According to two different reports, HarperCollins finished a strong fiscal 2014, which ended June 30, with revenue of $1.4 billion, up 5% over last year, while Simon & Schuster reported second-quarter revenues of $211 million, a 12% increase over the same period in 2013.
HarperCollins’s EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 39% to $197 million. Veronica Roth’s Divergent was the star of the year, selling more than 19 million copies. Other standout sellers were Mitch Albom’s The First Phone Call from Heaven and The Pioneer Woman Cooks by Ree Drummond.
Partially offsetting HC’s book gains was the sale of Women of Faith, an event business. E-book sales rose 35% in the year and represented 22% of worldwide sales, compared to 17% in fiscal 2013. Those results do not include Harlequin, which HC bought at the end of fiscal 2014.
HC also reported a higher profit margin, which was attributed to higher e-book sales and added operating efficiencies. CEO Brian Murray said that, with the exception of India, which suffered from the negative impacts of foreign exchange, all HC companies did well across the world.
In the U.S., in addition to the success of Divergent, HC’s adult general books also had a solid year. The U.K. saw general improvement, including lower costs. Costs were also under control in the U.S., as the company benefited from the first full year operating with one supply chain for its trade and Christian publishing groups. At one point in the recent past, HC had four warehouses—now it has one. Murray also noted that HC owns world rights to Divergent, which saw a huge boost from the publication of the third installment of the trilogy and a movie adaptation.
HC’s focus in fiscal 2015, as one might suspect, is on integrating Harlequin. Murray said the next three to six months will be used to develop a plan that highlights the strengths of both companies to identify best practices the can be implemented across the entire company. He noted that Harlequin does a number of things extremely well, including selling directly to consumers and exploiting its global brand. He expects that HC will be able to bring some of its resources to bear to let Harlequin take advantage of its scale.
S&S Second Quarter
Q2 revenue at Simon & Schuster jumped to $211 million, from $189 million in the same period in 2013, with OIBDA (operating income before depreciation and amortization) of $24 million, up 14% from $21 million. Driving results were print bestsellers such as Hillary Clinton’s Hard Choices and Stephen King’s Mr. Mercedes.
S&S CEO Carolyn Reidy emphasized that “all divisions are up for the quarter.” Digital sales accounted for 25% of total publishing revenue in the period, but Reidy acknowledged that such sales were down 6% in the second quarter, and down “double digits” for the year to date. She blamed the decline, in part, on a particularly strong performance in 2013. S&S had two major e-book movie tie-ins in the same period in 2013, Reidy said, one of which was The Great Gatsby, and that skewed e-book sales upward that year. “E-book sales are down a bit from last year, but this is in line with what we’re seeing in general—that e-book sales are slowing,” she explained.
S&S results are broken out from those of CBS, its parent company, which took note of the publisher’s initiatives with e-book subscription services Oyster and Scribd and the expansion of the availability of S&S e-books to library systems around the country. Reidy said that the initiatives were highlighted because they offer a “strategic move to be in the forefront of new ways to sell our titles.”
Revenue growth for S&S in the period was also driven by sales from such titles as Brad Thor’s Act of War and Jennifer Weiner’s All Fall Down, among other bestsellers. Looking ahead to this fall, Reidy pointed out big books to come from such authors as Stephen King (Revival); Walter Isaacson (The Innovators); Glenn Beck (Dreamers and Deceivers); and retiring New York Yankees shortstop Derek Jeter, who will be releasing Jeter Unfiltered through Jeter Publishing, his newly launched S&S imprint.