SCHL Scholastic Corporation

In $ millions

Second Quarter

Change

Fiscal 2025

Fiscal 2024

$

%

Revenues

$

544.6

$

562.6

$

(18.0)

(3) %

Operating income (loss)

$

74.7

$

101.3

$

(26.6)

(26) %

Earnings (loss) before taxes

$

70.0

$

101.5

$

(31.5)

(31) %

Diluted earnings (loss) per share

$

1.71

$

2.45

$

(0.74)

(30) %

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

$

78.9

$

101.3

$

(22.4)

(22) %

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

$

1.82

$

2.45

$

(0.63)

(26) %

Adjusted EBITDA *

$

108.7

$

124.0

$

(15.3)

(12) %

* Please refer to the non-GAAP financial tables attached

In $ millions

Second Quarter

Change

Fiscal 2025

Fiscal 2024

$

%

Net cash (used) provided by operating activities

$

71.2

$

109.7

$

(38.5)

(35) %

Additions to property, plant and equipment and prepublication expenditures

(16.6)

(21.1)

4.5

21 %

Net borrowings (repayments) of film related obligations

(12.2)

—

(12.2)

NM

Free cash flow (use)*

$

42.4

$

88.6

$

(46.2)

(52) %

Net cash (debt)*

$

(120.8)

$

143.2

$

(264.0)

NM

* Please refer to the non-GAAP financial tables attached

In $ millions (except per share data)

Year-To-Date

Change

Fiscal 2025

Fiscal 2024

$

%

Revenues

$

781.8

$

791.1

$

(9.3)

(1) %

Operating income (loss)

$

(13.8)

$

2.2

$

(16.0)

NM

Earnings (loss) before taxes

$

(21.8)

$

3.5

$

(25.3)

NM

Diluted earnings (loss) per share

$

(0.48)

$

0.09

$

(0.57)

NM

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

$

(6.7)

$

8.5

$

(15.2)

NM

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

$

(0.29)

$

0.23

$

(0.52)

NM

Adjusted EBITDA *

$

48.2

$

53.4

$

(5.2)

(10) %

* 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

Six months ended

11/30/24

11/30/23

11/30/24

11/30/23

Revenues ⁽¹⁾

$

544.6

$

562.6

$

781.8

$

791.1

Operating costs and expenses:

Cost of goods sold

228.6

234.1

356.9

364.1

Selling, general and administrative expenses ⁽²⁾

224.9

213.1

407.0

397.3

Depreciation and amortization

16.3

14.1

31.6

27.5

Asset impairments and write downs ⁽²⁾

0.1

—

0.1

—

Total operating costs and expenses

469.9

461.3

795.6

788.9

Operating income (loss)

74.7

101.3

(13.8)

2.2

Interest income (expense), net

(4.4)

0.4

(7.4)

1.8

Other components of net periodic benefit (cost)

(0.3)

(0.2)

(0.6)

(0.5)

Earnings (loss) before income taxes

70.0

101.5

(21.8)

3.5

Provision (benefit) for income taxes ⁽³⁾

21.2

24.6

(8.1)

0.8

Net income (loss) ⁽¹⁾

48.8

76.9

(13.7)

2.7

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

Basic

$

1.73

$

2.51

$

(0.48)

$

0.09

Diluted

$

1.71

$

2.45

$

(0.48)

$

0.09

Basic weighted average shares outstanding

28,234

30,653

28,309

31,159

Diluted weighted average shares outstanding

28,586

31,442

28,757

32,038

(1)

The financial results of 9 Story Media Group from the date of acquisition on June 20, 2024 through November 30, 2024 are
included in the Company's consolidated results of operations as of November 30, 2024. The unaudited pro-forma
 consolidated results of operations as if the acquisition had occurred on June 1, 2023, the beginning of fiscal 2024,
 includes revenues of $544.6 and $787.5 and net income of $48.8 and net loss of $15.5 for the three and six months ended
November 30, 2024, respectively, and revenues of $578.8 and $827.1 and net income of $73.9 and net loss of $4.9 for the
 three and six months ended November 30, 2023, respectively.

(2)

In the three and six months ended November 30, 2024, the Company recognized pretax severance of $3.8 and $5.0,
respectively, related to cost-savings initiatives and pretax costs of $0.4 and $2.1, respectively, related to the acquisition of 9
 Story Media Group. In the six months ended November 30, 2023, the Company recognized pretax severance of $6.3 related
to cost-savings initiatives.

