Houghton Mifflin Harcourt Announces Second Quarter 2015 Results
Second Quarter 2015 Highlights:
- HMH captured 41% market share for the first half of the year in its addressable domestic education market for K-12 instructional materials.
- In line with its capital allocation strategy, under the Company’s share repurchase program, HMH repurchased
$191 million of its common stock on the open market and through privately negotiated transactions during the second quarter. - HMH completed its acquisition of Scholastic Corporation’s Educational Technology & Services division (“EdTech”) on
May 29, 2015 . - Net sales declined 5% to
$380 million compared with$402 million in the second quarter of 2014, primarily due to the anticipated contraction in HMH’s addressable domestic education market in 2015. On an organic basis, which excludes the contribution from the EdTech business, sales would have been$362 million . - Billings declined approximately 15% to
$436 million compared with$516 million in the second quarter of 2014 primarily due to the aforementioned contraction in the domestic education market. - Net loss was
$8 million compared with net income of$12 million in the second quarter of 2014. - Adjusted EBITDA was
$80 million —$30 million or 27% lower compared with$109 million in the second quarter of 2014 primarily due to lower net sales and increased cost of sales and selling and administrative costs. Adjusted cash EBITDA was$136 million , compared with$223 million in the second quarter of 2014, primarily reflecting the impact of lower billings and lower deferrals. - Following the EdTech acquisition, the Company has revised its 2015 annual guidance on billings, net sales, pre-publication or content development costs.
“We continue to maintain a leading position in our core education market, while increasing our efforts in the consumer space and delivering a solid performance in our Trade segment. Our core business remains strong and we believe we are ideally positioned to capitalize on numerous growth opportunities
in the second half of the year,” said
Second Quarter 2015 Business Highlights:
Education Segment: HMH continued to see encouraging demand for its education products in the second quarter of 2015. For the first half of 2015, HMH captured an approximate 41% percent market share within its addressable domestic education market with key wins in
In the consumer space, HMH recently re-launched Cliffsnotes.com to provide an improved user interface, refreshed branding, mobile responsive design, and enhanced search functionality for its five million unique monthly visitors. The Company also grew its e-commerce revenue year to date almost 60 percent over the prior year due to sales from its redesigned flagship website hmhco.com.
Trade Publishing Segment: In the second quarter, HMH’s
Acquisition of EdTech Business: On
Second Quarter 2015 Financial Results
Net Sales: Net sales for the three months ended
Lois Lowry’s title The Giver.
Cost of Sales: Overall cost of sales in the second quarter 2015 decreased 4%, or
Selling and Administrative Costs: Selling and administrative costs in the second quarter of 2015 increased
Operating Loss: Operating loss for the three months ended
Net Loss: HMH recorded a net loss of
Adjusted EBITDA and Adjusted Cash EBITDA: Adjusted EBITDA for the second quarter of 2015 was
Cash Flow: Net cash used in operating activities for the six months ended
Capital Allocation
During the second quarter, HMH repurchased over eight million shares of its common stock for approximately
This share repurchase program aligns with HMH’s broader capital allocation strategy, which focuses on driving organic growth, pursuing strategic acquisition opportunities and returning capital to stockholders, when appropriate.
2015 Outlook
Following the EdTech acquisition, the Company has revised its 2015 annual guidance on billings, net sales, pre-publication or content development costs.
HMH now expects 2015 billings to be 2% to 6% higher than the 2014 billings of
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Use of Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), we have presented adjusted EBITDA, adjusted cash EBITDA, billings and free cash flow as non-GAAP measures in addition to our GAAP results. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. Management believes that the presentation of these non-GAAP measures provides useful information to investors regarding our results of operations becaus
e it assists both investors and management in analyzing and benchmarking the performance and value of our business.
Management believes that the presentation of adjusted EBITDA provides an indicator of our performance that is not affected by debt restructurings, fluctuations in interest rates or effective tax rates, non-cash charges, or levels of depreciation or amortization along with cost such as severance, facility closure cost, and acquisition cost. Accordingly, our management believes that this measurement is useful for comparing our performance from period to period. In addition, targets and positive trends in adjusted cash EBITDA and billings are used as performance measures and to determine certain compensation of management. Management believes that the presentation of adjusted cash EBITDA and billings also provide useful information to our investors and management as an indicator of our cash performance as it takes into account our deferred revenue and is not affected by the aforementioned items excluded from adjusted EBITDA. Management also believes that the presentation of free cash flow provides useful information to our investors because management regularly reviews free cash flow as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes decisions based on it.
