■SCHOLASTIC Second Quarter 2025 Earnings Call Presentation Thursday, December 19, 2024 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. Today's comments include references to certain non-GAAP financial measures as defined in Regulation G. The reconciliation ...

Financial Performance - Scholastic reported quarterly earnings of $1.82 per share, missing the Zacks Consensus Estimate of $2.30 per share, and down from $2.45 per share a year ago, representing an earnings surprise of -20.87% [1] - The company posted revenues of $544.6 million for the quarter ended November 2024, missing the Zacks Consensus Estimate by 1.69%, and down from $562.6 million year-over-year [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.78 on revenues of $347.05 million, and for the current fiscal year, it is $1.41 on revenues of $1.66 billion [8] - The estimate revisions trend for Scholastic is currently unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - Scholastic belongs to the Zacks Publishing - Books industry, which is currently in the bottom 13% of over 250 Zacks industries, suggesting a challenging environment for the company [9]

Financial Performance - Revenues for Q2 Fiscal 2025 decreased 3% to $544.6 million compared to $562.6 million in Q2 Fiscal 2024[4] - Operating income fell 26% to $74.7 million, down from $101.3 million a year ago, reflecting a 22% decrease when excluding one-time items[6] - Diluted earnings per share decreased 30% to $1.71, compared to $2.45 in the prior year[4] - Net income for the three months ended November 30, 2024, was $48.8 million, compared to $76.9 million for the same period in 2023, reflecting a decline of 36.6%[30] - Adjusted EBITDA for Q2 Fiscal 2025 decreased 12% to $108.7 million compared to $124.0 million in Q2 Fiscal 2024[6] - Adjusted EBITDA for the three months ended November 30, 2024, was $108.7 million, down from $124.0 million in the prior year[45] - Reported earnings before income taxes were $70.5 million, compared to a loss of $12.9 million in the previous period[51] - Earnings before income taxes excluding one-time items were $70.5 million, a significant improvement from a loss of $12.9 million[51] Segment Performance - The Children's Book Publishing and Distribution segment's revenues decreased 6% to $367.0 million, with Book Fairs revenues down 5% to $231.0 million[7][8] - Education Solutions revenues decreased 12% to $71.2 million, resulting in a segment operating loss of $0.5 million[11] - The Children's Book Publishing and Distribution segment reported total revenues of $367.0 million for the three months ended November 30, 2024, a decrease of 6% from $392.4 million in the prior year[33] - The Education Solutions segment experienced a revenue decline of 12% to $71.2 million for the three months ended November 30, 2024, compared to $81.0 million in the same period last year[33] - The Entertainment segment generated revenues of $16.8 million for the three months ended November 30, 2024, significantly up from $0.4 million in the prior year, marking a substantial increase[33] - The Children's Book Publishing and Distribution segment generated $102.1 million in earnings before income taxes for the three months ended November 30, 2024[50] - The Education Solutions segment reported a loss of $0.5 million for the three months ended November 30, 2024, compared to a loss of $5.8 million in the same period of 2023[50] - The newly formed Entertainment segment reported a loss of $4.9 million for the three months ended November 30, 2024[50] - International segment earnings before income taxes were $5.2 million for the three months ended November 30, 2024[50] Cash Flow and Debt - The Company reported a net cash provided by operating activities of $71.2 million, down from $109.7 million in the prior year[16] - Net debt increased to $120.8 million from a net cash position of $143.2 million in the prior year, due to borrowings for the acquisition of 9 Story Media Group[17] - Cash and cash equivalents decreased to $139.6 million as of November 30, 2024, down from $149.5 million a year earlier[36] - Free cash flow for the three months ended November 30, 2024, was $42.4 million, down from $88.6 million in the prior year[36] Cost Management - The company recognized pretax severance costs of $3.8 million for the three months ended November 30, 2024, related to cost-savings initiatives[30] - Overhead costs for the three months ended November 30, 2024, were $31.1 million, compared to $23.3 million in the prior year[50] - The company recognized pretax severance costs of $0.4 million related to cost-saving initiatives in the three months ended November 30, 2024[41] Future Outlook - The Company expects to achieve 90,000 Book Fairs in Fiscal 2025, indicating strong participation[8] - The Company reaffirmed its guidance for Fiscal 2025, confident in its ability to navigate the market[2] - Future outlook includes continued focus on cost-saving initiatives and potential acquisitions to enhance market position[41]