(3)

In the three and six months ended November 30, 2024, the Company recognized a benefit of $1.0 and $1.7, respectively, for
income taxes in respect to one-time pretax items. In the six months ended November 30, 2023, the Company recognized a
benefit of $1.6 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

Six months ended

Change

11/30/24

11/30/23

$

%

11/30/24

11/30/23

$

%

Children's Book Publishing and Distribution ⁽¹⁾

Revenues

Books Clubs

$

33.2

$

32.4

$

0.8

2 %

$

35.9

$

35.0

$

0.9

3 %

Book Fairs

231.0

242.1

(11.1)

(5) %

259.8

269.4

(9.6)

(4) %

School Reading Events

264.2

274.5

(10.3)

(4) %

295.7

304.4

(8.7)

(3) %

Consolidated Trade

102.8

117.9

(15.1)

(13) %

176.7

190.4

(13.7)

(7) %

Total Revenues

367.0

392.4

(25.4)

(6) %

472.4

494.8

(22.4)

(5) %

Operating income (loss)

102.1

111.6

(9.5)

(9) %

65.5

70.6

(5.1)

(7) %

Operating margin

27.8 %

28.4 %

13.9 %

14.3 %

Education Solutions

Revenues

71.2

81.0

(9.8)

(12) %

126.9

147.0

(20.1)

(14) %

Operating income (loss)

(0.5)

5.8

(6.3)

(109) %

(17.5)

(12.9)

(4.6)

(36) %

Operating margin

NM

7.2 %

NM

NM

Entertainment ⁽¹⁾

Revenues

16.8

0.4

16.4

NM

33.4

0.8

32.6

NM

Operating income (loss)

(4.7)

(0.8)

(3.9)

NM

(5.2)

(1.3)

(3.9)

NM

Operating margin

NM

NM

NM

NM

International

Revenues

86.7

86.5

0.2

0 %

143.5

143.7

(0.2)

(0) %

Operating income (loss)

5.7

8.0

(2.3)

(29) %

(2.6)

(0.2)

(2.4)

NM

Operating margin

6.6 %

9.2 %

NM

NM

Overhead

Revenues

2.9

2.3

0.6

26 %

5.6

4.8

0.8

17 %

Operating income (loss)

(27.9)

(23.3)

(4.6)

(20) %

(54.0)

(54.0)

0.0

NM

Operating income (loss)

$

74.7

$

101.3

$

(26.6)

(26) %

$

(13.8)

$

2.2

$

(16.0)

NM

NM - Not meaningful

(1)

The newly formed Entertainment segment includes the operations of Scholastic Entertainment Inc. (SEI),
which were included in the Children's Book Publishing and Distribution segment in prior periods, and 9 Story
Media Group. The financial results for SEI for the three and six months ended November 30, 2023 have been
reclassified to Entertainment to reflect this change. 

Table 3

Scholastic Corporation

Supplemental Information

(Unaudited)

(In $ Millions)

Selected Balance Sheet Items

11/30/24

11/30/23

Cash and cash equivalents

$

139.6

$

149.5

Accounts receivable, net

293.0

311.8

Inventories, net

282.0

302.3

Accounts payable

157.2

159.5

Deferred revenue

225.0

225.0

Accrued royalties

67.3

57.5

Film related obligations

21.6

—

Lines of credit and long-term debt

256.2

6.3

Net cash (debt) ⁽¹⁾

(120.8)

143.2

Total stockholders' equity

986.0

1,079.1

Selected Cash Flow Items

Three months ended

Six months ended

11/30/24

11/30/23

11/30/24

11/30/23

Net cash provided by (used in) operating activities

$

71.2

$

109.7

$

29.3

$

71.6

Property, plant and equipment additions

(10.9)

(14.8)

(30.9)

(29.1)

Prepublication expenditures

(5.7)

(6.3)

(10.1)

(11.7)

Net borrowings (repayments) of film related obligations

(12.2)

—

(14.6)

—

Free cash flow (use) ⁽²⁾

$

42.4

$

88.6

$

(26.3)

$

30.8

(1)

Net cash (debt) is defined by the Company as cash and cash equivalents less production
cash of $4.2 as of November 30, 2024, net of lines of credit, short-term and long-term debt.
Film related obligations are not included. 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 and adjusted for net cash flows from film related obligations. 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

11/30/2024

11/30/2023

Reported

One-time
items

Excluding
One-time
items

Reported

One-time
items

Excluding
One-time
items

Diluted earnings (loss) per share ⁽¹⁾

$

1.71

$

0.11

$

1.82

$

2.45

$

—

$

2.45

Net income (loss) ⁽²⁾

$

48.8

$

3.2

$

52.0

$

76.9

$

—

$

76.9

Earnings (loss) before income taxes

$

70.0

$

4.2

$

74.2

$

101.5

$

—

$

101.5

Children's Book Publishing and
Distribution ⁽³⁾

$

102.1

$

—

$

102.1

$

111.6

$

—

$

111.6

Education Solutions

(0.5)

