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As Of Filer Filing For·On·As Docs:Size 3/20/20 Scholastic Corp 10-Q 2/29/20 86:9.2M |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.31M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 30K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 30K 4: EX-32 Certification -- §906 - SOA'02 HTML 27K 40: R1 Document and Entity Information HTML 79K 72: R2 Condensed Consolidated Statements of Operations HTML 82K 63: R3 Consolidated Statements of Comprehensive Income HTML 53K (Loss) 12: R4 Condensed Consolidated Balance Sheets HTML 144K 41: R5 Condensed Consolidated Balance Sheets HTML 47K (Parentheticals) 73: R6 CONSOLIDATED STATEMENTS OF CHANGES IN HTML 121K STOCKHOLDERS' EQUITY Statement 64: R7 Consolidated Statements of Changes in HTML 35K Stockholders' Equity (Parenthetical) 15: R8 Consolidated Statements of Cash Flows HTML 128K 38: R9 Basis of Presentation HTML 49K 37: R10 Revenues HTML 48K 13: R11 Segment Information HTML 169K 61: R12 Asset Write Down HTML 26K 74: R13 Debt HTML 64K 39: R14 Commitments and Contingencies HTML 37K 14: R15 Earnings (Loss) Per Share HTML 54K 62: R16 Goodwill and Other Intangibles HTML 62K 75: R17 Investments HTML 36K 42: R18 Employee Benefit Plans HTML 77K 10: R19 Leases HTML 143K 56: R20 Stock-Based Compensation HTML 51K 84: R21 Treasury Stock HTML 30K 35: R22 Accumulated Other Comprehensive Income (Loss) HTML 113K 27: R23 Fair Value Measurements HTML 35K 57: R24 Income Taxes and Other Taxes HTML 33K 85: R25 Derivatives and Hedging HTML 28K 36: R26 Other Accrued Expenses HTML 40K 28: R27 Subsequent Events HTML 28K 55: R28 Basis of Presentation (Policies) HTML 56K 86: R29 Revenues (Tables) HTML 43K 71: R30 Segment Information (Tables) HTML 165K 59: R31 Debt (Tables) HTML 39K 17: R32 Earnings (Loss) Per Share (Tables) HTML 55K 44: R33 Goodwill and Other Intangibles (Tables) HTML 60K 69: R34 Investments (Tables) HTML 35K 58: R35 Employee Benefit Plans (Tables) HTML 73K 16: R36 Leases (Tables) HTML 96K 43: R37 Stock-Based Compensation (Tables) HTML 54K 68: R38 Treasury Stock (Tables) HTML 29K 60: R39 Accumulated Other Comprehensive Income (Loss) HTML 115K (Tables) 83: R40 Other Accrued Expenses (Tables) HTML 40K 53: R41 Basis of Presentation (Details) HTML 29K 23: R42 Revenues - Disaggregation of Revenue (Details) HTML 43K 30: R43 Revenues - Additional Information (Details) HTML 30K 82: R44 Segment Information - Schedule of segment HTML 97K reporting information (Details) 52: R45 Asset Write Down (Details) HTML 37K 22: R46 Debt - Schedule of Debt (Details) HTML 41K 29: R47 Debt - Narrative (Details) HTML 109K 81: R48 Commitments and Contingencies (Details) HTML 32K 54: R49 Earnings (Loss) Per Share - Schedule of Earnings HTML 47K Per Share, Basic and Diluted (Details) 66: R50 Earnings (Loss) Per Share - Schedule of Options HTML 26K Outstanding (Details) 76: R51 Earnings (Loss) Per Share - Narrative (Details) HTML 26K 45: R52 Goodwill and Other Intangibles - Schedule of HTML 37K activity in goodwill (Details) 18: R53 Goodwill and Other Intangibles - Narrative HTML 46K (Details) 67: R54 Goodwill and Other