Other companies may define these non-GAAP measures differently and, as a result, our measure of these non-GAAP measures may not be directly comparable to adjusted EBITDA, adjusted cash EBITDA, billings and free cash flow of other companies. Although we use non-GAAP measures as financial measures to assess the performance of our business, the use of non-GAAP measures are limited as they include and/ or do not include certain items not included and/or included in the most directly comparable GAAP measure. Billings, adjusted EBITDA and adjusted cash EBITDA should be considered in addition to, and not as a substitute for, net income or loss prepared in accordance with GAAP as a measure of performance; and free cash flow should be considered in addition to, and not as a substitute for, net cash provided by operating activities prepared in accordance with GAAP as a measure of performance. Adjusted EBITDA and adjusted cash EBITDA are not intended to be a measure of liquidity nor is free cash flow intended to be a measure for discretionary use. You are cautioned not to place undue reliance on these non-GAAP measures. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the appendix to this news release.
About
Forward-Looking Statements
The statements contained herein include forward-looking statements, which involve risks and uncertainties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “projects,” “anticipates,” “expects,” “could,” “intends,” “may,” “will” or “should,” “forecast,” “intend,” “plan,” “potential,” “project,” “target” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, including billings, net sales, deferred revenue; financial condition; pre-publication or content development costs; liquidity; products, including product mix and format; prospects; growth; adjacent markets and market share; strategies, including with respect to capital allocation; the market and industry in which we operate and potential business decisions. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this report.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if our results are consistent with the forward looking statements contained herein, those results or developments may not be indicative of results or developments in subsequent periods.
Important factors that could cause our results to vary from expectations include, but are not limited to: changes in state and local education funding and/or related programs, legislation and procurement processes; adverse or worsening economic trends or the continuation of current economic conditions; changes in consumer demand for, and acceptance of, our products; changes in product mix, format and timing of delivery; changes in competitive factors; offerings by technology companies that compete with our products; industry cycles and trends; conditions and/or changes in the publishing industry; changes or the loss of our key third-party print vendors; restrictions under agreements governing our outstanding indebtedness; changes in laws or regulations governing our business and operations; changes or failures in the information technology systems we use; demographic trends; uncertainty surrounding our ability to enforce our intellectual property rights; inability to retain management or hire employees; impact of potential impairment of goodwill and other intangibles in a challenging economy; decline or volatility of our stock price regardless of our operating performance; and other factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other news releases we issue and filings we make with the
We undertake no obligation, and do not expect, to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained herein.
