Press Release: Scholastic Reports Fiscal 2014 Second Quarter Results
New York - December 19, 2013 - Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported results for the fiscal 2014 second quarter ended November 30, 2013.
Revenue in the second quarter was $623.2 million, compared to $613.5 million a year ago. The Company reported second quarter earnings per diluted share from continuing operations of $1.80, versus $1.91 in the prior year period. Results for the second quarter of the current fiscal year include one-time expenses of $0.35 per diluted share, which include an impairment charge of $13.4 million, related to goodwill from legacy acquisitions previously made in the Children's Book Publishing and Distribution segment, and $5.5 million of one-time expenses related tocost reduction and restructuring programs. Consolidated earnings per diluted share was $1.80 in the quarter, compared to earnings of $1.89 a year ago.
Second quarter results were largely driven by profit improvement in children's books; continued robust performance of Scholastic's new educational technology programs, which were successfully launched over the summer; favorable results in classroom book collections and guided reading initiatives; and growing circulation of the Company's classroom magazines. These results were partially offset by the performance of the International segment where the impact of fluctuations in foreign currency exchange rates more than offset the effect of double-digit revenue growth in Asia.
During the second quarter, the Company generated free cash flow (as defined) of $129.4 million, compared to $60.4 million in the prior year period. At quarter-end, cash and cash equivalents exceeded the Company's total debt by $107.6 million, compared to $103.7 million a year ago.
"Scholastic had a very strong second quarter, driven by profit improvement in each part of our children's book business and excellent educational technology program sales. These operating results were offset by a one-time, non-cash charge related to acquisitions made more than 10 years ago," commented Richard Robinson, Chairman, President and Chief Executive Officer. "Scholastic continues to be a critical source for books that support children's independent reading in school and at home. In Trade, excitement for the Catching Fire film sparked an increase in The Hunger Games trilogy book and ebook sales following its release in November. Our multi-platform series, SPIRIT ANIMALSTM, also did very well in the quarter, as did franchise titles such as Harry Potter. The emphasis on reading in the classroom has never been stronger, and demand for books through our school channels remains vigorous in the Common Core era. Our new collaborative marketing efforts in children's book clubs and fairs enable us to provide books to teachers, parents and children through our school channels in a more streamlined, profitable manner."