NEW YORK, March 21, 2019 /PRNewswire/ -- Scholastic
Corporation (NASDAQ: SCHL), the global children's publishing,
education and media company, today reported results for the
Company's fiscal 2019 third quarter ended February 28, 2019. The Company reported third
quarter 2019 loss per diluted share of $0.36, compared to a loss of $1.41 per diluted share in the third quarter of
2018. Excluding one-time items, the third quarter loss per diluted
share was $0.32 versus a loss per
diluted share of $0.30 in the prior
year period. The third quarter is a lower revenue quarter for the
Company in which it typically records a loss.
Third quarter revenue was $360.1
million, an increase of 4% compared to $344.7 million in the third quarter of 2018. The
impact of the new ASC 606 revenue recognition guidelines in the
current fiscal year served to increase revenues by $9.4 million in the quarter. Without the impact
of these new accounting guidelines, the current period's revenue
would have shown an increase of 2%, as compared to the third
quarter of 2018. Revenue for the first nine months of fiscal 2019
was $1,183.2 million compared to
$1,132.2 million in the prior year,
an increase of $51.0 million or
5%.
Operating loss in the third quarter improved to $21.4 million, compared to an operating loss of
$23.7 million a year ago.
Net loss for the current period was $12.6
million, compared to a net loss in the prior year period of
$49.2 million. Net loss for the first
nine months of the 2019 fiscal year was $2.3
million versus a net loss of $55.8
million in the first nine months of fiscal 2018. The prior
fiscal year quarter and year-to-date periods included non-cash
pretax charges related to the partial settlement of the Company's
domestic defined benefit plan of $39.6
million and $55.0 million,
respectively.
Richard Robinson, Scholastic
Chairman, President and Chief Executive Officer commented:
"Consolidated revenue in the seasonally lower third quarter was up
4% over the prior year, keeping us on course to achieve our sales
targets for fiscal 2019. Children's Book Publishing and
Distribution was up 8% reflecting particularly strong performance
in trade and media, while Education was on plan, setting the stage
for the fourth quarter where almost half of the year's revenue is
recorded. Trade publishing also performed well in International,
though the strong dollar continued to affect revenues. Best-selling
titles included Fantastic Beasts™: The Crimes of
Grindelwald, series publishing such as Wings of Fire, The
Baby-Sitters Club® graphic novels, and Dav Pilkey's Dog Man, as well as titles by
Aaron Blabey and the 20th
anniversary publishing for Harry
Potter.
Mr. Robinson continued, "In February, the Education Group began
customer presentations of Scholastic Literacy, our
comprehensive core reading curriculum, which includes authentic and
culturally relevant books, integrated writing and digital
resources, combining to teach the basic skills of reading required
for students to succeed in grades K to 6. The market has responded
very positively to the program, which already has successfully
competed in several reading adoptions, though the revenues will not
be received until the first quarter of fiscal 2020. Meanwhile, the
education sales force is also concentrating on selling our
supplementary reading programs for which revenues will be received
in the fourth quarter of the current fiscal year. We also
successfully implemented sales tax collection for book clubs in
February, responding to the Supreme Court's Wayfair
decision, but the cost of implementation affected operating income
this quarter. With higher labor costs in fulfillment, combined with
cost increases in paper and printing, the impact of sales tax
collection, and the effect of the stronger U.S. dollar in
international, we now project our full year earnings to be at the
low end of our guidance range. In the fourth quarter, we are
focused on reducing operating costs, as well as achieving our
end-of-year education sales."
Fiscal 2019 Outlook
Scholastic believes it is on course to achieve its 2019 fiscal
year revenue goal in the range $1.65
to $1.70 billion, with the greater
part of its education segment sales coming at the end of the school
calendar year. The Company continues to experience rising costs for
product and fulfillment, as well as incremental book clubs sales
tax expense in the third and fourth quarters on the heels of the
Wayfair decision. While the Company is offsetting these
impacts through cost management and pricing, it now believes that
fiscal year 2019 earnings per diluted share, excluding one-time
items, will be at the low end of its previous guidance range of
$1.60 to $1.70. The Company has affirmed its target for
Adjusted EBITDA (a non-GAAP performance measure defined in the
accompanying tables and reconciled to net income) of $160 to $170
million. The Company's capital investments in technology and
facilities upgrades remain on track with capital expenditures now
projected to be approximately $80
million in the fiscal year.
Cash Flow and Cash Position
Net cash provided by operating activities was $21.0 million in the current fiscal quarter
compared to $36.5 million in the
third quarter of fiscal 2018. During the third quarter, the Company
had a free cash use (a non-GAAP liquidity measure defined in the
accompanying tables) of $10.4
million, compared to a free cash use of $9.6 million a year ago.
