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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Scholastic Corporation | NASDAQ:SCHL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.78 | 33.00 | 38.09 | 0 | 09:09:43 |
For the fiscal year ended
|
May 31, 2020
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Commission File No.
|
000-19860
|
Delaware
|
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13-3385513
|
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(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
|
557 Broadway
|
|
|
|
New York,
|
New York
|
|
10012
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(Address of principal executive offices)
|
|
(Zip Code)
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Title of Class
|
Trading Symbol
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Name of Each Exchange on Which Registered
|
Common Stock, $0.01 par value
|
SCHL
|
The NASDAQ Stock Market LLC
|
ý
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
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Title of each class
|
|
Number of shares outstanding as of June 30, 2020
|
Common Stock, $0.01 par value
|
|
32,530,986
|
Class A Stock, $.01 par value
|
|
1,656,200
|
Table of Contents
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(Amounts in millions)
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||||||||||
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2020
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2019
|
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2018
|
||||||
Children’s Book Publishing and Distribution
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$
|
875.4
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$
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990.3
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$
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970.2
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Education
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287.3
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297.4
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288.6
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International
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324.4
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366.2
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369.6
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Total
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$
|
1,487.1
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$
|
1,653.9
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|
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$
|
1,628.4
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•
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Prepublication costs - Prepublication costs are incurred in all of the Company’s reportable segments. Prepublication costs include costs incurred to create and develop the art, prepress,
|
•
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Royalty advances - Royalty advances are incurred in all of the Company’s reportable segments, but are most prevalent in the Children’s Book Publishing and Distribution segment and enable the Company to obtain contractual commitments from authors to produce Content. The Company regularly provides authors with advances against expected future royalty payments, often before the books are written. Upon publication and sale of the books or other media, the authors generally will not receive further royalty payments until the contractual royalties earned from sales of such books or other media exceed such advances. The Company values its position in the market as the largest publisher and distributor of children's books in obtaining Content, and the Company’s experienced editorial staff aggressively acquires Content from both new and established authors.
|
•
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Acquired intangible assets - The Company may acquire fully or partially developed Content from third parties via acquisitions of entities or the purchase of the rights to Content outright.
|
Name
|
Age
|
Employed by
Registrant Since
|
Previous Position(s) Held
|
Richard Robinson
|
83
|
1962
|
Chairman of the Board (since 1982), President (since 1974) and Chief Executive Officer (since 1975).
|
Kenneth J. Cleary
|
55
|
2008
|
Chief Financial Officer (since 2017); Senior Vice President, Chief Accounting Officer (2014-2017); Vice President, External Reporting and Compliance (2008-2014).
|
Iole Lucchese
|
53
|
1991
|
Executive Vice President (since 2016), Chief Strategy Officer (since 2014), President, Scholastic Entertainment (since 2018),
President, Scholastic Canada (2016).
|
Satbir Bedi
|
56
|
2012
|
Executive Vice President and Chief Technology Officer (since 2018); Senior Vice President and Chief Technology Officer (2012-2018).
|
Judith A. Newman
|
62
|
1993
|
Executive Vice President and President, Scholastic Book Clubs (since 2014), Book Clubs and eCommerce (2011-2014), Book Clubs (2005-2011); Senior Vice President and President, Book Clubs and Scholastic At Home (2004-2005); Senior Vice President, Book Clubs (1997-2004).
|
Sasha Quinton
|
42
|
2020
|
Executive Vice President and President, Scholastic Book Fairs (2020); Vice President & GMM, Bookstore, Barnes and Noble, Inc. (2019); Senior Vice President, Marketing and Procurement, ReaderLink Distribution Services (2017-2019); Vice President, Marketing and Procurement, ReaderLink Distribution Services (2014-2017).
|
Andrew S. Hedden
|
79
|
2008
|
Executive Vice President, General Counsel and Secretary (since 2008) and member of the Board of Directors (since 1991).
|
•
|
The ability of the Company to successfully implement its strategies in response to the COVID-19 pandemic in a timely and flexible manner. Examples include:
|
◦
|
strategies for its respective business units to adapt to changes in the school market related to virtual or remote learning
|
◦
|
strategies in implementing on-going cost containment and reduction programs
|
•
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The introduction and acceptance of new products and services, including the success of its digital strategy and its ability to implement and successfully market its new core literacy program, as well as other programs, in its educational publishing business, as well as through the Company's international educational publishing operation in Singapore
|
•
|
The ability to expand in the global markets that it serves
|
•
|
The ability to meet demand for content meeting current standards in the United States
|
•
|
The ability to implement cross channel marketing and pricing
|
Period
|
|
Total number of
shares purchased |
|
|
Average
price paid per share |
|
Total number of shares purchased as part of publicly
announced plans or programs |
|
Maximum number of shares (or approximate dollar value in millions) that may yet be purchased under the plans or programs (i)
|
|||||
March 1, 2020 through March 31, 2020
|
|
93,248
|
|
|
$
|
30.16
|
|
|
93,248
|
|
|
$
|
67.3
|
|
April 1, 2020 through April 30, 2020
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
67.3
|
|
May 1, 2020 through May 31, 2020
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
67.3
|
|
Total
|
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93,248
|
|
|
|
|
|
93,248
|
|
|
$
|
67.3
|
|
|
Fiscal year ending May 31,
|
|||||||||||||||||
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||
Scholastic Corporation
|
$
|
100.00
|
|
$
|
89.15
|
|
$
|
98.49
|
|
$
|
105.78
|
|
$
|
78.93
|
|
$
|
71.39
|
|
NASDAQ Composite Index
|
100.00
|
|
97.59
|
|
122.26
|
|
146.79
|
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147.00
|
|
187.18
|
|
||||||
Peer Group
|
100.00
|
|
70.27
|
|
58.40
|
|
76.63
|
|
67.16
|
|
41.14
|
|
|
(Amounts in millions, except per share data)
For fiscal years ended May 31,
|
|
|||||||||||||||||
|
2020
|
|
2019
|
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2018
|
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2017
|
|
2016
|
||||||||||
Statement of Operations Data:
|
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|
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|
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|
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Revenues
|
$
|
1,487.1
|
|
|
$
|
1,653.9
|
|
|
$
|
1,628.4
|
|
|
$
|
1,741.6
|
|
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$
|
1,672.8
|
|
Cost of goods sold (1)
|
|
751.0
|
|
|
|
779.9
|
|
|
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744.6
|
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|
|
814.5
|
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762.3
|
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Selling, general and administrative expenses(2)
|
|
705.3
|
|
|
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781.4
|
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|
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765.7
|
|
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777.5
|
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773.6
|
|
Depreciation and amortization
|
|
61.5
|
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|
|
56.1
|
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|
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41.4
|
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38.7
|
|
|
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38.9
|
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Severance (3)
|
|
17.2
|
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|
|
10.6
|
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|
9.9
|
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|
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14.9
