Consolidated Trade Sales Increased 7%
Announced Agreement to Invest in 9 Story Media
Group, Expanding Opportunities to Build and Monetize Global
Children's IP
Over $60 Million
Returned to Shareholders in Third Quarter
NEW
YORK, March 21, 2024 /PRNewswire/ -- Scholastic
Corporation (NASDAQ: SCHL), the global children's publishing,
education and media company, today reported financial results for
the Company's fiscal third quarter ended February 29,
2024.
Peter Warwick, President and
Chief Executive Officer, said, "Last quarter Scholastic's continued
successes in children's book publishing and entertainment
demonstrated our leadership in building beloved children's
franchises and brands. In Trade Publishing, multiple new releases
expanded Scholastic's presence on bestseller lists, including
Heroes: A Novel of Pearl
Harbor by Alan Gratz and
the latest titles in our popular graphic novel series
HeartstopperTM by Alice Oseman, Wings of FireTM
by Tui Sutherland, Amulet by
Kazi Kibuishi and The Baby-Sitters Club® by
Ann Martin. Looking ahead, we are
excited about the next title in Dav
Pilkey's Dog Man® series, as well as other
frontlist titles publishing this year. Following the success of the
live-action Goosebumps® TV debut last fall, based upon
R.L. Stine's worldwide bestselling Scholastic book series and
co-produced by Scholastic Entertainment, Disney announced it has
greenlit a second season of the hit series for
Disney+®.
"We are thrilled to significantly broaden the scope of our 360°
content creation strategy, which taps the virtuous circle from page
to screen back to page, with our recently announced agreement to
invest in 9 Story Media Group, acquiring 100% of the economic
interest in the company. This strategic investment in a leading
creator, producer and distributor of premium animated and
live-action children's content significantly grows Scholastic's
footprint in children's media as well as opportunities to build and
monetize Scholastic's trusted global brand, best-selling publishing
and unique distribution channels, reaching kids where they are and
creating more value for our shareholders.
"In line with our expectations, Scholastic experienced modest
revenue declines and higher losses in our seasonally small third
quarter, reflecting the continued impact of the currently complex
environment in U.S. schools on our School Reading Events and
Education divisions. During the quarter, Scholastic returned over
$60 million to shareholders through repurchases and our
regular dividend, demonstrating our confidence in the business. As
we begin our largest and most profitable quarter of the year with
strong expectations, we are affirming our revised fiscal 2024
guidance. Scholastic remains committed to executing on our
long-term strategy, investing in content and capabilities to drive
growth, maintaining a strong, efficient balance sheet, and
returning capital to shareholders, as we build on our unique
strengths as the world's largest and most trusted publisher and
distributor of children's books and media."
Fiscal 2024 Q3 Review
|
In $ millions (except
per share data)
|
Third
Quarter
|
|
Change
|
|
Fiscal
2024
|
|
Fiscal
2023
|
|
$
|
%
|
|
Revenues
|
$
|
323.7
|
|
$
|
324.9
|
|
$
|
(1.2)
|
0 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
(34.9)
|
|
$
|
(27.7)
|
|
$
|
(7.2)
|
(26) %
|
|
Earnings (loss) before
taxes
|
$
|
(34.6)
|
|
$
|
(26.2)
|
|
$
|
(8.4)
|
(32) %
|
|
Diluted earnings (loss)
per share
|
$
|
(0.91)
|
|
$
|
(0.57)
|
|
$
|
(0.34)
|
(60) %
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss), ex one-time items *
|
$
|
(30.6)
|
|
$
|
(27.7)
|
|
$
|
(2.9)
|
(10) %
|
|
Diluted earnings (loss)
per share, ex. one-time items *
|
$
|
(0.80)
|
|
$
|
(0.57)
|
|
$
|
(0.23)
|
(40) %
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
*
|
$
|
(7.2)
|
|
$
|
(5.4)
|
|
$
|
(1.8)
|
(33) %
|
|
* Please refer to the
non-GAAP financial tables attached
|
Revenues were approximately level in the quarter at
$323.7 million, a decrease of
$1.2 million from $324.9 million in the prior year. Lower U.S. Book
Clubs revenues of approximately $14.4
million related to the strategic repositioning of the
business, were offset by strong trade publishing revenues in the
U.S., Canada and the UK, which
benefited from the sales of popular book series titles.
