Scholastic Reports Fiscal 2014 First Quarter Results
New York – September 19, 2013 – Scholastic Corporation (NASDAQ: SCHL), the global children’s publishing, education and media company, today reported results for the fiscal 2014 first quarter ended August 31, 2013.
Revenue in the first quarter was $276.3 million, compared to $293.4 million a year ago. The Company reported first quarter loss per share from continuing operations of $0.94, versus $1.01 in the prior year period. Results for the first quarter include one-time expenses of $0.04 per share related to cost reduction and restructuring programs. Consolidated loss per share was $0.94 in the quarter, compared to a loss of $1.02 a year ago.
First quarter results were largely driven by strong sales of Scholastic’s new education technology programs and guided reading programs. Successful product launches in Educational Technology and Services drove segment revenue and operating profit growth of 19% and 46%, respectively. These results were offset by first quarter sales of The Hunger Games trilogy, which decreased in domestic and international markets compared to the prior period’s levels, but were within expectations. Scholastic typically records a loss in its fiscal first quarter, when most U.S. schools are not in session and its school book club and book fair businesses generate minimal revenue.
Free cash use for the quarter was $93.8 million, compared to free cash flow of $4.0 million a year ago, when the Company collected over $90 million from sales of The Hunger Games. This cash flow use in the current period resulted in seasonal net borrowings at quarter end of $13.4 million.
“We are off to a great start this year, as schools continue to turn to Scholastic for broad-scale instruction solutions to raise student achievement in the Common Core era. First quarter results were driven by robust, high-margin sales of our new education technology programs and our guided reading programs, as well as the related support services,” said Richard Robinson, Chairman, President and Chief Executive Officer. “Our successful launch of five new products, System 44®Next Generation,MATH 180TM,iReadTM,Common Core Code XTM and READ 180®for iPad, demonstrates our ability to build on a decade of success with READ 180 to offer more products across grade levels and subject areas to our installed customer base and to expand our reach into more schools. At the same time, we continue to see significant demand for our professional development and school improvement services. Given the timing of our recent product releases, we expect to see increasing sales of our instructional programs and services over the course of the year.”