Revenue in Houghton Mifflin Harcourt’s trade publishing segment rose 3.2% in the second quarter ended May 31, 2016, over the comparable period in 2015. Sales were $38.6 million, up from $37.4 million a year ago. Despite the gain, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) fell to $322,000 from $412,000 in the second quarter of 2015.
HMH said the sales increase was due to strong sales of cooking titles led by The Whole 30, Weber’s New American Barbecue, and Meathead. Those increases were partially offset by a decline in e-book sales, which HMH attributed to fewer movie tie-ins of bestselling e-books and lower e-book subscription revenue.
For the first half of 2016, trade sales fell 1.4%, to $70.2 million, and adjusted EBITDA dropped to a loss of $3.3 million from a $728,000 loss in the first six months of 2015.
The gain in trade sales was a bright spot for HMH in the quarter. Revenue in the education group rose 3.2%, to $353 million, but that was due mainly to revenue from Scholastic’s educational technology group, which HMH bought in May 2015. Adjusted EBITDA fell to $85.3 million from $86.4 million.
For the entire company, HMH had a net loss of $28 million in the period compared to a loss of $20 million in last year’s second quarter.
With the softer-than-expected second quarter, HMH lowered its financial guidance for the full year. The company now expects its net sales to be in the range of $1.48 billion to $1.55 billion and billings to be in the range of $1.53 billion to $1.60 million. The lower ranges are primarily due to a reduction in the expected 2016 new adoption market opportunity and lower than expected growth in the first full year of ownership of the acquired EdTech business, HMH reported.
