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RNS Number:4254D
Thomson Corporation
10 May 2001
( BW)(THOMSON-CORPORATION)(TOC.TO) Thomson Reports First-Quarter
2001 Results
Business Editors
TORONTO--(BUSINESS WIRE)--May 10, 2001--
(Unless otherwise stated, all amounts are in US dollars)
The Thomson Corporation (TSE:TOC) today reported strong first
quarter growth in revenues and operating profit, largely reflecting
the benefit of businesses acquired in 2000. Revenues from continuing
operations, excluding disposals, were $1.4 billion, an increase of 30%
over the first quarter of 2000. Operating profit grew 51% to $118
million.
Earnings from continuing operations were $151 million, or $0.24
per common share, for the first quarter compared to a loss of $42
million, or $0.07 per share, in the first quarter of 2000. These
earnings include a one-time gain associated with the sale of The Globe
and Mail in January 2001. Excluding one-time items, there was a loss
from continuing operations of $42 million, or $0.07 per share, for the
first quarter of 2001, comparable to the same period a year ago.
Seasonal cycles in many Thomson businesses typically result in first
quarter losses that are not indicative of the full-year performance of
the Corporation.
"Thomson has established itself as a decisive first mover in
e-information and - as our first quarter results underscore - we have
laid an outstanding foundation to deliver value to our shareholders in
2001 and beyond," stated Richard J. Harrington, president and chief
executive officer of The Thomson Corporation. "Revenue growth is on
target and our plans to integrate the many fine products and
businesses acquired in 2000 are progressing smoothly. This year, we
will offer our global customers an even greater array of
electronic-based products and solutions to enhance their efficiency
and enable them to make better decisions, faster."
Revenues from core operations, which excludes the impact of
acquisitions completed in 2000 and the first quarter of 2001, grew 5%
in constant currencies during the quarter with increases across all
groups except Learning, which had a modest decline of 3% in core
revenues. The decline was due to timing of certain ordering patterns
within the Lifelong Learning group.
Electronic revenues accounted for 63% of revenues during the
quarter, and Internet sales grew to $302 million. Revenues derived
from customers outside North America accounted for 21% of sales during
the quarter.
Corporate and other expenses decreased 61% to $11 million in the
first quarter due to decreased costs associated with stock
appreciation rights.
"While the recent economic slowdown has resulted in some softening
in trademark searches and financial transactions businesses, continued
growth in other segments of our legal and financial businesses made up
for this weakness," Mr. Harrington continued. "Barring any further
deterioration or prolonged downward trend in the economy, we continue
to expect revenues and EBITDA from continuing operations, including
the full-year effects of acquisitions made in 2000, to increase in
line with the growth we experienced last year. As we stated at
year-end, earnings growth will be offset by higher amortization and
financing costs associated with the acquisitions made in 2000 and the
upcoming acquisition of key Harcourt assets."
First-Quarter Business Highlights:
- Robust growth in Westlaw contributed to core revenue growth of 5%
within Legal & Regulatory, offset in part by reduced trademark
searches at Thomson & Thomson. In the U.S., Westlaw experienced
strong on-line growth due in part to added functionality targeted
to small- to medium-sized law firms. Internationally, Westlaw UK
has now signed contracts with over 70 law firms, including almost
half of the top 100 firms. On January 26th, West Group announced
the acquisition of FindLaw, the Web's most highly trafficked legal
portal. The acquisition gives West Group an expanded presence on
the Web for serving legal professionals and their clients.
- Thomson Financial showed good core revenue growth, primarily due
to new, integrated product offerings. In the first quarter, First
Call was aligned with Datastream and I/B/E/S (both acquired with
Primark) creating a single global business focused on research and
analytics. The integration of the three highly complementary
products firmly establishes Thomson as the primary source for
analyst expectation data, brokerage research, historical financial
and economic information, analytic tools and applied intelligence
to the global institutional investment community. While
acquisitions were additive to revenues and EBITDA, the operating
margins of acquired companies were initially lower than margins of
core operations. Margins from newly acquired companies are
expected to substantially improve once their integration into the
Financial group is completed.
- Approximately 15% of the Learning group's full-year revenues are
typically reflected in the first quarter due to the seasonal
nature of the academic businesses. Therefore, while a loss is
typically incurred in the first quarter, results are not
indicative of the likely outcome for the full year. The EBITDA
loss for the quarter was $10 million, compared to an EBITDA loss
of $8 million a year ago. The 32% increase in Learning revenues
was a result of strategic acquisitions, including Prometric, Wave
Technologies, and K.G. Saur Verlag.
