NEW YORK, July 19, 2018 /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, 2018.
As expected, the Company experienced lower revenues and
operating income in the 2018 fiscal year, following a strong fiscal
2017 bolstered by sales of the best-selling new title,
Harry Potter and the Cursed
Child, Parts One and Two. The Company also continued to invest
in technology and product development as part of its multi-year
Scholastic 2020 margin improvement plan through fiscal
2021.
By GAAP measures, fiscal 2018 revenues decreased 6% to
$1.63 billion and operating income
decreased 38% to $55.6 million in
comparison to $89.2 million in the
prior fiscal year, which benefited from strong sales of
Harry Potter and the Cursed
Child. Loss per diluted share from continuing operations, which
included a $57.3 million non-cash
charge from discontinuing the Company's domestic defined benefit
pension plan, as well as $11.2
million in non-cash impairment charges primarily associated
with the renovation of the New York
City headquarters building, was $0.14 compared to earnings per diluted share from
continuing operations of $1.48 in the
prior year period.
Excluding one-time items, fiscal 2018 full year earnings per
diluted share from continuing operations were $1.43, within guidance, compared to $1.83 in fiscal 2017. Operating income was
$75.0 million compared to
$109.4 million a year ago.
In the fourth quarter of fiscal 2018, revenue was $496.2 million compared to $499.6 million in fiscal 2017, and fourth quarter
fiscal 2018 operating income was $73.9
million, an increase of $9.6
million, or 15%, compared to $64.3
million in the prior year period. GAAP earnings from
continuing operations were $1.43 per
diluted share, compared to $1.11 per
diluted share in the fourth quarter of fiscal 2017. Fourth quarter
earnings per diluted share from continuing operations excluding
one-time items were $1.45 versus
$1.31 in the prior year period, an
increase of 11%.
"Strong fourth quarter results helped us reach the higher end of
full-year guidance for earnings per share, excluding one-time
items. We continued to invest in new publishing and
productivity-focused technologies under our Scholastic 2020
plan. The implementation of new finance and operating systems will
bring us information much more quickly, enabling improved inventory
and cost management, and is expected to provide cost savings of
$10 million in fiscal 2019," said
Richard Robinson, Scholastic
Chairman, President and Chief Executive Officer. "A new CRM system
now available to book fairs and education is now enabling improved
marketing effectiveness and reduced costs. We have also retired
over half of our legacy systems and migrated 95% of our
customer-facing applications to the Cloud."
Mr. Robinson continued, "Fiscal 2018 also saw strong trade sales
bolstered by top-selling titles across all genres – early years,
graphic novels, series publishing and young adult – including
Dav Pilkey's Dog Man, I
Survived, Five Nights at Freddy's, Wings of Fire
and Peppa Pig. We also expanded the Scholastic Education
sales force and broadened our publishing program, including the
development of a complete Pre-K to 6 core reading program,
Scholastic Literacy, which is expected to drive significant
sales beginning in fiscal 2020. We finished the major office
renovation of our headquarters building, adding capacity and
technology enhancements, and are now completing new high-value
retail space for tenanting in fiscal 2019 and beyond.
"While spending will continue for publishing and multi-year
technology improvements, we expect fiscal 2019 to show better
results, including a return to modest positive free cash flow. With
strong content for trade and education globally, increased
opportunities for profitable growth in school book clubs and book
fairs, and international expansion particularly in Asia, we continue to fulfill our mission of
helping children around the world become better readers to support
their personal and learning growth."
Cash Flow and Cash Position
Net cash provided by operating activities was $141.5 million in the current fiscal year
compared to $141.4 million in fiscal
2017. The Company had a free cash use (as defined in the
accompanying tables) of $16.1 million
in the current fiscal year, compared to free cash flow (as defined)
of $48.8 million in fiscal 2017. Free
cash use in fiscal 2018 was roughly at the midpoint of the
Company's previously reported guidance range of $10 to $20
million.
At year-end, the Company's cash and cash equivalents exceeded
the Company's total debt by $384.0
million, compared to $437.9
million a year ago. The lower net cash position is primarily
due to planned capital spending on the substantial upgrade of the
Company's headquarters building and multi-year technology
investments to implement the Scholastic 2020 plan.
The Company also distributed $21.1
million in dividends and reacquired $27.3 million of its common stock in open market
transactions over the course of the fiscal year.
