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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% | 36.15 | 33.00 | 37.50 | 28 | 12:00:11 |
For the quarterly period ended February 28, 2019
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Commission File No. 000-19860
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Delaware
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13-3385513
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer Identification No.)
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557 Broadway, New York, New York
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10012
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Title
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Number of shares outstanding
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of each class
|
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as of February 28, 2019
|
|
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Common Stock, $.01 par value
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33,556,817
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Class A Stock, $.01 par value
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1,656,200
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Page
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Item 1. Financial Statements
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SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
February 28,
|
|
February 28,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
$
|
360.1
|
|
|
$
|
344.7
|
|
|
$
|
1,183.2
|
|
|
$
|
1,132.2
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold
|
176.9
|
|
|
166.4
|
|
|
564.6
|
|
|
535.6
|
|
||||
Selling, general and administrative expenses
|
190.9
|
|
|
186.7
|
|
|
584.3
|
|
|
573.9
|
|
||||
Depreciation and amortization
|
13.7
|
|
|
11.0
|
|
|
41.3
|
|
|
30.0
|
|
||||
Asset impairments
|
—
|
|
|
4.3
|
|
|
—
|
|
|
11.0
|
|
||||
Total operating costs and expenses
|
381.5
|
|
|
368.4
|
|
|
1,190.2
|
|
|
1,150.5
|
|
||||
Operating income (loss)
|
(21.4
|
)
|
|
(23.7
|
)
|
|
(7.0
|
)
|
|
(18.3
|
)
|
||||
Interest income (expense), net
|
1.0
|
|
|
0.2
|
|
|
2.3
|
|
|
0.5
|
|
||||
Other components of net periodic benefit (cost)
|
(0.4
|
)
|
|
(39.8
|
)
|
|
(1.1
|
)
|
|
(55.4
|
)
|
||||
Earnings (loss) before income taxes
|
(20.8
|
)
|
|
(63.3
|
)
|
|
(5.8
|
)
|
|
(73.2
|
)
|
||||
Provision (benefit) for income taxes
|
(8.2
|
)
|
|
(14.1
|
)
|
|
(3.5
|
)
|
|
(17.4
|
)
|
||||
Net income (loss)
|
$
|
(12.6
|
)
|
|
$
|
(49.2
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(55.8
|
)
|
Basic and diluted earnings (loss) per Share of Class A
and Common Stock
|
|
|
|
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|
||||
Basic
|
$
|
(0.36
|
)
|
|
$
|
(1.41
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(1.59
|
)
|
Diluted
|
$
|
(0.36
|
)
|
|
$
|
(1.41
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(1.59
|
)
|
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - UNAUDITED
(Dollar amounts in millions)
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
February 28,
|
|
February 28,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
(12.6
|
)
|
|
$
|
(49.2
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(55.8
|
)
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
1.7
|
|
|
2.2
|
|
|
(2.0
|
)
|
|
6.0
|
|
||||
Pension and postretirement adjustments (net of tax)
|
0.2
|
|
|
22.2
|
|
|
3.1
|
|
|
31.7
|
|
||||
Total other comprehensive income (loss), net
|
$
|
1.9
|
|
|
$
|
24.4
|
|
|
$
|
1.1
|
|
|
$
|
37.7
|
|
Comprehensive income (loss)
|
$
|
(10.7
|
)
|
|
$
|
(24.8
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(18.1
|
)
|
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (Dollar amounts in millions, except per share data) |
|
February 28,
2019 |
|
May 31,
2018 |
|
February 28,
2018 |
||||||
|
(Unaudited)
|
|
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|
(Unaudited)
|
||||||
ASSETS
|
|
|
|
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|
|||
Current Assets:
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
338.1
|
|
|
$
|
391.9
|
|
|
$
|
362.6
|
|
Accounts receivable, net
|
317.3
|
|
|
204.9
|
|
|
186.0
|
|
|||
Inventories, net
|
356.8
|
|
|
294.9
|
|
|
356.9
|
|
|||
Prepaid expenses and other current assets
|
84.8
|
|
|
66.6
|
|
|
100.1
|
|
|||
Total current assets
|
1,097.0
|
|
|
958.3
|
|
|
1,005.6
|
|
|||
Noncurrent Assets:
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
574.9
|
|
|
555.6
|
|
|
530.6
|
|
|||
Prepublication costs, net
|
65.3
|
|
|
55.3
|
|
|
48.8
|
|
|||
Royalty advances, net
|
52.3
|
|
|
44.8
|
|
|
50.3
|
|
|||
Goodwill
|
119.1
|
|
|
119.2
|
|
|
119.1
|
|
|||
Noncurrent deferred income taxes
|
43.6
|
|
|
25.2
|
|
|
17.8
|
|
|||
Other assets and deferred charges
|
70.9
|
|
|
67.0
|
|
|
61.5
|
|
|||
Total noncurrent assets
|
926.1
|
|
|
867.1
|
|
|
828.1
|
|
|||
Total assets
|
$
|
2,023.1
|
|
|
$
|
1,825.4
|
|
|
$
|
1,833.7
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|||
Lines of credit and current portion of long-term debt
|
$
|
11.0
|
|
|
$
|
7.9
|
|
|
$
|
7.7
|
|
Accounts payable
|
215.3
|
|
|
198.9
|
|
|
208.4
|
|
|||
Accrued royalties
|
76.8
|
|
|
34.6
|
|
|
63.2
|
|
|||
Deferred revenue
|
154.7
|
|
|
24.7
|
|
|
56.5
|
|
|||
Other accrued expenses
|
236.2
|
|
|
177.9
|
|
|
162.6
|
|
|||
Accrued income taxes
|
2.1
|
|
|
1.8
|
|
|
1.2
|
|
|||
Total current liabilities
|
696.1
|
|
|
445.8
|
|
|
499.6
|
|
|||
Noncurrent Liabilities:
|
|
|
|
|
|
|
|
|
|||
Long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other noncurrent liabilities
|
57.9
|
|
|
58.8
|
|
|
66.5
|
|
|||
Total noncurrent liabilities
|
57.9
|
|
|
58.8
|
|
|
66.5
|
|
|||
|
|
|
|
|
|
||||||
Commitments and Contingencies (see Note 5)
