Press Release: Scholastic Reports Fiscal 2015 Second Quarter Results
Second Quarter Results
Children's Book Publishing and Distribution. Segment revenue in the second quarter was $402.6 million, compared to $352.1 million in the prior year period, an increase of $50.5 million, or 14%. In School Book Clubs, higher engagement levels of both teachers and parents, evidenced by a higher number of orders, drove a $32.2 million, or 33%, increase in revenues to $129.6 million, compared to $97.4 million in the prior year period. In School Book Fairs, revenue increased by 8% to $217.4 million, reflecting higher revenue per fair and an increase in the number of fairs held, as compared to $202.2 million in the prior year period. In Trade, sales of the successful Minecraft handbook series helped drive a 6% increase in revenues. Overall segment operating income improved by $39.4 million, or 57%, to $108.3 million versus $68.9 million in the prior year period as a result of the higher sales volume, together with lower investment in Storia in the current quarter. This favorable comparison also benefitted from an impairment charge of $13.4 million related to goodwill from legacy acquisitions taken in the prior year period.
Educational Technology and Services. Segment revenue in the quarter fell by 16% to $50.9 million, compared to $60.9 million in the prior year period. Lower sales of educational technology products in the current quarter were partially offset by gains in technology support and product dependent services, as well as in Math Solutions which was up 9% compared to the prior year period. Sales of the Company's flagship READ 180® product improved as the quarter progressed. Segment operating income declined by $8.1 million to a loss of $1.2 million, compared to operating profit of $6.9 million in the prior year period, due to lower revenues from higher margin educational technology programs.