Slide 1: Short Year 2015 Second Quarter and Six-Month Financial Update
Short Year 2015 Second Quarter and Six-Month Financial Update December 2, 2015
Slide 2: Short Year 2015 Second Quarter - Momentum Continues
Short Year 2015 Second Quarter - Momentum Continues NY School &” 8 Specialty. 2 | = One of the best operational peak-seasons in Company history based on productivity, on-time shipping metrics and direct customer (post-peak season survey) and employee feedback. = Transition to one-SSI model generatin
Slide 3: SY 2015 Second Quarter Financial Highlights
SY 2015 Second Quarter Financial Highlights N (| Soooelty. = Overall revenues of $245.1 million, an increase of $6.5 million or 2.7% 5 Distribution segment revenues of $207.4 million versus $207.9 million, a decline of $0.5 million or 0.2%; Strong growth in Furniture segment offset by declines in Su
Slide 4: SY 2015 Second Quarter Financial Highlights — Cont'd
SY 2015 Second Quarter Financial Highlights — Cont’d Le School Specialty. Gross margins of 36.1% vs. 36.4%, a decline of 30 basis points (“bps”) 5 Distribution segment margins of 32.6% vs. 34.2%; change in mix (higher Furniture revenues and lower Agendas and Supplies revenues) reduced gross margins
Slide 5: SY 2015 Six-Month Financial Highlights
SY 2015 Six-Month Financial Highlights N (| Soooelty. = Revenues of $447.7 mi mand Curriculum revenues up $3.0 million) Gross margin of 37.5%, down 20 bps (Distribution gross margin down 110 bps and Curriculum gross margin up 370 bps) 5 SG&Aexpenses of $118.9 million, a decrease of $10.9 million or
Slide 6: Consolidated Combined Statement of Operations
Consolidated Combined Statement of Operations (| School Specialty. a ‘Amounts in thousands, except per share amounts (unaudited) ‘Three Months Ended ThreeMonths Ended SixMonthsEnded ‘Six Months Ended October 24, 2015 October 25,2014 __ October 24,2015 October 25, 2014 Revenues s 2548S 238,670 $ 4467
Slide 7: Adjusted EBITDA Comparisons
Adjusted EBITDA Comparisons (| School Specialty. a ‘Amounts in thousands ‘Three MonthsEnded Three MonthsEnded SixMonths Ended Six Months Ended October 24,2015 _October 25,2014 __October 24,2015 __ October 25, 2014 Adjusted Eamnings before interest, axes, depreciation, amortization, bankruptcy-relate
Slide 8: SY 2015
School Specialty. Y, SY 2015 Corporate Update
Slide 9: Delivering on our Primary Corporate Objectives
Delivering on our Primary Corporate Objectives 4 School Specialty. a Returned to growth inSY5~totalreveriuesup 1.5% through the rt sicmonths of SY25 withstronger bookings andorder trendsinkeysegments a strong growth in Furniture segment dvig Distribution perormance. I snc scencemecuctcreestucre wowa
Slide 10: SY15 Distribution Segment Update
SY15 Distribution Segment Update NY Soooelty. SSI has returned to growth following years of degradation in the business, driven by new leadership, refined sales strategy, build-out of inside sales network and strong operational execution. SY15 YTD Accomplishments o Distribution segment revenues incr
Slide 11: SY15 Distribution Segment Update - Cont'd
SY15 Distribution Segment Update - Cont'd Le School &” 8 Specialty. Infrastructure enhancements and new sales force coverage model leading to stronger SY15 financial performance and optimism for FY16 organic growth. SY15 Accomplishments = Continued build-out of the inside sales team resulting in mor
Slide 12: SY15 Curriculum Segment Update
SY15 Curriculum Segment Update NY Soooelty. Strong customer acceptance of new curriculum offerings in Science fueling growth and optimism; SY15 Reading segment anticipated to decline modestly as new offerings are developed and sales model addressed. = FOSS Next Generation experiencing strong demand
Slide 13: SY15 Operational Update
SY15 Operational Update NY Soooelty. I Significantimprovements in order cycle time, on-time delivery, FC lines-carryover and FC lines per hour with significantly lower expenses and lower labor costsas a % of revenue. “Delivering” for our customers during the peak-season was our core priority for SY1
Slide 14: Balance Sheet Review
School Specialty. Y, Balance Sheet Review
Slide 15: Consolidated Balance Sheet Comparison
Consolidated Balance Sheet Comparison (| School Specialty. lunaveitea) October 24,2018 Ovtober 28,2014 ASSETS (Garent assets: (Cash and cash equivalents... of$1291, $806 and SI, 145, Jnventores Defend catalog costs... Godel. Intangible assets, net Development costs and other Defined toes lnetem oo J
Slide 16: Working Capital Comparison
Working Capital Comparison (| School Specialty. a (Amountsin mitions) VOY Changes's Accounts Recewable 11 A SEO ABT? DS) A} Prapaldenpense and othercumentassets «37 MS 18]S SST} S) OS) 282 ‘Accounts Payable Si 5200 sa us Os sD Da] sass) sca 014 change InDays os cists ai az Gs Summary (SY15_compariso
Slide 17: Balance Sheet Review
Balance Sheet Review (| School Specialty. Cash and cash equivalents ABL Facility, maturing in 2019 Term Loan, maturing in 2019 Total 1st Lien Debt ‘Term Loan Original Issue Discount Deferred Cash Payment Obligations Total Debt Net Debt (Total Debt - Cash and CE) Equity Market Capitalization Enterpri
Slide 18: Free Cash Flow Analysis
Free Cash FlowAnalysis ‘Adjusted EBITDA Capex Product development Proceeds from asset sales Other Change in working capital Unleveraged free cash flow Cashinterest Taxes Leveraged free cash flow Reconciliation ta GAAP cash flow: Net cash from (used) in operating activities Net cash from (used) in in
Slide 19: Financial Outlook & Executive Summary
Financial Outlook & Executive Summary
Slide 20: CY14 / SY14 Comparative Info and CY15 Outlook
CY14/ SY14 Comparative Info and CY15 Outlook (| School Specialty. Management indicates upside to prior guidance given on SY15 1Q Update Total Revenues $488.6 Gross Profit $182.2 [ePDsé. 37.3%] Total SGRAT $1565 [Expensesas a 95 of Revenues 32.086] Operating Income (Loss) 925.7 Net Income (Loss) Adju
Slide 21: Safe Harbor Statement / Non-GAAP Financial Information
Safe Harbor Statement/ Le / School Non-GAAP Financial Information (| Specialty. 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 heading “Fin
Slide 22: 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