Net earnings jumped 67% at The Quarto Group in 2022 over 2021, to $16.6 million, despite a 7% decline in sales, to $141 million. The company attributed the profit improvement to “strong cost control” and reduced financing charges. Cutting company debt has been a focus in recent years, and in 2022 Quarto reduced its debt by 89%, to $600,000.
The year also saw Quarto take a number of steps to focus on its trade and custom publishing businesses. To that end, it sold its toy unit, SmatLab, to Educational Development Corp. in September, for $500,000, and exited the distribution business. On the top line, Quarto’s custom publishing segment had a strong rebound after a Covid-induced slump, with revenue up $14.2 million, a 33% increase over 2021.
On the trade side, Quarto’s bestselling Little People Big Dreams series generated sales of $8.3 million last year (including sales of 175,000 copies for a book about Queen Elizabeth II, who died in September), and it will publish the 100th volume in the line this year. Another popular children's series, Story Orchestra, generated sales of $2.7 million. Sales of manga and anime titles also grew in the year.
The U.S. remained Quarto’s biggest market, though sales fell 8.5%, to $85.4 million. Sales in Europe rose 8.5% last year, to $23 million, but fell in the U.K., as well as in other markets. Adult publishing accounted for 69% of the publisher's revenue last year; new titles accounted for 42% of sales, and its backlist delivered 58% of overall revenue.
Quarto was generally optimistic about 2023, citing the upcoming launch of two new imprints and a strong backlist. The company also said it saw “much improved freight prices and improved shipping times” in the fourth quarter, adding: “We believe the market has now stabilized and we do not anticipate a return to the volatility of 2021 and 2022.”