Thomson Reports First-Quarter 2007 Results

    Revenues increase 11%; operating profit grows 8%

    EPS increases to $0.35, from $0.21 a year ago

    Net operating cash rises 25%; free cash flow up 25%

    (All amounts are in U.S. dollars)

    STAMFORD, Conn., April 26 /CNW/ -- The Thomson Corporation (NYSE:   TOC;
TSX: TOC), a leading global provider of information services to business and
professional customers, today reported that revenues for the first quarter of
2007 increased 11%, to $1.7 billion, and operating profit increased 8%, to
$226 million.  Diluted earnings per share increased to $0.35 in the first
quarter, from $0.21 in the year-ago period.
    (Logo: )
    "We continued to build momentum in the first quarter, successfully
executing on our business and efficiency strategies to drive organic revenue
growth and broad-based margin expansion in our operating businesses," said
Richard J. Harrington, president and chief executive officer of Thomson.  "We
achieved solid organic growth of 6%, generated high levels of recurring
revenue and improved retention rates as we continued to set the standard for
the delivery of must-have electronic solutions, software and services to
business and professional customers.  Our corporate initiatives to improve
operational performance across the organization resulted in higher margins in
the business units, and we remain on track to meet our full-year 2007 savings
targets.  With the pending sale of Thomson Learning, our ability to invest in
our businesses and leverage our world-class technology will further enhance
our growth and profitability prospects.
    "The Thomson Learning sales process is on schedule and has attracted a
very high level of interest from prospective buyers.  We anticipate announcing
a buyer at the end of the second quarter and closing the transaction in the
third quarter.  We will use the proceeds from the sale to pursue opportunities
aligned with our growth strategy and business model.  We will be disciplined
in reinvesting the proceeds and will focus on opportunities that drive growth
and create value for shareholders."

    Consolidated First-Quarter Financial Highlights:
    -- Revenues increased 11%, to $1.7 billion, led by strong growth in the
       Legal and Tax & Accounting business segments.  Organic revenue growth
       was 6% in the quarter, with each business segment across Thomson
       contributing to the increase.
    -- Operating profit increased 8%, to $226 million, as a result of strong
       operating performance, partly offset by $34 million of investments in
       THOMSONplus initiatives.  Operating profit margin was 13.5%, compared
       with 13.9% in the first quarter of 2006.  Excluding THOMSONplus
       expenses, operating profit increased 20% and the margins increased 130
       basis points, to 15.6%, in part reflecting efficiencies derived from
       the savings initiatives.
    -- Earnings attributable to common shares were $223 million, or $0.35
       diluted earnings per share, compared with $136 million, or $0.21
       diluted earnings per share, in the first quarter of 2006.  Earnings in
       the first quarter of 2007 included $35 million of one-time tax
       benefits.  After adjusting for these items, as well as other income,
       results of discontinued operations and the normalization of the tax
       rate, earnings were $145 million, or $0.23 per share, compared with
       $131 million, or $0.20 per share, in the first quarter of 2006.
    -- Net cash provided by operations was $287 million, compared with $229
       million, in the first quarter of 2006.  Free cash flow increased 25%,
       to $137 million, from $110 million.

    First-Quarter Operational Highlights:
    -- Operating performance of the businesses reflected successful execution
       of the Thomson business model, as well as savings generated by
       THOMSONplus efficiency initiatives.
    -- Approximately 85% of Thomson's revenues were derived from electronic
       solutions, software and services, which grew 12%.  In addition,
       approximately 84% of Thomson revenues were recurring in nature.
    -- To date, THOMSONplus initiatives have generated approximately $50
       million in annual run-rate savings.  Thomson remains on track to
       generate total annual run-rate savings of approximately $150 million by
       year-end 2008.

    First-Quarter Business Segment Highlights:
    -- Revenues grew 10%, to $747 million. Organic revenue growth was 7%,
       foreign exchange contributed 2% and acquisitions added 1%.
    -- Organic revenue growth was fueled by strong double-digit online growth.
       Westlaw continued to drive growth, delivering a strong performance
       across all of its customer segments.  Thomson's legal software and
       services also continued to be strong revenue drivers, posting double-
       digit increases in the first quarter.  The revenue increase for
       software and services reflected continued strong growth from FindLaw,
       as well as growth in consulting services.
    -- Segment operating profit grew 17%, to $207 million, aided by strong
       revenue growth and efficiency initiatives, resulting in a margin
       increase of 160 basis points, to 27.7%.

