Scholastic Corporation · NASDAQ:SCHL
Scholastic — Q3 FY2023 Earnings Presentation
16 slides from Scholastic's earnings presentation, Mar 23, 2023
Slide 1: Third Quarter FY 2023 Earnings Call Presentation
ADD COVER IMAGE HERE Third Quarter FY 2023 Earnings Call Presentation Thursday, March 23, 2023
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: Third Quarter FY 2023
Third Quarter FY 2023 • Lower results in seasonally small Q3 reflect continuing near-term market headwinds: soft retail bookselling market and longer education selling cycles • Updated FY23 guidance based on Q3 results and current outlook for seasonally important Q4 • Steps taken to align short-term
Slide 5: Children's Book Publishing & Distribution
Children’s Book Publishing & Distribution • Segment revenue grew 1%, outperforming overall children’s book market • Book Fairs revenues up $27.5M (36%) with higher fair count and revenue per fair, demonstrating unique value proposition of Scholastic school channels ADD IMAGE HERE; FULL WIDTH AND • B
Slide 6: Education Solutions
Education Solutions • Q3 sales down 9%, reflecting longer selling cycles that delay sales into Q4 and fiscal 2024 • Sales of supplemental print programs and collections impacted ADD IMAGE HERE; • Revenues from our state-sponsored programs FULL WIDTH AND remained solid against a big prior-year compar
Slide 7: International
International • Revenues decreased 18% in local currency, partly driven by the exit of unprofitable direct-to-consumer business in Asia in Q1 • Results most impacted by challenging market conditions and lower Trade sales in Canada, the UK ADD IMAGE HERE; and Australia FULL WIDTH AND HEIGHT OF GREY B
Slide 8: Capital Allocation
Capital Allocation • Continued commitment to deploying capital for strategy growth, maintaining a strong balance sheet and returning excess cash to shareholders • Over $53M returned to shareholders in Q3, through increased dividend and expanded open market share repurchases, reflecting optimism in l
Slide 9: Outlook
Outlook • Revised FY23 guidance based on Q3 results and updated outlook for seasonally important Q4, both impacted by short-term headwinds in retail bookselling and U.S. educational materials markets • Revenue growth of approximately 4% (previously 8% to 10%) • Adjusted EBITDA of $175M to $185M (pre
Slide 10: Kenneth Cleary
Kenneth Cleary Chief Financial Officer 10
Slide 11: Q3 FY23 Adjusted EBITDA
Q3 FY23 Adjusted EBITDA Three Months Ended Nine Months Ended In $ Millions 2/28/2023 2/28/2022 2/28/2023 2/28/2022 Earnings (loss) before income taxes as reported $ (26.2) $ (19.8) $ 16.8 $ 36.0 One-time items before income taxes — 2.8 — (6.7) Earnings (loss) before income taxes excluding one-time i
Slide 12: Q3 FY23 Balance Sheet Items and Cash Flow
Q3 FY23 Balance Sheet Items and Cash Flow February 28, February 28, In $ Millions 2023 2022 Free cash flow (use) (3 month period ending) (1) $ (11.9) $ 23.4 Free cash flow (use) (9 month period ending) (1) $ (25.7) $ 147.9 Accounts receivable, net $ 261.7 $ 287.7 Inventories, net $ 367.5 $ 299.4 Acc
Slide 13: Q3 FY23 Segment Revenues
Q3 FY23 Segment Revenues Three months ended Nine months ended In $ Millions 2/28/2023 2/28/2022 Change 2/28/2023 2/28/2022 Change Book Clubs $ 27.7 $ 40.5 $ (12.8) (32) % $ 91.6 $ 99.2 $ (7.6) (8)% Book Fairs 103.5 76.0 27.5 36 % 372.6 268.2 104.4 39 % Consolidated Trade 72.8 84.5 (11.7) (14) % 282.
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: Q3 FY23 Earnings (before and after one-time items)
Q3 FY23 Earnings (before and after one-time items) In $ Millions (except per share) Third Quarter 2023 Third 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-Time