Scholastic Reports Fiscal 2027 First Quarter Results

Fiscal 2027 Q1 Review

In $ millions (except per share data)

First Quarter

Change

Fiscal 2027

Fiscal 2026

%

Revenues

$

216.8

$

225.6

$

(8.8)

(4) %

Operating income (loss)

$

(92.2)

$

(92.2)

$

—

— %

Earnings (loss) before income taxes

$

(93.7)

$

(97.0)

$

3.3

3 %

Diluted earnings (loss) per share

$

(3.77)

$

(2.83)

$

(0.94)

(33) %

Adjusted operating income (loss)*

$

(88.7)

$

(81.9)

$

(6.8)

(8) %

Adjusted diluted earnings (loss) per share*

$

(3.63)

$

(2.52)

$

(1.11)

(44) %

Adjusted EBITDA*

$

(63.6)

$

(55.7)

$

(7.9)

(14) %

Pro forma adjusted operating income (loss)* ⁽¹⁾

$

(88.7)

$

(86.7)

$

(2.0)

(2) %

Pro forma adjusted EBITDA* ⁽¹⁾

$

(63.6)

$

(64.2)

$

0.6

1 %

* Excludes one-time items. Please refer to the non-GAAP financial tables attached.

(1)

Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted
EBITDA (a non-GAAP measure) reflect the net impact of the sale-leaseback transactions as if
the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental
impact to first-quarter fiscal 2026 adjusted operating income (loss) and Adjusted EBITDA was
$4.8 and $8.5, respectively. The Company refers to these measures in this release as results
"on a comparable basis." See Table 7 for the reconciliations to Adjusted operating income
(loss) and Adjusted EBITDA.

Capital Position and Liquidity

In $ millions

First Quarter

Change

Fiscal 2027

Fiscal 2026

$

%

Net cash (used) provided by operating activities

$

(94.6)

$

(81.8)

$

(12.8)

(16) %

Additions to property, plant and equipment and
prepublication expenditures

(18.1)

(14.9)

(3.2)

(21) %

Net borrowings (repayments) of film related obligations

1.9

(3.5)

5.4

NM

Free cash flow (use)*

$

(110.8)

$

(100.2)

$

(10.6)

(11) %

Net cash (debt)*

$

(86.8)

$

(242.8)

$

156.0

64 %

NM - Not meaningful

* Please refer to the non-GAAP financial tables attached

Table 1

Scholastic Corporation

Consolidated Statements of Operations

(Unaudited)

(In $ Millions, except shares and per share data)

Three months ended

08/31/26

08/31/25

Revenues

$

216.8

$

225.6

Operating costs and expenses:

Cost of goods sold

118.1

123.5

Selling, general and administrative expense

178.3

177.2

Depreciation and amortization

12.6

16.3

Asset impairments and write downs

—

0.8

Total operating costs and expenses

309.0

317.8

Operating income (loss)

(92.2)

(92.2)

Interest income (expense), net

(1.6)

(4.5)

Other components of net periodic benefit (cost)

0.1

(0.3)

Earnings (loss) before income taxes

(93.7)

(97.0)

Provision (benefit) for income taxes

(22.5)

(25.9)

Net income (loss)

(71.2)

(71.1)

Basic and diluted earnings (loss) per share of Class A and Common Stock ⁽¹⁾

Basic

$

(3.77)

$

(2.83)

Diluted

$

(3.77)

$

(2.83)

Basic weighted average shares outstanding

18,862

25,161

Diluted weighted average shares outstanding

19,589

25,410

(1)

Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding.
Recalculating earnings per share based on numbers rounded to millions may not yield the results
as presented.