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
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
|
|
|
0.0
|
|
|||
Common Stock, $0.01 par value: Authorized, 70.0 shares; Issued, 42.9 shares; Outstanding, 33.6, 33.3 and 33.1 shares, respectively
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|||
Additional paid-in capital
|
619.4
|
|
|
614.4
|
|
|
614.6
|
|
|||
Accumulated other comprehensive income (loss)
|
(54.6
|
)
|
|
(55.7
|
)
|
|
(56.5
|
)
|
|||
Retained earnings
|
1,000.5
|
|
|
1,065.2
|
|
|
1,019.6
|
|
|||
Treasury stock, at cost: 9.3, 9.6 and 9.8 shares, respectively
|
(296.6
|
)
|
|
(303.5
|
)
|
|
(310.5
|
)
|
|||
Total stockholders’ equity
|
1,269.1
|
|
|
1,320.8
|
|
|
1,267.6
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
2,023.1
|
|
|
$
|
1,825.4
|
|
|
$
|
1,833.7
|
|
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED (Dollar amounts in millions, except per share data) |
|
Class A Stock
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings
|
|
Treasury Stock
At Cost |
|
Total
Stockholders' Equity |
||||||||||||||||||||
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance at June 1, 2018
|
1.7
|
|
|
$
|
0.0
|
|
33.3
|
|
|
$
|
0.4
|
|
|
$
|
614.4
|
|
|
$
|
(55.7
|
)
|
|
$
|
1,065.2
|
|
|
$
|
(303.5
|
)
|
|
$
|
1,320.8
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61.3
|
)
|
|
—
|
|
|
(61.3
|
)
|
|||||||
Adoption of ASC 606 (net of tax $16.0)
|
|
|
|
|
|
|
|
|
|
|
|
(46.5
|
)
|
|
|
|
(46.5
|
)
|
||||||||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|||||||
Pension and post-retirement adjustments (net of tax of $0.0)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.1
|
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|
0.3
|
|
|||||||
Dividends ($0.15 per share)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
(5.3
|
)
|
|||||||
Balance at August 31, 2018
|
1.7
|
|
|
$
|
0.0
|
|
33.4
|
|
|
$
|
0.4
|
|
|
$
|
615.5
|
|
|
$
|
(58.6
|
)
|
|
$
|
952.1
|
|
|
$
|
(300.0
|
)
|
|
$
|
1,209.4
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71.6
|
|
|
—
|
|
|
71.6
|
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|||||||
Pension and post-retirement adjustments (net of tax of $0.8)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||||
Stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.2
|
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
0.6
|
|
|||||||
Dividends ($0.15 per share)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
(5.3
|
)
|
|||||||
Balance at November 30, 2018
|
1.7
|
|
|
$
|
0.0
|
|
33.6
|
|
|
$
|
0.4
|
|
|
$
|
617.9
|
|
|
$
|
(56.5
|
)
|
|
$
|
1,018.4
|
|
|
$
|
(295.6
|
)
|
|
$
|
1,284.6
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(12.6
|
)
|
|
—
|
|
|
(12.6
|
)
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|||||||
Pension and post-retirement adjustments (net of tax of $0.0)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||
Stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.1
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|||||||
Dividends ($0.15 per share)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
(5.3
|
)
|
|||||||
Balance at February 28, 2019
|
1.7
|
|
|
$
|
0.0
|
|
33.6
|
|
|
$
|
0.4
|
|
|
$
|
619.4
|
|
|
$
|
(54.6
|
)
|
|
$
|
1,000.5
|
|
|
$
|
(296.6
|
)
|
|
$
|
1,269.1
|
|
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED (Dollar amounts in millions, except per share data) |
|
Class A Stock
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings
|
|
Treasury Stock
At Cost |
|
Total
Stockholders' Equity |
||||||||||||||||||||
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance at June 1, 2017
|
1.7
|
|
|
$
|
0.0
|
|
33.4
|
|
|
$
|
0.4
|
|
|
$
|
606.8
|
|
|
$
|
(94.2
|
)
|
|
$
|
1,091.2
|
|
|
$
|
(296.3
|
)
|
|
$
|
1,307.9
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63.7
|
)
|
|
—
|
|
|
(63.7
|
)
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||||||
Pension and post-retirement adjustments (net of tax of $0.1)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|
(4.7
|
)
|
|||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.1
|
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
0.3
|
|
|||||||
Dividends ($0.15 per share)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
(5.3
|
)
|
|||||||
Balance at August 31, 2017
|
1.7
|
|
|
$
|
0.0
|
|
33.4
|
|
|
$
|
0.4
|
|
|
$
|
608.5
|
|
|
$
|
(90.0
|
)
|
|
$
|
1,022.2
|
|
|
$
|
(298.1
|
)
|
|
$
|
1,243.0
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.1
|
|
|
—
|
|
|
57.1
|
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||||
Pension and post-retirement adjustments (net of tax of $6.3)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.6
|
)
|
|
(8.6
|
)
|
|||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.1
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|
0.2
|
|
|||||||
Dividends ($0.15 per share)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
(5.2
|
)
|
|||||||
Balance at November 30, 2017
|
1.7
|
|
|
$
|
0.0
|
|
33.2
|
|
|
$
|
0.4
|
|
|
$
|
612.3
|
|
|
$
|
(80.9
|
)
|
|
$
|
1,074.1
|
|
|
$
|
(303.2
|
)
|
|
$
|
1,302.7
|
|
Net Income (loss)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49.2
|
)
|
|
—
|
|
|
(49.2
|
)
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||||
Pension and post-retirement adjustments (net of tax of $14.5)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
22.2
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||||||
Proceeds pursuant to stock-based compensation plans
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|||||||
Purchases of treasury stock at cost
|
—
|
|
|
—
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
|
(11.9
|
)
|
|||||||
Treasury stock issued pursuant to equity-based plans
|
—
|
|
|
—
|
|
0.2
|
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|