    -- Revenues increased 8%, to $527 million.  Organic growth was 4%, and
       acquisitions and foreign exchange each contributed 2%.
    -- Organic revenue growth was driven by the strong performance of the
       investment management, corporate services and investment banking
       segments.  Revenues from Europe and Asia grew at double-digit rates,
       and a Japanese-language version of Thomson ONE for investment
       management was launched in the quarter.
    -- Fixed income-related revenue was affected by softness in the U.S.
       Treasuries markets, resulting in lower volumes within Thomson's fixed-
       income transaction business.  Revenues declined slightly in the retail
       wealth management segment, as the business exited a low-margin contract
       and experienced declines in low-margin legacy desktops.
    -- Segment operating profit grew 20%, to $95 million, as a result of
       strong revenue growth and efficiency initiatives, and the corresponding
       margin increased 180 basis points, to 18.0%.

    Tax & Accounting
    -- Revenues increased 13%, to $160 million.  Organic revenue grew 9%, and
       growth from acquisitions was 4%.
    -- Thomson Tax & Accounting achieved strong organic growth across its
       research and guidance, and professional and corporate software and
       services customer segments, driven by higher new sales and improved
       retention levels.
    -- Segment operating profit grew 27%, to $38 million, as a result of
       strong operating performance and efficiency initiatives, raising the
       operating margin by 270 basis points, to 23.8%.

    -- Revenues grew 7%, to $149 million.  Organic revenues grew 4%, foreign
       exchange contributed 2% and acquisitions added 1%.
    -- Revenue growth continued to be driven by the strong performance of Web
       of Science and Web of Knowledge, corporate solutions and Thomson
       Pharma.  The acquisition of ScholarOne also contributed to revenue
       growth in the first quarter of 2007. Revenue growth was offset by
       declines in legacy online products, as well as print and CD offerings.
    -- Segment operating profit grew 21%, to $34 million, as a result of
       strong operating performance and efficiency initiatives, raising the
       operating margin by 270 basis points, to 22.8%.

    -- Revenues grew 42%, to $92 million.  Revenues from acquisitions
       contributed 39% and organic revenues grew 3%.  Because the first
       quarter is a relatively small quarter, growth rates were significantly
       affected by the timing of new customer contracts, as well as contract
    -- Revenue growth was largely driven by the acquisition of Solucient in
       the fourth quarter of last year.  Solucient's offerings further
       strengthened Thomson's management decision support products for
       hospitals, and posted solid revenue growth year-over-year.
    -- Segment operating profit was affected by acquisition-related costs and
       remained flat year-over-year.
    -- First-quarter performance of the Healthcare segment is not indicative
       of its anticipated full-year results, as historically less than 20% of
       its revenue and 10% of its operating profit have been earned in the
       first quarter.

    Corporate and Other
    -- Corporate and Other expenses in the first quarter of 2007 increased $42
       million, to $91 million, compared with $49 million in the prior-year
       period.  The increase was primarily due to $34 million of THOMSONplus-
       related costs and certain additional costs related to the company's
       organizational realignment.

    Discontinued Operations
    The former Thomson Learning market group accounted for the majority of
results in Discontinued Operations.  Discontinued Operations also includes
results of certain businesses sold or held for sale, which were formerly
managed in Thomson's Legal and Healthcare segments.

    The Board of Directors declared a quarterly dividend of $0.245 per common
share payable on June 15, 2007 to holders of record as of May 24, 2007.

    Normal Course Issuer Bid
    Thomson plans to renew its share repurchase program (normal course issuer
bid) for an additional 12-month period and expects to repurchase up to 15
million of its common shares (representing approximately 2.3% of its issued
and outstanding shares as of April 24, 2007).  Purchases under the new program
may commence on May 7, 2007 and will terminate no later than May 6, 2008.
Thomson may repurchase shares in open market transactions on the Toronto Stock
Exchange or the New York Stock Exchange.  Under its existing normal course
issuer bid, which began on May 5, 2006 and expires on May 4, 2007, Thomson has
purchased 6,285,000 common shares through April 24, 2007 at an average price
of US$40.55 per share.  Since beginning share repurchases in May 2005, Thomson
has purchased approximately 19.6 million common shares for a total cost of
approximately $736.9 million.  As of April 24, 2007, Thomson had 639,999,563
issued and outstanding common shares.  Decisions regarding the timing of
future repurchases will be based on market conditions, share price and other
factors.  Thomson may elect to suspend or discontinue the bid at any time.
Shares repurchased under the bid will be cancelled.
    From time to time, when Thomson does not possess material nonpublic
information about itself or its securities, it may enter into a pre-defined
plan with its broker to allow for the repurchase of common shares at times
when Thomson ordinarily would not be active in the market due to its own
internal trading blackout periods, insider trading rules or otherwise.  Any
such plans entered into with Thomson's broker will be adopted in accordance
with the requirements of applicable Canadian securities laws and Rule 10b5-1
under the U.S. Securities Exchange Act of 1934.

