Houghton Mifflin Harcourt Debt Refinancing Results in Improved Balance Sheet and Extended Maturity Profile

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Nov 20, 2019, 09:02 ET

BOSTON, Nov. 20, 2019 /PRNewswire/ -- Houghton Mifflin Harcourt (NASDAQ: HMHC) today commented on the expected benefits resulting from its recent debt refinancing activities.

"The Company's recent capital markets activities will enable us to have an improved balance sheet and a significantly extended maturity profile," said Jack Lynch, the Company's President and CEO. "Once our refinancing is completed, HMH will have a lower gross debt level – an important step forward in de-levering our balance sheet. The prepayment terms in this new capital structure will provide us the strategic flexibility to invest in growth, execute our strategy and generate greater free cash flow at all points in our business cycle."

"Our disciplined capital allocation strategy and strong financial performance were instrumental in an expected corporate credit rating upgrade from Moody's and the ability to refinance our existing term loan with extended maturities and attractive prepayment terms," said Joe Abbott, Chief Financial Officer of the Company. "We believe that we are on a path to de-lever over time and our next nearest material debt maturity will be in 2024."

Recent Transactions

Anticipated closing of the issuance of $306 million of 9.000% Senior Secured Notes due 2025 (the "New Senior Secured Notes") on November 22, 2019
Anticipated closing of a $380 million, five-year senior secured term loan facility at LIBOR plus 6.25% on November 22, 2019
Anticipated closing of a $250 million five-year senior secured asset-based revolving credit facility on November 22, 2019
Proceeds from the issuance of the New Senior Secured Notes and new term loan facility plus approximately $114 million in cash to be used to fully repay the outstanding $766 million term loan facility due 2021

Upcoming Conferences

Joe Abbott and Brian Shipman, the Company's Senior Vice President of Investor Relations will be presenting at the upcoming IDEAS Investor Conference in Dallas in November, the BMO Growth Conference in Boston in December, and the Barclays Global Technology, Media and Telecommunications Conference in San Francisco in December.

About Houghton Mifflin Harcourt

Houghton Mifflin Harcourt (Nasdaq: HMHC) is a learning company committed to delivering integrated 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 three 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.

CONTACT

Investor Relations
Brian S. Shipman, CFA
SVP, Investor Relations
212-592-1177
[email protected]

Media Relations
Bianca Olson
SVP, Corporate Affairs
617-351-3841
[email protected]

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, the expected benefits of the refinancing transactions, the expected corporate credit rating upgrade from Moody's and the completion and use of proceeds of the New Senior Secured Notes, the senior secured term loans, the asset-based revolving credit facility and the other refinancing transactions. 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. These risks and uncertainties include, but are not limited to, our ability to consummate the loan transactions; consummate the other refinancing transactions; market conditions relating to the issuance of debt; and other factors discussed in the "Risk Factors" section of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other news releases we issue and filings we make with the SEC. 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.

SOURCE Houghton Mifflin Harcourt