Operating loss increased 26.0% to $34.9 million in the quarter, including one-time
items of $4.3 million, compared to
$27.7 million a year ago, as
anticipated. Excluding one-time items in the current period,
operating loss increased 10%, reflecting higher spending on growth
initiatives, partly offset by increased profitability from higher
trade revenues, favorable freight costs in the U.S. markets and
lower promotion costs in book clubs. Adjusted EBITDA (a non-GAAP
measure of operations explained in the accompanying tables)
decreased $1.8 million to a loss of
$7.2 million.
Quarterly Results
Children's Book Publishing and Distribution
In the fiscal third quarter, the Children's Book Publishing and
Distribution segment's revenues decreased 5% to $193.6 million.
- Book Fairs revenues were $102.7
million, down slightly from the prior year period. The third
fiscal quarter is a seasonally smaller quarter for the U.S. school
channels.
- Book Clubs revenues were $13.3
million, a decline of 52% from the prior year period
reflecting the impact of lower planned promotional spending on
unprofitable offers.
- Consolidated Trade revenues were $77.6
million, up 7% from the prior year period primarily due to
the continued positive impact from backlist sales from bestselling
series like Hunger Games® and Five Nights at
Freddy'sTM. New releases in popular graphic novel
series as well as new titles from proven Scholastic authors drove
improved frontlist sales. This was partially offset by lower
revenues from the prior year delivery of the animated TV show
"Eva the Owlet"TM based on the Owl
DiariesTM book series.
Adjusted segment operating income was $2.7 million, excluding $3.5 million in one-time charges, compared to
$1.9 million in the prior period,
primarily related to lower freight costs and promotional
spending.
Education Solutions
Education Solutions revenues were $68.5
million, a slight decrease from the prior year period,
reflecting lower sales of supplemental instructional materials
partially offset by higher state-sponsored program revenues.
Segment operating loss was $0.8
million, compared to operating income of $0.7 million in the prior period. The decrease
was primarily due the on-going impact of increased spending on
growth initiatives, partially offset by lower promotional
spending.
International
Excluding the impact of foreign currency exchange, which on a
net basis was insignificant for the quarter, International revenues
increased 16% or $8.2 million as
trade channel revenues in Canada
and the U.K. improved on the strong performance of series titles
including Hunger Games, Heartstopper, Five Nights
at Freddy's and Dog Man. Canada's Book Fairs channel experienced
increased fair count and improved revenue per fair, and
India continued to experience
modest growth.
Segment operating loss was $5.9
million, compared to $9.0
million in the prior period. The improvement was primarily
driven by higher sales.
Overhead
Adjusted overhead costs were $26.6
million, excluding $0.8
million in one-time charges, compared to $21.3 million in the prior period. This increase
primarily reflects favorable litigation settlements and certain
legacy sales tax items, both of which benefited the prior year,
partially offset by higher rental income.
Capital Position and Liquidity
|
In $
millions
|
Third
Quarter
|
|
Change
|
|
Fiscal
2024
|
|
Fiscal
2023
|
|
$
|
%
|
|
Net cash (used)
provided by operating activities
|
$
|
13.1
|
|
$
|
7.6
|
|
$
|
5.5
|
72 %
|
|
Additions to property,
plant and equipment and prepublication expenditures
|
|
(20.2)
|
|
|
(19.5)
|
|
|
0.7
|
4 %
|
|
Free cash flow
(use)*
|
$
|
(7.1)
|
|
$
|
(11.9)
|
|
$
|
4.8
|
40 %
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
(debt)*
|
$
|
78.9
|
|
$
|
193.6
|
|
$
|
(114.7)
|
(59) %
|
|
* Please refer to the
non-GAAP financial tables attached
|
Net cash provided by operating activities increased $5.5 million compared to the prior period,
primarily driven by lower inventory purchasing and working capital
usage, partially offset by lower customer remittances. Lower
inventory spend reflects lower freight and manufacturing costs in
addition to lower purchased quantities. Free cash flow use (a
non-GAAP measure of operations explained in the accompanying
tables) was $7.1 million in fiscal
2024, compared to free cash flow use of $11.9 million in the prior period, reflecting the
lower working capital usage.
The Company distributed $6.1
million in dividends and repurchased 1,404,716 shares of its
common stock for $54.2 million
in the third quarter.
The Company's Board of Directors has authorized an
additional $54.6 million for repurchases of its common stock
under the Company's stock repurchase program, increasing the
authorization to $100.0 million. The
Company expects to continue purchasing shares, from time to time as
conditions allow, on the open market or in negotiated private
transactions for the foreseeable future.
