NEW YORK, July 23, 2020 /PRNewswire/ -- Scholastic
Corporation (NASDAQ: SCHL), the global children's publishing,
education and media company, today reported financial results for
the Company's fiscal fourth quarter and full year ended
May 31, 2020.
Fiscal 2020 Review
In $
millions
|
Fiscal
2020
|
Fiscal
2019
|
FY20 vs.
FY19
|
|
4Q
|
FY
|
4Q
|
FY
|
4Q
|
FY
|
Revenues
|
$284.0
|
$1,487.1
|
$470.7
|
$1,653.9
|
($186.7)
|
($166.8)
|
Operating income
(loss)
|
(46.2)
|
(88.5)
|
32.0
|
25.0
|
(78.2)
|
(113.5)
|
One-time
items
|
(6.8)
|
(56.2)
|
(8.1)
|
(16.0)
|
na
|
na
|
Operating income
(loss), excluding one-time items*
|
(39.4)
|
(32.3)
|
40.1
|
41.0
|
(79.5)
|
(73.3)
|
* Please
refer to the non-GAAP financial tables attached
|
Revenues
As more than 120,000 U.S. schools serving 55 million students
were closed from March through May, fourth quarter revenues fell
$186.7 million, or 40%, versus the
prior year period on a significantly lower number of school-based
book clubs and book fairs events that led to a $151.7 million reduction in combined quarterly
revenues in those two channels. School closings also adversely
impacted the Company's international revenues ($37 million) and the U.S. education business
($23 million). These revenue declines
in this important quarter were partially offset by a $25.0 million, or 45%, increase in domestic trade
sales, anchored by a solid frontlist including the widely
anticipated The Ballad of Songbirds and Snakes, the fourth
title in The Hunger Games® series by Suzanne Collins, even as industry-wide bookstore
sales declined as a result of brick-and-mortar store closures in
the quarter.
Fiscal 2020 full-year revenues declined $166.8 million, or 10%, as compared to the prior
year, to $1.49 billion.
Operating Income
Fourth quarter operating income fell $78.2 million, versus the prior year period, to
an operating loss of $46.2 million.
The fourth quarter decline in operating income was directly
attributable to the pandemic-related drop in sales of $186.7 million, as well as approximately
$19.9 million (net) in non-cash
charges taken as a direct result of the pandemic, including
increases in inventory and return reserves, customer bad debt, and
vacation accruals. More than half of the year's operating losses
came in the fourth quarter, a seasonally important quarter where
the Company typically records the majority of its earnings and cash
flow. Fiscal 2020 full-year operating income fell $113.5 million, as compared to the prior year, to
an operating loss of $88.5 million,
which included a $40.0 million
non-cash write down of inventory in the Company's third fiscal
quarter, as previously reported, and one-time severance charges of
$13.1 million for the year. Excluding
one-time items, the Company recorded an operating loss of
$32.3 million in fiscal year 2020,
versus operating income of $41.0
million in fiscal year 2019.
Chairman's Commentary
"In the fourth quarter, we took decisive action to mitigate the
impact of COVID-19 on our operating income and cash flow, while
continuing to support schools, teachers, parents and children as
schools were closed in the U.S. and globally," said Richard Robinson, Chairman, President and Chief
Executive Officer. "Responding to the revenue drop from school
closings of $187 million, primarily
from book clubs and book fairs, we focused on four key areas.
First, we successfully drove a 45% increase in trade sales in the
quarter, as children who could not access our in-school clubs and
fairs found our books in stores and on-line, including favorite
series like The Hunger Games, Dog Man®, The Baby-Sitters
Club®, The Bad Guys™ and Wings of
Fire™. Second, our new Scholastic Learn at Home
hub, a free at-home digital learning tool for pre-K to Grade 6 and
up, reached over 20 million families as they looked for support for
home learning, paving the way for future revenue opportunities.
Third, we successfully preserved cash through reducing inventory
purchases, cutting capital spending, and suspending our stock
buy-back program. And fourth, we slashed costs by more than
$50 million in the quarter through
closing distribution centers in highly impacted regions, scaling
our operations to meet near-term business needs, and reducing labor
costs. We ended the fiscal year with a strong balance sheet, with
over $175 million in net cash and
stockholders' equity of approximately $1.2
billion."
Mr. Robinson continued, "Scholastic has faced many challenges in
its 100-year history and we have always emerged better and
stronger. More than 90% of U.S. schools use Scholastic's products,
and at this time of concern on school openings, we are acquiring
information from school districts about starting dates, and whether
classes will be in-person, remote, or hybrid. Whatever the format,
schools will be able to turn to Scholastic for reading and
information to combat children's learning loss. Scholastic is
offering digital classroom magazines for use in school and at home,
improved online ordering for parents seeking quality inexpensive
books through book clubs, and Safe & Easy book fairs,
which simplify planning and setup, as well as expanded virtual
fairs. In short, we are flexibly modifying our familiar services to
meet the needs for books and digital learning, whether in physical
or virtual classrooms this fall."