0.3
|
|
|||||||
Dividends ($0.15 per share)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
(5.3
|
)
|
|||||||
Balance at February 28, 2018
|
1.7
|
|
|
$
|
0.0
|
|
33.1
|
|
|
$
|
0.4
|
|
|
$
|
614.6
|
|
|
$
|
(56.5
|
)
|
|
$
|
1,019.6
|
|
|
$
|
(310.5
|
)
|
|
$
|
1,267.6
|
|
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED (Dollar amounts in millions) |
|
Nine months ended
|
||||||
|
February 28,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows - operating activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
(2.3
|
)
|
|
$
|
(55.8
|
)
|
Adjustments to reconcile Net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Provision for losses on accounts receivable
|
5.7
|
|
|
7.9
|
|
||
Provision for losses on inventory
|
12.2
|
|
|
11.5
|
|
||
Provision for losses on royalty advances
|
3.0
|
|
|
3.3
|
|
||
Amortization of prepublication and production costs
|
16.6
|
|
|
16.4
|
|
||
Depreciation and amortization
|
43.7
|
|
|
32.2
|
|
||
Pension settlement
|
—
|
|
|
55.0
|
|
||
Amortization of pension and postretirement actuarial gains and losses
|
0.5
|
|
|
1.8
|
|
||
Deferred income taxes
|
(2.6
|
)
|
|
15.5
|
|
||
Stock-based compensation
|
6.8
|
|
|
9.1
|
|
||
Income from equity investments
|
(5.7
|
)
|
|
(3.7
|
)
|
||
Write off related to asset impairments
|
—
|
|
|
11.0
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(87.9
|
)
|
|
8.6
|
|
||
Inventories
|
(77.9
|
)
|
|
(82.0
|
)
|
||
Prepaid expenses and other current assets
|
(24.7
|
)
|
|
(57.8
|
)
|
||
Royalty advances
|
(10.7
|
)
|
|
(11.5
|
)
|
||
Accounts payable
|
29.4
|
|
|
63.4
|
|
||
Other accrued expenses
|
(9.6
|
)
|
|
(15.8
|
)
|
||
Returns liability
|
69.0
|
|
|
—
|
|
||
Accrued income taxes
|
0.4
|
|
|
(1.8
|
)
|
||
Accrued royalties
|
42.5
|
|
|
28.1
|
|
||
Deferred revenue
|
43.9
|
|
|
31.8
|
|
||
Pension and postretirement obligations
|
(2.0
|
)
|
|
(3.9
|
)
|
||
Other noncurrent liabilities
|
1.1
|
|
|
1.6
|
|
||
Other, net
|
9.1
|
|
|
0.0
|
|
||
Total adjustments
|
62.8
|
|
|
120.7
|
|
||
Net cash provided by (used in) operating activities
|
60.5
|
|
|
64.9
|
|
||
|
|
|
|
||||
Cash flows - investing activities:
|
|
|
|
|
|
||
Prepublication and production expenditures
|
(32.3
|
)
|
|
(22.4
|
)
|
||
Additions to property, plant and equipment (including capitalized software)
|
(71.0
|
)
|
|
(92.4
|
)
|
||
Other investment and acquisition related payments
|
(0.5
|
)
|
|
(2.0
|
)
|
||
Net cash provided by (used in) investing activities
|
(103.8
|
)
|
|
(116.8
|
)
|
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED
(Dollar amounts in millions)
|
|
Nine months ended
|
||||||
|
February 28,
|
|
February 28,
|
||||
|
2019
|
|
2018
|
||||
Cash flows - financing activities:
|
|
|
|
|
|
||
Borrowings under lines of credit
|
48.5
|
|
|
40.4
|
|
||
Repayments of lines of credit
|
(46.6
|
)
|
|
(37.8
|
)
|
||
Repayment of capital lease obligations
|
(1.1
|
)
|
|
(0.9
|
)
|
||
Reacquisition of common stock
|
(2.0
|
)
|
|
(23.8
|
)
|
||
Proceeds pursuant to stock-based compensation plans
|
5.8
|
|
|
8.9
|
|
||
Payment of dividends
|
(15.8
|
)
|
|
(15.8
|
)
|
||
Other
|
1.3
|
|
|
(1.2
|
)
|
||
Net cash provided by (used in) financing activities
|
(9.9
|
)
|
|
(30.2
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(0.6
|
)
|
|
0.6
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(53.8
|
)
|
|
(81.5
|
)
|
||
Cash and cash equivalents at beginning of period
|
391.9
|
|
|
444.1
|
|
||
Cash and cash equivalents at end of period
|
$
|
338.1
|
|
|
$
|
362.6
|
|
•
|
Variable consideration related to anticipated returns
|
•
|
Accounts receivable allowance for doubtful accounts
|
•
|
Pension and other postretirement obligations
|
•
|
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
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
•
|
Impairment testing for goodwill, intangibles and other long-lived assets and investments
|
•
|
Assets and liabilities acquired in business combinations
|
•
|
Revenues for book fairs which have not reported final results
|
•
|
Allocation of transaction price to performance obligations
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
As reported - May 31, 2018
|
Adjustments due to adoption
|
|
June 1, 2018
|
||||||
Accounts receivable, net
|
$
|
204.9
|
|
$
|
31.1
|
|
(1)
|
$
|
236.0
|
|
Inventories, net
|
294.9
|
|
(1.9
|
)
|
(2)
|
293.0
|
|
|||
Prepaid expenses and other current assets
|
66.6
|
|
(4.3
|
)
|
(2)(3)
|
62.3
|
|
|||
Noncurrent deferred income taxes
|
25.2
|
|
16.0
|
|
(4)
|
41.2
|
|
|||
Deferred revenue
|
24.7
|
|
86.3
|
|
(5)
|
111.0
|
|
|||
Other accrued expenses
|
177.9
|
|
1.1
|
|
(6)
|
179.0
|
|
|||
Retained earnings
|
1,065.2
|
|
(46.5
|
)
|
|
1,018.7
|
|
|
|
As reported
|
Adjustments
|
|
Without adoption of Topic 606
|
||||||
Three months ended February 28, 2019
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
360.1
|
|
$
|
(9.4
|
)
|
(1)
|
$
|
350.7
|
|
Cost of goods sold
|
|
176.9
|
|
(2.0
|
)
|
(1)
|
174.9
|
|
|||
Selling, general and administrative expenses
|
|
190.9
|
|
0.1
|
|
(2)
|
191.0
|
|
|||
Depreciation and amortization
|
|
13.7
|
|
—
|
|
|
13.7
|
|
|||
Operating income (loss)
|
|
(21.4
|
)
|
(7.5
|
)
|
|
(28.9
|
)
|
|||
Interest income (expense), net
|
|
1.0
|
|
—
|
|
|
1.0
|
|
|||
Other components of net periodic benefit (cost)
|
|
(0.4
|
)
|
—
|
|
|
(0.4
|
)
|
|||
Provision (benefit) for income taxes
|
|
(8.2
|
)
|
(2.0
|
)
|
(3)
|
(10.2
|
)
|
|||
Net income (loss)
|
|
$
|
(12.6
|
)
|
$
|
(5.5
|
)
|
|
$
|
(18.1
|
)
|
Basic earnings (loss) per share:
|
|
$
|
(0.36
|
)
|
$
|
(0.16
|
)
|
|
$
|
(0.52
|
)
|
Diluted earnings (loss) per share:
|
|
$
|
(0.36
|
)
|
$
|
(0.16
|
)
|
|
$
|
(0.52
|
)
|
|
|
|
|
|
|
||||||
Nine months ended February 28, 2019
|
|
|
|||||||||
Revenues
|
|
$
