NEW YORK, Sept. 4, 2025 /PRNewswire/ -- Scholastic Corporation (NASDAQ:SCHL) today announced the following schedule and conference call information for its first quarter fiscal year 2026 earnings announcement: Earnings Release: Thursday, September 18, 2025, at 4:00 PM ET and posted on the Company's investor relations website, investor.scholastic.com. Conference Call: Thursday, September 18, 2025, at 4:30 PM ET hosted by Peter Warwick, President and CEO, and Haji Glover, CFO and Executive Vice President. A l ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Scholastic Corporation, a leading children's book publisher and educational materials provider, operates through four segments with a highly seasonal business model - Scholastic Corporation is the world's largest publisher and distributor of children's books, primarily operating through school-based book clubs and fairs[13](index=13&type=chunk) Fiscal Year 2025 Revenue by Segment | Segment | Revenue (in millions) | % of Total Revenue | | :--- | :--- | :--- | | Children's Book Publishing and Distribution | $963.9 | 59.3% | | Education Solutions | $309.8 | 19.1% | | Entertainment | $61.0 | 3.8% | | International | $279.6 | 17.2% | | Overhead | $11.2 | 0.6% | | **Total** | **$1,625.5** | **100.0%** | - The company's business is highly seasonal, with lower revenues in the first and third fiscal quarters due to its school-year-based channels[50](index=50&type=chunk) Employee Distribution as of May 31, 2025 | Business Channel/Function | Full-time | Part-time | Seasonal | Total | | :--- | :--- | :--- | :--- | :--- | | Central Functions | 670 | 25 | — | 695 | | Primary U.S. Warehouse | 675 | 130 | 5 | 810 | | Book Fairs Warehouses | 640 | 700 | 435 | 1,775 | | Scholastic Reading Events | 505 | 10 | 75 | 590 | | Trade | 205 | 5 | — | 210 | | Education Solutions | 540 | 60 | — | 600 | | Entertainment | 760 | — | — | 760 | | International | 1,005 | 70 | 15 | 1,090 | | International Warehouses | 310 | 10 | 240 | 560 | | **Total** | **5,310** | **1,010** | **770** | **7,090** | [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces key risks including talent dependency, evolving customer patterns, rising costs, competition, cybersecurity, technological adaptation, regulatory changes, acquisition integration, and concentrated stock ownership - The company's business is highly dependent on maintaining strong relationships with authors, illustrators, and other creative talent[63](index=63&type=chunk) - The top five trade customers account for approximately **75% of U.S. trade business** and **16% of total company revenues**, indicating significant customer concentration risk[84](index=84&type=chunk) - As of May 31, 2025, the company held **$198.9 million in goodwill** and **$87.9 million in intangible assets**, subject to impairment risk if business objectives are not met[75](index=75&type=chunk) - Voting power is exclusively vested in Class A Stockholders, with the Estate of Richard Robinson owning a majority, controlling Board elections and major corporate actions[107](index=107&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments from the SEC - None[112](index=112&type=chunk) [Cybersecurity](index=20&type=section&id=Item%201C.%20Cybersecurity) Scholastic implements a NIST-CSF-based cybersecurity program, overseen by the Board's Technology, Data and Supply Chain Committee, with no material incidents reported to date - The company adopted the **NIST-CSF** as its cybersecurity program blueprint since 2018[114](index=114&type=chunk) - The Board's Technology, Data and Supply Chain Committee oversees cybersecurity risks, receiving quarterly updates from the CIO and CISO[116](index=116&type=chunk) - As of the report date, no past cybersecurity incidents are believed to have materially affected the company's business or financial condition[115](index=115&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) The company operates global owned and leased facilities, including its New York City headquarters and a primary Missouri warehouse, with the headquarters generating rental income Major Facilities as of May 31, 2025 | Location | Primary Purpose | Owned Square Footage | Leased Square Footage | | :--- | :--- | :--- | :--- | | Metropolitan NY Area | Principal offices | 355,000 | 19,000 | | U.S. Various Locations | Book Fairs warehouses | — | 2,302,000 | | Jefferson City, MO Area | Primary warehouse | 1,459,000 | — | | International | Warehouse and office | 236,000 | 1,022,000 | - The company's SoHo, New York City headquarters