NEW YORK, Sept. 23, 2021 /PRNewswire/ -- Scholastic
Corporation (NASDAQ: SCHL), the global children's publishing,
education and media company, today reported financial results for
the Company's fiscal first quarter ended August 31, 2021. Scholastic typically reports an
operating loss and high cash utilization in its first fiscal
quarter when most U.S. schools are not in session, however the
Company recorded positive net operating cash flow in the current
quarter.
Fiscal First Quarter 2022 Review
(In $ Millions)
|
First
Quarter
|
|
$
|
%
|
|
Fiscal
2022
|
|
Fiscal
2021
|
|
Change
|
Change
|
Revenues
|
$
|
259.8
|
|
|
$
|
215.2
|
|
|
$
|
44.6
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
(32.0)
|
|
|
$
|
(57.0)
|
|
|
$
|
25.0
|
|
44
|
%
|
One-time
items
|
|
(4.2)
|
|
|
|
12.0
|
|
|
|
|
|
Operating income
(loss), ex. one-time items*
|
$
|
(36.2)
|
|
|
$
|
(45.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
non-GAAP financial tables attached
|
Company Commentary
"We executed successfully against our annual operating plan in
the first fiscal quarter of 2022, leveraging the momentum and
strong results achieved in the last three months of the prior
fiscal year, with our strategic growth platforms in Trade and
Education Solutions performing ahead of plan," said Peter Warwick, President and Chief Executive
Officer. "Although the first quarter is typically a quiet quarter
with most schools closed for summer recess, all of the Company's
major domestic businesses realized solid double-digit top-line
growth year-over-year, while the international businesses,
primarily Australia and
New Zealand, were adversely
affected by new COVID restrictions."
"We are seeing increased bookings of our premium case book fairs
when compared to both prior year and this past spring season.
Although still well below pre-COVID levels, the current
back-to-school period looks favorable as students return to
in-classroom instruction this fall. With schools re-opening their
doors, we also saw higher sales of both curriculum and supplemental
reading materials, such as our classroom libraries and leveled
bookrooms. Subscriptions to the Company's education digital
programs, including BookFlix®, Scholastic
Literacy Pro®, and Scholastic
F.I.R.S.T.® also continued to grow in the period. In
trade publishing, we ended the quarter with 16 of the top 25
children's fiction books on the Publishers' Weekly Bestseller List
— a testament to the deep commitment we have to creating titles and
series that resonate with children and parents from all backgrounds
and with varied interests. And, we are excited about our new fall
frontlist that includes Cat Kid Comic Club®:
Perspectives, the second title in the bestselling series by
Dav Pilkey, as well as J.K.
Rowling's The Christmas Pig."
Mr. Warwick concluded, "We remain optimistic for continued
growth through the post-COVID recovery and expect strong operating
leverage and free cash flow generation given the success of our
recent cost savings initiatives and solid execution, even as we are
seeing inflationary pressures in our supply chain and labor pools.
I am confident that we remain on a path to generate sustainable
value for all of our stakeholders in the current fiscal year and
beyond."
Revenues
Consolidated revenues increased 21% to $259.8 million in the first quarter versus the
prior year period, primarily driven by the U.S. trade and education
channels. Trade publishing revenues grew on the strength of the
Company's series publishing and strong backlist titles. Higher
sales in the education channels were driven by the Company's new
early childhood program, PreK On My
Way™, and summer learning product offerings
bolstered by federal government funding for K-12 schools in the
U.S. Partially offsetting the revenue improvements was a reduction
in sales in the International segment as certain countries around
the world continue to struggle with the pandemic-related
disruptions in their local markets.
Operating Profit / Loss
First quarter operating loss improved 44% to $32.0 million versus the prior year period. The
first quarter's improved operating loss was directly attributable
to the higher sales volume as the Company is beginning to recover
from the pandemic, coupled with the continued benefits of the
restructuring program executed in the prior fiscal year, as well as
the proceeds from first tier insurance coverage related to the
settlement of an intellectual property legal matter, partially
offset by the prior period employee furlough and reduced work week
programs which did not reoccur in the current period. Excluding
one-time items in both periods, the Company had operating loss of
$36.2 million in the first quarter of
2022, versus $45.0 million in the
first quarter of 2021.
