This replay will be available until 5 pm ET April 2, 2003.
New York, NY (March 18, 2003) -- Scholastic Corporation (NASDAQ: SCHL) today announced results for the third fiscal quarter ended February 28, 2003. Revenue was $433.7 million as compared to $432.7 million in the year-ago quarter, operating income was $3.9 million as compared to $26.6 million, and net loss was $0.5 million, or ($0.01) per diluted share, as compared to net income of $11.9 million, or $0.31 per diluted share.
Profit declined as compared to the year-ago quarter, principally due to a change in the revenue mix. The current-year quarter also included approximately $13 million in incremental revenue from prior year acquisitions and a $2.9 million pre-tax gain from the previously disclosed sale of an interest in a French publisher. The prior year quarter included a benefit to operating income, resulting from a refinement of the Companys estimate of bad debt reserves to reflect better than anticipated credit performance, equal to pre-tax $6.1 million, with an impact of $0.10 per diluted share. The third quarter is Scholastics second smallest revenue and profit period.
In a continuing tough environment, we are taking aggressive steps to reduce discretionary spending and other costs and to improve revenues in our core businesses, said Richard Robinson, Chairman, President, and CEO. New marketing programs this Spring will support our School Book Club and Education businesses, and our Trade channel should benefit from marketing activities leading up to the June 21st publication of Harry Potter and The Order of The Phoenix. Based on high pre-publication demand for the book, we are ordering a second printing of 1.7 million books, bringing our total print run to 8.5 million copies. Given the announcement Monday night of the high likelihood of an Iraqi war and continued economic weakness, we are staying with our range for the year of $1.85 to $2.15.
Third Quarter Analysis Childrens Book Publishing & Distribution Revenue was $269.2 million, as compared to $269.0 million in the year-ago quarter. Current year Trade revenue declined $10.8 million due to lower Harry Potter backlist sales and the disappointing holiday season for booksellers. Trade revenue included approximately $8 million of revenue from the April 2002 Klutz acquisition. School Book Club revenue declined 4% or $4.2 million, while Continuities revenue improved 16% or $10.3 million and School Book Fair revenue grew 8% or $4.7 million.
Educational Publishing Revenue was $64.3 million as compared to $61.1 million in the year-ago quarter. Curriculum publishing revenue increased approximately $3 million due to the continued success of the READ 180 reading intervention program, while revenues for other Educational businesses were nearly level with last year.
InternationalGroningen luxury hotels Revenue was $70.1 million as compared to $70.4 million in the year-ago quarter, as the loss of revenue from certain discontinued unprofitable operations in Canada and the UK and a decline in higher margin exports were largely offset by favorable currency exchange rates.
Media, Licensing and Advertising Revenue was $30.1 million as compared to $32.2 million last year due to lower software and licensing revenues.
Nine-Month Fiscal 2003 Results Revenue for the nine months ended February 28, 2003 was $1,400.9 million as compared to $1,376.0 million in the year-ago period, with net income at $29.9 million, or $0.74 per diluted share, as compared to last years $41.5 million, or $1.09 per diluted share. Net income in the first quarter of Fiscal 2003 included an after-tax, one-time charge of $1.2 million, or $0.03 per diluted share, from the settlement of a 1997 lawsuit. Net income in the first quarter of Fiscal 2002 included an after-tax charge of $5.2 million, or $0.13 per diluted share, from a change in accounting due to the adoption of SOP 00-2, Accounting by Producers and Distributors of Films.
Conference Call Scholastic will discuss this news release in a conference call tomorrow (March 19, 2003) at 8 AM Eastern. To participate, call 973-935-8510 or 888-338-6461. Slides can be viewed at the Investor Relations section of
www.scholastic.com. After 11 AM tomorrow and until April 2, 2003, a replay of the slides and audio will be available at
www.scholastic.com/aboutscholastic/investor/index.htm and a replay of the audio will be available 877-519-4471 (use PIN Number 3793349).
About Scholastic Scholastic is the world's largest publisher and distributor of children's books. Scholastic creates quality educational and entertaining materials and products for use in school and at home, including children's books, textbooks, magazines, technology-based products, teacher materials, television programming, videos and toys. The Company distributes its products and services through a variety of channels, including: proprietary school-based book clubs, school-based book fairs, and direct-to-home continuity programs; retail stores, schools, libraries, and television networks; and the Company's
www.scholastic.com Internet site.
Forward-Looking Statements This news release contains certain forward-looking statements. Such forward-looking statements are subject to various risks and uncertainties including the conditions of the children's book and educational materials markets and acceptance of the Company's products within those markets and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.
Click here to view the Consolidated Statement of Operations (This file is in PDF format, which requires Adobe Acrobat Reader software. If you do not have this software already installed,
click here to download it for free from Adobe.).
For further financial information contact:
Scholastic Inc.
Investor Relations
557 Broadway
New York, NY 10012-3999
Phone: 212-343-6741
Fax: 212-343-6933
E-Mail: investor_relations@scholastic.com
About Scholastic
Scholastic (NMS: SCHL) is the world's largest publisher and distributor of children's books. As a global children's publishing and media company serving the needs of parents, teachers, and children, Scholastic provides proprietary book and software distribution through school book clubs, school book fairs and to classrooms, as well as through the retail trade. Since 1920, Scholastic has created quality educational materials for schools and has expanded its reach to include the distribution of books, software, toys, online learning services and television programming directly to the home. Scholastic is the leading print and online publisher of children's reference materials and the leader in children's direct-to-home book clubs. Internationally, Scholastic operates wholly owned companies in Argentina, Australia, Canada, Hong Kong, India, Indonesia, Ireland, Malaysia, Mexico, New Zealand, The Philippines, Singapore, Taiwan, Thailand and the United Kingdom. The U.S. Scholastic web site http://www.scholastic.com is a leading provider of educational services online for parents, teachers and children.
Important Disclaimer: The links to the United States Securities and Exchange Commission (SEC) and its EDGAR files take you to databases that are NOT maintained by Scholastic Corporation. Scholastic Corporation is not responsible for any inaccuracies or other errors contained therein.