    Business Outlook
    The business outlook for 2007 that was provided on February 8, 2007
remains unchanged.
     -- Revenue growth is expected to be at the high end of the company's
        long-term target range of 7%-9%, prior to the deployment of the
        proceeds from the sale of Thomson Learning.
     -- Operating margin is expected to be at or above 2006 levels, despite
        increasing investments in efficiency initiatives.
     -- Cash generated by continuing operations is expected to grow, excluding
        cash generated through deployment of the Thomson Learning sale

    Thomson expects its performance to further strengthen in 2008.  The
company expects to sustain its long-term revenue growth rates; operating
margin is expected to increase to above 20%; and free cash flow is expected to
strengthen, as improvements in operating performance are projected to more
than offset the loss of Thomson Learning's free cash flow, even before
deployment of the Thomson Learning sale proceeds.

    The Thomson Corporation
    The Thomson Corporation ( is a global leader in
providing essential electronic workflow solutions to business and professional
customers.  With operational headquarters in Stamford, Conn., Thomson provides
value-added information, software tools and applications to professionals in
the fields of law, tax, accounting, financial services, scientific research
and healthcare.  The Corporation's common shares are listed on the New York
and Toronto stock exchanges (NYSE:   TOC; TSX: TOC).

    The Thomson Corporation will webcast a discussion of first-quarter
results beginning at 8:30 a.m. ET today.  To participate in the webcast,
please visit and click the "Investor Relations" link
located at the top of the page.

    The Corporation's financial statements are prepared in accordance with
Canadian generally accepted accounting principles (GAAP) and are reported in
U.S. dollars.  When applicable, prior periods are restated for discontinued
operations.  This news release includes certain non-GAAP financial measures,
such as adjusted earnings from continuing operations and free cash flow.  We
use these non-GAAP financial measures as supplemental indicators of our
operating performance and financial position.  These measures do not have any
standardized meanings prescribed by GAAP and therefore are unlikely to be
comparable to the calculation of similar measures used by other companies, and
should not be viewed as alternatives to measures of financial performance
calculated in accordance with GAAP.  Reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP measures are set forth
in the tables below.

    This news release, in particular the section under the heading "Business
Outlook," includes forward-looking statements, such as the Corporation's
beliefs and expectations regarding its financial performance in 2007 and 2008.
These statements are based on certain assumptions and reflect the
Corporation's current expectations.  Forward-looking statements also include
statements about the Corporation's beliefs and expectations related to its
ability to deliver continued revenue growth and profitability, its ability to
continue to increase shareholder value, its anticipated run-rate savings
related to THOMSONplus and the timing of the completion of the sale of its
Thomson Learning businesses.  All forward-looking statements in this news
release are subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current expectations.  Some
of the factors that could cause actual results or events to differ materially
from current expectations are actions of competitors; failure to fully derive
anticipated benefits from acquisitions and divestitures; failure to develop
new products, services, applications and functionalities to meet customers'
needs, attract new customers or expand into new geographic markets; and
changes in the general economy.  Additional factors are discussed in the
Corporation's materials filed with the securities regulatory authorities in
Canada and the United States from time to time, including the Corporation's
latest annual information form, which is also contained in its most recently
filed annual report on Form 40-F.  A discussion of material assumptions
related to the Corporation's Business Outlook is contained in its most
recently filed management's discussion and analysis.  The Corporation
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or

    Media Contact:                         Investor Contact:
    Jason Stewart                          Frank J. Golden
    Vice President, Media Relations        Vice President, Investor Relations
    (203) 539-8339                         (203) 539-8470    

                      Consolidated Statement of Earnings
           (millions of U.S. dollars, except per common share data)

