Revenue grew by 2% in STMS, 4% for P/T, and 2% for Global Education.
EPS grew $0.34 to $0.80 in the quarter. Higher revenues, improved margins and a 9% reduction in operating and administrative expense is contributed to the result. Reduction and expense this is mainly due to cost savings initiative, lower accretive incentive compensation and lower bad debt provisions.
For the full-year revenue of $1.783 billion was up 1% on a currency neutral basis but grew 2% including the positive foreign exchange impact. Adjusted EPS for the fiscal year which excludes non-recurring one-off tax benefits in the prior Borders’ provision grew 13% to $3.21 including favorable foreign exchange. Excluding favorable foreign exchange, adjusted EPS grew by 11%.
Gross profit margin increased 0.3% for the year to 69.5%, reflecting increased sales of digital products, partially offset by higher composition costs. STMS and P/T reported gross margin improvement whereas Global Education margin declined as a result of higher composition and royalty costs.Year-to-date direct operating expenses excluding the Borders’ bad debt provision decreased by 2%. Expense savings were achieved across all three businesses as a result of lower accrued incentive compensation and prudent expense management. Year-to-date, shared services and administrative expenses were 3% higher than prior year reflecting increases in technology spending offset by reduced distribution expense and lower accrued incentive costs. Free cash flow for fiscal 2012 of $260 million was $10 million lower than prior year but $5 million better than we expected reflecting the combined effect of increased cash earnings offset by the timing of journal subscription cash collections and increased capital spending driven by cost related to new lease facilities and investments in digital products and infrastructure. Days sales outstanding improved by four days, while inventory decreased from a year ago due to smaller print runs resulting from the growth in e-book sales and lower returns in P/T.