Diluted Earnings Per Share of $2.45, Up 16% From Prior Year
Over $58 Million Returned to Shareholders
in Second Quarter
Board Approves an Additional $66 Million for Share Repurchases, Increasing
Total Authorization to $100
Million
NEW
YORK, Dec. 14, 2023 /PRNewswire/ -- Scholastic
Corporation (NASDAQ: SCHL), the global children's publishing,
education and media company, today reported financial results for
the Company's fiscal second quarter ended November 30, 2023.
Peter Warwick, President and
Chief Executive Officer, said, "During the seasonally important,
back-to-school second quarter, Scholastic delivered again on its
mission and long-term opportunity as we face a currently complex
environment in U.S. schools. School Book Fairs achieved higher fair
count and solid second quarter sales, and we began the process of
strategically repositioning our School Book Clubs as part of the
integrated School Reading Events business. Education sales remained
stable, reflecting Scholastic's unique ability to support literacy
by providing children access to engaging book collections through
our state and district partnerships. We also continued to invest in
our strategy to drive long-term growth and shareholder value. We
returned over $58 million to shareholders through share
buybacks and our dividend.
"Cat Kid Comic Club: Influencers by Dav Pilkey, the interactive edition of
Harry Potter and the Prisoner of
Azkaban, The Harry Potter Wizarding Almanac, and the new
paperback edition of The Ballad of Songbirds and
Snakes, Suzanne Collins' prequel
to the Hunger Games® series, all dominated bestseller
lists last quarter, evidencing Scholastic's leading position as a
provider of children's and young adult content. The new live-action
Goosebumps® TV series on Disney+® and
Hulu® also performed very well since its October launch.
Co-produced by Scholastic Entertainment, it is based on the classic
Scholastic series, which has sold over 400 million copies. Looking
ahead, we are positive about our publishing plan for the remainder
of the fiscal year, including new titles in our hugely popular Dog
Man® and HeartstopperTM series.
"Second quarter results came in below expectations for profit
growth, however, largely reflecting lower than forecast
participation and spending in our School Reading Events division,
which we expect to continue for the remainder of this school year.
As a result, we are adjusting our fiscal 2024 guidance as we take
steps to target additional revenue opportunities and align spending
in the second half of this year. Overall, last quarter's results
reinforce our conviction in Scholastic's long-term growth outlook –
as we continue to build on our unique strengths as the world's
largest and most trusted children's publisher and distributor – and
our commitment to continue deploying capital to invest in growth
and enhance shareholder returns."
Outlook
The Company has updated its guidance for fiscal year 2024 and
now expects Adjusted EBITDA (as defined in the accompanying tables)
of $165 million to $175 million (compared to a range of $190 million to $200
million, previously). Full-year revenue is now expected to
be approximately level with or slightly below the prior year
(compared to growth of 3% to 5%, previously).
Fiscal 2024 Q2 Review
In $ millions (except
per share data)
|
Second
Quarter
|
|
Change
|
|
Fiscal
2024
|
|
Fiscal
2023
|
|
$
|
%
|
Revenues
|
$
|
562.6
|
|
$
|
587.9
|
|
$
|
(25.3)
|
(4) %
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
101.3
|
|
$
|
100.1
|
|
$
|
1.2
|
1 %
|
Earnings (loss) before
taxes
|
$
|
101.5
|
|
$
|
100.9
|
|
$
|
0.6
|
1 %
|
Diluted earnings (loss)
per share
|
$
|
2.45
|
|
$
|
2.12
|
|
$
|
0.33
|
16 %
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss), ex one-time items *
|
$
|
101.3
|
|
$
|
100.1
|
|
$
|
1.2
|
1 %
|
Diluted earnings (loss)
per share, ex. one-time items *
|
$
|
2.45
|
|
$
|
2.12
|
|
$
|
0.33
|
16 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
*
|
$
|
124.0
|
|
$
|
122.3
|
|
$
|
1.7
|
1 %
|
* Please refer to the
non-GAAP financial tables attached
|
Revenues decreased 4% to $562.6
million, primarily as a result of reduced, more targeted
promotional spending and the elimination of unprofitable orders in
Book Clubs, as the channel is repositioned to a smaller, more
profitable core. Revenues from other channels and businesses were
approximately in line with the prior period.