—

(0.5)

5.8

—

5.8

Entertainment ^{(3) (4)}

(4.7)

0.8

(3.9)

(0.8)

—

(0.8)

International ⁽⁵⁾

5.7

1.4

7.1

8.0

—

8.0

Overhead ⁽⁶⁾

(27.9)

2.0

(25.9)

(23.3)

—

(23.3)

Operating income (loss)

$

74.7

$

4.2

$

78.9

$

101.3

$

—

$

101.3

Six months ended

11/30/2024

11/30/2023

Reported

One-time
items

Excluding
One-time
items

Reported

One-time
items

Excluding
One-time
items

Diluted earnings (loss) per share ⁽¹⁾

$

(0.48)

$

0.19

$

(0.29)

$

0.09

$

0.15

$

0.23

Net income (loss) ⁽²⁾

$

(13.7)

$

5.4

$

(8.3)

$

2.7

$

4.7

$

7.4

Earnings (loss) before income taxes

$

(21.8)

$

7.1

$

(14.7)

$

3.5

$

6.3

$

9.8

Children's Book Publishing and Distribution ⁽³⁾

$

65.5

$

—

$

65.5

$

70.6

$

—

$

70.6

Education Solutions

(17.5)

—

(17.5)

(12.9)

—

(12.9)

Entertainment ^{(3) (4)}

(5.2)

2.5

(2.7)

(1.3)

—

(1.3)

International ⁽⁵⁾

(2.6)

1.4

(1.2)

(0.2)

1.2

1.0

Overhead ⁽⁶⁾

(54.0)

3.2

(50.8)

(54.0)

5.1

(48.9)

Operating income (loss)

$

(13.8)

$

7.1

$

(6.7)

$

2.2

$

6.3

$

8.5

(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 six months ended November 30, 2024, the Company recognized a benefit of $1.0 and $1.7,
respectively, for income taxes in respect to one-time pretax items. In the six months ended November 30, 2023, the
Company recognized a benefit of $1.6 for income taxes in respect to one-time pretax items. 

(3)

The newly formed Entertainment segment includes the operations of Scholastic Entertainment Inc. (SEI), which were
included in the Children's Book Publishing and Distribution segment in prior periods, and 9 Story Media Group. The
financial results for SEI for the three and six months ended November 30, 2023 have been reclassified to Entertainment
to reflect this change. 

(4)

In the three and six months ended November 30, 2024, the Company recognized pretax severance of $0.4 related to
cost-savings initiatives and pretax costs of $0.4 and $2.1, respectively, related to the acquisition of 9 Story Media Group. 

(5)

In the three and six months ended November 30, 2024, the Company recognized pretax severance of $1.4 related to
cost-savings initiatives. In the six months ended November 30, 2023, the Company recognized pretax severance of
$1.2 related to cost-savings initiatives.

(6)

In the three and six months ended November 30, 2024, the Company recognized pretax severance of $2.0 and $3.2,
respectively, related to cost-savings initiatives. In the six months ended November 30, 2023, the Company recognized
pretax severance of $5.1 related to restructuring and cost-savings initiatives.

Table 5

Scholastic Corporation

Consolidated Statements of Operations - Supplemental

Adjusted EBITDA

(Unaudited)

(In $ Millions)

Three months ended

11/30/24

11/30/23

Earnings (loss) before income taxes as reported

$

70.0

$

101.5

One-time items before income taxes

4.2

—

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

74.2

101.5

Interest (income) expense ⁽¹⁾

4.2

(0.4)

Depreciation and amortization ⁽²⁾

30.3

22.9

Adjusted EBITDA ⁽³⁾

$

108.7

$

124.0

Six months ended

11/30/24

11/30/23

Earnings (loss) before income taxes as reported

$

(21.8)

$

3.5

One-time items before income taxes

7.1

6.3

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

(14.7)

9.8

Interest (income) expense ⁽¹⁾

7.6

(1.8)

Depreciation and amortization ⁽²⁾

55.3

45.4

Adjusted EBITDA ⁽²⁾

$

48.2

$

53.4

(1)

For the three and six months ended November 30, 2024, amounts include
production loan interest amortized into cost of goods sold.