At quarter end, the Company's cash and cash equivalents exceeded
the Company's total debt by $327.1
million, compared to $354.9
million a year ago, reflecting the timing of $19.7 million of capital investment in
technology, facilities, and other upgrades, as planned, as well as
$11.7 million in prepublication and
production costs in the quarter.
The Company distributed $5.2
million in dividends and reacquired $2.0 million of its common stock in open market
transactions pursuant to SEC Rule 10b-18 over the course of the quarter.
Overall Results
As noted above, net loss for the third quarter was $12.6 million compared to a net loss of
$49.2 million in the third quarter of
2018. Adjusted EBITDA (as defined in the accompanying tables) for
the third fiscal quarter of 2019 was $1.4
million, compared to a loss of $2.0
million in the third quarter of 2018, reflecting higher
levels of depreciation in the current period related to earlier
investments in facilities and technology upgrades now in service.
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.
Segment Results
All comparisons detailed in this section refer to operating
results for the third fiscal quarter 2019 versus the third fiscal
quarter 2018. The results for the third fiscal quarter of 2019
include the impact of the newly adopted revenue recognition
guidelines under ASC 606. Prior period's results have not been
restated. The new standard requires the Company to defer certain
revenues associated with its book fairs incentive program. It also
requires the Company to recognize, as a current period expense,
certain previously capitalized direct response marketing costs
primarily related to the classroom magazines business.
Children's Book Publishing and Distribution
In $
millions
|
Third
Quarter
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
Revenue
|
|
|
|
|
Book
Clubs
|
$
55.0
|
$
57.7
|
$
(2.7)
|
(5%)
|
Book
Fairs – before ASC 606
|
89.2
|
91.5
|
(2.3)
|
(3%)
|
Book
Fairs – ASC 606 accounting change
|
8.2
|
-
|
8.2
|
-
|
Book
Fairs
|
97.4
|
91.5
|
5.9
|
6%
|
Trade
|
65.6
|
52.4
|
13.2
|
25%
|
Total
revenue
|
218.0
|
201.6
|
16.4
|
8%
|
Operating
income / (loss), before accounting change
|
(2.1)
|
(1.0)
|
(1.1)
|
-
|
ASC 606
accounting change
|
6.5
|
-
|
6.5
|
-
|
Operating income /
(loss)
|
4.4
|
(1.0)
|
5.4
|
-
|
Operating income /
(loss), before one-time items*
|
4.4
|
(1.0)
|
5.4
|
-
|
* Please
refer to the non-GAAP financial tables attached
|
Third quarter revenues increased $16.4
million, or 8%, to $218.0
million with continued strength in trade publishing across
all categories – frontlist bestsellers, backlist favorites, and new
Harry Potter-related publishing in
conjunction with the 20th anniversary of the first
Harry Potter novel in the U.S., as
well as increased media sales of Scholastic's evergreen library of
Clifford® programming. Book fairs saw additional revenue
based on the timing of fairs at the end of the quarter and the
higher redemption of Scholastic Dollars™, which
schools may use to optimize their post-fair rewards program. While
the percentage of parents and teachers using clubs' on-line
ordering sites continued to increase, the number of reading club
events fell slightly year-over-year. The third quarter is a
comparatively small quarter for the Company's school-based
distribution channels as a result of the winter school break.
Segment operating income was $4.4
million compared to last year's operating loss of
$1.0 million, primarily reflecting
the contribution of the higher trade and media sales, partially
offset by increased sales tax expense in clubs as a result of the
Supreme Court's Wayfair decision. Key titles in the current
period included: Fantastic Beasts™: The Crimes of
Grindelwald; Dog Man: Brawl of the Wild; Wings of Fire
#12; Kristy's Big Day (The Baby-Sitters Club Graphic Novel
#6); Owl Diaries #10; and I Need a Hug, the new award
winning book from author-illustrator Aaron
Blabey.
Education
In $
millions
|
Third
Quarter
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
Revenue
|
$
60.3
|
$
59.5
|
$
0.8
|
1%
|
Operating
income / (loss), before accounting change
|
0.2
|
(0.1)
|
0.3
|
-
|
ASC 606
accounting change
|
0.1
|
-
|
0.1
|
-
|
Operating income /
(loss)
|
0.3
|
(0.1)
|
0.4
|
-
|
Operating income /
(loss), before one-time items*
|
0.3
|
(0.1)
|
0.4
|
-
|
* Please
refer to the non-GAAP financial tables attached
|
Third quarter revenues increased $0.8
million, or 1%, to $60.3
million mainly driven by higher sales of Scholastic
EDGE, with its age-appropriate leveled texts for striving
readers, as well as supplemental print products and dealer trade
sales of the Company's teaching resources line of products.
