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Scholastic Reports Fiscal 2025 Third Quarter Results

Published

2 months 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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SOURCE Scholastic Corporation

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Technology

Applied Medical Launches Two Innovative Suture Passing Instruments: RHAPSO™ and GEMINI®

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May 7, 2025

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BRECKSVILLE, Ohio, May 7, 2025 /PRNewswire/ — Applied Medical Technology, Inc. proudly announces the launch of two cutting-edge suture passing solutions engineered for precision, efficiency, and adaptability in minimally invasive procedures: RHAPSO™ and GEMINI®.

RHAPSO™ – Versatile Suture Passing Instrument

Designed for surgeons seeking refined control and ease in suturing, RHAPSO™ is a 17-gauge fine needle suture passer that delivers exceptional performance in confined surgical spaces. Featuring a wide opening for enhanced suture capture, RHAPSO™ streamlines suturing through its spring-assisted, atraumatic grasper arms.

Key Benefits:

Available with curved or straight echogenic needle options

Luer access for fluid and radiographic media management

Ergonomic design for intuitive, precise handling

Ideal for minimally invasive and complex tissue approximation

GEMINI® – Suture Passer with Magnet Technology

Introducing the next evolution in suture management, GEMINI® incorporates self-aligning magnet technology to simplify intracorporeal suture retrieval. Designed to minimize tissue trauma, GEMINI® includes magnetic suture loops and a magnetized grasper arm for seamless, reliable connection.

Key Benefits:

Smallest gauge suture passer in its class (17-gauge needle)

Straight and curved needle kits available

Built-in luer access and suture exchange loop feature

Enhanced wound healing potential via low-trauma design

“With RHAPSO™ and GEMINI®, we’re equipping surgeons with tools that simplify complex tasks and support better patient outcomes,” said Joe Harr, Surgical Sales Manager at Applied Medical Technology, Inc. “These devices reflect our commitment to advancing surgical precision and procedural confidence.”

For ordering information, visit www.AppliedMedical.net or contact Customer Service at 800-869-7382.

About AMT: Applied Medical Technology, Inc. (AMT) is a global leader in enteral and surgical devices committed to improving lives through innovation. For 40 years, AMT has bridged the gap between medical technology and patient needs, collaborating with healthcare professionals and users to develop high-quality, life-enhancing solutions. Our holistic approach prioritizes the well-being of the whole person, not just the device they use.

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SOURCE Applied Medical Technology, Inc.

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Technology

Only 0.001% of the Deep Seafloor Visually Observed in Seventy Years, Revealing Gaps and Bias in Ocean Exploration

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May 7, 2025

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SAUNDERSTOWN, R.I., May 7, 2025 /PRNewswire/ — In a groundbreaking study published today in Science Advances, researchers from Ocean Discovery League reveal that only a minuscule fraction of the deep seafloor has been imaged. Despite covering 66% of Earth’s surface, the deep ocean remains largely unexplored. The study, “How Little We’ve Seen: A Visual Coverage Estimate of the Deep Seafloor,” is the first to document that, in decades of deep-sea exploration, humans have observed less than 0.001% of the deep seafloor. This total area is roughly the size of Rhode Island or one-tenth the size of Belgium.

In a groundbreaking study, researchers reveal that only a minuscule fraction of the deep seafloor has been imaged.

The deep ocean, defined as being deeper than 200 meters, sustains diverse ecosystems and provides essential services, including oxygen production, climate regulation, and crucial pharmaceutical discoveries, and plays a critical role in maintaining the health of our planet. Yet, despite its importance, research into this immense ecosystem is severely limited, with visual surveys primarily focused on just a few regions and countries. Visual imaging is one of the most critical methods to study the deep seafloor and is one of the three key pillars of ocean exploration, alongside mapping and sampling.

“As we face accelerated threats to the deep ocean—from climate change to potential mining and resource exploitation—this limited exploration of such a vast region becomes a critical problem for both science and policy,” said Dr. Katy Croff Bell, President of Ocean Discovery League, National Geographic Explorer, and lead author of the study. “We need a much better understanding of the deep ocean’s ecosystems and processes to make informed decisions about resource management and conservation.”

Using data from approximately 44,000 deep-sea dives with observations conducted since 1958, across the waters of 120 different countries, the study is the most comprehensive global estimate of deep-sea benthic observations to date and highlights the disparity in global exploration efforts. Given that not all dive records are public, the researchers assert that even if these estimates are off by a full order of magnitude, less than one-hundredth of 1% of the seafloor would have any visual records.