Fourth Quarter and Fiscal 2018 Segment Results
Children's Book Publishing and Distribution. Segment
revenues for the fiscal year decreased $90.6
million, or 9%, to $961.5
million, as compared to the prior year, driven by a 27%
sales decline in trade, as predicted, given the prior year's
outstanding success of Harry
Potter and the Cursed Child. The lower Harry Potter revenues were partially offset by
the performance of a strong core publishing list including titles
from Dav Pilkey's Dog Man and
Captain Underpants series, as well as higher sales of the
Company's Klutz® book plus titles. Higher sales in the
Company's book fairs operations were more than offset by lower
sales in clubs. In the fourth quarter, segment sales were up
$0.7 million, versus the fourth
quarter of 2017, on stronger consolidated trade results. Operating
income for the year was $105.6
million, a decrease of $37.5
million, or 26%, as compared to the prior year, which
included Harry Potter and the
Cursed Child. Segment operating income in the fourth quarter
declined $1.6 million, or 3%, as
compared to the prior year period, mainly due to higher roll-out
costs of a new point-of-sale system in book fairs.
Education. Segment revenue for both the quarter and
fiscal year were driven by lower sales, the result, in part, of a
shift in customer buying patterns for leveled book room and guided
reading products; this was partially offset by gains in
Scholastic EDGE™, the Company's new Guided Reading support
program for striving readers, and in professional learning and
classroom magazines. For the fiscal year, segment revenue was
$297.3 million, compared to
$312.7 million a year ago, a 5%
decline. Segment revenue in the fourth quarter was $119.7 million, a decrease of $6.6 million, or 5%, versus the prior period
revenue of $126.3 million. Segment
operating income was $34.1 million in
fiscal 2018, down $16.6 million from
the prior fiscal year, as a result of lower sales and higher costs
associated with the expansion of an upgraded sales force with
expertise in selling complete literacy curriculum programs. Segment
operating income for the quarter was $43.0
million, a slight improvement over the $42.9 million recorded in the fourth quarter of
fiscal 2017.
International. Segment revenues for the fiscal year fell
$7.2 million, or 2%, to $369.6 million, compared to $376.8 million in the prior year, as a result of
sales of Harry Potter and the
Cursed Child in the Canadian and export channels in the prior
year period, partially offset by a strong list of new trade titles
in Australia, Canada, the United
Kingdom and Asia. This
includes The Ugly Five by Julia
Donaldson and Axel Scheffler
and new titles in the Liz Pichon Tom
Gates series in the U.K., as well as Dav Pilkey's Dog Man in Canada. Sales in the fourth quarter rose
$2.5 million, or 3%, to $93.0 million versus the prior year period driven
by robust performance in the U.K. and Asia. Although segment operating income in
fiscal 2018 was down $2.0 million, or
10%, from the prior year, the segment finished stronger with
operating income in the fourth quarter at $5.1 million, up $2.6
million or 104%, compared to the fourth quarter of fiscal
2017.
Other Financial Results. Corporate overhead for the
fiscal year was $83.4 million,
excluding one-time items of $18.4
million, pre-tax, which compared favorably with the
$106.6 million recorded in the prior
year, after excluding $17.7 million
in one-time items. The lower overhead expense in the current fiscal
year was primarily due to lower salary-related and incentive
compensation, as well as better cost management at the Company's
shared service distribution center in Jefferson City, Missouri. Corporate overhead
for the fourth quarter was $22.8
million, versus $23.4 million
in the fourth quarter of fiscal 2017, excluding one-time items in
both periods.
As previously announced, the Company's Board of Directors
declared a quarterly cash dividend of $0.15 per share on the Company's Class A and
Common Stock for the first quarter of fiscal 2019. The dividend is
payable on September 17, 2018 to
shareholders of record as of the close of business on August 31, 2018.
Scholastic 2020 Update
In the first year of Scholastic 2020 implementation, the
Company has modernized its technology infrastructure from fixed to
variable cost cloud-based models, resulting in lower technology
operating costs and a scalable infrastructure to grow and contract
based on its needs. These new systems have also expanded the
Company's business intelligence and workflow capabilities, and
improved the internal tools and platforms used for content
publishing and digital asset management.
In fiscal 2019, the Company is launching the new CRM system
supporting over 300 field sales personnel in book fairs and will
complete the integration of the education CRM to improve access to
customer data. Actionable information will allow the Company's
fairs and education teams to direct sellers to areas of
opportunity. The Company will also continue to simplify its online
content channels and online stores enabling customers to connect
online content to commerce. In fiscal 2019, the Company will
continue the transformation of its supply chain processes,
targeting a significant reduction in operating costs across
distribution, fulfillment, customer service and procurement. The
combined effect of Scholastic 2020 plan initiatives in
process automation and updated ERP back-end systems is expected to
reduce operations expense, a significant part of the Company's cost
structure. Savings are also expected to be achieved through
inventory optimization, transportation, and warehouse labor
efficiencies.