Operating income was $0.3 million,
compared to an operating loss of $0.1
million in the prior year period, driven by the higher sales
in the current quarter.
International
In $
millions
|
Third
Quarter
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
Revenue, before
accounting change
|
$ 80.6
|
$ 83.6
|
$
(3.0)
|
(4%)
|
ASC 606
accounting change
|
1.2
|
-
|
1.2
|
-
|
Revenue
|
81.8
|
83.6
|
(1.8)
|
(2%)
|
Operating
income / (loss), before accounting change
|
(3.9)
|
0.7
|
(4.6)
|
-
|
ASC 606
accounting change
|
0.9
|
-
|
(0.9)
|
-
|
Operating income /
(loss)
|
(3.0)
|
0.7
|
(3.7)
|
-
|
Operating income /
(loss), before one-time items*
|
(2.5)
|
0.7
|
(3.2)
|
-
|
* Please
refer to the non-GAAP financial tables attached
|
Third quarter revenues were $81.8
million, 2% below the prior year period, with higher trade
publishing sales in the Company's major markets in the U.K. and
Australia/New Zealand, as well as in Asia export, more than offset by the adverse
impact of $4.6 million in foreign
exchange in the current quarter. Without this currency impact,
local currency revenues were up 3% year-over-year. The
international segment showed an operating loss of $3.0 million, which included one-time
non-recurring charges and severance associated with a branch
warehouse consolidation project in Canada, in addition to higher operating costs.
The prior year period included a $0.6
million gain on the repositioning of an outstanding currency
hedge.
Overhead
In $
millions
|
Third
Quarter
|
|
|
|
2019
|
2018
|
$ Change
|
% Change
|
Overhead
expense
|
$
23.1
|
$
23.3
|
$
0.2
|
1%
|
Overhead expense,
excluding one-time items*
|
20.9
|
18.6
|
(2.3)
|
(12%)
|
* Please
refer to the non-GAAP financial tables attached
|
Third quarter overhead expense was $20.9
million, or 12% higher than overhead expense in the third
quarter of 2018, excluding one-time items of $2.2 million and $4.7
million in each period, respectively. The higher overhead,
excluding one-time items, in the current period is primarily due to
higher depreciation expense for building and technology upgrades
now in service, as well as higher non-capitalized costs incurred
for certain technology upgrades and improvements.
One-Time Items – Operating Income
Non-recurring items reflected in the Company's pre-tax operating
results for the third quarter totaled $2.7
million and included $2.2
million in pretax severance expense associated with the
Company's cost reduction programs and $0.5
million in connection with the warehouse consolidation
project. Non-recurring items in the prior year period totaled
$4.7 million, which included
$4.3 million related to facility
impairments associated with the renovation of the Company's
headquarters building and $0.4
million in one-time severance.
Year-to-Date Results
For the first nine months of fiscal 2019, revenue was
$1,183.2 million, compared to
$1,132.2 million in the prior year
period, an increase of $51.0 million,
or 5%. The Company reported a loss per diluted share in the first
nine months of the fiscal year of $0.07, compared to a loss per diluted share of
$1.59 a year ago. Excluding one-time
items of $0.16 and $1.57 per diluted share, respectively, the
Company's earnings per diluted share was $0.09 in the first nine months of fiscal 2019
versus a loss per diluted share of $0.02 in the prior year period. The favorable
current period's results are mainly attributable to robust trade
sales globally in the first nine months of fiscal 2019.
Adjusted EBITDA (as defined) for the first nine months of fiscal
2019 was $60.1 million, compared to
$46.6 million in the first nine
months of fiscal 2018, an increase of $13.5
million, or 29%, and primarily the result of higher reported
earnings and higher depreciation and amortization in the current
year period.
Net cash provided by operating activities was $60.5 million in the first nine months of the
current fiscal year compared to $64.9
million in the same period last year. The Company had a free
cash use (as defined) of $42.8
million in the current fiscal year-to-date, compared to a
free cash use of $49.9 million in the
prior year period. The current year-to-date's free cash use
includes $71.0 million in capital
expenditures and $32.3 million in net
prepublication and production spend.
Other Financial Results
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 fourth quarter of fiscal 2019. The dividend is
payable on June 17, 2019 to
shareholders of record as of the close of business on April 30, 2019.
