Houghton Mifflin Harcourt Announces Fourth Quarter and Full Year 2020 Results, Achieved 2020 Billings at the Top End of its Revised Guidance Range and Positive Free Cash Flow
Houghton Mifflin Harcourt (HMHC) reported significant financial results for Q4 and the full year 2020, revealing a 26% decline in net sales to $1.031 billion amid the COVID-19 pandemic. Billings dropped 32% to $1.089 billion, with the Education segment suffering a $515 million decrease. Despite challenges, SaaS billings grew 142% and digital platform users increased by 306%. HMH achieved positive free cash flow with an outlook for 2021 billings between $1.10 billion and $1.15 billion, alongside an expected unlevered free cash flow margin of 9% to 11%. Adjusted EBITDA for 2020 stood at $132 million.
- SaaS billings growth of 142%.
- Digital platform user growth of 306%.
- Achieved positive free cash flow in Q4 2020.
- Introduced new operational metrics for tracking recurring revenue.
- Net sales decreased by 26% from 2019.
- Billings dropped 32% year-over-year.
- Education segment billings decreased by $515 million.
- Net loss increased to $480 million in 2020.
BOSTON, Feb. 25, 2021 /PRNewswire/ -- Learning technology company Houghton Mifflin Harcourt ("HMH" or the "Company") (Nasdaq: HMHC) today announced financial results for the fourth quarter and full year ended December 31, 2020 and introduced new operational metrics HMH will use to track growth in recurring revenue and progress on connected solutions selling.
"As we head into a new year focused on executing against our Digital First, Connected strategy, we are supporting teaching and learning nationwide in every environment. HMH has unsurpassed reach to the nation's schools and we continue to see strong growth in important key performance indicators, including accelerating digital adoption of our platforms and tools, positioning HMH amongst the largest and fastest growing companies in the edtech market," said Jack Lynch, President and Chief Executive Officer of Houghton Mifflin Harcourt.
Q4 2020 Headlines:
HMH achieved 2020 billings at the top end of its revised guidance range and positive free cash flow, outperforming its revised guidance range for 2020. Additionally:
- Continued momentum with SaaS billings growth of
142% and digital platform user growth of306% for full year 2020 - Annualized Recurring Revenue (ARR) 1 of
$58 million in 2020; HMH will report its Net Retention Rate (NRR) beginning in the first quarter of 2021 - Connected Sales1 made up
50% of Education segment billings in 2020
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||
(in millions of dollars) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||
Net sales | $ | 204 | $ | 241 | (15.7) | % | $ | 1,031 | $ | 1,391 | (25.8) | % | ||||||||||||
Change in deferred revenue | (48) | (41) | (18.6) | % | 58 | 201 | (71.0) | % | ||||||||||||||||
Billings 1 | 155 | 201 | (22.6) | % | 1,089 | 1,591 | (31.5) | % | ||||||||||||||||
Impairment charge for goodwill | 17 | — | NM | 279 | — | NM | ||||||||||||||||||
Net loss | (83) | (125) | 33.5 | % | (480) | (214) | NM | |||||||||||||||||
Adjusted EBITDA 2 | 16 | (4) | NM | 132 | 166 | (20.5) | % | |||||||||||||||||
Pre-publication or content development costs | (10) | (21) | 52.4 | % | (61) | (103) | 40.2 | % | ||||||||||||||||
Net cash provided by operating activities | 40 | 128 | (68.6) | % | 115 | 255 | (54.8) | % | ||||||||||||||||
Free cash flow 2 | 14 | 96 | (85.0) | % | 3 | 115 | (97.4) | % | ||||||||||||||||
1 An operating measure. Please refer to "Operating Metrics" for an explanation. | ||||||||||||||||||||||||
2 Non-GAAP measure, please refer to Use of Non-GAAP Financial Measures for an explanation and reconciliation. | ||||||||||||||||||||||||
NM = not meaningful | ||||||||||||||||||||||||
Joe Abbott, HMH's Chief Financial Officer said, "During the quarter, we also continued to manage our expenses with discipline, and as a result, delivered higher adjusted EBITDA margins for the fourth quarter and for the full year. Additionally, we generated positive cash flow during the fourth quarter, resulting in positive free cash flow for the full year."
