Press Release: Scholastic Reports Fiscal 2015 Third Quarter Results

Educational Technology and Services. Segment revenue in the quarter fell by 4% to $34.3 million, compared to $35.8 million in the prior year period, mostly due to lower math product sales and lower consulting revenues in the Company's International Center for Leadership in Education unit. Sales of core literacy publishing product were essentially flat with the prior year; however, both new business and expansion sales of READ 180® stages, along with technology support services, were higher in the current quarter as compared to the prior year period. Segment operating loss increased by $1.7 million to a loss of $12.4 million, compared to an operating loss of $10.7 million in the prior year period, mainly due to higher cost of product and amortization expenses. The third quarter is traditionally a smaller period for educational technology sales as many schools and districts do not implement new curriculum programs mid-year.

Classroom and Supplemental Materials Publishing. Segment revenue in the quarter increased 7% to $49.1 million, compared to $46.0 million in the prior year period, as a result of higher circulation and increased pricing in classroom magazines and higher sales of the Company's guided reading and other classroom book collections, which were partially offset by lower sales in the Company's teaching resources business and its library publishing division. Segment operating income was $3.4 million, versus $2.1 million in the prior year period, an increase of 62%, primarily due to the higher circulation in classroom magazines.

International. Segment revenue in the quarter was $86.3 million, versus $91.0 million in the prior year period, primarily due to unfavorable foreign exchange translation of $5.5 million as the result of a strengthening U.S. dollar. Higher local currency sales in Australia/New Zealand, the Asia-Pacific region and Export were partially offset by lower local currency revenues in the United Kingdom and Canada due largely to lower Hunger Games sales in the quarter. Segment operating income was $0.9 million, compared to $0.1 million in the prior year period, primarily the result of lower promotional and salary related costs and an insurance recovery relating to a fire in India, partially offset by $1.5 million of costs associated with a warehouse optimization project in Canada.