Additional Information
To supplement the financial statements presented in accordance
with GAAP, the Company includes certain non-GAAP calculations and
presentations, including, as indicated, "Adjusted EBITDA" and "Free
Cash Flow". Please refer to the non-GAAP financial tables attached
to this press release for supporting details on special one-time
items, the use of non-GAAP financial measures, 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 4:30 p.m. ET today, March 21, 2019. Scholastic's Chairman, President
and CEO, Richard Robinson, and
Ken Cleary, the Company's CFO, 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 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 6297254. The recording will be available through
Friday, March 29, 2019.
About Scholastic
Scholastic Corporation (NASDAQ: SCHL) 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 quality books
and ebooks, 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 14
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. 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.
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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Table 1
|
|
Scholastic
Corporation
|
|
|
Consolidated
Statements of Operations
|
|
|
(Unaudited)
|
|
|
(In $
Millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
THREE MONTHS
ENDED
|
|
NINE MONTHS
ENDED
|
|
|
|
|
|
02/28/19
|
02/28/18
|
|
|
02/28/19
|
02/28/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$360.1
|
$344.7
|
|
|
$1,183.2
|
$1,132.2
|
|
|
|
|
|
|
|
|
|
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|
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Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
176.9
|
166.4
|
|
|
564.6
|
535.6
|
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
189.3
|
185.0
|
|
|
578.6
|
566.0
|
|
|
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|
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Bad debt
expense
|
1.6
|
1.7
|
|
|
5.7
|
7.9
|
|
|
|
|
|
Depreciation and
amortization
|
13.7
|
11.0
|
|
|
41.3
|
30.0
|
|
|
|
|
|
Asset impairments
(2)
|
-
|
4.3
|
|
|
-
|
11.0
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total operating costs
and expenses
|
381.5
|
368.4
|
|
|
1,190.2
|
1,150.5
|
|
|
|
|
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|
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|
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Operating income
(loss)
|
(21.4)
|
(23.7)
|
|
|
(7.0)
|
(18.3)
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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Interest income
(expense), net
|
1.0
|
0.2
|
|
|
2.3
|
0.5
|
|
|
|
|
Other components of
net periodic benefit (cost)(3)
|
(0.4)
|
(39.8)
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|
|
(1.1)
|
(55.4)
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Earnings (loss)
before income taxes
|
(20.8)
|
(63.3)
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|
|
(5.8)
|
(73.2)
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Provision (benefit)
for income taxes(4)
|
(8.2)
|
(14.1)
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(3.5)
|
(17.4)
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Net income
(loss)
|
($12.6)
|
($49.2)
|
|
|
($2.3)
|
($55.8)
|
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Basic and diluted
earnings (loss) per share of Class A and Common Stock
(5)
|
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Basic
|
($0.36)
|
($1.41)
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|
($0.07)
|
($1.59)
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Diluted
|
($0.36)
|
($1.41)
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($0.07)
|
($1.59)
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Basic weighted
average shares outstanding
|
35,265
|
34,948
|
|
|
35,204
|
35,058
|
|
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Diluted weighted
average shares outstanding
|
35,807
|
35,548
|
|
|
35,810
|
35,676
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(1)
|
In the three and nine
months ended February 28, 2019, the Company recognized pretax
severance of $2.2 and $3.1, respectively, and pretax branch
consolidation costs of $0.5 and $0.5, respectively. In the
nine months ended February 28, 2019, the Company recognized a $4.3
pretax charge related to a proposed settlement of a legacy sales
tax assessment. In the three and nine months ended February 28,
2018, the Company recognized pretax severance and stock
compensation charges of $0.4 and $5.7, respectively.
|
|
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(2)
|
In the three and nine
months ended February 28, 2018, the Company recognized pretax
impairment charges of $4.3 and $11.0, respectively, related to
legacy building improvements.
|
|
|
|
(3)
|
In the three and nine
months ended February 28, 2018, the Company recognized pretax
charges related to a partial settlement of the Company's domestic
defined benefit pension plan of $39.6 and $55.0,
respectively.
|
|
|
|
(4)
|
In the three and nine
months ended February 28, 2019, the Company recognized a benefit
for income taxes in respect to one-time pretax charges of $0.7 and
$2.1, respectively, and $0.5 and $0.3, respectively, 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 nine months ended February 28, 2018,
the Company recognized a benefit for income taxes in respect to
one-time pretax charges of $13.8 and $24.8, respectively, partly
offset by $8.3 and $8.3, respectively, 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.
