Scholastic Announces That First Quarter Results and FY2003 Profit Goals Are on Target; Next Harry Potter Novel Is Under Contract.Business Editors NEW YORK--(BUSINESS WIRE)--September 24, 2002 Scholastic Corporation (NMS See NetWare Management System. : SCHL SCHL Societé Canadienne d'Hypothèques et de Logement (Canada Mortgage and Housing Corporation) SCHL Southwest Collegiate Hockey League ) today announced its results for the first fiscal quarter ended August 31, 2002, and its new contract to publish Harry Potter A potter is someone who makes pottery. Potter may also refer to: People
Revenue for the first quarter of fiscal 2003 was $306.9 million as compared to $306.1 million in the year ago period with a net loss of $44.6 million, or $1.14 per share, as compared to a net loss of $37.0 million, or $1.05 per share last year. The net loss for the first quarter was $43.4 million or $1.11 per share, excluding a previously announced after-tax one-time charge of $1.2 million or $0.03 per share from the settlement of a securities lawsuit from 1997. The net loss for the year-ago quarter was $31.8 million or $0.90 per share, excluding an after-tax charge of $5.2 million or $0.15 per share for a change in accounting due to the adoption of SOP 00-2, "Accounting by Producers and Distributors of Films." "We're pleased to announce that author J.K. Rowling's next novel, Harry Potter and The Order of the Phoenix, is under contract to be published by Scholastic, and to reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our $2.65-$2.95 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. target for Fiscal 2003, with the range largely a function of the publication date of Harry Potter Book Five," said Richard Robinson
Sir Richard Atkinson Robinson , Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We're also pleased to announce that first quarter results were in line with expectations, excluding the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. charge, during our smallest revenue period, when most schools are not in session and we always report a seasonal loss," Mr. Robinson said. "Highlights included a strong performance in reading intervention products led by READ 180(R), which tripled in sales; 12% revenue growth in our International segment; and significant progress toward reaching our goal of at least $30 million in cost reductions this year, fueled by our purchasing initiative and similar efforts. While still early, book fair bookings are strong for the fall and the initial second quarter orders for book clubs and school-based continuities are in line with expectations." First Quarter Segment Analysis Children's Book Publishing book publishing. The term publishing means, in the broadest sense, making something publicly known. Usually it refers to the issuing of printed materials, such as books, magazines, periodicals, and the like. & Distribution - Revenue was $140.2 million in the quarter compared to $141.1 million in the year ago period. The Klutz "books plus" business (acquired in the fourth quarter of Fiscal 2002) added $11 million in revenue, while Direct-to-Home continuities revenue declined $6.3 million year over year, primarily due to the elimination of less profitable marketing programs, as previously announced, partially offset by revenue from THE BABY'S FIRT BOOK CLUB(R) acquisition. Best selling trade titles included all four Harry Potter novels, The Thief THIEF, crimes. One who has been guilty of larceny or theft. Lord, Captain Underpants Extra Crunchy crunchy - floppy disk Book O' Fun 2, and David Gets In Trouble. Educational Publishing -- Revenue was $88.0 million in the quarter compared to $91.7 million in the year ago period. Sales of READ 180, other reading intervention programs, and the Tom Snyder Tom Snyder (May 12, 1936 - July 29, 2007) was an American television personality, news anchor, and radio personality best known for his late night talk shows The Tomorrow Show, on the NBC television network in the late 1970s and '80s, and The Late Late Show Productions supplemental software business (acquired in the third quarter of Fiscal 2002) largely offset the anticipated decline in sales of the Scholastic Literacy Place(R) basal basal /ba·sal/ (ba´s'l) pertaining to or situated near a base; in physiology, pertaining to the lowest possible level. ba·sal adj. 1. reading program, which the Company decided not to update in fiscal 2001. International -- Revenue was $61.6 million in the quarter compared to $55.0 million in the year ago period, reflecting