Table 2

Scholastic Corporation

Segment Results, Excluding One-Time Items

(Unaudited)

(In $ Millions)

Three months ended

Change

08/31/26

08/31/25

$

Children's Book Publishing and Distribution

Revenues

Book Clubs

$

2.1

$

1.8

$

0.3

17 %

Book Fairs

33.2

34.1

(0.9)

(3) %

School Reading Events

35.3

35.9

(0.6)

(2) %

Consolidated Trade

70.5

73.5

(3.0)

(4) %

Total Revenues

105.8

109.4

(3.6)

(3) %

Adjusted operating income (loss)*

(37.8)

(34.3)

(3.5)

(10) %

Adjusted operating margin*

NM    

NM    

Education

Revenues

30.4

40.1

(9.7)

(24) %

Adjusted operating income (loss)*

(23.3)

(21.2)

(2.1)

(10) %

Adjusted operating margin*

NM    

NM    

Entertainment

Revenues

20.1

13.6

6.5

48 %

Adjusted operating income (loss)*

(1.6)

(4.0)

2.4

60 %

Adjusted operating margin*

NM    

NM    

International

Revenues

60.5

59.4

1.1

2 %

Adjusted operating income (loss)*

(2.7)

(4.1)

1.4

34 %

Adjusted operating margin*

NM    

NM    

Overhead

Revenues

—

3.1

(3.1)

(100) %

Adjusted operating income (loss)*

(23.3)

(18.3)

(5.0)

(27) %

Adjusted operating income (loss)*

$

(88.7)

$

(81.9)

$

(6.8)

(8) %

Adjusted operating margin*

NM    

NM    

NM - Not meaningful

* Excludes one-time items. Please refer to Table 4 for one-time items and a
reconciliation of the non-GAAP financials and Table 7 for results presented on a
comparable basis reflecting the impact of the sale-leaseback transactions.

Table 3

Scholastic Corporation

Supplemental Information

(Unaudited)

(In $ Millions)

Selected Balance Sheet Items

08/31/26

08/31/25

Cash and cash equivalents

$

106.8

$

94.3

Accounts receivable, net

186.6

187.0

Inventories, net

315.3

322.2

Accounts payable

150.2

175.8

Deferred revenue

171.6

181.0

Accrued royalties

68.0

86.6

Film related obligations

19.3

14.7

Lines of credit and long-term debt

184.8

331.2

Net cash (debt) ⁽¹⁾

(86.8)

(242.8)

Total stockholders' equity

656.5

878.0

Selected Cash Flow Items

Three months ended

08/31/26

08/31/25

Net cash provided by (used in) operating activities

$

(94.6)

$

(81.8)

Property, plant and equipment additions

(14.1)

(10.0)

Prepublication expenditures

(4.0)

(4.9)

Net borrowings (repayments) of film related obligations

1.9

(3.5)

Free cash flow (use) ⁽²⁾

$

(110.8)

$

(100.2)

(1)

Net cash (debt) is defined by the Company as cash and cash equivalents 
less production cash of $8.8 and $5.9 as of August 31, 2026 and August 31,
2025, respectively, net of lines of credit and short-term and long-term-debt.
Film related obligations are not included. The Company utilizes this non-
GAAP financial measure, and believes it is useful to investors, as an
indicator of the Company's effective leverage and financing needs.

(2)

Free cash flow (use) is defined by the Company as net cash provided by or 
used in operating activities (which includes royalty advances) and cash
acquired through acquisitions and from the sale of assets, reduced by
spending on property, plant and equipment and prepublication costs and
adjusted for net cash flows from film related obligations. The Company
believes that this non-GAAP financial measure is useful to investors as an
indicator of cash flow available for debt repayment and other investing
activities, such as acquisitions. The Company utilizes free cash flow as a
further indicator of operating performance and for planning investing activities.

