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NEC Purchase Results in 'New' Harcourt Brace
Jim Milliot -- 2/9/98
In its annual report for the fiscal year ended October 31, 1997, executives at Harcourt General called the June purchase of National Education Corp. (NEC) a "defining moment" that, along with the acquisitions of Churchill Livingstone and Doyma Libros, "helped transform Harcourt Brace from a traditional educational publishing business into a multifaceted learning-services company." The "new" Harcourt will not only serve the traditional educational market, but will also become involved with the multiple-media delivery of educational content and services in such nontraditional segments as distance learning, information technology training and supplemental education.
With the addition of NEC, Harcourt has reorganized itself into three major operating groups: education and trade, which had sales of $617 million in fiscal 1997; the learning and assessment group, comprised of the NEC units as well as The Psychological Corp., Drake Beam Morin and the Harcourt professional education group, with sales of $401 million; and the worldwide STM group, comprised of Academic Press, Saunders and Harcourt Brace Publishers International, which posted sales of $464 million. The new group had total sales of $1.4 billion last year, comprised of revenues of $1.25 billion from Harcourt's traditional publishing segments (News, Dec. 15, 1997), sales from Drake Beam Morin as well as sales from NEC, whose revenues were included from the time of its acquisition.
Every segment in Harcourt's traditional publishing operations, except the college division, posted gains last year, led by the 28.1% gain in Harcourt's elementary school unit. Higher adoption sales of social studies texts in Texas and reading texts in California helped drive the gains in the school group. The international group was Harcourt's second-fastest-growing segment with sales up 26.6%, due largely to gains in Europe, Latin America and Asia. Within its STMP group, the strongest performance was turned in by Academic Press's journals. Approximately 175 of Academic's journals are now available online.
Harcourt said it plans to spend about $180 million on capital expenditures in fiscal 1998, compared to $135 million last year. The increased investment will be used in part to expand and reposition NEC. -Jim Milliot
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