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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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Global AI Leader and Enterprise Transformation Visionary Zeya Ottomone Appointed Chief Executive Officer of Integrow

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July 24, 2026

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Author of Empowered to Execute in the Agentic Era to Lead Next Generation of AI-Powered Enterprise Innovation

ATLANTA, July 24, 2026 /PRNewswire-PRWeb/ — Integrow announced the appointment of Zeya Ottomone as Chief Executive Officer, marking a significant milestone in the company’s evolution as it accelerates its vision to become a global leader in Agentic AI-powered enterprise software and business transformation.

Integrow announced the appointment of Zeya Ottomone as Chief Executive Officer, marking a significant milestone in the company’s evolution as it accelerates its vision to become a global leader in Agentic AI-powered enterprise software and business transformation.

With more than three decades of executive leadership spanning Fortune 500 enterprises, global technology organizations, and enterprise software innovation, Ottomone joins Integrow at a defining moment in the evolution of artificial intelligence.

Widely recognized for helping organizations modernize operations, simplify complex business ecosystems, and deliver measurable transformation outcomes, Ottomone has led some of the industry’s largest enterprise modernization initiatives across ERP, CRM, workforce management, cloud computing, cybersecurity, artificial intelligence, and intelligent automation. His appointment signals Integrow’s commitment to redefining how enterprises execute strategy in the era of autonomous AI.

“Artificial Intelligence is no longer about automation alone, it’s about empowering organizations to execute faster, make smarter decisions, and fundamentally rethink how work gets done,” said Zeya Ottomone, Chief Executive Officer of Integrow. “We’re entering the Agentic Era, where intelligent AI agents become trusted digital teammates capable of planning, reasoning, collaborating and executing alongside people. At Integrow, we’re building the enterprise platform that makes that future practical, secure and measurable for every organization.”

Ottomone is internationally recognized as a leader in enterprise technology, SaaS transformation, digital modernization and AI-enabled business strategy. Throughout his career he has held executive leadership and C-level positions with ABB, Honeywell, AmerisourceBergen, Cable & Wireless, Chicago Tribune and Rimini Street, leading global organizations through large-scale transformation initiatives across North America, Europe, Asia-Pacific and the Middle East. His expertise spans enterprise applications, Salesforce ecosystems, ServiceNow, ERP modernization, customer experience, intelligent operations, data strategy, and the emerging field of Agentic AI.

Before joining Integrow, Ottomone led global SaaS Centers of Excellence focused on enterprise transformation, helping organizations modernize critical business operations while reducing technology complexity and accelerating innovation. A certified Lean Six Sigma Master Black Belt and recognized executive advisor, Ottomone has consistently delivered operational excellence by combining strategic leadership with emerging technologies to create sustainable business value.

His appointment also coincides with the upcoming publication of his new book, Empowered to Execute in the Agentic Era, which explores how organizations can bridge the gap between strategy and execution by leveraging AI, empowering people, and building intelligent enterprises capable of continuous innovation. The book reflects many of the same principles that will guide Integrow’s next phase of growth: human-centered AI, intelligent automation, operational excellence, and measurable business outcomes.

Under Ottomone’s leadership, Integrow will accelerate investment across:

Agentic AIEnterprise AI PlatformsIntelligent ERPAI-powered CRMHuman Capital ManagementIT Service ManagementPredictive AnalyticsAutonomous WorkflowsEnterprise CopilotsIndustry-specific AI Solutions

The company’s vision is to deliver a unified enterprise platform where AI is embedded into every business process, enabling organizations to eliminate operational silos, automate decision-making, increase productivity, and create competitive advantage through intelligent execution. “Zeya represents exactly the type of visionary leader required for the next generation of enterprise software,” said Harvey Nicholson, Chair of Corporate Governance and Member of Integrow’s Board of Directors. “His global experience, deep understanding of enterprise technology, and forward-looking vision for Agentic AI position Integrow to become one of the industry’s most innovative AI-powered enterprise software companies.”

Wayne Gadson, Chair of Growth Strategy, added: “The future belongs to organizations that can execute strategy with intelligence, speed and confidence. Zeya has spent his career helping enterprises achieve exactly that. His appointment marks the beginning of an exciting new chapter for Integrow, our customers and our partners worldwide.” As enterprises face mounting pressure to modernize operations, reduce costs, improve workforce productivity and harness the power of artificial intelligence, Integrow is uniquely positioned to help organizations transform through a single AI-powered enterprise platform that unifies finance, operations, customer engagement, workforce management, projects and service delivery.