| Consolidated Balance Sheets (Unaudited) | |||||||||||
| (in thousands of dollars, except share information) |
|
2014 |
|||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 319,410 | $ | 456,581 | |||||||
| Short-term investments | — | 286,764 | |||||||||
| Accounts receivable, net | 424,676 | 255,669 | |||||||||
| Inventories | 229,725 | 183,961 | |||||||||
| Deferred income taxes | 14,978 | 20,459 | |||||||||
| Prepaid expenses and other assets | 29,211 | 18,665 | |||||||||
| Total current assets | 1,018,000 | 1,222,099 | |||||||||
| Property, plant, and equipment, net | 133,790 | 138,362 | |||||||||
| Pre-publication costs, net | 326,870 | 236,995 | |||||||||
| Royalty advances to authors, net | 47,261 | 46,777 | |||||||||
| Goodwill | 783,923 | 532,921 | |||||||||
| Other intangible assets, net | 966,230 | 801,969 | |||||||||
| Deferred income taxes | 3,705 | 3,705 | |||||||||
| Other assets | 32,903 | 28,279 | |||||||||
|
Total assets |
$ | 3,312,682 | $ | 3,011,107 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Current portion of long-term debt | $ | 8,000 | $ | 67,500 | |||||||
| Accounts payable | 78,655 | 51,266 | |||||||||
|
Royalties payable |
92,027 | 80,089 | |||||||||
| Salaries, wages, and commissions payable | 36,801 | 59,733 | |||||||||
| Deferred revenue | 180,834 | 157,016 | |||||||||
| Interest payable | 201 | 47 | |||||||||
| Severance and other charges | 4,677 | 5,928 | |||||||||
| Accrued postretirement benefits | 2,037 | 2,037 | |||||||||
| Other liabilities | 39,832 | 27,015 | |||||||||
| Total current liabilities | 443,064 | 450,631 | |||||||||
| Long-term debt, net of discount | 788,056 | 175,625 | |||||||||
| Long-term deferred revenue | 407,871 | 370,103 | |||||||||
| Accrued pension benefits | 17,123 | 18,525 | |||||||||
| Accrued postretirement benefits | 25,203 | 26,500 | |||||||||
| Deferred income taxes | 113,011 | 112,220 | |||||||||
| Other liabilities | 93,883 | 97,823 | |||||||||
| Total liabilities | 1,888,211 | 1,251,427 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
| Preferred stock, |
— | — | |||||||||
| Common stock, |
1,359 | 1,420 | |||||||||
| Treasury stock, 8,201,435 and 82,022 shares at |
(191,238 | ) | — | ||||||||
| Capital in excess of par value | 4,809,926 | 4,784,962 | |||||||||
| Accumulated deficit | (3,167,596 | ) | (2,999,913 | )< /td> | |||||||
| Accumulated other comprehensive loss | (27,980 | ) | (26,789 | ) | |||||||
| Total stockholders’ equity | 1,424,471 | 1,759,680 | |||||||||
| Total liabilities and stockholders’ equity | $ | 3,312,682 | $ | 3,011,107 | |||||||
| Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||||
| Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
| (in thousands of dollars, except share and per share information) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Net sales | $ | 379,883 | $ | 401,890 | $ | 542,552 | $ | 555,823 | ||||||||||||||
| Costs and expenses | ||||||||||||||||||||||
| Cost of sales, excluding pre-publication and publishing rights amortization | 168,076 | 166,796 | 264,645 | 259,444 | ||||||||||||||||||
| Publishing rights amortization | 19,148 | 24,776 | 42,291 | 55,527 | ||||||||||||||||||
| Pre-publication amortization | 27,909 | 32,063 | 54,372 | 61,037 | ||||||||||||||||||
| Cost of sales | 215,133 | 223,635 | 361,308 | 376,008 | ||||||||||||||||||
| Selling and administrative | 170,687 | 152,283 | 313,696 | 289,293 | ||||||||||||||||||
| Other intangible asset amortization | 4,261 | 3,007 | 7,479 | 5,952 | ||||||||||||||||||
| Impairment charge for investment in preferred stock | — | 1,279 | — | 1,279 | ||||||||||||||||||
