UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended February 28, 2025 Commission File No. 000-19860 SCHOLASTIC CORPORATION (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 557 Broadway, New York, New York 10012 (Address of principal executive offices) (Zip Code) Delaware 13-3385513 (IRS Employ ...

♥SCHOLASTIC Third Quarter 2025 Earnings Call Presentation Thursday, March 20, 2025 2 Peter Warwick President and Chief Executive Officer Third Quarter 2025 Highlights Children's Books revenues up 5%, reflecting improved results in Book Fairs and Book Clubs ● Book Fairs on track to achieve target of 90,000 fairs in FY25 o Updated offerings in Book Clubs drove higher participation and order volumes o Newly published titles topped global best seller lists, driven by strong sales from Doq Man® children's o fran ...

Scholastic Corporation (NASDAQ:SCHL) Q3 2025 Earnings Conference Call March 20, 2025 4:30 PM ET Company Participants Jeffrey Mathews - Chief Growth Officer and Executive Vice President Peter Warwick - President and Chief Executive Officer Haji Glover - Chief Financial Officer and Executive Vice President Conference Call Participants Brendan McCarthy - Sidoti Operator Good day, and thank you for standing by. Welcome to the Scholastic Reports Third Quarter Fiscal Year 2025 Results. [Operator Instructions] Ple ...

Core Insights - Scholastic reported a quarterly loss of $0.05 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.78, and an improvement from a loss of $0.80 per share a year ago, indicating an earnings surprise of 93.59% [1] - The company posted revenues of $335.4 million for the quarter ended February 2025, missing the Zacks Consensus Estimate by 3.53%, but showing an increase from $323.7 million in the same quarter last year [2] - Scholastic shares have declined approximately 10.2% year-to-date, underperforming the S&P 500, which has seen a decline of 3.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.93 on revenues of $521.52 million, and for the current fiscal year, it is $0.84 on revenues of $1.65 billion [7] - The estimate revisions trend for Scholastic is mixed, leading to a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Publishing - Books industry, to which Scholastic belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% of industries [8]

