Slide 1: FY15: Fourth Quarter and Year-end Financial Update
School Specialty. b FY15: Fourth Quarter and Year-end Financial Update
Slide 2: Introduction
Introduction LEAD with oy Mission Statement To discover, develop and deliver innovative products, programs and services that help our customers create a better and more prepared tomorrow. Vision Statement To create the leading customer focused distributor of innovative and proprietary products, prog
Slide 3: School Specialty — A Historical Perspective
School Specialty — A Historical Perspective (Ss in millions) $1.200 $1.000 $0.800 $0.600 $0.400 $0.200 $0.000 $140.000 $120.000 $100,000 $80.000 $60.000 $40.000 $20.000 $0,000 Revenues ‘31.098 $1,058 ‘SBO7HT | $732M Fyos FYO9 FY10 FY11 FY12 ‘8675M I ] | Fyi3. FY14FYI5 Adjusted EBITDA $136M S117M ‘S1
Slide 4: Enhancements to Drive Performance and Shareholder Value
Enhancements to Drive Performance and Shareholder Value e Transformation Executedin FY15 New Leadership Team / Removal of Business Silos and Creation of One-SSI Model / Right sizing Initiatives Operations, Merchandising & Customer Care New operations management team put in place Investments made to
Slide 5: Other New, Key Management; Creation of One Senior Leadership Team
oooooo ooo Other New, Key Management P: Creation of One Senior Leadership Team (With a Stronger Team Approach Across Each Function Area) ip Team of School Specialty Driving Change Joseph Yorio appointed President and Chief Executive Officer in April 2014 Ryan Bohr appointed EVP and Chief Financial O
Slide 6: Consolidated vision improves collaboration and drives clear accountability
Consolidated vision improves collaboration and drives clear accountability Joe Yorio, President and CEO eee ee) ¥ ¥ ¥ ¥ Ee eee een Ryan Bohr, CFO — Financial Controls, Budgets & Capital Spending , Business Analytics and IT Operations Distribution Sales Distribution Mktg Human Resources DC's/Warehous
Slide 7: Impact of Restructuring Initiatives
Impact of Restructuring Initiatives Initiatives presented in October 2014 Expected results of ives FY'15E PF annual FY'15E PF annual @ Desc! yn savings impact Description savings impact Sales right | = Reduction in sales force of ~50 = Reduced sales force by ~50 ang individuals relatedto new sales p
Slide 8: Driving Growth — Refocus on Historical Strengths
Driving Growth — Refocus on Historical Strengths Early Childhood Art Supplies Furniture & the 215 Century Classroom EPS & Instructional Solutions Physical Education Franchise areas where SSI has well-recognized and trusted brands; strategies in placeto re-establish market leadership and drive growth
Slide 9: Driving Growth — Expansion in New and Adjacent Markets
Driving Growth — Expansion in New and Adjacent Markets E-Tail & Retail Office Products Public & Private Camp Sector Health Care Nursery Schools & Day Care Centers Higher Education FY15 & SY15 — Laying the Foundation for Growth Q Growing partnerships with e-tailers and retailers including DonorsChoos
Slide 10: FY15 Financial Review
Y School Specialty. FY15 Financial Review
Slide 11: Fiscal 2015 Fourth Quarter Financial Highlights
Fiscal 2015 Fourth Quarter Financial Highlights Fiscal Year 2015 — Stabilization, Development of Growth Plans and Better Allocation of Capital Resources 5 Revenues of $106.0 million vs. $108.3 million, down $2.3 million or 2.1% 5 Distribution segment revenues of $89.2 million vs. $89.7 million, cons
Slide 12: Fiscal 2015 Year-end Financial Highlights
a 0 a a Fiscal 2015 Year-end Financial Highlights Fiscal Year 2015 — Stabilization, Development of Growth Plans and Better Allocation of Capital Resources Revenues of $621.9 million vs. $630.7 million, down $8.8 million or 1.4% (prior year includes $4.3 million of discontinued print plant revenue wi
Slide 13: Fiscal 2015 Fourth Quarter and Full Year Business Segment Review
oooooodg (}inciudes $23milion of Print Plant revenue which was soln FYI4 Fiscal 2015 Fourth Quarter and Full Year Business Segment Review ‘Supplies 35981 97,189 35,521 «53,38—-269,830 Supplies 782 98,839 33,935 54882 274,438 Furniture 38033 65,957 22.432 20,278 146,698 Furniture 34276 68,750 19,189
Slide 14: Consolidated Combined Statement of Operations
Consolidated Combined Statement of Operations a SCHOOL SPECIALTY. INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Qa Thousands, Except Per Share Amounts) Predecessor Successor Company Successor Company Company __NowGAAP Combined ‘ThreeMonths Taree Mout Twelw Mouths Fomy-Sin Weeks |
