Scholastic Reports Fiscal 2025 Third Quarter Results

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]