Slide 1: School Specialty, Inc. Fiscal 2014 First Quarter Update
School Specialty, Inc. Fiscal 2014 First Quarter Update September 19, 2013
Slide 2: Safe Harbor Statement/Non-GAAP
Safe Harbor Statement/Non-GAAP Be Safe Harbor Statement This presentation contains statements about future financial conditions, results of operations, expectations, plans, or prospects, including the information in the heading “FY14 Financial Outlook”, that constitute forward-looking statements. Fo
Slide 3: Fiscal 2014 — 1Q Corporate
Fiscal 2014 — 1Q Corporate June 2013 + Successful emergence from Chapter 11 with new financing and significant new equity investment — New ownership and financing facilities — Improved capital position with stronger balance sheet — New equity investment in the form of equitization of DIP term loan u
Slide 4: Emergence from Chapter 11
Emergence from Chapter 1 + Courtapproved plan of reorganization on May 23, 2013 + Completed financial restructuring and emerged from Chapter 11 on June 11, 2013 + Company raises $320 million in exit financing — 5-year $175 million Asset Based Loan led by Bank of America, N.A. and SunTrust Bank — 6-y
Slide 5: Jim Henderson replaces Michael Lavelle as Interim President and CEO
+ Jim Henderson, Chairman of the Board, replaces Michael Lavelle as Interim President and CEO — Appointed by SSI Board of Directors - Significant financial, operational and turnaround expertise — Former COO, CFO and CEO of both public and private companies — Previously a Managing Director and operat
Slide 6: Process Improvement Program
Process Improvement Prog Board of Directors has conducted operational assessment with support of Synergetics Worldwide Program reviewed and approved — officially commenced in September 2013 Project Management Office and Steering Committees formed (led by Jim Henderson) Intendedto drive operational p
Slide 7: Consolidated Combined Statement of Operations
Consolidated Combined State In Thousands, Except Per Share Amounts Unaudited / Non-GAAP Successor Predecessor ‘Non-GAAP Predecessor ‘Company ‘Company Combined ‘Company Seven Weeks Ended Six Weeks Ended Three MonthsEnded Three Months Ended Tuly 27,2013 June 11,2013 July 27,2013 July 28, 2012 Revenues
Slide 8: Adjusted EBITDA Comparison
Adjusted EBITDA Compariso In Thousands, Except Per Share Amounts Unaudited /Non-GAAP Adjusted Earnings before interest, taxes, depreciation, amortization, banr uptcy-related restructuring and impairment charges (EBITDA) reconciliation: Net income Equity in (ncome)losses of unconsolidated affiliate P
Slide 9: FY14 1Q Results Review
FY14 1Q Results Review Combinedrevenue of $202.2 million, down $49.9 million or $19.8% YoY — However, additional $22 million of orders received in Q1 were shifted into Q2 — Order flow and bookings tempo have increased during Q2 — Q1 revenues were -13% vs. forecast due to issues described above, Q2 r
Slide 10: Condensed Consolidated Balance Sheet
Condensed Consolidated In Thousands, Except Per Share Data ASSETS Current assets: Cash and cash equivalents Restricted cash. Accounts receivable, less allowance for doubtful accounts of $2,176, $926 and $2,597, respectively Inventories Defened catalog costs Prepaid expenses and other current assets
Slide 11: Liabilities and Stockholders' Equity (Deficit)
In Thousands, Except Per Share Data LIABILITIES AND STOCKHOLDERS’ EQUITY DEFICIT) (Curvent tabuities: ‘Current maturities - long-term debe Accounts payable, Acenued compensation os vvvvvvvossvuvvvvssevvvnveversvone Deferred revenue. “Accrued fes for easly termination of long-tean debe Ouner accrued
Slide 12: Balance Sheet Review
Balance Sheet Review + Recapitalization has de-levered the Company with total debt down by approximately $160 million from year-end and approximately $150 million from Q1 last year + Successor company assets restated to fair value as of June 11, 2013 + ABLbalance of $60.8 million at end of Q1-14 ver
Slide 13: Consolidated Statement of Cash Flows
Slide 14: Process Improvement Program
Process Improvement Progra’ Companywide efficiency driven programs focused onprocesses Phasel: Phase ll: LEAN Process Implementations Product Management and S&OP Warehouse and Distribution Center Configuration SKU Rationalization Sales, Marketing and Merchandising Alignment SKU Rationalization (ongo
Slide 15: Operational Updates
Operational Updates + Distribution Center consolidation - Two distribution centers to be closed by December 2013 — Company to invest in Mansfield, OH operations with Greenville, WI providing surge capacity — Proximity to customers and key suppliers drive moves + Exiting of Commercial Printing operat
Slide 16: FY14 Financial Outlook
FY14 Financial Outlook Net revenues expected to be between $620 - $630 million; Business conditions improvingand revenuetracking in line with FY14 plan post-reorganization —- Core supplies business expectedto exceed forecast for first half and full year of Fiscal ‘14 Gross profit marginsto be compar
Slide 17: Top Corporate Priorities
Top Corporate Priorities ¥ Stabilize revenue ¥ Align organization and footprint to reflect current sales Y Drive sustainable and improved earnings and cash flow ¥ Put a foundation in place for long-term growth chool Bi Specialty
Slide 18: Get Back to Supporting our Trusted Brands
Get Back to Supporting our Trusted Brands C cpo) & science” — Abilitations& eran Projects ZALIFONE EducationEssentials. Om) Cuipcearr Ey CLASSROOM ul OBTION WORDLY WISE SELECT SUIENCE SYSTEM 3000 mcs
Slide 19: Investor Contacts
Investor Contacts: David N. Vander Ploeg Chief Financial Officer 920.882.5854 david.vanderploeg@schoolspecialty.com Glenn Wiener Investor Relations 920.243.5392 IR@schoolspecialty.com