Houghton Mifflin Harcourt

Company Information & Key Figures

About

Houghton Mifflin Harcourt (HMH) is a global learning company and a provider of Pre-K-12 content, services, and technology, serving more than 50m students throughout the U.S. and in 150 countries worldwide.

With approx. 88% of its revenues coming from education, and the remaining 12% from trade and reference, HMH prioritizes the Pre-K-12 market. Its portfolio encompasses K-12 education, early learning, general interest, children’s and reference works. The United States HMH is the leading provider of educational content by market share. (AR 2016).

Houghton Mifflin Harcourt’s history as an educational publisher goes back to 1832. In 2006, Houghton Mifflin was acquired by Riverdeep, an Irish company led by Barry Callaghan. By the end of 2007, it closed its acquisition of Harcourt from Reed Elsevier. In April 2015, HMH signed an agreement to acquire the Educational Technology and Services business of Scholastic Corporation.

1. General information201720162015
Corporate name of mother companyHoughton Mifflin HarcourtHoughton Mifflin HarcourtHoughton Mifflin Harcourt
Corporate headquarter (country)USAUSAUSA
Corporate headquarter (city)Boston, Mass.Boston, Mass.Boston, Mass.
Legal status of the grouppublicly traded companypublicly traded companypublicly traded company
Key personnel
(Chairperson, CEO, publisher, et al. – name, title)
Lawrence K. Fish (Chairman of the Board), John J.
Lynch, Jr. (President and CEO), Joseph P. Abbott
(CFO), Ellen Archer (President, Houghton
Mifflin Harcourt Trade Publishing)
Lawrence K. Fish (Chairman of the Board), Linda K.
Zecher (President and CEO), Joseph P. Abbott (CFO),
Ellen Archer (President, Houghton Mifflin
Harcourt Trade Publishing)
Lawrence K. Fish (Chairman of the Board), Linda K.
Zecher (President and CEO), Joseph P. Abbott (CFO),
Ellen Archer (President, Houghton Mifflin
Harcourt Trade Publishing)
Total number of employees (group)3,8004,5004,500
Website (mother company / holding)www.hmhco.comwww.hmhco.comwww.hmhco.com
2. Financial information201720162015
Source for financial informationARARAR
Consolidated yes/noyesyesyes
Currency for financial informationmUSDmUSDmUSD
Total revenues
Corporate (million)
1,4081,3731,416
Net profits / EBIT / EBITDA corporate (million)219183235
NotesEducational segment covers approx. 88% of total net
sales
Educational segment covers approx. 88% of total net
sales
Educational segment covers approx. 88% of total net
sales
Publishing divisions   
Division 01: NameEducationEducationEducation
Main sector of activitiesEducationEducationEducation
Revenues Publishing1,2231,2071,251
EBITDA Publishing254226269
Division 02: NameTrade PublishingTrade PublishingTrade Publishing
Main sector of activitiesTradeTradeTrade
Revenues Publishing185166165
EBITDA Publishing1668
3. Activity & portfolio201720162015
Main regions of activities & breakdown of
revenue (%)
n.a.U.S. 94%, International 6%U.S. 94%, International 6%
Main bestselling authors / titlesThe Whole30 series, Tribe of Mentors, Tools of
Titans, The Handmaid’s Tale, 1984, The Polar
Express, The Giver
The Whole30, Tools for Titans, Property Brothers
Dream Home and Food Freedom Forever
The Whole 30 – Melissa Hartwig, Jacques Pépin Heart
& Soul in the Kitchen – Jacques Pépi, Better
Homes and Gardens New Cook book, Thing Explainer
and What If – Randall Munroe, The Giver – Lois
Lowry

Analysis & Key Developments

Financial

In 2017 revenue for all of Houghton Mifflin Harcourt’s increased by 34.8mUSD, or 2.5%, from 1,372.7mUSD for the same period in 2016 to 1,407.5mUSD. The growth was driven by an increase in HMH’s Trade Publishing segment, primarily due to „sales of the Whole30 series and Tim Ferriss’ Tribe of Mentors and Tools of Titans, stronger eBook sales, such as The Handmaid’s Tale and 1984, and backlist print title sales, such as The Polar Express and The Giver, along with a lower product return rate and higher 35 subrights income.“ Within the company’s Education segment, the increase was primarily due to greater sales from Extension businesses, which primarily consist of Heinemann, intervention, supplemental and assessment products as well as professional services. Moreover, the company’s adjusted EBITDA increased from 183mUSD to 219mUSD in 2017. (AR 2017)

Internal organization

  • In March 2017 HMH announced, as part of the restructuring, that it is making “organizational design changes across layers of the company below the executive team” that will result in „reductions in force.” (PW 20.03.2017) When the reorganization is complete, HMH expects to save between 70mUSD and 80mUSD annually, beginning in 2019. (PW 25.04.2017)

Change in management

  • In March 2017, HMH announced that Jean S. Desravines, CEO of the national education nonprofit New Leaders, has been appointed to HMH’s board of directors. (PR 05.03.2018)
  • In February 2017, HMH announced the appointment of John (Jack) J. Lynch, Jr. as the company’s president, chief executive officer and a member of the Board of Directors. (PR 15.02.2017)
  • Also in February 2017, the company announced that Brian Shipman has joined the company as Senior Vice President and head of Investor Relations. (PR 27.02.2017)

Acquisitions and growth initiatives in publishing

International

HMH sells its educational solutions into global education markets predominantly to large English-language schools in high growth territories primarily in Asia, the Pacific, the Middle East, Latin America, the Caribbean and Africa. HMH’s revenues for 2017 from the US were 1,335.4mUSD (2016: 1,285mUSD) and from international businesses were 72mUSD (2016: 88mUSD). The lower sales from the international business were primarily due to a large Department of Defense order in 2016 not repeating in 2017. (AR 2017)

Digital

While print remains the primary format in which HMH’s trade books are produced and distributed, the market for trade titles in digital format, primarily e-books, has developed over the past several years, and generally represents approximately 10% of the company’s annual Trade Publishing net sales. (AR 2017)

Bestseller

HMH’s bestselling titles during 2017 included the Whole30 series and Tim Ferriss’ Tribe of Mentors and Tools of Titans, stronger eBook sales, such as The Handmaid’s Tale and 1984, and backlist print title sales, such as The Polar Express and The Giver. (AR 2017)

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