                                                   Three Months Ended
                                                        March 31,
                                                   2007           2006
                                                   ----           ----
    Revenues                                      1,669          1,507
    Cost of sales, selling, marketing,
     general and administrative expenses         (1,267)        (1,133)
    Depreciation                                   (115)          (105)
    Amortization                                    (61)           (60)
                                            -----------    -----------
    Operating profit                                226            209
    Net other income                                  6             38
    Net interest expense and
     other financing costs                          (53)           (52)
    Income taxes                                     31             10
                                            -----------    -----------
    Earnings from continuing operations             210            205
    Earnings (loss) from discontinued
     operations, net of tax                          14            (68)
                                            -----------    -----------
    Net earnings                                    224            137
    Dividends declared on preference shares          (1)            (1)
                                            -----------    -----------
    Earnings attributable to common shares          223            136
                                            ===========    ===========

    Basic and diluted earnings per
     common share                                 $0.35          $0.21
                                            ===========    ===========
    Basic weighted average common shares    641,071,690    648,153,472
                                            ===========    ===========
    Diluted weighted average common shares  643,783,735    648,998,104
                                            ===========    ===========

         Reconciliation of Earnings Attributable to Common Shares to
               Adjusted Earnings from Continuing Operations(1)
           (millions of U.S. dollars, except per common share data)

                                                  Three Months Ended
                                                       March 31,
                                                    2007       2006
                                                    ----       ----

    Earnings attributable to common shares           223        136
       One-time items:
        Net other income                              (6)       (38)
        Tax on above item                             --         (1)
        Tax benefits                                 (35)        (9)
       Interim period effective tax rate
        normalization(2)                             (23)       (25)
       Discontinued operations                       (14)        68
                                                   ------     ------
    Adjusted earnings from continuing operations     145        131
                                                   ======     ======
    Adjusted diluted earnings per common
     share from continuing operations              $0.23      $0.20
                                                   ======     ======

    (1) Adjusted earnings from continuing operations and adjusted earnings per
        common share from continuing operations are earnings attributable to
        common shares and per share amounts after adjusting for non-recurring
        items, discontinued operations, and other items affecting
        comparability.  Thomson uses these measures to assist in comparisons
        from one period to another.  Adjusted earnings per common share from
        continuing operations do not represent actual earnings per share
        attributable to shareholders.
    (2) Adjustment to reflect income taxes based on the estimated full-year
        effective tax rate of the consolidated group.  Reported earnings for
        interim periods reflect income taxes based on estimated effective tax
        rates of each of the group's jurisdictions.  The adjustment
        reallocates estimated full-year income taxes between interim periods,
        but has no effect on full-year income taxes.

                          Consolidated Balance Sheet
                          (millions of U.S. dollars)

                                                      March 31,   December 31,
                                                        2007          2006
    Cash and cash equivalents                              350           334
    Accounts receivable, net of allowances               1,285         1,364
    Inventories                                             80            72
    Prepaid expenses and other current assets              303           297
    Deferred income taxes                                  153           153
    Current assets of discontinued operations              868         1,045
    Current assets                                       3,039         3,265

    Computer hardware and other property, net              600           624
    Computer software, net                                 656           647
    Identifiable intangible assets, net                  3,467         3,457
    Goodwill                                             6,674         6,546
    Other non-current assets                             1,053         1,082
    Non-current assets of discontinued operations        4,549         4,511
    Total assets                                        20,038        20,132
    Liabilities and shareholders' equity
    Short-term indebtedness                                591           333
    Accounts payable and accruals                        1,058         1,307
    Deferred revenue                                     1,061           970
    Current portion of long-term debt                      661           264
    Current liabilities of discontinued operations         654           865
    Current liabilities                                  4,025         3,739

    Long-term debt                                       3,275         3,681
    Other non-current liabilities                          807           785
    Deferred income taxes                                  987           997
    Non-current liabilities of discontinued operations     434           449
    Total liabilities                                    9,528         9,651

    Shareholders' equity
    Capital                                              2,832         2,799
    Retained earnings                                    7,152         7,169
    Accumulated other comprehensive income                 526           513
    Total shareholders' equity                          10,510        10,481
    Total liabilities and shareholders' equity          20,038        20,132

                     Consolidated Statement of Cash Flow
                    (millions of U.S. dollars, unaudited)

