Scholastic Corporation · NASDAQ:SCHL
Scholastic — Q3 FY2019 Earnings Presentation
18 slides from Scholastic's earnings presentation, Mar 21, 2019
Slide 1: Third Quarter FY 2019 Earnings Call Presentation
ADD COVER IMAGE HERE Third Quarter FY 2019 Earnings Call Presentation Wizarding World Publishing Rights © J.K. Rowling. March 21, 2019 Wizarding World characters, names, and related indicia are TM and © Warner Bros. Entertainment Inc. Art by Brian Selznick © 2018 by Scholastic Inc. All rights reserv
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 in thos
Slide 3: Regulation G
Regulation G Today’s comments include references to certain non-GAAP financial measures as defined in Regulation G. The reconciliation of these non-GAAP financial measures with the relevant GAAP financial information and other information required by Regulation G is provided in the Company’s earning
Slide 4: Richard Robinson
Richard Robinson Chairman, President and Chief Executive Officer
Slide 5: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights • Third quarter sales increased by $15.4 million, up 4% higher year-over-year • Year-to-date, revenues are up $51 million, up 5%, primarily driven by outstanding trade publishing results worldwide ADD IMAGE HERE; FULL WIDTH AND • Led by strong front- and backlist trade
Slide 6: Children's Book Publishing & Distribution
Children’s Book Publishing & Distribution • 8% gain overall and a 25% gain in trade • Branded series continue to top children’s bestsellers: Dog Man, Wings of Fire, Owl Diaries, and The Baby-Sitters Club® – now a smash success in graphic novel format ADD IMAGE HERE; FULL WIDTH AND • Evergreen Cliffo
Slide 7: Education
Education • Scholastic Literacy customer presentations have begun; very positive response and already a finalist in several district reading adoptions • Comprehensive curriculum product builds on guided reading ADD IMAGE HERE; techniques and collections of motivational authentic text, FULL WIDTH AND
Slide 8: International
International • Revenues continue to track ahead of prior year before impact of currency • Strong trade publishing globally ADD IMAGE HERE; • Strong performance in multiple distribution channels in China FULL WIDTH AND HEIGHT OF GREY BOX • Distribution channels and growing list of digital offerings
Slide 9: Third Quarter 2019 Highlights, cont'd
Third Quarter 2019 Highlights, cont’d • Kids & Family Reading Report: 7th Edition launched this week; voices strong support from families for reading and calls on us all to support both reading aloud and independent reading • Refreshed summer reading program to launch in Q4 to engage ADD IMAGE HERE;
Slide 10: Kenneth Cleary
Kenneth Cleary Chief Financial Officer
Slide 11: ASC 606 Modified Adoption
ASC 606 Modified Adoption • The new guidelines require us to defer certain revenues associated mainly with our book fairs incentive program; it also requires us to recognize, as a current period expense, certain previously capitalized direct expenses • Net impact in quarter was an incremental of $9.
Slide 12: Income Statement
Income Statement In $ Millions (except per share) Third Quarter 2019 Third Quarter 2018 Fiscal Year to Date 2019 Fiscal Year to Date 2018 As One-Time Excluding As One-Time Excluding As One-Time Excluding As One-Time Excluding Reported Items One-Time Items Reported Items One-Time Items Reported Items
Slide 13: Adjusted EBITDA
Adjusted EBITDA Three Months Ended Nine Months Ended 2/28/2019 2/28/2018 2/28/2019 2/28/2018 Earnings (loss) before income taxes as reported ($20.8) ($63.3) ($5.8) ($73.2) One-time items before income taxes 2.7 44.3 7.9 71.7 Earnings (loss) before income taxes excluding one-time items (18.1) (19.0)
Slide 14: Segment Results
Segment Results Third Quarter 2019 Third Quarter 2018 Fiscal Year to Date 2019 Fiscal Year to Date 2018 As One-Time Excluding As One-Time Excluding As One-Time Excluding As One-Time Excluding Reported Items One-Time Items Reported Items One-Time Items Reported Items One-Time Items Reported Items One
Slide 15: Selected Balance Sheet, Free Cash Flow & Net Debt
Selected Balance Sheet, Free Cash Flow & Net Debt In $ Millions Feb 28, 2019 Feb 28, 2018 1 Free cash flow (use) (3 month period ending) ($10.4) ($9.6) Free cash flow (use) (9 month period ending) 1 ($42.8) ($49.9) Accounts receivable, net $317.3 $186.0 Inventories, net $356.8 $356.9 Accounts payabl
Slide 16: Fiscal 2019 Outlook
Fiscal 2019 Outlook Revenues $1.65–$1.70 billion Adjusted EBITDA 1 $160–$170 million EPS, excluding one-times ≈ $1.60 per share Capital expenditures ≈ $80 million 1. Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time items, before interest, taxes, depreciation and amort
Slide 17: Question & Answer
Question & Answer Participants • Richard Robinson • Kenneth Cleary 17
Slide 18: Slide 18