| Severance and other charges | 985 | 3,362 | 2,042 | 5,119 | ||||||||||||||||||
| Operating income (loss) | (11,183 | ) | 18,324 | (141,973 | ) | (121,828 | ) | |||||||||||||||
| Other income (expense) | ||||||||||||||||||||||
| Interest expense | (6,160 | ) | (4,395 | ) | (12,114 | ) | (8,692 | ) | ||||||||||||||
| Change in fair value of derivative instruments | 369 | (205 | ) | (1,851 | ) | (308 | ) | |||||||||||||||
| Loss on extinguishment of debt | (2,173 | ) | — | (2,173 | ) | — | ||||||||||||||||
| Income (loss) before taxes | (19,147 | ) | 13,724 | (158,111 | ) | (130,828 | ) | |||||||||||||||
| Income tax expense (benefit) | (11,404 | ) | 2,176 | 9,572 | 3,959 | |||||||||||||||||
| Net income (loss) | $ | (7,743 | ) | $ | 11,548 | $ | (167,683 | ) | $ | (134,787 | ) | |||||||||||
| Net loss per share attributable to common stockholders | ||||||||||||||||||||||
| Basic | $ | (0.06 | ) | $ | 0.08 | $ | (1.19 | ) | $ | (0.96 | ) | |||||||||||
| Diluted | $ | (0.06 | ) | $ | 0.08 | $ | (1.19 | ) | $ | (0.96 | ) | |||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||
| Basic | 139,961,856 | 140,074,707 | 141,090,469 | 140,028,757 | ||||||||||||||||||
| Diluted | 139,961,856 | 143,025,017 | 141,090,469 | 140,028,757 | ||||||||||||||||||
| Consolidated Statements of Cash Flows (Unaudited) | |||||||||||
| Six Months Ended |
|||||||||||
| (in thousands of dollars) | 2015 | 2014 | |||||||||
| Cash flows from operating activities | |||||||||||
| Net loss | $ | (167,683 | ) | $ | (134,787 | ) | |||||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
| Depreciation and amortization expense | 140,327 | 157,837 | |||||||||
| Amortization of debt discount and deferred financing costs | 4,369 | 2,375 | |||||||||
| Deferred income taxes | 6,272 | 1,826 | |||||||||
| Stock-based compensation expense | 6,812 | 5,944 | |||||||||
| Loss on extinguishment of debt | 2,173 | — | |||||||||
| Change in fair value of derivative instruments | 1,851 | 308 | |||||||||
| Impairment charge for investment in preferred stock | — | 1,279 | |||||||||
| Changes in operating assets and liabilities, net of acquisitions | |||||||||||
| Accounts receivable | (137,770 | ) | (247,183 | ) | |||||||
| Inventories | (32,050 | ) | (39,875 | ) | |||||||
| Accounts payable and accrued expenses | (6,606 | ) | 15,765 | ||||||||
| Royalties, net | 9,974 | 7,850 | |||||||||
| Deferred revenue | 41,397 | 103,475 | |||||||||
| Interest payable | 154 | (7 | ) | ||||||||
| Severance and other charges | (2,208 | ) | (2,397 | ) | |||||||
| Accrued pension and postretirement benefits | (2,699 | ) | (6,621 | ) | |||||||
| Other, net | 908 | 2,104 | |||||||||
| Net cash used in operating activities | (134,777 | ) | (132,107 | ) | |||||||
| Cash flows from investing activities | |||||||||||
| Proceeds from sales and maturities of short-term investments | 286,732 | 65,819 | |||||||||
| Purchases of short-term investments | — | (8,053 | ) | ||||||||
| Additions to pre-publication costs | (45,484 | ) | (61,352 | ) | |||||||
| Additions to property, plant, and equipment | (31,356 | ) | (31,144 | ) | |||||||
| Acquisition of business, net of cash acquired | (577,717 | ) | (9,091 | ) | |||||||
| Net cash used in investing activities | (367,825 | ) | (43,821 | ) | |||||||
| Cash flows from financing activities | |||||||||||
| Proceeds from term loan | 796,000 | — | |||||||||
| Payments of long-term debt | (243,125 | ) | (1,250 | ) | |||||||
| Payments of deferred financing fees | (13,670 | ) | — | ||||||||
| Repurchases of common stock | (191,238 | ) | — | ||||||||
| Tax withholding payments related to net share settlements of restricted stock units | (124 | ) | (366 | ) | |||||||
