Sales Up, Losses Cut At WRC Media

WRC Media Inc., the holding company whose primary properties are CompassLearning and Weekly Reader, reported that total revenues for 2001 rose 5.8%, to $231.5 million. The loss from operations was cut to $13 million, from $26.4 million, while the net loss was reduced to $48.5 million, from $62 million.

Sales in WRC's largest operating unit, Weekly Reader, rose 4.8%, to $162.2 million. Within the Weekly Reader segment, sales in the American Guidance division increased 5.2%, to $56.8 million; sales in the World Almanac division were up 5.3%, to $58 million; and sales at the Weekly Reader division (which focuses on the Weekly Reader publications) increased 3.5%, to $47.3 million.

According to WRC's 10-k filing with the Securities and Exchange Commission, the sales gain in the World Almanac division was led by higher telemarketing and Web site sales at its Facts on File News Service, plus a 7% increase in telemarketing sales at its book publishing subsidiary Gareth Stevens. Approximately 73% of Gareth Stevens's sales in the year came from its three imprints Gareth Stevens, World Almanac Library and Weekly Reader Early Learning Library. The remaining 27% came from the telesales distribution of titles from other publishers. Sales of books released under the World Almanac imprint increased by $400,000 in the year, while book sales from the library services group rose by $700,000. Sales fell 23% at Funk & Wagnalls as the company gradually phases out its print yearbook operation.

At Weekly Reader, periodical revenues slipped by 0.6%, while sales of skill books fell 42%. The total number of subscribers to the Weekly Reader magazine was more than seven million in the 2000 2001 school year. The unit also enjoyed a 252% increase in licensing revenues and opened up a new distribution channel last November when the Weekly Reader Book Club sold its books over the QVC network, generating $1.4 million in revenues in one day, far exceeding expectations.

The sales gain at American Guidance was the result of an increase in curriculum products geared for low-performing students, which offset a decline in sales of assessment products.

In the CompassLearning group, the sales gain was driven by a 22% increase in software sales, to $39.9 million, which offset a planned decrease in hardware sales. The company is focusing on growing its core business of providing electronic courseware and management system products.

WRC Media Revenues, 2000 2001
($ in millions)