SCHL Scholastic Corporation

In $ millions

Fourth Quarter

Change

Fiscal 2024

Fiscal 2023

$

%

Revenues

$

474.9

$

528.3

$

(53.4)

(10) %

Operating income (loss)

$

47.2

$

92.0

$

(44.8)

(49) %

Earnings (loss) before taxes

$

47.3

$

95.6

$

(48.3)

(51) %

Diluted earnings (loss) per share

$

1.23

$

2.26

$

(1.03)

(46) %

Operating income (loss), ex. one-time items*

$

66.8

$

92.0

$

(25.2)

(27) %

Diluted earnings (loss) per share, ex. one-time items *

$

1.73

$

2.26

$

(0.53)

(23) %

Adjusted EBITDA*

$

90.7

$

115.0

$

(24.3)

(21) %

* Please refer to the non-GAAP financial tables attached

In $ millions

Full Year

Change

Fiscal 2024

Fiscal 2023

$

%

Revenues

$

1,589.7

$

1,704.0

$

(114.3)

(7) %

Operating income (loss)

$

14.5

$

106.3

$

(91.8)

(86) %

Earnings (loss) before taxes

$

16.2

$

112.4

$

(96.2)

(86) %

Diluted earnings (loss) per share

$

0.40

$

2.49

$

(2.09)

(84) %

Operating income (loss), ex. one-time items*

$

44.7

$

106.3

$

(61.6)

(58) %

Diluted earnings (loss) per share, ex. one-time items *

$

1.14

$

2.49

$

(1.35)

(54) %

Adjusted EBITDA*

$

136.9

$

196.3

$

(59.4)

(30) %

* Please refer to the non-GAAP financial tables attached

In $ millions

Full Year

Change

Fiscal 2024

Fiscal 2023

$

%

Net cash provided by operating activities

$

154.6

$

148.9

$

5.7

4 %

Additions to property, plant and equipment and
prepublication expenditures

(81.2)

(88.9)

7.7

9 %

Free cash flow (use)*

$

73.4

$

60.0

$

13.4

22 %

Net cash (debt)*

$

107.7

$

218.5

$

(110.8)

(51) %

* Please refer to the non-GAAP financial tables attached

Table 1

Scholastic Corporation

Consolidated Statements of Operations

(Unaudited)

(In $ Millions, except shares and per share data)

Three months ended

Twelve months ended

05/31/24

05/31/23

05/31/24

05/31/23

Revenues

$

474.9

$

528.3

$

1,589.7

$

1,704.0

Operating costs and expenses:

Cost of goods sold

192.3

220.4

705.1

786.4

Selling, general and administrative expenses ⁽¹⁾

210.9

202.2

803.0

756.6

Depreciation and amortization

15.0

13.7

57.1

54.7

Asset impairments and write downs ⁽²⁾

9.5

—

10.0

—

Total operating costs and expenses

427.7

436.3

1,575.2

1,597.7

Operating income (loss)

47.2

92.0

14.5

106.3

Interest income (expense), net

0.3

3.5

2.7

5.8

Other components of net periodic benefit (cost)

(0.2)

0.1

(1.0)

0.3

Earnings (loss) before income taxes

47.3

95.6

16.2

112.4

Provision (benefit) for income taxes ⁽³⁾

11.4

19.8

4.1

25.9

Net income (loss)

35.9

75.8

12.1

86.5

Less: Net income (loss) attributable to noncontrolling interest

—

0.1

—

0.2

Net income (loss) attributable to Scholastic Corporation

$

35.9

$

75.7

$

12.1

$

86.3

Basic and diluted earnings (loss) per share of Class A and Common Stock ⁽⁴⁾

Basic

$

1.26

$

2.33

$

0.41

$

2.56

Diluted

$

1.23

$

2.26

$

0.40

$

2.49

Basic weighted average shares outstanding

28,511

32,585

29,557

33,780

Diluted weighted average shares outstanding

29,228

33,498

30,361

34,732

(1)

In the three and twelve months ended May 31, 2024, the Company recognized pretax costs related to its planned investment in 9 Story
Media Group of $6.3 and $9.3, respectively, and pretax costs, primarily severance, related to restructuring and cost-savings initiatives of
$3.8 and $10.9, respectively.