Fiscal Year-To-Date 2024 Review
|
In $ millions (except
per share data)
|
Year-To-Date
|
|
Change
|
|
Fiscal
2024
|
|
Fiscal
2023
|
|
$
|
%
|
|
Revenues
|
$
|
1,114.8
|
|
$
|
1,175.7
|
|
$
|
(60.9)
|
(5) %
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
(32.7)
|
|
$
|
14.3
|
|
$
|
(47.0)
|
NM
|
|
Earnings (loss) before
taxes
|
$
|
(31.1)
|
|
$
|
16.8
|
|
$
|
(47.9)
|
NM
|
|
Diluted earnings (loss)
per share
|
$
|
(0.80)
|
|
$
|
0.30
|
|
$
|
(1.10)
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss), ex. one-time items *
|
$
|
(22.1)
|
|
$
|
14.3
|
|
$
|
(36.4)
|
NM
|
|
Diluted earnings (loss)
per share, ex. one-time items*
|
$
|
(0.53)
|
|
$
|
0.30
|
|
$
|
(0.83)
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
*
|
$
|
46.2
|
|
$
|
81.3
|
|
$
|
(35.1)
|
(43) %
|
|
* Please refer to the
non-GAAP financial tables attached
|
Revenues decreased 5% to $1,114.8
million year-to-date, primarily due to the headwinds in the
retail market in the first quarter, which impacted the
domestic and international trade publishing revenues, and the
shifting timing of sales in Education Solutions. Revenues were also
impacted by the strategic plan to reposition Book Clubs to a
smaller, more profitable core.
Operating loss was $32.7
million year-to-date, including $10.6
million in one-time charges related to restructuring,
cost-savings activities and acquisition costs, compared to
operating income of $14.3 million a
year ago, which did not include any one-time charges. Excluding
one-time charges in the current period, operating loss in the
year-to-date period increased $36.4
million from a year ago. Adjusted EBITDA (a non-GAAP measure
of operations explained in the accompanying tables) decreased
$35.1 million to $46.2 million. As expected, the continued shift
in the overall seasonality of the Education Solutions segment
sales, which significantly impacted the first quarter performance
of this segment, coupled with continued investment in strategic
initiatives and increased spending in the Book Fairs business to
facilitate increased fair count resulted in the reduction in
operating income.
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 Flow". Please refer to the non-GAAP financial tables
attached to this press release for supporting details on the impact
of one-time items on operating income, net income and diluted EPS,
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, March 21, 2024. Peter
Warwick, Scholastic President and Chief Executive Officer,
and Haji Glover, the Company's Chief Financial Officer, Executive
Vice President, 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.investor.scholastic.com. To access the conference call
by phone, please go to this link (registration link), and you will
be provided with dial in details. To avoid delays, we encourage
participants to dial into the conference call fifteen minutes ahead
of the scheduled start time. Shortly following the call, an
archived webcast and accompanying slides from the conference call
will also be posted at investor.scholastic.com.
About Scholastic
For more than 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
international operations and exports in more than 135 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 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
|
Table 1
|
|
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
(In $ Millions,
except shares and per share data)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
02/29/24
|
02/28/23
|