“Our mission is simple,” Ottomone concluded. “We don’t believe AI should replace people. We believe AI should elevate people. The organizations that will define the next decade won’t simply adopt AI—they’ll empower every employee to execute better decisions every day. That’s the future Integrow is building.”

About Integrow

Integrow is a global enterprise software company delivering next-generation AI-powered business applications built on Salesforce. The platform unifies ERP, CRM, Human Capital Management, IT Service Management, Project Management, Field Service, Finance and Operations into a single intelligent ecosystem enhanced by Agentic AI.

By embedding artificial intelligence into every workflow, Integrow enables organizations to modernize operations, accelerate innovation, improve decision-making and execute strategy with confidence.

For more information, visit www.integrow.com.

Media Contact

Media Team, Integrow, Inc., 1 855-333-4769, info@integrow.com, www.integrow.com 

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Lufax Announces Board and Management Changes

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July 24, 2026

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SHANGHAI, July 24, 2026 /PRNewswire/ — Lufax Holding Ltd (“Lufax” or the “Company”) (NYSE: LU and HKEX: 6623), a leading financial services enabler for small business owners in China, today announced changes to its board of directors and senior management, effective July 25, 2026.

Ms. Fangfang Cai (“Ms. Cai”), Mr. Shibang Guo (“Mr. Guo”) and Mr. Peifeng Li (“Mr. Li”) have resigned as non-executive directors of the Company and from their respective positions on the Board’s committees. Mr. Tongzhuan Xi (“Mr. Xi”) has resigned as an executive director, the chief financial officer and the authorised representative of the Company (“Authorised Representative”) under Rule 3.05 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Hong Kong Listing Rules”), with effect from July 25, 2026. Each of the four directors cited personal work arrangements as the reason for their resignation and confirmed there is no disagreement with the Board and no matter relating to their departure that needs to be brought to shareholders’ attention.

The Company has begun a search for a new chief financial officer. During the transition, the CFO’s duties will be temporarily assumed by the Company’s internal team to ensure continuity of the Company’s financial functions. Mr. Xiang Ji, an executive director and the Company’s chief executive officer, has been appointed as the Authorised Representative, the Company’s designated liaison with the Stock Exchange under the Hong Kong Listing Rules, in place of Mr. Xi, with effect from July 25, 2026.

The Board has appointed Mr. Wai Kin Chim (“Mr. Chim”) as an independent non-executive director for an initial three-year term commencing July 25, 2026.

Mr. Chim, aged 65, has over 40 years of experience in international banking and extensive board experience in Asia Pacific, having worked in Hong Kong, Singapore and Beijing. He specializes in risk management and internal control, with a strong emphasis on corporate governance, credit risk, market risk and capital management.

Mr. Chim served as a loan officer at Standard Chartered Bank, Hong Kong Branch, from October 1985 to August 1988. He was then employed by Bankers Trust Company, Hong Kong Branch, as a vice president of the Asia Credit Department from September 1988 to October 1996. He subsequently served as the managing director and the chief credit officer for Deutsche Bank AG, a company listed on the Frankfurt Stock Exchange under ticker symbol DBK, for Asia Pacific (non-Japan Asia), from October 1996 to November 2006. He joined Bank of China Limited, a company listed on the Main Board of the Stock Exchange under stock code 3988, as the chief credit officer from March 2007 to March 2015.

Mr. Chim was an independent non-executive director of Standard Chartered Bank (China) Limited from October 2015 to October 2017. He served as an independent non-executive director of HDR Global Trading Limited, owner and operator of the BitMEX digital asset trading platform, from February 2021 to February 2022. Mr. Chim served as a non-executive director of China Chengtong Hong Kong Company Limited from July 2022 to June 2025. Mr. Chim is currently an independent non-executive director of OCBC Bank (Hong Kong) Limited, since November 2017; an independent non-executive director of Banco OCBC (Macau), S.A., since August 2023; an independent non-executive director of China Intellogis Technology Co., Ltd., since June 2024; and a director of Hong Kong Dance Company Limited since June 2026.

Mr. Chim obtained a Bachelor of Science degree from the Chinese University of Hong Kong in 1983 and an MBA degree from Indiana State University, USA, in 1985. He also graduated from the Senior Executive Program at Columbia University in 2000.

