286
Amortization (97) (77) (199) (144)
Restructuring charges (2) (13) (7) (21)
Year 2000 costs - - - (4)
------- ------- ------- -------
Operating profit after
amortization,
restructuring charges
and Year 2000 costs 175 124 185 117
Net gains on disposals of
businesses and
investments 22 38 295 50
Net interest expense and
other financing costs (50) (62) (96) (109)
Income taxes (21) (19) (90) (12)
Equity in losses of
associates (10) - (20) -
------- ------- ------- -------
Earnings before dividends
declared on preference
shares 116 81 274 46
Dividends declared on
preference shares (6) (7) (13) (14)
------- ------- ------- -------
Earnings from continuing
operations 110 74 261 32
Earnings from discontinued
newspaper operations 7 30 23 50
Earnings attributable to ------- ------- ------- --------
common shares 117 104 284 82
======== ======== ======= ========
Basic and fully diluted
earnings per common share:
- from continuing
operations $0.18 $0.12 $0.42 $0.05
- from discontinued
newspaper operations $0.01 $0.05 $0.03 $0.08
------- ------- -------- --------
$0.19 $0.17 $0.45 $0.13
======== ======== ======== ========
Supplemental earnings information:
Earnings from continuing
operations, as above 110 74 261 32
Deduct: one-time items,
net of tax, resulting from:
restructuring charges,
net gains on disposals
of businesses and
investments and Year
2000 costs (26) (18) (219) (22)
------- ------- ------- -------
Adjusted earnings from
continuing operations 84 56 42 10
======== ======== ======= =======
Adjusted basic and fully
diluted earnings per
common share from
continuing operations $0.13 $0.09 $0.07 $0.02
======== ======== ======== =======
BUSINESS SEGMENT INFORMATION
(millions of US dollars)
(unaudited)
Three months ended Six months ended
June 30, June 30,
CONTINUING OPERATIONS: 2001 2000 change 2001 2000 change
---- ---- ------ ---- ---- ------
Revenues:
Legal & Regulatory $683 $637 7.2% $1,301 $1,142 13.9%
Financial 403 263 53.2% 816 520 56.9%
Learning 312 279 11.8% 553 462 19.7%
Scientific & Healthcare 161 155 3.9% 318 301 5.6%
Intergroup (7) (7) (16) (7)
------ ------ ------ -------
Total ongoing
operations 1,552 1,327 17.0% 2,972 2,418 22.9%
Disposals (1) 83 168 160 340
------ ------ ------ -------
Total Revenues $1,635 $1,495 9.4% $3,132 $2,758 13.6%
====== ====== ====== ======
EBITDA: (2)
Legal & Regulatory $206 $188 9.6% $334 $291 14.8%
Financial 97 72 34.7% 189 141 34.0%
Learning 46 37 24.3% 36 29 24.1%
Scientific & Healthcare 34 33 3.0% 62 59 5.1%
Corporate and other (3) (17) (37) (28) (65)
------ ------ ------ -------
Total ongoing operations 366 293 24.9% 593 455 30.3%
Disposals (1) 19 18 19 20
------ ------ ------ -------
Total EBITDA $385 $311 23.8% $612 $475 28.8%
====== ====== ====== ======
Operating profit before
amortization, restructuring
charges and Year 2000 costs:
Legal & Regulatory $170 $153 11.1% $260 $224 16.1%
Financial 61 48 27.1% 114 93 22.6%
Learning 16 12 33.3% (19) (17) -11.8%
Scientific & Healthcare 29 28 3.6% 50 47 6.4%
Corporate and other (3) (17) (37) (28) (65)
------ ------ ------ -------
Total ongoing operations 259 204 27.0% 377 282 33.7%
Disposals (1) 15 10 14 4
------ ------ ------ -------
Total Operating profit $274 $214 28.0% $391 $286 36.7%
====== ====== ====== ======
Notes to business segment information for continuing operations
1) Disposals includes the results of businesses sold or held for
sale.
2) EBITDA is earnings before interest, tax, depreciation,
amortization, restructuring charges and Year 2000 costs.
3) Corporate and other principally comprises corporate costs,
minority interests and costs associated with Thomson Stock
Appreciation Rights.
*T
--30--rlg/mem/ny*
CONTACT: The Thomson Corporation
Investor Contact:
John Kechejian, 203/328-9470
john.kechejian@thomson.com
or
Media Contact:
Janey Loyd, 203/328-8342
janey.loyd@thomson.com
Jason Stewart, 203/328-8339
jason.stewart@thomson.com
END
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