Educational Publishers React to COVID-19, part 2

April 10, 2020 | Volume 51, Number 8

Editors’ Note: Because change in the COVID-19 pandemic is happening so quickly and continuously, Educational Marketer and Electronic Education Report are sharing news free about the virus-related changes in the K-12 and higher education markets and the companies that serve those markets. We will continue to post updates as we get them. Help us do this by asking us questions and sharing your insight.

 Instructional materials providers continue to expand their offerings to students, educators and parents even as they streamline their internal operations. As Charles Linsmeier, senor vice president content strategy at Macmillan Learning (New York) told EM: “As most classes in the U.S. rapidly transition from in-person to online, this has become a time of great and abrupt change within both the education and publishing industries. We have focused our attention on helping the high schools and colleges that have been impacted by these changes—many with educators who had never taught online classes before.”

Macmillan Learning: With the change in sales cycles, Macmillan sales are learning new ways to support and interact with instructors, particularly responding to the shift in demand to online course materials with support for the digital environment:

  • Offering free access to online learning platforms (Launchpad, Sapling, etc.) to instructors whether or not they were Macmillan customers as a stopgap during the winter term.
  • For students with print textbooks that lost access, Macmillan partnered with VitalSource and RedShelf to ensure that they were able to freely access ebooks in use in their courses. 
  • Offered use of iClicker, a software application that promotes student interaction in an online course, to all instructors and students.
  • For instructors that wanted more support about best practices for teaching online, Macmillan is offering a variety of resources by discipline, topic, and product, including FAQs, demos, one-on-one instruction, and webinars at no cost.

Among the upcoming webinars are Going Virtual: How to Create Student Curiosity in Remote Instruction Courses, hosted by Jose Vasquez of the University of Illinois on April 14 and Q&A with Paul Krugman and Robin Wells, Macmillan Learning authors, also on April 14.

For high school teachers, Macmillan through its Bedford, Freeman & Worth offers several resources including on-demand webinars in English language arts, math, science and social studies.

Given ongoing challenges, Macmillan said it planned to continue to support college and high school customers as they plan for fall classes.

Macmillan’s parent company did institute a savings initiative including temporary salary adjustments at Macmillan Learning.

Houghton Mifflin Harcourt: Houghton Mifflin Harcourt (Boston) initially focused on providing support to schools and parents. By the end of March, the company was taking actions to help mitigate some of the adverse business impacts of COVID-19 to the company’s profitability and cash flow in 2020. Those actions included:

  • Salary reductions for directors, executive and senior leadership.
  • A four-day work week with associated salary reductions for the majority of employee.
  • A freeze on spending not directly tied to near-term billings.
  • Reduced inventory purchasing.
  • Temporary closures of warehousing and distribution centers.
  • Deferral of long-term capital projects not directly contributing to billings in 2020.
  • Borrowing $150 million of its asset-backed credit facility as a pre-emptive measure to mitigate against capital market disruptions.

HMH began 2020 with approximately $300 million in cash along with a $250 million asset-backed revolving credit facility, which provides extra liquidity to help mitigate near-term business disruption. 

Given the COVID-19-related school closings, an expected impact to the HMH Education business and a persistent uncertainty in the marketplace, HMH withdrew its 2020 full-year financial guidance and 3-year outlook that it had issued at the end of February.

School Specialty: School Specialty (Greenville, WI) had a very strong start to the school year with booked revenue through March 14 up 9.9%. Then, school closures began in mid-March. Anticipating material impact from the closures on revenue, the company focused on discussions with its current senior secured lenders to address its capital structure. The company is focused on getting a transaction that will improve its liquidity and allow it to continue as a going concern.

Empty school buildings and offerings of free online materials does not bode well for the business, which is largely dependent on sales of furniture and school supplies. The company is particularly vulnerable to changes in school spending. Spending cuts generally put significant downward pressure on company revenues and operating margins. The switch to remote learning and use of digital-based materials also negatively impacts the physical paper-based supplements the company markets. 

The company scaled back costs, has substantially all its team working remotely and implemented additional sanitation and distancing measures in its fulfillment centers, a crucial step in its business, as much of its business comes from catalog ordering. School Specialty said it will pursue further cost reductions if school spending declines significantly from current levels.

 

We welcome your views. To submit a letter to the editor, send us an email to press@simbainformation.com.