The Scholastic 2020 management framework has also served
to intensify the Company's efforts on sustainable
profitability.
Outlook
Scholastic expects to grow operating income through both
targeted revenue growth and lower operating costs and is committed
to delivering improvements in operating margins using new
Scholastic 2020 work streams to leverage technology to
enhance marketing efficiency, as well as upgrade business
processes, with the goal of reducing costs and offsetting
inflationary pressures.
Topline growth over the next three years is projected in
education and trade, underpinned by new publishing. More targeted
revenue growth in clubs, fairs, and international is also expected
as the Company utilizes its new transformative technology
investments to launch products in a more efficient manner, expand
its existing customer relationships and target new customers more
effectively. The Company has set a three-year revenue target for
fiscal year 2021 of $1.80 billion, up
from $1.63 billion in fiscal 2018. In
pursuit of this three-year target, the Company expects fiscal year
2019 revenues to be in the range of $1.65 to $1.70
billion.
During this period, the Company believes that the greatest
impact from its Scholastic 2020 plan initiatives will be
reflected in future cash flows as measured by earnings before
interest, taxes, depreciation and amortization (EBITDA, as defined
in the accompanying tables) and expects EBITDA to grow at a rate
three-times that of revenue growth, inclusive of additional rental
income to be achieved upon the successful conversion and leasing of
the new retail space at its NYC headquarters. The Company has set
an EBITDA target for fiscal year 2019 of $160 to $170
million, up from $140.1
million, excluding one-time items, in fiscal 2018.
Scholastic expects earnings per diluted share in fiscal 2019 in the
range of $1.60 to $1.70, up from earnings per diluted share,
excluding one-time items, of $1.43 in
fiscal 2018, reflecting a projected increase in operating income,
as well as a reduction in the Company's effective tax rate given
the full-year benefit of recent tax reform legislation.
Scholastic will continue its multi-year investments in strategic
technology programs in alignment with its Scholastic 2020
plan, which are expected to impact both cash and earnings in fiscal
2019, as a portion of these investments will be expensed and impact
the Company's operating margins. Higher expected levels of
depreciation from the building improvements and technology
platforms now in service are expected to partially offset the
additional capital investment. This outlook includes capital
expenditures of $70 to $80 million in fiscal 2019, compared to
$121.5 million in fiscal 2018. The
reduction in projected capital spending is primarily due to the
renovation of the Company's headquarters, which was largely
finished in the past fiscal year although some capital will be
required in fiscal 2019 to develop high-end retail store fronts on
Mercer Street.
The Company expects to report key milestones relative to its
Scholastic 2020 initiatives and its three-year goals in
future periods as the Company makes progress towards these
goals.
Additional Information
To supplement our financial statements presented in accordance
with GAAP, we include certain non-GAAP calculations and
presentations. Please refer to the non-GAAP financial tables
attached to this press release for supporting details on one-time
items and other 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 8:30 am ET today, July 19, 2018. 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 5690868. The recording will be available through
Friday, July 27, 2018.
About Scholastic
Scholastic Corporation (NASDAQ: SCHL) is the world's largest
publisher and distributor of children's books, a leading provider
of core literacy curriculum and professional services, and a
producer of educational and entertaining children's media. The
Company creates quality books and ebooks, print and
technology-based learning programs for pre-K to grade 12, classroom
magazines and other products and services that support children's
learning and literacy both in school and at home. With operations
in 14 international offices 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 collections, school and public libraries, retail
and online. True to its mission of 98 years to encourage the
personal and intellectual growth of all children beginning with
literacy, the Company has earned a reputation as a trusted partner
to educators and families. 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
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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SCHOLASTIC
CORPORATION
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CONSOLIDATED
STATEMENTS OF OPERATIONS
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(UNAUDITED)
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(Amounts in
millions except per share data)
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THREE MONTHS
ENDED
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TWELVE MONTHS
ENDED
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05/31/18
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05/31/17
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05/31/18
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05/31/17
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Revenues
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$496.2
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$499.6
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$1,628.4
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$1,741.6
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Operating costs and
expenses:
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Cost of goods sold
(1)
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209.0
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213.2
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744.6
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814.5
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Selling, general and
administrative expenses (2)
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199.5
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203.5
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763.6
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781.4
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Bad debt
expense
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1.6
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1.7
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9.5
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11.0
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Depreciation and
amortization
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12.0
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10.1
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43.9
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38.7
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Asset impairments
(3)
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0.2
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6.8
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11.2
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6.8
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Total operating costs
and expenses
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422.3
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435.3
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1,572.8
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1,652.4
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Operating income
(loss)
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73.9
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64.3
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55.6
