A few days after laying off over 20 people in its trade division, Houghton Mifflin Harcourt reported that revenue in the trade group rose 16% in the first quarter ended March 31, over the same period in 2016. Sales were $36.5 million, up from $31.7 million a year ago. The net loss in the division was cut to $4.1 million from $7.1 million.
HMH attributed the revenue increase to higher sales of the Whole30 Cookbook and Tools of Titans as well as to higher e-book sales and lower returns. The smaller loss was due in part to higher e-book sales, which provide higher margins.
For the entire company, sales rose 8% in the quarter, to $222 million, and the net loss was cut to $121 million from $165 million in the first period of 2016.
New HMH CEO Jack Lynch acknowledged that “this is a transitional time for HMH as we make the necessary operational changes to streamline the company.” Speaking about the trade division in a conference call with analysts, Lynch said he sees the group as "a point of pride for HMH and is a particular point of pride for me adding that with a strong backlist and current bestsellers, "this business provides ongoing potential for revenue generation both as a stand-alone segment in our portfolio and as a partner to our core K-12 business."
HMH reiterate that it expects to save $70 million to $80 million once the restructuring is completed, a process that could involve eliminating over 400 jobs, most of which would come in its educational division. HMH said “substantially all” of the reorganization will be completed by the end of 2017, with any remaining actions to be done by the end of 2018.
