Slide 1: Fiscal 2015 Third Quarter and Nine Month Results Update
\ oe School Specialty, Inc. Fiscal 2015 Third Quarter and Nine Month Results Update March 4, 2015
Slide 2: About School Specialty - Our Business
About School Specialty - Our Business Business Summary Business Segment Overview Aleading distributor of supplies, furniture, technology products, supplemental learning products and curriculum solutions to the education marketplace "Founded in 1959 and headquartered in Greenville, Wi Access to over
Slide 3: Our Diverse Assortment & Offering
Our Diverse Assortment & Offering We offer educators and those responsible for purchasing for education, the widest assortment of products within our target markets and product categories. We continuously assemble products and solutions that help teachers teach and advance student learning. It’s thi
Slide 4: Distribution Segment Overview
Distribution Segment Overview Segment Ove w Product Categories Offers one of the broadest ranges and deepest assortments of general supplies and consumables, supplemental learning products, classroom ‘equipment and furniture available from a single-source supplier ‘Widely recognized brand names inth
Slide 5: Curriculum Segment Overview
Curriculum Segment Overview Segment Overview Product Categories Well established provider of core, supplemental and intervention curriculum products and services for science and reading (literacy) Aifferentiated portfolio of author-driven, efficacy-based solutionsintraditional print, digital and ble
Slide 6: Key Competitive Advantages and Customer Value Propositions
Key Competitive Advantages and Customer Value Propositions 6 | School Specialty serves over 90% of the more than 14,300 school districts in the U Value Proposition to Customers Y Longstanding customer relationships Y Comprehensive product offering = Served pore than Uitte schools locdied fi paughout
Slide 7: Growth Opportunities Supported by Improving Market Dynamics
Growth Opportunities Supported by Improving Market Dynamics Srra| School Specialty serves over 90% of the more than 14,300 school distri Education Market Conditions Improving PreK-12 Enrollment (2007-2022E} Nation's schools expected to enter a period of sustained enrollment (Gtudents in we growth of
Slide 8: Anticipated Growth in Addressable Curriculum Market
Anticipated Growth in Addressable Curriculum Market Curriculum Market Dyna ics ® Increased student assessments (driven by Common Core or other state standards) identifying weaknesses in student performance, driving increased spend on intervention and supplemental curriculum ~ 43 states have adopted
Slide 9: FY15 Financial Update
School Specialty. Y, FY15 Financial Update
Slide 10: Fiscal 2015 Third Quarter and Nine Month Financial Highlights
Fiscal 2015 Third Quarter and Nine Month Financial Highlights Third Quarter Financial Review = Revenues of $77.8millonvs. $747 milion an increase of $3.A millionor 4.156 Distribution segment revenues of S677 millonvs. S644 millon, up5.2%; strong yesr-over year performancainthe Furniture and Technolo
Slide 11: Fiscal 2015 Third Quarter and Nine Month Business Segment Review
Fiscal 2015 Third Quarter and Nine Month Business Segment Review Quarter to Date Year to Date Transactional products, $ 54,690 $ 54,025 $ 665 1.2% Transactional products $392.278 § 328.297 $ 3976 13% AV Tech DistributorBusiness 3564 (2,621 943 36.0% AV Tech Distributor Business 10,723 9127 1596 «17.
Slide 12: Consolidated Combined Statement of Operations
Consolidated Combined Statement of Operations SCHOOL SPECIALTY, IN CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Ga Thousands, Except Per Share Amounts) Predecessor Successor Company Successor Company Compmy __Now-GAAP Combined ‘Taree Months Three Monts Nine Months, = Thirt-Turee | Si
Slide 13: Adjusted EBITDA Comparisons
Adjusted EBITDA Comparisons eS SCHOOL SPECIALTY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in Thousands, Except Per Share Amounts) Successor Company Successor Company Non-GAAP Combined Three Months Three Months Ended Ended ‘Nine Months Ended Nine Months Ended January24,2015_
Slide 14: FY15
School Specialty. Y, FY15 Corporate Update
Slide 15: Organizational Realignment
Organizational Realignment Recent steps Taken to Drive Growth, Profits and Efficiencies for our Customers and Shareholders oooooo ‘Changing the way we do business- realigned and integrated into “one-SsI” Creation of one senior leadership and support structure, wheresales isthe driving force No longe
Slide 16: Corporate "Rightsizing" Initiatives
Corporate “Rightsizing” Initiatives Top Grading Assessments Project Babylon — Prior two years of process reforms enabled us to implement meaningful changes throughout the organization Two major programs implemented in F'15 to lower infrastructure costs, while improving operationaleffectiveness and c
Slide 17: Further Enhancements to Executive Leadership Structure
Further Enhancements to Executive Leadership Structure ‘The New Leadership Team of School Specialty D1 Joseph Yorio appointed President and Chief Executive Officer in April 2014 Ryan Bohr appointed EVP and Chief Financial Officer in November 2014 Todd Shaw promoted to EVP Oper: Ed Carr appointed EVP
Slide 18: Key Corporate Initiatives - 3Q Sales Force Updates
Key Corporate Initiatives - 3Q Sales Force Updates Sales forcerealignment completed in 3Q/ New Chief Sales Officerhired C1) State-by-state analysis 2g Territory mapping Sales force configuration Development and implementation of Detailed review of all US =Review of existing sales i aration territori