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89.2
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Other components of
net periodic (benefit) cost (4)
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2.8
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0.1
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58.2
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0.3
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Interest (income)
expense, net
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(0.6)
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(0.0)
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(1.1)
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1.0
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Earnings (loss) from
continuing operations before income taxes
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71.7
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64.2
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(1.5)
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87.9
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Provision (benefit)
for income taxes (5)
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20.9
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24.6
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3.5
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35.4
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Earnings (loss) from
continuing operations
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50.8
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39.6
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(5.0)
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52.5
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Earnings (loss) from
discontinued operations, net of tax
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(0.0)
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(0.2)
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(0.0)
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(0.2)
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Net income
(loss)
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$50.8
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$39.4
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($5.0)
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$52.3
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Basic and diluted
earnings (loss) per Share of Class A and Common Stock:
(6)
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Basic:
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Earnings (loss) from
continuing operations
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1.45
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1.13
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(0.14)
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1.51
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Earnings (loss) from
discontinued operations, net of tax
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(0.00)
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(0.01)
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(0.00)
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(0.00)
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Net income
(loss)
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1.45
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1.12
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(0.14)
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1.51
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Diluted:
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Earnings (loss) from
continuing operations
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1.43
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1.11
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(0.14)
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1.48
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Earnings (loss) from
discontinued operations, net of tax
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(0.00)
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(0.01)
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(0.00)
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(0.01)
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Net income
(loss)
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1.43
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1.10
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(0.14)
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1.47
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Basic weighted
average shares outstanding
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34,890
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34,983
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35,016
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34,694
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Diluted weighted
average shares outstanding
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35,497
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35,709
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35,016
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35,430
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(1)
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In the three and
twelve months ended May 31, 2018, the Company recognized costs
related to branch warehouse consolidation in Canada of $0.1. In the
twelve months ended May 31, 2017, the Company recognized pretax
exit costs related to its software distribution business in
Australia of $0.5.
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(2)
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In the three and
twelve months ended May 31, 2018, the Company recognized pretax
severance and stock compensation charges of $2.4 and $8.1,
respectively. In the three and twelve months ended May 31, 2017,
the Company recognized pretax severance expense as part of cost
reduction programs of $4.6 and $12.9, respectively.
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(3)
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In the three and
twelve months ended May 31, 2018, the Company recognized a pretax
impairment charge of $0.2 related to book fair trucks. In the
twelve months ended May 31, 2018, the Company recognized a pretax
impairment charge of $11.0 related to legacy building
improvements. In the three and twelve months ended May 31,
2017, the Company recognized a pretax impairment charge related to
certain website development assets of $5.7 and certain legacy
prepublication assets of $1.1.
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(4)
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In the three and
twelve months ended May 31, 2018, the Company recognized pretax
charges related to the settlement of the Company's domestic defined
benefit pension plan of $2.3 and $57.3, respectively.
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(5)
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In the three and
twelve months ended May 31, 2018, the Company recognized a benefit
for income taxes on one-time pretax charges of $1.7 and $26.5,
respectively. In the three months ended May 31, 2018, the
Company recognized a benefit for income taxes of $2.6 and for the
twelve months ended May 31, 2018, the Company recognized $5.7 of
income tax provision related to the remeasurement of the Company's
U.S. deferred tax balance in connection with the passage of the Tax
Cuts and Jobs Act of 2017. In the three and twelve months
ended May 31, 2017, the Company recognized a benefit for income
taxes on one-time pretax charges of $4.4 and $7.8,
respectively.
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(6)
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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.