- The Scientific & Healthcare group continued to leverage technology
to drive growth in its businesses, posting a 65% increase in
Internet sales and a 14% increase in overall electronic revenues
for the quarter. The improvement was led by the Scientific group,
as demand for its web-based products increased. The group also
expanded its presence internationally through its Web of Science
product, resulting in 26% of Scientific & Healthcare revenues
coming from outside North America.
- The planned sale of non-core Financial businesses that was
announced February 27th is progressing on schedule and is on
target to be completed later this year.
- The timing of the planned acquisition of select Harcourt
businesses from Reed Elsevier was delayed when Reed's planned
acquisition of Harcourt properties was referred to the UK
Competition Commission for further review. Thomson now expects to
close the transaction with Reed in the third quarter of 2001.
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
March 15, 2001. The dividend is payable on June 15, 2001 to holders of
common shares of record on May 24, 2001, other than holders of related
common shares of The Thomson Corporation PLC (Thomson PLC) who have
elected to receive the equivalent dividend of 12.3213 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 $6.0
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 webcast a discussion of
first-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
March 31
2001 2000
---- ----
Revenues 1,497 1,263
Cost of sales, selling, marketing, general
and administrative expenses (1,270) (1,099)
--------- ---------
Earnings before interest, tax, depreciation,
amortization, restructuring charges and
Year 2000 costs 227 164
Depreciation (110) (92)
--------- ---------
Operating profit before amortization,
restructuring charges and Year 2000 costs 117 72
Amortization (102) (67)
Restructuring charges (5) (8)
Year 2000 costs - (4)
--------- --------
Operating profit (loss) after amortization,
restructuring charges and Year 2000 costs 10 (7)
Net gains on disposals of businesses and
investments 273 12
Net interest expense and other financing costs (46) (47)
Income taxes (69) 7
Equity in losses of associates (10) -
--------- ---------
Earnings (loss) before dividends declared
on preference shares 158 (35)
Dividends declared on preference shares (7) (7)
--------- ---------
Earnings (loss) from continuing operations 151 (42)
Earnings from discontinued newspaper
operations 16 20
--------- ---------
Earnings (loss) attributable to common shares 167 (22)
========= =========
Basic and fully diluted earnings (loss)
per common share:
- from continuing operations $0.24 (0.07)
- from discontinued newspaper operations $0.03 $0.03
--------- ---------
$0.27 $(0.04)
========= =========
Supplemental earnings information:
Earnings (loss) from continuing operations,
as above 151 (42)
Deduct: one-time items, net of tax, resulting
from: restructuring charges, net gains
on disposals of businesses and investments
and Year 2000 costs (193) (4)
--------- ---------
Adjusted loss from continuing operations (42) (46)
========= =========
Adjusted basic and fully diluted loss per
common share from continuing operations $(0.07) $(0.07)
========= =========
BUSINESS SEGMENT INFORMATION
(millions of US dollars)
(unaudited)
Three months ended March 31
CONTINUING OPERATIONS:
2001 2000 change
---- ---- ------
Revenues:
Legal & Regulatory 618 505 22.4%
Financial 413 257 60.7%
Learning 241 183 31.7%
Scientific & Healthcare 157 146 7.5%
Intergroup (9) -
------ ------
Total ongoing operations 1,420 1,091 30.2%
Disposals (1) 77 172
------ ------
Total Revenues 1,497 1,263 18.5%
====== ======
EBITDA: (2)
Legal & Regulatory 128 103 24.3%
Financial 92 69 33.3%
Learning (10) (8) -25.0%
Scientific & Healthcare 28 25 12.0%
Corporate and other (3) (11) (28)
------ ------
Total ongoing operations 227 161 41.0%
Disposals (1) - 3
------ ------
Total EBITDA 227 164 38.4%
====== ======
Operating profit before amortization,
restructuring charges and Year 2000
costs:
Legal & Regulatory 90 71 26.8%
Financial 53 45 17.8%
Learning (35) (29) -20.7%
Scientific & Healthcare 21 19 10.5%
Corporate and other (3) (11) (28)
------ ------
Total ongoing operations 118 78 51.3%
Disposals (1) (1) (6)
------ ------
Total Operating profit 117 72 62.5%
====== ======
*T
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(Y2K) costs.
3) Corporate and other principally comprises corporate costs,
minority interests and costs associated with Thomson's Stock
Appreciation Rights.
--30--jgm/ny* tjs/in*
CONTACT: The Thomson Corporation
Investor Contact:
John Kechejian, 203/328-9470
john.kechejian@thomson.com
Media Contact:
Jason Stewart, 203/328-8339
jason.stewart@thomson.com
Janey Loyd, 203/328-8342
janey.loyd@thomson.com
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