BOSTON, March 27, 2020 /PRNewswire/ -- Houghton
Mifflin Harcourt (HMH) (NASDAQ:
HMHC) today announced steps to address COVID-19 and provided a
business update related to the pandemic.
HMH is enacting a number of measures intended to help protect
its shareholders, employees, and customers amid the COVID-19
outbreak. The company has already taken actions to help mitigate
some of the adverse impact of COVID-19 to its profitability and
cash flow in 2020, while working proactively with schools to
support them through this period of disruption with virtual
learning resources as highlighted in a separate release yesterday
here.
Actions taken to date include: (1) director, executive and
senior leadership salary reductions, and for the majority of
employees, a four day work week with associated labor cost
reductions; (2) a freeze on spending not directly tied to near-term
billings; (3) reduced inventory purchasing; (4) temporary closures
of warehousing and distribution centers, (5) deferral of long-term
capital projects not directly contributing to billings in 2020 and
(6) borrowing $100 million of its
asset-backed credit facility as a pre-emptive measure to mitigate
against capital market disruptions.
Given the COVID-19-related school closings mandated by states
and districts nationwide, the company's Education business will be
impacted, and significant uncertainty is likely to persist in the
marketplace. As a result, HMH is withdrawing its 2020 full-year
financial guidance and 3-year outlook, issued in conjunction with
its Q4 2019 earnings on February 27,
2020.
"While we continue to be confident in the strategic direction we
embarked on nearly two years ago, given the many unknowns about the
virus' impact on our customers, we believe it is appropriate at
this time to withdraw our prior guidance," said HMH CEO
Jack Lynch. "We are taking
precautionary steps to mitigate the commercial risk posed by school
closings and disrupted purchasing activity while working hard to
protect the safety and well-being of our staff."
HMH CFO Joe Abbott added, "We
began 2020 with approximately $300
million in cash along with our $250
million asset-backed revolving credit facility, which
provides us extra liquidity to help mitigate near-term disruption
to our business. The immediate expenditure reductions we have
implemented will also strengthen our financial condition, while
positioning us to resume operations after market conditions
stabilize."
Jack Lynch concluded, "Continuity
of K-12 education is vital to the long-term recovery of our nation
and the global economy. HMH is committed to supporting the
immediate crisis response, stabilization and recovery efforts of
our customers with connected learning solutions that are effective,
engaging and equitable. Our leadership team remains focused on this
fast-evolving situation, and rest assured we are taking action in
real-time to protect our people, deliver for our customers, and
maintain our momentum."
About Houghton Mifflin Harcourt
Houghton Mifflin Harcourt
(NASDAQ: HMHC) is a learning company committed to delivering
connected solutions that engage learners, empower educators and
improve student outcomes. As a leading provider of K–12 core
curriculum, supplemental and intervention solutions and
professional learning services, HMH partners with educators and
school districts to uncover solutions that unlock students'
potential and extend teachers' capabilities. HMH serves more than
50 million students and 3 million educators in 150 countries, while
its award-winning children's books, novels, non-fiction, and
reference titles are enjoyed by readers throughout the world. For
more information, visit www.hmhco.com.
Follow HMH
on Twitter, Facebook and YouTube.
CONTACT
Investor Relations
Brian S. Shipman, CFA
SVP, Investor Relations
212-592-1177
Brian.Shipman@hmhco.com
Media Relations
Bianca Olson
SVP, Corporate Affairs
617-351-3841
Bianca.Olson@hmhco.com
Forward-Looking Statements
This news release may contain certain statements that are not
historical facts, including information regarding our intentions,
beliefs or current expectations concerning, among other things, our
results of operations, financial condition, liquidity, prospects,
growth, strategies, the industry in which we operate and potential
business decisions. Those statements constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that could cause our actual results to differ materially
from the results expressed in or implied by our forward-looking
statements, including, but not limited to, changes in state and
local education funding and/or related programs, legislation and
procurement processes, including as a result of COVID-19; the
unknown duration and long-term impact of school closings in
response to COVID-19; adverse or worsening economic trends or
conditions; changes in consumer demand for, and acceptance of, our
products; industry cycles and trends; conditions and/or changes in
the publishing industry; and other factors discussed in our news
releases, public statements and/or filings with the U.S. Securities
and Exchange Commission, including our most recent Annual and
Quarterly Reports on Form 10-K and Form 10-Q. 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.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/houghton-mifflin-harcourt-takes-strong-steps-to-address-covid-19-and-provides-business-update-301030680.html
SOURCE Houghton Mifflin Harcourt