|
|
|
|
11.9
|
|
Asset impairments and write downs (4)
|
|
40.6
|
|
|
|
0.9
|
|
|
|
11.2
|
|
|
|
6.8
|
|
|
|
14.4
|
|
Operating income (loss)
|
|
(88.5
|
)
|
|
|
25.0
|
|
|
|
55.6
|
|
|
|
89.2
|
|
|
|
71.7
|
|
Interest (income) expense, net
|
|
(0.1
|
)
|
|
|
(3.4
|
)
|
|
|
(1.1
|
)
|
|
|
1.0
|
|
|
|
1.1
|
|
Other components of net periodic benefit (cost) (5)
|
|
(1.3
|
)
|
|
|
(1.4
|
)
|
|
|
(58.2
|
)
|
|
|
(0.3
|
)
|
|
|
(4.1
|
)
|
Gain (loss) on investments and other (6)
|
|
—
|
|
|
|
(1.0
|
)
|
|
|
0.0
|
|
|
|
—
|
|
|
|
2.2
|
|
Earnings (loss) from continuing operations before income taxes
|
|
(89.7
|
)
|
|
|
26.0
|
|
|
|
(1.5
|
)
|
|
|
87.9
|
|
|
|
68.7
|
|
Provision (benefit) for income taxes (7)
|
|
(46.0
|
)
|
|
|
10.4
|
|
|
|
3.5
|
|
|
|
35.4
|
|
|
|
24.7
|
|
Earnings (loss) from continuing operations
|
|
(43.7
|
)
|
|
|
15.6
|
|
|
|
(5.0
|
)
|
|
|
52.5
|
|
|
|
44.0
|
|
Earnings (loss) from discontinued operations, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2
|
)
|
|
|
(3.5
|
)
|
Net income (loss)
|
$
|
(43.7
|
)
|
|
$
|
15.6
|
|
|
$
|
(5.0
|
)
|
|
$
|
52.3
|
|
|
$
|
40.5
|
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
0.1
|
|
|
|
0.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net income (loss) attributable to Scholastic Corporation
|
$
|
(43.8
|
)
|
|
$
|
15.6
|
|
|
$
|
(5.0
|
)
|
|
$
|
52.3
|
|
|
$
|
40.5
|
|
Share Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations
|
$
|
(1.27
|
)
|
|
$
|
0.44
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.51
|
|
|
$
|
1.29
|
|
Earnings (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.00
|
)
|
|
$
|
(0.11
|
)
|
Net Income (loss) attributable to Scholastic Corporation
|
$
|
(1.27
|
)
|
|
$
|
0.44
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.51
|
|
|
$
|
1.18
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Earnings (loss) from continuing operations
|
$
|
(1.27
|
)
|
|
$
|
0.43
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.48
|
|
|
$
|
1.26
|
|
Earnings (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.10
|
)
|
Net Income (loss) attributable to Scholastic Corporation
|
$
|
(1.27
|
)
|
|
$
|
0.43
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.47
|
|
|
$
|
1.16
|
|
Weighted average shares outstanding - basic
|
|
34.6
|
|
|
|
35.2
|
|
|
|
35.0
|
|
|
|
34.7
|
|
|
|
34.1
|
|
Weighted average shares outstanding - diluted
|
|
34.6
|
|
|
|
35.8
|
|
|
|
35.0
|
|
|
|
35.4
|
|
|
|
34.9
|
|
Dividends declared per common share
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
$
|
533.8
|
|
|
$
|
419.1
|
|
|
$
|
512.5
|
|
|
$
|
583.4
|
|
|
$
|
571.8
|
|
Cash and cash equivalents
|
|
393.8
|
|
|
|
334.1
|
|
|
|
391.9
|
|
|
|
444.1
|
|
|
|
399.7
|
|
Total assets
|
|
2,033.6
|
|
|
|
1,878.5
|
|
|
|
1,825.4
|
|
|
|
1,760.4
|
|
|
|
1,713.1
|
|
Long-term debt (excluding capital leases)
|
|
210.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total debt
|
|
218.5
|
|
|
|
7.3
|
|
|
|
7.9
|
|
|
|
6.2
|
|
|
|
6.3
|
|
Long-term capital lease obligations
|
|
9.5
|
|
|
|
8.4
|
|
|
|
6.2
|
|
|
|
6.5
|
|
|
|
7.5
|
|
Total capital lease obligations
|
|
11.6
|
|
|
|
10.1
|
|
|
|
7.4
|
|
|
|
7.6
|
|
|
|
8.6
|
|
Total stockholders’ equity
|
$
|
1,180.6
|
|
|
$
|
1,272.8
|
|
|
$
|
1,320.8
|
|
|
$
|
1,307.9
|
|
|
$
|
1,257.6
|
|
|
(Amounts in millions, except per share data)
For fiscal years ended May 31,
|
|
|||||||||||
|
2020
|
|
2019
|
||||||||||
|
$
|
|
% (1)
|
|
$
|
|
% (1)
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Children’s Book Publishing and Distribution
|
$
|
875.4
|
|
|
58.9
|
|
|
$
|
990.3
|
|
|
59.9
|
|
Education
|
|
287.3
|
|
|
19.3
|
|
|
|
297.4
|
|
|
18.0
|
|
International
|
|
324.4
|
|
|
21.8
|
|
|
|
366.2
|
|
|
22.1
|
|
Total revenues
|
|
1,487.1
|
|
|
100.0
|
|
|
|
1,653.9
|
|
|
100.0
|
|
Cost of goods sold
|
|
751.0
|
|
|
50.5
|
|
|
|
779.9
|
|
|
47.2
|
|
Selling, general and administrative expenses (2)
|
|
705.3
|
|
|
47.5
|
|
|
|
781.4
|
|
|
47.2
|
|
Depreciation and amortization
|
|
61.5
|
|
|
4.1
|
|
|
|
56.1
|
|
|
3.4
|
|
Severance (3)
|
|
17.2
|
|
|
1.2
|
|
|
|
10.6
|
|
|
0.6
|
|
Asset impairments and write downs (4)
|
|
40.6
|
|
|
2.7
|
|
|
|
0.9
|
|
|
0.1
|
|
Operating income (loss)
|
|
(88.5
|
)
|
|
(6.0
|
)
|
|
|
25.0
|
|
|
1.5
|
|
Interest income
|
|
3.1
|
|
|
0.2
|
|
|
|
5.6
|
|
|
0.3
|
|
Interest expense
|
|
(3.0
|
)
|
|
(0.2
|
)
|
|
|
(2.2
|
)
|
|
(0.1
|
)
|
Other components of net periodic benefit (cost)
|
|
(1.3
|
)
|
|
(0.0
|
)
|
|
|
(1.4
|
)
|
|
(0.1
|
)
|
Gain (loss) on investments and other (5)
|
|
—
|
|
|
—
|
|
|
|
(1.0
|
)
|
|
(0.0
|
)
|
Earnings (loss) before income taxes
|
|
(89.7
|
)
|
|
(6.0
|
)
|
|
|
26.0
|
|
|
1.6
|
|
Provision (benefit) for income taxes (6)
|
|
(46.0
|
)
|
|
(3.1
|
)
|
|
|
10.4
|
|
|
0.7
|
|
Net income (loss)
|
$
|
(43.7
|
)
|
|
(2.9
|
)
|
|
$
|
15.6
|
|
|
0.9
|
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
0.1
|
|
|
0.0
|
|
|
|
0.0
|
|
|
0.0
|
|
Net income (loss) attributable to Scholastic Corporation
|
$
|
(43.8
|
)
|
|
(2.9
|
)
|
|
$
|
15.6
|
|
|
0.9
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Scholastic Corporation
|
$
|
(1.27
|
)
|
|
|
|
$
|
0.44
|
|
|
|
||
Diluted:
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Scholastic Corporation
|
$
|
(1.27
|
)
|
|
|
|
|
$
|
0.43
|
|
|
|
($ amounts in millions)
|
2020 compared to 2019
|
|
||||||||||||
|
2020
|
|
2019
|
|
$ change
|
|
% change
|
|||||||
Revenues
|
$
|
875.4
|
|
|
$
|
990.3
|
|
|
$
|
(114.9
|
)
|
|
(11.6
|
)%
|
Cost of goods sold
|
|
430.9
|
|
|
|
443.4
|
|
|
|
(12.5
|
)
|
|
(2.8
|
)
|
Other operating expenses *
|
|
420.9
|
|
|
|
464.0
|
|
|
|
(43.1
|
)
|
|
(9.3
|
)
|
Operating income (loss)
|
$
|
23.6
|
|
|
$
|
82.9
|
|
|
$
|
(59.3
|
)
|
|
(71.5
|
)%
|
Operating margin
|
|
2.7
|
%
|
|
|
8.4
|
%
|
|
|
|
|
|
|
|
($ amounts in millions)
|
2020 compared to 2019
|
|
||||||||||||
|
2020
|
|
2019
|
|
$ change
|
|
% change
|
|||||||
Revenues
|
$
|
287.3
|
|
|
$
|
297.4
|
|
|
$
|
(10.1
|
)
|
|
(3.4
|
)%
|
Cost of goods sold
|
|
100.7
|
|
|
|
100.6
|
|
|
|
0.1
|
|
|
0.1
|
|
Other operating expenses *
|
|
156.7
|
|
|
|
166.2
|
|
|
|
(9.5
|
)
|
|
(5.7
|
)
|
Operating income (loss)
|
$
|
29.9
|
|
|
$
|
30.6
|
|
|
$
|
(0.7
|
)
|
|
(2.3
|
)%
|
Operating margin
|
|
10.4
|
%
|
|
|
10.3
|
%
|
|
|
|
|
|
|
|
($ amounts in millions)
|
2020 compared to 2019
|
|
||||||||||||
|
2020
|
|
2019
|
|
$ change
|
|
% change
|
|||||||
Revenues
|
$
|
324.4
|
|
|
$
|
366.2
|
|
|
$
|
(41.8
|
)
|
|
(11.4
|
)%
|
Cost of goods sold
|
|
177.3
|
|
|
|
190.8
|
|
|
|
(13.5
|
)
|
|
(7.1
|
)%
|
Other operating expenses *
|
|
153.0
|
|
|
|
161.6
|
|
|
|
(8.6
|
)
|
|
(5.3
|
)%
|
Asset impairments and write downs
|
|
0.6
|
|
|
|
—
|
|
|
|
0.6
|
|
|
100.0
|
%
|
Operating income (loss)
|
$
|
(6.5
|
)
|
|
$
|
13.8
|
|
|
$
|
(20.3
|
)
|
|
(147.1
|
)%
|
Operating margin
|
|
(2.0
|
)%
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ amounts in millions
|
|
|||||||
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations
|
1 Year or Less
|
|
Years 2-3
|
|
Years 4-5
|
|
After Year 5
|
|
Total
|
||||||||||
Minimum print quantities
|
$
|
40.9
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44.0
|
|
Royalty advances
|
|
16.2
|
|
|
|
5.9
|
|
|
|
0.0
|
|
|
|
0.1
|
|
|
|
22.2
|
|
Lines of credit and short-term debt
|
|
7.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7.9
|
|
Long-term debt
|
|
—
|
|
|
|
210.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
210.6
|
|
Capital leases (1)
|
|
2.5
|
|
|
|
4.7
|
|
|
|
3.4
|
|
|
|
2.4
|
|
|
|
13.0
|
|
Pension and postretirement plans (2)
|
|
2.6
|
|
|
|
5.2
|
|
|
|
6.0
|
|
|
|
14.4
|
|
|
|
28.2
|
|
Operating leases
|
|
26.8
|
|
|
|
44.7
|
|
|
|
19.4
|
|
|
|
24.8
|
|
|
|
115.7
|
|
Total
|
$
|
96.9
|
|
|
$
|
274.2
|
|
|
$
|
28.8
|
|
|
$
|
41.7
|
|
|
$
|
441.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ amounts in millions
|
|
|||||||||||||||||
|
|
Fiscal Year Maturity
|
|
|
|
Fair Value
|
|||||||||||||||||||||||||
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
Thereafter
|
|
Total
|
|
2020
|
||||||||||||||||
Debt Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lines of credit and current portion of long-term debt
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
7.9
|
|
Average interest rate
|
|
4.6
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
210.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
210.6
|
|
|
$
|
210.6
|
|
Average interest rate
|
|
—
|
|
|
2.2
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
The following consolidated financial statement schedule for the years ended May 31, 2020, 2019 and 2018 is filed with this annual report on Form 10-K:
|
|
|
|
|
|
|
|
(Amounts in millions, except per share data)
For fiscal years ended May 31,
|
|
|||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Revenues
|
$
|
1,487.1
|
|
|
$
|
1,653.9
|
|
|
$
|
1,628.4
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
751.0
|
|
|
|
779.9
|
|
|
|
744.6
|
|
Selling, general and administrative expenses
|
|
705.3
|
|
|
|
781.4
|
|
|
|
765.7
|
|
Depreciation and amortization
|
|
61.5
|
|
|
|
56.1
|
|
|
|
41.4
|
|
Severance
|
|
17.2
|
|
|
|
10.6
|
|
|
|
9.9
|
|
Asset impairments and write downs
|
|
40.6
|
|
|
|
0.9
|
|
|
|
11.2
|
|
Total operating costs and expenses
|
|
1,575.6
|
|
|
|
1,628.9
|
|
|
|
1,572.8
|
|
Operating income (loss)
|
|
(88.5
|
)
|
|
|
25.0
|
|
|
|
55.6
|
|
Interest income
|
|
3.1
|
|
|
|
5.6
|
|
|
|
3.1
|
|
Interest expense
|
|
(3.0
|
)
|
|
|
(2.2
|
)
|
|
|
(2.0
|
)
|
Other components of net periodic benefit (cost)
|
|
(1.3
|
)
|
|
|
(1.4
|
)
|
|
|
(58.2
|
)
|
Gain (loss) on investments and other
|
|
—
|
|
|
|
(1.0
|
)
|
|
|
0.0
|
|
Earnings (loss) before income taxes
|
|
(89.7
|
)
|
|
|
26.0
|
|
|
|
(1.5
|
)
|
Provision (benefit) for income taxes
|
|
(46.0
|
)
|
|
|
10.4
|
|
|
|
3.5
|
|
Net income (loss)
|
$
|
(43.7
|
)
|
|
$
|
15.6
|
|
|
$
