Houghton Mifflin Harcourt Announces Third Quarter 2016 Results

Reports net sales of $533 million and billings of $620 million Company revises outlook for the full year 2016

Global learning company Houghton Mifflin Harcourt (“HMH” or the “Company”) (NASDAQ: HMHC) today announced its financial results for the third quarter ended September 30, 2016.

Third Quarter Highlights

  • Net sales for the three months ended September 30, 2016, were $533 million, a 7% decrease compared with $576 million in the same period in 2015.
  • Billings for the three months ended September 30, 2016, were $620 million, a 9% decrease compared with $682 million in the third quarter of 2015.
  • Net income for the third quarter of 2016 was $90 million, a 31% decrease compared with $131 million for the same period in 2015.
  • Adjusted EBITDA was $168 million for the three months ended September 30, 2016, a 12% decrease compared with $192 million for the same period in 2015.
  • Pre-publication or content development costs for the third quarter were $29 million, a 12% decrease compared with $33 million for the same period in 2015.
  • The Company has lowered its full year 2016 outlook for net sales and billings in light of weaker-than-expected results in the domestic education market. 2016 net sales are now expected to be between $1,320 and $1,380 million, and billings are now expected to be between $1,370 and $1,430 million.
  • HMH launched its new science curriculum, HMH Science Dimensions, the first comprehensive K-12 science curriculum in the education market created specifically to meet the new Next Generation Science Standards (NGSS). The Company continues to innovate and develop leading core products for upcoming large new adoption market opportunities.

“While we are disappointed with the Company’s performance year to date, especially in the domestic education market, we are squarely focused on restoring growth to the business,” said Gordon Crovitz, Interim Chief Executive Officer of HMH. “We are taking necessary steps to remedy issues which resulted in loss of market share in California this year, as well as to accelerate growth in our adjacent markets in order to create greater value for shareholders and improve our financial performance.”

Joe Abbott, Chief Financial Officer of HMH added, “We believe the factors contributing to our weak performance in the California English Language Arts adoption will result in lower than expected market share for the full year. We have revised our full year 2016 outlook to reflect year to date results and our expectations for fourth quarter performance. As we look forward, we see robust domestic education market opportunities and are focused on capturing market share as we continue to invest in our core business and adjacencies.”

read more/source: http://www.hmhco.com/media-center/press-releases/2016/november/q3-2016-earnings-results

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