(2)

In the three and the twelve months ended May 31, 2024, the Company recognized pretax asset impairment of $6.1 related to certain
education products and $3.4 and $3.9, respectively, primarily related to the early exit of certain leased office space in the U.S. and Canada.

(3)

In the three and twelve months ended May 31, 2024, the Company recognized a benefit of $5.0 and $7.7, respectively, for income taxes
in respect to one-time pretax items.

(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

Change

Twelve months ended

Change

05/31/24

05/31/23

$

%

05/31/24

05/31/23

$

%

Children's Book Publishing and
Distribution

Revenues

Books Clubs

$

14.4

$

26.2

$

(11.8)

(45) %

$

62.7

$

117.8

$

(55.1)

(47) %

Book Fairs

169.5

180.5

(11.0)

(6) %

541.6

553.1

(11.5)

(2) %

School Reading Events

183.9

206.7

(22.8)

(11) %

604.3

670.9

(66.6)

(10) %

Consolidated Trade

82.1

84.3

(2.2)

(3) %

350.9

367.1

(16.2)

(4) %

Total Revenues

266.0

291.0

(25.0)

(9) %

955.2

1,038.0

(82.8)

(8) %

Operating income (loss)

43.6

58.4

(14.8)

(25) %

112.1

143.4

(31.3)

(22) %

Operating margin

16.4 %

20.1 %

11.7 %

13.8 %

Education Solutions

Revenues

135.7

163.4

(27.7)

(17) %

351.2

386.6

(35.4)

(9) %

Operating income (loss)

29.5

55.0

(25.5)

(46) %

15.8

58.4

(42.6)

(73) %

Operating margin

21.7 %

33.7 %

4.5 %

15.1 %

International

Revenues

70.8

73.9

(3.1)

(4) %

273.6

279.4

(5.8)

(2) %

Operating income (loss)

(0.8)

2.2

(3.0)

(136) %

(6.9)

(3.6)

(3.3)

(92) %

Operating margin

NM

3.0 %

NM

NM

Overhead

Operating income (loss)

(25.1)

(23.6)

(1.5)

(6) %

(106.5)

(91.9)

(14.6)

(16) %

Operating income (loss)

$

47.2

$

92.0

$

(44.8)

(49) %

$

14.5

$

106.3

$

(91.8)

(86) %

NM - Not meaningful

Table 3

Scholastic Corporation

Supplemental Information

(Unaudited)

(In $ Millions)

Selected Balance Sheet Items

05/31/24

05/31/23

Cash and cash equivalents

$

113.7

$

224.5

Accounts receivable, net

235.0

278.0

Inventories, net

264.2

334.5

Accounts payable

138.5

170.9

Deferred revenue

161.1

169.1

Accrued royalties

48.5

52.8

Lines of credit and current portion of long-term debt

6.0

6.0

Long-term debt

—

—

Total debt

6.0

6.0

Net cash (debt) ⁽¹⁾

107.7

218.5

Total stockholders' equity

1,018.1

1,164.5

Selected Cash Flow Items

Three months ended

Twelve months ended

05/31/24

05/31/23

05/31/24

05/31/23

Net cash provided by (used in) operating activities

$

69.9

$

120.0

$

154.6

$

148.9

Less:

Additions to property, plant and equipment

14.6

25.2

58.4

62.0

Prepublication expenditures

5.6

9.1

22.8

26.9

Free cash flow (use) ⁽²⁾

$

49.7

$

85.7

$

73.4

$

60.0

(1)

Net cash (debt) is defined by the Company as cash and cash equivalents, net of lines of credit and
short-term debt plus long-term-debt. The Company utilizes this non-GAAP financial measure, and
believes it is useful to investors, as an indicator of the Company's effective leverage and financing
needs.

(2)

Free cash flow (use) is defined by the Company as net cash provided by or used in operating
activities (which includes royalty advances) and cash acquired through acquisitions and from sale
of assets, reduced by spending on property, plant and equipment and prepublication costs. The
Company believes that this non-GAAP financial measure is useful to investors as an indicator of
cash flow available for debt repayment and other investing activities, such as acquisitions. The
Company utilizes free cash flow as a further indicator of operating performance and for planning
investing activities.

