School Speciality Inc · OTC:SCOO
School Speciality — School Specialty — Q3 FY2016 Earnings Presentation
14 slides from School Speciality's earnings presentation, Nov 1, 2016
Slide 1: Fiscal Year 2016 Third Quarter Financial Update
School Specialty. h Fiscal Year 2016 Third Quarter Financial Update November 1, 2016
Slide 2: Fiscal Year 2016 — Third Quarter Highlights
Fiscal Year 2016 — Third Quarter Highlights ( School Specialty. EES e en cocoons ena nn emia onan Gannon meen ue tun nemenumes © Growth continues — Total revenues in the quarter of $301.6 creased by $2.2 million or 0.7%, driven by strength in the Supplies category within Distribution and Science cat
Slide 3: Fiscal Year 2016 — Third Quarter Revenue Review
Fiscal Year 2016 — Third Quarter Revenue Review 4 School i” 6 Specialty. Distribution segment revenues of $256.7 million versus $259.5 million, a marginal decrease of $2.8 million or 1.1%. 5 Supplies category revenue increased (up $1.3 million); YTD trenc-line is positive; tracking to first full yea
Slide 4: Fiscal Year 2016 — Third Quarter Financial Review
Fiscal Year 2016 — Third Quarter Financial Review N ( School Specialty. 5 Gross margins of 37.0% vs. 37.7%, a decrease of 70 basis points (“bps”). = Operatingincome of $47.0 millionvs. $46.9 mi Distribution segment margins of 33.8% vs. 34.8% in prior year; lower rate is primarily related to an incre
Slide 5: Fiscal Year 2016 — YTD Business Update
Fiscal Year 2016 — YTD Business Update N ( Spec elty Focus on balanced growth across product and category subsets remains top priority -YTD growth of $9.2 million or 1.7%, driven by continued strength in Science category (up $10 million or 17.6%) and Furniture category (up $6.1 million or 4.6%). YTD
Slide 6: Consolidated Combined Statement of Operations
Consolidated Combined Statement of Operations (| School Specialty. ‘TareeMonths Ended Three Months Ended Nine Months Ended ‘Nine Monts Ended Twelve Mouths Ended Tele Months Ended September 24,2016 _ September 26,2015 __ September 24,2016 __Septomber 26,2015 __Septomber 24,2016 __ September 26.2015.
Slide 7: Adjusted EBITDA Comparisons
Adjusted EBITDA Comparisons “Adjusted Earnings before intrest tam, deprecation, School Specialty. amortization, bankrupcy-rlatedcosts, restructuring andimpairment ‘charges (Adjusted EBTID A) reconciliation: ‘Netincome oss) Provision forincome toes ecegenztion toms, t Resmcrdng costs Restcrung eluted
Slide 8: Balance Sheet Review
School Specialty. Y Balance Sheet Review
Slide 9: Consolidated Balance Sheet Comparison
Consolidated Balance Sheet Comparison ASSETS Curentassets (Cash and cash equivalents Accounts receivabk, less alowanoe for doubtfulaccounts $1073, $1077, and $98, spectively Inventories, set. Defaned catalog costs Prepaid expenses and othercunent assets Refundabb income tes Total curentassets Progen
Slide 10: Working Capital Comparison
Working Capital Comparison ( School Specialty. AecountsReceivable S SES 1S MOS SE S$ 7S TSS Teas Ta3 [SimsS 12s w1s ua] s mes aos a7 lnvertaries S MES mas Gos wos $ wars mins UAT s ua7|s uss sos 2s 73] $ HIS BIS TOE Pepadenewesdomerarentases $ 27 $ 32$ MSS 1 $ MSS BOS i$ ue |s B2S Mas 05s wal $ BIS
Slide 11: Balance Sheet Review
Balance Sheet Review Cash and cash equivalents ABL Facility, maturing in 2019 Term Loan, maturingin 2019 Total 1st Lien Debt Deferred Cash Payment Obligations Total Debt (Note 1) Net Debt (Total Debt - Cash and CE) Equity Market Capitalization Enterprise Value GAAP Total Debt Reconcilaition Total De
Slide 12: Free Cash Flow Analysis
Free Cash FlowAnalysis N/ Spec elty Ba a Financial Recon iations and Footnotes 9 Months Months 6 TIM thru Q sFY16 nine-month Adj. EBITDA improvement of $0.8 million or 1.4%. Adjusted EBITDA. S$ 56,697 $ 55891 $ 45,854 $ 43,296 2 _sF¥16 nine-month capex increased YOY by $2.5 million; FY16 capex Capes
Slide 13: 2016 Outlook — Guidance Updated
Fiscal 2016 Outlook — Guidance Updated \ ( Spec elty Metric CV 15 Actual FY2016 Updated Outlook. Revenue $6375 Growth of 2.18-2.33%expactad; rvsedfrom original guidance of 258-3.0% Gross Margin (Excl.PD Amort.) % 38.2% Anticipate 40-60bpsdecling; negative impact of mic and growthwithinstratesic purc
Slide 14: Investor Contacts
OF scroa1. Investor Contacts: Ryan M. Bohr EVP & Chief Financial Officer 920-882-5868 Ryan.bohr@schoolspecialty.com Glenn Wiener Investor Relations 212-786-6011 gwiener@GWCco.com