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HOUGHTON MIFFLIN COMPANY ANNOUNCES SECOND-QUARTER RESULTS

 BOSTON, July 15 /PRNewswire/ -- Houghton Mifflin (NYSE: HTN) today reported net sales of $121.2 million for the second quarter ended June 30, 1993. Net sales in last year's second quarter were $125.7 million. Net income before the previously-announced special charges and extraordinary loss incurred in connection with prepayment of long-term debt was $11.1 million, or 80 cents per share, compared with $11.7 million or 82 cents per share, in 1992's second quarter. Net income after the special charges and extraordinary loss was $3.5 million, or 25 cents per share.
 The special charges taken in the second quarter totaled $8.4 million for realignment of the company's divisional and corporate workforce and closure of a warehouse. The total special charges of $10.6 million also included budgeted costs of $2.2 million connected with relocation of the company's headquarters in Boston and consolidation of certain publishing and support functions in the new headquarters. The after-tax cost of these charges amounted to $6.6 million, or 48 cents per share. In addition, an extraordinary loss was taken in the second quarter for prepayment of the $25 million, 8.78 percent Senior Notes due on Dec. 15, 1994, incurring a charge of approximately $1.6 million before taxes, or 7 cents per share. The total after-tax cost of the special charges and extraordinary loss was $7.6 million, or 55 cents per share.
 For the six months ended June 30, 1993, net sales were $170.9 million, compared with $177.8 million reported in 1992. The seasonal net loss for the first half of 1993, before special charges and the extraordinary loss, was $4.0 million, or 29 cents per share. This compared with a net loss of $2.3 million, or 16 cents per share, before accounting changes in the first six months of 1992. The 1993 net loss after special items was $11.5 million, or 83 cents per share, compared with the 1992 restated six-month net loss of $17.0 million, or $1.19 per share.
 The educational publishing segment's net sales declined 5.2 percent in the second quarter of 1993 compared with 1992. School Division sales were down approximately $4.7 million; significant secondary school sales opportunities boosted results in 1992. The company's elementary school reading series continues to outpace the company's 25 percent historical market share in the Northeast and Midwest. Since the bulk of schools sales in these areas normally occurs in the third quarter, these early results are clearly positive.
 Although The Riverside Publishing Company experienced some delays in publication of new editions of certain major standardized tests, it achieved a solid sales gain in the quarter. The third quarter will be especially significant for Riverside as carryover backlog from the second quarter combines with the sales contribution of tests acquired from DLM in 1992. The College Division's results in the second quarter remained below target but were better than the overall industry, where net sales are estimated to be down approximately 8 percent so far in 1993.
 General publishing sales were up 4 percent in the second quarter compared with 1992. However, adjusted for the Gollancz businesses sold late in 1992, sales advanced 16 percent. The Trade & Reference and Software divisions both reported double digit sales gains for the quarter.
 Chairman Nader F. Darehshori said, "Results for the second quarter and early third-quarter results for both the School Division and Riverside place the company firmly on track to achieve full-year 1993 earnings of at least $2.20 per share, net of special charges and the extraordinary loss reported in the second quarter. Although 1994 is not a good adoption year, earnings should exceed $2.70 per share. The company's net income in 1995 is expected to increase sharply, reflecting strong adoption opportunities and full benefit of a lower cost structure."
 HOUGHTON MIFFLIN COMPANY AND SUBSIDIARIES
 Unaudited Consolidated Financial Information
 (Dollars in thousands except per share amounts)
 Three months ended Six months ended 12 months ended
 June 30 June 30 June 30
 1993 1992 1993 1992 1993 1992
 Net sales by industry
 segment: (a)
 Educational
 publishing $98,289 $103,645 $128,667 $135,607 $346,560 $368,231
 General
 publishing 22,917 22,025 42,258 42,159 101,305 99,220
 Total 121,204 125,670a 170,925 177,766 447,865 467,451
 Costs and expenses:
 Cost of sales 59,708 60,622 95,281 96,051 219,508 232,129
 Selling &
 administrative 43,007 45,321 80,669 83,941 186,845 189,856
 Special
 charges (b) 10,560 --- 10,560 --- 10,560 ---
 Total 113,275 105,943 186,510 179,992 416,913 421,985
 Operating income
 (loss) (a,b) 7,929 19,727 (15,585) (2,226) 30,952 45,466
 Other income (expense):
 Loss on disposition
 of foreign publishing
 operations (a) --- --- --- --- (13,527) (710)
 Net interest
 expense (a) (758) (864) (1,329) (1,527) (2,141) (3,300)
 Income (loss) before
 taxes, extraordinary
 item and cumulative
 effect of accounting
 changes 7,171 18,863 (16,914) (3,753) 15,284 41,456
 Provision (benefit)
 for income taxes 2,689 7,166 (6,463) (1,428) 4,339 15,548
 Income (loss) before
 extraordinary item
 and cumulative effect
 of accounting
 changes 4,482 11,697 (10,451) (2,325) 10,945 25,908
 Extraordinary item,
 net of taxes:
 Loss on extinguish-
 ment of debt(c) (1,002) --- (1,002) --- (1,002) ---
 Cumulative effect of
 accounting changes:(d)
 Post-retirement benefits,
 net of tax credit --- --- --- (13,357) --- (13,357)
 Income taxes --- --- --- (1,300) --- (1,300)
 Net income
 (loss) $3,480 $11,697 $(11,453)$(16,982) $9,943 $11,251
 Average shares
 outstand-
 ing 13,804,673 14,197,395 13,788,275 14,241,467 13,787,723 14,248,275
 Net income (loss)
 per share $0.25 $0.82 $(0.83) $(1.19) $0.72 $0.79
 HOUGHTON MIFFLIN COMPANY
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL INFORMATION
 (a) Includes net sales and losses related to foreign operations which were disposed of in the fourth quarter of 1992 and third quarter of 1991 as follows:
 Three Months Ended Six Months Ended
 June 30, 1992 June 30, 1992
 (in thousands, except per share)
 Net sales $3,874 $6,383
 Operating loss (679) (2,679)
 Interest expense, net (109) (220)
 Net loss per share (6 cents) (20 cents)
 (b) Includes workforce restructuring costs totaling $7.5 million; net costs of $2.2 million connected with relocation of the company's headquarters in Boston and consolidation of certain publishing and support functions in the new headquarters; Newark, Calif., warehouse closing charge of $.9 million. The after-tax cost of the $10.6 million special charges amounted to $6.6 million, or 48 cents per share.
 (c) In June 1993, the company completed an early redemption of $25 million of 8.78 percent Senior Notes due December 1994, resulting in an after-tax extraordinary charge of $1.0 million, or 7 cents per share.
 (d) Effective Jan. 1, 1992, the company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and SFAS No. 109, "Accounting for Income Taxes." The non-cash, after-tax cost resulting from the adoption of both standards amounted to $14.7 million, or $1.03 per share. The results for the six- and 12-month periods ended June 30, 1992, have been restated to reflect the adoption of both accounting changes.
 -0- 7/15/93
 /CONTACT: Susan E. Hardy, director of investor relations for Houghton Mifflin Co., 617-351-5114/
 (HTN)


CO: Houghton Mifflin Co. ST: Massachusetts IN: PUB SU: ERN

CM-DJ -- NE004 -- 1917 07/15/93 11:45 EDT
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Date:Jul 15, 1993
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