Slide 1: Fourth Quarter FY 2021 Earnings Call Presentation
ADD COVER IMAGE HERE Fourth Quarter FY 2021 Earnings Call Presentation Thursday, July 22, 2021 Art © Dav Pilkey. DOG MAN ™/® Dav Pilkey
Slide 2: Presenters
James Barge Lead Independent Director Iole Lucchese Chair of the Board; EVP, Chief Strategy Officer, and President, Scholastic Entertainment Kenneth Cleary Chief Financial Officer Peter Warwick Incoming President and Chief Executive Officer 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements. Such forward-looking statements are subject to various risks and uncertainties, including those arising from the continuing impact of COVID-19 related measures taken by governmental authorities, school administ
Slide 4: Regulation G
Regulation G Today’s comments include references to certain non-GAAP financial measures as defined in Regulation G. The reconciliation of these non-GAAP financial measures with the relevant GAAP financial information and other information required by Regulation G is provided in the Company’s earning
Slide 5: James Barge
James Barge Lead Independent Director 5
Slide 6: Scholastic Continuity
Scholastic Continuity • Business continuity plan in place since early June. Lead independent director along with key executive officers working in concert to ensure day-to-day operations carry on uninterrupted. • Recent steps taken by Scholastic’s Board to further solidify the future of the Company:
Slide 7: Iole Lucchese
Iole Lucchese Chair of the Board; Executive Vice President, Chief Strategy Officer, and President, Scholastic Entertainment 7
Slide 8: Scholastic Overview & Strategy
Scholastic Overview & Strategy • Dick Robinson left a lasting impact on publishing and children’s education. For nearly 50 years, he led Scholastic’s businesses, operations, and strategy. • We will continue to support children in ways that no other company can, as we have during the recent unprecede
Slide 9: Children's Book Publishing & Distribution
Children’s Book Publishing & Distribution • Book Fairs continued to tailor the fair experience to meet the needs of schools as they re-opened in the spring, and intensified marketing drew positive results compared to prior year. ADD IMAGE HERE; FULL WIDTH AND • We are looking forward to our Book Fai
Slide 10: Children's Book Publishing & Distribution
Children’s Book Publishing & Distribution • Graphic novels including Dav Pilkey’s Dog Man® and Cat Kid Comic Club™ and the Baby-Sitters Club® continue to bring children to reading, while new picture books such as Wishes by Muon Thi Van and Lala’s Words by Gracey Zhang solidify the power of diverse p
Slide 11: Education
Education • Our Education business saw a 9% full year growth in revenues due to close partnerships fostered with state, district, school, and classroom leaders. • Strategic investments are being made in early education with ADD IMAGE HERE; FULL WIDTH AND PreK On My Way™ and social-emotional learning
Slide 12: International
International • Two highly-anticipated books, globally, in the coming fiscal year are from Australia-based author Aaron Blabey’s The Bad Guys™ series. ADD IMAGE HERE; • International clubs and fairs are beginning to recover and FULL WIDTH AND cost reductions support forward growth in the coming year
Slide 13: Looking Ahead: Fiscal Year 2022
Looking Ahead: Fiscal Year 2022 • There is positive momentum in fall fair bookings, while the overall climate still remains uncertain. • Fourth quarter success in book clubs bodes well for our distribution channels. • Trade will continue publishing books that resonate with kids and become part of co
Slide 14: Kenneth Cleary
Kenneth Cleary Chief Financial Officer 14
Slide 15: Financial Overview
Financial Overview • Pivoted resources to develop new distribution methods to meet customers’ needs as a result of the pandemic: o Book Clubs ship-to-home o Virtual book fairs o Individual “take-home” book packs o Digital classroom magazines • Streamlined processes and exceeded $100 million in cost
Slide 16: Q4 FY21 Balance Sheet Items and Cash Flow
Q4 FY21 Balance Sheet Items and Cash Flow In $ Millions May 31, 2021 May 31, 2020 1 Free cash flow (use) (3 month period ending) $19.0 ($63.2) 1 Free cash flow (use) (12 month period ending) $20.5 ($89.1) Accounts receivable, net $256.1 $239.8 Inventories, net $269.7 $270.6 Accounts payable $138.0 $
Slide 17: Q4 and FY21 Adjusted EBITDA
Q4 and FY21 Adjusted EBITDA Three Months Ended Twelve Months Ended 5/31/2021 5/31/2020 5/31/2021 5/31/2020 Earnings (loss) before income taxes as reported $8.0 ($47.4) ($18.2) ($89.7) One-time items before income taxes 31.9 6.8 61.7 56.2 Earnings (loss) before income taxes excluding one-time items 3
Slide 18: Q4 and FY21 Earnings (before and after one-time items)
Q4 and FY21 Earnings (before and after one-time items) In $ Millions (except per share) Fourth Quarter 2021 Fourth Quarter 2020 Fiscal Year to Date 2021 Fiscal Year to Date 2020 Excluding Excluding Excluding Excluding As One-Time One-Time As One-Time One-Time As One-Time One-Time As One-Time One-Tim
Slide 19: Q4 and FY21 Revenues
Q4 and FY21 Revenues In $ Millions Three Months Ended Twelve Months Ended 5/31/2021 5/31/2020 Change 5/31/2021 5/31/2020 Change Book Clubs $37.4 $19.5 $17.9 92% $145.1 $156.8 ($11.7) (7%) Book Fairs 76.4 32.1 44.3 138% 164.3 383.8 (219.5) (57%) Consolidated Trade 78.4 80.4 (2.0) (2%) 355.3 334.8 20.
Slide 20: FY22 Outlook
FY22 Outlook • Strong demand for products and solutions as schools return to in-person instruction • Leveraging our IP across platforms • Direct sales and marketing to parents • Investing in long-term Education Solutions growth • Growth in Asia through English language learning solutions • Continued
Slide 21: Peter Warwick
Peter Warwick Incoming President and Chief Executive Officer 21
Slide 22: Closing Remarks
Closing Remarks • Scholastic will continue to: o Do what it does best—be a trusted partner to schools and families. o Support its school customers in meeting their top priorities: Safety of students and teachers; Desire to accelerate learning from lost classroom time; and Meet the social-emoti
Slide 23: Questions
Questions For any questions, please contact Scholastic Investor Relations: Investor_Relations@Scholastic.com 23
Slide 24: RBASCHOLASTIC
RBASCHOLASTIC