|
02/29/24
|
02/28/23
|
|
Revenues
|
$
|
323.7
|
$
|
324.9
|
|
$
|
1,114.8
|
$
|
1,175.7
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
148.7
|
|
161.1
|
|
|
512.8
|
|
566.0
|
|
Selling, general and
administrative expenses (1)
|
|
194.8
|
|
178.0
|
|
|
592.1
|
|
554.4
|
|
Depreciation and
amortization
|
|
14.6
|
|
13.5
|
|
|
42.1
|
|
41.0
|
|
Asset impairments and
write downs (2)
|
|
0.5
|
|
—
|
|
|
0.5
|
|
—
|
|
Total operating costs
and expenses
|
|
358.6
|
|
352.6
|
|
|
1,147.5
|
|
1,161.4
|
|
Operating income
(loss)
|
|
(34.9)
|
|
(27.7)
|
|
|
(32.7)
|
|
14.3
|
|
Interest income
(expense), net
|
|
0.6
|
|
1.4
|
|
|
2.4
|
|
2.3
|
|
Other components of net
periodic benefit (cost)
|
|
(0.3)
|
|
0.1
|
|
|
(0.8)
|
|
0.2
|
|
Earnings (loss)
before income taxes
|
|
(34.6)
|
|
(26.2)
|
|
|
(31.1)
|
|
16.8
|
|
Provision (benefit) for
income taxes (3)
|
|
(8.1)
|
|
(6.9)
|
|
|
(7.3)
|
|
6.1
|
|
Net income
(loss)
|
|
(26.5)
|
|
(19.3)
|
|
|
(23.8)
|
|
10.7
|
|
Less: Net income (loss)
attributable to noncontrolling interest
|
|
—
|
|
(0.1)
|
|
|
—
|
|
0.1
|
|
Net income (loss)
attributable to Scholastic Corporation
|
$
|
(26.5)
|
$
|
(19.2)
|
|
$
|
(23.8)
|
$
|
10.6
|
|
Basic and diluted
earnings (loss) per share of Class A and Common Stock (4)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.91)
|
$
|
(0.57)
|
|
$
|
(0.80)
|
$
|
0.31
|
|
Diluted
|
$
|
(0.91)
|
$
|
(0.57)
|
|
$
|
(0.80)
|
$
|
0.30
|
|
Basic weighted average
shares outstanding
|
|
29,052
|
|
33,682
|
|
|
29,906
|
|
34,178
|
|
Diluted weighted
average shares outstanding
|
|
29,815
|
|
34,722
|
|
|
30,747
|
|
35,148
|
|
(1)
|
In the three and nine
months ended February 29, 2024, the Company recognized pretax costs
related to its planned investment in 9
Story Media Group of $3.0 and pretax severance expense of $0.8 and
$7.1, respectively, related to restructuring and cost-savings
initiatives.
|
|
(2)
|
In the three and nine
months ended February 29, 2024, the Company recognized pretax
asset impairment of $0.5 related to an early
exit of a sales office lease.
|
|
(3)
|
In the three and nine
months ended February 29, 2024, the Company recognized a benefit of
$1.1 and $2.7, respectively, for income
taxes in respect to one-time pretax items.
|
|
(4)
|
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
|
Change
|
|
Nine months
ended
|
Change
|
|
02/29/24
|
02/28/23
|
$
|
%
|
|
02/29/24
|
02/28/23
|
$
|
%
|
|
Children's Book
Publishing
and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Books Clubs
|
$
|
13.3
|
$
|
27.7
|
$
|
(14.4)
|
(52) %
|
|
$
|
48.3
|
$
|
91.6
|
$
|
(43.3)
|
(47) %
|
|
Book Fairs
|
|
102.7
|
|
103.5
|
|
(0.8)
|
(1) %
|
|
|
372.1
|
|
372.6
|
|
(0.5)
|
0 %
|
|
School Reading
Events
|
|
116.0
|
|
131.2
|
|
(15.2)
|
(12) %
|
|
|
420.4
|
|
464.2
|
|
(43.8)
|
(9) %
|
|
Consolidated
Trade
|
|
77.6
|
|
72.8
|
|
4.8
|
7 %
|
|
|
268.8
|
|
282.8
|
|
(14.0)
|
(5) %
|
|
Total
Revenues
|
|
193.6
|
|
204.0
|
|
(10.4)
|
(5) %
|
|
|
689.2
|
|
747.0
|
|
(57.8)
|
(8) %
|
|
Operating income
(loss)
|
|
(0.8)
|
|
1.9
|
|
(2.7)
|
(142) %
|
|
|
68.5
|
|
85.0
|
|
(16.5)
|
(19) %
|
|
Operating
margin
|
|
NM
|
|
0.9 %
|
|
|
|
|
|
9.9 %
|
|
11.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
68.5
|
|
70.0
|
|
(1.5)
|
(2) %
|
|
|
215.5
|
|
223.2
|
|
(7.7)
|
(3) %
|
|
Operating income
(loss)
|
|
(0.8)
|
|
0.7
|
|
(1.5)
|
NM
|
|
|
(13.7)
|
|
3.4
|
|
(17.1)
|
NM
|
|
Operating
margin
|
|
NM
|
|
1.0 %
|
|
|
|
|
|
NM
|
|
1.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
