Press Release: Scholastic Reports Fiscal 2015 Third Quarter Results

Media, Licensing and Advertising. Segment revenue in the quarter was $9.5 million, compared to $10.7 million in the prior year period, a decrease of 11%, primarily as a result of lower interactive media sales to Leapster and lower sales of audio books in the quarter, as well as lower revenues in the Company's entertainment programming unit related to the timing of certain programming revenues. Segment operating loss improved to a loss of $2.0 million, from a loss of $2.3 million in the prior period. During the quarter, the Company restructured the media organization to better align its operations with the Company's core businesses, which resulted in one-time severance charges captured in Corporate Overhead. As a result, beginning in March 2015, audio and video book operations will become a part of the trade publishing group.

Other Financial Results. Corporate overhead in the third quarter was $19.4 million, excluding one-time items of $3.5 million, compared to $11.2 million in the prior year period, excluding $1.7 million in one-time items. This increase was primarily due to higher planned strategic investment in corporate-level information technology in the current quarter, which was essentially offset by lower technology spend in the business segments, as well as higher depreciation expense related to the purchase of the Company's headquarters building.

As previously announced, the Company's Board of Directors declared a quarterly cash dividend of $0.15 per share on the Company's Class A and Common Stock for the fourth quarter of fiscal 2015. The dividend is payable on June 15, 2015 to shareholders of record as of the close of business on April 30, 2015.

Make Believe Ideas
Earlier this week, the Company announced the purchase of a minority equity interest in UK book publisher, Make Believe Ideas. MBI is a highly-regarded publisher of innovative books for children and babies, celebrated for well-designed books that encourage creativity and early learning. Under the purchase agreement, and subject to its provisions, Scholastic will purchase the remaining outstanding shares in MBI after four years.