Scholastic(SCHL) - 2025 Q2 - Quarterly Results

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]