Intangibles - Schedule of other HTML 44K intangible assets subject to amortization (Details) 77: R55 Investments (Details) HTML 54K 46: R56 Employee Benefit Plans - Schedule of net periodic HTML 50K costs (Details) 19: R57 Employee Benefit Plans - Narrative (Details) HTML 39K 65: R58 Leases (Narrative) (Details) HTML 27K 78: R59 Leases (Assets and Liabilities) (Details) HTML 42K 32: R60 Leases (Lease Expense) (Details) HTML 33K 25: R61 Leases (Cash Flow Information) (Details) HTML 29K 48: R62 Leases (Lease Maturity) (Details) HTML 63K 79: R63 Leases (Weighted Average) (Details) HTML 32K 33: R64 Stock-Based Compensation (Details) HTML 39K 26: R65 Treasury Stock - Schedule of repurchase of common HTML 32K stock (Details) 50: R66 Accumulated Other Comprehensive Income (Loss) - HTML 65K Schedule of AOCI Activity (Details) 80: R67 Accumulated Other Comprehensive Income (Loss) - HTML 46K Reclassification out of AOCI (Details) 34: R68 Income Taxes and Other Taxes (Details) HTML 31K 24: R69 Derivatives and Hedging (Details) HTML 29K 20: R70 Other Accrued Expenses - Schedule of accrued HTML 40K expenses (Details) 47: R71 Subsequent Events (Details) HTML 36K 70: R9999 Uncategorized Items - schl20200229-q3.htm HTML 27K 49: XML IDEA XML File -- Filing Summary XML 156K 31: XML XBRL Instance -- schl20200229-q3_htm XML 2.54M 51: EXCEL IDEA Workbook of Financial Reports XLSX 88K 6: EX-101.CAL XBRL Calculations -- schl-20200229_cal XML 245K 7: EX-101.DEF XBRL Definitions -- schl-20200229_def XML 575K 8: EX-101.LAB XBRL Labels -- schl-20200229_lab XML 1.48M 9: EX-101.PRE XBRL Presentations -- schl-20200229_pre XML 882K 5: EX-101.SCH XBRL Schema -- schl-20200229 XSD 171K 11: JSON XBRL Instance as JSON Data -- MetaLinks 343± 490K 21: ZIP XBRL Zipped Folder -- 0000866729-20-000004-xbrl Zip 314K
Document |
For
the quarterly period ended | Commission File No. |
i Delaware | i 13-3385513 | ||
(State
or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||
i 557 Broadway, | |||
i New
York, | i New York | i 10012 | |
(Address of principal
executive offices) | (Zip Code) |
Title
of Class | Trading Symbol | Name of Each Exchange on Which Registered |
i Common Stock, $0.01 par value | i SCHL | i The
NASDAQ Stock Market LLC |
i Large
accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | i ☐ | Emerging growth company | i ☐ |
Title of each class | Number of shares outstanding as of February 29, 2020 | |
Common Stock, $.01 par value | i 32,614,515 | |
Class
A Stock, $.01 par value | i 1,656,200 |
Page | |||
Item 1. Financial Statements |
SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED (Dollar amounts in millions, except per share data) |
Three
months ended | Nine months ended | ||||||||||
February 29, | February 28, | February 29, | |||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Revenues | $ i 373.3 | $ i 360.1 | $ i 1,203.1 | $ i 1,183.2 | |||||||
Operating
costs and expenses: | |||||||||||
Cost of goods sold | i 183.0 | i 176.9 | i 584.4 | i 564.6 | |||||||
Selling,
general and administrative expenses | i 194.9 | i 190.9 | i 574.8 | i 584.3 | |||||||
Depreciation
and amortization | i 15.4 | i 13.7 | i 46.2 | i 41.3 | |||||||