Table 4

Scholastic Corporation

Supplemental Results - Excluding One-Time Items

(Unaudited)

(In $ Millions, except per share data)

Three months ended

05/31/2024

05/31/2023

Reported

One-time
items

Excluding
One-time
items

Reported

One-time
items

Excluding
One-time
items

Diluted earnings (loss) per share ⁽¹⁾

$

1.23

$

0.51

$

1.73

$

2.26

$

—

$

2.26

Net income (loss) ⁽²⁾

$

35.9

$

14.6

$

50.5

$

75.7

$

—

$

75.7

Earnings (loss) before income taxes

$

47.3

$

19.6

$

66.9

$

95.6

$

—

$

95.6

Children's Book Publishing and Distribution ⁽³⁾

$

43.6

$

6.3

$

49.9

$

58.4

$

—

$

58.4

Education Solutions ⁽⁴⁾

29.5

6.1

35.6

55.0

—

55.0

International ⁽⁵⁾

(0.8)

2.6

1.8

2.2

—

2.2

Overhead ⁽⁶⁾

(25.1)

4.6

(20.5)

(23.6)

—

(23.6)

Operating income (loss)

$

47.2

$

19.6

$

66.8

$

92.0

$

—

$

92.0

Twelve months ended

05/31/2024

05/31/2023

Reported

One-time
items

Excluding
One-time
items

Reported

One-time
items

Excluding
One-time
items

Diluted earnings (loss) per share ⁽¹⁾

$

0.40

$

0.76

$

1.14

$

2.49

$

—

$

2.49

Net income (loss) ⁽²⁾

$

12.1

$

22.5

$

34.6

$

86.3

$

—

$

86.3

Earnings (loss) before income taxes

$

16.2

$

30.2

$

46.4

$

112.4

$

—

$

112.4

Children's Book Publishing and Distribution ⁽³⁾

$

112.1

$

9.8

$

121.9

$

143.4

$

—

$

143.4

Education Solutions ⁽⁴⁾

15.8

6.1

21.9

58.4

—

58.4

International ⁽⁵⁾

(6.9)

3.8

(3.1)

(3.6)

—

(3.6)

Overhead ⁽⁶⁾

(106.5)

10.5

(96.0)

(91.9)

—

(91.9)

Operating income (loss)

$

14.5

$

30.2

$

44.7

$

106.3

$

—

$

106.3

(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 and twelve months ended May 31, 2024, the Company recognized a benefit of $5.0 and $7.7, respectively, for
income taxes in respect to one-time pretax items.

(3)

In the three and twelve months ended May 31, 2024, the Company recognized pretax costs related to its planned investment
in 9 Story Media Group of $6.3 and $9.3, respectively, and pretax asset impairment of $0.0 and $0.5, respectively, related to
an early exit of a sales office lease.

(4)

In the three and twelve months ended May 31, 2024, the Company recognized pretax impairment of $6.1, related to certain
education products.

(5)

In the three and twelve months ended May 31, 2024, the Company recognized pretax costs, primarily severance, of $1.5 and
$2.7, respectively, related to restructuring and cost-savings initiatives and pretax impairment of $1.1 primarily related to the
early exit of an office lease in Canada.

(6)

In the three and twelve months ended May 31, 2024, the Company recognized pretax severance of $2.3 and $8.2, respectively,
related to restructuring and cost-savings initiatives and pretax impairment of $2.3 related to the early exit of an office lease.

Table 5

Scholastic Corporation

Consolidated Statements of Operations - Supplemental

Adjusted EBITDA

(Unaudited)

(In $ Millions)

Three months ended

05/31/24

05/31/23

Earnings (loss) before income taxes as reported

$

47.3

$

95.6

One-time items before income taxes

19.6

—

Earnings (loss) before income taxes excluding one-time items

66.9

95.6

Interest (income) expense

(0.3)

(3.5)

Depreciation and amortization ⁽¹⁾

17.8

16.3

Amortization of prepublication costs

6.3

6.6

Adjusted EBITDA ⁽²⁾

$

90.7

$

115.0

Twelve months ended

05/31/24

05/31/23

Earnings (loss) before income taxes as reported

$

16.2

$

112.4

One-time items before income taxes

30.2

—

Earnings (loss) before income taxes excluding one-time items

46.4

112.4

Interest (income) expense

(2.7)

(5.8)

