Houghton Mifflin Harcourt Completes $337 Million Debt Paydown with Proceeds from HMH Books & Media Sale

Rhea-AI Summary

On June 15, 2021, Houghton Mifflin Harcourt (HMHC) announced it reduced its outstanding debt by approximately $337 million following the divestiture of its HMH Books & Media business. The company's senior secured notes due in 2025 are now approximately $303 million, while its term loan facility due in 2024 has been reduced to about $22 million. CFO Joe Abbott remarked that this significant debt paydown enhances HMH's capital structure, offering more strategic flexibility for growth and acquisitions.

Positive

• Reduced outstanding debt by $337 million, improving financial health.
• Outstanding principal of Senior Secured Notes decreased to approximately $303 million.
• Term Loan Facility reduced to approximately $22 million, enhancing liquidity.

Negative

• None.

BOSTON, June 15, 2021 /PRNewswire/ -- Learning technology company Houghton Mifflin Harcourt ("HMH" or the "Company") (Nasdaq: HMHC) announced today that it has paid down approximately $337 million in principal of its outstanding debt with the net proceeds of its recent divestiture of HMH Books & Media, its consumer publishing business.

Following the completion of the required Asset Sale Offer and Collateral Asset Sale offer on June 8, HMH has reduced the outstanding principal amount of its Senior Secured Notes due 2025 (the "Notes") to approximately $303 million.  Additionally, via a combination of mandatory and voluntary prepayments, the Company has reduced the outstanding principal amount of its Senior Secured Term Loan Facility due 2024 (the "Term Loan Facility") to approximately $22 million.  All prepayments were completed at a price of 100% of the principal amount. 

"HMH has made excellent progress in transforming its capital structure to align it with our Digital First, Connected strategy. The added strategic flexibility derived from our debt paydown supports our ability to supplement strong organic growth with small, tuck-in acquisitions to fuel inorganic growth," said Joe Abbott, HMH's Chief Financial Officer. "With a strong balance sheet, disciplined capital allocation approach, and continued focus on investing for efficiency, we are confident that HMH is well-positioned for growth and substantial free cash flow generation in 2021 and beyond."

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.

CONTACT

Investor Relations
investor.relations@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. Forward-looking statements include all statements that are not statements of historical facts, including statements regarding our Digital First, Connected growth strategy and being well-positioned for growth in 2021 and meaningful free cash flow generation. 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 press release.

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. 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; any disruption resulting from the completed sale of our HMH Books & Media business that adversely affects our businesses and business relationships, including with employees and suppliers; 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; our ability to retain and hire key personnel; 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 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. These forward-looking statements speak only as of the date of this press release, and we do not assume any obligation to update or revise any forward-looking statement made herein.

View original content to download multimedia:http://www.prnewswire.com/news-releases/houghton-mifflin-harcourt-completes-337-million-debt-paydown-with-proceeds-from-hmh-books--media-sale-301313087.html

SOURCE Houghton Mifflin Harcourt

FAQ

What recent financial move did Houghton Mifflin Harcourt (HMHC) make?

HMHC paid down approximately $337 million in outstanding debt from the sale of its HMH Books & Media business.

How much debt does Houghton Mifflin Harcourt have remaining after the recent divestiture?

After the divestiture, HMHC has approximately $303 million in Senior Secured Notes and $22 million in a Term Loan Facility.

What impact does Houghton Mifflin Harcourt's debt reduction have on its capital structure?

The debt reduction strengthens HMHC's capital structure, enhancing its ability to pursue growth and acquisitions.