Scholastic Corporation · NASDAQ:SCHL
Scholastic — Q1 FY2010 Earnings Presentation
13 slides from Scholastic's earnings presentation, Sep 24, 2009
Slide 1: Fiscal 2010 First Quarter Earnings Presentation
Fiscal 2010 First Quarter Earnings Presentation September 24, 2009 1
Slide 2: Forward-Looking Statements
Forward--Looking Statements Forward This presentation contains certain forward-looking statements, which 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 those markets and oth
Slide 3: Dick Robinson, Chief Executive Officer, President and Chairman
Dick Robinson Chief Executive Officer, President and Chairman 3
Slide 4: Educational Publishing
Educational Publishing Record sales and $20M increase in operating income in seasonally most important quarter Over $35M / 50% increase in sales of educational technology – Strong execution, new products and adoptions, arrival of Federal stimulus funds in local districts Paperback collections and cl
Slide 5: Children's Books
Children’s Books Multiple bestsellers in Trade – Harry Potter and the Deathly Hallows paperback (July 7) – The 39 Clues® book five, and prior titles – The Hunger Games and Catching Fire by Suzanne Collins Clubs and Fairs positioned for modest growth and improved margins – Pricing increases in select
Slide 6: Maureen O'Connell, Executive Vice President, CAO and CFO
Maureen O’Connell Executive Vice President, Chief Administrative Officer and Chief Financial Officer 6
Slide 7: Cost Savings and Overheads
Cost Savings and Overheads Lower salary expense following last year’s reductions Completed consolidation of Fair regions from 14 to 7 Consolidated IT and e-commerce operations Lower spending on outside services, travel and entertainment 7
Slide 8: Reclassified Segment Results (FY09)
Reclassified Segment Results (FY09) $M 1Q09 2Q09 3Q09 4Q09 FY09 Children’s Book Publishing and Distribution Revenue Book Clubs 8.8 160.4 92.1 79.6 340.9 Book Fairs 12.6 180.5 78.4 144.3 415.8 Trade1 39.7 52.0 58.2 33.8 183.7 Total revenue 61.1 392.9 228.7 257.7 940.4 Operating income (loss) (54.6) 1
Slide 9: Reclassified Segment Results (FY08)
Reclassified Segment Results (FY08) $M 1Q08 2Q08 3Q08 4Q08 FY08 Children’s Book Publishing and Distribution Revenue Book Clubs 10.1 159.9 96.0 80.5 346.5 Book Fairs 10.6 180.8 80.8 149.8 422.0 Trade1 275.8 57.0 46.6 39.6 419.0 Total revenue 296.5 397.7 223.4 269.9 1,187.5 Operating income 14.0 117.2
Slide 10: Income Statement
Income Statement $M (except per share) 1Q10 1Q09 Revenue $315.6 $276.4 Cost of goods sold 156.1 146.0 Selling, general and administrative expenses 178.0 175.9 Bad debt expense 2.1 1.1 Depreciation and amortization 14.7 15.7 Total operating costs and expenses 350.9 338.7 Operating income (loss) from
Slide 11: Free Cash Flow and Balance Sheet
Free Cash Flow and Balance Sheet ($M) Aug 31, 2009 Aug 31, 2008 Free cash flow (3 month period)1 ($77.5) ($162.7) Accounts receivable, net 228.0 180.4 Inventories 435.0 471.0 Accounts payable 167.2 134.2 5% Notes Payable (2013) 152.1 159.3 $200M Amortizing Term-Loan (2012) 125.1 167.9 $325M credit a
Slide 12: Outlook
Outlook Affirming FY10 outlook for continuing operations: Revenue $1.8 to $1.9 billion Earnings per diluted share1 $1.80 to $2.30 Free cash flow $90 to $120 million 1Excludes severance and other one-time cash and non-cash expenses associated with anticipated cost reductions. 12
Slide 13: Questions & Answers
Questions & Answers Participants Richard Robinson Maureen O’Connell Ellie Berger, Scholastic Trade Publishing Deborah Forte, Scholastic Media Margery Mayer, Scholastic Education Judy Newman, Scholastic Book Clubs Hugh Roome, Scholastic International 13