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HOUGHTON MIFFLIN COMPANY REPORTS EARNINGS INCREASE

 HOUGHTON MIFFLIN COMPANY REPORTS EARNINGS INCREASE
 BOSTON, Oct. 14 /PRNewswire/ -- Houghton Mifflin Company (NYSE: HTN)


today reported increases in net income for the third quarter and first nine months ended Sept. 30, 1992, even though sales in the two periods were below last year's record results, reflecting reduced sales opportunities in the school textbook market. Net sales for the third quarter were $198.8 million, a 6 percent decline from 1991's third quarter net sales of $211.2 million. Net income for the quarter rose to $34.0 million, slightly above the $33.8 million recorded last year. Earnings per share increased to $2.46 from $2.36 in 1991. The third quarter of 1991 included operating costs and losses totaling $3.6 million, or 11 cents per share, related to the sale of the company's Australian business and U.S. management reorganization.
 For the nine months ended Sept. 30, 1992, net sales were $376.5 million, a 3 percent decline from the $388.4 million reported in 1991. Net income rose 3 percent to $31.7 million from last year's $30.7 million. Earnings per share rose to $2.25 from $2.14. Last year's nine-month results included Australian costs and losses and U.S. management reorganization costs of $4.9 million, or 20 cents per share.
 The educational publishing segment's sales declined 7.6 percent in the third quarter. Lower School Division sales reflected reduced sales opportunities in 1992 for elementary school reading and social studies textbook programs. Net sales of these two programs were nearly $23 million lower in 1992's third quarter than in the same period of 1991. A portion of this shortfall was made up by increased secondary school sales. College Division sales were up slightly and The Riverside Publishing Company's sales were even with 1991's third-quarter results.
 General publishing segment sales increased 3.8 percent in the third quarter. The Trade & Reference Division reported higher sales, led by the publication of the new edition of "The American Heritage Dictionary," which will reverse the recent downward trend in reference sales.
 Nader F. Darehshori, chairman and chief executive officer, said, "Third quarter results are a key factor in full-year performance in our seasonal educational publishing business. Results for 1992 have continued ahead of our plans for the year, which are focused on managing expenses to increase our profitability, even though opportunities to sell elementary school textbooks, the company's largest business, are significantly below last year. Sales of trade and college books will be the primary contributors to fourth-quarter results, and a minor contribution is expected from the company's recently completed acquisition of the DLM line of clinical and special needs tests."
 Darehshori said, "Houghton Mifflin normally reports an operating loss in the fourth quarter. Given the company's 1992 performance to date, we currently expect that this year's fourth-quarter loss will be modestly lower than the 39 cents per share reported last year. Fourth- quarter results will also include a one-time write-off of 45 cents to 50 cents per share related to the previously announced sale of the company's British subsidiary Victor Gollancz Limited." He said, "The company's nine-month results included Gollancz losses of $2.1 million, or 15 cents per share."
 HOUGHTON MIFFLIN COMPANY AND SUBSIDIARIES
 Unaudited Consolidated Financial Information
 (Dollars in thousands except per share amounts)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Net sales by
 industry segment:
 Educational publishing $167,115 $180,768 $302,722 $318,376
 General publishing 31,645 30,480 73,804 69,988
 Total 198,760 211,248 376,526 388,364
 Costs and expenses:
 Cost of sales 82,954 91,970 179,005 184,822
 Selling and admin. 60,283 63,687 144,224 150,781
 Total 143,237 155,657 323,229 335,603
 Operating income 55,523 55,591(a) 53,297 52,761(b)
 Net interest expense (698) (1,387) (2,225) (3,320)
 Income before income taxes 54,825 54,204 51,072 49,441
 Provision for income taxes 20,836 20,389 19,408 18,782
 Net income $33,989 $33,815 $31,664 $30,659
 Net income per share $2.46 $2.36(a) $2.25 $2.14(b)
 HOUGHTON MIFFLIN COMPANY AND SUBSIDIARIES
 Unaudited Consolidated Financial Information
 (Dollars in thousands except per share amounts)
 Twelve Months Ended
 Sept. 30,
 1992 1991
 Net sales by
 industry segment:
 Educational publishing $354,578 $366,881
 General publishing 100,385 98,066
 Total 454,963 464,947
 Costs and expenses:
 Cost of sales 223,113 226,776
 Selling and admin. 187,162 196,660
 Total 410,275 423,436
 Operating income 44,688 41,511(c)
 Net interest expense (2,611) (3,562)
 Income before income taxes 42,077 37,949
 Provision for income taxes 15,995 15,544
 Net income 26,082 22,405
 Net income per share $1.85 $1.57(b,c)
 NOTE: (a) Includes operating costs and losses totaling $3.6 million
 (11 cents per share after tax) related to the sale of the
 company's Australian business and provisions for U.S.
 cost reductions and reorganization.
 (b) The above actions reduced nine-month operating income by
 $4.9 million (20 cents per share after tax).
 (c) Includes a $2.2 million net pre-tax charge (17 cents per
 share after tax) for the write-down of intangible assets
 less a gain from the sale of the secondary school
 health publications.
 -0- 10/14/92
 /CONTACT: Stephen O. Jaeger, executive vice president and chief financial officer, 617-725-5017/
 (HTN) CO: Houghton Mifflin Company ST: Massachusetts IN: PUB SU: ERN


CH -- NE004 -- 9730 10/14/92 09:33 EDT
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