|
1,183.2
|
|
$
|
(11.1
|
)
|
(1)
|
$
|
1,172.1
|
|
Cost of goods sold
|
|
564.6
|
|
(3.5
|
)
|
(1)
|
561.1
|
|
|||
Selling, general and administrative expenses
|
|
584.3
|
|
(0.5
|
)
|
(2)
|
583.8
|
|
|||
Depreciation and amortization
|
|
41.3
|
|
—
|
|
|
41.3
|
|
|||
Operating income (loss)
|
|
(7.0
|
)
|
(7.1
|
)
|
|
(14.1
|
)
|
|||
Interest income (expense), net
|
|
2.3
|
|
—
|
|
|
2.3
|
|
|||
Other components of net periodic benefit (cost)
|
|
(1.1
|
)
|
—
|
|
|
(1.1
|
)
|
|||
Provision (benefit) for income taxes
|
|
(3.5
|
)
|
(1.9
|
)
|
(3)
|
(5.4
|
)
|
|||
Net income (loss)
|
|
$
|
(2.3
|
)
|
$
|
(5.2
|
)
|
|
$
|
(7.5
|
)
|
Basic earnings (loss) per share:
|
|
$
|
(0.07
|
)
|
$
|
(0.15
|
)
|
|
$
|
(0.22
|
)
|
Diluted earnings (loss) per share:
|
|
$
|
(0.07
|
)
|
$
|
(0.15
|
)
|
|
$
|
(0.22
|
)
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
Three months ended February 28,
|
2019
|
2018
|
||||
Book Clubs
|
$
|
55.0
|
|
$
|
57.7
|
|
Book Fairs
|
97.4
|
|
91.5
|
|
||
Trade
|
65.6
|
|
52.4
|
|
||
Total Children's Book Publishing & Distribution
|
218.0
|
|
201.6
|
|
||
|
|
|
||||
Education
|
60.3
|
|
59.5
|
|
||
|
|
|
||||
Major Markets
(1)
|
54.5
|
|
55.3
|
|
||
Other Markets
(2)
|
27.3
|
|
28.3
|
|
||
Total International
|
81.8
|
|
83.6
|
|
||
Total Revenues
|
$
|
360.1
|
|
$
|
344.7
|
|
|
|
|
||||
Nine months ended February 28,
|
2019
|
2018
|
||||
Book Clubs
|
$
|
165.4
|
|
$
|
165.6
|
|
Book Fairs
|
343.3
|
|
334.6
|
|
||
Trade
|
222.9
|
|
184.0
|
|
||
Total Children's Book Publishing & Distribution
|
731.6
|
|
684.2
|
|
||
|
|
|
||||
Education
|
179.7
|
|
171.4
|
|
||
|
|
|
||||
Major Markets
(1)
|
192.7
|
|
195.6
|
|
||
Other Markets
(2)
|
79.2
|
|
81.0
|
|
||
Total International
|
271.9
|
|
276.6
|
|
||
Total Revenues
|
$
|
1,183.2
|
|
$
|
1,132.2
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
•
|
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, print and digital supplemental and core classroom materials 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
two
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
|
||||||||||||
Three months ended
February 28, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$
|
218.0
|
|
|
$
|
60.3
|
|
|
$
|
—
|
|
|
$
|
278.3
|
|
|
$
|
81.8
|
|
|
$
|
360.1
|
|
Bad debt expense
|
0.8
|
|
|
0.5
|
|
|
—
|
|
|
1.3
|
|
|
0.3
|
|
|
1.6
|
|
||||||
Depreciation and amortization
(2)
|
5.9
|
|
|
2.6
|
|
|
10.4
|
|
|
18.9
|
|
|
1.6
|
|
|
20.5
|
|
||||||
Asset impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Segment operating income (loss)
|
4.4
|
|
|
0.3
|
|
|
(23.1
|
)
|
|
(18.4
|
)
|
|
(3.0
|
)
|
|
(21.4
|
)
|
||||||
Expenditures for other noncurrent assets
(4)
|
17.3
|
|
|
5.5
|
|
|
15.3
|
|
|
38.1
|
|
|
2.7
|
|
|
40.8
|
|
||||||
Three months ended
February 28, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$
|
201.6
|
|
|
$
|
59.5
|
|
|
$
|
—
|
|
|
$
|
261.1
|
|
|
$
|
83.6
|
|
|
$
|
344.7
|
|
Bad debt expense
|
0.7
|
|
|
0.4
|
|
|
—
|
|
|
1.1
|
|
|
0.6
|
|
|
1.7
|
|
||||||
Depreciation and amortization
(2)
|
5.8
|
|
|
1.9
|
|
|
7.5
|
|
|
15.2
|
|
|
1.8
|
|
|
17.0
|
|
||||||
Asset impairments
(3)
|
—
|
|
|
—
|
|
|
4.3
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
||||||
Segment operating income (loss)
|
(1.0
|
)
|
|
(0.1
|
)
|
|
(23.3
|
)
|
|
(24.4
|
)
|
|
0.7
|
|
|
(23.7
|
)
|
||||||
Expenditures for other noncurrent assets
(4)
|
17.7
|
|
|
4.5
|
|
|
29.7
|
|
|
51.9
|
|
|
5.7
|
|
|
57.6
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
Children’s
Book Publishing & Distribution |
|
Education
|
|
Overhead
(1)
|
|
Total
Domestic |
|
International
|
|
Total
|
||||||||||||
Nine months ended
February 28, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$
|
731.6
|
|
|
$
|
179.7
|
|
|
$
|
—
|
|
|
$
|
911.3
|
|
|
$
|
271.9
|
|
|
$
|
1,183.2
|
|
Bad debt expense
|
3.2
|
|
|
1.2
|
|
|
—
|
|
|
4.4
|
|
|
1.3
|
|
|
5.7
|
|
||||||
Depreciation and amortization
(2)
|
17.5
|
|
|
6.7
|
|
|
31.1
|
|
|
55.3
|
|
|
5.0
|
|
|
60.3
|
|
||||||
Asset impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Segment operating income (loss)
|
64.7
|
|
|
(6.3
|
)
|
|
(73.4
|
)
|
|
(15.0
|
)
|
|
8.0
|
|
|
(7.0
|
)
|
||||||
Segment assets at February 28, 2019
|
585.2
|
|
|
173.6
|
|
|
977.9
|
|
|
1,736.7
|
|
|
286.4
|
|
|
2,023.1
|
|
||||||
Goodwill at February 28, 2019
|
40.9
|
|
|
68.2
|
|
|
—
|
|
|
109.1
|
|
|
10.0
|
|
|
119.1
|
|
||||||
Expenditures for other noncurrent assets
(4)
|
48.3
|
|
|
15.6
|
|
|
55.9
|
|
|
119.8
|
|
|
10.1
|
|
|
129.9
|
|
||||||
Other noncurrent assets at
February 28, 2019 (4) |
170.4
|
|
|
112.3
|
|
|
502.8
|
|
|
785.5
|
|
|
80.3
|
|
|
865.8
|
|
||||||
Nine months ended
February 28, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$
|
684.2
|
|
|
$
|
171.4
|
|
|
$
|
—
|
|
|
$
|
855.6
|
|
|
$
|
276.6
|
|
|
$
|
1,132.2
|
|
Bad debt expense
|
3.4
|
|
|
1.4
|
|
|
—
|
|
|
4.8
|
|
|
3.1
|
|
|
7.9
|
|
||||||
Depreciation and amortization
(2)
|
17.0
|
|
|
5.4
|
|
|
20.7
|
|
|
43.1
|
|
|
5.2
|
|
|
48.3
|
|
||||||
Asset impairments
(3)
|
—
|
|
|
—
|
|
|
11.0
|
|
|
11.0
|
|
|
—
|
|
|
11.0
|
|
||||||
Segment operating income (loss)
|
55.1
|
|
|
(8.7
|
)
|
|
(77.3
|
)
|
|
(30.9
|
)
|
|
12.6
|
|
|
(18.3
|
)
|
||||||
Segment assets at February 28, 2018
|
503.7
|
|
|
170.2
|
|
|
886.1
|
|
|
1,560.0
|
|
|
273.7
|
|
|
1,833.7
|
|
||||||
Goodwill at February 28, 2018
|
40.9
|
|
|
68.2
|
|
|
—
|
|
|
109.1
|
|
|
10.0
|
|
|
119.1
|
|
||||||
Expenditures for other noncurrent assets
(4)
|
45.9
|
|
|
11.5
|
|
|
78.4
|
|
|
135.8
|
|
|
10.7
|
|
|
146.5
|
|
||||||
Other noncurrent assets at
February 28, 2018 (4) |
155.2
|
|
|
96.5
|
|
|
466.5
|
|
|
718.2
|
|
|
75.5
|
|
|
793.7
|
|
(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, its facility located in Connecticut and certain technology assets.
