Slide 1: Second Quarter FY 2023 Earnings Call Presentation
ADD COVER IMAGE HERE Second Quarter FY 2023 Earnings Call Presentation Thursday, December 15, 2022
Slide 2: Forward-Looking Statements / Regulation G
Forward-Looking Statements / Regulation G This presentation contains certain statements made today which will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipat
Slide 3: Peter Warwick
Peter Warwick President and Chief Executive Officer 3
Slide 4: Second Quarter FY 2023
Second Quarter FY 2023 • Strong Q2 revenue growth and higher earnings driven by Scholastic’s unique channels and content, improved operating efficiencies and continued investments in long-term growth opportunities • Affirming guidance based on momentum YTD and expectations for strong Q4 • Positive l
Slide 5: Children's Book Publishing & Distribution
Children’s Book Publishing & Distribution • Revenues up 19% with improved margins, on higher sales, strong operating leverage and improved efficiencies • Record Fall for Book Fairs, rising 37% on higher fair ADD IMAGE HERE; count and improved revenue per fair FULL WIDTH AND • Trade revenues near lev
Slide 6: Education Solutions
Education Solutions • Q2 sales level with last year’s record levels, as longer selling cycles delay sales from first half, now expected in remainder of the year (esp. Q4) • Lower operating income reflects continued investment in go-to-market capabilities and ADD IMAGE HERE; integration of Learning O
Slide 7: International
International • Revenues up 8% in local currencies, but down overall due to FX impact • Higher local revenues primarily driven by Book Fairs and the Company’s best-selling series titles in Trade ADD IMAGE HERE; FULL WIDTH AND • Challenging market conditions in Canada and UK HEIGHT OF GREY BOX also i
Slide 8: Outlook
Outlook • Anticipating continued return to pre-pandemic seasonality, when the strongest results are typically in Q2 and Q4 and higher earnings in second half • Reaffirming fiscal 2023 guidance for Adjusted EBITDA of $195 to $205 million, based on current momentum and expectations for strong Q4, driv
Slide 9: Capital Allocation
Capital Allocation • Continued commitment to deploying capital for strategy growth, maintaining a strong balance sheet and returning excess cash to shareholders • $32.9 million returned to shareholders in Q2, through increased dividend, open market share repurchases and modified “Dutch Auction” tend
Slide 10: Kenneth Cleary
Kenneth Cleary Chief Financial Officer 10
Slide 11: Q2 FY23 Adjusted EBITDA
Q2 FY23 Adjusted EBITDA Three Months Ended Six Months Ended In $ Millions 11/30/2022 11/30/2021 11/30/2022 11/30/2021 Earnings (loss) before income taxes as reported $ 100.9 $ 89.1 $ 43.0 $ 55.8 One-time items before income taxes — (5.3) — (9.5) Earnings (loss) before income taxes excluding one-time
Slide 12: Q2 FY23 Balance Sheet Items and Cash Flow
Q2 FY23 Balance Sheet Items and Cash Flow In $ Millions Nov 30, 2022 Nov 30, 2021 Free cash flow (use) (3 month period ending) (1) $ 62.7 $ 75.4 Free cash flow (use) (6 month period ending) (1) $ (13.8) $ 124.5 Accounts receivable, net $ 345.9 $ 370.5 Inventories, net $ 380.4 $ 279.3 Accounts payabl
Slide 13: Q2 FY23 Segment Revenues
Q2 FY23 Segment Revenues Three months ended Six months ended In $ Millions 11/30/2022 11/30/2021 Change 11/30/2022 11/30/2021 Change Book Clubs $ 57.6 $ 51.9 $ 5.7 11 % $ 63.9 $ 58.7 $ 5.2 9 % Book Fairs 240.8 176.2 64.6 37 % 269.1 192.2 76.9 40 % Consolidated Trade 119.9 124.4 (4.5) (4)% 210.0 217.
Slide 14: Peter Warwick
Peter Warwick President and Chief Executive Officer 14
Slide 15: Questions
Questions For any questions, please contact Scholastic Investor Relations: Investor_Relations@Scholastic.com 15
Slide 16: Q2 FY23 Earnings (before and after one-time items)
Q2 FY23 Earnings (before and after one-time items) In $ Millions (except per share) Second Quarter 2023 Second Quarter 2022 Fiscal Year to Date 2023 Fiscal Year to Date 2022 One- Excluding One- Excluding One- Excluding One- Excluding As Time One-Time As Time One-Time As Time One-Time As Time One-Tim