Houghton Mifflin Harcourt Company (HMH) would like to thank all the professional students out there. The firm is a publisher of educational material, covering areas from pre-K through grade 12, as well as adult learners. HMH publishes textbooks and printed materials, and provides digital content online to 50 million students and 116,000 school districts in more than 150 countries. It additionally publishes fiction (including J.R.R. Tolkien's The Lord of the Rings series and the popular line of Curious George books), as well as nonfiction titles and reference materials, and offers professional resources and educational services to teachers.
In late 2013 the company launched an IPO, and most of the $219 million in proceeds it earned went to its shareholders.
HMH filed for Chapter 11 bankruptcy protection in May 2012 and emerged a few months later. Houghton Mifflin was stung by the ill effects of the global financial crisis, which caused massive spending cuts in the US school budget, its main market. Education accounts for about 90% of the company's revenues, and struggling state and local governments had been forced to cut back on education-related purchases, causing HMH to file for Chapter 11.
HMH is headquartered in Boston and has 15 additional facilities in Colorado, Florida, Illinois, Indiana, Massachusetts, Missouri, New Hampshire, New York, and Texas. An international location resides in Ireland. The US accounts for 95% of its total sales.
HMH operates through two main segments: Education (88% of sales) and Trade Publishing (12%). Within these segments, a variety of divisions and brands focus on different of K-12, international, and trade and reference holdings.
Imprint Steck-Vaughn publishes text books and other educational material, while The Learning Company offers educational software brands such as Reader Rabbit, Carmen Sandiego, ClueFinders, and Oregon Trail. Its Classroom Connect brings software and other technology advances to K-12 schools in the US. Best-sellers from Houghton Mifflin Harcourt Trade and Reference Publishers include titles from the Curious George series and the Peterson Field Guides. The company also publishes the American Heritage Dictionary.
HMH outsources about 80% of the printing and binding of its products to two vendors.
HMH's revenues decreased slightly by less than 1% in fiscal 2012 compared to fiscal 2011 (hovering around the $1.3 billion mark the last two years). The dip was driven by a $47 million decline in domestic education sales from the prior year. New adoption and open territory sales also declined in 2012. These factors were offset by a 13% surge in international sales for 2012.
The company reported a net loss of $87 million in 2012. This loss was significantly down from the $2.2 billion loss it suffered the previous year due to around $1.6 billion it posted on impairment charges.
HMH intends to deepen its penetration of existing educational markets by adapting and broadening its content and service offers. It aims to expand into high-growth education markets and extend its international presence by targeting regions that have a high demand for English language offerings; these countries include Brazil, China, India, Korea, Mexico, the Philippines, and the Middle East Gulf region.
It primarily achieves these goals through partnerships with suppliers overseas and through acquisitions. In 2013 HMH it announced partnerships with suppliers in both the Middle East and Philippines for distributing its educational content. Also that year, HMH added to its technology product portfolio through the purchase of Choice Solutions, a data analytics firm catering to state and district-level education systems.
In 2012 HMH made a big purchase when it obtained certain assets belonging to the Professional/Trade division of John Wiley & Sons. The acquisition included the assets of classic reference titles such as Webster's New World Dictionary and CliffsNotes.
After Houghton Mifflin went public in late 2013, hedge fund Paulson & Co. maintained a 23% stake in the company.