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SCHOLASTIC
CORPORATION
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RESULTS OF
CONTINUING OPERATIONS - SEGMENTS
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(UNAUDITED)
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(Amounts in
millions)
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THREE MONTHS
ENDED
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TWELVE MONTHS
ENDED
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05/31/18
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05/31/17
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Change
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05/31/18
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05/31/17
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Change
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Children's Book
Publishing and Distribution
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Revenue
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Book Clubs
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$58.7
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$59.5
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($0.8)
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(1%)
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$224.3
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$235.8
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($11.5)
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(5%)
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Book Fairs
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179.0
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180.0
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(1.0)
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(1%)
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513.6
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508.4
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5.2
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1%
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Consolidated
Trade
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45.8
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43.3
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2.5
|
6%
|
|
223.6
|
307.9
|
|
(84.3)
|
(27%)
|
|
|
|
Total
revenue
|
283.5
|
282.8
|
|
0.7
|
0%
|
|
961.5
|
1,052.1
|
|
(90.6)
|
(9%)
|
|
|
|
Operating income
(loss)
|
50.3
|
51.9
|
|
(1.6)
|
(3%)
|
|
105.6
|
143.1
|
|
(37.5)
|
(26%)
|
|
|
|
Operating
margin
|
17.7%
|
18.4%
|
|
|
|
|
11.0%
|
13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
119.7
|
126.3
|
|
(6.6)
|
(5%)
|
|
297.3
|
312.7
|
|
(15.4)
|
(5%)
|
|
|
|
Operating income
(loss)
|
43.0
|
42.9
|
|
0.1
|
0%
|
|
34.1
|
50.7
|
|
(16.6)
|
(33%)
|
|
|
|
Operating
margin
|
35.9%
|
34.0%
|
|
|
|
|
11.5%
|
16.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
93.0
|
90.5
|
|
2.5
|
3%
|
|
369.6
|
376.8
|
|
(7.2)
|
(2%)
|
|
|
|
Operating income
(loss)
|
5.1
|
2.5
|
|
2.6
|
104%
|
|
17.7
|
19.7
|
|
(2.0)
|
(10%)
|
|
|
|
Operating
margin
|
5.5%
|
2.8%
|
|
|
|
|
4.8%
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
expense
|
24.5
|
33.0
|
|
8.5
|
26%
|
|
101.8
|
124.3
|
|
22.5
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$73.9
|
$64.3
|
|
$9.6
|
15%
|
|
$55.6
|
$89.2
|
|
($33.6)
|
(38%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHOLASTIC
CORPORATION
|
|
SUPPLEMENTAL
INFORMATION
|
|
(UNAUDITED)
|
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
BALANCE SHEET ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/31/18
|
05/31/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$391.9
|
$444.1
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
204.9
|
199.2
|
|
|
|
|
|
|
|
|
Inventories,
net
|
294.9
|
282.5
|
|
|
|
|
|
|
|
|
Accounts
payable
|
198.9
|
141.2
|
|
|
|
|
|
|
|
|
Accrued
royalties
|
34.6
|
34.2
|
|
|
|
|
|
|
|
|
Lines of credit,
short-term debt and current portion of long-term debt
|
7.9
|
6.2
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current portion
|
-
|
-
|
|
|
|
|
|
|
|
|
Total debt
|
7.9
|
6.2
|
|
|
|
|
|
|
|
|
Total capital lease
obligations
|
7.5
|
7.6
|
|
|
|
|
|
|
|
|
Net debt
(1)
|
(384.0)
|
(437.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
|
|
Total assets of
discontinued operations
|
-
|
0.4
|
|
|
|
|
|
|
|
|
Total liabilities of
discontinued operations
|
-
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
1,320.8
|
1,307.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
CASH FLOW ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
05/31/18
|
05/31/17
|
|
|
05/31/18
|
05/31/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$76.6
|
$28.0
|
|
|
$141.5
|
$141.4
|
|
|
|
|
Less: Additions to property, plant
and equipment
|
29.1
|
29.6
|
|
|
121.5
|
65.7
|
|
|
|
|
Pre-publication and production costs
|
13.7
|
7.9
|
|
|
36.1
|