Capital Position and Liquidity
At year-end, the Company's cash and cash equivalents exceeded
total debt by $175.3 million,
compared to $326.8 million a year
ago. The lower net cash position reflects $62.7 million in capital spending on technology
and other investments to strengthen the existing businesses and
$28.5 million in pre-publication
costs for the development of new titles and products. These capital
and pre-publication investments, taken as a whole, were
$41.9 million, or 31% below prior
year's levels as the Company curtailed spending in light of the
global pandemic in the last three months of the fiscal year. The
lower net cash position at fiscal year-end also reflects the
distribution of $20.8 million in
dividends and the repurchase of $35.5
million of common stock over the course of the fiscal year,
as compared to $8.5 million in share
repurchases in the prior year period. The Company's open-market
share buy-back program was put on hold in early March in the face
of COVID-19 uncertainties.
Net cash provided by operating activities was $2.1 million in the current fiscal year compared
to $116.4 million in fiscal 2019. The
Company had a free cash use (a non-GAAP liquidity measure defined
in the accompanying tables and reconciled to net cash use) of
$89.1 million in the current fiscal
year, compared to a free cash use of $12.4
million in fiscal 2019.
During the fiscal fourth quarter, the Company accessed its
$375 million committed bank credit
facility by taking a U.S. dollar LIBOR-based advance for
$200 million as a precautionary
measure. The resultant funds were placed in liquid investments and
remain unused at this time. Based on its fiscal year-end cash
position and access to capital, the Company believes it has
significant cash reserves to support its FY2021 business plan. The
Company's funding needs will be reassessed as new information on
the COVID-19 impacted business and banking markets becomes
available.
Fiscal 2021 Outlook and Cost Savings Initiatives
Scholastic is planning for a slower than normal start to the
2020-21 school year, with expectations for most schools to be open,
but with a variety of in person, distance learning and hybrid
options. As schools re-open, the Company expects strong demand for
children's books delivered through book clubs and book fairs to
schools and direct-to-home. We expect to have strong sales for our
digital education programs, including classroom magazines, as
schools look for digital learning tools to bridge the gap between
home and school. The trade business is expected to remain strong
with scheduled releases including Dog Man: Grime and
Punishment by Publishers Weekly's 2019 Person of the
Year, Dav Pilkey, as well as a
new Pilkey series, Cat Kid Comic Club™, launching in the
fall. The Ickabog®, the first new children's book
by J.K. Rowling in 13 years will launch in November and new titles
from other best-selling authors such as Tui
T. Sutherland, Alan Gratz,
Kelly Yang and Varian Johnson will appear throughout the
year.
At the same time, Scholastic has already made significant
progress in its cost savings program, with a target of reducing
expenses by $100 million in fiscal
2021. The program is designed to preserve the Company's
profitability and cash flow on likely lower revenues. The
$100 million cost reduction plan
focuses mainly on labor-related costs, as well as process
improvements. These changes will provide the Company with increased
flexibility to achieve higher operating leverage and adjust its
cost structure to align with changes in volume. Additional details
on these initiatives will be provided throughout the year.
In light of the evolving situation with school openings, the
Company expects revenues in FY2021 to be slightly below FY2020
sales, offset by the Company's $100
million cost reduction plan which is currently being
implemented.
Overall Results
In the fiscal fourth quarter of 2020, the Company recorded a
loss before taxes of $47.4 million,
versus earnings before taxes of $31.8
million in the prior year period. Adjusted EBITDA (a
non-GAAP performance measure defined in the accompanying tables and
reconciled to net income) for the fiscal fourth quarter of 2020 was
a loss of $17.3 million, compared to
Adjusted EBITDA of $61.2 million in
the fourth quarter of 2019. For the fiscal year ended May 31, 2020, the Company had a loss before taxes
of $89.7 million, including
$40.0 million in non-cash inventory
write-downs in the third quarter, compared to earnings before taxes
of $26.0 million in the prior fiscal
year. Fiscal 2020 full-year Adjusted EBITDA was $56.6 million, compared to $121.3 million in fiscal 2019. In both the fourth
quarter and fiscal year 2020, the year-over-year reduction in
Adjusted EBITDA primarily reflects the Company's lower operating
results in the important fiscal fourth quarter, after adjusting for
one-time non-cash items directly attributable to the coronavirus
pandemic and governmental actions taken to limit its spread.
Earnings Per Share and Other Items
In the fiscal fourth quarter of 2020, the Company recorded a
loss per diluted share of $0.38
compared to earnings per diluted share of $0.50 in the fiscal fourth quarter of 2019.
Excluding one-time items, the current year's fiscal fourth quarter
loss per diluted share was $0.23
versus earnings per diluted share of $0.84 in the prior year period. Full year
fiscal 2020 loss per diluted share was $1.27 compared to earnings per diluted share of
$0.43 in the prior year period.
Excluding one-time items, fiscal 2020 full year loss per diluted
share was $0.08 versus earnings per
diluted share of $0.92 in fiscal
2019.
In fiscal 2020, the impact of foreign exchange on the Company's
international businesses resulted in a $7.9
million reduction in revenues and a $0.3 million reduction in operating income versus
the prior year period.
Segment Results
All comparisons detailed in this section refer to operating
results for the fourth quarter and full year ended May 31, 2020 versus the fourth quarter and full
year ended May 31, 2019.
Children's Book Publishing and Distribution
In $
millions
|
Fiscal
2020
|
Fiscal
2019
|
FY20 vs.
