The Houghton Mifflin Harcourt trade division was a bright spot for the publishing company in the third quarter ended September 30, 2016. Revenue in the trade unit rose 5.9%, to $45.8 million, over the third quarter of 2015, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) jumped to $6.5 million in the most recent quarter compared to $3.1 million a year ago. The unit had net income of $3.2 million, up $3 million from the third period in 2015.
Revenue in the much larger education division fell in the quarter, resulting in an overall decline in results for the company. Total revenue fell 7% in the quarter, to $533 million, and adjusted EBITDA fell 12%, to $168 million, compared to a year ago.
HMH attributed the revenue decline to a $48 million drop in domestic education sales due in part to HMH underperforming in the California English-language adoption. Revenue was also down in its professional services and assessment businesses.
The increase in trade sales, HMH said, was driven by strong sales of both frontlist and backlist tiles. Among the quarter’s best performers were The Whole 30, Little Blue Truck Halloween, Steve Young’s QB and How to Bake Everything. Partially offsetting the increase in print sales was a decline in e-book sales.
For the first nine months of 2016, the trade group had revenue of $116.0 million, up from $114.5 million in the comparable period in 2015. Adjusted EBITDA was even at about $3.1 million.
With the drop in total revenue for the company in the education group, HMH lowered its sales forecast for the full year to between $1.32 billion and $1.38 billion. Earlier this fall, HMH CEO Linda Zecher resigned shortly after softer than expected second quarter results were released.