Asset
impairments and write downs | i 40.0 | i — | i 40.0 | i — | |||||||
Total
operating costs and expenses | i 433.3 | i 381.5 | i 1,245.4 | i 1,190.2 | |||||||
Operating
income (loss) | ( i 60.0) | ( i 21.4) | ( i 42.3) | ( i 7.0) | |||||||
Interest
income (expense), net | i 0.3 | i 1.0 | i 1.0 | i 2.3 | |||||||
Other
components of net periodic benefit (cost) | ( i 0.4) | ( i 0.4) | ( i 1.0) | ( i 1.1) | |||||||
Earnings
(loss) before income taxes | ( i 60.1) | ( i 20.8) | ( i 42.3) | ( i 5.8) | |||||||
Provision
(benefit) for income taxes | ( i 16.8) | ( i 8.2) | ( i 11.6) | ( i 3.5) | |||||||
Net
income (loss) | ( i 43.3) | ( i 12.6) | ( i 30.7) | ( i 2.3) | |||||||
Less:
Net income attributable to noncontrolling interest | i 0.0 | i — | i 0.1 | i — | |||||||
Net
income (loss) attributable to Scholastic Corporation | $( i 43.3) | $( i 12.6) | $( i 30.8) | $( i 2.3) | |||||||
Basic
and diluted earnings (loss) per Share of Class A and Common Stock | |||||||||||
Basic | $( i 1.25) | $( i 0.36) | $( i 0.89) | $( i 0.07) | |||||||
Diluted
| $( i 1.25) | $( i 0.36) | $( i 0.89) | $( i 0.07) |
SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - UNAUDITED (Dollar amounts in millions) |
Three
months ended | Nine months ended | |||||||||
February 29, | February 28, | February 29, | ||||||||
2020 | 2019 | 2020 | 2019 | |||||||
Net
income (loss) | $( i 43.3) | $( i 12.6) | $( i 30.7) | $( i 2.3) | ||||||
Other
comprehensive income (loss), net: | ||||||||||
Foreign currency translation adjustments | ( i 2.3) | i 1.7 | ( i 0.4) | ( i 2.0) | ||||||
Pension
and postretirement adjustments (net of tax) | i 0.3 | i 0.2 | i 0.7 | i 3.1 | ||||||
Total
other comprehensive income (loss), net | $( i 2.0) | $ i 1.9 | $ i 0.3 | $ i 1.1 | ||||||
Comprehensive
income (loss) | $( i 45.3) | $( i 10.7) | $( i 30.4) | $( i 1.2) | ||||||
Less:
Net income attributable to noncontrolling interest | i 0.0 | i — | i 0.1 | i — | ||||||
Comprehensive
income (loss) attributable to Scholastic Corporation | $( i 45.3) | $( i 10.7) | $( i 30.5) | $( i 1.2) |
SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (Dollar amounts in millions, except per share data) |
February
29, 2020 (unaudited) | May 31, 2019 (audited) | February 28, 2019 (unaudited) | ||||||
ASSETS | ||||||||
Current
Assets: | ||||||||
Cash and cash equivalents | $ i 263.8 | $ i 334.1 | $ i 338.1 | |||||
Accounts
receivable, net | i 281.2 | i 250.1 | i 317.3 | |||||
Inventories,
net | i 307.7 | i 323.7 | i 356.8 | |||||
Prepaid
expenses and other current assets | i 88.5 | i 52.7 | i 84.8 | |||||
Total
current assets | i 941.2 | i 960.6 | i 1,097.0 | |||||
Noncurrent
Assets: | ||||||||
Property, plant and equipment, net | i 579.1 | i 577.7 | i 574.9 | |||||
Prepublication
costs, net | i 70.8 | i 70.2 | i 65.3 | |||||
Operating
lease right-of-use assets, net | i 71.7 | — | — | |||||
Royalty
advances, net | i 51.1 | i 47.5 | i 52.3 | |||||
Goodwill | i 125.3 | i 125.2 | i 119.1 | |||||
Noncurrent
deferred income taxes | i 37.1 | i 37.0 | i 43.6 | |||||
Other
assets and deferred charges | i 72.1 | i 60.3 | i 70.9 | |||||
Total