FY19
|
|
4Q
|
FY
|
4Q
|
FY
|
4Q
|
FY
|
Revenues
|
|
|
|
|
|
|
Book
Clubs
|
$
19.5
|
$
156.8
|
$
47.0
|
$
212.4
|
$
(27.5)
|
$
(55.6)
|
Book
Fairs
|
32.1
|
383.8
|
156.3
|
499.6
|
(124.2)
|
(115.8)
|
Trade
|
80.4
|
334.8
|
55.4
|
278.3
|
25.0
|
56.5
|
Total
Revenue
|
132.0
|
875.4
|
258.7
|
990.3
|
(126.7)
|
(114.9)
|
Operating income
(loss)
|
(46.5)
|
23.6
|
18.2
|
82.9
|
(64.7)
|
(59.3)
|
Fourth quarter 2020 revenues fell $126.7
million, or 49%, to $132.0
million, with significantly fewer book fairs and book clubs
events held as a result of mandated coronavirus-related school
closures in the last quarter of fiscal 2020, which resulted in a
reduction in clubs and fairs revenues of 59% and 79%, respectively,
versus the fourth quarter of the prior fiscal year. The drop in
clubs and fairs revenues was partially offset by strong trade
sales, which grew 45% in the fourth quarter as compared to the
prior year period. Best-selling trade titles in the current fiscal
year included The Ballad of Songbirds and Snakes (A Hunger
Games Novel), Harry Potter and
the Goblet of Fire: The Illustrated Edition; Dog Man: For
Whom the Ball Rolls and Dog Man: Fetch-22, and
Guts, a true story from Raina
Telgemeier. The Company's Klutz® line of
book plus activity kits, including LEGO® Chain
Reactions and Klutz Maker Lab Rocks, Gems and Geodes,
also performed well in the fourth quarter as parents searched for
fun indoor activities to help their children practice STEAM skills,
such as problem solving and basic engineering, while learning at
home. Fiscal year 2020 revenues fell $114.9
million, or 12%, to $875.4
million reflecting the impact of the fourth quarter's
results on the year. In the fourth quarter, Children's Book
Publishing and Distribution recorded an operating loss of
$46.5 million versus operating income
of $18.2 million in the fourth
quarter of fiscal 2019. The fourth quarter operating loss was
directly attributable to the pandemic-related drop in sales and
certain non-cash charges taken as a direct result of the pandemic.
Fiscal 2020 segment operating income was $23.6 million, a reduction of $59.3 million, or 72%, compared to operating
income of $82.9 million in fiscal
2019.
Education
In $
millions
|
Fiscal
2020
|
Fiscal
2019
|
FY20 vs.
FY19
|
|
4Q
|
FY
|
4Q
|
FY
|
4Q
|
FY
|
Revenue
|
$
94.7
|
$
287.3
|
$
117.7
|
$
297.4
|
$
(23.0)
|
$
(10.1)
|
Operating income
(loss)
|
27.3
|
29.9
|
36.9
|
30.6
|
(9.6)
|
(0.7)
|
Fourth quarter 2020 revenues decreased by $23.0 million, or 20%, versus the comparable
prior year period as a result of school closings. The decrease in
fourth quarter revenue primarily impacted the Company's core
instruction programs, while its Teaching Resources Jumbo
Workbooks and Summer Express series, which offer
skill-building activities for students learning from home,
performed very well. For the fiscal year, segment revenue was
$287.3 million, compared to
$297.4 million a year ago, a decrease
of $10.1 million, or 3%, reflecting
the impact of the important fourth quarter's results on the fiscal
year after trending higher in the first three quarters of the year.
In the fourth quarter, Education recorded operating income of
$27.3 million versus operating income
of $36.9 million in the fourth
quarter of fiscal 2019. Fiscal 2020 segment operating income was
$29.9 million, a $0.7 million, or 2%, decrease versus the prior
year, driven by the lower revenues in the final three months of the
year.
International
In $
millions
|
Fiscal
2020
|
Fiscal
2019
|
FY20 vs.
FY19
|
|
4Q
|
FY
|
4Q
|
FY
|
4Q
|
FY
|
Revenue
|
$
57.3
|
$
324.4
|
$
94.3
|
$
366.2
|
$
(37.0)
|
$
(41.8)
|
Operating income
(loss)
|
(10.8)
|
(6.5)
|
5.8
|
13.8
|
(16.6)
|
(20.3)
|
Operating income /
(loss), excluding one-time items*
|
(9.1)
|
(4.8)
|
6.8
|
15.3
|
(15.9)
|
(20.1)
|
* Please
refer to the non-GAAP financial tables attached
|
Fourth quarter 2020 segment revenues were down $37.0 million, or 39%, as compared to the fourth
quarter of 2019, with lower sales in the Company's school-based
clubs and fairs in its major markets, direct-to-consumer selling
operations throughout Asia, and
education business in China, all
of which were impacted by actions taken to curtail the spread of
the coronavirus in the current quarter. Fiscal 2020 revenue was
$324.4 million, a $41.8 million, or 11%, decline from the prior
year. Excluding the $7.9 million
unfavorable impact of foreign exchange in the current fiscal year,
segment revenues were $33.9 million
lower in the current year. In the fourth quarter, International
recorded an operating loss of $9.1
million versus operating income of $6.8 million in the fourth quarter of fiscal
2019, excluding one-time items in both periods, primarily
reflecting the lower sales volumes based on the impact of COVID-19
in Asia, Canada, and the UK. Operating loss for the
fiscal year was $4.8 million,
excluding one-time charges of $1.7
million, a decrease of $20.1
million, as compared to operating income of $15.3 million in the prior year, which excluded
one-time charges of $1.5 million,
mainly the result of the lower revenues.