Slide 15: Adjusted EBITDA Comparisons
Adjusted EBITDA Comparisons Successor Successor Company Company __Non-GAAP Combined Three Months Three Months ‘Twelve Months Ended Ended Ended ‘Twelve Months Ended April 25.2015 _ April 26,2014 __April 25.2015 __April 26,2014 Adjusted Earnings before interest, taxes, depreciation, ‘amortization, ban
Slide 16: Balance Sheet Review
School Specialty. Y Balance Sheet Review
Slide 17: Balance Sheet Review
Balance Sheet Review ee ,,r——— Key Highlights as of April 25, 2015 ion and $10.6 5 Outstanding ABL facility balance was $24.2 jon as of Ay 25, 2015 and April 26, 2014, respectively 5 Excess availability of $51.6 mi \n at FYE; expected to increase di 1g the peak season 5 Outstanding gross balance on
Slide 18: Consolidated Balance Sheet Comparison
Consolidated Balance Sheet Comparison ee SCHOOL SPECIALTY, INC. ‘CONSOLIDATED BALANCE SHEETS (in Thousands, Except Share Data) Successor Company April2s, | April 26, 2018 2014 ASSETS (Cument assets Cash and cash equivalents Ss so. | $ 9,008 Accounts receivable, less allowance for doubtful accounts o
Slide 19: Consolidated Balance Sheet Comparison (Cont'd)
Consolidated Balance Sheet Comparison (Cont’d) EE SCHOOL SPECIALTY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in Thousands, Except Share Data) LIABILITIES AND STOCKHOLDERS’ EQUITY Cumrent liabilities: Cumrent maturities of ong-tem debt S 12388 Accounts payable. 2977 Accrued compensatio
Slide 20: Working Capital Analysis — FY15 vs. FY14
Working Capital Analysis — FY15 vs. FY14 gt O20 QR Qt 2 QR ga O20 OR Accounts Receivable 1358 1180 568 587 1389 1222 560 626 Ga 42) 08 9) Inventories 109.7 701 813 969 1049 677-732 984 48 24 81 35 Prepaidexpense andother currentassets 19.2165 «189159 27 Wl 137 180 (75) 24522) Accounts Payable 534363
Slide 21: Direct Free Cash Flow Analysis
Direct Free Cash Flow Analysis Nn ao SCHOOL SPECIALTY, INC. ‘CONSOLIDATED DIRECT FREE CASH FLOW (in Thousands) Adjusted EBITDA $ 40127 $ 42560 Capex (10,732) (12293) Productdevelopment (6.649) (6329) Proceeds romasset sales 1813 1511 Other (17,068) (4460) Change in working capital (2.675) 6344 Unlev
Slide 22: Financial Outlook / Investment Considerations
School Specialty. h Financial Outlook Investment Considerations
Slide 23: Transitioning from Fiscal Year to Calendar Year
Transitioning from Fiscal Year to Calendar Year ($51 officially changed Fiscal Year reporting cycle (from last Saturday in April to last Saturday in December) Better aligned with the Company's catalog and merchandi ing planning processes and the related development of sales plans; core catalogs drop
Slide 24: Core Objectives for the Short Year (2015)
Core Objectives for the Short Year (2015) Address the causal factors of multi-year declines in product categories that have traditionally represented areas of strength for the Company © Restore category expertise in sales © Improve merchandising and better align marketing activities with growth obje
Slide 25: Core Objectives for the Short Year (2015) — Cont'd
Core Objectives for the Short Year (2015) — Cont’d 5 Continue to drive productivity enhancements in operations, supply chain and customer care 5 Continue to realize efficiencies in labor utilization 1 Keyareas of further opportunity include: transportation management; supply chain pricing; and vendo
Slide 26: CY14 / SY14 Comparative Info and CY15 Outlook
CY14 / SY14 Comparative Info and CY15 Outlook BE Total Revenues $622.7 $488.6 Gross Profit $234.1 $182.2 [GPMg% 37.6% 373% Total SGRA* $224.1 31565 Expenses as a % of Revenues 36.0% 32.0% Operating Income (Loss) $10.0 $25.7 Net Income (Loss) ($25.8) S14 Adjusted EBITDA $38.3 $46.0 Net Unleveraged FC
Slide 27: Positioning for the Future: Investment Considerations
Positioning for the Future: Investment Considerations Large and stable addressable market with favorable growth outlook Positive Trends in Education End Markets Attractive financial profile with Ialeder a hihivcne tea high visibility - strong operating ; leverage and free cash flow 5o/ industry Sign
Slide 28: Safe Harbor Statement/Non-GAAP Financial Information
Safe Harbor Statement/Non-GAAP Financial Information ‘Safe Harbor Statement This presentation contains statements about School Specialty’s future financial conditions, results of operations, expectations, plans, orprospects, including the information underthe heading, “Financial Outlook/investment C
Slide 29: 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 School u (| Specialty.