Scholastic Corporation · NASDAQ:SCHL
Scholastic — Q3 2024 Earnings Presentation
20 slides from Scholastic's earnings presentation, Mar 21, 2024
Slide 1: Third Quarter 2024 Earnings Call Presentation
Third Quarter 2024 Earnings Call Presentation Thursday, March 21, 2024
Slide 2: Forward-Looking Statements / Regulation G
Forward-Looking Statements / Regulation G This presentation contains certain statements made today which will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipat
Slide 3: Peter Warwick, President and Chief Executive Officer
Peter Warwick President and Chief Executive Officer
Slide 4: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights ● Strong Trade publishing sales and 360-degree content-creation strategy, further establishing leadership in children’s publishing and media ● Announced strategic investment in 9 Story Media Group, a highly successful children’s media creator with incremental opportunit
Slide 5: Third Quarter 2024 Segment Highlights
Third Quarter 2024 Segment Highlights ● Children’s Books revenues declined 5%, reflecting planned resizing of Book Clubs and lower expected production revenue from Scholastic Entertainment ○ Consolidated Trade revenues up 15%, excluding Scholastic Entertainment, outperforming retail book-selling mar
Slide 6: Transaction Overview – Scholastic + 9 Story
Transaction Overview – Scholastic + 9 Story™ ● Scholastic to acquire 100% of the economic interest in and a minority of voting rights in 9 Story Media Group (“9 Story”), a leading creator, producer and distributor of premium, animated & live-action children’s content ● Purchase price of approximatel
Slide 7: 9 Story At A Glance
9 Story At A Glance KEY METRICS 9 Story is a leading independent creator, producer and distributor of premium children’s content 5,000+ 74% Half Hours of of Library Content Owned ● Award-winning, turn-key global production studios in Distributed Catalog IP or Long-Term Rights Toronto, Dublin, and Ba
Slide 8: Transaction Accelerates 360° Content Creation Strategy
Transaction Accelerates 360° Content Creation Strategy Bring Scholastic’s award-winning content from the pages of books and series to big and small screens Supports growth of 9 Story enables Scholastic children’s acceleration of franchises, driving book page-to-screen sales, creating additional capa
Slide 9: Transaction Highlights
Transaction Highlights 1 Accelerates 360° content creation strategy with significant brand & content monetization opportunity 2 Investment in best-in-class production studios with global distribution & licensing capabilities 3 Risk-mitigated production model through advantageous tax opportunities &
Slide 10: Haji Glover, Chief Financial Officer
Haji Glover Chief Financial Officer and Executive Vice President
Slide 11: Third Quarter Segment Results (excluding one-time items)
Third Quarter Segment Results (excluding one-time items) Three Months Ended In $ Millions 02/29/2024 02/28/2023 Change Children’s Book Publishing and Distribution Book Clubs $ 13.3 $ 27.7 (52) % Book Fairs 102.7 103.5 (1)% School Reading Events 116.0 131.2 (12) % Consolidated Trade 77.6 72.8 7 % Tot
Slide 12: Balance Sheet and Cash Flow Results
Third Quarter Balance Sheet and Cash Flow Results February 29, February 28, In $ Millions 2024 2023 Free cash flow (use) (3 month period ending) (1) $ (7.1) $ (11.9) Free cash flow (use) (9 month period ending) (1) $ 23.7 $ (25.7) Accounts receivable, net $ 253.0 $ 261.7 Inventories, net 282.5 367.5
Slide 13: 9 Story Financial Overview
9 Story Financial Overview 3% 40% Scholastic’s strategic Creative Service Production investment and 19% IP Production $104M economic interest in 9 Story expected to contribute long-term FY2023 Revenue1 growth & earnings Distribution accretion Consumer Products 39% 1) 9 Story's fiscal year ended Augu
Slide 14: Transaction Summary
Transaction Summary • Scholastic to acquire 100% of the economic interest in and a minority of voting rights in Transaction 9 Story Media Group Overview • Purchase price (enterprise value on cash-free, debt-free basis) of ~$186M1 USD ($250m CAD) • Transaction expected to be initially funded from Sch
Slide 15: Fiscal 2024 Outlook
Fiscal 2024 Outlook ● Affirming previously revised FY24 guidance ahead of seasonally important fourth quarter ○ Adjusted EBITDA of $165 million to $175 million ○ Revenue approximately level with or slightly below the prior year ● FY24 Free Cash Flow now forecast to be $55 million to $65 million, up
Slide 16: Peter Warwick, President and Chief Executive Officer
Peter Warwick President and Chief Executive Officer
Slide 17: Q&A
Q&A
Slide 18: Appendix
Appendix
Slide 19: Third Quarter Adjusted EBITDA
Third Quarter Adjusted EBITDA Three Months Ended In $ Millions 2/29/2024 2/28/2023 Earnings (loss) before income taxes as reported $ (34.6) $ (26.2) One-time items before income taxes 4.3 — Earnings (loss) before income taxes excluding one-time items (30.3) (26.2) Interest (income) expense (0.6) (1.
Slide 20: Earnings (before and after one-time items)
Third Quarter Earnings (before and after one-time items) In $ Millions (except per share) Third Quarter 2024 Third Quarter 2023 Fiscal Year to Date 2024 Fiscal Year to Date 2023 Excluding Excluding Excluding Excluding As One-Time One-Time As One-Time One-Time As One-Time One-Time As One-Time One-Tim