generated **$11.2 million in rental income** during fiscal 2025[123](index=123&type=chunk) [Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal proceedings, with management not expecting any material adverse effect on its financial position or results of operations - The company accrues for probable and estimable legal liabilities, anticipating no material adverse effect from current matters on its financial position[126](index=126&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[127](index=127&type=chunk) Part II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=23&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Scholastic's common stock trades on NASDAQ, with the company declaring a **$0.20 per share quarterly dividend** and repurchasing **$70.9 million in shares** during fiscal 2025 - On July 16, 2025, the Board declared a regular quarterly cash dividend of **$0.20 per share** for Q1 fiscal 2026[132](index=132&type=chunk) Share Repurchases (Fiscal 2025 vs. 2024) | Fiscal Year | Shares Repurchased | Average Price Paid | Total Cost (incl. tax) | | :--- | :--- | :--- | :--- | | 2025 | 3,482,280 | $20.10 | $70.9 million | | 2024 | 3,993,576 | $39.00 | $156.8 million | - As of May 31, 2025, approximately **$70.0 million** remains available for future common share repurchases under board authorizations[133](index=133&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 revenues grew **2.3% to $1.626 billion**, driven by Entertainment and Children's Book Publishing, but a **net loss of $1.9 million** resulted from increased interest expense related to the 9 Story acquisition Fiscal 2025 vs. 2024 Consolidated Results | Metric | Fiscal 2025 | Fiscal 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $1,625.5 M | $1,589.7 M | +2.3% | | Operating Income | $15.8 M | $14.5 M | +$1.3 M | | Net Income (Loss) | ($1.9 M) | $12.1 M | -$14.0 M | | Diluted EPS | ($0.07) | $0.40 | -$0.47 | - Fiscal 2025 revenue growth was primarily driven by a **$59.1 million increase** in Entertainment (9 Story acquisition) and a **$10.6 million increase** in Children's Book Publishing, offset by a **$41.4 million decrease** in Education Solutions[164](index=164&type=chunk) - Interest expense significantly increased to **$18.2 million** in fiscal 2025 from **$1.9 million** in fiscal 2024, primarily due to debt for the 9 Story acquisition[174](index=174&type=chunk) - Cash provided by operating activities decreased to **$124.2 million** in fiscal 2025 from **$154.6 million** in fiscal 2024, due to lower customer remittances and increased inventory and royalty payments[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from foreign currency and variable-rate debt interest rate fluctuations, managing currency risk with short-term forward exchange contracts without speculative derivatives - The company's primary market risks include foreign currency exchange rate fluctuations and interest rate changes on its variable-rate debt[212](index=212&type=chunk)[213](index=213&type=chunk) Debt Obligations by Maturity as of May 31, 2025 (in millions) | Type | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Lines of credit/Current Debt | $6.2 | $— | $— | $— | $— | $— | $6.2 | | Long-term debt | $— | $— | $— | $— | $250.0 | $— | $250.0 | | Film related obligations | $6.1 | $9.3 | $0.7 | $2.2 | $— | $— | $18.3 | [Consolidated Financial Statements and Supplementary Data](index=38&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section provides audited consolidated financial statements for fiscal years 2023-2025, including key statements and notes, with critical audit matters identified for book fair revenue recognition and 9 Story acquisition asset valuation Consolidated Balance Sheet Highlights (as of May 31) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | $725.3 | $676.9 | | Total Noncurrent Assets | $1,224.8 | $994.3 | | **Total Assets** | **$1,950.1** | **$1,671.2** | | **Liabilities & Equity** | | | | Total Current Liabilities | $626.4 | $534.7 | | Total Noncurrent Liabilities | $377.2 | $118.4 | | Total Stockholders' Equity | $946.5 | $1,018.1 | | **Total Liabilities & Equity** | **$1,950.1** | **$1,671.2** | Consolidated Cash Flow Highlights (Year ended May 31) | (in millions) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $124.2 | $154.6 | $148.9 | | Net cash used in investing activities | ($252.9) | ($89.7) | ($99.6) | | Net cash from (used in) financing activities | $137.3 | ($176.1) | ($139.5) | | Net increase (decrease) in cash | $10.3 | ($110.8) | ($92.1) | - Ernst & Young LLP identified two critical audit matters: school-based book fair revenue recognition and the valuation of 9 Story acquisition assets[455](index=455&type=chunk)[460](index=460&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=93&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[475](index=475&type=chunk) [Controls and Procedures](index=93&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of May 31, 2025, with the independent auditor issuing an unqualified opinion - The CEO and CFO concluded that the Corporation's disclosure controls and procedures were effective as of May 31, 2025[476](index=476&type=chunk) - Management concluded that the Corporation's internal control over financial reporting was effective as of May 31, 2025, based on the COSO 2013 framework[477](index=477&type=chunk) [Other Information](index=93&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of fiscal 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended May 31, 2025[479](index=479&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=93&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[480](index=480&type=chunk) Part III This section incorporates by reference information from the definitive proxy statement for the September 17, 2025 Annual Meeting, covering directors, executive officers, governance, compensation, security ownership, and accounting fees [Directors, Executive Officers and Corporate Governance](index=94&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required by this item is incorporated by reference from the company's definitive proxy statement for the upcoming Annual Meeting of Stockholders [Executive Compensation](index=94&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item is incorporated by reference from the company's definitive proxy statement for the upcoming Annual Meeting of Stockholders [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=94&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required by this item is incorporated by reference from the company's definitive proxy statement for the upcoming Annual Meeting of Stockholders [Certain Relationships and Related Transactions, and Director Independence](index=94&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's definitive proxy statement for the upcoming Annual Meeting of Stockholders [Principal Accounting Fees and Services](index=94&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's definitive proxy statement for the upcoming Annual Meeting of Stockholders Part IV [Exhibits, Financial Statement Schedules](index=95&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, supplementary information, and exhibits filed with the annual report, including corporate governance documents and compensation plans [Form 10-K Summary](index=99&type=section&id=Item%2016.%20Summary) This item is noted as 'None' in the report - None[497](index=497&type=chunk)

Core Insights - Scholastic reported quarterly earnings of $0.87 per share, exceeding the Zacks Consensus Estimate of $0.85 per share, but down from $1.73 per share a year ago, indicating an earnings surprise of +2.35% [1] - The company achieved revenues of $508.3 million for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 2.77% and up from $474.9 million year-over-year [2] - Scholastic has surpassed consensus EPS estimates three times over the last four quarters and topped revenue estimates twice in the same period [2] Earnings Outlook - The sustainability of Scholastic's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is -$2.09 on revenues of $244.84 million, while for the current fiscal year, it is $2.13 on revenues of $1.7 billion [7] Industry Context - The Publishing - Books industry, to which Scholastic belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Core Insights - Scholastic Corp. reported strong second-quarter results, with adjusted earnings of 87 cents per share, surpassing the analyst consensus estimate of 85 cents [1] - Quarterly revenue reached $508.3 million, exceeding the Street estimate of $494.58 million [1] Financial Performance - The company achieved solid financial results in fiscal 2025, with strong Adjusted EBITDA aligning with original guidance [2] - Continued strength in Children's Book Publishing and Distribution, along with disciplined cost management, helped mitigate macroeconomic pressures on school spending affecting the Education division [3] Future Outlook - Scholastic anticipates "significant growth" in fiscal 2026 Adjusted EBITDA, projecting it to be between $160 million and $170 million, driven by core business strength and cost savings, despite ongoing challenges in school spending [4] - Revenue growth is expected to be between 2% to 4% in fiscal 2026 [4] Stock Performance - Following the earnings report, Scholastic stock rose by 12.39%, reaching $24.22 in extended trading [4]