Depreciation and amortization ⁽¹⁾

67.0

64.6

Amortization of prepublication costs

26.2

25.1

Adjusted EBITDA ⁽²⁾

$

136.9

$

196.3

(1)

For the three and twelve months ended May 31, 2024, amounts include depreciation
of $0.6 and $2.3, respectively, recognized in cost of goods sold, amortization of deferred
financing costs of $0.0 and $0.2, respectively, and amortization of capitalized cloud
software of $2.2 and $7.4, respectively, recognized in selling, general and administrative
expenses. For the three and twelve months ended May 31, 2023, amounts include
depreciation of $0.8 and $3.3, respectively, recognized in cost of goods sold, amortization
of deferred financing costs of $0.1 and $0.3, respectively, and amortization of capitalized
cloud software of $1.7 and $6.3, 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.

Table 6

Scholastic Corporation

Revenues & Adjusted EBITDA by Segment & Historical 9 Story Media Group

(Unaudited)

(In $ Millions)

Twelve months ended

05/31/24

CBPD ^{(1) (2)}

EDUC ⁽¹⁾

INTL ⁽¹⁾

OVH ⁽¹⁾

9 Story ⁽³⁾

Revenues

$

955.2

$

351.2

$

273.6

$

9.7

$

81.7

Earnings (loss) before income taxes as reported

$

112.0

$

15.8

$

(8.3)

$

(103.3)

$

(15.9)

One-time items before income taxes

9.8

6.1

3.8

10.5

8.7

Earnings (loss) before income taxes excluding one-time items

121.8

21.9

(4.5)

(92.8)

(7.2)

Interest (income) expense

0.2

—

(0.2)

(2.7)

2.7

Depreciation and amortization ⁽⁴⁾

24.9

14.0

5.5

22.6

16.5

Amortization of prepublication costs

7.3

17.0

1.9

—

—

Adjusted EBITDA ⁽⁵⁾

$

154.2

$

52.9

$

2.7

$

(72.9)

$

12.0

Twelve months ended

05/31/23

CBPD ^{(1) (2)}

EDUC ⁽¹⁾

INTL ⁽¹⁾

OVH ⁽¹⁾

9 Story ⁽³⁾

Revenues

$

1,038.0

$

386.6

$

279.4

$

—

$

114.6

Earnings (loss) before income taxes as reported

$

143.4

$

58.3

$

(4.0)

$

(85.3)

$

(4.1)

One-time items before income taxes

—

—

—

—

10.0

Earnings (loss) before income taxes excluding one-time items

143.4

58.3

(4.0)

(85.3)

5.9

Interest (income) expense

—

—

0.2

(6.0)

1.9

Depreciation and amortization ⁽⁴⁾

26.9

13.7

5.7

18.3

17.4

Amortization of prepublication costs

7.6

15.8

1.7

—

—

Adjusted EBITDA ⁽⁵⁾

$

177.9

$

87.8

$

3.6

$

(73.0)

$

25.2

(1)

The Company's segments are defined as the following: CBPD - Children's Book Publishing and Distribution segment; EDUC
- Education Solutions segment; INTL - International segment; OVH - unallocated overhead.

(2)

The Children's Book Publishing and Distribution segment includes results for Scholastic Entertainment Inc. (SEI), which will
be recategorized into the new Entertainment segment beginning in fiscal 2025. In the twelve months ended May 31, 2024,
SEI contributed revenues of $1.9, a loss before income taxes excluding one-time items of $1.9, and Adjusted EBITDA loss
of $1.6. In the twelve months ended May 31, 2023, SEI contributed revenues of $19.0, income before income taxes excluding
one-time items of $1.2, and Adjusted EBITDA of $1.5. 

(3)

Represents historical financial data for 9 Story Media Group, adjusted for differences between IFRS and US GAAP and
conformed to the Scholastic fiscal year period. This does not include pro forma adjustments as the purchase accounting is
not yet complete. One-time items before income taxes represent severance expenses related to restructuring events as well
as lease and library content impairments. Interest (income) expense includes production loan interest amortized into Cost of
sales. 9 Story Media Group results will be consolidated with SEI in a new Entertainment segment.

(4)

Depreciation and amortization in the Children's Book Publishing and Distribution, Education Solutions and International segments
includes amounts allocated from overhead.

(5)

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.