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Scholastic Reports Fiscal 2025 Third Quarter Results

Published

1 year ago

on

Over $35 Million Returned to Shareholders in Third Quarter; Share Repurchase Authorization Increased to $100 Million

Company Affirms Adjusted EBITDA Outlook at Low End of Range

NEW YORK, March 20, 2025 /PRNewswire/ — Scholastic Corporation (NASDAQ: SCHL), the global children’s publishing, education and media company, today reported financial results for the Company’s fiscal third quarter ended February 28, 2025.

Peter Warwick, President and Chief Executive Officer, said, “Scholastic achieved modest revenue growth and improved operating results in the third quarter. Despite increasing pressure on family and school spending on books and educational materials, strong performance by School Book Fairs and Clubs, successful new titles and the addition of 9 Story Media Group contributed to positive results, underscoring Scholastic’s unique strengths engaging kids with great books and quality children’s media.

“Scholastic’s winning record creating global children’s franchises continued last quarter. Dog Man: Big Jim Begins, the thirteenth book in Dav Pilkey’s global phenomenon, has been the top-selling book in the US and major English-speaking markets since its release in early December. Earlier this week Scholastic published the fifth book in Suzanne Collins’ bestselling Hunger Games® series, Sunrise on the Reaping, which is already topping some bestseller lists based on pre-orders. Last quarter Scholastic Entertainment also leveraged its new capabilities to greatly expand the distribution and monetization of the Company’s IP on YouTube, the dominant platform for kids’ media consumption. In February alone Scholastic’s branded channels drew almost 10 million views, up nearly 40 times from a year ago.

“The Education Solutions division was impacted by the continued slow-down in the supplemental curriculum market in the third quarter, but we remain encouraged by upcoming product launches. We have also begun a strategic review of this important and valuable business, as we explore options to optimize it for long-term success.

“Based on the intensifying spending pressure that we experienced last quarter and expect to continue into the fourth quarter, we forecast full-year Adjusted EBITDA at the low end of our fiscal 2025 guidance and more modest revenue growth year-over-year. We have taken a number of one-time and ongoing cost actions in response to these headwinds, as previously disclosed, benefiting both the current and next fiscal years. As we continue to focus on Scholastic’s long-term growth and profitability, we remain committed to our capital allocation priorities, expanding our share repurchase authorization to $100 million and after having returned over $35 million to shareholders through share repurchases and dividends last quarter.”

Outlook 

For fiscal year 2025, the Company has narrowed its outlook for Adjusted EBITDA (as defined in the accompanying tables) to approximately $140 million, from $140 million to $150 million previously. The Company now forecasts modest full-year revenue growth, compared to prior guidance of 4% to 6% growth.

Fiscal 2025 Q3 Review

In $ millions (except per share data)

Third Quarter

Change

Fiscal 2025

Fiscal 2024

$

%

Revenues

$

335.4

$

323.7

$

11.7

4 %

Operating income (loss)

$

(23.9)

$

(34.9)

$

11.0

32 %

Earnings (loss) before taxes

$

(28.4)

$

(34.6)

$

6.2

18 %

Diluted earnings (loss) per share

$

(0.13)

$

(0.91)

$

0.78

86 %

Operating income (loss), ex. one-time items *

$

(20.9)

$

(30.6)

$

9.7

32 %

Diluted earnings (loss) per share, ex. one-time items *

$

(0.05)

$

(0.80)

$

0.75

94 %

Adjusted EBITDA *

$

6.0

$

(7.2)

$

13.2

183 %

* Please refer to the non-GAAP financial tables attached

Revenues increased 4% to $335.4 million, reflecting the contribution of 9 Story Media Group, recorded in the Entertainment segment, and higher revenues in School Reading Events, partly offset by lower supplemental curriculum and collections product sales in Education Solutions.

Operating loss improved 32% to a loss of $23.9 million in the quarter compared to a loss of $34.9 million a year ago, including $3.0 million and $4.3 million in one-time charges in each period, respectively. Excluding one-time charges in both periods, operating loss improved $9.7 million. Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) increased 183% to $6.0 million. The improved seasonal loss primarily reflects a reduction in discretionary overhead expenses and higher revenues in the Children’s Book Publishing and Distribution segment, which more than offset the impact of lower sales in Education Solutions.

Quarterly Results 

Children’s Book Publishing and Distribution

In the fiscal third quarter, the Children’s Book Publishing and Distribution segment’s revenues increased 5% to $203.3 million.

Book Fairs revenues were $110.7 million, up 8% from the prior year period, reflecting a larger number of fall-season fairs occurring in December compared to the prior year period, which contributed to higher fair count in the quarter. Fair count remains on track to achieve 90,000 fairs in fiscal 2025. Revenue per fair was in-line with prior year.Book Clubs revenues were $15.2 million, up 14% from the prior year period, primarily reflecting higher order volumes and revenue per sponsor.Consolidated Trade revenues were $77.4 million, in line with the prior year period, primarily reflecting the strong performance of the global bestselling Dog Man® series, offset by lower backlist sales as increasing pressure on consumer spending led to softness in the retail book market. Fourth quarter revenues are expected to benefit from the March 2025 release of Sunrise on the Reaping, the fifth book in Suzanne Collins’ Hunger Games® series.