Outlook:
HMH expects 2021 billings in a range of
Full year 2020 Financial Results:
Net Sales: HMH reported net sales of
Billings1: Billings for 2020 decreased
Cost of Sales: Overall cost of sales decreased by
Selling and Administrative Costs: Selling and administrative costs decreased by
Restructuring/severance: Our restructuring/severance and other charges for the full year ended December 31, 2020 increased by
Operating Loss: Operating loss for 2020 was
Net Loss: Net loss of
Adjusted EBITDA: Adjusted EBITDA for 2020 was
Cash Flows and Liquidity: Net cash provided by operating activities for 2020 was
As of February 25, 2021, there were no amounts outstanding under our revolving credit facility. We expect our net cash from operations combined with our cash and cash equivalents and borrowing availability under our revolving credit facility to provide sufficient liquidity to fund our current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months.
Conference Call:
At 9:30 a.m. ET on Thursday, February 25, 2021, HMH will host a conference call to discuss the results and management's outlook with its investors. The call will be webcast live at ir.hmhco.com. The following information is provided for investors who would like to participate:
Toll Free: (844) 835-6565
International: (484) 653-6719
Passcode: 1675959
Moderator: Brian Shipman, Senior Vice President, Investor Relations
Webcast Link: https://edge.media-server.com/mmc/p/oyi49sqv
An archived webcast with the accompanying slides will be available at ir.hmhco.com for one year for those unable to participate in the live event. An audio replay of this conference call will also be available until March 7, 2021 via the following telephone numbers: (855) 859-2056 in the United States and (404) 537-3406 internationally using passcode 1675959.
Use of Non-GAAP Financial Measures:
To supplement our financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP) and to provide additional insights into our performance (for a completed period and/or on a forward-looking basis), we have presented adjusted EBITDA and free cash flow. These measures are not prepared in accordance with GAAP. 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 and/or our expected results of operations because 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 useful information to our investors and management as an indicator of our performance that is not affected by debt restructurings, fluctuations in interest rates or effective tax rates, gain or losses on investments, non-cash charges and impairment charges, or levels of depreciation or amortization along with costs such as severance, separation and facility closure costs, acquisition/disposition-related activity costs, restructuring costs and integration costs. Accordingly, management believes that this measure is useful for comparing our performance from period to period and makes decisions based on it. In addition, targets in adjusted EBITDA (further adjusted to include the change in deferred revenue) are used as performance measures to determine certain incentive compensation of management. Management also believes that the presentation of free cash flow provides useful information to our investors because management regularly reviews these metrics as an important indicator of how much cash is generated by general business operations, excluding capital expenditures, and makes decisions based on it.
Other companies may define these non-GAAP measures differently and, as a result, our use of these non-GAAP measures may not be directly comparable to adjusted EBITDA and free cash flow used by other companies. Although we use these non-GAAP measures as financial measures to assess our business, the use of non-GAAP measures is limited as they include and/or do not include certain items not included and/or included in the most directly comparable GAAP measure. Adjusted 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 from operating activities prepared in accordance with GAAP. Adjusted EBITDA is not intended to be a measure of liquidity nor is free cash flow intended to be a measure of residual cash flow available for discretionary use. You are cautioned not to place undue reliance on these non-GAAP measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures (to the extent available without unreasonable efforts in the case of forward-looking measures) and related disclosure is provided in the appendix to this news release.
Operating Metrics:
Annualized Recurring Revenue (ARR) for a given period is the annualized revenues derived from termed subscription contracts existing at the end of the period. ARR excludes contracts that are one-time in nature. ARR is currently one of the key performance metrics being used by management to assess the health and trajectory of our business. ARR does not have a standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of U.S. GAAP revenue, deferred revenue and unbilled revenue and is not intended to be combined with or to replace those items. ARR does not represent revenue for any particular period or remaining revenue that will be recognized in future periods. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
Connected Sales are billings from the sale of core, intervention, supplemental, assessment and service offerings hosted on or transitioning to be hosted on our Ed: Your Friend in Learning® teaching and learning platform.
Billings is an operating measure which we derive from net sales taking into account the change in deferred revenue. Education and HMH Books & Media segment billings represent an operating measure which we derive from net sales taking into account the change in deferred revenue. Billings for Core Solutions and Extensions is an operating measure based on invoiced sales adjusted for returns, other publishing income and change in deferred revenue.