noncurrent assets | i 1,007.2 | i 917.9 | i 926.1 | |||||
Total
assets | $ i 1,948.4 | $ i 1,878.5 | $ i 2,023.1 | |||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Lines
of credit and current portion of long-term debt | $ i 9.7 | $ i 7.3 | $ i 11.0 | |||||
Accounts
payable | i 187.9 | i 195.3 | i 215.3 | |||||
Accrued
royalties | i 77.3 | i 41.9 | i 76.8 | |||||
Deferred
revenue | i 158.1 | i 130.8 | i 154.7 | |||||
Other
accrued expenses | i 170.9 | i 164.8 | i 236.2 | |||||
Accrued
income taxes | i 3.7 | i 1.4 | i 2.1 | |||||
Operating
lease liabilities | i 22.7 | — | — | |||||
Total current liabilities | i 630.3 | i 541.5 | i 696.1 | |||||
Noncurrent
Liabilities: | ||||||||
Long-term debt | i 6.4 | i — | i — | |||||
Operating
lease liabilities | i 52.0 | — | — | |||||
Other noncurrent
liabilities | i 60.4 | i 64.2 | i 57.9 | |||||
Total
noncurrent liabilities | i 118.8 | i 64.2 | i 57.9 | |||||
Commitments
and Contingencies (see Note 6) | i — | i — | i — | |||||
Stockholders’
Equity: | ||||||||
Preferred Stock, $1.00 par value: Authorized, 2.0 shares; Issued and Outstanding, none | i — | i — | i — | |||||
Class
A Stock, $0.01 par value: Authorized, 4.0 shares; Issued and Outstanding, 1.7 shares | i 0.0 | i 0.0 | i 0.0 | |||||
Common
Stock, $0.01 par value: Authorized, 70.0 shares; Issued, 42.9 shares; Outstanding, 32.6, 33.4 and 33.6 shares, respectively | i 0.4 | i 0.4 | i 0.4 | |||||
Additional
paid-in capital | i 621.9 | i 620.8 | i 619.4 | |||||
Accumulated
other comprehensive income (loss) | ( i 59.4) | ( i 59.7) | ( i 54.6) | |||||
Retained
earnings | i 966.2 | i 1,012.6 | i 1,000.5 | |||||
Treasury
stock, at cost: 10.3, 9.5 and 9.3 shares, respectively | ( i 331.2) | ( i 302.6) | ( i 296.6) | |||||
Total
stockholders’ equity of Scholastic Corporation | i 1,197.9 | i 1,271.5 | i 1,269.1 | |||||
Noncontrolling
interest | i 1.4 | i 1.3 | i — | |||||
Total
stockholders’ equity | i 1,199.3 | i 1,272.8 | i 1,269.1 | |||||
Total
liabilities and stockholders’ equity | $ i 1,948.4 | $ i 1,878.5 | $ i 2,023.1 |
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 of Scholastic Corporation | Noncontrolling
interest | Total Stockholders' Equity | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Balance at June 1, 2018 | i 1.7 | $ i 0.0 | i 33.3 | $ i 0.4 | $ i 614.4 | $( i 55.7) | $ i 1,065.2 | $( i 303.5) | $ i 1,320.8 | $ i 0.0 | $ i 1,320.8 | ||||||||||||||||||||
Net
Income (loss) | — | — | — | — | — | — | ( i 61.3 | ) | — | ( i 61.3 | ) | — | ( i 61.3 | ) | |||||||||||||||||
Adoption
of ASC 606 ( net of tax of $16.0) | — | — | — | — | — | — | ( i 46.5 | ) | — | ( i 46.5 | ) | — | ( i 46.5 | ) | |||||||||||||||||
Foreign
currency translation adjustment | — | — | — | — | — | ( i 3.1 | ) | — | — | ( i 3.1 | ) | — | ( i 3.1 | ) | |||||||||||||||||
Pension
and post-retirement adjustments (net of tax of $0.0) | — | — | — | — | — | i 0.2 | — | — | i 0.2 | — | i 0.2 | ||||||||||||||||||||
Stock-based
compensation | — | — | — | — | i 1.5 | — | — | — | i 1.5 | — | i 1.5 | ||||||||||||||||||||
Proceeds
pursuant to stock-based compensation plans | — | — | — | — | i 2.8 | — | — | — | i 2.8 | — | i 2.8 | ||||||||||||||||||||