|
(2)
|
Includes depreciation of property, plant and equipment and amortization of intangible assets and prepublication and production costs.
|
(3)
|
Impairment charges of
$4.3
and
$11.0
for the three and nine months ended
February 28, 2018
, respectively, relate to the prior fiscal year abandonment of legacy building improvements in connection with the Company's renovation of its headquarters in New York City.
|
(4)
|
Other noncurrent assets include property, plant and equipment, prepublication assets, production assets, royalty advances, goodwill, intangible assets and investments. Expenditures for other noncurrent assets for the International reportable segment include expenditures for long-lived assets of
$1.5
and
$3.6
for the three months ended
February 28, 2019
and
February 28, 2018
, respectively, and
$5.9
and
$6.6
for the
nine months ended
February 28, 2019
and
February 28, 2018
, respectively. Other noncurrent assets for the International reportable segment include long-lived assets of
$36.3
and
$35.8
as of
February 28, 2019
and
February 28, 2018
, respectively.
|
|
February 28, 2019
|
|
May 31, 2018
|
|
February 28, 2018
|
||||||
Revolving Loan
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unsecured lines of credit (weighted average interest rates of 4.3%, 2.9% and 3.7%, respectively)
|
11.0
|
|
|
7.9
|
|
|
7.7
|
|
|||
Total debt
|
$
|
11.0
|
|
|
$
|
7.9
|
|
|
$
|
7.7
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
•
|
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%
plus, 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.
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
Three months ended February 28,
|
Nine months ended February 28,
|
||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||
Net income (loss) attributable to Class A and Common Shares
|
$
|
(12.6
|
)
|
|
$
|
(49.2
|
)
|
$
|
(2.3
|
)
|
|
$
|
(55.8
|
)
|
Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions)
|
35.3
|
|
|
34.9
|
|
35.2
|
|
|
35.1
|
|
||||
Dilutive effect of Class A Stock and Common Stock potentially issuable pursuant to stock-based compensation plans (in millions) *
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||
Adjusted weighted average Shares of Class A Stock and Common Stock outstanding for diluted earnings (loss) per share (in millions)
|
35.3
|
|
|
34.9
|
|
35.2
|
|
|
35.1
|
|
||||
Earnings (loss) per share of Class A Stock and Common Stock:
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(0.36
|
)
|
|
$
|
(1.41
|
)
|
$
|
(0.07
|
)
|
|
$
|
(1.59
|
)
|
Diluted
|
$
|
(0.36
|
)
|
|
$
|
(1.41
|
)
|
$
|
(0.07
|
)
|
|
$
|
(1.59
|
)
|
|
February 28, 2019
|
|
February 28, 2018
|
||
Options outstanding pursuant to stock-based compensation plans (in millions)
|
2.9
|
|
|
3.1
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
Nine months ended February 28,
|
|
Twelve months ended May 31,
|
|
Nine months ended February 28,
|
||||||
|
2019
|
|
2018
|
|
2018
|
||||||
Gross beginning balance
|
$
|
158.8
|
|
|
$
|
158.5
|
|
|
$
|
158.5
|
|
Accumulated impairment
|
(39.6
|
)
|
|
(39.6
|
)
|
|
(39.6
|
)
|
|||
Beginning balance
|
$
|
119.2
|
|
|
$
|
118.9
|
|
|
$
|
118.9
|
|
Foreign currency translation
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
|||
Other
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Ending balance
|
$
|
119.1
|
|
|
$
|
119.2
|
|
|
$
|
119.1
|
|
|
Nine months ended February 28,
|
|
Twelve months ended May 31,
|
|
Nine months ended February 28,
|
||||||
|
2019
|
|
2018
|
|
2018
|
||||||
Beginning balance other intangibles subject to amortization
|
$
|
10.1
|
|
|
$
|
9.0
|
|
|
$
|
9.0
|
|
Additions
|
0.6
|
|
|
3.3
|
|
|
1.5
|
|
|||
Amortization expense
|
(2.0
|
)
|
|
(2.1
|
)
|
|
(1.6
|
)
|
|||
Foreign currency translation
|
0.0
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Total other intangibles subject to amortization, net of accumulated amortization of $26.1, $24.1 and $23.6, respectively
|
$
|
8.7
|
|
|
$
|
10.1
|
|
|
$
|
9.0
|
|
Total other intangibles not subject to amortization
|
$
|
2.1
|
|
|
$
|
2.1
|
|
|
$
|
2.1
|
|
Total other intangibles
|
$
|
10.8
|
|
|
$
|
12.2
|
|
|
$
|
11.1
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
U.S. Pension Plan
|
|
UK Pension Plan
|
|
Postretirement Benefits
|
||||||||||||||||||
|
Three months ended February 28,
|
|
Three months ended February 28,
|
|
Three months ended February 28,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Components of net periodic (benefit) cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
Interest cost
|
—
|
|
|
0.5
|
|
|
0.3
|
|
|
0.3
|
|
|
0.2
|
|
|
0.2
|
|
||||||
Expected return on assets
|
—
|
|
|
(1.1
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||||
Net amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.0
|
|
|
—
|
|
||||||
Benefit cost of settlement event
|
—
|
|
|
39.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of (gains) losses
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
0.0
|
|
||||||
Net periodic (benefit) cost
|
$
|
—
|
|
|
$
|
39.3
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
U.S. Pension Plan
|
|
UK Pension Plan
|
|
Postretirement Benefits
|
||||||||||||||||||
|
Nine months ended February 28,
|
|
Nine months ended February 28,
|
|
Nine months ended February 28,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Components of net periodic (benefit) cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
Interest cost
|
—
|
|
|
1.9
|
|
|
0.8
|
|
|
0.8
|
|
|
0.6
|
|
|
0.7
|
|
||||||
Expected return on assets
|
—
|
|
|
(4.0
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
||||||
Net amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||||
Benefit cost of settlement event
|
—
|
|
|
55.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of (gains) losses
|
—