About Houghton Mifflin Harcourt
Houghton Mifflin Harcourt (Nasdaq: HMHC) is a learning technology 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
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," "should," "forecast," "intend," "plan," "potential," "project," "target" or, in each case, their negative, or other variations or comparable terminology. Forward-looking statements include all statements that are not statements of historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things: 2021 outlook for billings and unlevered free cash flow margin; the expected impact of our Digital First, Connected strategy and the actions described in this press release; the expected impact of the COVID-19 pandemic; our future results of operations, financial condition, liquidity, prospects, growth and strategies; the timing, structure and expected impact of our operational efficiency and cost-reduction initiatives and the estimated savings and amounts expected to be incurred in connection therewith; 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. 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 actual results may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if actual 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 actual results to vary from expectations include, but are not limited to: the duration and severity of the COVID-19 pandemic and its impact on the federal, state and local economies and on K-12 schools; the rate and state of technological change; state requirements related to digital instructional materials; our ability to execute on our Digital First, Connected growth strategy; increases in our operating costs; management and personnel changes; timing, higher costs and unintended consequences of our operational efficiency and cost-reduction initiatives, including the actions described in this press release; our ability to sell the HMH Books & Media business and the terms of any such potential sale; and other factors discussed in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. In light of these risks, uncertainties and assumptions, the forward-looking events described herein may not occur.
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.
Houghton Mifflin Harcourt Company | ||||||||
Consolidated Balance Sheets | ||||||||
December 31, | ||||||||
(in thousands of dollars, except share information) | 2020 | 2019 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 281,200 | $ | 296,353 | ||||
Accounts receivable, net | 152,832 | 184,425 | ||||||
Inventories | 166,963 | 213,059 | ||||||
Prepaid expenses and other assets | 19,931 | 19,257 | ||||||
Total current assets | 620,926 | 713,094 | ||||||
Property, plant, and equipment, net | 93,202 | 100,388 | ||||||
Pre-publication costs, net | 203,149 | 268,197 | ||||||
Royalty advances to authors, net | 42,485 | 44,743 | ||||||
Goodwill | 437,977 | 716,977 | ||||||
Other intangible assets, net | 428,584 | 474,225 | ||||||
Operating lease assets | 126,850 | 132,247 | ||||||
Deferred income taxes | 2,415 | 2,520 | ||||||
Deferred commissions | 30,659 | 29,291 | ||||||
Other assets | 34,879 | 31,490 | ||||||
Total assets | $ | 2,021,126 | $ | 2,513,172 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | 19,000 | $ | 19,000 | ||||
Accounts payable | 49,104 | 52,128 | ||||||
Royalties payable | 50,771 | 72,985 | ||||||
Salaries, wages, and commissions payable | 21,944 | 54,938 | ||||||
Deferred revenue | 342,605 | 305,285 | ||||||
Interest payable | 11,017 | 3,826 | ||||||
Severance and other charges | 19,590 | 12,407 | ||||||
Accrued pension benefits | 1,593 | — | ||||||
Accrued postretirement benefits | 1,555 | 1,571 | ||||||
Operating lease liabilities | 9,669 | 8,685 | ||||||
Other liabilities | 24,973 | 24,325 | ||||||
Total current liabilities | 551,821 | 555,150 | ||||||
Long-term debt, net of discount and issuance costs | 624,692 | 638,187 | ||||||
Operating lease liabilities | 132,014 | 134,994 | ||||||
Long-term deferred revenue | 562,679 | 542,821 | ||||||
Accrued pension benefits | 24,061 | 23,648 | ||||||
Accrued postretirement benefits | 16,566 | 15,113 | ||||||
Deferred income taxes | 16,411 | 30,871 | ||||||
Other liabilities | 2,419 | 6,028 | ||||||
Total liabilities | 1,930,663 | 1,946,812 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, | — | — | ||||||
Common stock, | 1,505 | 1,489 | ||||||
Treasury stock, 24,577,034 shares as of December 31, 2020 and 2019, respectively, at cost | (518,030) | (518,030) | ||||||
Capital in excess of par value | 4,918,542 | 4,906,165 | ||||||
Accumulated deficit | (4,255,830) | (3,775,992) | ||||||
Accumulated other comprehensive loss | (55,724) | (47,272) | ||||||
