Scholastic(US:SCHL)2025-12-18 21:01Revenue Performance - Fiscal 2026 Q2 revenues increased by 1% to $551.1 million, driven by strength in the Children's Book Publishing and Distribution segment[8]. - The Children's Book Publishing and Distribution segment's revenues increased 4% to $380.9 million, with Book Fairs revenues up 5% to $242.0 million[10]. - Year-to-date revenues of $776.7 million were in line with the prior year, primarily reflecting strength in Book Fairs[21]. - Revenues for the three months ended November 30, 2025, were $551.1 million, a 1.0% increase from $544.6 million in the same period last year[30]. - The total revenues for the Children's Book Publishing and Distribution segment increased by 4% to $380.9 million for the three months ended November 30, 2025, compared to $367.0 million in the same period last year[31]. - International revenues increased by 3% to $89.5 million for the three months ended November 30, 2025, compared to $86.7 million in the same period last year[31]. Income and Profitability - Operating income rose 11% to $82.9 million, with adjusted EBITDA improving 13% to $122.5 million[9]. - Net income for the three months ended November 30, 2025, was $55.9 million, up from $48.8 million in the prior year, representing a 14.5% increase[30]. - Operating income for the three months ended November 30, 2025, was $82.9 million, compared to $74.7 million for the same period last year, reflecting a 10.8% increase[30]. - Adjusted EBITDA for the three months ended November 30, 2025, was $122.5 million, compared to $108.7 million for the same period in 2024, indicating a 12.5% growth[42]. - The Children's Book Publishing and Distribution segment reported earnings before income taxes of $108.7 million for the three months ended November 30, 2025, compared to $102.1 million in the same period of 2024, indicating a year-over-year increase of approximately 5.8%[45]. Cash Flow and Financial Position - The Company expects full-year Adjusted EBITDA to be between $146 million and $156 million, with free cash flow forecasted to exceed $430 million[6]. - Free cash flow increased by 40% to $59.2 million in fiscal 2026 compared to $42.4 million in the prior period[16]. - Cash and cash equivalents decreased to $99.3 million as of November 30, 2025, down from $139.6 million a year earlier[33]. - Total stockholders' equity as of November 30, 2025, was $931.2 million, a decrease from $986.0 million in the prior year[33]. - The Company generated $481 million in gross proceeds from sale-leaseback transactions, with estimated net proceeds of $401 million[19]. Segment Performance - Education Solutions revenues decreased 13% to $62.2 million, reflecting a challenging funding environment for schools[11]. - The Education Solutions segment reported revenues of $62.2 million, a decrease of 13% from $71.2 million in the prior year[31]. - The Education Solutions segment experienced a loss of $4.7 million for the three months ended November 30, 2025, compared to a loss of $0.5 million in the prior year[37]. - The International segment reported income of $12.4 million for the three months ended November 30, 2025, compared to $5.7 million in the prior year, a significant increase of 117.5%[37]. - The International segment reported earnings before income taxes of $11.9 million for the three months ended November 30, 2025, compared to $5.2 million in the same period of 2024, marking a significant increase of approximately 128.8%[45]. Shareholder Returns and Debt - The Board authorized a $150 million expanded share repurchase program, building on nearly $500 million returned to shareholders since 2021[3]. - Net debt increased to $186.6 million, primarily due to share repurchases over the last 12 months[17]. One-time Items and Adjustments - The company reported a one-time benefit of $3.3 million for income taxes related to pretax items in the three months ended November 30, 2025[39]. - The total one-time items before income taxes for the three months ended November 30, 2025, amounted to $13.7 million, compared to $4.2 million in the same period of 2024, indicating an increase of approximately 226.2%[45]. - The company recognized pretax asset impairment of $3.4 million related to certain education products in the three months ended November 30, 2025[40]. Losses and Impairments - For the six months ended November 30, 2025, the company recognized a net loss of $15.2 million, an improvement from a loss of $13.7 million in the same period of 2024[38]. - The total adjusted EBITDA for the six months ended November 30, 2025, was $66.8 million, down from $80.9 million in the prior year, reflecting a decrease of approximately 17.4%[45]. - The Entertainment segment reported a loss before income taxes of $9.4 million for the three months ended November 30, 2025, compared to a loss of $5.7 million in the same period of 2024[45]. - The Education Solutions segment experienced a loss before income taxes of $4.7 million for the three months ended November 30, 2025, an improvement from a loss of $5.7 million in the prior year[45].