growth in the United Kingdom, Canada and Australia and a small impact from favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency exchange rates in Fiscal 2003 as compared to the year-ago quarter. Media, Licensing & Advertising - Revenue was $17.1 million in the quarter compared to $18.3 million in the year ago period due in part to slightly lower advertising revenue in consumer magazines. During the quarter, Scholastic reached an agreement with PBS Kids PBS Kids (often styled all-caps as "PBS KIDS") is the umbrella brand for children's programming aired by the Public Broadcasting Service in the United States. As with all PBS programming, PBS Kids programming is non-commercial. to produce Clifford's Puppy Days Clifford's Puppy Days is an animated television series on PBS Kids. It features Clifford the Big Red Dog, a popular cartoon character and it is set when Clifford was a puppy. , a new series for late 2003-early 2004 broadcast, which will be used to expand Scholastic's highly successful Clifford(TM) publishing, multi-media and consumer products franchise. In November, I Spy I spy is a guessing game usually played in families with young children, partly to assist in both observation and in alphabet familiarity. I spy is often played as a car game. (TM), based on Scholastic's best selling publishing franchise, will make its series debut on HBO Family HBO Family is an American premium cable television network from sister station HBO. It was launched in 1996 as a family friendly version of HBO. Programming Schedule . Conference Call Scholastic will discuss its first quarter Fiscal 2003 results in a conference call tomorrow (September 25, 2002) at 8 AM Eastern. To participate, call (800) 374-0124 (conference ID number 5631044, meeting leader Richard Robinson). Slides can be viewed at www.mshow.com (show number 71457). Slides also will be available at the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of www.scholastic.com. Replay of slides and audio will be available at mshow.com and the Investor Relations section of scholastic.com until October 8, 2002. An audio replay of the call will also be available from 11 AM, September 25, 2002, to 5 PM, October 8, 2002 at (800) 642-1687. About Scholastic Scholastic 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, textbooks, magazines, technology-based products, teacher materials, television programming, 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 direct-to-home continuity programs; retail stores, schools, libraries, television networks; and the Company's www.scholastic.com Internet site. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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.
SCHOLASTIC CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 31, 2002 AND 2001
UNAUDITED
(Amounts in millions except per share data)
THREE MONTHS ENDED
---------------------------------------
08/31/02 08/31/01 VARIANCE
----------------------- ------------
Revenue
Children's book publishing &
distribution $140.2 $141.1 ($0.9) -1%
Educational publishing 88.0 91.7 (3.7) -4%
International 61.6 55.0 6.6 12%
Media, licensing & advertising 17.1 18.3 (1.2) -7%
----------------- ----------
Total revenue 306.9 306.1 0.8 0%
Costs and expenses 367.1 347.8 (19.3) -6%
Litigation & other charges (1) 1.9 (1.9) +
----------------- ----------
Operating loss (62.1) (41.7) (20.4) -49%
Net interest expense 7.6 8.1 0.5 7%
----------------- -----------
Loss before taxes and
accounting change (69.7) (49.8) (19.9) -40%
Tax benefit 25.1 18.0 7.1 40%
----------------- -----------
Loss before accounting change (44.6) (31.8) (12.8) -40%
Cumulative effect of change in
accounting principle
(net of tax) (2) - (5.2) 5.2 100%
----------------- ----------
Net loss ($44.6) ($37.0) ($7.6) -20%
================= ==========
Weighted average shares
outstanding:
Basic & diluted 39.1 35.2
Net loss per share:
Basic & diluted ($1.14) ($1.05) ($0.09) -9%
Net loss and net loss per share
before the accounting change and
litigation and other charges(1)(2):
Net loss ($43.4) ($31.8) ($11.6) -36%
Net loss per share -
basic & diluted ($1.11) ($0.90) ($0.21) -23%
(1) The results for fiscal 2003 include an after-tax charge of
$1.2 million or $0.03 per share from the settlement of a securities
lawsuit from 1997.
(2) The results for fiscal 2002 include the cumulative effect of
change in accounting principle (net of tax) of $5.2 ($0.15 net income
per diluted share after tax).
+ Percent change not meaningful.
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