Total stockholders' equity | 90,463 | 566,360 | ||||||
Total liabilities and stockholders' equity | $ | 2,021,126 | $ | 2,513,172 | ||||
Houghton Mifflin Harcourt Company | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(Unaudited) Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
(in thousands of dollars, except share and per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Net sales | $ | 203,561 | $ | 241,475 | $ | 1,031,292 | $ | 1,390,674 | ||||||||
Costs and expenses | ||||||||||||||||
Cost of sales, excluding publishing rights and pre-publication amortization | 100,677 | 134,695 | 497,816 | 668,108 | ||||||||||||
Publishing rights amortization | 4,761 | 6,340 | 20,056 | 26,557 | ||||||||||||
Pre-publication amortization | 32,137 | 41,375 | 126,180 | 149,515 | ||||||||||||
Cost of sales | 137,575 | 182,410 | 644,052 | 844,180 | ||||||||||||
Selling and administrative | 111,095 | 146,400 | 478,101 | 662,606 | ||||||||||||
Other intangible asset amortization | 6,766 | 5,791 | 25,585 | 25,310 | ||||||||||||
Impairment charge for goodwill | 17,000 | — | 279,000 | — | ||||||||||||
Restructuring/severance and other charges | 98 | 15,821 | 33,643 | 21,742 | ||||||||||||
Operating loss | (68,973) | (108,947) | (429,089) | (163,164) | ||||||||||||
Other income (expense) | ||||||||||||||||
Retirement benefits non-service (expense) income | (1,039) | 42 | (856) | 167 | ||||||||||||
Interest expense | (15,526) | (13,636) | (65,959) | (48,778) | ||||||||||||
Interest income | 26 | 1,459 | 899 | 3,157 | ||||||||||||
Change in fair value of derivative instruments | 500 | 272 | 672 | (899) | ||||||||||||
Gain on investments | 353 | — | 2,091 | — | ||||||||||||
Income from transition services agreement | — | — | — | 4,248 | ||||||||||||
Loss on extinguishment of debt | — | (4,363) | — | (4,363) | ||||||||||||
Loss before taxes | (84,659) | (125,173) | (492,242) | (209,632) | ||||||||||||
Income tax (benefit) expense | (1,514) | (55) | (12,404) | 4,201 | ||||||||||||
Net loss | $ | (83,145) | $ | (125,118) | $ | (479,838) | $ | (213,833) | ||||||||
Net loss per share attributable to common stockholders | ||||||||||||||||
Basic and diluted | $ | (0.66) | $ | (1.01) | $ | (3.82) | $ | (1.72) | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic and diluted | 125,867,093 | 124,342,086 | 125,455,487 | 124,152,984 | ||||||||||||
Houghton Mifflin Harcourt Company | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Years Ended December 31, | ||||||||
(in thousands of dollars) | 2020 | 2019 | ||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (479,838) | $ | (213,833) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||
Depreciation and amortization expense | 236,489 | 272,692 | ||||||
Operating lease assets, amortization and impairments | 5,397 | 15,949 | ||||||
Amortization of debt discount and deferred financing costs | 6,004 | 4,286 | ||||||
Gain on investments | (2,091) | — | ||||||
Deferred income taxes | (14,355) | 4,535 | ||||||
Stock-based compensation expense | 11,573 | 13,968 | ||||||
Impairment charge for goodwill | 279,000 | — | ||||||
Loss on extinguishment of debt | — | 4,363 | ||||||
Change in fair value of derivative instruments | (672) | 899 | ||||||
Changes in operating assets and liabilities, net of acquisitions | ||||||||
Accounts receivable | 31,593 | 19,182 | ||||||
Inventories | 46,096 | (28,850) | ||||||
Other assets | (11,425) | (20,155) | ||||||
Accounts payable and accrued expenses | (34,941) | (12,136) | ||||||
Royalties payable and author advances, net | (19,956) | 9,342 | ||||||
Deferred revenue | 57,178 | 200,473 | ||||||
Interest payable | 7,191 | 3,690 | ||||||
Severance and other charges | 7,183 | 10,631 | ||||||
Accrued pension and postretirement benefits | 3,443 | (4,800) | ||||||
Operating lease liabilities | (1,996) | (17,281) | ||||||
Other liabilities | (10,625) | (7,980) | ||||||
Net cash provided by operating activities | 115,248 | 254,975 | ||||||
Cash flows from investing activities | ||||||||
Proceeds from sales and maturities of short-term investments | — | 50,000 | ||||||
Additions to pre-publication costs | (61,331) | (102,562) | ||||||
Additions to property, plant, and equipment | (50,940) | (37,561) | ||||||
Acquisition of business, net of cash acquired | — | (5,447) | ||||||
Investment in preferred stock | — | (750) | ||||||
Net cash used in investing activities | (112,271) | (96,320) | ||||||
Cash flows from financing activities | ||||||||
Proceeds from term loan, net of discount | — | 364,800 | ||||||
Proceeds from senior secured notes, net of discount | — | 299,880 | ||||||
Borrowings under revolving credit facility | 150,000 | 60,000 | ||||||