Revenue Performance - Revenues for Q3 fiscal 2025 increased by 4% to $335.4 million, compared to $323.7 million in Q3 fiscal 2024[8] - The Children's Book Publishing and Distribution segment's revenues rose by 5% to $203.3 million, with operating income improving to $7.6 million from $2.3 million a year ago[11] - The Education Solutions segment experienced a 16% revenue decline to $57.2 million, driven by ongoing challenges in the supplemental curriculum market[13] - International revenues increased by 5% to $59.3 million, excluding a negative impact of $2.7 million from foreign currency exchange[15] - Revenues for the three months ended February 28, 2025, were $335.4 million, a 3% increase from $323.7 million for the same period last year[34] - The Children's Book Publishing and Distribution segment reported revenues of $203.3 million for the three months ended February 28, 2025, a 5% increase from $193.1 million in the prior year[41] - The Education Solutions segment experienced a 16% decline in revenues, reporting $57.2 million for the three months ended February 28, 2025, down from $68.5 million[41] - The Entertainment segment generated revenues of $12.8 million for the three months ended February 28, 2025, a significant increase from $0.5 million in the prior year[41] - International revenues remained stable at $59.3 million for the three months ended February 28, 2025, compared to $59.1 million in the same period last year[41] Profitability and Earnings - Adjusted EBITDA for Q3 fiscal 2025 was $6.0 million, a significant increase of 183% from a loss of $7.2 million in the same quarter last year[10] - Operating income for the three months ended February 28, 2025, was a loss of $23.9 million, an improvement from a loss of $34.9 million in the prior year[34] - Net loss for the three months ended February 28, 2025, was $3.6 million, compared to a net loss of $26.5 million for the same period last year[34] - Basic and diluted earnings per share for the three months ended February 28, 2025, were both $(0.13), an improvement from $(0.91) in the prior year[34] - Adjusted EBITDA for the three months ended February 28, 2025, was $6.0 million, compared to $(7.2) million in the prior year, indicating a positive trend[56] - The total earnings before income taxes reported was $(28.4) million, compared to $(34.6) million for the same period in the previous year, indicating an improvement of approximately 17.5%[60] Cash Flow and Debt - Free cash flow usage for fiscal 2025 was $30.7 million, compared to $7.1 million in the prior year period, reflecting lower customer remittances and higher interest payments[19] - Net debt increased to $189.4 million, compared to a net cash position of $78.9 million in the prior year, due to borrowings for the acquisition[20] - Cash and cash equivalents decreased to $94.7 million from $110.4 million year-over-year, a decline of 14.5%[44] - Net cash used in operating activities for the three months ended February 28, 2025, was $(12.0) million, compared to $13.1 million for the same period last year[44] - Free cash flow for the three months ended February 28, 2025, was $(30.7) million, a significant decrease from $(7.1) million in the prior year[44] - The company’s lines of credit and long-term debt increased to $280.8 million from $31.5 million year-over-year, indicating a significant rise in leverage[44] Shareholder Returns - The company returned over $35 million to shareholders through share repurchases and dividends in Q3, with an increased share repurchase authorization of $100 million[6][24] Segment Performance - The acquisition of 9 Story Media Group contributed to revenue growth, particularly in the Entertainment segment, which reported revenues of $12.8 million[14] - The Children's Book Publishing and Distribution segment reported earnings before income taxes of $73.0 million for the nine months ended February 28, 2025, consistent with the previous year's $72.8 million, showing stability in this segment[60] - The Education Solutions segment experienced a loss before income taxes of $(24.4) million for the nine months ended February 28, 2025, compared to a loss of $(13.7) million in the prior year, indicating a decline of approximately 78.0%[60] - The International segment reported a loss before income taxes of $(6.0) million for the nine months ended February 28, 2025, compared to $(7.2) million in the previous year, indicating an improvement of approximately 16.7%[60] - The Entertainment segment's loss before income taxes was $(11.4) million for the nine months ended February 28, 2025, compared to $(4.4) million in the previous year, representing a decline of approximately 159.1%[60] Cost Management - The company recognized pretax severance costs of $1.8 million for the three months ended February 28, 2025, related to cost-savings initiatives[35] - The company recognized pretax severance costs of $0.7 million related to cost-savings initiatives for the three months ended February 28, 2025[52] Guidance and Future Outlook - Full-year Adjusted EBITDA guidance for fiscal 2025 has been narrowed to approximately $140 million, down from a previous range of $140 million to $150 million[7] - Adjusted EBITDA for the nine months ended February 28, 2025, was $54.2 million, a significant increase from $(31.1) million reported for the same period last year, reflecting a turnaround in performance[60] - One-time items before income taxes for the nine months ended February 28, 2025, totaled $10.1 million, compared to $10.6 million in the previous year, showing a slight decrease[60] - Depreciation and amortization for the nine months ended February 28, 2025, amounted to $82.4 million, up from $69.1 million in the same period last year, reflecting increased investment in assets[60] - Interest expense for the nine months ended February 28, 2025, was $11.9 million, compared to $2.4 million in the previous year, indicating an increase in financing costs[60]

Core Insights - Scholastic Corporation reported a return of over $35 million to shareholders in the third quarter, with an increased share repurchase authorization of $100 million [1][5][19] - The company affirmed its adjusted EBITDA outlook at the low end of the range, forecasting approximately $140 million for fiscal year 2025 [6][5] - Despite modest revenue growth, the company faces increasing pressure on family and school spending on books and educational materials [2][5] Financial Performance - Revenues for the third quarter increased by 4% to $335.4 million, driven by contributions from the 9 Story Media Group and higher revenues in School Reading Events [7][9] - Operating loss improved by 32% to $23.9 million compared to a loss of $34.9 million in the prior year [8][21] - Adjusted EBITDA increased by 183% to $6.0 million, reflecting a reduction in discretionary overhead expenses and higher revenues in the Children's Book Publishing and Distribution segment [8][41] Segment Analysis - The Children's Book Publishing and Distribution segment saw revenues rise by 5% to $203.3 million, with Book Fairs revenues up 8% to $110.7 million [9][32] - Education Solutions revenues decreased by 16% to $57.2 million, impacted by ongoing challenges in the supplemental curriculum market [11][32] - The Entertainment segment generated revenues of $12.8 million, primarily due to the addition of 9 Story Media Group [12][32] Capital Position and Liquidity - The company reported net cash used by operating activities of $12.0 million, a significant decrease from $13.1 million provided in the prior year [15][35] - Free cash flow usage was $30.7 million, compared to $7.1 million in the previous period, reflecting increased cash outflows [15][35] - Net debt increased to $189.4 million, compared to a net cash position of $78.9 million in the prior year, due to borrowings for the acquisition of 9 Story Media Group [16][34] Shareholder Returns - In the third quarter, the company distributed $5.7 million in dividends and repurchased 1,450,274 shares for $30.0 million [19][5] - The Board of Directors authorized an additional $53.4 million for share repurchases, raising the total authorization to $100 million [19][5]

