Peter Warwick, President and Chief Executive Officer, said, “After a solid first quarter, Scholastic is excited for this year’s back-to-school season. Book Fairs is well positioned to increase in-person fair counts to meet our goal of 85% pre-pandemic levels, and Book Club offerings are receiving positive early responses from participating teachers and families. In Trade, we are looking forward to multiple new releases from best-selling authors, including the fourth Cat Kid Comic Club® in Dav Pilkey’s latest series. Importantly, across all of our children’s books channels, we are well prepared with inventory and staffing to meet anticipated demand.

 

“Up against a difficult prior year comparison, when sales benefited partly because of the timing of shipments, Education Solutions continued its multi-year growth trajectory in the first quarter. At the same time, we strategically invested in long-term go-to-market capabilities and moved to acquire Learning Ovations^TM, the creator of A2i^TM, a Science of Reading-based literacy assessment and instructional system, backed by gold-standard research, validation and efficacy. Combined with Scholastic’s bestselling books and ebooks, print and technology-based learning programs, and other products and services that support children's learning and literacy, this acquisition, which closed subsequent to quarter end, significantly accelerates development of Scholastic’s comprehensive literacy platform.

 

“Every back-to-school season represents an opportunity for Scholastic to reaffirm its role supporting students, educators and families. This year we are committed to being there for schools and communities more than ever, given recent reports of expanding learning gaps as a result of the pandemic. The news has renewed focus on supporting children’s basic learning needs, especially with the historic levels of federal and state school funding now available. Together, we can help improve childhood literacy. We are confident that our engaging, high-quality content and the reputation we have built with teachers over the past 100 years uniquely positions Scholastic to help kids learn to read and read to learn.”

 

 

 

 

 

 

Revenues decreased $6.9 million to $73.2 million, relative to the prior year when significant sales shifted from the preceding fourth quarter owing to supply chain constraints at that time. This was partially offset by higher revenues from the New Worlds Reading Initiative, a free book delivery program to advance literacy in the state of Florida, which did not commence shipping until the third quarter of the prior year. As expected, operating loss increased $11.6 million, on the shift in product shipments and continued strategic investments in long-term go-to-market capabilities in the division.    

 

 

In local currency, International revenues increased $5.8 million to $65.0 million, primarily driven by the performance of the trade and book fairs channels in the Australia and Canada markets. This was partially offset by $4.7 million in unfavorable foreign currency translation adjustment due to the strengthening of the US dollar. In addition, during the quarter, the Company finalized the disposition of its low margin direct-to-consumer business in Asia, which generated losses in the prior year. 

 

 

Excluding one-time items, overhead costs were relatively flat at $20.2 million, as the Company continues to focus on capital resources allocations.

 

 

The Company has affirmed its guidance for fiscal year 2023 for revenues to increase 8% to 10% and Adjusted EBITDA (as defined in the accompanying tables) of $195 million to $205 million, up from $189 million in fiscal 2022, with the greatest contribution expected in the seasonally important second and fourth fiscal quarters.

 

 

To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, “Adjusted EBITDA” and “Free Cash Flow”. Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

 

 

 

 

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.

 

 

This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children’s book and educational materials markets generally and acceptance of the Company’s products within those markets, and other risks and factors identified from time to time in the Company’s filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.

 

SCHL: Financial