Payments of revolving credit facility | (150,000) | (60,000) | ||||||
Payments of long-term debt | (19,000) | (772,000) | ||||||
Payments of deferred financing fees | — | (8,493) | ||||||
Tax withholding payments related to net share settlements of restricted stock units | (48) | (2,018) | ||||||
Issuance of common stock under employee stock purchase plan | 918 | 1,028 | ||||||
Net collections under transition service agreement | — | 1,136 | ||||||
Net cash used in financing activities | (18,130) | (115,667) | ||||||
Net increase (decrease) in cash and cash equivalents | (15,153) | 42,988 | ||||||
Cash and cash equivalents at the beginning of the period | 296,353 | 253,365 | ||||||
Cash and cash equivalents at the end of the period | $ | 281,200 | $ | 296,353 | ||||
Houghton Mifflin Harcourt Company | |||||||||||||||||
Non-GAAP Reconciliations (Unaudited) | |||||||||||||||||
Adjusted EBITDA | |||||||||||||||||
Consolidated | |||||||||||||||||
(in thousands of dollars) | |||||||||||||||||
Three Months Ended | Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net loss | $ | (83,145) | $ | (125,118) | $ | (479,838) | $ | (213,833) | |||||||||
Interest expense | 15,526 | 13,636 | 65,959 | 48,778 | |||||||||||||
Interest income | (26) | (1,459) | (899) | (3,157) | |||||||||||||
Provision (benefit) for income taxes | (1,514) | (55) | (12,404) | 4,201 | |||||||||||||
Depreciation expense | 12,699 | 14,530 | 50,715 | 61,475 | |||||||||||||
Amortization expense – film asset | 9,099 | 3,063 | 13,953 | 9,835 | |||||||||||||
Amortization expense | 43,664 | 53,506 | 171,821 | 201,382 | |||||||||||||
Non-cash charges – goodwill impairment | 17,000 | — | 279,000 | — | |||||||||||||
Non-cash charges – stock compensation | 2,822 | 2,874 | 11,573 | 13,968 | |||||||||||||
Non-cash charges – loss on derivative instruments | (500) | (272) | (672) | 899 | |||||||||||||
Inventory obsolescence related to strategic transformation | — | 9,758 | — | 9,758 | |||||||||||||
Fees, expenses or charges for equity offerings, debt or acquisitions/dispositions | 714 | 5,596 | 1,080 | 6,327 | |||||||||||||
Restructuring/severance and other charges | 98 | 15,821 | 33,643 | 21,742 | |||||||||||||
Gain on investments | (353) | — | (2,091) | — | |||||||||||||
Loss on extinguishment of debt | — | 4,363 | — | 4,363 | |||||||||||||
Adjusted EBITDA | $ | 16,084 | $ | (3,757) | $ | 131,840 | $ | 165,738 | |||||||||
Free Cash Flow | |||||||||||||||||
Consolidated | |||||||||||||||||
(in thousands of dollars) | |||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net cash provided by operating activities | $ | 40,082 | $ | 127,603 | $ | 115,248 | $ | 254,975 | |||||||||
Cash flows from investing activities | |||||||||||||||||
Additions to pre-publication costs | (10,010) | (21,030) | (61,331) | (102,562) | |||||||||||||
Additions to property, plant, and equipment | (15,665) | (10,211) | (50,940) | (37,561) | |||||||||||||
Free Cash Flow | $ | 14,407 | $ | 96,362 | $ | 2,977 | $ | 114,852 | |||||||||
We are unable to reconcile forward looking cash flow (both before and after interest payments) and related margin without unreasonable efforts. Unlevered free cash flow margin is the ratio of free cash flow before interest payments to billings. | |||||||||||||||||
Houghton Mifflin Harcourt Company | |||||||||||||||||
Calculation of Billings (Unaudited) | |||||||||||||||||
Billings (in thousands of dollars) | |||||||||||||||||
Consolidated | |||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net sales | $ | 203,561 | $ | 241,475 | $ | 1,031,292 | $ | 1,390,674 | |||||||||
Change in deferred revenue | (48,169) | (40,618) | 58,178 | 200,662 | |||||||||||||
Billings | $ | 155,392 | $ | 200,857 | $ | 1,089,470 | $ | 1,591,336 | |||||||||
Education | |||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net sales | $ | 140,979 | $ | 189,387 | $ | 839,553 | $ | 1,210,646 | |||||||||
Change in deferred revenue | (48,294) | (40,514) | 58,281 | 201,621 | |||||||||||||
Education Billings | $ | 92,685 | $ | 148,873 | $ | 897,834 | $ | 1,412,267 | |||||||||
HMH Books & Media | |||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net sales | $ | 62,582 | $ | 52,088 | $ | 191,739 | $ | 180,028 | |||||||||
Change in deferred revenue | 125 | (104) | (103) | (959) | |||||||||||||
HMH Books & Media Billings | $ | 62,707 | $ | 51,984 | $ | 191,636 | $ | 179,069 | |||||||||
Billings is an operating measure utilized by the Company derived as shown above. | |||||||||||||||||
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SOURCE Houghton Mifflin Harcourt
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