Remarkably, a majority of the visual observations have occurred within 200 nautical miles of just three countries: the United States, Japan, and New Zealand. Due to the high cost of ocean exploration, a mere handful of nations dominate deep-sea exploration, with five countries— the United States, Japan, New Zealand, France, and Germany—responsible for 97% of all deep-sea submergence observations. This bias in geographic coverage and operator representation has led the oceanographic community to base much of its characterization of the deep ocean ecosystem on this incredibly small and unrepresentative sample.

These findings underscore the urgent need for a more comprehensive and global effort to explore the deep ocean, ensuring that scientific research and conservation efforts accurately reflect the true extent of the seafloor. As noted in the study, if the scientific community were to make all assumptions about terrestrial ecosystems from observations of only 0.001% of that total area, they would be basing their assessments of all land-based life on Earth on an area roughly the size of Houston, Texas.

“There is so much of our ocean that remains a mystery,” says Dr. Ian Miller, Chief Science and Innovation Officer at the National Geographic Society, which contributed funding for this work. “Deep-sea exploration led by scientists and local communities is crucial to better understanding the planet’s largest ecosystem. Dr. Bell’s goals to equip global coastal communities with cutting-edge research and technology will ensure a more representative analysis of the deep sea. If we have a better understanding of our ocean, we are better able to conserve and protect it.”

To address these challenges, the researchers call for expanding exploration efforts and utilizing advancements in smaller, more affordable deep-sea tools to increase access to the deep ocean.

Funding for this study was provided in part by the National Geographic Society and Rolex Perpetual Planet Expeditions program, Lyda Hill Philanthropies, and the Cabot Family Charitable Trust.

Link: https://www.science.org/doi/10.1126/sciadv.adp8602

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SOURCE Ocean Discovery League

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Proactive Data Storage Management: Open-E’s New Check-Up Service is Here

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May 7, 2025

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Open-E Introduces Check-Up Service: Proactive Health Check for Data Storage Systems

ATLANTA, May 7, 2025 /PRNewswire/ — Open-E, a leading developer of innovative data storage software, today announced the launch of Open-E Check-Up, a professional service designed to evaluate and optimize the health of Open-E JovianDSS-powered data storage systems. This service provides businesses with a comprehensive assessment of their data storage infrastructure, identifying potential issues and ensuring peak performance and reliability.

“The efficient and secure operation of data storage systems is crucial. Open-E Check-Up Service offers a proactive approach to system maintenance, helping organizations avoid costly downtime and data loss, and being proactive, instead of reactive. The service includes a detailed evaluation process, starting with a consultation to understand specific needs. Secure data collection and analysis are then performed using log files and a dedicated spreadsheet, ensuring no direct external access to the system,” said Krzysztof Franek, CEO of Open-E. 

The Open-E Check-Up service delivers:

Detailed System Documentation: A comprehensive overview of the current storage environment.Issue Identification and Risk Assessment: A clear summary of any identified problems, along with an evaluation of the associated risks.Tailored Optimization Recommendations: Specific, actionable steps to improve system stability, efficiency, and security.Personal Consultation: An expert-led discussion of the findings and recommendations.

“Open-E Check-Up is more than just a health check; it’s a strategy for data storage excellence,” said Krzysztof Franek. “By identifying and addressing potential issues before they escalate, we empower businesses to maintain optimal performance, minimize risks, and focus on their core objectives.”

The Open-E Check-Up Service is ideal for businesses of all sizes seeking to ensure the reliability and efficiency of their data storage systems. The service is available immediately. For more information, please visit the Open-E Check-Up Service page: https://www.open-e.com/r/gb62/ or register to join the Open-E’s webinar on May 14th: https://www.open-e.com/r/rny4/

About Open-E

Open-E is the developer of the award-winning Open-E JovianDSS, a flagship software-defined storage platform renowned for its reliability, flexibility, and high performance. With over 40,000 implementations worldwide, Open-E has established itself as a trusted leader in the data storage industry. The company has garnered significant recognition for its innovative solutions, consistently meeting the demanding storage needs of businesses across various sectors. Open-E remains committed to delivering cutting-edge technology and exceptional support to its global customer base.

Press Contact

Paweł Brzeżek
Open-E, Inc.
+49 (89) 800-777-18
pawel.brzezek@open-e.com 

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