|
|
|
0.9
|
|
|
0.6
|
|
|
0.9
|
|
|
—
|
|
|
0.0
|
|
||||||
Net periodic (benefit) cost
|
$
|
—
|
|
|
$
|
53.8
|
|
|
$
|
0.6
|
|
|
$
|
0.9
|
|
|
$
|
0.5
|
|
|
$
|
0.7
|
|
|
Three months ended February 28,
|
Nine months ended February 28,
|
||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||
Stock option expense
|
$
|
0.7
|
|
|
$
|
0.8
|
|
$
|
4.3
|
|
|
$
|
6.2
|
|
Restricted stock unit expense
|
0.7
|
|
|
0.6
|
|
2.0
|
|
|
2.0
|
|
||||
Management stock purchase plan
|
0.0
|
|
|
0.1
|
|
0.2
|
|
|
0.7
|
|
||||
Employee stock purchase plan
|
0.2
|
|
|
0.1
|
|
0.3
|
|
|
0.2
|
|
||||
Total stock-based compensation expense
|
$
|
1.6
|
|
|
$
|
1.6
|
|
$
|
6.8
|
|
|
$
|
9.1
|
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
Three months ended February 28,
|
|
Nine months ended February 28,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Common Stock issued pursuant to stock-based compensation plans (in millions)
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
|
0.4
|
|
Authorizations
|
Amount
|
||
July 2015
|
$
|
50.0
|
|
March 2018
|
50.0
|
|
|
Total current Board authorizations
|
$
|
100.0
|
|
Less repurchases made under these authorizations
|
$
|
(40.6
|
)
|
Remaining Board authorization at February 28, 2019
|
$
|
59.4
|
|
|
Three months ended February 28, 2019
|
||||||||||
|
Foreign currency translation adjustments
|
|
Retirement benefit plans
|
|
Total
|
||||||
Beginning balance at December 1, 2018
|
$
|
(45.6
|
)
|
|
$
|
(10.9
|
)
|
|
$
|
(56.5
|
)
|
Other comprehensive income (loss) before reclassifications
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|||
Less amount reclassified from Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|||||
Amortization of gains and losses (net of tax of $0.0)
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Amortization of prior service credit (net of tax of $0.0)
|
—
|
|
|
0.0
|
|
|
0.0
|
|
|||
Other comprehensive income (loss)
|
1.7
|
|
|
0.2
|
|
|
1.9
|
|
|||
Ending balance at February 28, 2019
|
$
|
(43.9
|
)
|
|
$
|
(10.7
|
)
|
|
$
|
(54.6
|
)
|
|
|
|
|
|
|
||||||
|
Three months ended February 28, 2018
|
||||||||||
|
Foreign currency translation adjustments
|
|
Retirement benefit plans
|
|
Total
|
||||||
Beginning balance at December 1, 2017
|
$
|
(41.5
|
)
|
|
$
|
(39.4
|
)
|
|
$
|
(80.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|||
Less amount reclassified from Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|||||
Benefit from settlement (net of tax of $15.8)
|
—
|
|
|
23.8
|
|
|
23.8
|
|
|||
Amortization of gains and losses (net of tax of $0.1)
|
—
|
|
|
0.5
|
|
|
0.5
|
|
|||
Other reclassifications (net of tax of $1.4)
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|||
Other comprehensive income (loss)
|
2.2
|
|
|
22.2
|
|
|
24.4
|
|
|||
Ending balance at February 28, 2018
|
$
|
(39.3
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(56.5
|
)
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
Nine months ended February 28, 2019
|
||||||||||
|
Foreign currency translation adjustments
|
|
Retirement benefit plans
|
|
Total
|
||||||
Beginning balance at June 1, 2018
|
$
|
(41.9
|
)
|
|
$
|
(13.8
|
)
|
|
$
|
(55.7
|
)
|
Other comprehensive income (loss) before reclassifications
|
(2.0
|
)
|
|
—
|
|
|
(2.0
|
)
|
|||
Less amount reclassified from Accumulated other comprehensive income (loss):
|
|
|
|
|
|
||||||
Amortization of gains and losses (net of tax of $0.0)
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||
Postretirement benefit plan remeasurement (net of tax of $0.8)
|
—
|
|
|
2.0
|
|
|
2.0
|
|
|||
Amortization of prior service credit (net of tax of $0.0)
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Other reclassifications (net of tax of $0.0)
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||
Other comprehensive income (loss)
|
(2.0
|
)
|
|
3.1
|
|
|
1.1
|
|
|||
Ending balance at February 28, 2019
|
$
|
(43.9
|
)
|
|
$
|
(10.7
|
)
|
|
$
|
(54.6
|
)
|
|
|
|
|
|
|
||||||
|
Nine months ended February 28, 2018
|
||||||||||
|
Foreign currency translation adjustments
|
|
Retirement benefit plans
|
|
Total
|
||||||
Beginning balance at June 1, 2017
|
$
|
(45.3
|
)
|
|
$
|
(48.9
|
)
|
|
$
|
(94.2
|
)
|
Other comprehensive income (loss) before reclassifications
|
6.0
|
|
|
—
|
|
|
6.0
|
|
|||
Less amount reclassified from Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|||||
Benefit from settlement (net of tax of $22.0)
|
—
|
|
|
33.0
|
|
|
33.0
|
|
|||
Amortization of gains and losses (net of tax of $0.4)
|
—
|
|
|
1.4
|
|
|
1.4
|
|
|||
Other reclassifications (net of tax of $1.9)
|
—
|
|
|
(2.7
|
)
|
|
(2.7
|
)
|
|||
Other comprehensive income (loss)
|
6.0
|
|
|
31.7
|
|
|
37.7
|
|
|||
Ending balance at February 28, 2018
|
$
|
(39.3
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(56.5
|
)
|
|
Three months ended February 28,
|
|
Nine months ended February 28,
|
Condensed consolidated statements of operations line item
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Employee benefit plans:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of unrecognized (gain) loss
|
$
|
0.2
|
|
|
$
|
0.6
|
|
|
0.6
|
|
|
1.8
|
|
Other components of net periodic benefit (cost)
|
||
Settlement charge
|
—
|
|
|
39.6
|
|
|
—
|
|
|
55.0
|
|
Other components of net periodic benefit (cost)
|
||||
Amortization of prior service credit
|
0.0
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
Other components of net periodic benefit (cost)
|
||||
Less: Tax effect
|
0.0
|
|
|
(15.9
|
)
|
|
0.0
|
|
|
(22.4
|
)
|
Provision (benefit) for income taxes
|
||||
Total cost, net of tax
|
$
|
0.2
|
|
|
$
|
24.3
|
|
|
$
|
0.5
|
|
|
$
|
34.4
|
|
|
•
|
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
•
|
Level 2
Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.