26.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (use)
(2) (3)
|
$33.8
|
($9.5)
|
|
|
($16.1)
|
$48.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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), reduced by
spending on property, plant and equipment and prepublication and
production 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Free cash flow (use)
includes discontinued operations for the three and twelve months
ended May 31, 2018 and May 31, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHOLASTIC
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS SUPPLEMENTAL
|
|
(UNAUDITED)
|
|
(Amounts in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
05/31/18
|
items
|
One-time
items
|
|
|
05/31/17
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$496.2
|
$0.0
|
$496.2
|
|
|
$499.6
|
$0.0
|
$499.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
(1)
|
|
209.0
|
(0.1)
|
208.9
|
|
|
213.2
|
-
|
213.2
|
|
|
|
|
|
Selling, general and
administrative expenses (2)
|
|
199.5
|
(2.4)
|
197.1
|
|
|
203.5
|
(4.6)
|
198.9
|
|
|
|
|
|
Bad debt
expense
|
|
1.6
|
-
|
1.6
|
|
|
1.7
|
-
|
1.7
|
|
|
|
|
|
Depreciation and
amortization
|
|
12.0
|
-
|
12.0
|
|
|
10.1
|
-
|
10.1
|
|
|
|
|
|
Asset impairments
(3)
|
|
0.2
|
(0.2)
|
(0.0)
|
|
|
6.8
|
(6.8)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
|
422.3
|
(2.7)
|
419.6
|
|
|
435.3
|
(11.4)
|
423.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
73.9
|
2.7
|
76.6
|
|
|
64.3
|
11.4
|
75.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components of
net periodic (benefit) cost (4)
|
|
2.8
|
(2.3)
|
0.5
|
|
|
0.1
|
-
|
0.1
|
|
|
|
|
Interest (income)
expense, net
|
|
(0.6)
|
-
|
(0.6)
|
|
|
(0.0)
|
-
|
(0.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations before income taxes
|
|
71.7
|
5.0
|
76.7
|
|
|
64.2
|
11.4
|
75.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes (5)
|
|
20.9
|
4.3
|
25.2
|
|
|
24.6
|
4.4
|
29.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
50.8
|
0.7
|
51.5
|
|
|
39.6
|
7.0
|
46.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
discontinued operations, net of tax
|
|
(0.0)
|
-
|
(0.0)
|
|
|
(0.2)
|
-
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$50.8
|
$0.7
|
$51.5
|
|
|
$39.4
|
$7.0
|
$46.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
diluted share from continuing operations
|
|
1.43
|
|
1.45
|
|
|
1.11
|
|
1.31
|
|
|
|
|
Earnings (loss) per
diluted share from discontinued operations, net of tax
|
(0.00)
|
|
(0.00)
|
|
|
(0.01)
|
|
(0.01)
|
|
|
|
|
Net income (loss) per
diluted share
|
|
1.43
|
|
1.45
|
|
|
1.10
|
|
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
05/31/18
|
items
|
One-time
items
|
|
|
05/31/17
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$1,628.4
|
$0.0
|
$1,628.4
|
|
|
$1,741.6
|
$0.0
|
$1,741.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
(1)
|
|
744.6
|
(0.1)
|
744.5
|
|
|
814.5
|
(0.5)
|
814.0
|
|
|
|
|
|
Selling, general and
administrative expenses (2)
|
|
763.6
|
(8.1)
|
755.5
|
|
|
781.4
|
(12.9)
|
768.5
|
|
|
|
|
|
Bad debt
expense
|
|
9.5
|
-
|
9.5
|
|
|
11.0
|
-
|
11.0
|
|
|
|
|
|
Depreciation and
amortization
|
|
43.9
|
-
|
43.9
|
|
|
38.7
|
-
|
38.7
|
|
|
|
|
|
Asset impairments
(3)
|
|
11.2
|
(11.2)
|
-
|
|
|
6.8
|
(6.8)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
|
1,572.8
|
(19.4)
|
1,553.4
|
|
|
1,652.4
|
(20.2)
|
1,632.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
55.6
|
19.4
|
75.0
|
|
|
89.2
|
20.2
|
109.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components of
net periodic (benefit) cost (4)
|
|
58.2
|
(57.3)
|
0.9
|
|
|
0.3
|
-
|
0.3
|
|
|
|
|
Interest (income)
expense, net
|
|
(1.1)
|
-
|
(1.1)
|
|
|
1.0
|
-
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations before income taxes
|
|
(1.5)
|
76.7
|
75.2
|
|
|
87.9
|
20.2
|
108.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes (5)
|
|
3.5
|
20.8
|
24.3
|
|
|
35.4
|
7.8
|
43.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
(5.0)
|
55.9
|
50.9
|
|
|
52.5
|
12.4
|
64.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
discontinued operations, net of tax
|
|
(0.0)
|
-
|
(0.0)
|
|
|
(0.2)
|
-
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
($5.0)
|
$55.9
|
$50.9
|
|
|
$52.3
|
$12.4
|
$64.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
diluted share from continuing operations
|
|
(0.14)
|
|
1.43
|
|
|
1.48
|
|
1.83
|
|
|
|
|
Earnings (loss) per
diluted share from discontinued operations, net of tax
|
(0.00)
|
|
(0.00)
|
|
|
(0.01)
|
|
(0.01)
|
|
|
|
|
Net income (loss) per
diluted share
|
|
(0.14)
|
|
1.43
|
|
|
1.47
|
|
1.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three and
twelve months ended May 31, 2018, the Company recognized costs
related to branch warehouse consolidation in Canada of $0.1. In the
twelve months ended May 31, 2017, the Company recognized pretax
exit costs related to its software distribution business in
Australia of $0.5.