Overhead
In $
millions
|
Fiscal
2020
|
Fiscal
2019
|
FY20 vs.
FY19
|
|
4Q
|
FY
|
4Q
|
FY
|
4Q
|
FY
|
Overhead
expense
|
$
16.2
|
$
135.5
|
$
28.9
|
$
102.3
|
$
12.7
|
$
(33.2)
|
Overhead expense,
excluding one-time items*
|
11.1
|
81.0
|
21.8
|
87.8
|
10.7
|
6.8
|
* Please
refer to the non-GAAP financial tables attached
|
In the fourth quarter of fiscal 2020, overhead expense,
excluding one-time items, was $11.1
million, a reduction of $10.7
million, or 49%, versus, $21.8
million of overhead expense, excluding one-time items, in
the fourth quarter of fiscal 2019. The lower overhead expense in
the fourth quarter of 2020 was directly attributable to cost
savings actions taken to mitigate the impact of the coronavirus
pandemic on the Company's profitability and cash position.
Corporate overhead for the fiscal year was $81.0 million, excluding one-time, mostly
non-cash items of $54.5 million,
pre-tax, including a third quarter $40.0
million non-cash write down of inventory primarily resulting
from lower anticipated activity in the Company's school channels,
as well as $12.0 million in one-time
severance, versus corporate overhead of $87.8 million recorded in the prior year, after
excluding $14.5 million in one-time
items. Excluding one-time items in both periods, the lower overhead
expense in the current fiscal year was mainly due to lower
technology-related spending.
Additional Information
To supplement our financial statements presented in accordance
with GAAP, we include certain non-GAAP calculations and
presentations including, as noted above, "Adjusted EBITDA" and
"Free Cash Use". Please refer to the non-GAAP financial tables
attached to this press release for supporting details on one-time
items and the use of non-GAAP financial measures included in this
release. This information should be considered as supplemental in
nature and not as a substitute for the related financial
information prepared in accordance with GAAP.
Conference Call
The Company will hold a conference call to discuss its results
at 4:30 p.m. ET today, July 23, 2020. Scholastic's Chairman, President
and CEO, Richard Robinson, and
Kenneth Cleary, the Company's Chief
Financial Officer, will moderate the call.
The conference call and accompanying slides will be webcast and
accessible through the Investor Relations section of Scholastic's
website, www.scholastic.com. Participation by telephone will be
available by dialing (877) 654-5161 from within the U.S. or +1
(678) 894-3064 internationally. Shortly following the call, an
archived webcast and accompanying slides from the conference call
will also be posted at www.investor.scholastic.com. An audio-only
replay of the call will be available by dialing (855) 859-2056 from
within the U.S. or +1 (404) 537-3406 internationally, and entering
access code 6783468. The recording will be available through
Friday, July 31, 2020.
About Scholastic
For 100 years, Scholastic Corporation (NASDAQ: SCHL) has been
encouraging the personal and intellectual growth of all children,
beginning with literacy. Having earned a reputation as a trusted
partner to educators and families, Scholastic is the world's
largest publisher and distributor of children's books, a leading
provider of literacy curriculum, professional services, and
classroom magazines, and a producer of educational and entertaining
children's media. The Company creates and distributes bestselling
books and e-books, print and technology-based learning programs for
pre-K to grade 12, and other products and services that support
children's learning and literacy, both in school and at home. With
15 international operations and exports to 165 countries,
Scholastic makes quality, affordable books available to all
children around the world through school-based book clubs and book
fairs, classroom libraries, school and public libraries, retail,
and online. Learn more at www.scholastic.com.
Forward-Looking Statements
This news release contains certain forward-looking statements
relating to future periods. Such forward-looking statements are
subject to various risks and uncertainties, including those arising
from the continuing impact of COVID-19 related measures taken by
governmental authorities or suppliers or other business providers
which may curtail or otherwise adversely affect certain of the
Company's business operations, and the conditions of the children's
book and educational materials markets generally and acceptance of
the Company's products within those markets, and other risks and
factors identified from time to time in the Company's filings with
the Securities and Exchange Commission. Actual results could differ
materially from those currently anticipated.