|
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(5)
|
Earnings (loss) per
share are calculated on non-rounded net income (loss) and shares
outstanding. Recalculating earnings per share based on numbers
rounded to millions may not yield the results as
presented.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2
|
|
Scholastic
Corporation
|
|
|
Segment
Results
|
|
|
(Unaudited)
|
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
NINE MONTHS
ENDED
|
|
|
|
|
|
02/28/19
|
02/28/18
|
|
Change
|
|
02/28/19
|
02/28/18
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
$55.0
|
$57.7
|
|
($2.7)
|
(5%)
|
|
$165.4
|
$165.6
|
|
($0.2)
|
(0%)
|
|
|
|
|
Book Fairs
|
97.4
|
91.5
|
|
5.9
|
6%
|
|
343.3
|
334.6
|
|
8.7
|
3%
|
|
|
|
|
Consolidated
Trade
|
65.6
|
52.4
|
|
13.2
|
25%
|
|
222.9
|
184.0
|
|
38.9
|
21%
|
|
|
|
|
Total
revenue
|
218.0
|
201.6
|
|
16.4
|
8%
|
|
731.6
|
684.2
|
|
47.4
|
7%
|
|
|
|
|
Operating income
(loss)
|
4.4
|
(1.0)
|
|
5.4
|
|
|
64.7
|
55.1
|
|
9.6
|
17%
|
|
|
|
|
Operating
margin
|
2.0%
|
-
|
|
|
|
|
8.8%
|
8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
60.3
|
59.5
|
|
0.8
|
1%
|
|
179.7
|
171.4
|
|
8.3
|
5%
|
|
|
|
|
Operating income
(loss)
|
0.3
|
(0.1)
|
|
0.4
|
|
|
(6.3)
|
(8.7)
|
|
2.4
|
|
|
|
|
|
Operating
margin
|
0.5%
|
-
|
|
|
|
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
81.8
|
83.6
|
|
(1.8)
|
(2%)
|
|
271.9
|
276.6
|
|
(4.7)
|
(2%)
|
|
|
|
|
Operating income
(loss)
|
(3.0)
|
0.7
|
|
(3.7)
|
|
|
8.0
|
12.6
|
|
(4.6)
|
(37%)
|
|
|
|
|
Operating
margin
|
-
|
0.8%
|
|
|
|
|
2.9%
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead
expense
|
23.1
|
23.3
|
|
0.2
|
1%
|
|
73.4
|
77.3
|
|
3.9
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
($21.4)
|
($23.7)
|
|
$2.3
|
|
|
($7.0)
|
($18.3)
|
|
$11.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3
|
|
Scholastic
Corporation
|
|
|
Supplemental
Information
|
|
|
(Unaudited)
|
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/28/19
|
02/28/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$338.1
|
$362.6
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
317.3
|
186.0
|
|
|
|
|
|
|
|
|
|
Inventories,
net
|
356.8
|
356.9
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
215.3
|
208.4
|
|
|
|
|
|
|
|
|
|
Accrued
royalties
|
76.8
|
63.2
|
|
|
|
|
|
|
|
|
|
Lines of credit,
short-term debt and current portion of long-term debt
|
11.0
|
7.7
|
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current portion
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Total debt
|
11.0
|
7.7
|
|
|
|
|
|
|
|
|
|
Total capital lease
obligations
|
10.5
|
7.8
|
|
|
|
|
|
|
|
|
|
Net debt
(1)
|
(327.1)
|
(354.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
1,269.1
|
1,267.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Cash Flow Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
NINE MONTHS
ENDED
|
|
|
|
|
|
02/28/19
|
02/28/18
|
|
|
02/28/19
|
02/28/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$21.0
|
$36.5
|
|
|
$60.5
|
$64.9
|
|
|
|
|
|
Less: Additions to property, plant
and equipment
|
19.7
|
38.4
|
|
|
71.0
|
92.4
|
|
|
|
|
|
Pre-publication
and production costs
|
11.7
|
7.7
|
|
|
32.3
|
22.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (use)
(2)
|
($10.4)
|
($9.6)
|
|
|
($42.8)
|
($49.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4
|
|
Scholastic
Corporation
|
|
|
Consolidated
Statements of Operations - Supplemental
|
|
|
Excluding
One-Time Items
|
|
|
(Unaudited)
|
|
|
(In $
Millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
02/28/19
|
items
|
One-time
items
|
|
|
02/28/18
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$360.1
|
$0.0
|
$360.1
|
|
|
$344.7
|
$0.0
|
$344.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