| Proceeds from stock option exercises | 17,588 | 3,345 | |||||||||
| Net cash provided by financing activities | 365,431 | 1,729 | |||||||||
| Net increase (decrease) in cash and cash equivalents | (137,171 | ) | (174,199 | ) | |||||||
| Cash and cash equivalents | |||||||||||
| Beginning of period | 456,581 | 313,628 | |||||||||
| Net increase (decrease) in cash and cash equivalents | (137,171 | ) | (174,199 | ) | |||||||
| End of period | $ | 319,410 | $ | 139,429 | |||||||
| Non-GAAP Reconciliations (Unaudited) | ||||||||||||
| Consolidated | ||||||||||||
| (in thousands of dollars) | ||||||||||||
| Three Months Ended |
||||||||||||
| 2015 | 2014 | |||||||||||
| Net income (loss) | $ | (7,743 | ) | |||||||||
| Interest expense | 6,160 | 4,395 | ||||||||||
| Provision (benefit) for income taxes | (11,404 | ) | 2,176 | |||||||||
| Depreciation expense | 17,776 | 18,082 | ||||||||||
| Amortization expense (1) | 51,318 | 59,846 | ||||||||||
| Non-cash charges—stock-based compensation expense | 3,717 | 3,547 | ||||||||||
| Non-cash charges—(gain) loss on derivative instruments | (369 | ) | 205 | |||||||||
| Asset impairment charges | — | 1,279 | ||||||||||
| Purchase accounting adjustments (2) | 877 | 1,016 | ||||||||||
| Fees, expenses or charges for equity offerings, debt or acquisitions | 15,515 | 1,576 | ||||||||||
| Restructuring | 651 | 2,207 | ||||||||||
| Severance separation costs and facility closures | 985 | 3,362 | ||||||||||
| Loss on extinguishment of debt | 2,173 | — | ||||||||||
| Adjusted EBITDA | $ | 79,656 | ||||||||||
| Change in deferred revenue | 56,141 | 113,769 | ||||||||||
| Adjusted Cash EBITDA | $ | 135,797 | ||||||||||
|
|
Six Months Ended |
|||||||||||
| 2015 | 2014 | |||||||||||
| Net loss | $ | (167,683 | ) | $ | (134,787 | ) | ||||||
| Interest expense | 12,114 | 8,692 | ||||||||||
| Provision for income taxes | 9,572 | 3,959 | ||||||||||
| Depreciation expense | 36,185 | 35,321 | ||||||||||
| Amortization expense (1) | 104,142 | 122,516 | ||||||||||
| Non-cash charges—stock-based compensation expense | 6,812 | 5,944 | ||||||||||
| Non-cash charges—loss on derivative instruments | 1,851 | 308 | ||||||||||
| Asset impairment charges | — | 1,279 | ||||||||||
| Purchase accounting adjustments (2) | 1,074 | 1,591 | ||||||||||
| Fees, expenses or charges for equity offerings, debt or acquisitions | 18,892 | 3,690 | ||||||||||
| Restructuring | 661 | 2,412 | ||||||||||
| Severance separation costs and facility closures | 2,042 | 5,119 | ||||||||||
| Debt extinguishment loss | 2,173 | — | ||||||||||
| Adjusted EBITDA | $ | 27,835 | $ | 56,044 | ||||||||
| Change in deferred revenue | 41,398 | 104,326 | ||||||||||
| Adjusted Cash EBITDA | $ | 69,233 | $ | 160,370 | ||||||||
(1) Includes pre-publication amortization of
(2) Represents certain non-cash accounting adjustments, most significantly relating to deferred revenue and inventory costs.
| Non-GAAP Reconciliations (Unaudited) | |||||||||||
|
Education |
|||||||||||
|
(in thousands of dollars) |
|||||||||||
| Three Months
Ended |
|||||||||||
| 2015 | 2014 | ||||||||||
| Net income | $ | 23,085 | $ | 43,840 | |||||||
| Depreciation expense | 14,494 | 16,874 | |||||||||
| Amortization expense | 47,996 | 56,307 | |||||||||
| Non-cash charges-asset impairment charges | — | 1,279 | |||||||||
| Purchase accounting adjustments | 877 | 1,016 | |||||||||
| Adjusted EBITDA | $ | 86,452 | $ | 119,316 | |||||||
| Six Months
Ended |
|||||||||||
| 2015 | 2014 | ||||||||||
| Net loss | $ | (79,168 | ) | $ | (71,050 | ) | |||||
| Depreciation expense | 29,980 | 32,034 | |||||||||
| Amortization expense | 97,219 | 115,235 | |||||||||
| Non-cash charges – asset impairment charges | — | 1,279 | |||||||||