Table 4

Scholastic Corporation

Supplemental Results - Excluding One-Time Items

(Unaudited)

(In $ Millions, except per share data)

Three months ended

08/31/2026

08/31/2025

Reported

One-time
items

Adjusted

Reported

One-time
items

Adjusted

Diluted earnings (loss) per share ⁽¹⁾

$

(3.77)

$

0.14

$

(3.63)

$

(2.83)

$

0.31

$

(2.52)

Net income (loss) ⁽²⁾

$

(71.2)

$

2.6

$

(68.6)

$

(71.1)

$

7.8

$

(63.3)

Earnings (loss) before income taxes

$

(93.7)

$

3.5

$

(90.2)

$

(97.0)

$

10.3

$

(86.7)

Children's Book Publishing and Distribution ⁽³⁾

$

(38.2)

$

0.4

$

(37.8)

$

(35.1)

$

0.8

$

(34.3)

Education

(23.3)

—

(23.3)

(21.2)

—

(21.2)

Entertainment ⁽⁴⁾

(1.8)

0.2

(1.6)

(4.0)

0.0

(4.0)

International ⁽⁵⁾

(2.9)

0.2

(2.7)

(4.2)

0.1

(4.1)

Overhead ⁽⁶⁾

(26.0)

2.7

(23.3)

(27.7)

9.4

(18.3)

Operating income (loss) *

$

(92.2)

$

3.5

$

(88.7)

$

(92.2)

$

10.3

$

(81.9)

* Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions.

(1)

Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating
earnings per share based on rounded numbers may not yield the results as presented.

(2)

In the three months ended August 31, 2026 and August 31, 2025, the Company recognized a benefit of $0.9 and $2.5,
respectively, for income taxes in respect to one-time pretax items.

(3)

In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.4. In the three
months ended August 31, 2025, the Company recognized pretax asset impairment of $0.8 related to a certain product.

(4)

In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.2. In the three
months ended August 31, 2025, the Company recognized pretax costs of less than $0.1 related to the acquisition of 9
Story Media Group.

(5)

In the three months ended August 31, 2026 and August 31, 2025, the Company recognized pretax severance of $0.2
and $0.1, respectively, related to cost-savings initiatives.

(6)

In the three months ended August 31, 2026, the Company recognized pretax severance of $2.3 related to cost-savings
initiatives and other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized
pretax severance of $8.7, related to cost-savings initiatives and other pretax expenses of $0.7. 

Table 5

Scholastic Corporation

Consolidated Statements of Operations - Supplemental

Adjusted EBITDA

(Unaudited)

(In $ Millions)

Three months ended

08/31/26

08/31/25

Earnings (loss) before income taxes as reported

$

(93.7)

$

(97.0)

One-time items before income taxes

3.5

10.3

Earnings (loss) before income taxes excluding one-time items

(90.2)

(86.7)

Interest (income) expense ⁽¹⁾

1.6

4.5

Depreciation and amortization

25.0

26.5

Adjusted EBITDA ⁽²⁾

$

(63.6)

$

(55.7)

(1)

Amounts include production loan interest amortized into cost of goods sold.

(2)

Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time
items, before interest, taxes, depreciation and amortization. The Company believes that
Adjusted EBITDA is a meaningful measure of operating profitability and useful for
measuring returns on capital investments over time as it is not distorted by unusual gains,
losses, or other items.

Table 6

Scholastic Corporation

Consolidated Statements of Operations - Supplemental

Adjusted EBITDA by Segment

(Unaudited)

(In $ Millions)

Three months ended

08/31/26

CBPD ⁽¹⁾

EDUC ⁽¹⁾

ENT ⁽¹⁾

INTL ⁽¹⁾

OVH ⁽¹⁾

Total

Earnings (loss) before income taxes as reported

$

(38.3)

$

(23.3)

$

(2.1)

$

(3.0)

$

(27.0)

$

(93.7)

One-time items before income taxes

0.4

—

0.2

0.2

2.7

3.5

Earnings (loss) before income taxes excluding one-time items

(37.9)

(23.3)

(1.9)

(2.8)

(24.3)

(90.2)