|
(5.0
|
)
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
0.1
|
|
|
|
0.0
|
|
|
|
—
|
|
Net income (loss) attributable to Scholastic Corporation
|
$
|
(43.8
|
)
|
|
$
|
15.6
|
|
|
$
|
(5.0
|
)
|
|
|
|
|
|
|
|
|
|
|||
Basic and diluted earnings (loss) per share of Class A and Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|||
Net Income (loss) attributable to Scholastic Corporation
|
$
|
(1.27
|
)
|
|
$
|
0.44
|
|
|
$
|
(0.14
|
)
|
Diluted:
|
|
|
|
|
|
|
|
|
|||
Net Income (loss) attributable to Scholastic Corporation
|
$
|
(1.27
|
)
|
|
$
|
0.43
|
|
|
$
|
(0.14
|
)
|
Dividends declared per share of Class A and Common Stock
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
(Amounts in millions)
For fiscal years ended May 31,
|
|
|||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Net income (loss)
|
$
|
(43.7
|
)
|
|
$
|
15.6
|
|
|
$
|
(5.0
|
)
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
(2.9
|
)
|
|
|
(5.2
|
)
|
|
|
3.4
|
|
Pension and postretirement adjustments net of tax
|
|
4.3
|
|
|
|
1.2
|
|
|
|
35.1
|
|
Total other comprehensive income (loss)
|
$
|
1.4
|
|
|
$
|
(4.0
|
)
|
|
$
|
38.5
|
|
Comprehensive income (loss)
|
|
(42.3
|
)
|
|
|
11.6
|
|
|
|
33.5
|
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
0.1
|
|
|
|
0.0
|
|
|
|
—
|
|
Comprehensive income (loss) attributable to Scholastic Corporation
|
$
|
(42.4
|
)
|
|
$
|
11.6
|
|
|
$
|
33.5
|
|
|
|
|
|
|
|
|
|
|
(Amounts in millions)
Balances at May 31,
|
|
||||||
ASSETS
|
2020
|
|
2019
|
||||
Current Assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
393.8
|
|
|
$
|
334.1
|
|
Accounts receivable, net
|
|
239.8
|
|
|
|
250.1
|
|
Inventories, net
|
|
270.6
|
|
|
|
323.7
|
|
Income tax receivable
|
|
90.0
|
|
|
|
10.3
|
|
Prepaid expenses and other current assets
|
|
41.1
|
|
|
|
42.4
|
|
Total current assets
|
|
1,035.3
|
|
|
|
960.6
|
|
Noncurrent Assets:
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
576.9
|
|
|
|
577.7
|
|
Prepublication costs, net
|
|
70.6
|
|
|
|
70.2
|
|
Operating lease right-of-use assets, net
|
|
95.3
|
|
|
|
—
|
|
Royalty advances, net
|
|
39.9
|
|
|
|
47.5
|
|
Goodwill
|
|
124.9
|
|
|
|
125.2
|
|
Noncurrent deferred income taxes
|
|
18.6
|
|
|
|
37.0
|
|
Other assets and deferred charges
|
|
72.1
|
|
|
|
60.3
|
|
Total noncurrent assets
|
|
998.3
|
|
|
|
917.9
|
|
Total assets
|
$
|
2,033.6
|
|
|
$
|
1,878.5
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
||
Lines of credit and current portion of long-term debt
|
$
|
7.9
|
|
|
$
|
7.3
|
|
Accounts payable
|
|
153.6
|
|
|
|
195.3
|
|
Accrued royalties
|
|
37.8
|
|
|
|
41.9
|
|
Deferred revenue
|
|
116.5
|
|
|
|
130.8
|
|
Other accrued expenses
|
|
161.5
|
|
|
|
164.8
|
|
Accrued income taxes
|
|
1.4
|
|
|
|
1.4
|
|
Operating lease liabilities
|
|
22.8
|
|
|
|
—
|
|
Total current liabilities
|
|
501.5
|
|
|
|
541.5
|
|
Noncurrent Liabilities:
|
|
|
|
|
|
|
|
Long-term debt
|
|
210.6
|
|
|
|
—
|
|
Operating lease liabilities
|
|
75.7
|
|
|
|
—
|
|
Other noncurrent liabilities
|
|
65.2
|
|
|
|
64.2
|
|
Total noncurrent liabilities
|
|
351.5
|
|
|
|
64.2
|
|
Commitments and Contingencies:
|
|
—
|
|
|
|
—
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
Preferred Stock, $1.00 par value: Authorized, 2.0 shares; Issued and Outstanding, none
|
$
|
—
|
|
|
$
|
—
|
|
Class A Stock, $0.01 par value: Authorized, 4.0 shares; Issued and Outstanding, 1.7 shares
|
|
0.0
|
|
|
|
0.0
|
|
Common Stock, $0.01 par value: Authorized, 70.0 shares; Issued, 42.9 shares; Outstanding, 32.5 and 33.4 shares, respectively
|
|
0.4
|
|
|
|
0.4
|
|
Additional paid-in capital
|
|
622.4
|
|
|
|
620.8
|
|
Accumulated other comprehensive income (loss)
|
|
(58.3
|
)
|
|
|
(59.7
|
)
|
Retained earnings
|
|
948.0
|
|
|
|
1,012.6
|
|
Treasury stock at cost: 10.4 shares and 9.5 shares, respectively
|
|
(333.3
|
)
|
|
|
(302.6
|
)
|
Total stockholders' equity of Scholastic Corporation
|
|
1,179.2
|
|
|
|
1,271.5
|
|
Noncontrolling interest
|
|
1.4
|
|
|
|
1.3
|
|
Total stockholders’ equity
|
|
1,180.6
|
|
|
|
1,272.8
|
|
Total liabilities and stockholders’ equity
|
$
|
2,033.6
|
|
|
$
|
1,878.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in millions)
|
|
||||||||||||||||||||||||
|
Class A Stock
|
Common Stock
|
Additional Paid-in Capital
|
Accumulated
Other Comprehensive
Income (Loss)
|
Retained
Earnings
|
Treasury Stock
At Cost
|
Total
Stockholders'
Equity of Scholastic Corporation
|
Noncontrolling interest
|
Total
Stockholders' Equity |
|||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
||||||||||||||||||||||||||||||||
Balance at May 31, 2017
|
1.7
|
|
|
$
|
0.0
|
|
33.4
|
|
|
$
|
0.4
|
|
|
$
|
606.8
|
|
|
$
|
(94.2
|
)
|
|
$
|
1,091.2
|
|
|
$
|
(296.3
|
)
|
|
$
|
1,307.9
|
|
$
|
—
|
|
$
|
1,307.9
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
—
|
|
(5.0
|
)
|
|||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
—
|
|
3.4
|
|
|||||||||
Pension and post-retirement adjustments (net of tax of $20.9)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.1
|
|
|
—
|
|
|
—
|
|
|
35.1
|
|
—
|
|
35.1
|
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
—
|
|
10.7
|
|
|||||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.8
|
|
—
|
|
15.8
|
|
|||||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.2
|
)
|
|
(27.2
|
)
|
—
|
|
(27.2
|
)
|
|||||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.6
|
|
|
—
|
|
|
(18.9
|
)
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
1.1
|
|
—
|
|
1.1
|
|
|||||||||
Dividends
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.0
|
)
|
|
—
|
|
|
(21.0
|
)
|
—
|
|
(21.0
|
)
|
|||||||||
Balance at May 31, 2018
|
1.7
|
|
|
$
|
0.0
|
|
33.3
|
|
|
$
|
0.4
|
|
|
$
|
614.4
|
|
|
$
|
(55.7
|
)
|
|
$
|
1,065.2
|
|
|
$
|
(303.5
|
)
|
|
$
|
1,320.8
|
|
$
|
—
|
|
$
|
1,320.8
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.6
|
|
|
—
|
|
|
15.6
|
|
—
|
|
15.6
|
|
|||||||||
Adoption of ASC606 (net of tax of $16.0)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.0
|
)
|
|
—
|
|
|
(47.0
|
)
|
—
|
|
(47.0
|
)
|
|||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
—
|
|
(5.2
|
)
|
|||||||||
Pension and post-retirement adjustments (net of tax of $0.5)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
—
|
|
1.2
|
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
8.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
—
|
|
8.3
|
|
|||||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
—
|
|
6.0
|
|
|||||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.5
|
)
|
|
(8.5
|
)
|
—
|
|
(8.5
|
)
|
|||||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.3
|
|
|
—
|
|
|
(7.9
|
)
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|
1.5
|
|
—
|
|
1.5
|
|
|||||||||
Dividends
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.2
|
)
|
|
—
|
|
|
(21.2
|
)
|
—
|
|
(21.2
|
)
|
|||||||||
Fair value of noncontrolling interest in Make Believe Ideas Limited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
1.3
|
|
|||||||||||||||||
Balance at May 31, 2019
|
1.7
|
|
|
$
|
0.0
|
|
33.4
|
|
|
$
|
0.4
|
|
|
$
|
620.8
|
|
|
$
|
(59.7
|
)
|
|
$
|
1,012.6
|
|
|
$
|
(302.6
|
)
|
|
$
|
1,271.5
|
|
$
|
1.3
|
|
$
|
1,272.8
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.8
|
)
|
|
—
|
|
|
(43.8
|
)
|
0.1
|
|
(43.7
|
)
|
|||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|
|
|
|
—
|
|
|
(2.9
|
)
|
—
|
|
(2.9
|
)
|
|||||||||
Pension and post-retirement adjustments (net of tax of $0.4)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
—
|
|
4.3
|
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
—
|
|
3.8
|
|
|||||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
—
|
|
0.7
|
|
|||||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35.5
|
)
|
|
(35.5
|
)
|
—
|
|
(35.5
|
)
|
|||||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.1
|
|
|
—
|
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
4.8
|
|
|
1.9
|
|
—
|
|
1.9
|
|
|||||||||
Dividends
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.8
|
)
|
|
—
|
|
|
(20.8
|
)
|
—
|
|
(20.8
|
)
|
|||||||||
Balance at May 31, 2020
|
1.7
|
|
|
$
|
0.0
|
|
32.5
|
|
|
$
|
0.4
|
|
|
$
|
622.4
|
|
|
$
|
(58.3
|
)
|
|
$
|
948.0
|
|
|
$
|
(333.3
|
)
|
|
$
|
1,179.2
|
|
$
|
1.4
|
|
$
|
1,180.6
|
|
|
(Amounts in millions)
Years ended May 31,
|
|
|||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flows - operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Scholastic Corporation
|
$
|
(43.8
|
)
|
|
$
|
15.6
|
|
|
$
|
(5.0
|
)
|
Adjustments to reconcile Net income (loss) to
net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Provision for losses on accounts receivable
|
|
15.6
|
|
|
|
7.0
|
|
|
|
9.5
|
|
Provision for losses on inventory
|
|
34.3
|
|
|
|
20.8
|
|
|
|
18.4
|
|
Provision for losses on royalty advances
|
|
8.1
|
|
|
|
6.8
|
|
|
|
4.1
|
|
Pension settlement
|
|
—
|
|
|
|
—
|
|
|
|
57.3
|
|
Amortization of prepublication and production costs
|
|
26.2
|
|
|
|
22.4
|
|
|
|
21.8
|
|
Depreciation and amortization
|
|
64.0
|
|
|
|
59.3
|
|
|
|
44.2
|
|
Amortization of pension and postretirement actuarial gains and losses
|
|
0.8
|
|
|
|
0.7
|
|
|
|
2.2
|
|
Deferred income taxes
|
|
17.9
|
|
|
|
3.3
|
|
|
|
7.7
|
|
Stock-based compensation
|
|
3.8
|
|
|
|
8.3
|
|
|
|
10.7
|
|
Income from equity investments
|
|
(3.2
|
)
|
|
|
(5.9
|
)
|
|
|
(4.8
|
)
|
Non cash write off related to asset impairments and write downs
|
|
40.6
|
|
|
|
0.9
|
|
|
|
11.2
|
|
(Gain) loss on investments
|
|
—
|
|
|
|
1.0
|
|
|
|
—
|
|
Changes in assets and liabilities, net of amounts acquired:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(7.0
|
)
|
|
|
(11.9
|
)
|
|
|
(12.9
|
)
|
Inventories
|
|
(20.8
|
)
|
|
|
(49.8
|
)
|
|
|
(27.4
|
)
|
Income tax receivable
|
|
(79.8
|
)
|
|
|
7.4
|
|
|
|
(13.8
|
)
|
Prepaid expenses and other current assets
|
|
0.9
|
|
|
|
8.1
|
|
|
|
(8.3
|
)
|
Royalty advances