|
•
|
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 and liabilities acquired in a business combination
|
•
|
Goodwill and definite and indefinite-lived intangible assets
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
SCHOLASTIC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
(Dollar amounts in millions, except per share data)
|
|
February 28, 2019
|
|
May 31, 2018
|
|
February 28, 2018
|
||||||
Accrued payroll, payroll taxes and benefits
|
$
|
45.2
|
|
|
$
|
47.1
|
|
|
$
|
44.8
|
|
Accrued bonus and commissions
|
13.0
|
|
|
22.4
|
|
|
19.9
|
|
|||
Returns liability
(1)
|
97.3
|
|
|
—
|
|
|
—
|
|
|||
Accrued other taxes
|
23.5
|
|
|
25.7
|
|
|
23.4
|
|
|||
Accrued advertising and promotions
(1)
|
10.2
|
|
|
35.8
|
|
|
35.8
|
|
|||
Accrued insurance
|
8.5
|
|
|
7.8
|
|
|
8.1
|
|
|||
Other accrued expenses
|
38.5
|
|
|
39.1
|
|
|
30.6
|
|
|||
Total accrued expenses
|
$
|
236.2
|
|
|
$
|
177.9
|
|
|
$
|
162.6
|
|
|
Three months ended February 28,
|
|||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$ change
|
|
% change
|
|||||||||||
Revenues
|
$
|
360.1
|
|
$
|
(9.4
|
)
|
$
|
350.7
|
|
|
$
|
344.7
|
|
|
$
|
6.0
|
|
|
1.7
|
%
|
Cost of goods sold
|
176.9
|
|
(2.0
|
)
|
174.9
|
|
|
166.4
|
|
|
8.5
|
|
|
5.1
|
%
|
|||||
Selling, general and administrative expenses
|
190.9
|
|
0.1
|
|
191.0
|
|
|
186.7
|
|
|
4.3
|
|
|
2.3
|
%
|
|||||
Depreciation and amortization
|
13.7
|
|
—
|
|
13.7
|
|
|
11.0
|
|
|
2.7
|
|
|
24.5
|
%
|
|||||
Asset impairments
|
—
|
|
—
|
|
—
|
|
|
4.3
|
|
|
4.3
|
|
|
—
|
%
|
|||||
Operating income (loss)
|
(21.4
|
)
|
(7.5
|
)
|
(28.9
|
)
|
|
(23.7
|
)
|
|
(5.2
|
)
|
|
(21.9
|
)%
|
|||||
Interest income (expense), net
|
1.0
|
|
—
|
|
1.0
|
|
|
0.2
|
|
|
0.8
|
|
|
*
|
|
|||||
Other components of net periodic benefit (cost)
|
(0.4
|
)
|
—
|
|
(0.4
|
)
|
|
(39.8
|
)
|
|
39.4
|
|
|
99.0
|
%
|
|||||
Provision (benefit) for income taxes
|
(8.2
|
)
|
(2.0
|
)
|
(10.2
|
)
|
|
(14.1
|
)
|
|
3.9
|
|
|
27.7
|
%
|
|||||
Net income (loss)
|
$
|
(12.6
|
)
|
$
|
(5.5
|
)
|
$
|
(18.1
|
)
|
|
$
|
(49.2
|
)
|
|
$
|
31.1
|
|
|
63.2
|
%
|
Basic earnings (loss) per share:
|
$
|
(0.36
|
)
|
$
|
(0.16
|
)
|
$
|
(0.52
|
)
|
|
$
|
(1.41
|
)
|
|
$
|
0.89
|
|
|
*
|
|
Diluted earnings (loss) per share:
|
$
|
(0.36
|
)
|
$
|
(0.16
|
)
|
$
|
(0.52
|
)
|
|
$
|
(1.41
|
)
|
|
$
|
0.89
|
|
|
*
|
|
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
|
Nine months ended February 28,
|
|||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$ change
|
|
% change
|
|||||||||||
Revenues
|
$
|
1,183.2
|
|
$
|
(11.1
|
)
|
$
|
1,172.1
|
|
|
$
|
1,132.2
|
|
|
$
|
39.9
|
|
|
3.5
|
%
|
Cost of goods sold
|
564.6
|
|
(3.5
|
)
|
561.1
|
|
|
535.6
|
|
|
25.5
|
|
|
4.8
|
%
|
|||||
Selling, general and administrative expenses
|
584.3
|
|
(0.5
|
)
|
583.8
|
|
|
573.9
|
|
|
9.9
|
|
|
1.7
|
%
|
|||||
Depreciation and amortization
|
41.3
|
|
—
|
|
41.3
|
|
|
30.0
|
|
|
11.3
|
|
|
37.7
|
%
|
|||||
Asset impairments
|
—
|
|
—
|
|
—
|
|
|
11.0
|
|
|
(11.0
|
)
|
|
—
|
%
|
|||||
Operating income (loss)
|
(7.0
|
)
|
(7.1
|
)
|
(14.1
|
)
|
|
(18.3
|
)
|
|
4.2
|
|
|
23.0
|
%
|
|||||
Interest income (expense), net
|
2.3
|
|
—
|
|
2.3
|
|
|
0.5
|
|
|
1.8
|
|
|
*
|
|
|||||
Other components of net periodic benefit (cost)
|
(1.1
|
)
|
—
|
|
(1.1
|
)
|
|
(55.4
|
)
|
|
54.3
|
|
|
98.0
|
%
|
|||||
Provision (benefit) for income taxes
|
(3.5
|
)
|
(1.9
|
)
|
(5.4
|
)
|
|
(17.4
|
)
|
|
12.0
|
|
|
69.0
|
%
|
|||||
Net income (loss)
|
$
|
(2.3
|
)
|
$
|
(5.2
|
)
|
$
|
(7.5
|
)
|
|
$
|
(55.8
|
)
|
|
$
|
48.3
|
|
|
86.6
|
%
|
Basic earnings (loss) per share:
|
$
|
(0.07
|
)
|
$
|
(0.15
|
)
|
$
|
(0.22
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
1.37
|
|
|
*
|
|
Diluted earnings (loss) per share:
|
$
|
(0.07
|
)
|
$
|
(0.15
|
)
|
$
|
(0.22
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
1.37
|
|
|
*
|
|
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
|
Three months ended February 28,
|
|
Nine months ended February 28,
|
||||||||||||||||||||||||
|
Adjusted 2019
(1)
|
|
2018
|
|
Adjusted 2019
(1)
|
|
2018
|
||||||||||||||||||||
($ amounts in millions)
|
$
|
|
% of Revenue
|
|
$
|
|
% of Revenue
|
|
$
|
|
% of Revenue
|
|
$
|
|
% of Revenue
|
||||||||||||
Product, service and production costs
|
$
|
93.4
|
|
|
26.6
|
%
|
|
$
|
86.1
|
|
|
25.0
|
%
|
|
$
|
300.5
|
|
|
25.6
|
%
|
|
$
|
283.2
|
|
|
25.0
|
%
|
Royalty costs
|
24.5
|
|
|
7.0
|
%
|
|
22.4
|
|
|
6.5
|
%
|
|
87.7
|
|
|
7.5
|
%
|
|
77.6
|
|
|
6.9
|
%
|
||||
Prepublication and production amortization
|
6.2
|
|
|
1.8
|
%
|
|
5.5
|
|
|
1.6
|
%
|
|
17.2
|
|
|
1.5
|
%
|
|
16.3
|
|
|
1.4
|
%
|
||||
Postage, freight, shipping, fulfillment and other
|
50.8
|
|
|
14.5
|
%
|
|
52.4
|
|
|
15.2
|
%
|
|
155.7
|
|
|
13.3
|
%
|
|
158.5
|
|
|
14.0
|
%
|
||||
Total
|
$
|
174.9
|
|
|
49.9
|
%
|
|
$
|
166.4
|
|
|
48.3
|
%
|
|
$
|
561.1
|
|
|
47.9
|
%
|
|
$
|
535.6
|
|
|
47.3
|
%
|
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
|
Three months ended February 28,
|
||||||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$
change
|
|
%
change
|
||||||||||||||
Revenues
|
$
|
218.0
|
|
$
|
(8.2
|
)
|
$
|
209.8
|
|
|
$
|
201.6
|
|
|
$
|
8.2
|
|
|
4.1
|
%
|
|||
Cost of goods sold
|
101.4
|
|
(1.7
|
)
|
99.7
|
|
|
92.1
|
|
|
7.6
|