Financial Data and Key Metrics Changes - Revenue increased by 7% to $508.3 million in Q4 and up 2% to $1.6255 billion for the fiscal year [28] - Adjusted operating income decreased to $63.4 million in Q4 from $66.8 million in the prior year, with full year adjusted operating income at $35.8 million compared to $44.7 million [29] - Adjusted EBITDA increased by 1% to $91.2 million in Q4 and up 6% to $145.4 million for the fiscal year [29] Business Line Data and Key Metrics Changes - Children's book publishing and distribution revenue increased by 9% to $288.2 million in Q4, driven by strong performance in book fairs and trade publishing [29] - Education segment revenue decreased by 7% in Q4 to $125.7 million and down 12% for the full year to $309.8 million, reflecting continued headwinds in the supplemental curriculum market [31] - Entertainment segment revenue increased to $14.8 million in Q4 compared to $0.6 million in the prior year, with full year revenue at $61 million compared to $1.9 million [32] Market Data and Key Metrics Changes - International segment revenue increased by 8% to $76.8 million in Q4 and up 2% to $279.6 million for the fiscal year, driven by strong trade channel performance [34] - Foreign exchange had an unfavorable impact of $600,000 in Q4 and $1.6 million for the full year [34] Company Strategy and Development Direction - The company aims to strengthen its core businesses and unlock value from its iconic intellectual property while positioning for long-term profitable growth [7][8] - Strategic integration of trade publishing, book fairs, and book clubs is expected to drive long-term revenue growth and increase profitability [19][20] - The company is exploring monetization opportunities for its real estate assets to unlock value for shareholders [38][39] Management's Comments on Operating Environment and Future Outlook - Management noted continued pressure on consumer and school spending but expects modest revenue growth in fiscal 2026 [14][15] - The company anticipates adjusted EBITDA growth of approximately 20% in fiscal 2026, excluding expected tariff expenses [14][40] - Management expressed optimism about the education segment's potential for growth through state-sponsored programs and literacy partnerships [25][60] Other Important Information - The company returned over $92 million to shareholders in fiscal 2025, including $35 million in Q4 [37] - The company appointed two new independent directors to support business transformation and growth strategies [26] Q&A Session Summary Question: What are the sources of cost savings going forward? - Cost actions are primarily from non-discretionary functions, focusing on areas that are not revenue-driven [51][52] Question: What are the driving factors behind flat revenue expectations in the Education Solutions business? - Parts of the education business are performing well, particularly state-sponsored work, but overall market conditions remain cyclically difficult [54][55] Question: Is there a shift towards science-based reading approaches in literacy instruction? - There is a growing importance of science-based reading, and the company has materials aligned with this approach [57] Question: What is the pipeline for additional state partnerships in literacy programs? - The company is optimistic about expanding partnerships with state governments, although sales cycles are long [60][61] Question: What is the expectation for profitability in the entertainment business for fiscal 2026? - Profitability is expected to be slightly lower but in line with the current year, impacted by inflation [64] Question: What is the timing for potential sale leaseback transactions of real estate assets? - The company is working towards having something within the next 90 to 120 days regarding real estate monetization [66]

Fourth Quarter 2025 Earnings Call Presentation Thursday, July 24, 2025 Forward-Looking Statements / Regulation G This presentation contains certain statements made today which will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipated. 2 Peter Warwick President and Chief Executive Officer Fourth Quarter & Fiscal 2025 Results Today's comments include references to certain ...