|
|
(2.6
|
)
|
|
|
(9.8
|
)
|
|
|
(7.0
|
)
|
Accounts payable
|
|
(33.6
|
)
|
|
|
11.8
|
|
|
|
45.9
|
|
Accrued income taxes
|
|
0.1
|
|
|
|
(0.9
|
)
|
|
|
(1.1
|
)
|
Accrued royalties
|
|
(3.8
|
)
|
|
|
7.9
|
|
|
|
(0.3
|
)
|
Deferred revenue
|
|
(13.8
|
)
|
|
|
20.1
|
|
|
|
0.2
|
|
Other, net
|
|
(1.8
|
)
|
|
|
(6.7
|
)
|
|
|
(11.1
|
)
|
Total adjustments
|
|
45.9
|
|
|
|
100.8
|
|
|
|
146.5
|
|
Net cash provided by (used in) operating activities
|
|
2.1
|
|
|
|
116.4
|
|
|
|
141.5
|
|
Cash flows - investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Prepublication and production expenditures
|
|
(28.5
|
)
|
|
|
(38.1
|
)
|
|
|
(36.1
|
)
|
Additions to property, plant and equipment
|
|
(62.7
|
)
|
|
|
(95.0
|
)
|
|
|
(121.5
|
)
|
Other investment and acquisition-related payments
|
|
(1.2
|
)
|
|
|
(14.2
|
)
|
|
|
(4.4
|
)
|
Land acquisition
|
|
(3.3
|
)
|
|
|
—
|
|
|
|
—
|
|
Net cash provided by (used in) investing activities
|
|
(95.7
|
)
|
|
|
(147.3
|
)
|
|
|
(162.0
|
)
|
|
|
|
|
|
(Amounts in millions)
Years ended May 31,
|
|
|||||
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flows - financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under lines of credit, credit agreement and revolving loan
|
|
234.2
|
|
|
|
58.8
|
|
|
|
44.9
|
|
Repayments of lines of credit, credit agreement and revolving loan
|
|
(26.7
|
)
|
|
|
(60.1
|
)
|
|
|
(42.0
|
)
|
Repayment of capital lease obligations
|
|
(2.0
|
)
|
|
|
(1.6
|
)
|
|
|
(1.3
|
)
|
Reacquisition of common stock
|
|
(35.5
|
)
|
|
|
(8.5
|
)
|
|
|
(27.3
|
)
|
Proceeds pursuant to stock-based compensation plans
|
|
0.7
|
|
|
|
6.0
|
|
|
|
15.8
|
|
Payment of dividends
|
|
(20.8
|
)
|
|
|
(21.1
|
)
|
|
|
(21.1
|
)
|
Other, net
|
|
4.2
|
|
|
|
0.8
|
|
|
|
(1.0
|
)
|
Net cash provided by (used in) financing activities
|
|
154.1
|
|
|
|
(25.7
|
)
|
|
|
(32.0
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(0.8
|
)
|
|
|
(1.2
|
)
|
|
|
0.3
|
|
Net increase (decrease) in cash and cash equivalents
|
|
59.7
|
|
|
|
(57.8
|
)
|
|
|
(52.2
|
)
|
Cash and cash equivalents at beginning of period
|
|
334.1
|
|
|
|
391.9
|
|
|
|
444.1
|
|
Cash and cash equivalents at end of period
|
$
|
393.8
|
|
|
$
|
334.1
|
|
|
$
|
391.9
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Supplemental Information:
|
|
|
|
|
|
|
|
|
|
|
|
Income tax payments (refunds)
|
$
|
7.2
|
|
|
$
|
2.5
|
|
|
$
|
14.5
|
|
Interest paid
|
|
1.5
|
|
|
|
1.3
|
|
|
|
1.4
|
|
Non cash: Property, plant and equipment additions accrued in accounts payable
|
|
2.5
|
|
|
|
6.1
|
|
|
|
23.7
|
|
•
|
Accounts receivable allowance for doubtful accounts
|
•
|
Pension and postretirement benefit plans
|
•
|
Uncertain tax positions
|
•
|
The timing and amount of future income taxes and related deductions
|
•
|
Inventory reserves
|
•
|
Cost of goods sold from book fair operations during interim periods based on estimated gross profit rates
|
•
|
Sales tax contingencies
|
•
|
Royalty advance reserves and royalty expense accruals
|
•
|
Impairment testing for goodwill, intangibles and other long-lived assets and investments
|
•
|
Assets and liabilities acquired in business combinations
|
•
|
Variable consideration related to anticipated returns
|
•
|
Allocation of transaction price to contractual performance obligations
|
|
2020
|
|
2019
|
|
2018
|
||||||
Estimated fair value of stock options granted
|
$
|
6.99
|
|
|
$
|
11.97
|
|
|
$
|
10.45
|
|
Assumptions:
|
|
|
|
|
|
|
|
|
|||
Expected dividend yield
|
1.9
|
%
|
|
1.4
|
%
|
|
1.5
|
%
|
|||
Expected stock price volatility
|
27.4
|
%
|
|
28.4
|
%
|
|
29.8
|
%
|
|||
Risk-free interest rate
|
1.3
|
%
|
|
3.0
|
%
|
|
2.1
|
%
|
|||
Average expected life of options
|
5 years
|
|
|
6 years
|
|
|
6 years
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Book Clubs
|
$
|
156.8
|
|
|
$
|
212.4
|
|
|
$
|
224.3
|
|
Book Fairs
|
|
383.8
|
|
|
|
499.6
|
|
|
|
513.6
|
|
Trade
|
|
306.8
|
|
|
|
275.4
|
|
|
|
232.3
|
|
Total Children's Book Publishing & Distribution
|
$
|
847.4
|
|
|
$
|
987.4
|
|
|
$
|
970.2
|
|
|
|
|
|
|
|
|
|
|
|||
Education
|
$
|
287.1
|
|
|
$
|
297.3
|
|
|
$
|
288.6
|
|
|
|
|
|
|
|
|
|
|
|||
Major Markets(1)
|
|
256.6
|
|
|
|
257.9
|
|
|
|
258.3
|
|
Other Markets(2)
|
|
96.0
|
|
|
|
111.3
|
|
|
|
111.3
|
|
Total International
|
$
|
352.6
|
|
|
$
|
369.2
|
|
|
$
|
369.6
|
|
Total Revenues
|
$
|
1,487.1
|
|
|
$
|
1,653.9
|
|
|
$
|
1,628.4
|
|
•
|
Children’s Book Publishing and Distribution operates as an integrated business which includes the publication and distribution of children’s books, ebooks, media and interactive products in the United States through its book clubs and book fairs in its school channels and through the trade channel. This segment is comprised of three operating segments.
|
•
|
Education includes the publication and distribution to schools and libraries of children’s books, classroom magazines, supplemental and core classroom materials and programs and related support services, and print and on-line reference and non-fiction products for grades pre-kindergarten to 12 in the United States. This segment is comprised of three operating segments.
|
•
|
International includes the publication and distribution of products and services outside the United States by the Company’s international operations, and its export and foreign rights businesses. This segment is comprised of three operating segments.
|
|
Children's
Book
Publishing &
Distribution
|
|
Education
|
|
Overhead (1)
|
|
Total
Domestic
|
|
International
|
|
Total
|
||||||||||||
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
875.4
|
|
|
$
|
287.3
|
|
|
$
|
—
|
|
|
$
|
1,162.7
|
|
|
$
|
324.4
|
|
|
$
|
1,487.1
|
|
Bad debts
|
|
5.8
|
|
|
|
2.5
|
|
|
|
—
|
|
|
|
8.3
|
|
|
|
7.3
|
|
|
|
15.6
|
|
Depreciation and amortization(2)
|
|
26.5
|
|
|
|
13.0
|
|
|
|
43.4
|
|
|
|
82.9
|
|
|
|
7.3
|
|
|
|
90.2
|
|
Asset impairments and write downs
|
|
—
|
|
|
|
—
|
|
|
|
40.0
|
|
|
|
40.0
|
|
|
|
0.6
|
|
|
|
40.6
|
|
Segment operating income (loss)
|
|
23.6
|
|
|
|
29.9
|
|
|
|
(135.5
|
)
|
|
|
(82.0
|
)
|
|
|
(6.5
|
)
|
|
|
(88.5
|
)
|
Segment assets at May 31, 2020
|
|
523.7
|
|
|
|
223.4
|
|
|
|
1,012.7
|
|
|
|
1,759.8
|
|
|
|
273.8
|
|
|
|
2,033.6
|
|
Goodwill at May 31, 2020
|
|
46.9
|
|
|
|
68.1
|
|
|
|
—
|
|
|
|
115.0
|
|
|
|
9.9
|
|
|
|
124.9
|
|
Expenditures for other non-current assets(3)
|
|
49.5
|
|
|
|
20.1
|
|
|
|
49.0
|
|
|
|
118.6
|
|
|
|
22.0
|
|
|
|
140.6
|
|
Other non-current assets at May 31, 2020(3)
|
|
169.6
|
|
|
|
123.8
|
|
|
|
499.8
|
|
|
|
793.2
|
|
|
|
74.6
|
|
|
|
867.8
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
990.3
|
|
|
$
|
297.4
|
|
|
$
|
—
|
|
|
$
|
1,287.7
|
|
|
$
|
366.2
|
|
|
$
|
1,653.9
|
|
Bad debts
|
|
3.8
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
5.2
|
|
|
|
1.8
|
|
|
|
7.0
|
|
Depreciation and amortization(2)
|
|
23.7
|
|
|
|
9.5
|
|
|
|
41.7
|
|
|
|
74.9
|
|
|
|
6.8
|
|
|
|
81.7
|
|
Asset impairments and write downs
|
|
—
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
0.9
|
|
|
|
—
|
|
|
|
0.9
|
|
Segment operating income (loss)
|
|
82.9
|
|
|
|
30.6
|
|
|
|
(102.3
|
)
|
|
|
11.2
|
|
|
|
13.8
|
|
|
|
25.0
|
|
Segment assets at May 31, 2019
|
|
523.4
|
|
|
|
214.7
|
|
|
|
887.6
|
|
|
|
1,625.7
|
|
|
|
252.8
|
|
|
|
1,878.5
|
|
Goodwill at May 31, 2019
|
|
47.0
|
|
|
|
68.2
|
|
|
|
—
|
|
|
|
115.2
|
|
|
|
10.0
|
|
|
|
125.2
|
|
Expenditures for other non-current assets(3)
|
|
71.4
|
|
|
|
22.6
|
|
|
|
77.6
|
|
|
|
171.6
|
|
|
|
13.5
|
|
|
|
185.1
|
|
Other non-current assets at May 31, 2019(3)
|
|
175.0
|
|
|
|
116.3
|
|
|
|
507.7
|
|
|
|
799.0
|
|
|
|
65.3
|
|
|
|
864.3
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
970.2
|
|
|
$
|
288.6
|
|
|
$
|
—
|
|
|
$
|
1,258.8
|
|
|
$
|
369.6
|
|
|
$
|
1,628.4
|
|
Bad debts
|
|
4.4
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
5.8
|
|
|
|
3.7
|
|
|
|
9.5
|
|
Depreciation and amortization(2)
|
|
23.3
|
|
|
|
7.4
|
|
|
|
29.1
|
|
|
|
59.8
|
|
|
|
6.2
|
|
|
|
66.0
|
|
Asset impairments and write downs
|
|
0.2
|
|
|
|
—
|
|
|
|
11.0
|
|
|
|
11.2
|
|
|
|
—
|
|
|
|
11.2
|
|
Segment operating income (loss)
|
|
105.8
|
|
|
|
33.9
|
|
|
|
(101.8
|
)
|
|
|
37.9
|
|
|
|
17.7
|
|
|
|
55.6
|
|
Segment assets at May 31, 2018
|
|
434.8
|
|
|
|
202.4
|
|
|
|
927.9
|
|
|
|
1,565.1
|
|
|
|
260.3
|
|
|
|
1,825.4
|
|
Goodwill at May 31, 2018
|
|
40.9
|
|
|
|
68.3
|
|
|
|
—
|
|
|
|
109.2
|
|
|
|
10.0
|
|
|
|
119.2
|
|
Expenditures for other non-current assets(3)
|
|
58.6
|
|
|
|
19.2
|
|
|
|
104.5
|
|
|
|
182.3
|
|
|
|
15.3
|
|
|
|
197.6
|
|
Other non-current assets at May 31, 2018(3)
|
|
151.2
|
|
|
|
101.8
|
|
|
|
492.7
|
|
|
|
745.7
|
|
|
|
74.3
|
|
|
|
820.0
|
|
(1)
|
Overhead includes all domestic corporate amounts not allocated to segments, including expenses and costs related to the management of corporate assets. Unallocated assets are principally comprised of deferred income taxes and property, plant and equipment related to the Company’s headquarters in the metropolitan New York area, its fulfillment and distribution facilities located in Missouri and its facility located in Connecticut.
|
(2)
|
Includes depreciation of property, plant and equipment and amortization of intangible assets and prepublication and production costs.
|
(3)
|
Other non-current assets include property, plant and equipment, prepublication assets, production assets, cloud computing costs, royalty advances, goodwill, intangible assets and investments. Expenditures for other non-current assets for the International reportable segment include expenditures for long-lived assets of $17.3, $8.2 and $10.0 for the fiscal years ended May 31, 2020, 2019 and 2018, respectively. Other non-current assets for the International reportable segment include long-lived assets of $43.8, $35.9 and $36.8 at May 31, 2020, 2019 and 2018, respectively.
