Sales and earnings fell at Houghton Mifflin Harcourt Books & Media in 2019 compared to 2018, parent company HMH reported. Revenue fell 9.9% in the year, to $180.0 million, and the division had a net loss of $8.1 million, compared to net income of $2.4 million in 2018. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) fell to $14.9 million, from $21.9 million in 2018.

HMH blamed the sales decline mainly on a drop in licensing income—in 2018, HMH Books & Media received income of $16 million from licensing 1984 and Animal Farm. In terms of book sales, HMH said an increase in sales in the Little Blue Truck series and strong sales for Maybe You Should Talk to Someone last year were offset by strong sales performances of Instant Pot Miracle and The Whole 30 series.

The trade group was also hurt by a weak fourth quarter. Sales in the quarter fell 13.6% compared to the similar period in 2018, with revenue dropping to $52.1 million, from $60.3 million, in the final period of 2018.

“Our outlook for the Books & Media business remains solid," president Ellen Archer told PW, noting that the decline in revenue was expected because the business grew well above expectation in 2018, which included the licensing income. She attributed the steep fourth quarter decline to industry-wide softness.

Archer said she continues to expect low single-digit annual growth for the group. "We continue to be proud of our current and upcoming lists, including the strength of our Versify imprint, which had Caldecott-winning The Undefeated in its launch list," Archer said.

For the entire company, revenue rose 5% over 2019, to $1.39 billion. The decline in the trade group was offset by an $88 million increase in HMH’s education segment. HMH reported that the gain in the education group was due to higher net sales in its Extensions offerings as well as in Core Solutions, which benefited from strong sales of the Texas and national versions of the Into Reading and Into Literature programs.

Despite the sales gain, total operating loss for 2019 was $163 million, up from the $91 million operating loss recorded in 2018. HMH said the “unfavorable change was primarily the result of higher cost of sales coupled with the increase in selling and administrative expenses.” Adjusted EBITDA from continuing operations for 2019 was $166 million, down from $192 million in 2018.

Editor's Note: This article has been updated to include remarks from Ellen Archer.