Operating income was $101.3
million in the quarter, an increase of $1.2 million from $100.1
million a year ago. Adjusted EBITDA (a non-GAAP measure of
operations explained in the accompanying tables) increased
$1.7 million to $124.0 million. Profits improved, reflecting
lower promotional spending and improvements in inventory product
and freight costs, which more than offset the impact of lower sales
in Clubs.
Quarterly Results
Children's Book Publishing and Distribution
In the fiscal second quarter, the Children's Book Publishing and
Distribution segment's revenues decreased 6% to $392.8 million.
- Book Fairs revenues were $242.1
million, up 1% from the prior year period primarily on
higher fair count. Increased redemptions of incentive program
credits were partly offset by modestly lower average revenue per
fair. On a same-fair basis, revenue per fair rose modestly.
- Book Clubs revenues were $32.4
million, down 44% from the prior year period, reflecting a
planned reduction in promotional spending on unprofitable offers,
as the business implements new customer-centric strategies and is
integrated with Book Fairs into a combined School Reading Events
division.
- Consolidated Trade revenues were $118.3
million, a decline of 1% from the prior year period
primarily due to lower revenues in Scholastic Entertainment,
relative to the prior year, which benefited from the release of the
Eva the OwletTM TV series. Excluding media revenues,
channel revenues increased 3%, driven by higher foreign rights
sales and the success of multiple front and backlist titles,
despite headwinds in the retail book market. The Company's retail
book sales continue to benefit from the success of movies and TV
shows, including Lionsgate's release of The Ballad of Songbirds
and SnakesTM and Blumhouse's Five Nights at
Freddy'sTM.
Segment operating income was $110.8
million, compared to $113.2
million in the prior period, largely reflecting lower
revenues and higher planned spending related to facilities and
employees ahead of budgeted growth in Book Fairs' operations.
Education Solutions
Education Solutions revenues increased 1% to $81.0 million, due to higher state-sponsored
program revenues, partly offset by lower sales of supplemental
instructional materials.
Segment operating income was $5.8
million, compared to $7.0
million in the prior period, largely reflecting lower gross
margins due to product mix.
International
Excluding favorable foreign currency exchange of $0.7 million, International revenues declined 4%
or $3.8 million as revenues in
Australia and New Zealand were impacted by continued
softness in the overall retail market. Revenue declines were partly
offset by higher Book Fairs and Trade channel revenues in the
UK.
Segment operating income was $8.0
million, compared to $6.7
million in the prior period. Improved results were primarily
driven by Canada, which benefited
from the reorganization of Book Clubs.
Overhead
Overhead costs were $23.3 million,
compared to $26.8 million in the
prior period. Overhead benefited from higher rental income
associated with an additional tenant in the retail space of the
Company's headquarters building in Soho, New York City.
Capital Position and Liquidity
In $
millions
|
Second
Quarter
|
|
Change
|
|
Fiscal
2024
|
|
Fiscal
2023
|
|
$
|
%
|
Net cash (used)
provided by operating activities
|
$
|
109.7
|
|
$
|
81.6
|
|
$
|
28.1
|
34 %
|
Additions to property,
plant and equipment and prepublication
expenditures
|
|
(21.1)
|
|
|
(18.9)
|
|
|
2.2
|
12 %
|
Free cash flow
(use)*
|
$
|
88.6
|
|
$
|
62.7
|
|
$
|
25.9
|
41 %
|
|
|
|
|
|
|
|
|
|
|
Net cash
(debt)*
|
$
|
143.2
|
|
$
|
256.3
|
|
$
|
(113.1)
|
(44) %
|
* Please refer to the
non-GAAP financial tables attached
|
Net cash provided by operating activities increased $28.1 million compared to the prior period,
primarily driven by lower inventory purchasing and working capital
usage. Lower inventory spend reflects lower freight and
manufacturing costs. Free cash flow (a non-GAAP measure of
operations explained in the accompanying tables) was $88.6 million in fiscal 2024, compared to free
cash flow of $62.7 million in the
prior period, reflecting higher operating cash flow.
