Higher operating earnings from the Company’s medical and scientific publishing group and its corporate and professional services group more than offset higher corporate expenses and a larger seasonal loss from the educational publishing businesses in the quarter.
For the three months ended April 30, 2001, Harcourt General reported revenues of $454.6 million, up 10.8 percent from $410.3 million a year earlier. The seasonal operating loss in the quarter was $36.2 million, compared to $40.0 million in the second quarter of fiscal 2000.
These results include corporate expenses, which rose in the quarter to $10.1 million from $5.3 million a year ago, due primarily to costs associated with the sale of the Company. The Company had a net loss in the fiscal 2001 quarter of $37.4 million, or 52 cents per share, compared to a net loss of $40.2 million or 57 cents per share a year ago.
Brian J. Knez, co-chief executive officer, said, Second quarter results were encouraging and generally in line with our expectations. Overall, we are pleased with the operating performance of our businesses through the first half of fiscal 2001 and believe we are currently on track to attain our financial objectives for the full year.
For the six months ended April 30, 2001, the Company had revenues of $861.7 million, up 6.0 percent from $813.2 million a year ago. The Company’s operating loss for the first half of fiscal 2001 was $90.7 million, compared to a loss of $75.9 million the prior year.
These results include corporate expenses, which increased in the first six months to $20.0 million from $11.0 million the prior year, reflecting costs associated with the Company’s sale.
The net loss in the current year period was $86.0 million or $1.19 per share, compared to a net loss of $73.6 million or $1.04 per share a year ago. The prior year six-month results include a pre-tax gain of $7.6 million or 7 cents per share from the
sale of securities.
The Company reported that its Education Group, which publishes instructional materials for the elementary and secondary markets, had revenues in the second quarter of $90.2 million, up 20.6 percent from $74.8 million a year earlier. The Group’s seasonal loss in the quarter rose to $40.8 million from $36.7 million a year earlier. The revenue increase is an early indicator of continuing strong demand for our educational programs in the K-12 market, Robert A. Smith, co-chief executive officer, stated. Our marketing and sales efforts are generating high levels of interest in our programs across all disciplines, and we expect to have strong operating results from this group in the second half of the year. 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 $50.7 million, compared to $51.1 million a year ago, and a seasonal operating loss of $21.0 million compared to a loss of $18.8 million the prior year. Revenues from our traditional college publishing business, in what is a seasonally slow quarter, were essentially the same as a year ago, according to Mr. Smith, as were revenues in our distance education and professional education businesses.
The Company’s Corporate and Professional Services Group had revenues in the second quarter of $147.9 million, a 22.4 percent increase from $120.9 million the prior year, and an operating profit of $7.5 million compared to $1.8 million a year ago. Drake Beam Morin, our outplacement business, was the major contributor to the Group’s gains in the quarter. In addition, the Group’s testing businesses had strong revenue growth, reflecting growing demand across educational, clinical and corporate markets for our testing and assessment products and services, Mr. Knez said. NETg, our web-based training business, also had slightly higher revenues in the quarter.
The Worldwide Scientific, Technical, Medical (STM) Group had second quarter revenues of $165.8 million, up 1.4 percent from $163.5 million last year. The Group’s operating profit rose sharply to $28.1 million from $19.1 million in the 2000 quarter. Academic Press, our scientific publisher, led the Group’s performance, while Harcourt Health Sciences and our international operations also had improved operating earnings in the quarter, Mr. Smith noted.
Our sales momentum continues to build as we begin the important educational ordering season, Mr. Knez concluded, and we anticipate strong operating results for the Company as a whole in the second half of the fiscal year.