Core Insights - Scholastic Corporation reaffirms its fiscal 2025 guidance despite a 3% decrease in revenues for the second quarter, primarily due to timing-related factors in publishing releases and lower sales in Education Solutions [1][7][10] - The company continues to see growth in its school-based channels, with a record number of fall Book Fairs booked since the pandemic, and positive momentum in Book Clubs [2][3] - The acquisition of 9 Story Media Group is contributing to the company's integrated development and production slate, enhancing its digital-first growth opportunities [3][5] Financial Performance - Revenues for the second quarter decreased to $544.6 million from $562.6 million, reflecting a 3% decline year-over-year [7][31] - Operating income fell 26% to $74.7 million, down from $101.3 million in the prior year, influenced by one-time charges [8][31] - Adjusted EBITDA decreased 12% to $108.7 million, indicating lower operating income in key segments [10][31] Segment Analysis - Children's Book Publishing and Distribution segment revenues decreased 6% to $367.0 million, with Book Fairs revenues down 5% to $231.0 million [11][12] - Education Solutions revenues decreased 12% to $71.2 million, reflecting lower spending on supplemental curriculum products [16] - The Entertainment segment generated $16.8 million in revenues, primarily from the addition of 9 Story Media Group, but reported an operating loss of $4.7 million [17][34] Capital Position and Liquidity - The company has a strong balance sheet with a recently upsized revolving credit facility of $400 million, allowing for continued investment in growth opportunities [5][21] - Free cash flow for the second quarter was $42.4 million, down from $88.6 million in the prior year, primarily due to higher inventory spend and interest payments [20][35] - Net cash position shifted to a debt of $120.8 million compared to a net cash position of $143.2 million in the prior year, reflecting borrowings for the acquisition [21][35] Strategic Outlook - Scholastic plans to release several highly anticipated titles in the coming months, including the fifth book in the Hunger Games series, which is expected to drive revenue growth [4][14] - The company aims to leverage its trusted brand and bestselling intellectual properties to expand its market presence and drive long-term profitable growth [5][29]

Group 1 - Scholastic Corporation declared a quarterly cash dividend of $0.20 per share for the third quarter of fiscal 2025 [1] - The dividend is payable on March 14, 2025, to shareholders of record as of January 31, 2025 [1] Group 2 - Scholastic has over 100 years of experience in providing 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 classroom materials [2]

Scholastic (SCHL) came out with a quarterly loss of $2.13 per share versus the Zacks Consensus Estimate of a loss of $2.48. This compares to loss of $2.20 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 14.11%. A quarter ago, it was expected that this publishing, education and media company would post earnings of $2.66 per share when it actually produced earnings of $1.73, delivering a surprise of -34.96%. Over the last four ...

Company Affirms Fiscal 2025 Guidance NEW YORK, Sept. 26, 2024 /PRNewswire/ -- Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal first quarter ended August 31, 2024. Peter Warwick, President and Chief Executive Officer, said, "During our first quarter, Scholastic prepared for another important back-toschool season, as we executed on our long-term growth initiatives. In the seasonally quiet quarter fo ...

NEW YORK, Sept. 25, 2024 /PRNewswire/ -- Scholastic (NASDAQ: SCHL), the global children's publishing, education and media company, today announced that Jeffrey Mathews has been appointed to the new role of Scholastic's Chief Growth Officer and Executive Vice President, effective immediately. He rejoined Scholastic two years ago, as Executive Vice President, Corporate Development and Investor Relations. Scholastic Appoints Jeffrey Mathews as Chief Growth OfficerScholastic Appoints Jeffrey Mathews as Chief Gr ...

The 2024-25 cohort of 27 kids ages 10-14 join a legacy of more than 500 students who have participated in the award-winning program, reporting "news for kids, by kids" NEW YORK, Sept. 23, 2024 /PRNewswire/ -- Today, Scholastic welcomes 27 student journalists to join the award-winning Scholastic Kids Press program. Since 2000, more than 500 Kid Reporters, ages 10–14, from around the world, have participated in the program and developed skills related to media literacy, including how to vet sources, think and ...

NEW YORK, Sept. 18, 2024 /PRNewswire/ -- Scholastic Corporation (NASDAQ: SCHL) announced today that its Board of Directors declared a quarterly cash dividend of $0.20 per share on the Company's Class A and Common Stock for the second quarter of fiscal 2025. The dividend is payable on December 16, 2024, to all shareholders of record as of the close of business on October 31, 2024. About Scholastic For more than 100 years, Scholastic Corporation (NASDAQ: SCHL) has been encouraging the personal and intellectua ...