[Executive Summary and Outlook](index=1&type=section&id=Executive%20Summary%20and%20Outlook) Scholastic achieved solid fiscal 2025 Adjusted EBITDA, driven by Children's Book Publishing, and is advancing its IP strategy while focusing on cost management and strategic initiatives for fiscal 2026 earnings growth [CEO Remarks and Strategic Overview](index=1&type=section&id=CEO%20Remarks%20and%20Strategic%20Overview) Scholastic achieved solid fiscal 2025 Adjusted EBITDA, driven by Children's Book Publishing, and is advancing its IP strategy while focusing on cost management and strategic initiatives for fiscal 2026 earnings growth - Delivered strong **Adjusted EBITDA** in line with original guidance for fiscal 2025, with strength in Children's Book Publishing offsetting weakness in the Education division[2](index=2&type=chunk) - The company is progressing on its **360-degree IP strategy**, highlighted by the global success of the new Hunger Games book and the integration of 9 Story Media Group to expand IP monetization[3](index=3&type=chunk) - The Education division is being repositioned under new leadership to better align with market needs amid challenges in school funding and the supplemental curriculum market[3](index=3&type=chunk) - Key strategic initiatives for fiscal 2026 include a strategic reorganization, cost reductions, and evaluating options to optimize real estate assets to drive long-term growth and shareholder value[4](index=4&type=chunk) [Fiscal 2026 Outlook](index=1&type=section&id=Fiscal%202026%20Outlook) Scholastic projects fiscal 2026 Adjusted EBITDA of **$160 million to $170 million** and **2% to 4% revenue growth**, despite anticipated school spending headwinds and **$10 million** in higher tariff costs Fiscal 2026 Guidance | Metric | Target | | :--- | :--- | | **Adjusted EBITDA** | $160 million to $170 million | | **Revenue Growth** | 2% to 4% | - Guidance includes approximately **$10 million** of expected incremental expense related to higher tariff rates[5](index=5&type=chunk) - The company anticipates a seasonal loss in the first quarter of fiscal 2026, approximately in line with the prior year[5](index=5&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) Scholastic reported a 7% revenue increase in Q4 and 2% for the full fiscal year 2025, driven by Children's Book Publishing and the 9 Story Media Group acquisition, despite declines in Education Solutions [Fourth Quarter Fiscal 2025 Review](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Review) Q4 fiscal 2025 revenues grew **7% to $508.3 million**, driven by Children's Book Publishing and 9 Story Media Group, offsetting Education Solutions' decline, with operating income up **13%** and Adjusted EBITDA stable at **$91.2 million** Q4 Fiscal 2025 Financial Highlights (in millions, except per share data) | Metric | Q4 FY2025 | Q4 FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $508.3 | $474.9 | 7% | | **Operating Income** | $53.5 | $47.2 | 13% | | **Diluted EPS** | $0.59 | $1.23 | (52)% | | **Adjusted EBITDA** | $91.2 | $90.7 | 1% | - Revenue growth was primarily driven by higher revenues in Children's Book Publishing and Distribution and the contribution of 9 Story Media Group, partly offset by lower sales in Education Solutions[6](index=6&type=chunk) [Children's Book Publishing and Distribution](index=2&type=section&id=Q4%20Children's%20Book%20Publishing%20and%20Distribution) Segment revenue grew **9% to $288.2 million**, driven by **19%** Consolidated Trade growth from the new Hunger Games book and **5%** Book Fairs increase, despite a **9%** decline in Book Clubs Q4 Segment Revenue Breakdown (in millions) | Sub-segment | Revenue | YoY Change (%) | | :--- | :--- | :--- | | Book Fairs | $177.8 | 5% | | Book Clubs | $13.1 | (9)% | | Consolidated Trade | $97.3 | 19% | | **Total Segment Revenue** | **$288.2** | **9%** | - The strong performance in Consolidated Trade was driven by the fifth book in Suzanne Collins' global best-selling Hunger Games series, *Sunrise on the Reaping*[10](index=10&type=chunk) [Education Solutions](index=2&type=section&id=Q4%20Education%20Solutions) Education Solutions