New York,
NY (September
23,
2003) --
Scholastic Corporation (NASDAQ: SCHL) today announced its first quarter results reflecting the record setting June release of
Harry Potter and The Order of The Phoenix, as well as sales growth in Educational Publishing.
For the fiscal quarter ended August 31, 2003, revenue increased 55% to $475.4 million as compared to $306.9 million in the year ago quarter. Net loss improved 44% to $24.8 million, or $0.63 per share, as compared to a net loss of $44.6 million, or $1.14 per share, in the first quarter of last year. The first fiscal quarter is Scholastic's smallest revenue period, as most schools are not in session, thus resulting in a loss.
Richard Robinson, Chairman, President and CEO, commented, "We're pleased with Scholastic's performance during the quarter, which was consistent with our plan for Fiscal 2004. Highlights of the quarter included sales of 11 million copies of
Harry Potter and The Order of The Phoenix and 20% revenue growth in our Education business. We improved cash flow in the quarter over the prior year quarter, largely due to a $26 million reduction in capital expenditures, and are on track to reach our target of $40 million in cost savings in Fiscal 2004.”
First Quarter Segment Analysis
Children's Book Publishing & Distribution. Revenue more than doubled to $288.2 million as compared to $140.2 million in the year-ago quarter, reflecting $203.3 million in trade revenue as compared to $57.4 million in the year ago quarter.
Harry Potter® revenue increased to approximately $170 million from $15 million in last year's first quarter.
Educational Publishing. Revenue increased to $105.8 million as compared to $88.2 million in the year-ago quarter. The segment benefited from sales of classroom libraries to New York City and other public school systems, sales of the
READ 180® intervention program, and sales of the
Scholastic Early Childhood Program in Texas.
International. Revenue increased 6% to $65.3 million as compared to $61.7 million in the year-ago quarter, primarily due to favorable currency exchange rates.
Media, Licensing and Advertising. Revenue declined 4% to $16.1 million as compared to $16.8 million in the first quarter last year. Lower revenues from software and consumer magazines were partly offset
by revenue from episodes of the
I Spy and
Clifford's Puppy Days™ television series.
Recent Acquisition
The first quarter of Fiscal 2004 also reflects the August 2003 acquisition from Amazon.com of Back to Basics Toys, a direct-to-home catalog company specializing in high-quality toys for young children, for $4.75 million. “Back to Basics Toys gives us a position in the children's catalog business, complementing our direct-to-home continuities business, which currently has more than five million families as active customers,” Mr. Robinson said.
Conference Call
Scholastic will hold a conference call tomorrow (September 24, 2003) at 8:00 AM Eastern. To listen and ask questions, dial 888-338-6461 or 973-935-8510 (meeting leader is “Richard Robinson”). To view accompanying slides, go to the Investor Relations section of Scholastic.com at
www.scholastic.com/aboutscholastic/investor/index.htm. Following the call, the slides will be available on the Investor Relations section of Scholastic.com and an audio replay will be available at 877-519-4471 or 973-341-3080, PIN number 4157896.
Upcoming Investor Presentation
Scholastic will also make a presentation at the Morgan Stanley Conference in Phoenix on Monday, November 17, 2003. Ray Marchuk, Senior Vice President - Finance and Investor Relations, will make the presentation. Further details about the conference will be posted in the Investor Relations section of
www.scholastic.com when available.
About Scholastic
Scholastic Corporation is the world's largest publisher and distributor of children's books. Scholastic creates quality educational and entertaining materials and products for use in school and at home, including children's books, magazines, technology-based products, teacher materials, television programming, film, videos and toys. The Company distributes its products and services through a variety of channels, including proprietary school-based book clubs, school-based book fairs, and school-based and direct-to-home continuity programs; retail stores, schools, libraries and television networks; and the Company's Internet site,
www.scholastic.com.
Forward-Looking Statements
This news release contains certain forward-looking statements. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children's book and educational materials markets and acceptance of the Company's products within those markets and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.