Hungry Minds is not looking for a quick turnaround in its business performance, executives told analysts in a conference call related to its first-quarter results for the period ended December 31, 2000. The company expects sales to be soft again in the second quarter and also anticipates posting a loss in the period. For the full year, HM is forecasting a decline of about $29 million from sales in fiscal 2000 of $243 million, and is expecting flat sales in 2002.
The decline in sales is a result of the company's decision to cut its workforce by about 20% (News, January 29) and to reduce its title output. Company president Bill Barry said HM is trimming its frontlist by between 10% and 15% and is cutting its backlist from about 2,600 titles to between 2,100 and 2,200. HM is also cutting way back on its Internet activities, including canceling its e-learning site launch; HM chairman John Kilcullen said the company is now looking for a partner to develop an e-learning program. HM is focusing its online efforts on initiatives that show the potential for profitability and is most optimistic about Arthur Frommer's Budget Travel (www.frommers.com), where sales were up 30% in the first quarter and another 30% gain is expected in the second quarter. HM's new e-books are due out in March, and the company expects to have more than 200 Dummies and Frommer's e-books out by the end of the year. Selected titles will also be available through print on demand. On the traditional print side, HM will test the market later in the year by putting some of its strongest-selling titles into mass market paperback format with price points below $10.
For the first quarter, total sales at HM fell 11%, to $51.2 million, and the company had a net loss of $1.5 million compared to net income of $3.4 million in the first quarter of fiscal 2000. As previously reported, HM has been hurt by slowing computer book sales, and revenues in its technology group fell 13%, to $24.2 million, while sales in its consumer book group were off 5.2%, to $24.7 million. Licensing and other revenues were down 40%, to $2 million.