Segment operating income was $7.6 million, compared to $2.3 million a year ago, which included one-time charges of $0.5 million in the prior year period. Excluding one-time charges, adjusted operating loss improved by $4.8 million. The year-over-year increase was primarily driven by higher revenue in School Reading Events.

Education Solutions

Education Solutions revenues decreased 16% to $57.2 million, on lower sales driven by the continuing headwinds in the supplemental curriculum market. Segment operating loss was $6.9 million, compared to segment operating loss of $0.8 million in the prior period, reflecting lower segment revenues. The segment continues to invest in new products for release in the 2025/2026 school year.

Entertainment

Segment revenues were $12.8 million, primarily reflecting the addition of 9 Story Media Group. Segment operating loss was $3.9 million, which included one-time charges of $1.5 million, compared to $3.1 million in the prior year period, which included one-time charges of $3.0 million. Excluding one-time charges, adjusted segment operating loss increased $2.3 million. As part of the acquisition, the Company incurred $2.3 million of intangible amortization during the quarter. Excluding the amortization, operating loss was $0.1 million.

International

Excluding unfavorable foreign currency exchange of $2.7 million, International revenues increased 5% to $59.3 million, reflecting higher revenues in major markets. Segment operating loss was $2.1 million, which included one-time charges of $0.1 million, compared to a loss of $5.9 million in the prior year period. Excluding one-time charges, adjusted operating loss improved by $3.9 million, driven by higher revenues and operational efficiencies.

Overhead

Overhead costs were $18.6 million, which included one-time charges of $1.4 million, compared to $27.4 million in the prior year period, which included one-time charges of $0.8 million. Excluding one-time charges, adjusted overhead costs decreased $9.4 million driven by lower employee-related costs.

Capital Position and Liquidity 

In $ millions

Third Quarter

Change

Fiscal 2025

Fiscal 2024

$

%

Net cash (used) provided by operating activities

$

(12.0)

$

13.1

$

(25.1)

NM

Additions to property, plant and equipment and prepublication expenditures

(14.7)

(20.2)

5.5

27 %

Net borrowings (repayments) of film related obligations

(4.0)

—

(4.0)

NM

Free cash flow (use)*

$

(30.7)

$

(7.1)

$

(23.6)

NM

Net cash (debt)*

$

(189.4)

$

78.9

$

(268.3)

NM

NM – Not meaningful

* Please refer to the non-GAAP financial tables attached

Net cash used by operating activities was $12.0 million, compared to net cash provided of $13.1 million in the prior year period, primarily driven by lower customer remittances and higher interest payments, partly offset by lower taxes. Free cash use (a non-GAAP measure of operations explained in the accompanying tables) was $30.7 million in fiscal 2025, compared to free cash use of $7.1 million in the prior period.

Net debt was $189.4 million compared to a net cash position of $78.9 million in the prior year period, reflecting the Company’s borrowings under its recently upsized revolving credit facility to fund the acquisition of 9 Story Media Group. The Company believes its balance sheet provides significant flexibility, with modest debt and non-operating assets that could be monetized, if and when the Company chose to, market conditions permitting, in accordance with its capital allocation priorities.

The Company owns its headquarters building at 555 / 557 Broadway in Soho, New York City, with 355,000 square feet, of which 26,600 square feet is premium retail space that is currently under lease and is expected to generate $11.1 million in rental revenue in fiscal year 2026, based on currently held lease agreements. Of the remaining 328,400 square feet of Class A office space, 108,000 square feet are currently being marketed, as the Company consolidates its use of the building. Offsetting gains on any potential monetization transaction, the tax basis of the New York City headquarters reflects the purchase of 555 Broadway in 2014 for approximately $255 million and subsequent improvements, less accumulated depreciation.

In addition to the New York City headquarters building, the Company owns its distribution facilities, including three warehouses with 1,459,000 square feet of space and 162 acres of related land, situated in and around Jefferson City, MO. These facilities are approximately 70% utilized at the moment. The tax basis on this asset is low, reflecting many years of accumulated depreciation.

Consistent with its capital allocation priorities, the Company distributed $5.7 million in dividends and repurchased 1,450,274 shares of its common stock for $30.0 million in the third quarter.

The Company’s Board of Directors authorized an additional $53.4 million for repurchases of its common stock under the Company’s stock repurchase program increasing the authorization to $100 million. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions for the foreseeable future.

Fiscal Year-To-Date 2025 Review

In $ millions (except per share data)

Year-To-Date

Change

Fiscal 2025

Fiscal 2024

$

%

Revenues

$

1,117.2

$

1,114.8

$

2.4

0 %

Operating income (loss)

$

(37.7)

$

(32.7)

$

(5.0)

(15) %

Earnings (loss) before taxes

$

(50.2)

$

(31.1)

$

(19.1)

(61) %

Diluted earnings (loss) per share

$

(0.61)

$

(0.80)

$

0.19

24 %

Operating income (loss), ex. one-time items *

$

(27.6)

$

(22.1)

$

(5.5)

(25) %

Diluted earnings (loss) per share, ex. one-time items*

$

(0.34)

$

(0.53)

$

0.19

36 %

Adjusted EBITDA *

$

54.2

$

46.2

$

8.0

17 %

* Please refer to the non-GAAP financial tables attached

Revenues of $1,117.2 million year to date were in line with the prior year period, primarily reflecting the contribution of 9 Story Media Group, recorded in the Entertainment segment, offset by lower supplemental curriculum and collections product sales in Education Solutions.