59.1
|
|
50.9
|
|
8.2
|
16 %
|
|
|
202.8
|
|
205.5
|
|
(2.7)
|
(1) %
|
|
Operating income
(loss)
|
|
(5.9)
|
|
(9.0)
|
|
3.1
|
34 %
|
|
|
(6.1)
|
|
(5.8)
|
|
(0.3)
|
(5) %
|
|
Operating
margin
|
|
NM
|
|
NM
|
|
|
|
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(27.4)
|
|
(21.3)
|
|
(6.1)
|
(29) %
|
|
|
(81.4)
|
|
(68.3)
|
|
(13.1)
|
(19) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
(34.9)
|
$
|
(27.7)
|
$
|
(7.2)
|
(26) %
|
|
$
|
(32.7)
|
$
|
14.3
|
$
|
(47.0)
|
NM
|
|
Table 3
|
|
|
Scholastic
Corporation
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
Selected Balance
Sheet Items
|
|
02/29/24
|
02/28/23
|
|
|
|
|
Cash and cash
equivalents
|
$
|
110.4
|
$
|
198.8
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
253.0
|
|
261.7
|
|
|
|
|
|
|
Inventories,
net
|
|
282.5
|
|
367.5
|
|
|
|
|
|
|
Accounts
payable
|
|
126.1
|
|
158.4
|
|
|
|
|
|
|
Deferred
revenue
|
|
193.8
|
|
203.0
|
|
|
|
|
|
|
Accrued
royalties
|
|
75.1
|
|
83.2
|
|
|
|
|
|
|
Lines of credit and
current portion of long-term debt
|
|
31.5
|
|
5.2
|
|
|
|
|
|
|
Long-term
debt
|
|
—
|
|
—
|
|
|
|
|
|
|
Total debt
|
|
31.5
|
|
5.2
|
|
|
|
|
|
|
Net cash (debt)
(1)
|
|
78.9
|
|
193.6
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
997.6
|
|
1,149.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Cash Flow
Items
|
|
Three months
ended
|
|
Nine months
ended
|
|
02/29/24
|
02/28/23
|
|
02/29/24
|
02/28/23
|
|
Net cash provided by
(used in) operating activities
|
$
|
13.1
|
$
|
7.6
|
|
$
|
84.7
|
$
|
28.9
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
14.7
|
|
12.7
|
|
|
43.8
|
|
36.8
|
|
Prepublication
expenditures
|
|
5.5
|
|
6.8
|
|
|
17.2
|
|
17.8
|
|
Free cash flow (use)
(2)
|
$
|
(7.1)
|
$
|
(11.9)
|
|
$
|
23.7
|
$
|
(25.7)
|
|
(1)
|
Net cash (debt) is
defined by the Company as cash and cash equivalents, net of lines
of credit and
short-term debt plus long-term-debt. 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 and from sale
of assets, 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
|
|
Supplemental
Results
|
|
Excluding One-Time
Items
|
|
(Unaudited)
|
|
(In $ Millions,
except per share data)
|
|
|
Three months
ended
|
|
02/29/2024
|
|
02/28/2023
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
|
Diluted earnings (loss)
per share (1)
|
$
|
(0.91)
|
|
$
|
0.11
|
|
$
|
(0.80)
|
|
$
|
(0.57)
|
|
$
|
—
|
|
$
|
(0.57)
|
|
Net income (loss)
(2)
|
$
|
(26.5)
|
|
$
|
3.2
|
|
$
|
(23.3)
|
|
$
|
(19.2)
|
|
$
|
—
|
|
$
|
(19.2)
|
|
Earnings (loss) before
income taxes
|
$
|
(34.6)
|
|
$
|
4.3
|
|
$
|
(30.3)
|
|
$
|
(26.2)
|
|
$
|
—
|
|
$
|
(26.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution (3)
|
$
|
(0.8)
|
|
$
|
3.5
|
|
$
|
2.7
|
|
$
|
1.9
|
|
$
|
—
|
|
$
|
1.9
|
|
Education
Solutions
|
|
(0.8)
|
|
|
—
|
|
|
(0.8)
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
International
|
|
(5.9)
|
|
|
—
|
|
|
(5.9)
|
|
|
(9.0)
|
|
|
—
|
|
|
(9.0)
|
|
Overhead
(5)
|
|
(27.4)
|
|
|
0.8
|
|
|
(26.6)
|
|
|
(21.3)
|
|
|
—
|
|
|
(21.3)
|
|
Operating income
(loss)
|
$
|
(34.9)
|
|
$
|
4.3
|
|
$
|
(30.6)
|
|
$
|
(27.7)
|
|
$
|
—
|
|
$
|
(27.7)
|
|
Nine months
ended
|
|
02/29/2024
|
|
02/28/2023
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
|
Diluted earnings (loss)
per share (1)
|
$
|
(0.80)
|
|
$
|
0.26
|
|
$
|
(0.53)
|
|
$
|
0.30
|
|
$
|
—
|
|
$
|
0.30
|
|
Net income (loss)
(2)
|
$
|
(23.8)
|
|
$
|
7.9
|
|
$
|
(15.9)
|
|
$
|
10.6
|
|
$
|
—
|
|
$
|
10.6
|
|
Earnings (loss) before
income taxes
|
$
|
(31.1)
|
|
$
|
10.6
|