| Purchase accounting adjustments | 1,074 | 1,591 | |||||||||
| Adjusted EBITDA | $ | 49,105 | $ | 79,089 | |||||||
| Non-GAAP Reconciliations (Unaudited) | |||||||||||
|
(in thousands of dollars) |
|||||||||||
| Three Months
Ended |
|||||||||||
| 2015 | 2014 | ||||||||||
| Net loss | $ | (3,141 | ) | $ | (1,751 | ) | |||||
| Depreciation expense | 231 | 152 | |||||||||
| Amortization expense | 3,322 | 3,539 | |||||||||
| Adjusted EBITDA | $ | 412 | $ | 1,940 | |||||||
| Six Months
Ended |
|||||||||||
| 2015 | 2014 | ||||||||||
| Net loss | $ | (8,082 | ) | $ | (6,935 | ) | |||||
| Depreciation expense | 431 | 276 | |||||||||
| Amortization expense | 6,923 | 7,281 | |||||||||
| Adjusted EBITDA | $ | (728 | ) | $ | 622 | ||||||
| Non-GAAP Reconciliations (Unaudited) | |||||||||||
|
|
|||||||||||
| Corporate and Other | |||||||||||
|
(in thousands of dollars) |
|||||||||||
| Three Months Ended
|
|||||||||||
| 2015 | 2014 | ||||||||||
| Net loss | $ | (27,687 | ) | $ | (30,541 | ) | |||||
| Interest expense | 6,160 | 4,395 | |||||||||
| Provision (benefit) for income taxes | (11,404 | ) | 2,176 | ||||||||
| Depreciation expense | 3,051 | 1,056 | |||||||||
| Non-cash charges—gain (loss) on derivative instruments | (369 | ) | 205 | ||||||||
| Non-cash charges—stock-based compensation expense | 3,717 | 3,547 | |||||||||
| Fees, expenses or charges for equity offerings, debt or acquisitions | 15,515 | 1,576 | |||||||||
| Restructuring | 651 | 2,207 | |||||||||
| Severance separation costs and facility closures | 985 | 3,362 | |||||||||
| Loss on extinguishment of debt | 2,173 | — | |||||||||
| Adjusted EBITDA | $ | (7,208 | ) | $ | (12,017 | ) | |||||
| Six Months Ended
|
|||||||||||
| 2015 | 2014 | ||||||||||
| Net loss | $ | (80,433 | ) | $ | (56,802 | ) | |||||
| Interest expense | 12,114 | 8,692 | |||||||||
| Provision for income taxes | 9,572 | 3,959 | |||||||||
| Depreciation expense | 5,774 | 3,011 | |||||||||
| Non-cash charges—gain on derivative instruments | 1,851 | 308 | |||||||||
| Non-cash charges—stock-based compensation expense | 6,812 | 5,944 | |||||||||
| Fees, expenses or charges for equity offerings, debt or acquisitions | 18,892 | 3,690 | |||||||||
| Restructuring Restructuring | 661 | 2,412 | |||||||||
| Severance separation costs and facility closures | 2,042 | 5,119 | |||||||||
| Loss on extinguishment of debt | 2,173 | — | |||||||||
| Adjusted EBITDA | $ | (20,542 | ) | $ | (23,667 | ) | |||||
| Non-GAAP Reconciliations (Unaudited) | |||||||||
| Billings | |||||||||
|
(in thousands of dollars) |
|||||||||
| Three Months
Ended |
|||||||||
| 2015 | 2014 | ||||||||
| Net Sales | $ | 379,883 | $ | 401,890 | |||||
| Change in deferred revenue | 56,140 | 113,769 | |||||||
| Billings | $ | 436,023 | $ | 515,659 | |||||
| Six Months
Ended |
|||||||||
| 2015 | 2014 | ||||||||
| Net Sales | $ | 542,552 | $ | 555,823 | |||||
| Change in deferred revenue | 41,397 | 104,326 | |||||||
| Billings | $ | 583,949 | $ | 660,149 | |||||
| Non-GAAP Reconciliations (Unaudited) | |||||||
| Six Months Ended |
|||||||
| (in thousands of dollars) | 2015 | 2014 | |||||
| Cash flows from operating activities | |||||||
| Net cash used in operating activities | |||||||
| Cash flows from investing activities | |||||||
| Additions to pre-publication costs | (45,484 ) | (61,352 ) | |||||
| Additions to property, plant, and e quipment |
(31,356) | (31,144 ) | |||||
| Free Cash Flow | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20150806005646/en/
Investor Relations
Vice President, Investor Relations
rima.hyder@hmhco.com
or
Media Relations
Senior Vice President, Corporate Affairs
bianca.olson@hmhco.com