SCHL: Financial
|
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Table 1
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
(In $
Millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
05/31/20
|
05/31/19
|
|
|
05/31/20
|
05/31/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$284.0
|
$470.7
|
|
|
$1,487.1
|
$1,653.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
166.6
|
215.3
|
|
|
751.0
|
779.9
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
139.4
|
206.4
|
|
|
706.9
|
785.0
|
|
|
|
|
Bad debt
expense
|
8.3
|
1.3
|
|
|
15.6
|
7.0
|
|
|
|
|
Depreciation and
amortization
|
15.3
|
14.8
|
|
|
61.5
|
56.1
|
|
|
|
|
Asset impairments and
write downs (2)
|
0.6
|
0.9
|
|
|
40.6
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
330.2
|
438.7
|
|
|
1,575.6
|
1,628.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(46.2)
|
32.0
|
|
|
(88.5)
|
25.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
(0.9)
|
1.1
|
|
|
0.1
|
3.4
|
|
|
|
Other components of
net periodic benefit (cost)
|
(0.3)
|
(0.3)
|
|
|
(1.3)
|
(1.4)
|
|
|
|
Gain (loss) on
investments (3)
|
-
|
(1.0)
|
|
|
-
|
(1.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
(47.4)
|
31.8
|
|
|
(89.7)
|
26.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes(4)
|
(34.4)
|
13.9
|
|
|
(46.0)
|
10.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(13.0)
|
17.9
|
|
|
(43.7)
|
15.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
0.0
|
0.0
|
|
|
0.1
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Scholastic Corporation
|
($13.0)
|
$17.9
|
|
|
($43.8)
|
$15.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per share of Class A and Common Stock
(5)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
($0.38)
|
$0.51
|
|
|
($1.27)
|
$0.44
|
|
|
|
|
Diluted
|
($0.38)
|
$0.50
|
|
|
($1.27)
|
$0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
34,244
|
35,189
|
|
|
34,622
|
35,201
|
|
|
|
Diluted weighted
average shares outstanding
|
34,244
|
35,652
|
|
|
34,622
|
35,772
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three and
twelve months ended May 31, 2020, the Company recognized pretax
severance of $6.2 and $13.1, respectively. In the twelve months
ended May 31, 2020, the Company recognized a pretax charge of $1.0
related to a settlement of an intellectual property producing
agreement and a pretax settlement expense of $1.5 related to an
alleged patent infringement claim. In the three and twelve months
ended May 31, 2019, the Company recognized pretax severance of $3.4
and $6.5, respectively, pretax charges related to a legacy sales
tax assessment of $3.8 and $8.1, respectively, and pretax branch
consolidation costs of $0.0 and $0.5,
respectively.
|
|
|
(2)
|
In the three and
twelve months ended May 31, 2020, the Company recognized a pretax
impairment charge of $0.6 related to an outdated technology
platform in Canada. In the twelve months ended May 31, 2020, the
Company recognized a pretax asset write down of $40.0 primarily
resulting from lower anticipated requirements in the Company's club
and fair channels. In the three and twelve months ended May 31,
2019, the Company recognized a pretax impairment charge of $0.9
related to legacy building improvements.
|
|
|
(3)
|
In the three and
twelve months ended May 31, 2019, the Company recognized a pretax
loss on investments of $1.0 related to the recognition of a foreign
currency translation adjustment as a result of the acquisition of
Make Believe Ideas Limited.
|
|
|
(4)
|
In the three and
twelve months ended May 31, 2020, the Company recognized a benefit
for income taxes in respect to one-time pretax charges of $1.8 and
$15.3, respectively. In the three and twelve months ended May 31,
2019, the Company recognized a benefit for income taxes in respect
to one-time pretax charges of $2.1 and $4.2, respectively, and
income tax provision of $5.0 and $4.7, respectively, primarily
related to the Company's state deferred tax
balances.
|
|
|
(5)
|
Earnings (loss) per
share are calculated on non-rounded net income (loss) and shares
outstanding. Recalculating earnings per share based on numbers
rounded to millions may not yield the results as
presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2
|
Scholastic
Corporation
|
|
Segment
Results
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
05/31/20
|
05/31/19
|
|
Change
|
|
05/31/20
|
05/31/19
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
$19.5
|
$47.0
|
|
($27.5)
|
(59%)
|
|
$156.8
|
$212.4
|
|
($55.6)
|
(26%)
|
|
|
|
Book Fairs
|
32.1
|
156.3
|
|
(124.2)
|
(79%)
|
|
383.8
|
499.6
|
|
(115.8)
|
(23%)
|
|
|
|
Consolidated
Trade
|
80.4
|
55.4
|
|
25.0
|
45%
|
|
334.8
|
278.3
|
|
56.5
|
20%
|
|
|
|
Total
revenues
|
132.0
|
258.7
|
|
(126.7)
|
(49%)
|
|
875.4
|
990.3
|
|
(114.9)
|
(12%)
|
|
|
|
Operating income
(loss)
|
(46.5)
|
18.2
|
|
(64.7)
|
|
|
23.6
|
82.9
|
|
(59.3)
|
(72%)
|
|
|
|
Operating
margin
|
-
|
7.0%
|
|
|
|
|
2.7%
|
8.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
94.7
|
117.7
|
|
(23.0)
|
(20%)
|
|
287.3
|
297.4
|
|
(10.1)
|
(3%)
|
|
|
|
Operating income
(loss)
|
27.3
|
36.9
|
|
(9.6)
|
(26%)
|
|
29.9
|
30.6
|
|
(0.7)
|
(2%)
|
|
|
|
Operating
margin