|
$
|
(20.5)
|
|
$
|
16.8
|
|
$
|
—
|
|
$
|
16.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution (3)
|
$
|
68.5
|
|
$
|
3.5
|
|
$
|
72.0
|
|
$
|
85.0
|
|
$
|
—
|
|
$
|
85.0
|
|
Education
Solutions
|
|
(13.7)
|
|
|
—
|
|
|
(13.7)
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
International
(4)
|
|
(6.1)
|
|
|
1.2
|
|
|
(4.9)
|
|
|
(5.8)
|
|
|
—
|
|
|
(5.8)
|
|
Overhead
(5)
|
|
(81.4)
|
|
|
5.9
|
|
|
(75.5)
|
|
|
(68.3)
|
|
|
—
|
|
|
(68.3)
|
|
Operating income
(loss)
|
$
|
(32.7)
|
|
$
|
10.6
|
|
$
|
(22.1)
|
|
$
|
14.3
|
|
$
|
—
|
|
$
|
14.3
|
|
(1)
|
Earnings (loss) per
share are calculated on non-rounded net income (loss) and shares
outstanding. Recalculating earnings
per share based on rounded numbers may not yield the results as
presented.
|
|
(2)
|
In the three and nine
months ended February 29, 2024, the Company recognized a benefit of
$1.1 and $2.7, respectively, for
income taxes in respect to one-time pretax items.
|
|
(3)
|
In the three and nine
months ended February 29, 2024, the Company recognized pretax costs
associated with its planned
investment in 9 Story Media Group of $3.0 and pretax asset
impairment of $0.5 related to an early exit of a sales office
lease.
|
|
(4)
|
In the nine months
ended February 29, 2024, the Company recognized pretax severance of
$1.2 related to restructuring and
cost-savings initiatives.
|
|
(5)
|
In the three and nine
months ended February 29, 2024, the Company recognized pretax
severance of $0.8 and $5.9,
respectively, related to restructuring and cost-savings
initiatives.
|
|
Table 5
|
|
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations - Supplemental
|
|
Adjusted
EBITDA
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
Three months
ended
|
|
|
02/29/24
|
|
02/28/23
|
|
|
Earnings (loss) before
income taxes as reported
|
$
|
(34.6)
|
|
$
|
(26.2)
|
|
|
One-time items before
income taxes
|
|
4.3
|
|
|
—
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
(30.3)
|
|
|
(26.2)
|
|
|
Interest (income)
expense
|
|
(0.6)
|
|
|
(1.4)
|
|
|
Depreciation and
amortization (1)
|
|
17.1
|
|
|
16.1
|
|
|
Amortization of
prepublication costs
|
|
6.6
|
|
|
6.1
|
|
|
Adjusted EBITDA
(2)
|
$
|
(7.2)
|
|
$
|
(5.4)
|
|
|
|
Nine months
ended
|
|
|
02/29/24
|
|
02/28/23
|
|
|
Earnings (loss) before
income taxes as reported
|
$
|
(31.1)
|
|
$
|
16.8
|
|
|
One-time items before
income taxes
|
|
10.6
|
|
|
—
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
(20.5)
|
|
|
16.8
|
|
|
Interest (income)
expense
|
|
(2.4)
|
|
|
(2.3)
|
|
|
Depreciation and
amortization (1)
|
|
49.2
|
|
|
48.3
|
|
|
Amortization of
prepublication costs
|
|
19.9
|
|
|
18.5
|
|
|
Adjusted EBITDA
(2)
|
$
|
46.2
|
|
$
|
81.3
|
|
|
(1)
|
For the three and nine
months ended February 29, 2024, amounts include depreciation of
$0.5 and $1.7, respectively, recognized in cost of goods sold,
amortization of deferred
financing costs of $0.1 and $0.2, respectively, and amortization of
capitalized cloud
software of $1.9 and $5.2, respectively, recognized in selling,
general and administrative
expenses. For the three and nine months ended February 28, 2023,
amounts include
depreciation of $0.9 and $2.5, respectively, recognized in cost of
goods sold, amortization
of deferred financing costs of $0.1 and $0.2, respectively, and
amortization of capitalized
cloud software of $1.6 and $4.6, 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.
|
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SOURCE Scholastic Corporation