segment revenues decreased **7% to $125.7 million** due to supplemental curriculum market headwinds, leading to a **$4.3 million** adjusted operating income decline - Segment revenues decreased **7% to $125.7 million** due to continuing headwinds in the supplemental curriculum market[12](index=12&type=chunk) - The company is actively repositioning the segment to optimize for long-term growth and improved profitability[13](index=13&type=chunk) [Entertainment](index=3&type=section&id=Q4%20Entertainment) Entertainment segment revenue surged to **$14.8 million** from **$0.6 million**, primarily due to the 9 Story Media Group acquisition, resulting in a **$3.0 million** operating loss including **$2.7 million** intangible amortization - Segment revenues surged to **$14.8 million**, mainly reflecting the addition of 9 Story Media Group[14](index=14&type=chunk) - The segment incurred a **$3.0 million** operating loss, which included **$0.9 million** in one-time charges and **$2.7 million** of intangible amortization from the acquisition[14](index=14&type=chunk) [International](index=3&type=section&id=Q4%20International) International revenues increased **9%** on a constant currency basis to **$76.8 million**, driven by strong trade channel performance from the latest Hunger Games release, improving adjusted operating income by **$4.3 million** - Excluding a **$0.6 million** unfavorable currency impact, revenues increased **9% to $76.8 million**[15](index=15&type=chunk) - Growth was primarily driven by strong performance in trade channels across major markets following the latest Hunger Games release[15](index=15&type=chunk) [Overhead](index=3&type=section&id=Q4%20Overhead) Adjusted overhead costs, excluding one-time charges, increased by **$9.6 million** to **$35.5 million**, primarily due to the timing of employee-related expenses - Excluding one-time charges, adjusted overhead costs increased by **$9.6 million**, primarily attributable to the timing of employee-related expenses[16](index=16&type=chunk) [Full Year Fiscal 2025 Review](index=3&type=section&id=Full%20Year%20Fiscal%202025%20Review) Full fiscal year 2025 revenues grew **2% to $1.63 billion**, driven by the 9 Story Media Group acquisition and strong Book Fairs, while Adjusted EBITDA increased **6% to $145.4 million** Full Year Fiscal 2025 Financial Highlights (in millions, except per share data) | Metric | FY2025 | FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $1,625.5 | $1,589.7 | 2% | | **Operating Income** | $15.8 | $14.5 | 9% | | **Diluted EPS** | $(0.07) | $0.40 | (118)% | | **Adjusted EBITDA** | $145.4 | $136.9 | 6% | - Revenue growth was primarily driven by the contribution of 9 Story Media Group, higher revenues from new releases in Trade Publishing, and strong performance in Book Fairs[17](index=17&type=chunk) - Adjusted EBITDA increased by **6% to $145.4 million**, reflecting the benefit of the 9 Story Media Group acquisition and strong performance in the Children's Book Publishing and Distribution and International segments[19](index=19&type=chunk) [Capital Position and Shareholder Returns](index=4&type=section&id=Capital%20Position%20and%20Shareholder%20Returns) Scholastic's fiscal 2025 free cash flow decreased by 60%, shifting to a net debt position of $136.6 million after the 9 Story Media Group acquisition, while returning over $90 million to shareholders [Liquidity and Cash Flow](index=4&type=section&id=Liquidity%20and%20Cash%20Flow) Fiscal 2025 free cash flow decreased **60% to $29.2 million**, shifting the balance sheet from a **$107.7 million** net cash position to a **$136.6 million** net debt position post-acquisition Fiscal 2025 Cash Flow and Capital Position (in millions) | Metric | FY2025 | FY2024 | Change ($) | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $124.2 | $154.6 | $(30.4) | | **Free cash flow (use)** | $29.2 | $73.4 | $(44.2) | | **Net cash (debt)** | $(136.6) | $107.7 | $(244.3) | - The shift to a net debt position reflects borrowings under the company's revolving credit facility to fund the acquisition of 9 Story Media Group[21](index=21&type=chunk) [Shareholder Returns and Strategic