|
28.8%
|
31.4%
|
|
|
|
|
10.4%
|
10.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
57.3
|
94.3
|
|
(37.0)
|
(39%)
|
|
324.4
|
366.2
|
|
(41.8)
|
(11%)
|
|
|
|
Operating income
(loss)
|
(10.8)
|
5.8
|
|
(16.6)
|
|
|
(6.5)
|
13.8
|
|
(20.3)
|
|
|
|
|
Operating
margin
|
-
|
6.2%
|
|
|
|
|
-
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
expense
|
16.2
|
28.9
|
|
12.7
|
44%
|
|
135.5
|
102.3
|
|
(33.2)
|
(32%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
($46.2)
|
$32.0
|
|
($78.2)
|
|
|
($88.5)
|
$25.0
|
|
($113.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3
|
Scholastic
Corporation
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/31/20
|
05/31/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$393.8
|
$334.1
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
239.8
|
250.1
|
|
|
|
|
|
|
|
|
Inventories,
net
|
270.6
|
323.7
|
|
|
|
|
|
|
|
|
Accounts
payable
|
153.6
|
195.3
|
|
|
|
|
|
|
|
|
Accrued
royalties
|
37.8
|
41.9
|
|
|
|
|
|
|
|
|
Lines of credit and
current portion of long-term debt
|
7.9
|
7.3
|
|
|
|
|
|
|
|
|
Long-term
debt
|
210.6
|
-
|
|
|
|
|
|
|
|
|
Total debt
|
218.5
|
7.3
|
|
|
|
|
|
|
|
|
Total finance lease
liabilities
|
11.6
|
10.1
|
|
|
|
|
|
|
|
|
Net debt
(1)
|
(175.3)
|
(326.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
1,180.6
|
1,272.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Cash Flow Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
05/31/20
|
05/31/19
|
|
|
05/31/20
|
05/31/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
($41.9)
|
$55.9
|
|
|
$2.1
|
$116.4
|
|
|
|
|
Cash acquired through
acquisition
|
-
|
4.3
|
|
|
-
|
4.3
|
|
|
|
|
Less: Additions to property, plant
and equipment
|
14.3
|
24.0
|
|
|
62.7
|
95.0
|
|
|
|
|
Pre-publication expenditures
|
7.0
|
5.8
|
|
|
28.5
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (use)
(2)
|
($63.2)
|
$30.4
|
|
|
($89.1)
|
($12.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net debt is defined
by the Company as lines of credit and short-term debt plus
long-term-debt, net of cash and cash equivalents. The Company
utilizes this non-GAAP financial measure, and believes it is useful
to investors, as an indicator of the Company's effective leverage
and financing needs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Free cash flow (use)
is defined by the Company as net cash provided by or used in
operating activities (which includes royalty advances) and cash
acquired through acquisitions, reduced by spending on property,
plant and equipment and prepublication costs. The Company believes
that this non-GAAP financial measure is useful to investors as an
indicator of cash flow available for debt repayment and other
investing activities, such as acquisitions. The Company utilizes
free cash flow as a further indicator of operating performance and
for planning investing activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations - Supplemental
|
|
Excluding
One-Time Items
|
|
(Unaudited)
|
|
(In $
Millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
05/31/20
|
items
|
One-time
items
|
|
05/31/19
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$284.0
|
$0.0
|
$284.0
|
|
$470.7
|
$0.0
|
$470.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
166.6
|
-
|
166.6
|
|
215.3
|
-
|
215.3
|
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
|
139.4
|
(6.2)
|
133.2
|
|
206.4
|
(7.2)
|
199.2
|
|
|
|
|
|
Bad debt
expense
|
|
8.3
|
-
|
8.3
|
|
1.3
|
-
|
1.3
|
|
|
|
|
|
Depreciation and
amortization
|
|
15.3
|
-
|
15.3
|
|
14.8
|
-
|
14.8
|
|
|
|
|
|
Asset impairments and
write downs (2)
|
|
0.6
|
(0.6)
|
0.0
|
|
0.9
|
(0.9)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
|
330.2
|
(6.8)
|
323.4
|
|
438.7
|
(8.1)
|
430.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(46.2)
|
6.8
|
(39.4)
|
|
32.0
|
8.1
|
40.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
(0.9)
|
-
|
(0.9)
|
|
1.1
|
-
|
1.1
|
|
|
|
|
Other components of
net periodic benefit (cost)
|
|
(0.3)
|
-
|
(0.3)
|
|
(0.3)
|
-
|
(0.3)
|
|
|
|
|
Gain (loss) on
investments (3)
|
|
-
|
-
|
-
|
|
(1.0)
|
1.0
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
|
(47.4)
|
6.8
|
(40.6)
|
|
31.8
|
9.1
|
40.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes(4)
|
|
(34.4)
|
1.8
|
(32.6)
|
|
13.9
|
(2.9)
|
11.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(13.0)
|
5.0
|
(8.0)
|
|
17.9
|
12.0
|
29.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
0.0
|
-
|
0.0
|
|
0.0
|
-
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Scholastic Corporation
|
|
($13.0)
|
$5.0
|
($8.0)
|
|
$17.9
|
$12.0
|
$29.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
($0.38)
|
$0.15
|
($0.23)
|
|
$0.50
|
$0.34
|
$0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
05/31/20
|
items
|
One-time
items
|
|
05/31/19
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$1,487.1
|
$0.0
|
$1,487.1
|
|
$1,653.9
|
$0.0
|
$1,653.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
751.0
|
-
|
751.0
|
|
779.9
|
-
|
779.9
|
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
|
706.9
|
(15.6)
|
691.3
|
|
785.0
|
(15.1)
|
769.9
|
|
|
|
|
|
Bad debt
expense
|
|
15.6
|
-
|
15.6
|
|