The Company distributed $6.3
million in dividends and repurchased 1,355,277 shares of its
common stock for $52.3 million in the
second quarter.
The Company's Board of Directors has authorized an additional
$66.2 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
|
$
|
791.1
|
|
$
|
850.8
|
|
$
|
(59.7)
|
(7) %
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
2.2
|
|
$
|
42.0
|
|
$
|
(39.8)
|
(95) %
|
Earnings (loss) before
taxes
|
$
|
3.5
|
|
$
|
43.0
|
|
$
|
(39.5)
|
(92) %
|
Diluted earnings (loss)
per share
|
$
|
0.09
|
|
|
0.84
|
|
$
|
(0.75)
|
(89) %
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss), ex. one-time items *
|
$
|
8.5
|
|
$
|
42.0
|
|
$
|
(33.5)
|
(80) %
|
Diluted earnings (loss)
per share, ex. one-time items*
|
$
|
0.23
|
|
$
|
0.84
|
|
$
|
(0.61)
|
(73) %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
*
|
$
|
53.4
|
|
$
|
86.7
|
|
$
|
(33.3)
|
(38) %
|
* Please refer to the
non-GAAP financial tables attached
|
Revenues decreased 7% to $791.1
million year-to-date, primarily due to the headwinds in the
retail market, which impacted both the domestic and international
trade markets in the first quarter and to a lesser extent the
second quarter, 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 income was $2.2
million in the first half of fiscal 2024, including
$6.3 million in one-time charges
related to restructuring and cost-savings activities, compared to
$42.0 million a year ago, which did
not include any one-time charges. Excluding one-time charges in the
current period, operating income decreased $33.5 million from a year ago. Adjusted EBITDA (a
non-GAAP measure of operations explained in the accompanying
tables) decreased $33.3 million to
$53.4 million. As expected, the
continued shift in the overall seasonality of the Education 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, December 14, 2023. Peter
Warwick, Scholastic President and Chief Executive Officer,
and Kenneth Cleary, the Company's
Chief Financial Officer and Acting President, International, 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
|
|
Six months
ended
|
|
11/30/23
|
11/30/22
|
|
11/30/23
|
11/30/22
|
Revenues
|
$
|
562.6
|
$
|
587.9
|
|
$
|
791.1
|
$
|
850.8
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
234.1
|
|
260.4
|
|
|
364.1
|
|
404.9
|
Selling, general and
administrative expenses (1)
|
|
213.1
|
|
213.6
|
|
|
397.3
|
|
376.4
|
Depreciation and
amortization
|
|
14.1
|
|
13.8
|
|
|
27.5
|
|
27.5
|
Total operating costs
and expenses
|
|
461.3
|
|
487.8
|
|
|
788.9
|
|
808.8
|
Operating income
(loss)
|
|
101.3
|
|
100.1
|
|
|
2.2
|
|
42.0
|
Interest income
(expense), net
|
|
0.4
|
|
0.7
|
|
|
1.8
|
|
0.9
|
Other components of net
periodic benefit (cost)
|
|
(0.2)
|
|
0.1
|
|
|
(0.5)
|
|
0.1
|
Earnings (loss)
before income taxes
|
|
101.5
|
|
100.9
|
|
|
3.5
|
|
43.0
|
Provision (benefit) for
income taxes (2)
|
|
24.6
|
|
25.5
|
|
|
0.8
|
|
13.0
|
Net income
(loss)
|
|
76.9
|
|
75.4
|
|
|
2.7
|
|
30.0
|
Less: Net income (loss)
attributable to noncontrolling interest
|
|
—
|
|
0.1
|
|
|
—
|
|
0.2
|
Net income (loss)
attributable to Scholastic Corporation
|
$
|
76.9
|
$
|
75.3
|
|
$
|
2.7
|
$
|
29.8
|
Basic and diluted
earnings (loss) per share of Class A and Common
Stock (3)
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.51
|
$
|
2.17
|
|
$
|
0.09
|
$
|
0.86
|
Diluted
|
$
|
2.45
|
$
|
2.12
|
|
$
|
0.09
|
$
|
0.84
|
Basic weighted average
shares outstanding
|
|
30,653
|
|
34,488
|
|
|
31,159
|
|
34,422
|
Diluted weighted
average shares outstanding
|
|
31,442
|
|
35,352
|
|
|
32,038
|
|
35,354
|
(1) In the six months
ended November 30, 2023, the Company recognized pretax
severance of $6.3 related to restructuring and cost-savings
initiatives.
