Press Release: Scholastic Reports Fiscal 2015 Third Quarter Results
Non-recurring items reflected in the Company's pre-tax results for the third quarter include $2.9 million of one-time severance charges primarily associated withthe restructuring of the Company's interactive business in the media segment, non-cash asset write-downs of $1.5 million related to a warehouse consolidation project in Canada, and a non-cash settlement charge of $0.6 million connected to the Company's defined benefit pension plan as a result of lump sum payments made to certain participants during the quarter.
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 and non-cash, non-operating items. The Company continues to expect free cash flow in the range of $65 to $85 million.
Third Quarter Results
Children's Book Publishing and Distribution. Segment revenue in the third quarter was $202.9 million, compared to $190.0 million in the prior year period, an increase of $12.9 million, or 7%. In School Book Clubs, higher engagement levels of both teachers and parents, evidenced by a higher number of orders, drove a $10.0 million, or 17%, increase in revenues to $70.2 million, compared to $60.2 million in the prior year period. In School Book Fairs, revenue increased by 2% to $91.2 million, reflecting higher revenue per fair, as compared to $89.2 million in the prior year period. The harsh winter weather in many parts of the United States and related school closures had an unfavorable effect on the number of fairs held during the quarter. In Trade, sales of the popular Minecraft Handbook series and core backlist titles, including the Harry Potter series, helped drive a 2% increase in revenues to $41.5 million, versus $40.6 million in the prior year period. Overall segment operating loss improved by $8.4 million, or 79%, to a loss of $2.2 million versus a loss of $10.6 million in the prior year period. The year-over-year improvement was primarily the result of the higher sales volume, together with lower operating expenses and lower technology investment, including in Storia® School Edition, partially offset by higher promotion spending in Clubs in the current quarter.