Slide 19: Key Corporate Initiatives - 4Q Sales Force Focus Areas
Key Corporate Initiatives -4Q Sales Force Focus Areas F’16 planning underway - bottom-up budgeting based on new district modeling a Management a a a Outside Sales Force Inside Sales Direct Marketing Note: # of cstnsterepresens citrate SSI cod to dung the 12 monthsending December 2014, Penevaton casu
Slide 20: Key Corporate Initiatives - 3Q Operations Updates
Key Corporate Initiatives - 3Q Operations Updates Today's footprint Actions taken over the last 18 months... ¥ ClosedFresne, CA andSalina, KS facilties Y —Consolidatedinventory to Mansfield, OH andGreenville, WI Mansfield set upasprimary distributioncenter ¥ Greenvilleconfigured for peak-season supp
Slide 21: Key Corporate Initiatives — Operational Improvements
Key Corporate Initiatives — Operational Improvements “2 | vou ith ant iar 3 open for pes a Improved line fill rates Reduction in split orders Reduction in backorders = New operations management team and = Split sales order (line items ship fromdifferent = Backorder (order in which one or more line i
Slide 22: Key Corporate Initiatives — Shared Services
Key Corporate Initiatives — Shared Services All functional departments brought together under one leadership structure to leverage resources, drive efficiencies and lower costs, while investing opportunistically Project Babylon creates one centralized operating model D_ Finance/'t (Ryan Bohr, EVP an
Slide 23: SSIGUARDIAN — Security Solutions Launch
SSIGUARDIAN — Securi The Launch of GUARDIAN BsuaRDIAN® ‘ONLY NAME IN SAFE SCHOOL TRAINING Target Markets Solutions > K-12 Schools > Advanced Training > Higher Learning > Consulting Services > Healthcare > Security Products > Transportation > Technology Solutions Safety and Cri Preparedness Solutions
Slide 24: Summary: Executing our Turnaround Plan to Drive Future Performance
Summary: Executing our Turnaround Plan to Drive J Future Performance and Increase Customer Satisfaction School Specialty Continues to Implement its Tu ‘ound Plan to Drive Efficiencies, Growth and Profitability ‘Topzline Initiatives Significant scope to continue turnaround. = Realize returns from act
Slide 25: Balance Sheet Review
School Specialty. Y, Balance Sheet Review
Slide 26: Balance Sheet Review
Balance Sheet Review Key Highlights as of January 24, 2015 ion vs. $10.6 mi = Outstanding ABL facility balance was $13.6 nas of April 26, 2014 and $0 as of January 25, 2014 5 Outstan 1g gross balance on Term Loan Credit Agreement was $142.7 ion vs. $143.9 mi nas of April 26, 2014 © $1.3 million refl
Slide 27: Consolidated Balance Sheet Comparison
Consolidated Balance Sheet Comparison SCHOOL SPECIALTY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (a Thousands, Except Share Data) Tanuary 24,2015 April26,2014 _January25, 2014 equivalents $ 11g61 $ 9008 $ 17888 Accounts receivable, less allowance for doubtfil accounts of $925, $084 and
Slide 28: Consolidated Balance Sheet Comparison (Cont'd)
Consolidated Balance Sheet Comparison (Cont’d) SCHOOL SPECIALTY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) a Thousands, Except Share Data) January 24,2015 April 26,2014 _ January 28,2014 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: ‘Current maturities - long-term debt. s 14
Slide 29: Working Capital Analysis
Working Capital Analysis Accounts receivable,net S873 $560 (S13) $626 «S37 $1389 $1358 (S21) $1222 $1180 (842) $560 SHES SUE Inventories $867 S732 (8138) soa $08 $1049 $1097 S48 E77 SOT S24 7D SBIZ SBA Prepaid expenses and other current assets sind S137 S33. S299 $180 S119) «SBT S192 GTS) SIA SBS 82
Slide 30: Direct Free Cash Flow Analysis
Direct Free Cash Flow Analysis SCHOOL SPECIALTY, INC. CONSOLIDATED DIRECT FREE CASH FLOW (In Thousands) Adjusted EBITDA Capex Product development Proceeds from asset sales Other Change in working capital Unieveraged free cash flow Cash interest Leveraged free cash flow Reconciliation to GAAP cash fl
Slide 31: Financial Outlook
Financial Outlook Investment Considerations
Slide 32: Updated Fiscal 2015 Financial Outlook
Updated Fiscal 2015 Financial Outlook o P15 revenues expected tocome in at the low to mid-point of prior guidance of $625 million - $640 million © Company on trackto meet the lower-end of prior revenue guidance; growth in 2H is establishing momentum for F'16, but not sufficientto offset soft y-o-y p
Slide 33: Positioning for the Future: Investment Considerations
Positioning for the Future: Investment Considerations Large and stable addressable market with favorable growth outlook Positive Trends in Education End Markets Attractive financial profile with (A leader ie = highly tracmented high visibility — strong operating : leverage and free cash flow SF indu
Slide 34: Safe Harbor Statement/Non-GAAP Financial Information
Safe Harbor Statement/Non-GAAP Financial Information ‘Safe Harbor Statement ‘This presentation contains statements about School Specially’s future financial conditions, results of operations, expectations, plans, or prospects, including the information underthe heading, “Updated Fiscal 2015 Financia
Slide 35: Investor Contacts
Investor Contacts: Ryan M. Bohr EVP & Chief Financial Officer 920-882-5868 Ryan.bohr@schoolspecialty.com Glenn Wiener Investor Relations 212-786-6011 IR@schoolspecialty.com OG scroa1.