Press Release: Scholastic Reports Fiscal 2015 Third Quarter Results
New York - March 26, 2015 - Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal 2015 third quarter ended February 28, 2015.
Revenue in the third quarter was $382.1 million, compared to $373.5 million a year ago, an increase of 2%. The Company reported a third quarter loss per share of $0.68, versus a loss of $0.38 a year ago, when the Company recorded a one-time tax benefit as a result of a favorable settlement of outstanding federal tax audits. Results for the third quarter of the current fiscal year include one-time expenses of $0.09 per share, which are detailed below. The prior year period included a one-time net benefit of $0.30 per share. Excluding one-time items, third quarter loss per share was $0.59 compared to a loss of $0.68 in the prior year period.
The year-over-year improvement in third quarter operating results was largely driven by stronger sales in children's books, especially in the Company's school-based distribution channels, higher circulation of the Company's classroom magazines, and increased sales of the Company's classroom books and literacy initiatives. These gains were partially offset by the adverse effect of foreign exchange on the Company's international business, as well as lower sales in the Company's educational technology and services business and reduced local currency revenues in the United Kingdom and Canada.
During the third quarter, free cash use (as defined) was $4.6 million, compared to a use of $17.0 million in the prior year period. At quarter-end, the Company's net debt (as defined) was $69.5 million, compared to $157.7 million a year ago.
"We continued our positive trajectory of profitable year-over-year sales growth in the third quarter, which is typically a lower revenue quarter for the Company. Our turnaround in Clubs performance, which began in January 2014 on the strength of new marketing initiatives and promotion strategies, has progressed a full year, now providing for tougher comparisons. We remain excited about the longer-term growth prospects for children's books and supplemental education publishing in terms of higher teacher-sponsor engagement and increased student participation in our reading clubs, higher revenue per school book fair, and our ability to customize classroom collections of books and materials to meet school districts' needs as they face more exacting proficiency standards for all students," commented Richard Robinson, Chairman, President and Chief Executive Officer. "We were also encouraged by the results of our recently released Kids & Family Reading ReportTM, which show that children rate school book clubs and school book fairs as important ways to find books they want to choose, read, and own - second only to finding books through the library. Also during the quarter, we continued with a number of targeted restructuring initiatives aimed at enhancing the margin contribution of our operating businesses, including our media unit."