Capital Position and Liquidity
Net cash provided by operating activities was $63.6 million in the first quarter compared to
net cash used in operating activities of $26.0 million in the prior year period, an
increase of $89.6 million. The
Company had free cash flow (a non-GAAP liquidity measure defined in
the accompanying tables and reconciled to net cash provided) of
$49.1 million in the first quarter
compared to a free cash use of $34.9
million in the prior year period. As of August 31, 2021, the Company's cash and cash
equivalents exceeded total debt by $219.1
million, compared to $135.6
million a year ago.
The higher net cash position and the $84.0 million increase in free cash flow was
primarily driven by the receipt of a $63.1
million federal income tax refund, higher customer
remittances, and a $6.6 million
insurance reimbursement related to the settlement of an
intellectual property matter. The $20.0
million settlement was accrued for in the prior fiscal year
and paid in September 2021. The
Company is still in the process of filing claims with secondary and
tertiary insurance carriers for the remaining settlement
amount.
During the quarter, the Company paid down $100.0 million of the outstanding borrowings
under its domestic revolving credit facility, resulting in
$75.0 million in outstanding
revolving credit loans at quarter-end. The Company will continue to
evaluate its borrowing position and capital allocations based on
the performance of the school-based channels during the course of
the current fiscal year. The Company is also in dialogue with
its banks on the renewal of its multi-year domestic committed
credit facility, which is scheduled to mature on January 5, 2022.
Overall Results
In $
millions
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
2022
|
|
Fiscal
2021
|
Earnings (loss)
before taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(33.3)
|
|
|
$
|
(51.8)
|
|
One-time
items*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.2)
|
|
|
|
12.0
|
|
Earnings (loss) ex.
one-times
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(37.5)
|
|
|
$
|
(39.8)
|
|
Interest (income)
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|
|
1.2
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.4
|
|
|
|
16.4
|
|
Prepublication
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.8
|
|
|
|
6.3
|
|
Adjusted
EBITDA*
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(13.0)
|
|
|
$
|
(15.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
non-GAAP financial tables attached
|
Loss before taxes for the first quarter was $33.3 million, compared to a loss before taxes of
$51.8 million in the prior year
period, an $18.5 million improvement.
Adjusted EBITDA (a non-GAAP performance measure defined in the
accompanying tables and reconciled to earnings (loss) before taxes)
for the first quarter was a loss of $13.0
million, compared to a loss of $15.9
million in the prior year period. Adjusted EBITDA improved
over the prior period due to the increase in revenues, which was
partially offset by a $6.6 million
benefit from the sale of the Danbury,
CT facility in the prior year period.
Fiscal 2022 Outlook
The Company is currently experiencing strong demand for its
products and programs as schools begin to re-open this fall with
rising book club sponsorship and increased book fair bookings and
expects sequential improvements in its school-based
distribution channels in each quarter of the current fiscal year.
The Company is well-positioned to meet expected demand in these
channels, especially in its book fairs businesses in the U.S.,
Canada and UK. Scholastic's
properties and titles continue to lead the market and occupy spots
on the New York Times bestsellers list
and are being leveraged for streaming services such as the recent
announcement of Puppy Place, a live-action series based on the
Company's best-selling books, premiering on October 15th on AppleTV+. In the education
solutions channel, the Company continues to closely monitor how
federal stimulus funds will impact the overall K‒12 education
landscape and expects to benefit from a portion of this new
spending. Internationally, the Company expects the lockdowns in
Australia to lift and continues to
explore growth through the expansion of Scholastic's range of
English language learning digital product offerings in Asia.
The Company faces certain headwinds in fiscal 2022 with higher
labor costs, the discontinuation of certain COVID-related
government subsidies and inflationary pressures that could impact
paper, freight and other operating costs. Supply chain issues and
potential labor shortages could adversely impact operating income
through higher costs and/or revenue shortfalls. The Company is
taking actions, when available, to help mitigate these potential
increases and still expects stronger operating leverage and
positive free cash flows. Additionally, the Company continues to
identify further opportunities for incremental cost savings through
process improvements and automation, consolidation of functions,
and increased utilization of the Company's international shared
services resources.