Interest (income) expense ⁽²⁾

0.1

0.0

0.2

0.0

1.3

1.6

Depreciation and amortization ⁽³⁾

8.0

5.3

7.4

2.1

2.2

25.0

Adjusted EBITDA*

$

(29.8)

$

(18.0)

$

5.7

$

(0.7)

$

(20.8)

$

(63.6)

Three months ended

08/31/25

CBPD ⁽¹⁾

EDUC ⁽¹⁾

ENT ⁽¹⁾

INTL ⁽¹⁾

OVH ⁽¹⁾

Total

Earnings (loss) before income taxes as reported

$

(35.1)

$

(21.2)

$

(4.5)

$

(4.7)

$

(31.5)

$

(97.0)

One-time items before income taxes

0.8

—

0.0

0.1

9.4

10.3

Earnings (loss) before income taxes excluding one-time items

(34.3)

(21.2)

(4.5)

(4.6)

(22.1)

(86.7)

Interest (income) expense ⁽²⁾

0.0

0.0

0.5

(0.0)

4.0

4.5

Depreciation and amortization ⁽³⁾

7.6

6.1

4.8

1.9

6.1

26.5

Adjusted EBITDA*

$

(26.7)

$

(15.1)

$

0.8

$

(2.7)

$

(12.0)

$

(55.7)

* Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions.

(1)

The Company's segments are defined as the following: CBPD - Children's Book Publishing and Distribution segment;
EDUC - Education segment; ENT - Entertainment segment; INTL - International segment; OVH - unallocated overhead.

(2)

Amounts include production loan interest amortized into cost of goods sold.

(3)

Depreciation and amortization in the Children's Book Publishing and Distribution, Education and International segments
includes amounts allocated from overhead.

Table 7

Scholastic Corporation

Supplemental Information (Unaudited)

(In $ Millions)

Three months
ended

Three months ended

Variance on a
comparable basis

08/31/2026

08/31/2025

Adjusted
operating
income (loss)

Incremental
sale-
leaseback
impact

Pro forma
adjusted
operating
income (loss) ⁽¹⁾

$

%

Children's Book Publishing and Distribution

$

(37.8)

$

(34.3)

$

(2.9)

$

(37.2)

$

(0.6)

(2) %

Education

(23.3)

(21.2)

(0.8)

(22.0)

(1.3)

(6) %

Entertainment

(1.6)

(4.0)

(0.0)

(4.0)

2.4

60 %

International

(2.7)

(4.1)

—

(4.1)

1.4

34 %

Overhead

(23.3)

(18.3)

(1.1)

(19.4)

(3.9)

(20) %

Total

$

(88.7)

$

(81.9)

$

(4.8)

$

(86.7)

$

(2.0)

(2) %

Three months 
ended

Three months ended

Variance on a
comparable basis

08/31/2026

08/31/2025

Adjusted
EBITDA

Adjusted
EBITDA

Incremental
sale-
leaseback
impact ⁽²⁾

Pro forma
adjusted
EBITDA ⁽¹⁾

$

%

Children's Book Publishing and Distribution

$

(29.8)

$

(26.7)

$

(3.5)

$

(30.2)

$

0.4

1 %

Education

(18.0)

(15.1)

(1.5)

(16.6)

(1.4)

(8) %

Entertainment

5.7

0.8

(0.1)

0.7

5.0

NM

International

(0.7)

(2.7)

—

(2.7)

2.0

74 %

Overhead

(20.8)

(12.0)

(3.4)

(15.4)

(5.4)

(35) %

Total

$

(63.6)

$

(55.7)

$

(8.5)

$

(64.2)

$

0.6

1 %

NM - Not meaningful

(1)

Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure)
reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of
fiscal 2026. The incremental adjustments shown above reflect the impact to the first quarter of fiscal 2026 prior to completion
of the transactions.

(2)

The $8.5 incremental impact to Pro forma adjusted EBITDA includes the $4.8 impact to Pro forma adjusted operating income
(loss) plus a $3.7 depreciation adjustment.