In a year in which it replaced both its chairman and CEO and sold or closed a number of divisions, the Quarto Group reported that revenue in 2018 fell 2% from 2017, to $149.3 million. The company’s bottomline improved, however, as adjusted profit rose to $10.3 million from $7.2 million a year ago and the net loss for the year was reduced to $600,000 from $18.5 million in 2017.

Both 2018 and 2017 include a number of one-time items that impacted profits, including $1.8 million in severance charges last year, up from $544,000 in 2017. Among the company’s closures in 2018, Quarto shut its Minneapolis office. The company also said it cut its number of imprints in the year to 33 from 40 in 2017. The downsizing followed the departure of Laurence Orbach as chairman and Marcus Leaver as CEO. C.K. Lau, who has a major stake in Quarto, took over as CEO from Leaver in May.

Lau said he was particularly pleased with the ability of the company to improve earnings and cut its debt “in a time of continued softness in the marketplace and of considerable transition for the Group.”

For 2019, Lau said the board’s focus will be “on achieving stability in the business, returning the Group to full health and defining further growth strategies for 2020 and beyond.”

Operating highlights in the year included a 2% increase in children’ publishing revenues which somewhat offset a 4.3% decline in adult publishing. Children’s revenues now represent about one-third of Quarto’s total sales, the company said. Backlist sales did well last year and represented 63.2% of revenue, up from 60.3% in 2017.The decline in adult publishing was due in part to industry consolidation which negatively impacted Quarto’s co-editions business (especially for Star Wars titles). In response to that trend, Quarto said it is looking at new opportunities in custom publishing and to grow its customer base.

In the U.S., sales fell to $81.2 million from $81.8 million in 2017. Quarto cited a strong performance from its Quarry and Fair Winds Press imprints and said growth at specialty retailer accounts largely offset a decline in sales in the bookstore channel in some of the publisher’s biggest categories. Despite the sales dip, profits in the U.S. were up 15%, to $4.6 million, due to lower returns (due in part to much lower returns of adult coloring books compared to 2017) as well as “a significant reduction in expenses” through the company’s cost-cutting program.