                                                      Three Months Ended
                                                           March 31,
                                                       2007         2006
    Cash provided by (used in):
    Operating activities
    Net earnings                                       224          137
    Remove (earnings) loss from
     discontinued operations                           (14)          68
    Add back (deduct) items not involving cash:
      Depreciation                                     115          105
      Amortization                                      61           60
      Net gains on disposals of
       businesses and investments                       (6)         (41)
      Deferred income taxes                            (42)         (17)
      Other, net                                        64           64
    Pension contributions                               (1)          (5)
    Changes in working capital and other items        (103)        (123)
    Cash used in operating activities -
     discontinued operations                           (11)         (19)
    Net cash provided by operating activities          287          229

    Investing activities
    Acquisitions                                      (154)        (132)
    Proceeds from disposals                              6           55
    Capital expenditures, less
     proceeds from disposals                           (98)         (66)
    Other investing activities                         (10)         (11)
    Capital expenditures of discontinued operations    (37)         (38)
    Other investing activities of
     discontinued operations                            (4)          (3)
    Proceeds from disposals of
     discontinued operations                            35           --
    Acquisitions by discontinued operations            (54)          (3)
    Net cash used in investing activities             (316)        (198)

    Financing activities
    Repayments of debt                                  --          (52)
    Net borrowings under short-term loan facilities    244          198
    Repurchase of common shares                        (55)        (168)
    Dividends paid on preference shares                 (1)          (1)
    Dividends paid on common shares                   (153)        (139)
    Other financing activities, net                     10            9
    Net cash provided by (used in)
     financing activities                               45         (153)
    Translation adjustments                             --           --
    Increase (decrease) in cash and cash equivalents    16         (122)
    Cash and cash equivalents at beginning of period   334          407
    Cash and cash equivalents at end of period         350          285

         Reconciliation of Net Cash Provided by Operating Activities
                             to Free Cash Flow(1)
                    (millions of U.S. dollars, unaudited)

                                                      Three Months Ended
                                                          March 31,
                                                      2007         2006
                                                      ----         ----
    Net cash provided by operating activities          287          229
    Capital expenditures                               (98)         (66)
    Other investing activities                         (10)         (11)
    Capital expenditures of discontinued operations    (37)         (38)
    Other investing activities of
     discontinued operations                            (4)          (3)
    Dividends paid on preference shares                 (1)          (1)
    Free cash flow                                     137          110

    (1)  Free cash flow is net cash provided by operating activities less
         capital expenditures, other investing activities and dividends paid
         on preference shares.  Thomson uses free cash flow as a performance
         measure because it represents cash available to repay debt, pay
         common dividends and fund new acquisitions.

                      2007 Business Segment Information
                          (millions of U.S. dollars)

                                           Three Months Ended
                                                March 31,
                                        2007      2006    Change
                                        ----      ----    ------
      Legal                              747       678      10 %
      Financial                          527       487       8 %
      Tax & Accounting                   160       142      13 %
      Scientific                         149       139       7 %
      Healthcare                          92        65      42 %
      Intercompany eliminations           (6)       (4)
                                      -------   -------
      Total revenues                   1,669     1,507      11 %
                                      =======   =======
    Operating Profit:
      Segment operating profit
        Legal                            207       177      17 %
        Financial                         95        79      20 %
        Tax & Accounting                  38        30      27 %
        Scientific                        34        28      21 %
        Healthcare                         4         4       0 %
        Corporate and other(1)           (91)      (49)
                                      -------   -------
      Total segment operating profit     287       269       7 %
      Amortization                       (61)      (60)
                                      -------   -------
      Operating profit                   226       209       8 %
                                      =======   =======

    (1)  Corporate and other includes THOMSONplus costs, corporate costs and
         certain costs associated with the company's stock incentive and
         phantom stock plans.

    Detail of depreciation by segment:

                                                 Three Months Ended
                                                      March 31,
                                                2007            2006
               Legal                            (48)            (43)
               Financial                        (46)            (44)
               Tax & Accounting                  (6)             (6)
               Scientific                        (7)             (6)
               Healthcare                        (5)             (4)
               Corporate and other               (3)             (2)
                                               (115)           (105)


For further information:

For further information: Media, Jason Stewart, Vice President, Media 
Relations, +1-203-539-8339,, or Investors, Frank J. 
Golden, Vice President, Investor Relations, +1-203-539-8470,, both of The Thomson Corporation Web Site:

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