Houghton Mifflin expects sales in its elhi segment to rise by the mid-teens in 2005, with sales in its college segment up slightly in the year. Sales in its trade and reference group will be flat to slightly down, said CEO Tony Lucki in a conference call discussing 2004 results. Revenue in 2004 inched ahead 1.5%, to $1.29 billion, and the net loss declined to $70.4 million from $73.4 million.
The trade and reference group, HM's smallest unit, had the biggest gains in 2004, with sales up 18.5%, to $148.2 million, driven by an exceptionally strong fourth quarter, when sales jumped 58.9%. During the year, HM sold 3.5 million copies of The Polar Express—related books, and sales in the adult segment were led by The Gourmet Cookbook, which has 350,000 copies in print, as well as The Plot Against America, which is now up to 375,000 copies. Lucki said that following the unexpectedly strong performance of the trade and reference group last year, he expects sales generally to be stable in the segment in 2005, noting that without a surprise bestseller, sales may show a small decrease.
Sales in the elhi segment rose to $849.8 million from $848.4 million, driven by a 19% increase in sales in open territories. Lucki said the addition of 60 reps in the elhi group helped to boost sales, which were up in reading, secondary math and language arts. More adoption opportunities is the main reason behind HM's bullish outlook for school publishing in 2005.
College sales fell 2.3% in the year, to $220.9 million, which the company said was due to lower backlist sales. Lucki said the entire college market was "sideswiped" last year by the aggressive campaign mounted by various groups about the price of college textbooks. He believes pricing will be less of an issue in 2005 and is looking for a small gain. College demographics, Lucki observed, "are still favorable," with enrollments rising.
