WHITBY, ONTARIO--(Marketwire - July 27, 2012) - McGraw-Hill Ryerson Limited (TSX:MHR) -

Attention: Business/Financial Editors -

Three Months to June 30 ($000) (unaudited)	2012			2011
Sales revenue, less returns	$	14,391		$	16,182
Other income		467			399
Rental income		116			146
Total Revenue	$	14,974		$	16,727
Net income	$	210		$	545
Net income per share	$	0.11		$	0.27
Six Months to June 30 ($000) (unaudited)	2012			2011
Sales revenue, less returns	$	22,084		$	24,548
Other income		594			576
Rental income		231			297
Total Revenue	$	22,909		$	25,421
Net loss	$	(2,534	)	$	(1,647	)
Net loss per share	$	( 1.27	)	$	( 0.82	)

Summary

The Company generally reports a modest net income for the second quarter of the year as sales are more heavily weighted to the second half. For the second quarter in 2012, net income is $0.2 million compared to $0.5 million in the second quarter of last year as a result of lower sales. As expenses are more evenly distributed over the course of the year, the Company generally reports a net loss in the first half of each year. For the first half of 2012, the net loss is $2.5 million compared to a net loss of $1.6 million in the first half of 2011.

Three Months Ended June 30, 2012

Total revenue for the second quarter decreased by 10.5% to $15.0 million in 2012 compared to $16.7 million in 2011.

The Higher Education Division sales decreased by $0.9 million in the second quarter of 2012 to $6.9 million. Despite the decline, digital and custom products continue to be a growth area for this Division.

The School Division sales decreased $0.8 million to $6.3 million in the second quarter of 2012 from $7.1 million in the corresponding quarter of 2011. This decrease was mainly driven by nonrecurring orders placed in 2011 by the Atlantic and Western provinces.

In the Professional Division, sales decreased by $0.1 million in the second quarter of 2012 to $1.2 million.

Cost of goods sold decreased to $4.9 million from $5.5 million last year. The decrease of 11.5% is consistent with the decrease in sales.

Income before taxes was $0.4 million compared to $0.8 million in the second quarter last year, mainly the result of the decrease in sales.

Six Months Ended June 30, 2012

Total revenue for the first six months decreased by 10.0% to $22.9 million in 2012 compared to $25.4 million in 2011.

The Higher Education Division sales decreased $1.0 million compared to the first half of 2011 to $10.9 million. This decrease is mostly the result of customers delaying orders until closer to the beginning of the school year. Digital and custom products continue to be a growth area for this Division.

The School Division sales decreased 12.0% to $9.0 million in the first half of 2012 from $10.2 million in the corresponding quarter of 2011. This decrease was mainly driven by nonrecurring orders placed in 2011 by the Atlantic and Western provinces.

In the Professional Division, sales decreased by $0.1 million in the first half of 2012 to $2.3 million, from $2.4 million in the comparative period of the prior year. This decrease was caused in part by reduced orders and increased returns from retailers and distributors. Sales of print products have migrated to e-book offerings where the channel is still being developed and average unit revenues are lower.

Cost of goods sold decreased to $7.5 million from $8.3 million for the first six months of 2011.

Operating expenses increased slightly to $15.7 million during the first half of 2012 compared to $15.5 million in the comparative period of the prior year as a result of one-time legal fees.

Year to date loss before taxes was $3.2 million compared to $2.1 million in the first half of last year. The variance was mainly a reflection of the decrease in sales.

Notice to Reader

The attached financial statements have been prepared by management of McGraw-Hill Ryerson Limited. The financial statements for the three and six month period ended June 30, 2012 and June 30, 2011 have not been reviewed by the auditors of McGraw-Hill Ryerson Limited.

In business since 1944, McGraw-Hill Ryerson Limited is a leading Canadian publisher of educational resources, and information products and services for lifelong learning and enjoyment. Total revenue in 2011 was $82 million. Additional information is available at www.mcgrawhill.ca.

