McGraw-Hill reported its 2018 Q4 and full-year earnings and annual report today, with overall 2018 revenue of $1.6 billion. This is the fifth straight year of sales decline for the company, down from $1.83 billion in 2014. For the quarter, performance was “generally in-line with expectations,” with total billings down to $302 million from $340 million (11 percent decline) and adjusted EBITDA to $(25) million from $(5) million. The year as a whole was weighed down by “substantial headwinds” in the K-12 adoption market, which significantly impacted EBITDA — as well as by investment in new Higher Ed “affordability initiatives” […]
Education
Corporate, Etc.: Pearson Sells K-12 Textbook Group and More
Pearson announced the $250 million sale of its K-12 courseware division to private equity group Nexus Capital Management, a sale which the company had been pursuing for at least a year as part of its simplification strategy. Chief executive John Fallon says it “frees us up to focus on the digital first strategy that will drive our future growth.” Nexus will pay just $25 million now, with the remainder due in an unconditional $225 million vendor note “expected to be repaid in three to seven years.” Thereafter, Pearson will continue to receive 20 percent of all future cash flows to […]
Pearson’s January Trading Report: “There Is Still Much to Do”
Pearson issued their traditional January “trading report,” with highlight data in advance of a full annual report on February 22. It brings familiar news regarding 2018 performance: The company remains adept at cutting costs, but not yet at increasing revenue, as the declining US higher ed market continues to weigh on their prospects. US higher ed courseware is expected to be down 5 percent year on year, a greater decline than expected by analysts. Pearson expects that trend will continue through 2019 as the long digital transformation continues: “Expect US HECW revenue to be zero to down 5% as underlying […]
Barnes & Noble Education Shares Fall Hard On Poor Quarter
Barnes & Noble Education underperformed again, with second quarter sales falling 8.1 percent to $815 million, and investors headed straight for the door. Ninety minutes after the market opening, shares were down approximately 28 percent, to about $4.60 a share, which would be a new all-time low for the stock if it holds. (At that price, the market cap is around $209 million.) Sales at the College stores declined $54.4 million, with comparable store sales down 5.6 percent, “primarily due to lower textbook sales.” Sales from net new stores (new stores less closed stores) declined by $15.2 million, compared to an increase […]
Wiley Buys Learning House for $200 Million
Wiley announced Tuesday it has signed a definitive agreement to acquire education services provider Learning House from Weld North Holdings for $200 million in cash. The transaction is expected to close on or around November 1. The Louisville, KY-based Learning House provides online program management (OPM) services for colleges and universities, along with professional development services for teachers; and learning solutions for corporate clients. 2018 sales for the unit are expected to be roughly $70 million, up 17 percent from last year. Wiley ceo Brian Napack says in the announcement, “Learning House is a dynamic growth company and we are thrilled […]
Kaplan to Swallow Barron’s Test Books
Kaplan Test Prep has acquired key assets of longtime rival Barron’s Educational Series, including the test prep, study aid, and foreign language assets, as well as the Barron’s brand name. The acquisition comprises about 650 of Barron’s more than 2,000 titles, also including their reference, business, and law titles. As Newsday notes, “The purchase combines two of the oldest and best-known brands in educational services and test-prep books in a market that is becoming increasingly competitive.” Terms of the transaction were not disclosed. Following the merger, Kaplan’s new assets will still carry the Barron name, operating as a distinct brand. […]