|
(2) In the six months
ended November 30, 2023, the Company recognized a benefit of
$1.6 for income taxes in respect to one-time pretax
items.
|
(3) 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
|
|
Six months
ended
|
Change
|
|
|
11/30/23
|
11/30/22
|
$
|
%
|
|
11/30/23
|
11/30/22
|
$
|
%
|
|
Children's Book
Publishing and
Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Books Clubs
|
$
|
32.4
|
$
|
57.6
|
$
|
(25.2)
|
(44) %
|
|
$
|
35.0
|
$
|
63.9
|
$
|
(28.9)
|
(45) %
|
|
Book Fairs
|
|
242.1
|
|
240.8
|
|
1.3
|
1 %
|
|
|
269.4
|
|
269.1
|
|
0.3
|
0 %
|
|
School Reading
Events
|
|
274.5
|
|
298.4
|
|
(23.9)
|
(8) %
|
|
|
304.4
|
|
333.0
|
|
(28.6)
|
(9) %
|
|
Consolidated
Trade
|
|
118.3
|
|
119.9
|
|
(1.6)
|
(1) %
|
|
|
191.2
|
|
210.0
|
|
(18.8)
|
(9) %
|
|
Total
Revenues
|
|
392.8
|
|
418.3
|
|
(25.5)
|
(6) %
|
|
|
495.6
|
|
543.0
|
|
(47.4)
|
(9) %
|
|
Operating income
(loss)
|
|
110.8
|
|
113.2
|
|
(2.4)
|
(2) %
|
|
|
69.3
|
|
83.1
|
|
(13.8)
|
(17) %
|
|
Operating
margin
|
|
28.2 %
|
|
27.1 %
|
|
|
|
|
|
14.0 %
|
|
15.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
81.0
|
|
80.0
|
|
1.0
|
1 %
|
|
|
147.0
|
|
153.2
|
|
(6.2)
|
(4) %
|
|
Operating income
(loss)
|
|
5.8
|
|
7.0
|
|
(1.2)
|
(17) %
|
|
|
(12.9)
|
|
2.7
|
|
(15.6)
|
NM
|
|
Operating
margin
|
|
7.2 %
|
|
8.8 %
|
|
|
|
|
|
NM
|
|
1.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
86.5
|
|
89.6
|
|
(3.1)
|
(3) %
|
|
|
143.7
|
|
154.6
|
|
(10.9)
|
(7) %
|
|
Operating income
(loss)
|
|
8.0
|
|
6.7
|
|
1.3
|
19 %
|
|
|
(0.2)
|
|
3.2
|
|
(3.4)
|
(106) %
|
|
Operating
margin
|
|
9.2 %
|
|
7.5 %
|
|
|
|
|
|
NM
|
|
2.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(23.3)
|
|
(26.8)
|
|
3.5
|
13 %
|
|
|
(54.0)
|
|
(47.0)
|
|
(7.0)
|
(15) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
101.3
|
$
|
100.1
|
$
|
1.2
|
1 %
|
|
$
|
2.2
|
$
|
42.0
|
$
|
(39.8)
|
(95) %
|
|
Table 3
|
|
Scholastic
Corporation
|
Supplemental
Information
|
(Unaudited)
|
(In $
Millions)
|
|
Selected Balance
Sheet Items
|
|
11/30/23
|
11/30/22
|
|
|
|
Cash and cash
equivalents
|
$
|
149.5
|
$
|
261.1
|
|
|
|
|
|
Accounts receivable,
net
|
|
311.8
|
|
345.9
|
|
|
|
|
|
Inventories,
net
|
|
302.3
|
|
380.4
|
|
|
|
|
|
Accounts
payable
|
|
159.5
|
|
212.4
|
|
|
|
|
|
Deferred
revenue
|
|
225.0
|
|
232.7
|
|
|
|
|
|
Accrued
royalties
|
|
57.5
|
|
69.4
|
|
|
|
|
|
Lines of credit and
current portion of long-term debt
|
|
6.3
|