Group 1 - Scholastic Corporation declared a quarterly cash dividend of $0.20 per share for the fourth quarter of fiscal 2025 [1] - The dividend is payable on June 16, 2025, to shareholders of record as of April 30, 2025 [1] Group 2 - Scholastic has over 100 years of experience in creating quality content and experiences focused on literacy for children [2] - The company is the world's largest publisher and distributor of children's books, reaching over 135 countries [2] - Scholastic aims to empower children to become lifelong readers and learners through various resources, including bestselling books and educational media [2]

Company Overview - Scholastic Corporation has been a leader in children's publishing for over 100 years, focusing on literacy and educational content [1] - The company is the largest publisher and distributor of children's books globally, reaching over 135 countries [1] Earnings Announcement - Scholastic will release its third quarter fiscal year 2025 earnings on March 20, 2025, at 4:00 PM ET [2] - A conference call will follow at 4:30 PM ET, hosted by the President and CEO, Peter Warwick, and CFO, Haji Glover [2] - Participants are encouraged to join the call five minutes early to avoid delays [2] Access Information - The earnings release will be available on the company's investor relations website [2] - A live webcast of the conference call can be accessed online, with details for phone access also provided [2] - An archived version of the webcast and accompanying slides will be available shortly after the live call [2]

Financial Performance - Revenues for the second quarter ended November 30, 2024 were $544.6 million, a decrease of $18.0 million or 3% compared to the prior fiscal year quarter [166]. - Net income per diluted share for the second quarter of fiscal 2024 was $1.71, down from $2.45 in the prior fiscal year quarter [166]. - Revenues for the six months ended November 30, 2024 decreased by $9.3 million to $781.8 million, compared to $791.1 million in the prior fiscal year period [169]. - Revenues for the quarter ended November 30, 2024 decreased by $18.0 million to $544.6 million, a decline of 3.2% compared to the prior fiscal year quarter [195]. - Revenues for the three months ended November 30, 2024 were $71.2 million, a decrease of 12.1% from $81.0 million in the prior fiscal year quarter [236]. - Revenues for the quarter ended November 30, 2024 increased by $0.2 million to $86.7 million, compared to $86.5 million in the prior fiscal year quarter [244]. - Revenues from the Entertainment segment for the three and six months ended November 30, 2024 were $16.8 million and $33.4 million, respectively, compared to $0.4 million and $0.8 million in the prior fiscal year period [241]. Segment Performance - The Children's Book Publishing and Distribution segment saw a revenue decrease of $22.4 million, primarily due to lower trade channel revenues [169]. - Revenues from the Entertainment segment increased by $32.6 million, reflecting the addition of 9 Story [169]. - Education Solutions segment revenues decreased by $20.1 million to $126.9 million, driven by lower spending on supplemental materials [183]. - The Children's Book Publishing and Distribution segment saw a revenue decrease of $25.4 million, primarily due to lower trade channel revenues and a shift in book fair deliveries [195]. - Education Solutions segment revenues decreased by $9.8 million, attributed to reduced spending on supplemental materials and lower subscription revenues from Magazines+ [208]. - The Entertainment segment's revenues increased by $16.4 million, benefiting from the addition of 9 Story [195]. Expenses and Costs - Selling, general and administrative expenses for the six months ended November 30, 2024 increased to $407.0 million, compared to $397.3 million in the prior fiscal year period [172]. - Selling, general and administrative expenses increased to $224.9 million, up $11.8 million from the prior fiscal year quarter, primarily due to higher operating expenses from the addition of 9 Story [198]. - Cost of goods sold for the quarter was $228.6 million, or 42.0% of revenues, compared to $234.1 million, or 41.6% of revenues in the prior year [197]. - Cost of goods sold for