Operating loss was $37.7 million year to date, compared to operating loss of $32.7 million a year ago, including $10.1 million and $10.6 million in one-time charges related to restructuring and cost-savings activities in each period, respectively. Excluding one-time charges, operating loss increased $5.5 million from a year ago. This primarily reflects the impact of lower sales in Education Solutions and the impact of the 9 Story Media Group acquisition. Adjusted EBITDA increased $8.0 million to $54.2 million, primarily reflecting the impact of the 9 Story Media Group acquisition. As part of the acquisition, the Company incurred $6.5 million of intangible amortization during the period. Excluding the amortization, operating loss was $31.2 million.

Additional Information

To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, “Adjusted EBITDA” and “Free Cash Flow”. Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

Conference Call

The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, March 20, 2025. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company’s Chief Financial Officer, Executive Vice President, will moderate the call.

A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/m98wgyws/. To access the conference call by phone, please go to https://register.vevent.com/register/BIba13029c72e1414fa441a92404a14a4d, which will provide dial-in details. To avoid delays, participants are encouraged to dial into the conference call five minutes ahead of the scheduled start time. Shortly following the call, an archived webcast and accompanying slides from the conference call will be posted at investor.scholastic.com.

About Scholastic

For more than 100 years, Scholastic Corporation (NASDAQ: SCHL) has been meeting children where they are – at school, at home and in their communities – by creating quality content and experiences, all beginning with literacy. Scholastic delivers stories, characters, and learning moments that empower all kids to become lifelong readers and learners through bestselling children’s books, literacy- and knowledge-building resources for schools including classroom magazines, and award-winning, entertaining children’s media. As the world’s largest publisher and distributor of children’s books through school-based book clubs and book fairs, classroom libraries, school and public libraries, retail, and online, and with a global reach into more than 135 countries, Scholastic encourages the personal and intellectual growth of all children, while nurturing a lifelong relationship with reading, themselves, and the world around them. Learn more at www.scholastic.com. 

Forward-Looking Statements

This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children’s book and educational materials markets generally 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.

SCHL: Financial

Table 1

Scholastic Corporation

Consolidated Statements of Operations

(Unaudited)

(In $ Millions, except shares and per share data)

Three months ended

Nine months ended

02/28/25

02/29/24

02/28/25

02/29/24

Revenues (1)

$

335.4

$

323.7

$

1,117.2

$

1,114.8

Operating costs and expenses:

Cost of goods sold

154.6

148.7

511.5

512.8

Selling, general and administrative expenses (2)

187.5

194.8

594.5

592.1

Depreciation and amortization

16.9

14.6

48.5

42.1

Asset impairments and write downs (3)

0.3

0.5

0.4

0.5

Total operating costs and expenses

359.3

358.6

1,154.9

1,147.5

Operating income (loss)

(23.9)

(34.9)

(37.7)

(32.7)

Interest income (expense), net

(4.3)

0.6

(11.7)

2.4

Other components of net periodic benefit (cost)

(0.2)

(0.3)

(0.8)

(0.8)

Earnings (loss) before income taxes

(28.4)

(34.6)

(50.2)

(31.1)

Provision (benefit) for income taxes (4)

(24.8)

(8.1)

(32.9)

(7.3)

Net income (loss) (1)

(3.6)

(26.5)

(17.3)

(23.8)

Basic and diluted earnings (loss) per share of Class A and Common Stock (5)

Basic

$

(0.13)

$

(0.91)

$

(0.61)

$

(0.80)

Diluted

$

(0.13)

$

(0.91)

$

(0.61)

$

(0.80)

Basic weighted average shares outstanding

27,778

29,052

28,135

29,906

Diluted weighted average shares outstanding

27,876

29,815

28,490

30,747

(1)

The financial results of 9 Story Media Group from the date of acquisition on June 20, 2024 through February 28, 2025 are included in
the Company’s consolidated results of operations as of February 28, 2025. The unaudited pro-forma consolidated results of operations
as if the acquisition had occurred on June 1, 2023, the beginning of fiscal 2024, includes revenues of $335.4 and $1,122.9 and net loss
of $3.6 and $19.1 for the three and nine months ended February 28, 2025, respectively, and revenues of $341.9 and $1,169.0 and net
loss of $29.3 and $34.2 for the three and nine months ended February 29, 2024, respectively.

(2)

In the three and nine months ended February 28, 2025, the Company recognized pretax severance of $1.8 and $6.8, respectively, related
to cost-savings initiatives and pretax costs of $0.9 and $3.0, respectively, related to the acquisition of 9 Story Media Group and other costs.
In the three and nine months ended February 29, 2024, the Company recognized pretax costs related to its planned investment in 9 Story
Media Group of $3.0 and pretax severance of $0.8 and $7.1, respectively, related to restructuring and cost-savings initiatives.

(3)

In the three and nine months ended February 28, 2025, the Company recognized pretax asset impairment of $0.3 related to an early exit
of an office lease. In the three and nine months ended February 29, 2024, the Company recognized pretax asset impairment of $0.5 related
to an early exit of a sales office lease.

