Press Release: Scholastic Reports Fiscal 2015 Second Quarter Results
"Scholastic had a solid quarter of revenue growth with significant gains in our Club and Fair school distribution channels, reflecting the success of the new marketing strategies implemented by Clubs in the second half of last year, as well as in classroom books. With Clubs leading the way on a 33% revenue gain, Children's Book Publishing and Distribution saw 14% sales growth in the quarter. The growth in these channels shows that educators and families are continuing to emphasize independent reading as an important way to drive children's motivation, thinking skills, and testing results," commented Richard Robinson, Chairman, President and Chief Executive Officer. "Classroom magazines' print and online offerings also continued to perform well, bringing Common Core-connected non-fiction into the classroom. Despite lower sales of core educational technology products in the quarter in comparison to last year, we are encouraged by an improving pipeline that we believe will lead to increased purchases of reading and math intervention programs, which are effective in raising student achievement. In addition, we remain on track for the release of MATH 180® Course 2, which is concentrated on algebra readiness, in the fourth quarter of the fiscal year."
Non-recurring items reflected in the Company's pre-tax results for the second quarter include a non-cash settlement charge of $3.7 million related to the Company's defined benefit pension plan as a result of bulk lump sum payments made to certain participants during the quarter, $2.9 million related to the planned closure of its retail store in Manhattan, $0.9 million of one-time severance charges associated with the Company's cost savings initiatives, and a $0.6 million gain on the sale of an investment.
Scholastic affirmed its fiscal 2015 outlook for total revenue of approximately $1.9 billion and earnings per diluted share from continuing operations in the range of $1.80 to $2.00, before the impact of one-time items associated with cost reduction programs or non-cash, non-operating items. The Company continues to expect free cash flow in the range of $65 to $85 million.