Scholastic Reports Fiscal 2014 First Quarter Results
Educational Technology and Services. Segment revenue for the first quarter was $94.8 million, compared to $80.0 million in the prior year period, a 19% increase, reflecting robust sales of new products in the current year period, including System 44 Next Generation, MATH 180, Common Core Code X and iRead. Segment operating income increased 46% to $36.2 million, compared to $24.8 million in the prior year period, due to higher revenues from higher margin education technology programs in the current year period.
Classroom and Supplemental Materials Publishing. Segment revenue was $37.8 million, approximately equivalent to the $37.9 million recorded in the prior year period. Segment operating loss improved to $1.6 million, compared to the prior year operating loss of $2.6 million, due to increased sales of the Company’s higher-margin guided reading programs and classroom books in the current quarter.
International. Segment revenue in the first quarter decreased to $78.7 million, from $90.2 million in the prior year period, as higher sales in Asia were partially offset by lower sales of The Hunger Games in the UK and Canada. Foreign currency exchange rates adversely impacted revenue by $4.3 million in the quarter. Segment operating loss was $0.7 million, compared to income of $2.8 million in the prior year period.
Media, Licensing and Advertising. Segment revenue in the first quarter was $10.4 million, down from $14.4 million in the prior year period, primarily as a result of lower sales of The Hunger Games audio-books. As a result, segment operating loss was $1.9 million, compared to operating income of $0.2 million last year.
Other Financial Results. Corporate overhead was $16.4 million, compared to $17.3 million in the prior year period, reflecting a decline in employee-related expenses from cost reduction programs. Free cash use (as defined) in the first quarter was $93.8 million, compared to free cash flow of $4.0 million in the prior year period, due to higher cash collections from sales of The Hunger Games in the first quarter of fiscal 2013. During the quarter, the Company repurchased 21,034 shares in open market transactions and had $19.0 million remaining under its current board authorization for share repurchases.