(4)

In the three and nine months ended February 28, 2025, the Company recognized a benefit of $0.7 and $2.4, respectively, for income taxes
in respect to one-time pretax items. In the three and nine months ended February 29, 2024, the Company recognized a benefit of $1.1 and
$2.7, respectively, for income taxes in respect to one-time pretax items.

(5)

Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per share based
on numbers rounded to millions may not yield the results as presented.

 

Table 2

Scholastic Corporation

Segment Results

(Unaudited)

(In $ Millions)

Three months ended

Change

Nine months ended

Change

02/28/25

02/29/24

$

%

02/28/25

02/29/24

$

%

Children’s Book Publishing and Distribution (1)

Revenues

Books Clubs

$

15.2

$

13.3

$

1.9

14 %

$

51.1

$

48.3

$

2.8

6 %

Book Fairs

110.7

102.7

8.0

8 %

370.5

372.1

(1.6)

(0) %

School Reading Events

125.9

116.0

9.9

9 %

421.6

420.4

1.2

0 %

Consolidated Trade

77.4

77.1

0.3

0 %

254.1

267.5

(13.4)

(5) %

Total Revenues

203.3

193.1

10.2

5 %

675.7

687.9

(12.2)

(2) %

Operating income (loss)

7.6

2.3

5.3

NM

73.1

72.9

0.2

0 %

Operating margin

3.7 %

1.2 %

10.8 %

10.6 %

Education Solutions

Revenues

57.2

68.5

(11.3)

(16) %

184.1

215.5

(31.4)

(15) %

Operating income (loss)

(6.9)

(0.8)

(6.1)

NM

(24.4)

(13.7)

(10.7)

(78) %

Operating margin

NM

NM

NM

NM

Entertainment (1)

Revenues

12.8

0.5

12.3

NM

46.2

1.3

44.9

NM

Operating income (loss)

(3.9)

(3.1)

(0.8)

(26) %

(9.1)

(4.4)

(4.7)

(107) %

Operating margin

NM

NM

NM

NM

International

Revenues

59.3

59.1

0.2

0 %

202.8

202.8

0.0

0 %

Operating income (loss)

(2.1)

(5.9)

3.8

64 %

(4.7)

(6.1)

1.4

23 %

Operating margin

NM

NM

NM

NM

Overhead

Revenues

2.8

2.5

0.3

12 %

8.4

7.3

1.1

15 %

Operating income (loss)

(18.6)

(27.4)

8.8

32 %

(72.6)

(81.4)

8.8

11 %

Operating income (loss)

$

(23.9)

$

(34.9)

$

11.0

32 %

$

(37.7)

$

(32.7)

$

(5.0)

(15) %

NM – Not meaningful

(1)

The newly formed Entertainment segment includes the operations of Scholastic Entertainment Inc. (SEI), which were included
in the Children’s Book Publishing and Distribution segment in prior periods, and 9 Story Media Group. The financial results for
SEI for the three and nine months ended February 29, 2024 have been reclassified to Entertainment to reflect this change.

 

Table 3

Scholastic Corporation

Supplemental Information

(Unaudited)

(In $ Millions)

Selected Balance Sheet Items

02/28/25

02/29/24

Cash and cash equivalents

$

94.7

$

110.4

Accounts receivable, net

255.9

253.0

Inventories, net

270.8

282.5

Accounts payable

133.5

126.1

Deferred revenue

205.2

193.8

Accrued royalties

85.1

75.1

Film related obligations

18.8

—

Lines of credit and long-term debt

280.8

31.5

Net cash (debt) (1)

(189.4)

78.9

Total stockholders’ equity

941.3

997.6

Selected Cash Flow Items

Three months ended

Nine months ended

02/28/25

02/29/24

02/28/25

02/29/24

Net cash provided by (used in) operating activities

$

(12.0)

$

13.1

$

17.3

$

84.7

Property, plant and equipment additions

(9.0)

(14.7)

(39.9)

(43.8)

Prepublication expenditures

(5.7)

(5.5)

(15.8)

(17.2)

Net borrowings (repayments) of film related obligations

(4.0)

—

(18.6)

—

Free cash flow (use) (2)

$

(30.7)

$

(7.1)

$

(57.0)

$

23.7

(1)

Net cash (debt) is defined by the Company as cash and cash equivalents less production cash of $3.3
as of February 28, 2025, net of lines of credit and short-term and long-term debt. Film related obligations
are not included. The Company utilizes this non-GAAP financial measure, and believes it is useful to
investors, as an indicator of the Company’s effective leverage and financing needs.

(2)

Free cash flow (use) is defined by the Company as net cash provided by or used in operating activities
(which includes royalty advances) and cash acquired through acquisitions and from the sale of assets,
reduced by spending on property, plant and equipment and prepublication costs and adjusted for net
cash flows from film related obligations. The Company believes that this non-GAAP financial measure
is useful to investors as an indicator of cash flow available for debt repayment and other investing
activities, such as acquisitions. The Company utilizes free cash flow as a further indicator of operating
performance and for planning investing activities.

