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, and is the leading provider of educational content in the United States.
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.
Analysis & Key Developments
Houghton Mifflin Harcourt’s overall revenue decreased by 3% in 2016 to 1.4 billion USD. The company recorded a net loss of 285 million USD. Though the education division represented approximately 88% of the total net sales, the trade division was a bright spot in what was a disappointing 2016 for the entire company. For the year ending December 31, 2016, Trade Publishing net sales and adjusted EBITDA were approximately 166 million US and 6 million USD, up from 165 million USD and 8 million USD respectively in 2015. HMH announced to take actions to reduce costs in 2017.
Houghton Mifflin Harcourt Trade president Gary Gentel has announced he would retire in 2016, and was succeeded by Ellen Archer. Archer was most recently president and publisher of Walt Disney Co.’s Hyperion Books.
HMH appointed Jack J. Lynch, Jr. as CEO, president and member of the board of directors in February 2015. He succeeded Linda Zechner, who resigned as CEO in September 2016.
In March 2017 HMH announced, as part of the restructuring, that it is making organizational design changes across layers of the company below the executive team. When the reorganization is complete, HMH expects to save between 70 million USD and 80 million USD annually, beginning in 2019.
HMH reaches global education markets with large English language schools in high growth territories such as Asia, the Pacific, the Middle East, Latin America, the Caribbean and Africa. In 2016 HMH’s net sales increased by 11 million USD in the international business due primarily to Department of Defense sales, and to a lesser extent, greater sales in Asia Pacific.
Digital products with net sales from e-books reached 15 million USD in 2016, representing approximately 9% of trade publishing segment. The decline in e-book sales was due to lower subscriptions.
Houghton’s bestselling titles during 2016 included The Whole 30 by Melissa Hartwig, Tools for Titans by Timothy Ferriss, Property Brother’s Dream Home, and Melissa Hartwig’s Food Freedom Forever.