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
|
|
2020
|
|
|
2019
|
||||||||||
Loan Agreement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Loan
|
$
|
200.0
|
|
|
$
|
200.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unsecured Lines of Credit (weighted average interest rates of 4.6% and 4.1%, respectively)
|
|
7.9
|
|
|
|
7.9
|
|
|
|
7.3
|
|
|
|
7.3
|
|
UK long-term debt
|
|
10.6
|
|
|
|
10.6
|
|
|
|
—
|
|
|
|
—
|
|
Total debt
|
$
|
218.5
|
|
|
$
|
218.5
|
|
|
$
|
7.3
|
|
|
$
|
7.3
|
|
Less: lines of credit and current portion of long-term debt
|
|
(7.9
|
)
|
|
|
(7.9
|
)
|
|
|
(7.3
|
)
|
|
|
(7.3
|
)
|
Total long-term debt
|
$
|
210.6
|
|
|
$
|
210.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2021
|
$
|
7.9
|
|
2022
|
|
210.6
|
|
2023
|
|
—
|
|
2024
|
|
—
|
|
2025
|
|
—
|
|
Thereafter
|
|
—
|
|
Total debt
|
$
|
218.5
|
|
•
|
the borrowing limit was reduced to $375.0 from $425.0;
|
•
|
A Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.50% or (iii) the Eurodollar Rate for a one month interest period plus 1.00%, as well as, in each case, an applicable spread ranging from 0.175% to 0.60%, as determined by the Company’s prevailing consolidated debt to total capital ratio.
|
•
|
A Eurodollar Rate equal to the London interbank offered rate (LIBOR) plus an applicable spread ranging from 1.175% to 1.60%, as determined by the Company’s prevailing consolidated debt to total capital ratio.
|
|
Royalty Advances
|
|
Minimum Print Quantities
|
||||
2021
|
$
|
16.2
|
|
|
$
|
40.9
|
|
2022
|
|
5.3
|
|
|
|
1.7
|
|
2023
|
|
0.6
|
|
|
|
1.4
|
|
2024
|
|
0.0
|
|
|
|
—
|
|
2025
|
|
0.0
|
|
|
|
—
|
|
2026 and thereafter
|
|
0.1
|
|
|
|
—
|
|
Total commitments
|
$
|
22.2
|
|
|
$
|
44.0
|
|
|
2020
|
|
2019
|
|
Segment
|
||||
Equity method investments
|
$
|
25.0
|
|
|
$
|
23.4
|
|
|
International
|
Other equity investments
|
|
6.0
|
|
|
|
6.0
|
|
|
Children's Book Publishing & Distribution
|
Total investments
|
$
|
31.0
|
|
|
$
|
29.4
|
|
|
|
|
2020
|
|
2019
|
||||
Land
|
$
|
82.5
|
|
|
$
|
79.1
|
|
Buildings
|
|
246.7
|
|
|
|
239.1
|
|
Capitalized software
|
|
189.5
|
|
|
|
158.9
|
|
Furniture, fixtures and equipment
|
|
217.0
|
|
|
|
213.4
|
|
Building and leasehold improvements
|
|
212.2
|
|
|
|
211.0
|
|
Construction in progress
|
|
49.0
|
|
|
|
46.8
|
|
Total at cost
|
$
|
996.9
|
|
|
$
|
948.3
|
|
Less: Accumulated depreciation and amortization
|
|
(420.0
|
)
|
|
|
(370.6
|
)
|
Property, plant and equipment, net
|
$
|
576.9
|
|
|
$
|
577.7
|
|
|
May 31, 2020
|
|
Location within Consolidated Balance Sheet
|
||
Operating leases
|
$
|
95.3
|
|
|
Operating lease right-of-use assets, net
|
Finance leases
|
|
10.9
|
|
|
Property, plant and equipment, net
|
Total lease assets
|
$
|
106.2
|
|
|
|
|
|
|
|
|
|
Operating leases :
|
|
|
|
|
|
Current portion
|
$
|
22.8
|
|
|
Current portion of operating lease liabilities
|
Non-current portion
|
|
75.7
|
|
|
Long-term operating lease liabilities
|
Total operating lease liabilities
|
$
|
98.5
|
|
|
|
|
|
|
|
|
|
Finance leases :
|
|
|
|
|
|
Current portion
|
$
|
2.1
|
|
|
Other accrued expenses
|
Non-current portion
|
|
9.5
|
|
|
Other noncurrent liabilities
|
Total finance lease liabilities
|
$
|
11.6
|
|
|
|
Total lease liabilities
|
$
|
110.1
|
|
|
|
|
Fiscal Year Ended May 31, 2020
|
|
Location within Consolidated Statements of Operations
|
||
|
|
||||
Operating lease expense (1)
|
$
|
28.6
|
|
|
Selling, general and administrative expenses
|
Finance lease costs :
|
|
|
|
|
|
Depreciation of leased assets
|
|
2.1
|
|
|
Depreciation and amortization
|
Accretion of lease liabilities
|
|
0.4
|
|
|
Interest expense
|
Total lease expense
|
$
|
31.1
|
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
Fiscal 2021
|
$
|
26.8
|
|
|
$
|
2.5
|
|
Fiscal 2022
|
|
25.3
|
|
|
|
2.4
|
|
Fiscal 2023
|
|
19.4
|
|
|
|
2.3
|
|
Fiscal 2024
|
|
11.8
|
|
|
|
2.1
|
|
Fiscal 2025
|
|
7.6
|
|
|
|
1.3
|
|
Fiscal 2026 and thereafter
|
|
24.8
|
|
|
|
2.4
|
|
Total lease payments
|
$
|
115.7
|
|
|
$
|
13.0
|
|
Less: interest
|
|
(17.2
|
)
|
|
|
(1.4
|
)
|
Total lease liabilities
|
$
|
98.5
|
|
|
$
|
11.6
|
|
|
Operating Leases
|
|
Finance Leases
|
Weighted-average remaining lease term (years)
|
5.8
|
|
5.9
|
Weighted-average discount rate
|
4.7%
|
|
3.8%
|
|
2020
|
|
2019
|
||||
Gross beginning balance
|
$
|
164.8
|
|
|
$
|
158.8
|
|
Accumulated impairment
|
|
(39.6
|
)
|
|
|
(39.6
|
)
|
Beginning balance
|
$
|
125.2
|
|
|
$
|
119.2
|
|
Additions
|
|
—
|
|
|
|
6.3
|
|
Foreign currency translation
|
|
(0.3
|
)
|
|
|
(0.3
|
)
|
Other
|
|
—
|
|
|
|
—
|
|
Ending balance
|
$
|
124.9
|
|
|
$
|
125.2
|
|
|
2020
|
|
2019
|
||||
Other intangibles subject to amortization - beginning balance
|
$
|
12.2
|
|
|
$
|
10.1
|
|
Additions
|
|
1.6
|
|
|
|
4.5
|
|
Other
|
|
—
|
|
|
|
0.6
|
|
Amortization expense
|
|
(3.2
|
)
|
|
|
(2.8
|
)
|
Foreign currency translation
|
|
(0.1
|
)
|
|
|
(0.2
|
)
|
Total other intangibles subject to amortization, net of accumulated amortization of $30.1 and $26.9, respectively
|
$
|
10.5
|
|
|
$
|
12.2
|
|
|
|
|
|
|
|
||
Total other intangibles not subject to amortization
|
|
2.1
|
|
|
|
2.1
|
|
Total other intangibles
|
$
|
12.6
|
|
|
$
|
14.3
|
|
2021
|
$
|
2.2
|
|
2022
|
|
2.1
|
|
2023
|
|
1.9
|
|
2024
|
|
1.6
|
|
2025
|
|
1.3
|
|
Thereafter
|
|
1.4
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
United States
|
$
|
(92.5
|
)
|
|
$
|
8.7
|
|
|
$
|
(18.4
|
)
|
Non-United States
|
|
2.8
|
|
|
|
17.3
|
|
|
|
16.9
|
|
Total
|
$
|
(89.7
|
)
|
|
$
|
26.0
|
|
|
$
|
(1.5
|
)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Current
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
$
|
(72.2
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(3.6
|
)
|
State and local
|
|
(1.2
|
)
|
|
|
4.8
|
|
|
|
0.7
|
|
Non-United States
|
|
2.1
|
|
|
|
2.8
|
|
|
|
4.9
|
|
Total Current
|
$
|
(71.3
|
)
|
|
$
|
7.4
|
|
|
$
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
$
|
27.3
|
|
|
$
|
1.1
|
|
|
$
|
5.0
|
|
State and local
|
|
(0.9
|
)
|
|
|
3.1
|
|
|
|
(3.5
|
)
|
Non-United States
|
|
(1.1
|
)
|
|
|
(1.2
|
)
|
|
|
—
|
|
Total Deferred
|
$
|
25.3
|
|
|
$
|
3.0
|
|
|
$
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|||
Total Current and Deferred
|
$
|
(46.0
|
)
|
|
$
|
10.4
|
|
|
$
|
3.5
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Computed federal statutory provision
|
|
21.0
|
%
|
|
|
21.0
|
%
|
|
|
29.2
|
%
|
State income tax provision, net of federal income tax benefit
|
|
2.0
|
|
|
|
25.7
|
|
|
|
37.1
|
|
Difference in effective tax rates on earnings of foreign subsidiaries
|
|
1.8
|
|
|
|
2.3
|
|
|
|
(1.3
|
)
|
Rate differential on net operating loss carrybacks
|
|
34.2
|
|
|
|
—
|
|
|
|
—
|
|
GILTI inclusion
|
|
(2.4
|
)
|
|
|
3.4
|
|
|
|
—
|
|
Charitable contributions
|
|
0.1
|
|
|
|
(0.6
|
)
|
|
|
28.6
|
|
Tax credits
|
|
0.8
|
|
|
|
(3.1
|
)
|
|
|
42.8
|
|
Valuation allowances
|
|
(1.1
|
)
|
|
|
2.3
|
|
|
|
68.1
|
|
Uncertain positions
|
|
(2.3
|
)
|
|
|
(6.3
|
)
|
|
|
110.3
|
|
Remeasurement of deferred tax balances
|
|
—
|
|
|
|
—
|
|
|
|
(371.3
|
)
|
Permanent differences
|
|
(1.1
|
)
|
|
|
0.1
|
|
|
|
(177.6
|
)
|
Other
|
|
(1.7
|
)
|
|
|
(4.8
|
)
|
|
|
0.8
|
|
Effective tax rates
|
|
51.3
|
%
|
|
|
40.0
|
%
|
|
|
(233.3
|
)%
|
Total provision (benefit) for income taxes
|
$
|
(46.0
|
)
|
|
$
|
10.4
|
|
|
$
|
3.5
|
|
|
2020
|
|
2019
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
|
Tax uniform capitalization
|
$
|
10.4
|
|
|
$
|
12.8
|
|
Prepublication expenses
|
|
0.8
|
|
|
|
1.2
|
|
Inventory reserves
|
|
10.3
|
|
|
|
15.1
|
|
Allowance for doubtful accounts
|
|
2.9
|
|
|
|
1.9
|
|
Deferred revenue
|
|
—
|
|
|
|
23.5
|
|
Other reserves
|
|
18.0
|
|
|
|
17.2
|
|
Postretirement, post employment and pension obligations
|
|
5.3
|
|
|
|
6.0
|
|
Tax carryforwards
|
|
51.1
|
|
|
|
31.8
|
|
Lease Liabilities
|
|
25.2
|
|
|
|
—
|
|
Other
|
|
11.9
|
|
|
|
13.7
|
|
Gross deferred tax assets
|
$
|
135.9
|
|
|
$
|
123.2
|
|
Valuation allowance
|
|
(31.3
|
)
|
|
|
(25.7
|
)
|
Total deferred tax assets
|
$
|
104.6
|
|
|
$
|
97.5
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
(65.8
|
)
|
|
|
(60.3
|
)
|
Lease Right of Use Assets
|
|
(24.4
|
)
|
|
|
—
|
|
Prepaid expenses
|
|
(0.2
|
)
|
|
|
(0.2
|
)
|
Other
|
|
(1.9
|
)
|
|
|
—
|
|
Total deferred tax liability
|
$
|
(92.3