 

Table 4

Scholastic Corporation

Supplemental Results – Excluding One-Time Items

(Unaudited)

(In $ Millions, except per share data)

Three months ended

02/28/2025

02/29/2024

Reported

One-time
items

Excluding
One-time
items

Reported

One-time
items

Excluding
One-time
items

Diluted earnings (loss) per share (1)

$

(0.13)

$

0.08

$

(0.05)

$

(0.91)

$

0.11

$

(0.80)

Net income (loss)

$

(3.6)

$

2.3

$

(1.3)

$

(26.5)

$

3.2

$

(23.3)

Earnings (loss) before income taxes

$

(28.4)

$

3.0

$

(25.4)

$

(34.6)

$

4.3

$

(30.3)

Children’s Book Publishing and Distribution (2)

$

7.6

$

—

$

7.6

$

2.3

$

0.5

$

2.8

Education Solutions

(6.9)

—

(6.9)

(0.8)

—

(0.8)

Entertainment (3)

(3.9)

1.5

(2.4)

(3.1)

3.0

(0.1)

International (4)

(2.1)

0.1

(2.0)

(5.9)

—

(5.9)

Overhead (5)

(18.6)

1.4

(17.2)

(27.4)

0.8

(26.6)

Operating income (loss)

$

(23.9)

$

3.0

$

(20.9)

$

(34.9)

$

4.3

$

(30.6)

Nine months ended

02/28/2025

02/29/2024

Reported

One-time
items

Excluding
One-time
items

Reported

One-time
items

Excluding
One-time
items

Diluted earnings (loss) per share (1)

$

(0.61)

$

0.27

$

(0.34)

$

(0.80)

$

0.26

$

(0.53)

Net income (loss)

$

(17.3)

$

7.7

$

(9.6)

$

(23.8)

$

7.9

$

(15.9)

Earnings (loss) before income taxes

$

(50.2)

$

10.1

$

(40.1)

$

(31.1)

$

10.6

$

(20.5)

Children’s Book Publishing and Distribution (2)

$

73.1

$

—

$

73.1

$

72.9

$

0.5

$

73.4

Education Solutions

(24.4)

—

(24.4)

(13.7)

—

(13.7)

Entertainment (3)

(9.1)

4.0

(5.1)

(4.4)

3.0

(1.4)

International (4)

(4.7)

1.5

(3.2)

(6.1)

1.2

(4.9)

Overhead (5)

(72.6)

4.6

(68.0)

(81.4)

5.9

(75.5)

Operating income (loss)

$

(37.7)

$

10.1

$

(27.6)

$

(32.7)

$

10.6

$

(22.1)

(1)

Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per
share based on rounded numbers may not yield the results as presented.

(2)

In the three and nine months ended February 29, 2024, the Company recognized pretax asset impairment of $0.5 related to an
early exit of a sales office lease.

(3)

In the three and nine months ended February 28, 2025, the Company recognized pretax severance of $0.7 and $1.1, respectively,
related to cost-savings initiatives, pretax costs of $0.5 and $2.6, respectively, related to the acquisition of 9 Story Media Group and
pretax asset impairment of $0.3 related to an early exit of an office lease. In the three and nine months ended February 29, 2024,
the Company recognized pretax costs associated with its planned investment in 9 Story Media Group of $3.0.

(4)

In the three and nine months ended February 28, 2025, the Company recognized pretax severance of $0.1 and $1.5, respectively,
related to cost-savings initiatives. In the nine months ended February 29, 2024, the Company recognized pretax severance of $1.2
related to cost-savings initiatives.

(5)

In the three and nine months ended February 28, 2025, the Company recognized pretax severance of $1.0 and $4.2, respectively,
related to cost-savings initiatives and other pretax expenses of $0.4. In the three and nine months ended February 29, 2024, the
Company recognized pretax severance of $0.8 and $5.9, respectively, related to restructuring and cost-savings initiatives.

 

Table 5

Scholastic Corporation

Consolidated Statements of Operations – Supplemental

Adjusted EBITDA

(Unaudited)

(In $ Millions)

Three months ended

02/28/25

02/29/24

Earnings (loss) before income taxes as reported

$

(28.4)

$

(34.6)

One-time items before income taxes

3.0

4.3

Earnings (loss) before income taxes excluding one-time items

(25.4)

(30.3)

Interest (income) expense (1)

4.3

(0.6)

Depreciation and amortization

27.1

23.7

Adjusted EBITDA (2)

$

6.0

$

(7.2)

Nine months ended

02/28/25

02/29/24

Earnings (loss) before income taxes as reported

$

(50.2)

$

(31.1)

One-time items before income taxes

10.1

10.6

Earnings (loss) before income taxes excluding one-time items

(40.1)

(20.5)

Interest (income) expense (1)

11.9

(2.4)

Depreciation and amortization

82.4

69.1

Adjusted EBITDA (2)

$

54.2

$

46.2

(1)

For the three and nine months ended February 28, 2025, amounts include production loan
interest amortized into cost of goods sold.

(2)

Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time items,
before interest, taxes, depreciation and amortization. The Company believes that Adjusted
EBITDA is a meaningful measure of operating profitability and useful for measuring returns
on capital investments over time as it is not distorted by unusual gains, losses, or other items.

