Scholastic Reports Fiscal 2014 First Quarter Results
Mr. Robinson continued, “First quarter sales of The Hunger Games were within our expectations, and we expect sales to build in anticipation of the Catching Fire film release later this fall. Common Core driven opportunities extend into our children’s book business, and market research shows that families depend on our clubs and fairs to find the right books at the right level for their children’s independent reading, which also helps them meet the more challenging Common Core requirements. Our book fair bookings are on track and, in preparation for the new school year, we redesigned our book club flyers to feature grade-specific selections and more non-fiction content for children from pre-K to eighth grade.”
Mr. Robinson concluded, “We continue to execute our strategy to grow profitable sales by providing schools proven, effective print and digital instructional packages and ongoing professional development programs to help with Common Core implementation and by helping teachers and families find and purchase the very best children’s book titles to support children’s independent reading, as we drive efficiencies across our businesses.”
Scholastic affirmed its fiscal 2014 outlook for total revenue of approximately $1.8 billion and earnings per diluted share from continuing operations in the range of $1.40 to $1.80, before the impact of any one-time items associated with cost reduction programs or non-cash, non-operating items.
The Company continues to expect free cash flow in the range of $60 to $80 million.
First Quarter Results
Children’s Book Publishing and Distribution. Segment revenue in the first quarter was $54.6 million, compared to $70.9 million in the prior year period. Strong frontlist titles, including the Harry Potter trade paperback collection, which was released with new cover illustrations in August, and The New York Times best-selling Star Wars: Jedi Academy by Jeffrey Brown, partially offset the anticipated lower sales of The Hunger Games trilogy. Because most U.S. schools are not in session, revenues from book fairs and book clubs, the segment’s school channels, are minimal in the first quarter and year-over-year differences are not meaningful. The seasonal operating loss for the segment was $61.5 million, compared to $54.9 million a year ago, with the impact of the anticipated decline in The Hunger Games sales being partially offset by lower book clubs costs.