the quarter ended November 30, 2024 was $27.3 million, or 38.3% of revenues, compared to $30.7 million, or 37.9% of revenues, in the prior fiscal year quarter [238]. - Cost of goods sold for the quarter ended November 30, 2024 was $48.9 million, or 56.4% of revenues, compared to $48.9 million, or 56.5% of revenues, in the prior fiscal year quarter [246]. - Other operating expenses for the six months ended November 30, 2024 were $89.7 million, a decrease of $6.9 million compared to $96.6 million in the prior fiscal year period [239]. Cash Flow and Liquidity - Cash provided by operating activities was $29.3 million for the six months ended November 30, 2024, a decrease of $42.3 million compared to $71.6 million in the prior fiscal year period [221]. - Cash provided by financing activities was $214.5 million for the six months ended November 30, 2024, an increase of $312.3 million compared to cash used in financing activities of $97.8 million in the prior fiscal year period [222]. - The Company's cash and cash equivalents totaled $139.6 million at November 30, 2024, compared to $149.5 million at November 30, 2023 [223]. - Cash used in investing activities was $217.2 million for the six months ended November 30, 2024, an increase of $168.1 million compared to the prior fiscal year period, driven by the acquisition of 9 Story for $176.2 million [251]. - The Company expects to maintain sufficient liquidity, with cash and cash equivalents of $139.6 million and availability under the U.S. Credit Agreement of $149.6 million as of November 30, 2024 [224]. Tax and Interest - The interim effective tax rate for the six months ended November 30, 2024 was 37.2%, an increase from 22.9% in the prior fiscal year [201]. - Interest expense for the six months ended November 30, 2024 was $8.7 million, compared to $0.8 million in the prior fiscal year period, due to borrowings for the 9 Story acquisition [173]. - The average interest rate on long-term debt is 6.8% with total long-term debt amounting to $250.0 million as of November 30, 2024 [229]. - The company is subject to market risks from changes in interest rates affecting its variable-rate borrowings [257]. Strategic Initiatives - The Company expects revenues to benefit from new releases, including the thirteenth book in the Dog Man series and the fifth book in the Hunger Games series [167]. - The company is developing new supplemental products for schools, expected to launch for the 2025/2026 school years [194]. - The company has $76.6 million remaining available for future purchases of common shares under its open-market buy-back program as of November 30, 2024 [252]. - The company categorizes its businesses into four reportable segments: Children's Book Publishing and Distribution, Education Solutions, International, and Entertainment [277]. - The company’s operating philosophy focuses on using cash from operating activities for debt reduction, reinvestment, and strategic acquisitions [252]. Risks and Challenges - The company faces risks from changing industry trends in the media and content sector, which may affect the demand for its entertainment programming [281]. - The company’s entertainment business relies on key relationships with buyers of film and television content, which may impact financial performance due to demand fluctuations [264]. - The entertainment segment includes operations from the recently acquired 9 Story Media Group Inc., which may impact the company's financial performance if synergies are not realized [265]. - The company reported a significant increase in cash used for acquisitions, with the previous year involving only $5.8 million for educational programs and $2.1 million for a noncontrolling interest [251].

Scholastic Corporation (NASDAQ:SCHL) Q2 2025 Earnings Conference Call December 19, 2024 4:30 PM ET Company Participants Jeffrey Mathews - Chief Growth Officer and Executive Vice President Peter Warwick - President and Chief Executive Officer Haji Glover - Chief Financial Officer and Executive Vice President Conference Call Participants Brendan McCarthy - Sidoti Operator Hello, everyone, and welcome to Scholastic Reports Second Quarter Fiscal Year 2025 Results. At this time, all participants are in a listen- ...