|
|
|
(2)
|
In the three and
twelve months ended May 31, 2018, the Company recognized pretax
severance and stock compensation charges of $2.4 and $8.1,
respectively. In the three and twelve months ended May 31, 2017,
the Company recognized pretax severance expense as part of cost
reduction programs of $4.6 and $12.9, respectively.
|
|
|
(3)
|
In the three and
twelve months ended May 31, 2018, the Company recognized a pretax
impairment charge of $0.2 related to book fair trucks. In the
twelve months ended May 31, 2018, the Company recognized a pretax
impairment charge of $11.0 related to legacy building
improvements. In the three and twelve months ended May 31,
2017, the Company recognized a pretax impairment charge related to
certain website development assets of $5.7 and certain legacy
prepublication assets of $1.1.
|
|
|
(4)
|
In the three and
twelve months ended May 31, 2018, the Company recognized pretax
charges related to the settlement of the Company's domestic defined
benefit pension plan of $2.3 and $57.3, respectively.
|
|
|
(5)
|
In the three and
twelve months ended May 31, 2018, the Company recognized a benefit
for income taxes on one-time pretax charges of $1.7 and $26.5,
respectively. In the three months ended May 31, 2018, the
Company recognized a benefit for income taxes of $2.6 and for the
twelve months ended May 31, 2018, the Company recognized $5.7 of
income tax provision related to the remeasurement of the Company's
U.S. deferred tax balance in connection with the passage of the Tax
Cuts and Jobs Act of 2017. In the three and twelve months
ended May 31, 2017, the Company recognized a benefit for income
taxes on one-time pretax charges of $4.4 and $7.8,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHOLASTIC
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS SUPPLEMENTAL
|
|
(UNAUDITED)
|
|
(Amounts in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
05/31/18
|
items
|
One-time
items
|
|
|
05/31/17
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$50.8
|
$0.7
|
$51.5
|
|
|
$39.4
|
$7.0
|
$46.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense, net
|
|
(0.6)
|
-
|
(0.6)
|
|
|
(0.0)
|
-
|
(0.0)
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
20.9
|
4.3
|
25.2
|
|
|
24.6
|
4.4
|
29.0
|
|
|
|
|
|
Depreciation and
amortization (1)
|
|
12.0
|
-
|
12.0
|
|
|
10.2
|
-
|
10.2
|
|
|
|
|
|
Amortization of
prepublication and production costs
|
|
5.4
|
-
|
5.4
|
|
|
6.1
|
-
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before interest, taxes, depreciation and amortization
|
|
$88.5
|
$5.0
|
$93.5
|
|
|
$80.3
|
$11.4
|
$91.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
05/31/18
|
items
|
One-time
items
|
|
|
05/31/17
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
($5.0)
|
$55.9
|
$50.9
|
|
|
$52.3
|
$12.4
|
$64.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense, net
|
|
(1.1)
|
-
|
(1.1)
|
|
|
1.0
|
-
|
1.0
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
3.5
|
20.8
|
24.3
|
|
|
35.4
|
7.8
|
43.2
|
|
|
|
|
|
Depreciation and
amortization (1)
|
|
44.2
|
-
|
44.2
|
|
|
39.1
|
-
|
39.1
|
|
|
|
|
|
Amortization of
prepublication and production costs
|
|
21.8
|
-
|
21.8
|
|
|
23.3
|
-
|
23.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before interest, taxes, depreciation and amortization
|
|
$63.4
|
$76.7
|
$140.1
|
|
|
$151.1
|
$20.2
|
$171.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes amortization
of deferred financing costs of $0.0 and $0.3 for the three and
twelve months ended May 31, 2018 and $0.1 and $0.4 for the three
and twelve months ended May 31, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHOLASTIC
CORPORATION
|
|
RESULTS OF
CONTINUING OPERATIONS - SEGMENT SUPPLEMENTAL
|
|
(UNAUDITED)
|
|
(Amounts in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
05/31/18
|
items
|
One-time
items
|
|
|
05/31/17
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
$58.7
|
|
$58.7
|
|
|
$59.5
|
|
$59.5
|
|
|
|
|
|
|
Book Fairs
|
|