|
4.8
|
|
|
|
|
|
Long-term
debt
|
|
—
|
|
—
|
|
|
|
|
|
Total debt
|
|
6.3
|
|
4.8
|
|
|
|
|
|
Net cash (debt)
(1)
|
|
143.2
|
|
256.3
|
|
|
|
|
|
Total stockholders'
equity
|
|
1,079.1
|
|
1,218.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Cash Flow
Items
|
|
Three months
ended
|
|
Six months
ended
|
|
11/30/23
|
11/30/22
|
|
11/30/23
|
11/30/22
|
Net cash provided by
(used in) operating activities
|
$
|
109.7
|
$
|
81.6
|
|
$
|
71.6
|
$
|
21.3
|
Less:
|
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
14.8
|
|
12.7
|
|
|
29.1
|
|
24.1
|
Prepublication
expenditures
|
|
6.3
|
|
6.2
|
|
|
11.7
|
|
11.0
|
Free cash flow (use)
(2)
|
$
|
88.6
|
$
|
62.7
|
|
$
|
30.8
|
$
|
(13.8)
|
(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
|
|
11/30/2023
|
|
11/30/2022
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
Diluted earnings (loss)
per share (1)
|
$
|
2.45
|
|
$
|
—
|
|
$
|
2.45
|
|
$
|
2.12
|
|
$
|
—
|
|
$
|
2.12
|
Net income
(loss)
|
$
|
76.9
|
|
$
|
—
|
|
$
|
76.9
|
|
$
|
75.3
|
|
$
|
—
|
|
$
|
75.3
|
Earnings (loss) before
income taxes
|
$
|
101.5
|
|
$
|
—
|
|
$
|
101.5
|
|
$
|
100.9
|
|
$
|
—
|
|
$
|
100.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and
Distribution
|
$
|
110.8
|
|
$
|
—
|
|
$
|
110.8
|
|
$
|
113.2
|
|
$
|
—
|
|
$
|
113.2
|
Education
Solutions
|
|
5.8
|
|
|
—
|
|
|
5.8
|
|
|
7.0
|
|
|
—
|
|
|
7.0
|
International
|
|
8.0
|
|
|
—
|
|
|
8.0
|
|
|
6.7
|
|
|
—
|
|
|
6.7
|
Overhead
|
|
(23.3)
|
|
|
—
|
|
|
(23.3)
|
|
|
(26.8)
|
|
|
—
|
|
|
(26.8)
|
Operating income
(loss)
|
$
|
101.3
|
|
$
|
—
|
|
$
|
101.3
|
|
$
|
100.1
|
|
$
|
—
|
|
$
|
100.1
|
|
Six months
ended
|
|
11/30/2023
|
|
11/30/2022
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
|
Reported
|
|
One-time
items
|
|
Excluding
One-time
items
|
Diluted earnings (loss)
per share (1)
|
$
|
0.09
|
|
$
|
0.15
|
|
$
|
0.23
|
|
$
|
0.84
|
|
$
|
—
|
|
$
|
0.84
|
Net income (loss)
(2)
|
$
|
2.7
|
|
$
|
4.7
|
|
$
|
7.4
|
|
$
|
29.8
|
|
$
|
—
|
|
$
|
29.8
|
Earnings (loss) before
income taxes
|
$
|
3.5
|
|
$
|
6.3
|
|
$
|
9.8
|
|
$
|
43.0
|
|
$
|
—
|
|
$
|
43.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and
Distribution
|
$
|
69.3
|
|
$
|
—
|
|
$
|
69.3
|
|
$
|
83.1
|
|
$
|
—
|
|
$
|
83.1
|
Education
Solutions
|
|
(12.9)
|
|
|
—
|
|
|
(12.9)
|
|
|
2.7
|
|
|
—
|
|
|
2.7
|
International
(3)
|
|
(0.2)
|
|
|
1.2
|
|
|
1.0
|
|
|
3.2
|
|
|
—
|
|
|
3.2
|
Overhead
(4)
|
|
(54.0)
|
|
|
5.1
|
