School Speciality Inc · OTC:SCOO
School Speciality — School Specialty — Short Year 2015 Q1 Earnings Presentation
20 slides from School Speciality's earnings presentation, Sep 2, 2015
Slide 1: Short Year 2015 First Quarter Financial Update
School Specialty. h Short Year 2015 First Quarter Financial Update September 1, 2015
Slide 2: Short Year 2015 First Quarter Take-Away
Short Year 2015 First Quarter Take-Away a 5 Revenues up slightly compared to prior year period — stabilization continues © Operations and Fulfillment Centers excelling in delivering the peak-season—on-time, accurate and more efficient = Realizing efficiencies from one-SS| model; anticipate cost savi
Slide 3: SY 2015 First Quarter Financial Highlights
SY 2015 First Quarter Financial Highlights SE 2 Overallrevenues of $199.5 million consistent with prior year period 5 Distribution segment revenues up 2.4% or $4.0 million; Supplies product lines up $5.4 million and Furniture product lines up $3.9 million, offset by $4.5 million decline in the Agend
Slide 4: SY 2015 First Quarter Financial Highlights — Cont'd
SY 2015 First Quarter Financial Highlights — Cont’d ee © Gross margins of 39.1% vs. 39.4%, a decline of 30 basis points (“bps”) 5 Di increased and Agenda sales declined. ribution segment margins of 36.6% vs. 37.1%; 50 bps decline was primarily related to a change in mix as Furniture revenues 5 Curri
Slide 5: Consolidated Combined Statement of Operations
Consolidated Combined Statement of Operations ‘Amounts in thousands, except per share amounts (unaudited) ThreeMonths ‘Three Months Ended Ended July 25,2015 July 26,2014 Revenues. s 199,530 199,469 Cost of revenues. D128 120.903 Gross profit. 78,002 78,566 Selling, general and administrative expense
Slide 6: Adjusted EBITDA Comparisons
Adjusted EBITDA Comparisons ‘Amounts in thousands ‘Three Months ‘Three Months Ended Ended Suly 25,2015 July 26,2014 Adjusted Earnings before interest, taxes, depreciation, amortization, bankruptcy-related costs, restructuring andimpairment charges (EBITDA) reconciliation: Net income $ 14958 S$ 11014
Slide 7: SY 2015 Corporate Objectives Update
School Specialty. yy SY 2015 Corporate Objectives Update
Slide 8: Core Objectives for the Short Year 2015
Core Objectives for the Short Year 2015: Key Actions Taken in the First Quarter 1 Address the causal factors of multi-year declines in product categories that have traditionally represented areas of strength for the Company [Restore category expertisein sales Improve merchandising and procurement fu
Slide 9: Core Objectives for the Short Year 2015
Core Objectives for the Short Year 2015: Key Actions Taken in the First Quarter ——————————— Begin implementation of cross-departmental, multi-year strategic growth plans for core product category (Top 7) Early Childhood art Furniture andthe 21* Century Classroom [EPS & Instructional Solutions Specia
Slide 10: Core Objectives for the Short Year 2015
Core Objectives for the Short Year 2015: Key Actions Taken in the First Quarter or Enhance overall systems management in DC’s/Warehouses and across SSI sales infrastructure 1 Simplifying/consolidating technology footprint, upgrading select hardware/software platforms and fully implementing CRM remai
Slide 11: Continued Focus on Building a Platform for Organic Growth
Continued Focus on Building a Platform for Organic Growth f Fun Early. Childhood Art Supplies Chasstaokn EPS & Instructional Solutions Special,Needs Physical Education as Public & Private NS aes Summer /Day camp Sector Office Products Higher Education Outside Sales / Inside Sales / Category Speciali
Slide 12: Balance Sheet Review
School Specialty. Y Balance Sheet Review
Slide 13: Balance Sheet Review
Balance Sheet Review Key Highlights as of July 25, 2015 CSS SET = outstanding ABL facility balance was $69.4 million and $7.9 million as of Cash and cash equivalents $8645 59.281 July 25, 2015 and July 26, 2014, respectively © Subsequent to quarter end, Company elected to reduce ABL ine size New ABL
Slide 14: Consolidated Balance Sheet Comparison
Consolidated Balance Sheet Comparison wea ea cee ae lunaveites) ASSETS Cunent assets Cash and cash equivalents Accounts receivable, Net. Inventories, net. Deferred catalog costs Prepaid expenses and other cument assets Retindabl income taxes Assetheld for sale. Totalcumentassets Property, plant and
Slide 15: Working Capital Analysis — FY15 vs. FY14
Working Capital Analysis — FY15 vs. FY14 eee Accounts Receivable 1351358 1805685719222 S6O a. 7) Ba) 2) 0888) Inventories 120 0a7, 7011398917732 mS 48 24 0 8135 Prapsid expense andothar currentassets 137 1920658315974 180 js) 7s) 2852 (2a) Accounts Payable ese 534 363320416 18230430 wo 43 5 80 (28)
Slide 16: Direct Free Cash Flow Analysis
Direct Free Cash Flow Analysis Three Months Ended Three Months Ended Financial Recon jons and Footnotes 2 SY15 capex lower by $1.4 million and product , developmentiowery $0.6 millon, expecta irish Adjusted EBITDA 27287 27,206 " $ $ ‘SY below internal plan; continue to prioritize higher ROI opportun
Slide 17: Financial Outlook & Executive Summary
School Specialty. h Financial Outlook & Executive Summary
Slide 18: CY14 / SY14 Comparative Info and CY15 Outlook
CY14 / SY14 Comparative Info and CY15 Outlook Ee Guidance providedat FY15 year-endreaffirmed CY45 (Jai Total Revenues $622.7 Gross Profit $234.1 [cPm% 37.696 Total SG&A $224.1 Expenses as a% of Revenues 36.0% Operating Income (Loss) $10.0 Net Income (Loss) (525.8) Adjusted EBITDA $38.3 Net Unleverag
Slide 19: Safe Harbor Statement/Non-GAAP Financial Information
Safe Harbor Statement/Non-GAAP Financial Information Safe Harbor Statement This presentation contains statements about School Specialty's future financial conditions, results of operations, expectations, plans, or prospects, including the information under the headings “Short Year 2015 First Quarter
Slide 20: 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 School u (| Specialty.
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