Scholastic Corporation · NASDAQ:SCHL
Scholastic — FY2017 Earnings Presentation
21 slides from Scholastic's earnings presentation, Jul 20, 2017
Slide 1: Fourth Quarter and Fiscal Year 2017 Earnings Presentation
FOURTH QUARTER AND FISCAL YEAR 2017 EARNINGS PRESENTATION July 20, 2017
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: Dick Robinson, Chief Executive Officer, President and Chairman
Dick Robinson Chief Executive Officer, President and Chairman 4
Slide 5: Fiscal 2017 Highlights
Fiscal 2017 Highlights • Solid 2017 with strong Trade publishing and market share growth in Education • Harry Potter and the Cursed Child, Parts One and Two – the year’s best selling book across all genres • Revenues +4% to $1.74 billion; +5% excluding foreign exchange • Full year operating margins
Slide 6: Scholastic 2020
Scholastic 2020 • A three‐year plan to drive future growth and profitability as we approach our 100th Anniversary in October 2020 • Reduce operating costs by simplifying business processes • Expand revenue opportunities with more targeted marketing and sales initiatives • Lower technology costs thro
Slide 7: Scholastic Reach in Schools
Scholastic Reach in Schools 7
Slide 8: Key Business Overview - Education
Key Business Overview - Education Education • Executing strategy to deliver a complete Pre‐K to 6 core literacy program to districts and schools – expanding opportunities beyond historical focus on supplemental materials • Substantially expanded curriculum publishing programs, field organization and
Slide 9: Key Business Overview – Children’s Books
Key Business Overview – Children’s Books Children’s Book Publishing and Distribution • Improving Book Fairs revenue per fair in most profitable segments by using more robust business analytics to right‐size fair types and target growth opportunities in higher demographic markets • Simplified Book Cl
Slide 10: Key Business Overview – International
Key Business Overview – International International • No new Harry Potter titles in Canada or Export, but expect increased growth in Asia as we strengthen our management and sales teams • Greater emphasis on expanding our international education business in both mature and emerging markets with key
Slide 11: Real Estate Update
Real Estate Update • New workspace redefines Scholastic and complements the Scholastic 2020 plan • Bright office environment, new technology, refreshed feeling to the workspace – will bring most of NY‐ based staff together in one building upon completion in December • Completing agreement with LVMH’
Slide 12: Maureen O’Connell, EVP, Chief Administrative Officer and CFO
Maureen O’Connell Executive Vice President, Chief Administrative Officer and CFO 12
Slide 13: Income Statement
Income Statement In $ Millions (except per share) Fourth Quarter 2017 Fourth Quarter 2016 Fiscal Year to Date 2017 Fiscal Year to Date 2016 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 Ite
Slide 14: Segment Results
Segment Results Fourth Quarter 2017 Fourth Quarter 2016 Fiscal Year to Date 2017 Fiscal Year to Date 2016 In $ Millions (except per share) 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 Item
Slide 15: Capital Investment Update
Capital Investment Update • FY2017 Capital Expenditures included: • $30.6 million for strategic technology upgrades and initiatives as part of our multi‐ year transformational technology investment program • $20.6 million to redesign and commence upgrades on our headquarters building (of the two‐yea
Slide 16: Free Cash Flow & Net Debt
Free Cash Flow & Net Debt In $ Millions May 31, 2017 May 31, 2016 Free cash flow (use) (3 month period ending)1 ($9.5) $52.1 Free cash flow (use) (12 month period ending)1 $48.8 ($139.7) Accounts receivable, net $199.2 $196.3 Inventories, net $282.5 $271.2 Accounts payable $141.3 $138.2 Accrued roya
Slide 17: Fiscal 2018 Overview
Fiscal 2018 Overview • Scholastic 2020 will align our investments in strategic technology, facilities, people and content, and will create a performance management structure and system for change that will drive higher revenues and reduce costs in 2019, 2020 and 2021 • Projecting lower operating inc
Slide 18: Fiscal 2018 Outlook
Fiscal 2018 Outlook Metric Guidance Revenue $1.65 ‐ $1.7 billion Earnings from Continuing Operations 1 $1.20 ‐ $1.30 per diluted share Free Cash Use $10 ‐ $20 million Capital Expenditures $90 ‐ $100 million Prepublication/Production Spending $30 ‐ $40 million 1. Outlook for EPS and operating income
Slide 19: Fiscal 2018 Outlook – Key Elements
Fiscal 2018 Outlook – Key Elements • Children’s Books • Trade revenue return to more normal levels after strong 2017 Harry Potter performance • Exciting market opportunities with Harry Potter’s 20th anniversary in the fall of 2018 • Expect low‐ to mid‐single digit revenue growth in clubs and fairs •
Slide 20: Questions & Answers
Questions & Answers Participants • Richard Robinson • Maureen O’Connell • Judy Newman, School Book Clubs and E‐Commerce 20
Slide 21: RBASCHOLASTIC
RBASCHOLASTIC