176.9
|
-
|
176.9
|
|
|
166.4
|
-
|
166.4
|
|
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
|
189.3
|
(2.7)
|
186.6
|
|
|
185.0
|
(0.4)
|
184.6
|
|
|
|
|
|
|
Bad debt
expense
|
|
1.6
|
-
|
1.6
|
|
|
1.7
|
-
|
1.7
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
13.7
|
-
|
13.7
|
|
|
11.0
|
-
|
11.0
|
|
|
|
|
|
|
Asset impairments
(2)
|
|
-
|
-
|
-
|
|
|
4.3
|
(4.3)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
|
381.5
|
(2.7)
|
378.8
|
|
|
368.4
|
(4.7)
|
363.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(21.4)
|
2.7
|
(18.7)
|
|
|
(23.7)
|
4.7
|
(19.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
1.0
|
-
|
1.0
|
|
|
0.2
|
-
|
0.2
|
|
|
|
|
|
Other components of
net periodic benefit (cost)(3)
|
|
(0.4)
|
-
|
(0.4)
|
|
|
(39.8)
|
39.6
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
|
(20.8)
|
2.7
|
(18.1)
|
|
|
(63.3)
|
44.3
|
(19.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes(4)
|
|
(8.2)
|
1.2
|
(7.0)
|
|
|
(14.1)
|
5.5
|
(8.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
($12.6)
|
$1.5
|
($11.1)
|
|
|
($49.2)
|
$38.8
|
($10.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
($0.36)
|
$0.04
|
($0.32)
|
|
|
($1.41)
|
$1.11
|
($0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NINE MONTHS
ENDED
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
02/28/19
|
items
|
One-time
items
|
|
|
02/28/18
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$1,183.2
|
$0.0
|
$1,183.2
|
|
|
$1,132.2
|
$0.0
|
$1,132.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
564.6
|
-
|
564.6
|
|
|
535.6
|
-
|
535.6
|
|
|
|
|
|
|
Selling, general and
administrative expenses (1)
|
|
578.6
|
(7.9)
|
570.7
|
|
|
566.0
|
(5.7)
|
560.3
|
|
|
|
|
|
|
Bad debt
expense
|
|
5.7
|
-
|
5.7
|
|
|
7.9
|
-
|
7.9
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
41.3
|
-
|
41.3
|
|
|
30.0
|
-
|
30.0
|
|
|
|
|
|
|
Asset impairments
(2)
|
|
-
|
-
|
-
|
|
|
11.0
|
(11.0)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
|
1,190.2
|
(7.9)
|
1,182.3
|
|
|
1,150.5
|
(16.7)
|
1,133.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(7.0)
|
7.9
|
0.9
|
|
|
(18.3)
|
16.7
|
(1.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
2.3
|
-
|
2.3
|
|
|
0.5
|
-
|
0.5
|
|
|
|
|
|
Other components of
net periodic benefit (cost)(3)
|
|
(1.1)
|
-
|
(1.1)
|
|
|
(55.4)
|
55.0
|
(0.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
|
(5.8)
|
7.9
|
2.1
|
|
|
(73.2)
|
71.7
|
(1.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes(4)
|
|
(3.5)
|
2.4
|
(1.1)
|
|
|
(17.4)
|
16.5
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
($2.3)
|
$5.5
|
$3.2
|
|
|
($55.8)
|
$55.2
|
($0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
($0.07)
|
$0.16
|
$0.09
|
|
|
($1.59)
|
$1.57
|
($0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three and nine
months ended February 28, 2019, the Company recognized pretax
severance of $2.2 and $3.1, respectively, and pretax branch
consolidation costs of $0.5 and $0.5, respectively. In the
nine months ended February 28, 2019, the Company recognized a $4.3
pretax charge related to a proposed settlement of a legacy sales
tax assessment. In the three and nine months ended February 28,
2018, the Company recognized pretax severance and stock
compensation charges of $0.4 and $5.7, respectively.
|
|
|
|
(2)
|
In the three and nine
months ended February 28, 2018, the Company recognized pretax
impairment charges of $4.3 and $11.0, respectively, related to
legacy building improvements.
|
|
|
|
(3)
|
In the three and nine
months ended February 28, 2018, the Company recognized pretax
charges related to a partial settlement of the Company's domestic
defined benefit pension plan of $39.6 and $55.0,
respectively.
