Boosted by a renewal of its licensing agreement for paperback rights to 1984 and Animal Farm, sales and earnings at Houghton Mifflin Harcourt’s trade division both soared in the third quarter ended September 30, over the comparable period a year ago.
Revenue in the most recent quarter was $66.6 million, up 30% from the third period of 2017 when sales were $51.2 million. Adjusted EBITDA (earnings before interest, taxes depreciation, and amortization) soared 133% in the quarter, to $15.5 million. The trade group’s net income was $12.1 million, up from $3.1 million a year ago.
In addition to the licensing deal, HMH said revenue in the period benefited from strong sales of the latest edition of Fall of Gandolin as well as from Instant Pot Miracle. Sales of the backlist title Beautiful Boy rose in the quarter thanks to the release of the same-titled filme based on the book. Higher print sales at the company were offset by a decline in e-book sales.
The strong third quarter lifted sales for the first nine months in the trade group, to $139.4 million from $130.2 million in the comparable period in 2017. Adjusted EBITDA was $14.7 million in the first nine months of 2018, compared to $8.9 million in 2017. The trade group posted net income of $4.6 million in the nine-month period, compared to a net loss of $1.8 million in 2017.
For all of HMH, which includes the much larger education division, third quarter revenue was flat at $516 million. Net income dipped to $86 million, from $90 million in the third quarter of 2017. For the first nine months of 2018, revenue fell 1.8%, $1.07 billion, while the net loss was cut to $38.2 million from $77.0 million in the comparable period a year ago.
Editor's note: This story has been updated to include details of the licensing agreement.