|
|
8.3
|
%
|
||||||||
Other operating expenses
(3)
|
112.2
|
|
—
|
|
112.2
|
|
|
110.5
|
|
|
1.7
|
|
|
1.5
|
%
|
||||||||
Operating income (loss)
|
$
|
4.4
|
|
$
|
(6.5
|
)
|
$
|
(2.1
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.1
|
)
|
|
110.0
|
%
|
|||
Operating margin
|
|
2.0
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
|
|
|
Nine months ended February 28,
|
||||||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$
change
|
|
%
change
|
||||||||||||||
Revenues
|
$
|
731.6
|
|
(11.7
|
)
|
$
|
719.9
|
|
|
$
|
684.2
|
|
|
$
|
35.7
|
|
|
5.2
|
%
|
||||
Cost of goods sold
|
325.6
|
|
(3.4
|
)
|
322.2
|
|
|
296.8
|
|
|
25.4
|
|
|
8.6
|
%
|
||||||||
Other operating expenses
(3)
|
341.3
|
|
—
|
|
341.3
|
|
|
332.3
|
|
|
9.0
|
|
|
2.7
|
%
|
||||||||
Operating income (loss)
|
$
|
64.7
|
|
$
|
(8.3
|
)
|
$
|
56.4
|
|
|
$
|
55.1
|
|
|
$
|
1.3
|
|
|
2.4
|
%
|
|||
Operating margin
|
|
8.8
|
%
|
|
|
7.8
|
%
|
|
|
8.1
|
%
|
|
|
|
|
|
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
|
Three months ended February 28,
|
||||||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$
change
|
|
%
change
|
||||||||||||||
Revenues
|
$
|
60.3
|
|
$
|
—
|
|
$
|
60.3
|
|
|
$
|
59.5
|
|
|
$
|
0.8
|
|
|
1.3
|
%
|
|||
Cost of goods sold
|
20.6
|
|
—
|
|
20.6
|
|
|
19.0
|
|
|
1.6
|
|
|
8.4
|
%
|
||||||||
Other operating expenses
(3)
|
39.4
|
|
0.1
|
|
39.5
|
|
|
40.6
|
|
|
(1.1
|
)
|
|
(2.7
|
)%
|
||||||||
Operating income (loss)
|
$
|
0.3
|
|
$
|
(0.1
|
)
|
$
|
0.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.3
|
|
|
*
|
|
|||
Operating margin
|
|
0.5
|
%
|
|
|
0.3
|
%
|
|
|
—
|
%
|
|
|
|
|
|
Nine months ended February 28,
|
||||||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$
change
|
|
%
change
|
||||||||||||||
Revenues
|
$
|
179.7
|
|
$
|
—
|
|
$
|
179.7
|
|
|
$
|
171.4
|
|
|
$
|
8.3
|
|
|
4.8
|
%
|
|||
Cost of goods sold
|
62.5
|
|
—
|
|
62.5
|
|
|
58.7
|
|
|
3.8
|
|
|
6.5
|
%
|
||||||||
Other operating expenses
(3)
|
123.5
|
|
(0.5
|
)
|
123.0
|
|
|
121.4
|
|
|
1.6
|
|
|
1.3
|
%
|
||||||||
Operating income (loss)
|
$
|
(6.3
|
)
|
$
|
0.5
|
|
$
|
(5.8
|
)
|
|
$
|
(8.7
|
)
|
|
$
|
2.9
|
|
|
33.3
|
%
|
|||
Operating margin
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
|
|
|
|
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
|
Three months ended February 28,
|
||||||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$
change
|
|
%
change
|
||||||||||||||
Revenues
|
$
|
81.8
|
|
$
|
(1.2
|
)
|
$
|
80.6
|
|
|
$
|
83.6
|
|
|
$
|
(3.0
|
)
|
|
(3.6
|
)%
|
|||
Cost of goods sold
|
44.1
|
|
(0.3
|
)
|
43.8
|
|
|
41.8
|
|
|
2.0
|
|
|
4.8
|
%
|
||||||||
Other operating expenses
(3)
|
40.7
|
|
—
|
|
40.7
|
|
|
41.1
|
|
|
(0.4
|
)
|
|
(1.0
|
)%
|
||||||||
Operating income (loss)
|
$
|
(3.0
|
)
|
$
|
(0.9
|
)
|
$
|
(3.9
|
)
|
|
$
|
0.7
|
|
|
$
|
(4.6
|
)
|
|
—
|
%
|
|||
Operating margin
|
|
—
|
%
|
|
|
—
|
%
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
Nine months ended February 28,
|
||||||||||||||||||||||
($ amounts in millions)
|
2019
|
Accounting Adoption
(1)
|
Adjusted 2019
(2)
|
|
2018
|
|
$
change
|
|
%
change
|
||||||||||||||
Revenues
|
$
|
271.9
|
|
$
|
0.6
|
|
$
|
272.5
|
|
|
$
|
276.6
|
|
|
$
|
(4.1
|
)
|
|
(1.5
|
)%
|
|||
Cost of goods sold
|
142.8
|
|
(0.1
|
)
|
142.7
|
|
|
140.0
|
|
|
2.7
|
|
|
1.9
|
%
|
||||||||
Other operating expenses
(3)
|
121.1
|
|
—
|
|
121.1
|
|
|
124.0
|
|
|
(2.9
|
)
|
|
(2.3
|
)%
|
||||||||
Operating income (loss)
|
$
|
8.0
|
|
$
|
0.7
|
|
$
|
8.7
|
|
|
$
|
12.6
|
|
|
$
|
(3.9
|
)
|
|
(31.0
|
)%
|
|||
Operating margin
|
|
2.9
|
%
|
|
|
3.2
|
%
|
|
|
4.6
|
%
|
|
|
|
|
|
|
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC CORPORATION
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
($ amounts in millions)
|
Fiscal Year Maturity
|
||||||||||||||||||||||||||||||
|
2019
(1)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
Fair
Value @ 2/28/2019 |
||||||||||||||||
Debt Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lines of Credit and current
portion of long-term debt
|
$
|
11.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.0
|
|
|
$
|
11.0
|
|
Average interest rate
|
4.3
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
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) that may yet be purchased under the plans or programs
(i)
|
|
|||||
December 1, 2018 through December 31, 2018
|
|
49,527
|
|
|
38.41
|
|
|
49,527
|
|
|
59.5
|
|
|
|
January 1, 2019 through January 31, 2019
|
|
1,300
|
|
|
39.92
|
|
|
1,300
|
|
|
59.4
|
|
|
|
February 1, 2019 through February 28, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59.4
|
|
|
|
Total
|
|
50,827
|
|
|
38.45
|
|
|
50,827
|
|
|
$
|
59.4
|
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definitions Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHOLASTIC CORPORATION
|
|
|
|
(Registrant)
|
|
|||
Date: March 22, 2019
|
By:
|
/s/ Richard Robinson
|
|
|
|
||
|
|||
|
|
|
Richard Robinson
|
|
|
|
Chairman of the Board,
President and Chief
Executive Officer
|
|
|||
Date: March 22, 2019
|
By:
|
/s/ Kenneth J. Cleary
|
|
|
|
||
|
|||
|
|
|
Kenneth J. Cleary
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
1 Year Scholastic Chart |
1 Month Scholastic Chart |
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