|
)
|
|
$
|
(60.5
|
)
|
Total net deferred tax assets
|
$
|
12.3
|
|
|
$
|
37.0
|
|
Gross unrecognized benefits at May 31, 2017
|
$
|
14.1
|
|
Decreases related to prior year tax positions
|
|
(2.6
|
)
|
Increase related to prior year tax positions
|
|
0.4
|
|
Increases related to current year tax positions
|
|
0.5
|
|
Settlements during the period
|
|
(1.9
|
)
|
Lapse of statute of limitation
|
|
(0.4
|
)
|
Gross unrecognized benefits at May 31, 2018
|
$
|
10.1
|
|
Decreases related to prior year tax positions
|
|
(1.1
|
)
|
Increase related to prior year tax positions
|
|
0.2
|
|
Increases related to current year tax positions
|
|
0.7
|
|
Settlements during the period
|
|
(0.2
|
)
|
Lapse of statute of limitation
|
|
(0.7
|
)
|
Gross unrecognized benefits at May 31, 2019
|
$
|
9.0
|
|
Decreases related to prior year tax positions
|
|
(0.2
|
)
|
Increase related to prior year tax positions
|
|
1.8
|
|
Increases related to current year tax positions
|
|
0.1
|
|
Settlements during the period
|
|
(0.2
|
)
|
Lapse of statute of limitation
|
|
(0.3
|
)
|
Gross unrecognized benefits at May 31, 2020
|
$
|
10.2
|
|
|
Class A Stock
|
|
Common Stock
|
|
Preferred Stock
|
|||
Authorized
|
4,000,000
|
|
|
70,000,000
|
|
|
2,000,000
|
|
Reserved for Issuance
|
—
|
|
|
8,409,143
|
|
|
—
|
|
Outstanding
|
1,656,200
|
|
|
32,529,874
|
|
|
—
|
|
•
|
Scholastic Corporation 2001 Stock Incentive Plan (the “2001 Plan”), under which no further awards can be made;
|
•
|
Scholastic Corporation 2011 Stock Incentive Plan (the “2011 Plan”);
|
•
|
Scholastic Corporation 2007 Outside Directors Stock Incentive Plan (the “2007 Directors Plan”), under which no further grants can be made; and
|
•
|
Scholastic Corporation 2017 Outside Directors Stock Incentive Plan (the “2017 Directors Plan”)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Total intrinsic value of stock options exercised
|
$
|
0.2
|
|
|
$
|
2.1
|
|
|
$
|
5.0
|
|
Total stock-based compensation cost (pretax)
|
|
3.8
|
|
|
|
8.3
|
|
|
|
10.7
|
|
Tax benefits (shortfalls) related to stock-based compensation cost
|
|
(0.5
|
)
|
|
|
0.5
|
|
|
|
(0.2
|
)
|
Weighted average grant date fair value per option
|
$
|
6.99
|
|
|
$
|
11.97
|
|
|
$
|
10.45
|
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Average Remaining
Contractual
Term (in years)
|
|
Aggregate
Intrinsic Value (in millions)
|
|||||||
Outstanding at May 31, 2019
|
|
2,942,129
|
|
|
$
|
36.62
|
|
|
|
|
|
|
|
|
Additional grants (1)
|
|
2,306
|
|
|
|
42.96
|
|
|
|
|
|
|
|
|
Granted
|
|
125,563
|
|
|
|
32.12
|
|
|
|
|
|
|
|
|
Exercised
|
|
(26,326
|
)
|
|
|
30.56
|
|
|
|
|
|
|
|
|
Expired, canceled and forfeited
|
|
(40,691
|
)
|
|
|
40.72
|
|
|
|
|
|
|
|
|
Outstanding at May 31, 2020
|
|
3,002,981
|
|
|
$
|
36.43
|
|
|
|
5.5
|
|
$
|
1.2
|
|
Exercisable at May 31, 2020
|
|
2,215,823
|
|
|
$
|
35.46
|
|
|
|
4.6
|
|
$
|
1.1
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|||
Granted
|
|
34,632
|
|
|
|
82,044
|
|
|
|
68,089
|
|
Weighted average grant date price per unit
|
$
|
32.56
|
|
|
$
|
42.86
|
|
|
$
|
38.97
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|||
MSPP RSUs allocated
|
|
3,843
|
|
|
|
17,239
|
|
|
|
73,965
|
|
Purchase price per unit
|
$
|
24.36
|
|
|
$
|
30.48
|
|
|
$
|
28.76
|
|
|
Restricted stock units and MSPP RSUs
|
|
|
|
Weighted
Average grant
date fair value
|
||
Nonvested as of May 31, 2019
|
287,564
|
|
|
|
$
|
25.61
|
|
Granted
|
38,475
|
|
|
|
|
30.21
|
|
Vested
|
(98,942
|
)
|
|
|
|
28.36
|
|
Forfeited
|
(664
|
)
|
|
|
|
34.04
|
|
Nonvested as of May 31, 2020
|
226,433
|
|
|
|
$
|
25.11
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|||
Shares issued
|
|
65,714
|
|
|
|
48,000
|
|
|
|
50,516
|
|
Weighted average purchase price per share
|
$
|
27.84
|
|
|
$
|
36.25
|
|
|
$
|
33.74
|
|
Authorizations
|
Amount
|
|
||
July 2015
|
$
|
50.0
|
|
|
March 2018
|
|
50.0
|
|
|
March 2020
|
|
50.0
|
|
|
Total current Board authorizations
|
$
|
150.0
|
|
|
Less repurchases made under the authorizations as of May 31, 2020
|
$
|
(82.7
|
)
|
|
Remaining Board authorization at May 31, 2020
|
$
|
67.3
|
|
|
|
U.S. Pension Plan
|
|
UK Pension Plan
|
|
Postretirement Benefits
|
|||||||||||||||||||
|
2020 *
|
|
2019 *
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
|||||||
Weighted average assumptions used to determine benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
*
|
|
*
|
|
—
|
%
|
|
1.7
|
%
|
|
2.3
|
%
|
|
2.6
|
%
|
|
2.7
|
%
|
|
3.6
|
%
|
|
4.0
|
%
|
Rate of compensation increase
|
*
|
|
*
|
|
—
|
|
|
3.6
|
%
|
|
4.1
|
%
|
|
3.9
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average assumptions used to determine net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Discount rate (1)
|
*
|
|
*
|
|
2.3
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.5
|
%
|
|
3.2
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
Expected short-term return on plan assets (2)
|
*
|
|
*
|
|
4.8
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected long-term return on plan assets
|
*
|
|
*
|
|
—
|
|
|
3.1
|
%
|
|
3.4
|
%
|
|
3.4
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Rate of compensation increase
|
*
|
|
*
|
|
—
|
|
|
4.1
|
%
|
|
3.9
|
%
|
|
4.1
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
UK Pension Plan
|
|
Postretirement Benefits
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Benefit obligation at beginning of year
|
$
|
40.9
|
|
|
$
|
40.0
|
|
|
$
|
23.4
|
|
|
$
|
26.8
|
|
Service cost
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.0
|
|
Interest cost
|
|
0.9
|
|
|
|
0.9
|
|
|
|
0.6
|
|
|
|
0.8
|
|
Plan participants’ contributions
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.4
|
|
Actuarial losses (gains)
|
|
2.4
|
|
|
|
3.1
|
|
|
|
(1.3
|
)
|
|
|
0.1
|
|
Foreign currency translation
|
|
(1.1
|
)
|
|
|
(2.0
|
)
|
|
|
—
|
|
|
|
—
|
|
Plan amendments
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
(2.7
|
)
|
Benefits paid, including expenses
|
|
(1.4
|
)
|
|
|
(1.2
|
)
|
|
|
(2.1
|
)
|
|
|
(2.0
|
)
|
Benefit obligation at end of year
|
$
|
41.7
|
|
|
$
|
40.9
|
|
|
$
|
20.8
|
|
|
$
|
23.4
|
|
|
UK Pension Plan
|
||||||
|
2020
|
|
2019
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year
|
$
|
31.8
|
|
|
$
|
30.8
|
|
Actual return on plan assets
|
|
6.0
|
|
|
|
2.8
|
|
Employer contributions
|
|
1.1
|
|
|
|
1.0
|
|
Benefits paid, including expenses
|
|
(1.4
|
)
|
|
|
(1.2
|
)
|
Foreign currency translation
|
|
(0.9
|
)
|
|
|
(1.6
|
)
|
Fair value of plan assets at end of year
|
$
|
36.6
|
|
|
$
|
31.8
|
|
|
UK Pension Plan
|
|
Postretirement Benefits
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Current liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.5
|
)
|
|
$
|
(1.8
|
)
|
Non-current liabilities
|
|
(5.1
|
)
|
|
|
(9.1
|
)
|
|
|
(19.3
|
)
|
|
|
(21.6
|
)
|
Net funded balance
|
$
|
(5.1
|
)
|
|
$
|
(9.1
|
)
|
|
$
|
(20.8
|
)
|
|
$
|
(23.4
|
)
|
|
2020
|
|
2019
|
||||||||||||||||||||
|
UK Pension
Plan |
|
Post -
Retirement Benefits |
|
Total
|
|
UK Pension
Plan |
|
Post -
Retirement Benefits |
|
Total
|
||||||||||||
Net actuarial gain (loss)
|
$
|
(9.6
|
)
|
|
$
|
1.3
|
|
|
$
|
(8.3
|
)
|
|
$
|
(13.0
|
)
|
|
$
|
0.5
|
|
|
$
|
(12.5
|
)
|
Amount recognized in
Accumulated comprehensive
income (loss) before tax
|
|
(9.6
|
)
|
|
|
1.2
|
|
|
|
(8.4
|
)
|
|
|
(13.0
|
)
|
|
|
0.0
|
|
|
|
(13.0
|
)
|
|
UK Pension Plan
|
||||||
|
2020
|
|
2019
|
||||
Projected benefit obligations
|
$
|
41.7
|
|
|
$
|
40.9
|
|
Accumulated benefit obligations
|
|
41.4
|
|
|
|
40.2
|
|
Fair value of plan assets
|
|
36.6
|
|
|
|
31.8
|
|
|
U.S. Pension Plan
|
|
UK Pension Plan
|
|
Postretirement Benefits
|
||||||||||||||||||||||||||||||
|
2020 *
|
|
2019 *
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
||||||||||||||||||
Components of net (benefit)
cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service cost
|
*
|
|
|
*
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
||
Interest cost
|
*
|
|
|
*
|
|
|
|
1.9
|
|
|
|
0.9
|
|
|
|
0.9
|
|
|
|
1.1
|
|
|
|
0.6
|
|
|
|
0.8
|
|
|
|
0.8
|
|
||
Expected return on assets
|
*
|
|
|
*
|
|
|
|
(4.1
|
)
|
|
|
(1.0
|
)
|
|
|
(1.0
|
)
|
|
|
(1.0
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||
Settlement charge
|
*
|
|
|
*
|
|
|
|
57.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||