7.0
|
-
|
7.0
|
|
|
|
|
|
Depreciation and
amortization
|
|
61.5
|
-
|
61.5
|
|
56.1
|
-
|
56.1
|
|
|
|
|
|
Asset impairments and
write downs (2)
|
|
40.6
|
(40.6)
|
-
|
|
0.9
|
(0.9)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
|
1,575.6
|
(56.2)
|
1,519.4
|
|
1,628.9
|
(16.0)
|
1,612.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(88.5)
|
56.2
|
(32.3)
|
|
25.0
|
16.0
|
41.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
0.1
|
-
|
0.1
|
|
3.4
|
-
|
3.4
|
|
|
|
|
Other components of
net periodic benefit (cost)
|
|
(1.3)
|
-
|
(1.3)
|
|
(1.4)
|
-
|
(1.4)
|
|
|
|
|
Gain (loss) on
investments (3)
|
|
-
|
-
|
-
|
|
(1.0)
|
1.0
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
|
(89.7)
|
56.2
|
(33.5)
|
|
26.0
|
17.0
|
43.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes(4)
|
|
(46.0)
|
15.3
|
(30.7)
|
|
10.4
|
(0.5)
|
9.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(43.7)
|
40.9
|
(2.8)
|
|
15.6
|
17.5
|
33.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
0.1
|
-
|
0.1
|
|
0.0
|
-
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Scholastic Corporation
|
|
($43.8)
|
$40.9
|
($2.9)
|
|
$15.6
|
$17.5
|
$33.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
($1.27)
|
$1.18
|
($0.08)
|
|
$0.43
|
$0.49
|
$0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three and
twelve months ended May 31, 2020, the Company recognized pretax
severance of $6.2 and $13.1, respectively. In the twelve months
ended May 31, 2020, the Company recognized a pretax charge of $1.0
related to a settlement of an intellectual property producing
agreement and a pretax settlement expense of $1.5 related to an
alleged patent infringement claim. In the three and twelve months
ended May 31, 2019, the Company recognized pretax severance of $3.4
and $6.5, respectively, pretax charges related to a legacy sales
tax assessment of $3.8 and $8.1, respectively, and pretax branch
consolidation costs of $0.0 and $0.5,
respectively.
|
|
|
(2)
|
In the three and
twelve months ended May 31, 2020, the Company recognized a pretax
impairment charge of $0.6 related to an outdated technology
platform in Canada. In the twelve months ended May 31, 2020, the
Company recognized a pretax asset write down of $40.0 primarily
resulting from lower anticipated requirements in the Company's club
and fair channels. In the three and twelve months ended May 31,
2019, the Company recognized a pretax impairment charge of $0.9
related to legacy building improvements.
|
|
|
(3)
|
In the three and
twelve months ended May 31, 2019, the Company recognized a pretax
loss on investments of $1.0 related to the recognition of a foreign
currency translation adjustment as a result of the acquisition of
Make Believe Ideas Limited.
|
|
|
(4)
|
In the three and
twelve months ended May 31, 2020, the Company recognized a benefit
for income taxes in respect to one-time pretax charges of $1.8 and
$15.3, respectively. In the three and twelve months ended May 31,
2019, the Company recognized a benefit for income taxes in respect
to one-time pretax charges of $2.1 and $4.2, respectively, and
income tax provision of $5.0 and $4.7, respectively, primarily
related to the Company's state deferred tax
balances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations - Supplemental
|
|
Adjusted
EBITDA
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
05/31/20
|
|
05/31/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes as reported
|
|
($47.4)
|
|
|
$31.8
|
|
|
|
|
One-time items before
income taxes
|
|
6.8
|
|
|
9.1
|
|
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
(40.6)
|
|
|
40.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense
|
|
0.9
|
|
|
(1.1)
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
15.9
|
|
|
15.6
|
|
|
|
|
|
Amortization of
prepublication costs
|
|
6.5
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(2)
|
|
($17.3)
|
|
|
$61.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
|
|
05/31/20
|
|
05/31/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes as reported
|
|
($89.7)
|
|
|
$26.0
|
|
|
|
|
One-time items before
income taxes
|
|
56.2
|
|
|
17.0
|
|
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
(33.5)
|
|
|
43.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense
|
|
(0.1)
|
|
|
(3.4)
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
64.0
|
|
|
59.3
|
|
|
|
|
|
Amortization of
prepublication costs
|
|
26.2
|
|
|
22.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(2)
|
|
$56.6
|
|
|
$121.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For the three and
twelve months ended May 31, 2020, amounts include depreciation of
$0.5 and $2.2, respectively, recognized in cost of goods sold,
amortization of deferred financing costs of $0.1 and $0.3,
respectively, and amortization of capitalized cloud software of
$0.0 recognized in selling, general and administrative expenses. In
the three and twelve months ended May 31, 2019, amounts include
depreciation of $0.7 and $2.9, respectively, recognized in cost of
goods sold, and amortization of deferred financing costs of $0.1
and $0.3, respectively, recognized in selling, general and
administrative expenses.