|
|
|
|
(4)
|
In the three and nine
months ended February 28, 2019, the Company recognized a benefit
for income taxes in respect to one-time pretax charges of $0.7 and
$2.1, respectively, and $0.5 and $0.3, respectively, 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 nine months ended February 28, 2018,
the Company recognized a benefit for income taxes in respect to
one-time pretax charges of $13.8 and $24.8, respectively, partly
offset by $8.3 and $8.3, respectively, 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5
|
|
Scholastic
Corporation
|
|
|
Consolidated
Statements of Operations - Supplemental
|
|
|
Adjusted
EBITDA
|
|
|
(Unaudited)
|
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
|
02/28/19
|
|
02/28/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes as reported
|
|
($20.8)
|
|
|
($63.3)
|
|
|
|
|
|
One-time items before
income taxes
|
|
2.7
|
|
|
44.3
|
|
|
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
(18.1)
|
|
|
(19.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense
|
|
(1.0)
|
|
|
(0.2)
|
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
14.6
|
|
|
11.7
|
|
|
|
|
|
|
Amortization of
prepublication and production costs
|
|
5.9
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(2)
|
|
$1.4
|
|
|
($2.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NINE MONTHS
ENDED
|
|
|
|
|
|
|
|
02/28/19
|
|
02/28/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes as reported
|
|
($5.8)
|
|
|
($73.2)
|
|
|
|
|
|
One-time items before
income taxes
|
|
7.9
|
|
|
71.7
|
|
|
|
|
|
Earnings (loss)
before income taxes excluding one-time items
|
|
2.1
|
|
|
(1.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense
|
|
(2.3)
|
|
|
(0.5)
|
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
43.7
|
|
|
32.2
|
|
|
|
|
|
|
Amortization of
prepublication and production costs
|
|
16.6
|
|
|
16.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(2)
|
|
$60.1
|
|
|
$46.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For the three and
nine months ended February 28, 2019, amounts include depreciation
of $0.8 and $2.2, respectively, recognized in cost of goods sold
and amortization of deferred financing costs of $0.1 and $0.2,
respectively. In the three and nine months ended February 28,
2018, amounts include depreciation of $0.6 and $1.9, respectively,
recognized in cost of goods sold and amortization of deferred
financing costs of $0.1 and $0.2, respectively.
|
|
|
|
(2)
|
Adjusted EBITDA is
defined by the Company as earnings (loss), excluding one-time
items, before interest, taxes, depreciation and amortization.
The Company believes that Adjusted EBITDA is a meaningful measure
of operating profitability and useful for measuring returns on
capital investments over time as it is not distorted by unusual
gains, losses, or other items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6
|
|
Scholastic
Corporation
|
|
|
Segment
Results - Supplemental
|
|
|
Excluding
One-Time Items
|
|
|
(Unaudited)
|
|
|
(In $
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
|
02/28/19
|
items
|
One-time
items
|
|
|
02/28/18
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
$55.0
|
|
$55.0
|
|
|
$57.7
|
|
$57.7
|
|
|
|
|
|
|
|
Book Fairs
|
|
97.4
|
|
97.4
|
|
|
91.5
|
|
91.5
|
|
|
|
|
|
|
|
Consolidated
Trade
|
|
65.6
|
|
65.6
|
|
|
52.4
|
|
52.4
|
|
|
|
|
|
|
|
Total
revenue
|
|
218.0
|
|
218.0
|
|
|
201.6
|
|
201.6
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
4.4
|
-
|
4.4
|
|
|
(1.0)
|
-
|
(1.0)
|
|
|
|
|
|
|
|
Operating
margin
|
|
2.0%
|
|
2.0%
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
60.3
|
|
60.3
|
|
|
59.5
|
|
59.5
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
0.3
|
-
|
0.3
|
|
|
(0.1)
|
-
|
(0.1)
|
|
|
|
|
|
|
|
Operating
margin
|
|
0.5%
|
|
0.5%
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
81.8
|
|
81.8
|
|
|
83.6
|
|
83.6
|
|
|
|
|
|
|
|
Operating income
(loss)(1)
|
|
(3.0)
|
0.5
|
(2.5)
|
|
|
0.7
|
-
|
0.7
|
|
|
|
|
|
|
|
Operating
margin
|
|
-
|
|
-
|
|
|
0.8%
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead expense
(2)
|
|
23.1
|
(2.2)
|
20.9
|
|
|
23.3
|
(4.7)
|
18.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
($21.4)
|
$2.7
|
($18.7)
|
|
|
($23.7)
|
$4.7
|
($19.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NINE MONTHS
ENDED
|
|
|
|
|
|
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
Reported
|
One-time
|
Excluding
|
|
|
|
|
|
|
|
|
|
02/28/19
|
items
|
One-time
items
|
|
|
02/28/18
|
items
|
One-time
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children's Book
Publishing and Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Clubs
|
|
$165.4
|
|
$165.4
|
|
|
$165.6
|
|
$165.6
|
|
|
|
|
|
|
|
Book Fairs
|
|
343.3
|
|
343.3
|
|
|
334.6
|
|
334.6
|
|
|
|
|
|
|
|
Consolidated
Trade
|
|
222.9
|
|
222.9
|
|
|
184.0
|
|
184.0
|
|
|
|
|
|
|
|
Total
revenue
|
|
731.6
|
|
731.6
|
|
|
684.2
|
|
684.2
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
64.7
|
-
|
64.7
|
|
|
55.1
|
-
|
55.1
|
|
|
|
|
|
|
|
Operating
margin
|
|
8.8%
|
|
8.8%
|
|
|
8.1%
|
|
8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
179.7
|
|
179.7
|
|
|
171.4
|
|
171.4
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(6.3)
|
-
|
(6.3)
|
|
|
(8.7)
|
-
|
(8.7)
|
|
|
|
|
|
|
|
Operating
margin
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
271.9
|
|
271.9
|
|
|
276.6
|
|
276.6
|
|
|
|
|
|
|
|
Operating income
(loss) (1)
|
|
8.0
|
0.5
|
8.5
|
|
|
12.6
|
-
|
12.6
|
|
|
|
|
|
|
|
Operating
margin
|
|
2.9%
|
|
3.1%
|
|
|
4.6%
|
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead expense
(2)
|
|
73.4
|
(7.4)
|
66.0
|
|
|
77.3
|
(16.7)
|
60.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
($7.0)
|
$7.9
|
$0.9
|
|
|
($18.3)
|
$16.7
|
($1.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the three and nine
months ended February 28, 2019, the Company recognized pretax
branch consolidation costs of $0.5.
|
|
|
|
(2)
|
In the three and nine
months ended February 28, 2019, the Company recognized pretax
severance of $2.2 and $3.1, respectively. In the nine months
ended February 28, 2019, the Company recognized a $4.3 pretax
charge related to a proposed settlement of a legacy sales tax
assessment. In the three and nine months ended February 28, 2018,
the Company recognized pretax severance and stock compensation
charges of $0.4 and $5.7, respectively. In the three and nine
months ended February 28, 2018, the Company recognized pretax
impairment charges of $4.3 and $11.0, respectively, related to
legacy building improvements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7
|
|
Scholastic
Corporation
|
|
|
Segment
Results - Supplemental
|
|
|
Impact of
ASC 606 Accounting Adoption
|
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(Unaudited)
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(In $
Millions)
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THREE MONTHS
ENDED
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Excluding
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Reported
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Accounting
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Accounting
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02/28/19
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Adoption
(1)
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Adoption
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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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$55.0