McGraw-Hill Ryerson Limited

STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

[in thousands of dollars except per share data]

(unaudited)

	Three months ended June 30					Six months ended June 30
	2012		2011			2012			2011
	$		$			$			$
Sales revenue, less returns		14,391		16,182			22,084			24,548
Other income		467		399			594			576
Rental income		116		146			231			297
Total revenue		14,974		16,727			22,909			25,421
Cost of goods sold		4,864		5,494			7,522			8,317
Gross profit		10,110		11,233			15,387			17,104
Operating expenses		7,771		7,836			15,738			15,495
Amortization - pre-publication costs		1,912		2,349			2,739			3,379
Depreciation - property, plant and equipment		210		239			426			474
Operating income (loss)		217		809			(3,516	)		(2,244	)
Finance income		82		89			189			220
Finance costs		30		28			66			56
Foreign exchange gain (loss)		121		(57	)		174			12
Income (loss) before income taxes		390		813			(3,219	)		(2,068	)
Income tax expense (recovery)		180		268			(685	)		(421	)
Net income (loss) and comprehensive income (loss) for the period attributable to equity holders of the Company		210		545			(2,534	)		(1,647	)
Income (loss) per share
Basic and diluted	$	0.11	$	0.27		$	(1.27	)	$	(0.82	)

McGraw-Hill Ryerson Limited

STATEMENTS OF FINANCIAL POSITION

[in thousands of dollars]

(unaudited)

As at		June 30,	December 31,	June 30,
		2012	2011	2011
		$	$	$
ASSETS
Current
Cash and cash equivalents		12,904	41,926	18,585
Marketable securities		746	716	790
Trade and other receivables, net		9,526	11,429	9,338
Inventories, net		8,259	6,123	8,124
Due from parent and affiliated companies		4,140	1,925	6,585
Income taxes receivable		3,590	-	3,155
Prepaid expenses and other assets		876	280	886
Total current assets		40,041	62,399	47,463
Property, plant and equipment, net		13,673	14,071	14,454
Intangible assets		16,184	16,439	17,435
Deferred tax assets		-	494	-
Total non-current assets		29,857	31,004	31,889
		69,898	93,403	79,352
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		8,690	11,122	9,465
Income taxes payable		-	713	-
Due to parent and affiliated companies		950	4,784	1,698
Total current liabilities		9,640	16,619	11,163
Employee future benefits		2,416	2,281	2,474
Long-term payable		-	44	197
Deferred tax liabilities		876	-	503
Total liabilities		12,932	18,944	14,337
Equity
Issued capital
	Authorized 5,000,000 no par value common shares
	Issued and outstanding 1,996,638 common shares	1,997	1,997	1,997
Paid-in capital		888	702	524
Retained earnings		54,081	71,760	62,494
Total equity		56,966	74,459	65,015
		69,898	93,403	79,352

McGraw-Hill Ryerson Limited

STATEMENTS OF CHANGES IN EQUITY

[in thousands of dollars]

(unaudited)

	Share capital	Paid-in capital	Retained earnings		Total
	$	$	$		$
Balance, December 31, 2010	1,997	372	75,232		77,601
Dividends paid ($5.555 per share)	-	-	(11,091	)	(11,091	)
Additional paid-in capital	-	152	-		152
Net loss and comprehensive loss attributable to equity holders of the Company	-	-	(1,647	)	(1,647	)
Balance, June 30, 2011	1,997	524	62,494		65,015
Balance, December 31, 2011	1,997	702	71,760		74,459
Dividends paid ($7.585 per share)	-	-	(15,145	)	(15,145	)
Additional paid-in capital	-	186	-		186
Net loss and comprehensive loss attributable to equity holders of the Company	-	-	(2,534	)	(2,534	)
Balance, June 30, 2012	1,997	888	54,081		56,966

McGraw-Hill Ryerson Limited

STATEMENTS OF CASH FLOWS

[in thousands of dollars]

(unaudited)

Six months ended June 30
	2012		2011
	$		$
Operating activities
Net loss for the period	(2,534	)	(1,647	)
Add (deduct) charges not affecting cash:
Amortization - pre-publication costs	2,739		3,379
Depreciation - property, plant and equipment	426		474
Decrease in long-term payable	(44	)	(194	)
Employee future benefits	135		(114	)
Deferred taxes	1,370		1,315
Net change in non-cash working capital balances related to operations	(13,599	)	(15,203	)
Cash used in operating activities	(11,507	)	(11,990	)
Investing activities
Investment in pre-publication costs	(2,498	)	(2,624	)
Investment in property, plant and equipment	(28	)	(298	)
Decrease (increase) in marketable securities	(30	)	42
Cash used in investing activities	(2,556	)	(2,880	)
Financing activities
Dividends paid to shareholders	(15,145	)	(11,091	)
Change in paid-in capital	186		152
Cash used in financing activities	(14,959	)	(10,939	)
Net decrease in cash and cash equivalents	(29,022	)	(25,809	)
Cash and cash equivalents, beginning of period	41,926		44,394
Cash and cash equivalents, end of period	12,904		18,585