Amortization of net actuarial (gain) loss
|
*
|
|
|
*
|
|
|
|
0.9
|
|
|
|
1.0
|
|
|
|
0.8
|
|
|
|
1.2
|
|
|
|
(0.2
|
)
|
|
|
(0.1
|
)
|
|
|
0.1
|
|
||
Net periodic (benefit) cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56.0
|
|
|
$
|
0.9
|
|
|
$
|
0.7
|
|
|
$
|
1.3
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
|
$
|
0.9
|
|
|
|
UK Pension Plan
|
||||
|
|
2020
|
|
2019
|
||
Equity securities
|
|
28.6
|
%
|
|
35.0
|
%
|
Cash and cash equivalents
|
|
2.2
|
%
|
|
3.0
|
%
|
Liability-driven instruments
|
|
48.0
|
%
|
|
38.0
|
%
|
Real estate
|
|
6.1
|
%
|
|
7.0
|
%
|
Other
|
|
15.1
|
%
|
|
17.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
UK
Pension
Plan
|
|
Equity securities
|
|
29
|
%
|
Cash and cash equivalents
|
|
2
|
%
|
Liability-driven instruments and other
|
|
63
|
%
|
Real estate
|
|
6
|
%
|
Total
|
|
100
|
%
|
|
Assets at Fair Value as of May 31, 2020
|
||||||||||||||
|
UK Pension Plan
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
U.S. (1)
|
|
3.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.7
|
|
International (2)
|
|
6.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.8
|
|
Pooled, Common and Collective Funds (3) (4)
|
|
—
|
|
|
|
17.5
|
|
|
|
—
|
|
|
|
17.5
|
|
Annuities
|
|
—
|
|
|
|
—
|
|
|
|
5.6
|
|
|
|
5.6
|
|
Real estate (5)
|
|
2.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.2
|
|
Total
|
$
|
13.5
|
|
|
$
|
17.5
|
|
|
$
|
5.6
|
|
|
$
|
36.6
|
|
|
Assets at Fair Value as of May 31, 2019
|
||||||||||||||
|
UK Pension Plan
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. (1)
|
|
1.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.1
|
|
International (2)
|
|
10.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10.0
|
|
Pooled, Common and
Collective Funds (3) (4)
|
|
—
|
|
|
|
12.0
|
|
|
|
—
|
|
|
|
12.0
|
|
Annuities
|
|
—
|
|
|
|
—
|
|
|
|
5.5
|
|
|
|
5.5
|
|
Real estate (5)
|
|
2.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.3
|
|
Total
|
$
|
14.3
|
|
|
$
|
12.0
|
|
|
$
|
5.5
|
|
|
$
|
31.8
|
|
Balance at May 31, 2018
|
$
|
5.7
|
|
Actual Return on Plan Assets:
|
|
|
|
Relating to assets still held at May 31, 2019
|
|
0.1
|
|
Relating to assets sold during the year
|
|
—
|
|
Purchases, sales and settlements, net
|
|
—
|
|
Transfers in and/or out of Level 3
|
|
—
|
|
Foreign currency translation
|
|
(0.3
|
)
|
Balance at May 31, 2019
|
$
|
5.5
|
|
Actual Return on Plan Assets:
|
|
|
|
Relating to assets still held at May 31, 2020
|
|
0.2
|
|
Relating to assets sold during the year
|
|
—
|
|
Purchases, sales and settlements, net
|
|
—
|
|
Transfers in and/or out of Level 3
|
|
—
|
|
Foreign currency translation
|
|
(0.1
|
)
|
Balance at May 31, 2020
|
$
|
5.6
|
|
|
UK Pension Plan
|
|
Postretirement
|
||||||||
|
Pension benefits
|
|
Benefit
payments
|
|
Medicare
subsidy
receipts
|
||||||
2021
|
$
|
0.9
|
|
|
$
|
1.7
|
|
|
$
|
0.1
|
|
2022
|
|
1.1
|
|
|
|
1.6
|
|
|
|
0.1
|
|
2023
|
|
0.9
|
|
|
|
1.6
|
|
|
|
0.1
|
|
2024
|
|
1.3
|
|
|
|
1.6
|
|
|
|
0.1
|
|
2025
|
|
1.5
|
|
|
|
1.6
|
|
|
|
0.2
|
|
2026 and thereafter
|
|
7.4
|
|
|
|
7.0
|
|
|
|
0.6
|
|
|
2020
|
|
2019
|
||
Health care cost trend rate assumed for the next fiscal year
|
6.3
|
%
|
|
6.5
|
%
|
Rate to which the cost trend is assumed to decline (the ultimate trend rate)
|
5.0
|
%
|
|
5.0
|
%
|
Year that the rate reaches the ultimate trend rate
|
2026
|
|
|
2026
|
|
|
2020
|
|
2019
|
||||
Total service and interest cost - 1% increase
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Total service and interest cost - 1% decrease
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
Postretirement benefit obligation - 1% increase
|
|
1.9
|
|
|
|
2.1
|
|
Postretirement benefit obligation - 1% decrease
|
|
(1.7
|
)
|
|
|
(1.9
|
)
|
|
2020
|
|
2019
|
|
2018
|
||||||||||||||||||
|
Pension
Plans |
|
Post -
Retirement Benefits |
|
Pension
Plans |
|
Post -
Retirement Benefits |
|
Pension
Plans |
|
Post -
Retirement Benefits |
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.0
|
|
Net amortization and deferrals
|
|
—
|
|
|
|
(0.2
|
)
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|
—
|
|
|
|
—
|
|
Lump sum settlement charge
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
55.0
|
|
|
|
—
|
|
Amortization of net actuarial losses (gains)
|
|
1.0
|
|
|
|
—
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
2.1
|
|
|
|
0.1
|
|
Tax (benefit) expense
|
|
—
|
|
|
|
0.0
|
|
|
|
—
|
|
|
|
0.0
|
|
|
|
(22.3
|
)
|
|
|
0.0
|
|
Amounts reclassified from Accumulated other comprehensive income (loss)
|
$
|
1.0
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
34.8
|
|
|
$
|
0.1
|
|
|
Foreign currency translation adjustments
|
|
Pension
Plans |
|
Post -
Retirement Benefits |
|
Total
|
||||||||
Balance at May 31, 2018 (1)
|
$
|
(41.9
|
)
|
|
$
|
(12.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(55.7
|
)
|
Other comprehensive income (loss) before reclassifications
|
$
|
(5.2
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
1.9
|
|
|
$
|
(4.7
|
)
|
Less: amount reclassified from Accumulated other comprehensive income (loss) (net of taxes)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of net actuarial loss
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
Other comprehensive income (loss)
|
|
(5.2
|
)
|
|
|
(0.6
|
)
|
|
|
1.8
|
|
|
|
(4.0
|
)
|
Balance at May 31, 2019 (1)
|
$
|
(47.1
|
)
|
|
$
|
(13.1
|
)
|
|
$
|
0.5
|
|
|
$
|
(59.7
|
)
|
Other comprehensive income (loss) before reclassifications
|
$
|
(2.9
|
)
|
|
$
|
2.5
|
|
|
$
|
1.0
|
|
|
$
|
0.6
|
|
Less: amount reclassified from Accumulated other comprehensive income (loss) (net of taxes)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of net actuarial loss
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.8
|
|
Other comprehensive income (loss)
|
|
(2.9
|
)
|
|
|
3.5
|
|
|
|
0.8
|
|
|
|
1.4
|
|
Balance at May 31, 2020 (1)
|
$
|
(50.0
|
)
|
|
$
|
(9.6
|
)
|
|
$
|
1.3
|
|
|
$
|
(58.3
|
)
|
|
2020
|
|
2019
|
|
2018
|
||||||
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to Class A and Common Shares
|
$
|
(43.8
|
)
|
|
$
|
15.5
|
|
|
$
|
(5.0
|
)
|
Weighted average Shares of Class A Stock and Common Stock
outstanding for basic earnings (loss) per share (in millions)
|
|
34.6
|
|
|
|
35.2
|
|
|
|
35.0
|
|
Dilutive effect of Class A Stock and Common Stock potentially issuable pursuant to stock-based compensation plans (in millions)
|
|
—
|
|
|
|
0.6
|
|
|
|
—
|
|
Adjusted weighted average Shares of Class A Stock and Common Stock outstanding for diluted earnings (loss) per share (in millions)
|
|
34.6
|
|
|
|
35.8
|
|
|
|
35.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of Class A Stock and Common Stock
|
|
|
|
|
|
|
|
|
|||
Basic earnings (loss) per share
|
$
|
(1.27
|
)
|
|
$
|
0.44
|
|
|
$
|
(0.14
|
)
|
Diluted earnings (loss) per share
|
$
|
(1.27
|
)
|
|
$
|
0.43
|
|
|
$
|
(0.14
|
)
|
|
2020
|
|
2019
|
Options outstanding pursuant to stock-based compensation plans (in millions)
|
3.0
|
|
2.9
|
|
|
2020
|
|
|
2019
|
||
|
|
|
|
|
|
||
Accrued payroll, payroll taxes and benefits
|
$
|
38.8
|
|
|
$
|
41.2
|
|
Accrued bonus and commissions
|
|
12.1
|
|
|
|
13.7
|
|
Accrued other taxes
|
|
22.9
|
|
|
|
29.3
|
|
Returns liability
|
|
43.5
|
|
|
|
34.5
|
|
Accrued advertising and promotions
|
|
9.9
|
|
|
|
9.6
|
|
Other accrued expenses
|
|
34.3
|
|
|
|
36.5
|
|
Total accrued expenses
|
$
|
161.5
|
|
|
$
|
164.8
|
|
|
|
2020
|
|
|
2019
|
||
Beginning balance
|
$
|
5.5
|
|
|
$
|
4.2
|
|
Accruals
|
|
17.2
|
|
|
|
10.6
|
|
Payments
|
|
(17.0
|
)
|
|
|
(9.3
|
)
|
Ending balance
|
$
|
5.7
|
|
|
$
|
5.5
|
|
•
|
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
|
•
|
Level 2 Observable inputs other than unadjusted quoted prices in active markets for identical assets or liabilities such as:
|
◦
|
Quoted prices for similar assets or liabilities in active markets
|
◦
|
Quoted prices for identical or similar assets or liabilities in inactive markets
|
◦
|
Inputs other than quoted prices that are observable for the asset or liability
|
◦
|
Inputs that are derived principally from or corroborated by observable market data by correlation or other means
|
•
|
Level 3 Unobservable inputs in which there is little or no market data available, which are significant to the fair value measurement and require the Company to develop its own assumptions.
