Scholastic Corporation · NASDAQ:SCHL
Scholastic — Q3 FY2015 Earnings Presentation
17 slides from Scholastic's earnings presentation, Mar 26, 2015
Slide 1: Third Quarter Fiscal Year 2015 Earnings Presentation
THIRD QUARTER FISCAL YEAR 2015 EARNINGS PRESENTATION March 26, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward‐looking statements, which are subject to various risks and uncertainties, including the conditions of the children’s book and educational materials markets and acceptance of the Company’s products in those markets and other risks
Slide 3: 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 4: Dick Robinson, Chief Executive Officer, President and Chairman
Dick Robinson Chief Executive Officer, President and Chairman 4
Slide 5: Third Quarter 2015 Results
Third Quarter 2015 Results • Revenues increased by $8.6 million, or +2%, to $382.1 million • Gains in Clubs +17%, Fairs +2%, Trade +2%, Classroom Books and Magazines +7% • Lower Educational Technology revenues ‐4%, with growth in new business, expansion sales of READ 180® stages and technology suppo
Slide 6: Children's Books
Children’s Books • Book Clubs – new marketing initiatives implemented in the second half of last year continued to drive order volume • Revised mix of grade‐specific and “classic” offers • New kid‐friendly merchandise and promotions • Restructured teacher rewards program tied to higher spending • Bo
Slide 7: Make Believe Ideas - UK
Make Believe Ideas - UK • Purchased a minority stake in UK children’s book publisher in March 2015 • MBI is noted for: • Distinctive, fashion‐forward design • Industry‐leading, innovative formats • Vivid, original, photographic images, bright high‐ contrast colors, and creative textures and material
Slide 8: Classroom Books and Supplemental Materials
Classroom Books and Supplemental Materials • Customized classroom book collections and guided reading programs revenues up in quarter • Progressively building vocabulary and comprehension skills • Key tools teachers rely on for small group instruction • New edition of “all‐in‐one” bookroom resource
Slide 9: Education Technology and Services
Education Technology and Services • Implementing new sales initiatives to expand user base for all core intervention programs • Grew new READ 180 ® business and tech support services • Well positioned for summer and back‐to‐school seasons • Recognized leader in intervention that helps all students a
Slide 10: International
International • Adverse foreign exchange impact of $5.5 million on revenues in the quarter due to the strengthening U.S. dollar • Solid local currency sales growth in Australia/New Zealand, Asia‐Pacific Region and Export • Building significant capacity in publishing in Asia both for local and global
Slide 11: Maureen O'Connell, EVP, Chief Administrative Officer and CFO
Maureen O’Connell Executive Vice President, Chief Administrative Officer and CFO 11
Slide 12: Income Statement – Adjusted Earnings Per Share
Income Statement – Adjusted Earnings Per Share Third Quarter 2015 Third Quarter 2014 Fiscal Year to Date 2015 Fiscal Year to Date 2014 In $ Millions (except per share) As One‐Time Excluding As One‐Time Excluding As One‐Time Excluding As One‐Time Excluding Reported Items One‐Time Items Reported Items
Slide 13: Segment Results – Adjusted for One-Time Items
Segment Results – Adjusted for One-Time Items Third Quarter 2015 Third Quarter 2014 Fiscal Year to Date 2015 Fiscal Year to Date 2014 In $ Millions (except per share) As One‐Time Excluding As One‐Time Excluding As One‐Time Excluding As One‐Time Excluding Reported Items One‐Time Items Reported Items
Slide 14: Free Cash Flow and Balance Sheet
Free Cash Flow and Balance Sheet In $ Millions Feb 28, 2015 Feb 28, 2014 Free cash flow (use) (3 month period ending) 1 ($ 4.6) ($ 17.0) Free cash flow (9 month period ending) 1 $ 44.2 $ 18.6 Accounts receivable, net $ 204.4 $ 206.0 Inventories, net $ 341.4 $ 335.6 Accounts payable $ 186.8 $ 159.8 A
Slide 15: Affirmed Outlook – Lower End of Earnings Range
Affirmed Outlook – Lower End of Earnings Range FY 2015 Outlook Revenue ≈ $1.9 billion Earnings from Continuing Operations 1 $1.80 ‐ $2.00 per diluted share Free Cash Flow $65 ‐ $85 million Capital Expenditures $45 ‐ $55 million Prepublication / Production Spending $65 ‐ $75 million 1. Outlook for EP
Slide 16: Questions & Answers
Questions & Answers Participants • Richard Robinson • Maureen O’Connell • Margery Mayer, Educational Technology & Services • Judy Newman, School Book Clubs and E‐Commerce 16
Slide 17: RBASCHOLASTIC
RBASCHOLASTIC ORn Wer, POSSIBLE