For the three months ended April 30, 2000, Harcourt General reported revenues from continuing operations of $410.3 million, up 8.4 percent from $378.4 million a year earlier. The seasonal operating loss in the quarter was $40.0 million, down from $46.1 million in the second quarter of fiscal 1999.
The Company had a net loss in the fiscal 2000 quarter of $40.2 million, or 57 cents per share, compared to a loss from continuing operations of $39.4 million or 55 cents per share a year ago. The 1999 quarter includes a pre-tax gain of $3.0 million or 3 cents per share from the sale of securities.
In the year-ago quarter, the Company had earnings from its discontinued specialty retailing operations of $15.8 million, equal to 22 cents per share, reducing the net loss for that period to $23.6 million, or 33 cents per share.
Brian J. Knez, co-chief executive officer, said, We had a strong second quarter, with results across the Company generally in line with our expectations.
Overall, we are pleased with the results and believe we are on track to attain our financial objectives for the full fiscal year.
For the six months ended April 30, 2000, the Company had revenues of $813.2 million, up 6.2 percent from $766.0 million a year ago. The Company’s operating loss for the first half of fiscal 2000 was $75.9 million, compared to a loss of $74.8 million the prior year.
The net loss in the current year period was $73.6 million or $1.04 per share, compared to a loss from continuing operations a year ago of $71.7 million or $1.01 per share. The current year six-month period includes a pre-tax gain of $7.6 million or 7 cents per share from the sale of securities, while the prior year period includes a pre-tax gain of $3.0 million or 3 cents per share from the sale of securities. In the 1999 period, earnings from discontinued specialty retailing operations were $28.6 million, equal to 40 cents per share, reducing the Company’s net loss to $43.1 million or 61 cents per share.
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The Company reported that its Education Group, which publishes instructional materials for the elementary and secondary markets, had revenues in the second quarter of $74.8 million, up 16.2 percent from $64.3 million a year earlier. The Group’s seasonal loss rose to $36.7 million from $34.8 million a year earlier.
The revenue increase is an early indicator of strong acceptance of our educational programs, Robert A. Smith, co-chief executive officer, stated. We have high expectations of meeting or exceeding our market share goals in what will be a very strong market for educational materials this spring and summer. The Education Group typically has operating losses in the first two fiscal quarters as a result of high selling and marketing expenses in anticipation of sales of elementary and secondary instructional materials that occur in the second half of the fiscal year.
The Higher Education Group had revenues in the second quarter of $51.1 million, down from $57.7 million a year ago, and a seasonal operating loss of $18.8 million compared to a loss of $15.3 million the prior year. Operating results from our traditional college publishing business, in what is a seasonally slow quarter, trailed a year ago, according to Mr. Smith.
Also, revenues at Harcourt Learning Direct, our distance learning company, were lower, reflecting the transfer of its Canadian business to our international operations. Revenues in the quarter were also reduced by last year’s sale of the Conviser CPA Review business.
The Group’s larger loss this year reflects planned increased expenses associated with our efforts to develop accredited on-line distance learning curriculum for the high school and higher education markets, he said.
The Company’s Corporate and Professional Services Group had revenues in the second quarter of $120.9 million, a 15.1 percent increase from $105.0 million the prior year, and an operating profit of $1.8 million compared to an operating loss of $0.2 million a year ago.
The Company’s testing businesses had strong revenue and earnings growth in the quarter, reflecting growing demand across educational, clinical and corporate markets for our testing and assessment products and services, Mr. Knez said. NETg, our technology-based training business for information technology professionals, also contributed to the Group’s revenue growth, although its operating loss was, as expected, slightly larger than a year ago.
The Worldwide Scientific, Technical, Medical (STM) Group had second quarter revenues of $163.5 million, up 8.0 percent from $151.4 million last year.
The Group’s operating profit nearly doubled to $19.1 million from $9.8 million in the 1999 quarter. Harcourt Health Sciences had higher revenues and earnings in the quarter as we continue to benefit from the successful integration of the Saunders, Mosby and Churchill Livingstone publishing programs.
Our scientific publisher, Academic Press, and our international operations also contributed to the quarter’s gains, Mr. Smith noted.
Our sales momentum is building, Mr. Knez reported. All indications continue to be very positive and we currently anticipate strong operating results in the second half of the fiscal year, he concluded.