Segment Results
All comparisons detailed in this section refer to operating
results for the first quarter ended August
31, 2021 versus the first quarter ended August 31, 2020.
Children's Book Publishing and Distribution (CBP&D)
In $
millions
|
First
Quarter
|
|
$
|
%
|
|
Fiscal
2022
|
|
Fiscal
2021
|
|
Change
|
Change
|
Revenues
|
|
|
|
|
|
|
|
|
|
Books Clubs
|
$
|
6.8
|
|
|
$
|
5.8
|
|
|
$
|
1.0
|
|
17
|
%
|
Book Fairs
|
|
16.0
|
|
|
|
13.2
|
|
|
|
2.8
|
|
21
|
%
|
Trade
|
|
93.0
|
|
|
|
73.3
|
|
|
|
19.7
|
|
27
|
%
|
Total
Revenue
|
$
|
115.8
|
|
|
$
|
92.3
|
|
|
$
|
23.5
|
|
25
|
%
|
Operating income
(loss)
|
|
(21.7)
|
|
|
|
(29.0)
|
|
|
|
7.3
|
|
25
|
%
|
Operating income
(loss) ex. one-time items*
|
|
(21.7)
|
|
|
|
(29.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
non-GAAP financial tables attached
|
First quarter segment revenues were $115.8 million, an increase of $23.5 million, or 25%, versus the prior year
period primarily driven by trade channel sales. Marketing and
publicity activities drove higher sales of Harry Potter® box sets and
limited edition foil covers for Dog Man®. New
releases from the Company's popular series, The
Baby-sitters Club® Graphix™ and
Baby-sitters Little Sisters® Graphix, Five
Nights at Freddy's™, The Bad
Guys™, and Nat Enough™ coupled
with the continued success of Alan
Gratz's Refugee and Ground Zero and
Pam Munoz Ryan's Esperanza Rising also resulted in increased
sales. The Company's specialty products performed well both from
the Klutz® division and the Make Believe
Ideas™ business, which included the launch of a
plush product line, Sensory Snuggables™. The
fully illustrated MinaLima edition of Harry Potter continued to perform well with
the second book to be released at the end of October and The
Official Harry Potter Baking book was a bestseller. While the
first quarter is not traditionally a significant quarter for the
Company's school-based distribution channels, the book clubs
channel experienced an increase in the number of teacher sponsors
and the book fairs channel had higher revenue per fair when
compared to the prior period.
Education Solutions
In $
millions
|
First
Quarter
|
|
$
|
%
|
|
Fiscal
2022
|
|
Fiscal
2021
|
|
Change
|
Change
|
Revenue
|
$
|
80.1
|
|
|
$
|
53.6
|
|
|
$
|
26.5
|
|
49
|
%
|
Operating income
(loss)
|
|
7.3
|
|
|
|
(2.4)
|
|
|
|
9.7
|
|
NM
|
|
Operating income
(loss) ex. one-time items*
|
|
7.3
|
|
|
|
(2.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
non-GAAP financial tables attached
|
NM - Not
meaningful
|
First quarter segment revenues were $80.1
million, an increase of $26.5
million, or 49%, versus the prior year period. Demand for
the Company's summer learning product offerings drove an increase
in revenues as educators tried to help students recover lost ground
before starting the new school year. In addition, the Company
experienced higher sales for its supplemental and core instruction
products, especially in the new early childhood program,
PreK On My Way, as more
schools began to open for in-classroom learning. Digital product
subscriptions increased when compared to the prior year period,
continuing to support the trend digital solutions will play in the
education market. Although not yet at pre-COVID levels, the
Company's classroom magazine products experienced improvement with
a 13% increase in subscriptions which will benefit the Company in
future quarters. The first quarter was also positively impacted by
the consolidation of the multiple education channels into a single
Education Solutions segment allowing the Company to be well
positioned to meet the needs of an ever changing market.