 

Table 6

Scholastic Corporation

Consolidated Statements of Operations – Supplemental

Adjusted EBITDA by Segment

(Unaudited)

(In $ Millions)

Three months ended

02/28/25

CBPD (1)

EDUC (1)

ENT (1)

INTL (1)

OVH (1)

Total

Earnings (loss) before income taxes as reported

$

7.5

$

(6.9)

$

(4.6)

$

(2.5)

$

(21.9)

$

(28.4)

One-time items before income taxes

—

—

1.5

0.1

1.4

3.0

Earnings (loss) before income taxes excluding one-time items

7.5

(6.9)

(3.1)

(2.4)

(20.5)

(25.4)

Interest (income) expense (2)

0.0

0.0

0.7

0.0

3.6

4.3

Depreciation and amortization (3)

7.8

6.2

5.0

1.9

6.2

27.1

Adjusted EBITDA

$

15.3

$

(0.7)

$

2.6

$

(0.5)

$

(10.7)

$

6.0

Three months ended

02/29/24

CBPD (1)

EDUC (1)

ENT (1)

INTL (1)

OVH (1)

Total

Earnings (loss) before income taxes as reported

$

2.3

$

(0.8)

$

(3.1)

$

(6.3)

$

(26.7)

$

(34.6)

One-time items before income taxes

0.5

—

3.0

—

0.8

4.3

Earnings (loss) before income taxes excluding one-time items

2.8

(0.8)

(0.1)

(6.3)

(25.9)

(30.3)

Interest (income) expense (2)

0.0

0.0

—

(0.0)

(0.6)

(0.6)

Depreciation and amortization (3)

8.3

7.7

0.0

2.0

5.7

23.7

Adjusted EBITDA

$

11.1

$

6.9

$

(0.1)

$

(4.3)

$

(20.8)

$

(7.2)

Nine months ended

02/28/25

CBPD (1)

EDUC (1)

ENT (1)

INTL (1)

OVH (1)

Total

Earnings (loss) before income taxes as reported

$

73.0

$

(24.4)

$

(11.4)

$

(6.0)

$

(81.4)

$

(50.2)

One-time items before income taxes

—

—

4.0

1.5

4.6

10.1

Earnings (loss) before income taxes excluding one-time items

73.0

(24.4)

(7.4)

(4.5)

(76.8)

(40.1)

Interest (income) expense (2)

0.1

0.0

2.5

0.0

9.3

11.9

Depreciation and amortization (3)

23.1

18.6

16.5

5.9

18.3

82.4

Adjusted EBITDA

$

96.2

$

(5.8)

$

11.6

$

1.4

$

(49.2)

$

54.2

Nine months ended

02/29/24

CBPD (1)

EDUC (1)

ENT (1)

INTL (1)

OVH (1)

Total

Earnings (loss) before income taxes as reported

$

72.8

$

(13.7)

$

(4.4)

$

(7.2)

$

(78.6)

$

(31.1)

One-time items before income taxes

0.5

—

3.0

1.2

5.9

10.6

Earnings (loss) before income taxes excluding one-time items

73.3

(13.7)

(1.4)

(6.0)

(72.7)

(20.5)

Interest (income) expense (2)

0.1

0.0

—

(0.1)

(2.4)

(2.4)

Depreciation and amortization (3)

24.0

23.3

0.2

5.5

16.1

69.1

Adjusted EBITDA

$

97.4

$

9.6

$

(1.2)

$

(0.6)

$

(59.0)

$

46.2

(1)

The Company’s segments are defined as the following: CBPD – Children’s Book Publishing and Distribution segment; EDUC – Education
Solutions segment; ENT – Entertainment segment; INTL – International segment; OVH – unallocated overhead.

(2)

For the three and nine months ended February 28, 2025, amounts include production loan interest amortized into cost of goods sold.

(3)

Depreciation and amortization in the Children’s Book Publishing and Distribution, Education Solutions and International segments includes
amounts allocated from overhead.

 

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Great Place To Work names Invisors on the 2026 Best Workplaces for Women List, Ranking no.65

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July 24, 2026

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Invisors named a UK’s Best Workplaces for Women™!

GLASGOW, Scotland, July 24, 2026 /PRNewswire/ — Invisors, a Workday Services Partner has officially been recognized as one of UK’s Best Workplaces for Women 2026™, in 65th place out of the 350 ranked organisations.

Invisors’ values and culture are among the reasons women at our organisation say it is a great place to work. Discover how the team brings this philosophy to life at invisors.com/company-overview.

The 2026 UK’s Best Workplaces for Women list is made up of employers whose people have told Great Place To Work® UK they work for a place that is inclusive and equitable for all. The 350 companies on the list are committed to ensuring a reasonable balance of women and men across the organisation; removing barriers to women’s career advancement; and creating workplaces where all employees, regardless of gender, can flourish.

“I’m incredibly proud to see Invisors recognized as a Top Place for Women to Work. This award reflects the culture we’ve built together—one that values inclusivity, flexibility and empowerment. It’s a place where people are supported to bring their whole selves to work, grow their careers and strive for excellence every day.” Jennifer Donnelly-Corbett, EMEA Manager, HCM and Absence at Invisors.

Benedict Gautrey, Managing Director of Great Place To Work UK says:

“This year’s UK’s Best Workplaces for Women list celebrates businesses making a genuine difference day to day, not just in what they say, but in how people experience work. What matters most is that this recognition comes directly from women working in these organisations, who tell us they feel supported, valued, and able to grow.

Our research demonstrates that these organisations creating high-trust environments deliver stronger results, whether in financial outcomes, impact, or service delivery, alongside greater agility and resilience in the face of change.