|
|
|
(2)
|
Adjusted EBITDA is
defined by the Company as earnings (loss), excluding one-time
items, before interest, taxes, depreciation and amortization. The
Company believes that Adjusted EBITDA is a meaningful measure of
operating profitability and useful for measuring returns on capital
investments over time as it is not distorted by unusual gains,
losses, or other items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6
|
Scholastic
Corporation
|
|
Segment
Results - Supplemental
|
|
Excluding
One-Time Items
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
05/31/20
|
items
|
One-time
items
|
|
05/31/19
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
$19.5
|
|
$19.5
|
|
$47.0
|
|
$47.0
|
|
|
|
|
|
|
Book Fairs
|
|
32.1
|
|
32.1
|
|
156.3
|
|
156.3
|
|
|
|
|
|
|
Consolidated
Trade
|
|
80.4
|
|
80.4
|
|
55.4
|
|
55.4
|
|
|
|
|
|
|
Total
Revenues
|
|
132.0
|
|
132.0
|
|
258.7
|
|
258.7
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(46.5)
|
-
|
(46.5)
|
|
18.2
|
-
|
18.2
|
|
|
|
|
|
|
Operating
margin
|
|
-
|
|
-
|
|
7.0%
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
94.7
|
|
94.7
|
|
117.7
|
|
117.7
|
|
|
|
|
|
|
Operating income
(loss)
|
|
27.3
|
-
|
27.3
|
|
36.9
|
-
|
36.9
|
|
|
|
|
|
|
Operating
margin
|
|
28.8%
|
|
28.8%
|
|
31.4%
|
|
31.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
57.3
|
|
57.3
|
|
94.3
|
|
94.3
|
|
|
|
|
|
|
Operating income
(loss) (1)
|
|
(10.8)
|
1.7
|
(9.1)
|
|
5.8
|
1.0
|
6.8
|
|
|
|
|
|
|
Operating
margin
|
|
-
|
|
-
|
|
6.2%
|
|
7.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead expense
(2)
|
|
16.2
|
(5.1)
|
11.1
|
|
28.9
|
(7.1)
|
21.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
($46.2)
|
$6.8
|
($39.4)
|
|
$32.0
|
$8.1
|
$40.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
05/31/20
|
items
|
One-time
items
|
|
05/31/19
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
$156.8
|
|
$156.8
|
|
$212.4
|
|
$212.4
|
|
|
|
|
|
|
Book Fairs
|
|
383.8
|
|
383.8
|
|
499.6
|
|
499.6
|
|
|
|
|
|
|
Consolidated
Trade
|
|
334.8
|
|
334.8
|
|
278.3
|
|
278.3
|
|
|
|
|
|
|
Total
Revenues
|
|
875.4
|
|
875.4
|
|
990.3
|
|
990.3
|
|
|
|
|
|
|
Operating income
(loss)
|
|
23.6
|
-
|
23.6
|
|
82.9
|
-
|
82.9
|
|
|
|
|
|
|
Operating
margin
|
|
2.7%
|
|
2.7%
|
|
8.4%
|
|
8.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
287.3
|
|
287.3
|
|
297.4
|
|
297.4
|
|
|
|
|
|
|
Operating income
(loss)
|
|
29.9
|
-
|
29.9
|
|
30.6
|
-
|
30.6
|
|
|
|
|
|
|
Operating
margin
|
|
10.4%
|
|
10.4%
|
|
10.3%
|
|
10.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
324.4
|
|
324.4
|
|
366.2
|
|
366.2
|
|
|
|
|
|
|
Operating income
(loss) (1)
|
|
(6.5)
|
1.7
|
(4.8)
|
|
13.8
|
1.5
|
15.3
|
|
|
|
|
|
|
Operating
margin
|
|
-
|
|
-
|
|
3.8%
|
|
4.2%
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
Overhead expense
(2)
|
|
135.5
|
(54.5)
|
81.0
|
|
102.3
|
(14.5)
|
87.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
($88.5)
|
$56.2
|
($32.3)
|
|
$25.0
|
$16.0
|
$41.0
|
|
|
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(1)
|
In the three and
twelve months ended May 31, 2020, the Company recognized pretax
severance of $1.1 and a pretax impairment charge of $0.6 related to
an outdated technology platform in Canada. In the three and twelve
months ended May 31, 2019, the Company recognized pretax severance
of $1.0 and $1.0, respectively and pretax branch consolidation
costs of $0.0 and $0.5, respectively.
|
|
|
(2)
|
In the three and
twelve months ended May 31, 2020, the Company recognized
pretax severance of $5.1 and $12.0, respectively. In the twelve
months ended May 31, 2020, the Company recognized a pretax asset
write down of $40.0 primarily resulting from lower anticipated
requirements in the Company's club and fair channels, a pretax
charge of $1.0 related to a settlement of an intellectual property
producing agreement and a pretax settlement expense of $1.5 related
to an alleged patent infringement claim. In the three and twelve
months ended May 31, 2019, the Company recognized pretax impairment
charges of $0.9 related to legacy building improvements, pretax
severance of $2.4 and $5.5, respectively, and pretax charges
related to a legacy sales tax assessment of $3.8 and $8.1,
respectively.
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View original content to download
multimedia:http://www.prnewswire.com/news-releases/scholastic-reports-q4-and-fiscal-2020-results-301099044.html
SOURCE Scholastic Corporation