Mixed results for Waverly stockholders News of stock split, dividend rise counters poor earnings report

Net income fell 44%

Publishing firm says remainder of year should be strong

April 30, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

Waverly Inc.'s governing board yesterday gave shareholders some good news at its annual meeting -- a two-for-one stock split and an 8 percent quarterly dividend increase.

But the shareholders also learned that the company's first-quarter earnings fell 44 percent from the same period in 1995.

The Baltimore-based publisher of medical and scientific journals said it had expected a poor quarter. The company said a combination of one-time occurances boosted earnings in the same quarter of last year and increased expenses in the first quarter of 1996. Company officials predicted a strong performance for the remainder of the year.

Net income for the quarter that ended March 31 was $539,000, or 6 cents per share. That's down from $962,000 in the first quarter of 1995, or 11 cents per share. The per-share earnings take the pending stock split into account, the company said.

Revenues for the first quarter of 1996 were $37.9 million, 9 percent higher than the same period in 1995.

"We indicated in the annual report that the first quarter's profit results would trail the performance in 1995 and that prediction has held," Edward B. Hutton Jr., president and chief executive officer, told shareholders yesterday.

In explaining the decline in profits, Mr. Hutton said the company published the 26th edition of Stedman's Medical Dictionary in the first quar-ter of 1995, shipping most of the year's sales in that period. In 1996, he said, sales "will occur largely in the last nine months."

He also said the company benefited in the first quarter of 1995 from a one-time gain on foreign currency exchange.

And, "investments in new product served as a drag on earnings of our book publishing in the United States and abroad," he said.

Despite the poor earnings report, Waverly Inc.'s shares closed yesterday at $47.625, up from $45, on the Nasdaq stock market.

In brief comments to shareholders, William M. Passano Jr., Waverly's chairman, announced the stock split and an increase in quarterly dividends from 6 cents per share to 6.5 cents per share. The stock split and dividend increase will affect shareholders of record as of May 28.

"With more stock in the marketplace, there should be more opportunity for stock to trade," Mr. Passano said, adding that the stock price had risen $2 since the split was announced in a press release earlier in the day.

Mr. Passano told the shareholders that Waverly produced a better return over the last 10 years than the Standard & Poor's 500 index. He also predicted a year of record earnings with dividends that will not decrease.

Waverly officials said the company will publish 20 percent more titles in 1996 than in 1995.

Pub Date: 4/30/96

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