Initiatives](index=4&type=section&id=Shareholder%20Returns%20and%20Strategic%20Initiatives) Scholastic returned over **$90 million** to shareholders in fiscal 2025 through **$22.6 million** in dividends and **$70.0 million** in share repurchases, while exploring real estate sale-leaseback transactions for liquidity - In fiscal 2025, the company returned capital to shareholders through[22](index=22&type=chunk) - **$22.6 million** in dividends[22](index=22&type=chunk) - **$70.0 million** in share repurchases (3,482,280 shares)[22](index=22&type=chunk) - The company is exploring sale-leaseback transactions for its New York City real estate and Missouri distribution centers to provide significant liquidity for debt reduction and share repurchases[23](index=23&type=chunk) [Financial Statements and Supplemental Data](index=6&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) This section provides unaudited consolidated financial statements, detailed segment results, key balance sheet and cash flow items, and reconciliations of non-GAAP measures for fiscal year 2025 [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents unaudited consolidated income statements for the three and twelve months ended May 31, 2025, detailing revenues, operating income, pre-tax earnings, net income, and earnings per share Consolidated Statements of Operations (Unaudited, in millions) | | Three months ended | Twelve months ended | | :--- | :--- | :--- | | | **05/31/25** | **05/31/24** | **05/31/25** | **05/31/24** | | **Revenues** | $508.3 | $474.9 | $1,625.5 | $1,589.7 | | **Operating income (loss)** | $53.5 | $47.2 | $15.8 | $14.5 | | **Earnings (loss) before income taxes** | $48.9 | $47.3 | $(1.3) | $16.2 | | **Net income (loss)** | $15.4 | $35.9 | $(1.9) | $12.1 | | **Diluted earnings (loss) per share** | $0.59 | $1.23 | $(0.07) | $0.40 | [Segment Results](index=7&type=section&id=Segment%20Results) This section details revenues and operating income by business segment for the fourth quarter and full fiscal year 2025, including Children's Book Publishing, Education Solutions, Entertainment, and International Full Year Fiscal 2025 Segment Revenues (in millions) | Segment | FY2025 Revenue | FY2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | **Children's Book Publishing & Dist.** | $963.9 | $953.3 | 1% | | **Education Solutions** | $309.8 | $351.2 | (12)% | | **Entertainment** | $61.0 | $1.9 | NM | | **International** | $279.6 | $273.6 | 2% | Full Year Fiscal 2025 Segment Operating Income (in millions) | Segment | FY2025 Op. Income | FY2024 Op. Income | Change (%) | | :--- | :--- | :--- | :--- | | **Children's Book Publishing & Dist.** | $130.7 | $123.3 | 6% | | **Education Solutions** | $6.3 | $15.8 | (60)% | | **Entertainment** | $(12.1) | $(11.2) | (8)% | | **International** | $(1.0) | $(6.9) | 86% | [Supplemental Financial Information](index=8&type=section&id=Supplemental%20Financial%20Information) This section provides a snapshot of key balance sheet and cash flow items as of May 31, 2025, including cash, receivables, debt, and Free Cash Flow calculations Selected Balance Sheet Items (in millions) | Item | 05/31/25 | 05/31/24 | | :--- | :--- | :--- | | Cash and cash equivalents | $124.0 | $113.7 | | Inventories, net | $250.2 | $264.2 | | Lines of credit and long-term debt | $256.2 | $6.0 | | Net cash (debt) | $(136.6) | $107.7 | | Total stockholders' equity | $946.5 | $1,018.1 | Selected Cash Flow Items (in millions) | Item | Twelve months ended 05/31/25 | Twelve months ended 05/31/24 | | :--- | :--- | :--- | | Net cash provided by operating activities | $124.2 | $154.6 | | Free cash flow (use) | $29.2 | $73.4 | [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP measures, including adjustments to operating income, net income, EPS, and a full reconciliation of pre-tax earnings to Adjusted EBITDA Full Year Fiscal 2025 GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | Reported (GAAP) | One-time Items | Excluding One-time Items (Non-GAAP) | | :--- | :--- | :--- | :--- | | **Operating Income** | $15.8 | $20.0 | $35.8 | | **Earnings Before Taxes** | $(1.3) | $20.0 | $18.7 | | **Net Income** | $(1.9) | $15.2 | $13.3 | | **Diluted EPS** | $(0.07) | $0.55 | $0.48 | Adjusted EBITDA Reconciliation - Full Year (in millions) | | FY2025 | FY2024 | | :--- | :--- | :--- | | **Earnings (loss) before income taxes as reported** | $(1.3) | $16.2 | | One-time items before income taxes | $20.0 | $30.2 | | Interest (income) expense | $16.4 | $(2.7) | | Depreciation and amortization | $110.3 | $93.2 | | **Adjusted EBITDA** | **$145.4** | **$136.9** |

