The integration of Harcourt's higher education division into Thomson Learning is going according to plan, Thomson Learning chairman David Shaffer told analysts in a conference call following the release of parent company Thomson Corp.'s third-quarter results. The back offices of the higher education group were consolidated in mid-October and the "book bag" of Harcourt and Thomson products were combined. Because the combination of the two companies' materials makes for a large list, Thomson has kept all of Harcourt's higher education sales reps and created smaller territories.
Another major project underway is the building of a new distribution center in Florence, Ky. The facility is slated to open around the end of next year's first quarter, at which time Thomson will begin consolidating its four existing distribution centers into the Florence facility. The consolidation of Harcourt's Philadelphia location into Thomson's Cincinnati and Belmont, Calif., offices is also expected to be completed early next year.
Total revenues at Thomson Learning rose 38.2% in the third quarter ended September 30, 2001, to $676 million. Harcourt contributed approximately $170 million in sales in the period, while sales in Thomson's existing operations increased about 3%. Operating profit was up 6.4%, to $150 million. Shaffer said Thomson Learning has seen little impact on its academic business from the economic slowdown, although he said there has been some effect on business in the library market, which has slowed growth at Gale Group. Computer book sales to the higher education market have held up, although there is softness in the general computer book market, Shaffer said. Thomson's lifelong learning unit has been the most negatively affected by the downturn, as corporations have cut training budgets. Despite the current softness in the lifelong learning area, "we're still bullish on the long-term prospects" of the business, Shaffer said.
For the nine-month period, sales at Thomson Learning were up 29.2%, to $1.23 billion, and operating profit rose 5.6%, to $131 million.
