Houghton Mifflin Harcourt (HMH) is a global educational publishing and technology company that reaches more than 50 million students in the U.S. and 150 other countries.
Eighty-eight percent of its revenue comes from education, with the remaining 12 % from trade and reference. HMH is primarily focused on the Pre-K-12 market, but also covers general interest, children’s and reference works. The company leads K-12 market with a market share of 44%.
Houghton Mifflin Harcourt’s history as an educational publisher dates back to 1832. Houghton Mifflin was acquired by Riverdeep in 2006 and acquired Harcourt from Reed Elsevier in 2007. In April 2015, HMH signed an agreement to acquire the Educational Technology and Services business of Scholastic Corporation. HMH was listed as a public company on NASDAQ in November 2013.
Analysis & Key Developments
Houghton’s net sales for fiscal 2014 remained stable and decreased slightly from 1.38 million USD to 1.37 billion USD. While revenues at the larger educational division were steady, the trade unit experienced a slight loss from 171 million USD to 163 million USD. The dip was attributed to a lack of strong movie tie-in releases compared to the previous year, when The Hobbit and Life of Pi were top sellers. The company expects total sales to rise between 2% and 5% in 2015 due in part to deferred revenue.
HMH hired Rick Wolff in September 2014 to start a new line of business books. Wolff had left Hachette in June when the imprint he founded, Business Plus, was closed amidst downsizing.
In April 2015, HMH announced it would acquire Scholastic’s Educational Technology and Services business for 575 million USD. According to HMH’s CEO Linda Zecher, "The transaction would provide added digital infrastructure and expertise to support the continued development of next-generation products for HMH’s pre-K-12 and consumer businesses.” She added that the purchase would diversify the group's education portfolio. HMH’s board approved another 100 million USD share repurchase program, lifting the total authorization to 200 million USD.
Digital products with net sales from e-books reached 23 million USD in 2013, representing 13.2% of trade publishing sales. HMH has 34,000 titles available in digital format.
Bestselling titles from HMH included What If by Randall Munroe, The Giver by Lois Lowry, Polar Express by Chris van Allsburg, Better Homes and Gardens New Cookbook, The Things They Carried by Tim O’Brien, Little Blue Truck by Alice Schertle, How to Cook Everything Fast by Mark Bittman, The Hobbit by J.R.R. Tolkien, and Weight Watchers New Complete Cookbook.