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$0.0
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$55.0
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Book Fairs
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97.4
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(8.2)
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89.2
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Consolidated
Trade
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65.6
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-
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65.6
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Total
revenue
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218.0
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(8.2)
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209.8
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Operating income
(loss)
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4.4
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(6.5)
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(2.1)
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Operating
margin
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2.0%
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-
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Education
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Revenue
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60.3
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-
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60.3
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Operating income
(loss)
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0.3
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(0.1)
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0.2
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Operating
margin
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0.5%
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0.3%
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International
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Revenue
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81.8
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(1.2)
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80.6
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Operating income
(loss)
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(3.0)
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(0.9)
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(3.9)
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Operating
margin
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-
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-
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Overhead
expense
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23.1
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-
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23.1
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Operating income
(loss)
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($21.4)
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($7.5)
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($28.9)
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NINE MONTHS
ENDED
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Excluding
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Reported
|
Accounting
|
Accounting
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02/28/19
|
Adoption
(1)
|
Adoption
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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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$165.4
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$0.0
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$165.4
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Book Fairs
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343.3
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(11.7)
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331.6
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Consolidated
Trade
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222.9
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-
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222.9
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Total
revenue
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731.6
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(11.7)
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719.9
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Operating income
(loss)
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64.7
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(8.3)
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56.4
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Operating
margin
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8.8%
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7.8%
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Education
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Revenue
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179.7
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-
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179.7
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Operating income
(loss)
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(6.3)
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0.5
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(5.8)
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Operating
margin
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-
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-
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International
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Revenue
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271.9
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0.6
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272.5
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Operating income
(loss)
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8.0
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0.7
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8.7
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Operating
margin
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2.9%
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3.2%
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Overhead
expense
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73.4
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-
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73.4
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Operating income
(loss)
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($7.0)
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($7.1)
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($14.1)
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(1)
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Amounts represent the
impact of the adoption of ASC 606 - Revenue from Contracts with
Customers in the current fiscal year.
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View original content to download
multimedia:http://www.prnewswire.com/news-releases/scholastic-reports-fiscal-2019-third-quarter-results-300816685.html
SOURCE Scholastic Corporation