International
In $
millions
|
First
Quarter
|
|
$
|
%
|
|
Fiscal
2022
|
|
Fiscal
2021
|
|
Change
|
Change
|
Revenue
|
$
|
63.9
|
|
|
$
|
69.3
|
|
|
$
|
(5.4)
|
|
(8)
|
%
|
Operating income
(loss)
|
|
(1.7)
|
|
|
|
4.8
|
|
|
|
(6.5)
|
|
NM
|
Operating income
(loss) ex. one-time items*
|
|
(1.3)
|
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
non-GAAP financial tables attached
|
NM - Not
meaningful
|
First quarter segment revenues were $63.9
million, a decrease of $5.4
million, or 8%, versus the prior year period. The decrease
was primarily driven by lower revenues in Australia, where lockdowns due to the COVID
variant caused interruptions to in-classroom learning that were not
seen in the same period of the previous year. Revenues also
decreased in Canada, New Zealand and in the direct sales business
in Asia due to the continued
impact the pandemic has had around the world. The Company expects
many of the tightest restrictions to begin to loosen in the second
fiscal quarter. Operating loss was impacted by lower government
subsidies related to COVID-related governmental retention programs
in Canada, the UK, Australia and New
Zealand which decreased by $4.3
million. New education regulations in China are expected to impact the Company's
revenue related to its franchise-based tutorial center programs and
education business. Management will continue to monitor changes in
this market place and seek to appropriately adapt its offerings in
the context of such regulations.
Overhead
In $
millions
|
|
|
First
Quarter
|
|
$
|
%
|
|
|
|
Fiscal
2022
|
|
Fiscal
2021
|
|
Change
|
Change
|
Overhead
expense
|
|
|
$
|
15.9
|
|
|
$
|
30.4
|
|
|
$
|
14.5
|
|
48
|
%
|
Overhead expense ex.
one-time items*
|
|
|
|
20.5
|
|
|
|
19.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
non-GAAP financial tables attached
|
First quarter overhead expenses were $15.9 million, a decrease of $14.5 million, or 48%, versus the prior year
period. The decrease was primarily due to lower severance in the
current year period and $6.6 million
of insurance recoveries in the first quarter related to the
intellectual property legal settlement accrued in fiscal 2021.
Dividends and Other Distributions
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 second quarter of fiscal 2022. The dividend is
payable on December 15, 2021 to
shareholders of record as of the close of business on October 29, 2021.
Subsequent to its fiscal quarter-end, the Company's open-market
share buy-back program, which was put on hold in March 2020 in the face of COVID-19 uncertainties,
was re-instated by the Company's board of directors. The current
authorization for share repurchases is $67.3
million. Under this program, the Company may purchase
shares, from time to time as conditions allow, on the open market
or in negotiated private transactions. The actual number of shares
to be purchased and the timing and pricing of any purchases under
the share repurchase program will depend on future market
conditions and upon potential alternative uses for the Company's
available cash. There is no assurance that any shares will be
purchased under the share repurchase program and the Company may
elect to modify, suspend or discontinue the program at any time
without prior notice.
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
table 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, September 23, 2021. Peter
Warwick, Scholastic's President and Chief Executive Officer,
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 1075330. The recording will be available
through Friday, October 1, 2021.
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
15 international operations and exports to 165 countries,
Scholastic makes quality, affordable books available to all
children around the world through school-based book clubs and book
fairs, classroom libraries, school and public libraries, retail,
and online. Learn more at www.scholastic.com.
Forward-Looking Statements
This news release contains certain forward-looking statements
relating to future periods. Such forward-looking statements are
subject to various risks and uncertainties, including those arising
from the continuing impact of COVID-19 related measures taken by
governmental authorities, school administrators, or suppliers or
customers which may curtail or otherwise adversely affect certain
of the Company's business operations, and the conditions of the
children's book and educational materials markets generally and
acceptance of the Company's products within those markets, and
other risks and factors identified from time to time in the
Company's filings with the Securities and Exchange Commission.