Core Insights - Scholastic Corporation reported solid financial results for fiscal 2025, with Adjusted EBITDA in line with original guidance and a focus on cost management and profit growth for fiscal 2026 [1][2][6] - The company returned over $90 million to shareholders during the fiscal year, including dividends and share repurchases [21][22] Financial Performance - In Q4 of fiscal 2025, revenues increased by 7% to $508.3 million, driven by strong performance in Children's Book Publishing and Distribution, and the contribution from 9 Story Media Group [7][17] - Operating income rose 13% to $53.5 million, while Adjusted EBITDA increased by 1% to $91.2 million [8][17] - For the full year, revenues reached $1,625.5 million, a 2% increase from the previous year, with Adjusted EBITDA growing by 6% to $145.4 million [17][18] Segment Performance - The Children's Book Publishing and Distribution segment saw revenues rise by 9% to $288.2 million in Q4, while Education Solutions revenues decreased by 7% to $125.7 million due to market headwinds [9][13] - The Entertainment segment's revenues surged to $14.8 million, primarily due to the acquisition of 9 Story Media Group [14] - International revenues increased by 9% to $76.8 million, reflecting strong performance in trade channels [15] Strategic Initiatives - The company is implementing a strategic reorganization to enhance long-term growth and profitability, including a focus on product development aligned with educators' needs [4][5] - Scholastic is targeting Adjusted EBITDA of $160 million to $170 million for fiscal 2026, with revenue growth expected between 2% to 4% [6][17] Capital Position and Shareholder Returns - Scholastic distributed $22.6 million in dividends and repurchased shares worth $70 million during fiscal 2025 [21] - The company is exploring sale-leaseback transactions for its real estate assets to enhance liquidity for capital allocation priorities [22]

Core Insights - Scholastic has appointed Milena Alberti and Anne Clarke Wolff as independent directors to its board, effective July 16, 2025, while directors John L. Davies and David J. Young have stepped down immediately to facilitate this transition [1][2][3] Board Composition and Changes - The board has undergone significant refreshment, with seven new independent directors appointed over the past four years, reflecting a commitment to adapt to the business's evolving needs [2] - Alix Guerrier has been reappointed to the board as a representative of Class A Stockholders, indicating ongoing efforts to ensure diverse representation [2] Directors' Backgrounds - Milena Alberti brings over 30 years of experience in publishing and finance, having held key roles at Penguin Random House and Getty Images, and currently chairs the board of Pitney-Bowes Inc. [4][5][6] - Anne Clarke Wolff has 30 years of experience in financial services, having founded Independence Point Advisors and previously held senior positions at Bank of America and JP Morgan [7][8][9][10] Strategic Focus - The new directors are expected to support the board's focus on business transformation, growth strategies, and capital allocation, aimed at maximizing shareholder value during a pivotal time for Scholastic [3]

Group 1 - Scholastic Corporation declared a quarterly cash dividend of $0.20 per share for the first quarter of fiscal 2026, payable on September 15, 2025, to shareholders of record as of August 29, 2025 [1] - The company has over 100 years of experience in creating quality content and experiences focused on literacy for children [2] - Scholastic is the world's largest publisher and distributor of children's books, reaching over 135 countries [2]