(2)

For the three and six months ended November 30, 2024, amounts include
prepublication and production cost amortization of $10.7 and $17.4, respectively,
and depreciation of $0.8 and $1.5, respectively, recognized in cost of goods sold,
amortization of deferred financing costs of less than $0.1 and $0.1, respectively,
and amortization of capitalized cloud software of $2.5 and $4.7, respectively,
recognized in selling, general and administrative expenses. For the three and
six months ended November 30, 2023, amounts include prepublication
amortization of $6.6 and $13.3, respectively, and depreciation of $0.6 and
$1.2, respectively, recognized in cost of goods sold, amortization of
deferred financing costs of less than $0.1 and $0.1, respectively, and
amortization of capitalized cloud software of $1.6 and $3.3, respectively,
recognized in selling, general and administrative expenses.

(3)

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

Consolidated Statements of Operations - Supplemental

Adjusted EBITDA by Segment

(Unaudited)

(In $ Millions)

Three months ended

11/30/24

CBPD ^{(1) (2)}

EDUC ⁽¹⁾

ENT ^{(1) (2)}

INTL ⁽¹⁾

OVH ⁽¹⁾

Total

Earnings (loss) before income taxes as reported

$

102.1

$

(0.5)

$

(5.7)

$

5.2

$

(31.1)

$

70.0

One-time items before income taxes

—

—

0.8

1.4

2.0

4.2

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

102.1

(0.5)

(4.9)

6.6

(29.1)

74.2

Interest (income) expense ⁽³⁾

0.1

0.0

0.7

0.0

3.4

4.2

Depreciation and amortization ⁽⁴⁾

7.8

6.2

8.0

2.1

6.2

30.3

Adjusted EBITDA ⁽⁵⁾

$

110.0

$

5.7

$

3.8

$

8.7

$

(19.5)

$

108.7

Three months ended

11/30/23

CBPD ^{(1) (2)}

EDUC ⁽¹⁾

ENT ^{(1) (2)}

INTL ⁽¹⁾

OVH ⁽¹⁾

Total

Earnings (loss) before income taxes as reported

$

111.6

$

5.8

$

(0.8)

$

7.6

$

(22.7)

$

101.5

One-time items before income taxes

—

—

—

—

—

—

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

111.6

5.8

(0.8)

7.6

(22.7)

101.5

Interest (income) expense ⁽³⁾

0.1

0.0

—

0.0

(0.5)

(0.4)

Depreciation and amortization ⁽⁴⁾

8.0

7.8

0.1

1.6

5.4

22.9

Adjusted EBITDA ⁽⁵⁾

$

119.7

$

13.6

$

(0.7)

$

9.2

$

(17.8)

$

124.0

Six months ended

11/30/24

CBPD ^{(1) (2)}

EDUC ⁽¹⁾

ENT ^{(1) (2)}

INTL ⁽¹⁾

OVH ⁽¹⁾

Total

Earnings (loss) before income taxes as reported

$

65.5

$

(17.5)

$

(6.8)

$

(3.5)

$

(59.5)

$

(21.8)

One-time items before income taxes

—

—

2.5

1.4

3.2

7.1

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

65.5

(17.5)

(4.3)

(2.1)

(56.3)

(14.7)

Interest (income) expense ⁽³⁾

0.1

0.0

1.8

0.0

5.7

7.6

Depreciation and amortization ⁽⁴⁾

15.3

12.4

11.5

4.0

12.1

55.3

Adjusted EBITDA ⁽⁵⁾

$

80.9

$

(5.1)

$

9.0

$

1.9

$

(38.5)

$

48.2

Six months ended

11/30/23

CBPD ^{(1) (2)}

EDUC ⁽¹⁾

ENT ^{(1) (2)}

INTL ⁽¹⁾

OVH ⁽¹⁾

Total

Earnings (loss) before income taxes as reported

$

70.5

$

(12.9)

$

(1.3)

$

(0.9)

$

(51.9)

$

3.5

One-time items before income taxes

—

—

—

1.2

5.1

6.3

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

70.5

(12.9)

(1.3)

0.3

(46.8)

9.8

Interest (income) expense ⁽³⁾

0.1

0.0

—

(0.1)

(1.8)

(1.8)

Depreciation and amortization ⁽⁴⁾

15.7

15.6

0.2

3.5

10.4

45.4

Adjusted EBITDA ⁽⁵⁾

$

86.3

$

2.7

$

(1.1)

$

3.7

$

(38.2)

$

53.4

(1)

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

(2)

The newly formed Entertainment segment includes the operations of Scholastic Entertainment Inc. (SEI), which were
included in the Children's Book Publishing and Distribution segment in prior periods, and 9 Story Media Group. The
financial results for SEI for the three and six months ended November 30, 2023 have been reclassified to Entertainment
to reflect this change. 

(3)

For the three and six months ended November 30, 2024, amounts include production loan interest amortized into cost
of goods sold.

(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.