|
|
(48.9)
|
|
|
(47.0)
|
|
|
—
|
|
|
(47.0)
|
Operating income
(loss)
|
$
|
2.2
|
|
$
|
6.3
|
|
$
|
8.5
|
|
$
|
42.0
|
|
$
|
—
|
|
$
|
42.0
|
(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 six months
ended November 30, 2023, the Company recognized a benefit of
$1.6 for income taxes in respect to one-time pretax
items.
|
(3) In the six months
ended November 30, 2023, the Company recognized pretax
severance of $1.2 related to restructuring and cost-savings
initiatives.
|
(4) In the six months
ended November 30, 2023, the Company recognized pretax
severance of $5.1 related to restructuring and cost-savings
initiatives.
|
Table 5
|
|
Scholastic
Corporation
|
Consolidated
Statements of Operations - Supplemental
|
Adjusted
EBITDA
|
(Unaudited)
|
(In $
Millions)
|
|
|
Three months
ended
|
|
|
11/30/23
|
|
11/30/22
|
|
Earnings (loss) before
income taxes as reported
|
$
|
101.5
|
|
$
|
100.9
|
|
One-time items before
income taxes
|
|
—
|
|
|
—
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
101.5
|
|
|
100.9
|
|
Interest (income)
expense
|
|
(0.4)
|
|
|
(0.7)
|
|
Depreciation and
amortization (1)
|
|
16.3
|
|
|
16.0
|
|
Amortization of
prepublication costs
|
|
6.6
|
|
|
6.1
|
|
Adjusted EBITDA
(2)
|
$
|
124.0
|
|
$
|
122.3
|
|
|
|
Six months
ended
|
|
|
11/30/23
|
|
11/30/22
|
|
Earnings (loss) before
income taxes as reported
|
$
|
3.5
|
|
$
|
43.0
|
|
One-time items before
income taxes
|
|
6.3
|
|
|
—
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
9.8
|
|
|
43.0
|
|
Interest (income)
expense
|
|
(1.8)
|
|
|
(0.9)
|
|
Depreciation and
amortization (1)
|
|
32.1
|
|
|
32.2
|
|
Amortization of
prepublication costs
|
|
13.3
|
|
|
12.4
|
|
Adjusted EBITDA
(2)
|
$
|
53.4
|
|
$
|
86.7
|
|
(1) For the three and
six months ended November 30, 2023, amounts include
depreciation of $0.6 and $1.2, respectively, recognized in cost
of
goods sold, amortization of deferred financing
costs of $0.0 and $0.1, respectively, and amortization of
capitalized cloud software of $1.6
and $3.3, respectively, recognized in selling,
general and administrative expenses. For the three and six months
ended November 30, 2022,
amounts include depreciation of $0.7 and $1.6,
respectively, recognized in cost of goods sold, amortization of
deferred financing costs of
$0.0 and $0.1, respectively, and amortization
of capitalized cloud software of $1.5 and $3.0, 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