McGraw-Hill Companies chairman Terry McGraw told analysts in a conference call earlier this month that a "solid year is shaping up" in the company's education business. Revenues in the education group rose 30.2% in the first quarter ended March 31, 2001, to $307.7 million, while the operating loss increased from $38.4 million in last year's first quarter to $57.8 million in the most recent period. The higher loss was attributed to the acquisitions of Tribune Education and Mayfield Publishing; the purchase of Tribune also contributed about $60 million to education group sales in the quarter.
McGraw said among the encouraging signs in the first quarter that point to double-digit revenue gains in the year are improved sales in open territories and continued strong sales in adoption states. In addition, state education budgets appear to be remaining firm despite the slowing economy, and the federal government continues to make education a high priority. All of the divisions within the education group's elhi operation had a good start to the year, McGraw said, particularly its testing unit, CTB/McGraw-Hill. Bob Bahash, MHC chief financial officer, said that the integration of the former Tribune units is largely complete, with most companies becoming part of existing MHC divisions. The lone exception is the Wright Group, which will remain a stand-alone business. To help accommodate increased volume in the elhi sector, MHC is expanding an existing warehouse and plans to open a new facility in Ohio this summer.
The college division posted double-digit revenue gains in the quarter due to a good reception to its frontlist titles. PageOut, a program that allows college instructors to create course-specific Web sites, finished the quarter with about 53,000 users. Strong sales of the 15th edition of Harrison's Principles of Internal Medicine helped boost sales in MHC's professional and international operations, offsetting higher returns from the professional segment.
