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Scholastic Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: March 23, 2012 04:31PM

Scholastic Corp. (SCHL) filed Quarterly Report for the period ended 2012-02-29. Scholastic Corp has a market cap of $1.12 billion; its shares were traded at around $37.51 with a P/E ratio of 13.4 and P/S ratio of 0.6. The dividend yield of Scholastic Corp stocks is 1.4%. Scholastic Corp had an annual average earning growth of 2.4% over the past 10 years.



Highlight of Business Operations:

Revenue for the quarter ended February 29, 2012 was $467.0 million, up 22% from $384.3 million in the prior fiscal year quarter. Net loss from continuing operations for the quarter ended February 29, 2012 was $9.9 million as compared to a loss of $24.0 million in the prior year fiscal quarter. The seasonal loss per share from continuing operations was $0.32, which compared favorably to a loss per share from continuing operations of $0.77 in the prior year fiscal period. Strong revenue and a substantially lower net loss in the quarter reflected higher sales in the Children’s Book Publishing and Distribution segment as well as in the International segment. The consolidated loss per share was $0.33 in the quarter compared to $0.81 in the comparable period a year ago.

Revenues for the quarter ended February 29, 2012 increased by $82.7 million, or 21.5%, to $467.0 million, compared to $384.3 million in the prior fiscal year quarter, driven by higher revenues in the Children’s Book Publishing and Distribution, the International, the Media, Licensing and Advertising and the Educational Technology and Services segments of $73.0 million, $10.5 million, $2.3 million and $1.8 million, respectively, offset partially by lower revenue in the Classroom and Supplemental Materials Publishing segment of $4.9 million. Revenues for the nine months ended February 29, 2012 increased by $127.7 million, or 9.5%, to $1,470.3 million, compared to $1,342.6 million in the prior year fiscal period, primarily due to higher revenues in the Children’s Book Publishing and Distribution, the Educational Technology and Services, the International and the Classroom and Supplemental Materials Publishing segments of $78.7 million, $32.6 million, $14.5 million and $10.5 million, respectively, offset partially by lower revenue in the Media, Licensing and Advertising segment of $8.6 million.

Revenues in the Children’s Book Publishing and Distribution segment for the quarter ended February 29, 2012 increased by $73.0 million, or 37.8%, to $266.0 million, compared to $193.0 million in the prior fiscal year quarter. This is primarily due to a $68.5 million increase in revenue in the Company’s trade business driven by strong titles such as Wonderstruck and The 39 Clues®: Cahills vs. Vespers and sales of The Hunger Games trilogy, in both print and ebook formats, The Invention of Hugo Cabret, War Horse and overall favorable return rates. Additionally, revenues in the Company’s book fairs business increased by $9.3 million as a result of increased revenue per fair, as well as an increase in the number of fairs held. Revenues for the nine months ended February 29, 2012 increased by $78.7 million, or 12.0%, to $731.9 million, compared to $653.2 million in the prior fiscal year period. The increase is related to higher revenues of $89.3 million in the Company’s trade business, due to higher backlist sales, as well as higher revenues of $8.8 million in the Company’s book fairs business, primarily related to an increase in the number of fairs held and an increase in revenue per fair. These increases were partially offset by a $19.4 million decrease in revenues in the Company’s book clubs business, resulting from a decrease in the number of sponsors due to a change in promotional strategy.

Revenues in the International segment for the quarter ended February 29, 2012 increased by $10.5 million, or 11.0%, to $105.6 million, compared to $95.1 million in the prior fiscal year quarter. This was primarily due to higher local currency revenues in the Company’s Canada, UK and Australia trade businesses, which benefited from increased sales through local trade channels. Revenues for the nine months ended February 29, 2012 increased by $14.5 million, or 4.5%, to $337.4 million, compared to $322.9 million during the prior fiscal year period, due to the favorable impact of foreign currency exchange rates of $13.1 million, as well as increased local currency revenue in the Company’s Canada and UK trade businesses, partially offset by lower local currency revenues in the Company’s Australia and New Zealand software distribution businesses.

Segment operating results for the quarter ended February 29, 2012 increased by $5.7 million, resulting in operating income of $4.3 million, compared to an operating loss of $1.4 million in the prior fiscal year quarter, due to higher local currency revenues in the Company’s Canada, UK and Australia trade businesses, as well as the restructuring costs incurred in the prior fiscal year quarter of $1.8 million. Segment operating income for the nine months ended February 29, 2012 increased by $9.1 million, or 41.9%, to $30.8 million, compared to $21.7 million in the prior fiscal year period, related to improved results in the Company’s UK and Canada operations, as well as the favorable impact of foreign currency exchange rates and the restructuring costs incurred in the prior fiscal year period of $3.0 million.

Read the The complete Report



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