Actual results could differ materially from those currently
anticipated.
SCHL: Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 1
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
(In $
Millions, except shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
08/31/21
|
08/31/20
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$259.8
|
$215.2
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
Cost of goods
sold
|
133.3
|
115.0
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
143.6
|
141.7
|
|
|
|
|
Depreciation and
amortization
|
14.9
|
15.5
|
|
|
|
Total operating costs
and expenses
|
291.8
|
272.2
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(32.0)
|
(57.0)
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
(1.3)
|
(1.2)
|
|
|
|
Other components of
net periodic benefit (cost)
|
0.0
|
(0.2)
|
|
|
|
Gain (loss) on sale
of assets and other (2)
|
-
|
6.6
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
(33.3)
|
(51.8)
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes(3)
|
(8.9)
|
(12.0)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(24.4)
|
(39.8)
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to noncontrolling interest
|
(0.2)
|
0.0
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Scholastic Corporation
|
($24.2)
|
($39.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per share of Class A and Common Stock
(4)
|
|
|
|
|
|
|
Basic
|
($0.70)
|
($1.16)
|
|
|
|
|
Diluted
|
($0.70)
|
($1.16)
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
34,417
|
34,258
|
|
|
|
Diluted weighted
average shares outstanding
|
35,473
|
34,393
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three months
ended August 31, 2021 and August 31, 2020, the Company recognized
pretax severance of $2.4 and $12.0, respectively. In the three
months ended August 31,2021, the Company recognized $6.6 of
insurance proceeds related to an intellectual property legal
settlement accrued in fiscal 2021.
|
|
|
|
|
|
|
(2)
|
In the three months
ended August 31, 2020, the Company recognized pretax gain on the
sale of its Danbury facility of $6.6.
|
|
|
|
|
|
|
(3)
|
In the three months
ended August 31, 2021 the Company recognized a provision for income
taxes in respect to one-time pretax charges of $1.1. In the three
months ended August 31, 2020, the Company recognized a benefit for
income taxes in respect to one-time pretax charges of
$3.1.
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
|
|
08/31/21
|
08/31/20
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
|
|
|
$6.8
|
$5.8
|
|
$1.0
|
17%
|
|
|
|
Book Fairs
|
|
|
|
|
16.0
|
13.2
|
|
2.8
|
21%
|
|
|
|
Consolidated
Trade
|
|
|
|
|
93.0
|
73.3
|
|
19.7
|
27%
|
|
|
|
Total
Revenues
|
|
|
|
|
115.8
|
92.3
|
|
23.5
|
25%
|
|
|
|
Operating income
(loss)
|
|
|
|
|
(21.7)
|
(29.0)
|
|
7.3
|
25%
|
|
|
|
Operating
margin
|
|
|
|
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
80.1
|
53.6
|
|
26.5
|
49%
|
|
|
|
Operating income
(loss)
|
|
|
|
|
7.3
|
(2.4)
|
|
9.7
|
NM
|
|
|
|
Operating
margin
|
|
|
|
|
9.1%
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
63.9
|
69.3
|
|
(5.4)
|
(8%)
|
|
|
|
Operating income
(loss)
|
|
|
|
|
(1.7)
|
4.8
|
|
(6.5)
|
NM
|
|
|
|
Operating
margin
|
|
|
|
|
-
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
expense
|
|
|
|
|
15.9
|
30.4
|
|
14.5
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
($32.0)
|
($57.0)
|
|
$25.0
|
44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3
|
Scholastic
Corporation
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
Selected
Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
|
|
08/31/21
|
08/31/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$308.6
|
$355.5
|
|
|
|
|
|
Accounts receivable,
net
|
244.3
|
219.6
|
|
|
|
|
|
Inventories,
net
|
298.1
|
323.2
|
|
|
|
|
|
Accounts
payable
|
185.6
|
168.3
|
|
|
|
|
|
Accrued
royalties
|
65.8
|
56.2
|
|
|
|
|
|
Lines of credit and
current portion of long-term debt
|
89.5
|
19.9
|
|
|
|
|
|
Long-term
debt
|
-
|
200.0
|
|
|
|
|
|
Total debt
|
89.5
|
219.9
|
|
|
|
|
|
Net debt (cash)
(1)
|
(219.1)
|
(135.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
1,149.6
|
1,147.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Cash Flow Items
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
08/31/21
|
08/31/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$63.6
|
($26.0)
|
|
|
|
|
|
Add: Net proceeds from sale
of assets
|
-
|
12.3
|
|
|
|
|
|
Less: Additions to property, plant
and equipment
|
10.2
|
16.0
|
|
|
|
|
|
Prepublication expenditures
|
4.3
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (use)
(2)
|
$49.1
|
($34.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net debt (cash) is
defined by the Company as lines of credit and short-term debt plus
long-term-debt, net of cash and cash equivalents. The Company
utilizes this non-GAAP financial measure, and believes it is useful
to investors, as an indicator of the Company's effective leverage
and financing needs.