|
•
|
Long-lived assets
|
•
|
Investments
|
•
|
Assets acquired in a business combination
|
•
|
Impairment assessment of goodwill and intangible assets
|
•
|
Long-lived assets held for sale
|
|
Net carrying
value as of |
|
Fair value measured and recognized using
|
|
Impairment losses
for fiscal year ended |
|
Additions due to acquisitions
|
||||||||||||||||
|
May 31, 2020
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
May 31, 2020
|
|
|||||||||||||
Author advances
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
Prepublication costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
—
|
|
Property, plant and equipment, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
—
|
|
Intangible assets
|
|
1.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.6
|
|
|
|
—
|
|
|
|
1.6
|
|
|
Net carrying
value as of |
|
Fair value measured and recognized using
|
|
Impairment losses
for fiscal year ended
|
|
Additions due to acquisitions
|
||||||||||||||||
|
May 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
May 31, 2019
|
|
|||||||||||||
Property, plant and equipment, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
Investment acquired
|
|
6.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.0
|
|
|
|
—
|
|
|
|
6.0
|
|
Intangible assets
|
|
4.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5.1
|
|
|
|
—
|
|
|
|
5.1
|
|
|
Net carrying
value as of |
|
Fair value measured and
recognized using |
|
Impairment losses
for fiscal year ended
|
|
Additions due to other investments and acquisitions
|
||||||||||||||||
|
May 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
May 31, 2018
|
|
|||||||||||||
Property, plant and equipment, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
|
$
|
—
|
|
Intangible assets
|
|
3.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.3
|
|
|
|
—
|
|
|
|
3.3
|
|
|
Revenue Recognition - allocation of contract transaction price to identified performance obligations
|
|
Description of the Matter
|
|
As described in Note 1 to the consolidated financial statements, the Company identifies two performance obligations within its school-based book fair contracts, which include (i) the fulfillment of book fairs product and (ii) the fulfillment of product upon the redemption of incentive program credits by customers. The Company allocates the transaction price to each performance obligation on a relative standalone selling price. Changes in the allocation of the transaction price could impact the timing of the recognition of revenue.
Considering the nature and volume of school-based book fair transactions, we identified the allocation of the transaction price to the identified performance obligations within school-based book fair contracts as a critical audit matter because the estimation of standalone selling price for the incentive program credits required especially challenging auditor effort and judgment in evaluating the methodology used to establish standalone selling price. Estimating standalone selling price for the incentive program credits utilizes estimates of a standardized value per credit. The standardized value per credit is based on historical experience of issuance and redemption patterns related to the incentive program, adjusted to normalize the data and to align with expectations of future redemptions. Changes in those assumptions can have a material effect on the amount of revenue recognized in the current or future periods.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s allocation of transaction price to the two performance obligations. We tested management’s review controls over the significant assumptions, such as adjustments made to historical experience and redemption patterns, and completeness and accuracy of the data used in the calculation.
To test the allocation of revenue recognized in current and future periods, our audit procedures included, among others, evaluating the methodology used and analyzing the historical experience and redemption patterns, particularly the adjustments made to normalize the data and to align with expectations of future redemptions. We tested the accuracy and completeness of the underlying historical incentive credit program data used in management’s calculation. To test the accuracy and completeness of historical incentive program issuance and redemption data used in the analysis, we agreed the total incentive program activity to the source system and for a sample of transactions performed transactional testing to source documents. We also evaluated the appropriateness of management’s adjustments to historical data by gaining an understanding of the nature of the adjustments, performing a sensitivity analysis and tracing the adjustments to the historical data to source documents.
|
Supplementary Financial Information
|
|
|
Summary of Quarterly Results of Operations
(Unaudited, amounts in millions except per share data)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Fiscal
Year
Ended
May 31,
|
||||||||||
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
232.6
|
|
|
$
|
597.2
|
|
|
$
|
373.3
|
|
|
$
|
284.0
|
|
|
$
|
1,487.1
|
|
Cost of goods sold
|
|
137.1
|
|
|
|
264.3
|
|
|
|
183.0
|
|
|
|
166.6
|
|
|
|
751.0
|
|
Net income (loss)
|
|
(58.5
|
)
|
|
|
71.1
|
|
|
|
(43.3
|
)
|
|
|
(13.0
|
)
|
|
|
(43.7
|
)
|
Net income (loss) attributable to Scholastic Corporation
|
|
(58.5
|
)
|
|
|
71.0
|
|
|
|
(43.3
|
)
|
|
|
(13.0
|
)
|
|
|
(43.8
|
)
|
Net income (loss) per share of Class A and Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic (1)
|
$
|
(1.68
|
)
|
|
$
|
2.04
|
|
|
$
|
(1.25
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(1.27
|
)
|
Diluted (1)
|
$
|
(1.68
|
)
|
|
$
|
2.02
|
|
|
$
|
(1.25
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(1.27
|
)
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
218.4
|
|
|
$
|
604.7
|
|
|
$
|
360.1
|
|
|
$
|
470.7
|
|
|
$
|
1,653.9
|
|
Cost of goods sold
|
|
125.3
|
|
|
|
262.4
|
|
|
|
176.9
|
|
|
|
215.3
|
|
|
|
779.9
|
|
Net income (loss)
|
|
(61.3
|
)
|
|
|
71.6
|
|
|
|
(12.6
|
)
|
|
|
17.9
|
|
|
|
15.6
|
|
Net income (loss) attributable to Scholastic Corporation
|
|
(61.3
|
)
|
|
|
71.6
|
|
|
|
(12.6
|
)
|
|
|
17.9
|
|
|
|
15.6
|
|
Net income (loss) per share of Class A and Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic (1)
|
$
|
(1.75
|
)
|
|
$
|
2.03
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.51
|
|
|
$
|
0.44
|
|
Diluted (1)
|
$
|
(1.75
|
)
|
|
$
|
1.99
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.50
|
|
|
$
|
0.43
|
|
(a)(1)
|
Financial Statements:
|
|
|
|
The following Consolidated Financial Statements are included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data”:
|
|
|
|
Consolidated Statements of Operations for the years ended May 31, 2020, 2019 and 2018;
|
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended May 31, 2020, 2019 and 2018;
|
|
|
|
Consolidated Balance Sheets at May 31, 2020 and 2019;
|
|
|
|
Consolidated Statement of Changes in Stockholders’ Equity for the years ended May 31, 2020, 2019 and 2018;
|
|
|
|
Consolidated Statements of Cash Flows for the years ended May 31, 2020, 2019 and 2018; and
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
(a)(2)
|
Supplementary Financial Information - Summary of Quarterly Results of Operations Financial Statement Schedule.
|
|
|
and (c)
|
|
|
|
|
The following consolidated financial statement schedule is included with this report: Schedule II-Valuation and Qualifying Accounts and Reserves.
|
|
|
|
All other schedules have been omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements or the Notes thereto.
|
|
|
(a)(3) and (b)
|
|
|
|
|
Exhibits:
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
|
*
|
The referenced exhibit is a management contract or compensation plan or arrangement described in Item 601(b) (10) (iii) of Regulation S-K.
|
|
|
**
|
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed.”
|
Dated:
|
July 27, 2020
|
SCHOLASTIC CORPORATION
|
|
|
|
|
|
By: /s/ Richard Robinson
|
|
|
Richard Robinson, Chairman of the Board,
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Richard Robinson
|
|
Chairman of the Board, President and
Chief Executive Officer and Director
(principal executive officer)
|
|
July 27, 2020
|
Richard Robinson
|
|
|
||
|
|
|
|
|
/s/ Kenneth J. Cleary
|
|
Chief Financial Officer
(principal financial officer)
|
|
July 27, 2020
|
Kenneth J. Cleary
|
|
|
||
|
|
|
|
|
/s/ Paul Hukkanen
|
|
Vice President and Chief Accounting Officer
(principal accounting officer)
|
|
July 27, 2020
|
Paul Hukkanen
|
|
|
||
|
|
|
|
|
/s/ Andrés Alonso
|
|
Director
|
|
July 27, 2020
|
Andrés Alonso
|
|
|
|
|
|
|
|
|
|
/s/ James W. Barge
|
|
Director
|
|
July 27, 2020
|
James W. Barge
|
|
|
||
|
|
|
|
|
/s/ Mary Beech
|
|
Director
|
|
July 27, 2020
|
Mary Beech
|
|
|
||
|
|
|
|
|
/s/ John L. Davies
|
|
Director
|
|
July 27, 2020
|
John L. Davies
|
|
|
||
|
|
|
|
|
/s/ Andrew S. Hedden
|
|
Director
|
|
July 27, 2020
|
Andrew S. Hedden
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Peter Warwick
|
|
Director
|
|
July 27, 2020
|
Peter Warwick
|
|
|
||
|
|
|
|
|
/s/ Margaret A. Williams
|
|
Director
|
|
July 27, 2020
|
Margaret A. Williams
|
|
|
||
|
|
|
|
|
/s/ David J. Young
|
|
Director
|
|
July 27, 2020
|
David J. Young
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in millions)
|
||||||
|
|
|
|
|
|
|
|
|
Years ended May 31,
|
||||||
|
Balance at Beginning of Year
|
|
Expensed
|
|
Write-Offs and Other
|
|
Balance at End of Year
|
||||||||
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts
|
$
|
11.6
|
|
|
$
|
15.6
|
|
|
$
|
7.3
|
|
|
$
|
19.9
|
|
Returns liability
|
|
34.5
|
|
|
|
76.7
|
|
|
|
67.7
|
|
(2)
|
|
43.5
|
|
Reserves for obsolescence
|
|
72.9
|
|
|
|
34.3
|
|
|
|
16.1
|
|
|
|
91.1
|
|
Reserve for royalty advances
|
|
102.9
|
|
|
|
8.1
|
|
|
|
1.5
|
|
|
|
109.5
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Allowance for doubtful accounts
|
$
|
12.4
|
|
|
$
|
7.0
|
|
|
$
|
7.8
|
|
|
$
|
11.6
|
|
Returns liability, after adoption of Topic 606 (1)
|
|
30.0
|
|
|
|
67.2
|
|
|
|
62.7
|
|
(2)
|
|
34.5
|
|
Reserves for obsolescence
|
|
67.5
|
|
|
|
20.8
|
|
|
|
15.4
|
|
|
|
72.9
|
|
Reserve for royalty advances
|
|
97.0
|
|
|
|
6.8
|
|
|
|
0.9
|
|
|
|
102.9
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Allowance for doubtful accounts
|
$
|
13.7
|
|
|
$
|
9.5
|
|
|
$
|
10.8
|
|
|
$
|
12.4
|
|
Reserve for returns
|
|
36.3
|
|
|
|
54.5
|
|
|
|
60.8
|
|
(2)
|
|
30.0
|
|
Reserves for obsolescence
|
|
71.9
|
|
|
|
18.4
|
|
|
|
22.8
|
|
|
|
67.5
|
|
Reserve for royalty advances
|
|
93.8
|
|
|
|
4.1
|
|
|
|
0.9
|
|
|
|
97.0
|
|
(1)
|
In fiscal year 2019, this balance was reclassified from a reduction to Accounts receivable, net, to a current liability within Other accrued expenses in accordance with Topic 606.
|
(2)
|
Represents actual returns charged to the reserve.
|
1 Year Scholastic Chart |
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