179.0
|
|
179.0
|
|
|
180.0
|
|
180.0
|
|
|
|
|
|
|
Consolidated
Trade
|
|
45.8
|
|
45.8
|
|
|
43.3
|
|
43.3
|
|
|
|
|
|
|
Total
revenue
|
|
283.5
|
|
283.5
|
|
|
282.8
|
|
282.8
|
|
|
|
|
|
|
Operating income
(loss) (1)
|
|
50.3
|
0.2
|
50.5
|
|
|
51.9
|
-
|
51.9
|
|
|
|
|
|
|
Operating
margin
|
|
17.7%
|
|
17.8%
|
|
|
18.4%
|
|
18.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
119.7
|
|
119.7
|
|
|
126.3
|
|
126.3
|
|
|
|
|
|
|
Operating income
(loss) (2)
|
|
43.0
|
-
|
43.0
|
|
|
42.9
|
1.1
|
44.0
|
|
|
|
|
|
|
Operating
margin
|
|
35.9%
|
|
35.9%
|
|
|
34.0%
|
|
34.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
93.0
|
|
93.0
|
|
|
90.5
|
|
90.5
|
|
|
|
|
|
|
Operating income
(loss) (3)
|
|
5.1
|
0.8
|
5.9
|
|
|
2.5
|
0.7
|
3.2
|
|
|
|
|
|
|
Operating
margin
|
|
5.5%
|
|
6.3%
|
|
|
2.8%
|
|
3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
expense (4)
|
|
24.5
|
(1.7)
|
22.8
|
|
|
33.0
|
(9.6)
|
23.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$73.9
|
$2.7
|
$76.6
|
|
|
$64.3
|
$11.4
|
$75.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
05/31/18
|
items
|
One-time
items
|
|
|
05/31/17
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
$224.3
|
|
$224.3
|
|
|
$235.8
|
|
$235.8
|
|
|
|
|
|
|
Book Fairs
|
|
513.6
|
|
513.6
|
|
|
508.4
|
|
508.4
|
|
|
|
|
|
|
Consolidated
Trade
|
|
223.6
|
|
223.6
|
|
|
307.9
|
|
307.9
|
|
|
|
|
|
|
Total
revenue
|
|
961.5
|
|
961.5
|
|
|
1,052.1
|
|
1,052.1
|
|
|
|
|
|
|
Operating income
(loss) (1)
|
|
105.6
|
0.2
|
105.8
|
|
|
143.1
|
-
|
143.1
|
|
|
|
|
|
|
Operating
margin
|
|
11.0%
|
|
11.0%
|
|
|
13.6%
|
|
13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
297.3
|
|
297.3
|
|
|
312.7
|
|
312.7
|
|
|
|
|
|
|
Operating income
(loss) (2)
|
|
34.1
|
-
|
34.1
|
|
|
50.7
|
1.1
|
51.8
|
|
|
|
|
|
|
Operating
margin
|
|
11.5%
|
|
11.5%
|
|
|
16.2%
|
|
16.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
369.6
|
|
369.6
|
|
|
376.8
|
|
376.8
|
|
|
|
|
|
|
Operating income
(loss) (3)
|
|
17.7
|
0.8
|
18.5
|
|
|
19.7
|
1.4
|
21.1
|
|
|
|
|
|
|
Operating
margin
|
|
4.8%
|
|
5.0%
|
|
|
5.2%
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
expense (4)
|
|
101.8
|
(18.4)
|
83.4
|
|
|
124.3
|
(17.7)
|
106.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) from continuing operations
|
|
$55.6
|
$19.4
|
$75.0
|
|
|
$89.2
|
$20.2
|
$109.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three and
twelve months ended May 31, 2018, the Company recognized a pretax
impairment charge associated with book fair trucks of
$0.2.
|
|
|
(2)
|
In the three and
twelve months ended May 31, 2017, the Company recognized a pretax
impairment charge associated with certain legacy prepublication
assets of $1.1.
|
|
|
(3)
|
In the three and
twelve months ended May 31, 2018, the Company recognized pretax
severance expense as part of cost reduction programs of $0.7 and
pretax costs associated with the consolidation of a Canadian book
fair warehouse of $0.1. In the three and twelve months ended May
31, 2017, the Company recognized pretax severance expense as part
of cost reduction programs of $0.7 and $0.9, respectively. In the
twelve months ended May 31, 2017, the Company recognized pretax
exit costs related to its software distribution business in
Australia of $0.5.
|
|
|
(4)
|
In the three and
twelve months ended May 31, 2018, the Company recognized pretax
severance and stock compensation charges of $1.7 and $7.4,
respectively. In the twelve months ended May 31, 2018, the
Company recognized pretax impairment charges of $11.0 related to
legacy building improvements. In the three and twelve months
ended May 31, 2017, the Company recognized a pretax impairment
charge related to certain website development assets of $5.7.
In the three and twelve months ended May 31, 2017, the Company
recognized pretax severance expense as part of cost reduction
programs of $3.9 and $12.0, respectively.
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SOURCE Scholastic Corporation