In connection with these changes, with effect from July 25, 2026, Ms. Cai will step down from the Nomination and Remuneration Committee, and Mr. Koon Wing Ernest Ip has been appointed as a member to that committee. The Company’s Special Committee will comprise Mr. Dicky Peter Yip, Mr. Koon Wing Ernest Ip and Mr. Siu Hong Cheng, continuing under the chairmanship of Mr. Dicky Peter Yip, with effect from July 25, 2026.

The Board would like to take this opportunity to thank Ms. Cai, Mr. Guo, Mr. Li and Mr. Xi for their service during the tenure of their office and warmly welcome Mr. Chim to the Board.

About Lufax

Lufax is a leading financial services enabler for small business owners in China. The Company offers financing products designed principally to address the needs of small business owners. In doing so, the Company has established relationships with 85 financial institutions in China as funding partners, many of which have worked with the Company for over three years.

Investor Relations Contact

Lufax Holding Ltd
Email: Investor_Relations@lu.com

ICR, LLC
Robin Yang
Tel: +1 (646) 308-0546
Email: lufax.ir@icrinc.com

 

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SOURCE Lufax Holding Ltd

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UMD Smith School Researchers Warn AI Security Lapses Highlight Urgent Need for Independent Oversight

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July 24, 2026

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COLLEGE PARK, Md., July 24, 2026 /PRNewswire/ — A series of recent AI security lapses—including the OpenAI–Hugging Face breach—raises a fundamental question, say a pair of researchers at the University of Maryland’s Robert H. Smith School of Business: Can tech companies safely govern the powerful AI systems they build, or is stronger outside oversight now essential?

In its incident report, OpenAI confirmed that one of its experimental AI agents exploited a weakness in its testing environment while working on a routine benchmark task. The system wasn’t instructed to behave maliciously; instead, its persistence turned a small design flaw into a real escape. Earlier tests showed similar behavior, including agents that learned to bypass security checks by manipulating authentication tokens.

This pattern echoes findings from Dean’s Professor of Information Systems Siva Viswanathan at the Smith School, who studies how large technology platforms enforce rules. His research on mobile app privacy—published in Management Science—examined Google’s rollout of Android 6.0, which gave users more control over what data apps could collect. Developers were granted a flexible window to update their apps. Many used that flexibility to delay compliance for months, continuing to gather user data until Google imposed consequences such as lower search rankings and reduced visibility in its app store.

Viswanathan’s takeaway: when companies rely on voluntary compliance, self‑interested actors often exploit the slack. Real accountability requires pairing flexibility with firm, enforceable penalties.

That lesson now reverberates across the AI sector. As companies race to build increasingly capable systems, Viswanathan says oversight must treat these AI systems as strategic actors and must include strong safeguards that can pause or reverse a system before harm occurs.

He notes that a separate study from Anthropic underscores the stakes. In controlled tests, even an AI system designed to monitor another AI inherited the same flaws it was supposed to catch. In some cases, the “judge” model failed to flag clear sabotage because it agreed with the agent’s goals, allowing dangerous behavior to pass without human review.

Balaji Padmanabhan, Dean’s Professor of Decisions, Operations and Information Technologies and director of the Smith School’s Center for Artificial Intelligence in Business, extends Viswanathan’s governance argument into the realm of autonomous AI agents, warning that the same structural weaknesses now carry far higher stakes.

“The fact that this breach occurred organically without the AI agent being asked to be malicious is itself notable. Imagine what someone who actually intends to do harm can do. It’s also not terribly reassuring that the same firms we depend on for AI infrastructure, who are facing these issues, are the ones assuring enterprises that their systems with guardrails are perfectly safe,” says Padmanabhan. “We have to wake up to the fact that we’ve created capabilities that let software become as powerful as we want it to be—and then some. It’s time we seriously ask what’s needed to create an infrastructure to play defense well.”

Across the independent studies, the pattern is consistent, says Viswanathan: Voluntary compliance fails when the governed actor is more capable than the regulator. And AI systems cannot be governed by trust or good intentions alone. Oversight must be preventive, independent and capable of stopping harmful behavior before it spreads.

About the University of Maryland’s Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

Contact: Greg Muraski, gmuraski@umd.edu

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SOURCE University of Maryland’s Robert H. Smith School of Business

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