Scholastic(SCHL) - 2024 Q4 - Annual Results

Financial Performance - Fiscal 2024 Q4 revenues decreased by 10% to $474.9 million, primarily due to lower U.S. Book Club revenues and decreased sales in Education Solutions[7] - Operating income for Q4 fell 49% to $47.2 million, with Adjusted EBITDA decreasing 21% to $90.7 million, reflecting lower revenues and consistent operating expenses[8] - Fiscal 2024 full-year revenues decreased by 7% to $1,589.7 million, impacted by lower sales in the Children's Books segment and softness in Education Solutions[19] - Revenues for the three months ended May 31, 2024, were $474.9 million, a decrease of 10% from $528.3 million in the same period last year[33] - Operating income for the three months ended May 31, 2024, was $47.2 million, down 49% from $92.0 million in the prior year[33] - Net income attributable to Scholastic Corporation for the three months ended May 31, 2024, was $35.9 million, compared to $75.7 million in the same period last year, representing a decline of 53%[33] - Total revenues for the Children's Book Publishing and Distribution segment decreased by 9% to $266.0 million for the three months ended May 31, 2024, compared to $291.0 million in the prior year[38] - The Education Solutions segment reported revenues of $135.7 million for the three months ended May 31, 2024, a decrease of 17% from $163.4 million in the same period last year[38] - The Children's Book Publishing and Distribution segment generated revenues of $955.2 million for the twelve months ended May 31, 2024, compared to $1,038.0 million in the previous year, a decrease of 8.0%[53] - The Education Solutions segment reported revenues of $351.2 million for the twelve months ended May 31, 2024, down from $386.6 million, a decline of 9.1%[53] Shareholder Returns - The company returned over $181 million to shareholders in fiscal 2024, including $24.7 million in dividends and $156.8 million in share repurchases[23] Future Outlook - For fiscal 2025, the company expects revenue growth of 4% to 6% and targets Adjusted EBITDA of $140 to $150 million, partially offset by ongoing spending pressures[6] - The addition of 9 Story Media Group is expected to enhance Scholastic's production and distribution capabilities in the new Entertainment segment starting in fiscal 2025[3] - The company plans to continue investing in growth initiatives while managing operating expenses amid external pressures on consumer spending[5] Cash Flow and Equity - Cash and cash equivalents decreased to $113.7 million as of May 31, 2024, down from $224.5 million a year earlier[40] - Free cash flow for the three months ended May 31, 2024, was $49.7 million, compared to $85.7 million in the same period last year[40] - The total stockholders' equity decreased to $1,018.1 million as of May 31, 2024, from $1,164.5 million a year earlier[40] Earnings and Costs - The Company reported a basic earnings per share of $1.26 for the three months ended May 31, 2024, down from $2.33 in the prior year[33] - For the three months ended May 31, 2024, diluted earnings per share were $0.40, down from $0.76 in the same period last year, representing a decrease of 47.4%[46] - Net income for the three months ended May 31, 2024, was $12.1 million, compared to $22.5 million for the same period in 2023, a decline of 46.2%[46] - Adjusted EBITDA for the three months ended May 31, 2024, was $90.7 million, down from $115.0 million in the prior year, reflecting a decrease of 21.1%[51] Restructuring and Investments - The Company recognized pretax costs related to its planned investment in 9 Story Media Group of $6.3 million for the three months ended May 31, 2024[33] - The company recognized pretax costs related to restructuring and cost-savings initiatives of $1.5 million and $2.7 million for the three and twelve months ended May 31, 2024, respectively[48] - The company plans to invest $6.3 million and $9.3 million in 9 Story Media Group for the three and twelve months ended May 31, 2024, respectively[47] - The company reported a one-time benefit of $5.0 million and $7.7 million for income taxes in respect to one-time pretax items for the three and twelve months ended May 31, 2024[47] Segment Performance - Adjusted segment operating income for Education Solutions was $35.6 million, down from $55.0 million in the prior period, primarily due to decreased revenues[14] - The International segment experienced a loss before income taxes of $8.3 million for the twelve months ended May 31, 2024, compared to a loss of $4.0 million in the previous year[53] - The company will recategorize Scholastic Entertainment Inc. into a new Entertainment segment beginning in fiscal 2025, with SEI contributing revenues of $1.9 million for the twelve months ended May 31, 2024[54]