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Free cash flow (use)
is defined by the Company as net cash provided by or used in
operating activities (which includes royalty advances) and cash
acquired through acquisitions 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
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
08/31/21
|
items
|
One-time
items
|
|
08/31/20
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share (1)
|
|
($0.70)
|
($0.09)
|
($0.79)
|
|
($1.16)
|
$0.26
|
($0.90)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(2)
|
|
($24.2)
|
($3.1)
|
($27.3)
|
|
($39.8)
|
$8.9
|
($30.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
($21.7)
|
$0.0
|
($21.7)
|
|
($29.0)
|
$0.0
|
($29.0)
|
|
|
|
|
|
|
Education
Solutions
|
|
7.3
|
-
|
7.3
|
|
(2.4)
|
-
|
(2.4)
|
|
|
|
|
|
|
International(3)
|
|
(1.7)
|
0.4
|
(1.3)
|
|
4.8
|
1.0
|
5.8
|
|
|
|
|
|
|
Overhead(4)
|
|
(15.9)
|
(4.6)
|
(20.5)
|
|
(30.4)
|
11.0
|
(19.4)
|
|
|
|
|
|
|
Operating income
(loss)
|
|
($32.0)
|
($4.2)
|
($36.2)
|
|
($57.0)
|
$12.0
|
($45.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 three months
ended August 31, 2021 the Company recognized a provision for
income taxes in respect to one-time pretax charges of $1.1. In the
three months ended August 31, 2020, the Company recognized a
benefit for income taxes in respect to one-time pretax charges of
$3.1.
|
|
|
|
|
|
|
(3)
|
In the three months
ended August 31, 2021 and August 31, 2020, the Company recognized
pretax severance of $0.4 and $1.0, respectively.
|
|
|
|
|
|
|
(4)
|
In the three months
ended August 31, 2021 and August 31, 2020, the Company recognized
pretax severance of $2.0 and $11.0, respectively. In the three
months ended August 31, 2021, the Company recognized $6.6 of
insurance proceeds related to an intellectual property legal
settlement accrued in fiscal 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5
|
Scholastic
Corporation
|
|
Consolidated
Statements of Operations - Supplemental
|
|
Adjusted
EBITDA
|
|
(Unaudited)
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
08/31/21
|
|
08/31/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes as reported
|
|
($33.3)
|
|
|
($51.8)
|
|
|
|
|
One-time items before
income taxes
|
|
(4.2)
|
|
|
12.0
|
|
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
(37.5)
|
|
|
(39.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense
|
|
1.3
|
|
|
1.2
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
16.4
|
|
|
16.4
|
|
|
|
|
|
Amortization of
prepublication costs
|
|
6.8
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(2)
|
|
($13.0)
|
|
|
($15.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For the three months
ended August 31, 2021 and August 31, 2020, amounts include
depreciation of $0.9 and $0.8, respectively, recognized in cost of
goods sold, amortization of deferred financing costs of $0.1 and
$0.1, respectively, and amortization of capitalized cloud software
of $0.5 and $0.0, 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/scholastic-reports-fiscal-2022-first-quarter-results-301384263.html
SOURCE Scholastic Corporation