Congratulations to Invisors for creating an environment where inclusion is clearly felt in practice.” 

Matt Smith, Managing Director, Global HR Operations, Invisors “Being named as one of the UK’s Best Workplaces for Women list is an achievement because it reflects what our people actually experience, not just what we aspire to. We’ve worked to build an environment where career growth and success aren’t something women have to fight for — it’s built into how we operate. This recognition is a great step in the journey, not the finish line, and we’re committed to keeping that bar high as Invisors grows within the UK.”

About Invisors

As a certified Workday Services Partner, Invisors helps clients leverage their organisational data to make better-informed business decisions through the deployment of Workday. Invisors’ success is measured by their clients’ ability to achieve their big-picture vision. From initial deployments to ongoing projects, Invisors is dedicated to elevating perspectives and transforming results. To learn more, visit invisors.com. 

About Great Place To Work®

Great Place To Work® is the global authority on workplace culture, helping organisations to create exceptional, high-performing workplaces where employees feel trusted and valued. The UK’s Best Workplaces for Women™ enables these outstanding organisations to celebrate their achievements, build their employer brand, and inspire others to take action. For more information, visit www.greatplacetowork.co.uk.

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Auction Direct USA in Raleigh, NC, Makes It Easy to Shop for Used Vehicles Online

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July 24, 2026

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RALEIGH, N.C., July 24, 2026 /PRNewswire/ — Auction Direct USA in Raleigh, NC, helps shoppers browse used-vehicle inventory, compare options, and complete key steps of the buying process online for a faster, more convenient shopping experience.

Auction Direct USA in Raleigh, NC, is simplifying the used vehicle shopping experience by offering convenient online tools that help drivers browse inventory, compare options, and begin the purchasing process from the comfort of home.

With a user-friendly website, shoppers can explore an extensive selection of used cars, trucks, and SUVs that fit a variety of budgets and lifestyles. Detailed vehicle listings provide important information, including photos, key features, specifications, pricing, and availability, allowing customers to make informed decisions before visiting the dealership.

The online platform also makes it easy to narrow vehicle choices using search filters for make, model, body style, price range, mileage, model year, and other preferences. These features help shoppers quickly find vehicles that meet their individual needs while saving valuable time.

In addition to browsing inventory, customers can use several digital shopping tools to streamline the buying process. Visitors can estimate monthly payments, value a trade-in, complete a finance application, and schedule a test drive online. These resources allow shoppers to prepare for their dealership visit with greater confidence and convenience.

Auction Direct USA in Raleigh, NC, regularly updates its online inventory, giving customers access to fresh vehicle selections as they become available. Whether someone is searching for a dependable commuter car, a family-friendly SUV, or a capable pickup truck, the website provides an efficient way to explore available options before stepping into the showroom.

The dealership remains committed to delivering a straightforward, customer-focused buying experience by combining a wide range of high-quality used vehicles with digital tools that simplify every stage of the shopping journey.

Drivers looking to begin their search can visit Auction Direct USA in Raleigh, NC, or browse the current inventory online to compare vehicles and take advantage of convenient shopping resources before visiting the dealership in person.

About Auction Direct USA in Raleigh, NC

Auction Direct USA in Raleigh, NC, offers a diverse inventory of quality used cars, trucks, and SUVs to meet a wide range of driving needs and budgets. By combining a customer-focused approach with convenient online shopping tools, the dealership helps make finding and purchasing a used vehicle simple, efficient, and enjoyable.

Media Contact: Tony Kicinski, 844-678-8048, tonyk@auctiondirectusa.com

 

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FLAGSTAR BANK, N.A. ANNOUNCES $250 MILLION SHARE REPURCHASE PROGRAM

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July 24, 2026

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Board of Directors Authorizes Repurchase of Up to $250 Million of Outstanding Common Stock, Reflecting the Bank’s Strong Capital Position and Commitment to Long-Term Shareholder Value

HICKSVILLE, N.Y., July 24, 2026 /PRNewswire/ — Flagstar Bank, N.A. (NYSE: FLG) (the “Bank”) today announced that its Board of Directors has authorized a common stock repurchase program under which the Bank may repurchase up to $250 million of its outstanding common stock over the next 12-month period.

Commenting on the repurchase program, Joseph M. Otting, Executive Chairman and Chief Executive Officer stated, “We are pleased to announce our stock buyback program, which reflects the meaningful progress we have made in executing our strategic plan, the strength of the balance sheet, and Flagstar’s long-term growth prospects. We have consistently maintained capital levels well above regulatory requirements, and we believe that returning capital to our shareholders through a share repurchase program represents a compelling and disciplined use of our excess capital at this time.

“We remain deeply committed to serving our customers and communities and we are confident that this program — alongside our continued investment in our people, products, systems, and technology — will deliver sustainable, long-term value for our shareholders.”

Repurchases may be conducted through open-market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. The timing and exact amount of any share repurchases will be subject to a variety of factors, including the availability of stock for repurchases, the Bank’s capital position and financial performance, regulatory considerations, and general market conditions. The share repurchase program does not obligate the Bank to acquire any specific number of shares and may be modified, suspended, or discontinued at any time without prior notice. Any future stock repurchase programs would be subject to the approval of the Board of Directors and other various factors, including the Bank’s liquidity, capital position and financial performance, accounting and regulatory considerations, and general market conditions.

Flagstar Bank, N.A.

Flagstar Bank, N.A. is one of the largest regional banks in the country and is headquartered in Hicksville, New York. At June 30, 2026, the Bank had $87.7 billion of assets, $61.2 billion of loans, deposits of $67.5 billion, and total stockholders’ equity of $8.1 billion. Flagstar Bank, N.A. operates approximately 340 locations across nine states, with strong footholds in the greater New York/New Jersey metropolitan region and in the upper Midwest, along with a significant presence in fast-growing markets in Florida and the West Coast.

Cautionary Statements Regarding Forward-Looking Language

This press release may include forward‐looking statements by us and our authorized officers pertaining to such matters as our goals, beliefs, intentions, and expectations regarding, among other things: (a) revenues, earnings, loan production, asset quality, liquidity position, capital levels, risk analysis, divestitures, acquisitions, and other material transactions, among other matters; (b) the future costs and benefits of the actions we may take; (c) our assessments of credit risk and probable losses on loans and associated allowances and reserves; (d) our assessments of interest rate and other market risks; (e) our ability to achieve profitability goals within projected timeframes and to execute on our strategic plan, including the sufficiency of our internal resources, procedures and systems; (f) our ability to execute our capital management strategies, including our ability to complete our current stock repurchase program and to implement future stock repurchase programs; (g) our ability to attract, incentivize, and retain key personnel and the roles of key personnel; (h) our ability to achieve our financial and other strategic goals, including those related to our recent holding company reorganization, which was completed in October 2025 (the “Reorganization”), our merger with Flagstar Bancorp, Inc., which was completed in December 2022, our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023, and our ability to comply with the heightened regulatory standards with respect to governance and risk management programs to which we are subject as a national bank with assets of $50 billion or more; (i) the impact of the $1.05 billion capital raise we completed in March 2024; (j) the conversion or exchange of shares of our preferred stock; (k) the payment of dividends on shares of our capital stock, including adjustments to the amount of dividends payable on shares of our preferred stock; (l) the dilution of existing equity holders associated with future equity awards and stock issuances; (m) the effects of the reverse stock split we effected in July 2024; and (n) the impact of the 2024 sale of our mortgage servicing operations, third party mortgage loan origination business, and mortgage warehouse business.

Forward‐looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “should,” “confident,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; we do not assume any duty, and do not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.

Our forward‐looking statements are subject to, among others, the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities, credit and financial markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios, including associated allowances and reserves; changes in future allowance for credit losses, including changes required under relevant accounting and regulatory requirements; the ability to pay future dividends; the ability to implement future stock repurchase programs, which are subject to the approval of the Board of Directors and other various factors, including the Bank’s liquidity, capital position, and financial performance, accounting and regulatory considerations, as well as general market conditions; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; our ability to achieve the anticipated benefits of the Reorganization; changes in our Board of Directors and our executive management team; changes in our strategic plan, including changes in our internal resources, procedures and systems, and our ability to successfully implement such plan; changes in competitive pressures among financial institutions or from non‐financial institutions; changes in legislation, regulations, and policies; changes relating to rent regulation and housing, including recent legislative action in New York City to freeze rents on certain rent-regulated properties; the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts; the outcome of federal, state, and local elections and the resulting economic and other impact on the areas in which we conduct business; the impact of changing political conditions or federal government shutdowns; the imposition of restrictions on our operations by bank regulators; the outcome of pending or threatened litigation, or of investigations or any other matters before regulatory agencies, whether currently existing or commencing in the future; our ability to comply with heightened regulatory standards with respect to governance and risk management programs to which we are subject as a national bank with assets of $50 billion or more; the restructuring of our mortgage business; our ability to achieve anticipated cost savings and enhanced efficiencies with respect to our balance sheet and expense reduction strategies; the impact of failures or disruptions in or breaches of our operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the impact of natural disasters, extreme weather events, civil unrest, international military conflict, terrorism or other geopolitical events; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control. Our forward-looking statements are also subject to the following principal risks and uncertainties with respect to our merger with Flagstar Bancorp, which was completed in December 2022, and our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023: the possibility that the anticipated benefits of the transactions will not be realized when expected or at all; the possibility of increased legal and compliance costs, including with respect to any litigation or regulatory actions related to the business practices of acquired companies or the combined business; diversion of management’s attention from ongoing business operations and opportunities; the possibility that we may be unable to achieve expected synergies and operating efficiencies in or as a result of the transactions within the expected timeframes or at all; and revenues following the transactions may be lower than expected.

More information regarding some of these factors is provided in the Risk Factors section of our Annual Report on Form 10‐K for the year ended December 31, 2025, and in other reports we file with the Office of the Comptroller of the Currency (the “OCC”) and voluntarily file with the Securities and Exchange Commission (the “SEC”), and which are also available on our Investor Relations website. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our securities disclosure filings. All such files are accessible on our website at ir.flagstar.com, on the OCC’s website at www.occ.gov, and on the SEC’s website at www.sec.gov.

Investor Contact:
Salvatore J. DiMartino
(516) 683-4286

Media Contact:
Jessica Torchia
(248) 312-6451

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SOURCE Flagstar Bank, N.A.

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