Treasury
stock issued pursuant to equity-based plans | — | — | i 0.1 | — | ( i 3.2 | ) | — | — | i 3.5 | i 0.3 | — | i 0.3 | |||||||||||||||||||
Dividends
($0.15 per share) | — | — | — | — | — | — | ( i 5.3 | ) | — | ( i 5.3 | ) | — | ( i 5.3 | ) | |||||||||||||||||
Balance
at August 31, 2018 | i 1.7 | $ i 0.0 | i 33.4 | $ i 0.4 | $ i 615.5 | $( i 58.6) | $ i 952.1 | $( i 300.0) | $ i 1,209.4 | $ i 0.0 | $ i 1,209.4 | ||||||||||||||||||||
Net
Income (loss) | — | — | — | — | — | — | i 71.6 | — | i 71.6 | — | i 71.6 | ||||||||||||||||||||
Foreign
currency translation adjustment | — | — | — | — | — | ( i 0.6 | ) | — | — | ( i 0.6 | ) | — | ( i 0.6 | ) | |||||||||||||||||
Pension
and post-retirement adjustments (net of tax of $0.8) | — | — | — | — | — | i 2.7 | — | — | i 2.7 | — | i 2.7 | ||||||||||||||||||||
Stock-based
compensation | — | — | — | — | i 3.7 | — | — | — | i 3.7 | — | i 3.7 | ||||||||||||||||||||
Proceeds
pursuant to stock-based compensation plans | — | — | — | — | i 2.5 | — | — | — | i 2.5 | — | i 2.5 | ||||||||||||||||||||
Purchases
of treasury stock at cost | — | — | i — | — | — | — | — | i — | i — | — | i — | ||||||||||||||||||||
Treasury
stock issued pursuant to equity-based plans | — | — | i 0.2 | — | ( i 3.8 | ) | — | — | i 4.4 | i 0.6 | — | i 0.6 | |||||||||||||||||||
Dividends
($0.15 per share) | — | — | — | — | — | — | ( i 5.3 | ) | — | ( i 5.3 | ) | — | ( i 5.3 | ) | |||||||||||||||||
Balance
at November 30, 2018 | i 1.7 | $ i 0.0 | i 33.6 | $ i 0.4 | $ i 617.9 | $( i 56.5) | $ i 1,018.4 | $( i 295.6) | $ i 1,284.6 | $ i 0.0 | $ i 1,284.6 | ||||||||||||||||||||
Net
Income (loss) | — | — | — | — | — | — | ( i 12.6 | ) | — | ( i 12.6 | ) | — | ( i 12.6 | ) | |||||||||||||||||
Foreign
currency translation adjustment | — | — | — | — | — | i 1.7 | — | — | i 1.7 | — | i 1.7 | ||||||||||||||||||||
Pension
and post-retirement adjustments (net of tax of $0.0) | — | — | — | — | — | i 0.2 | — | — | i 0.2 | — | i 0.2 | ||||||||||||||||||||
Stock-based
compensation | — | — | — | — | i 1.6 | — | — | — | i 1.6 | — | i 1.6 | ||||||||||||||||||||
Proceeds
pursuant to stock-based compensation plans | — | — | — | — | i 0.5 | — | — | — | i 0.5 | — | i 0.5 | ||||||||||||||||||||
Purchases
of treasury stock at cost | — | — | ( i 0.1 | ) | — | — | — | — | ( i 2.0 | ) | ( i 2.0 | ) | — | ( i 2.0 | ) | ||||||||||||||||
Treasury
stock issued pursuant to equity-based plans | — | — | i 0.1 | — | ( i 0.6 | ) | — | — | i 1.0 | i 0.4 | — | i 0.4 | |||||||||||||||||||
Dividends
($0.15 per share) | — | — | — | — | — | — | ( i 5.3 | ) | — | ( i 5.3 | ) | — | ( i 5.3 | ) | |||||||||||||||||
Balance
at February 28, 2019 | i 1.7 | $ i 0.0 | i 33.6 | $ i 0.4 | $ i 619.4 | $( i 54.6) | $ i 1,000.5 | $( i 296.6) | $ i 1,269.1 | $ i 0.0 | $ i 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 of Scholastic Corporation | Noncontrolling
interest | Total Stockholders' Equity | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Balance at June 1, 2019 | i 1.7 | $ i 0.0 | i 33.4 | $ i 0.4 | $ i 620.8 | $( i 59.7) | $ i 1,012.6 | $( i 302.6) | $ i 1,271.5 | $ i 1.3 | $ i 1,272.8 | ||||||||||||||||||||
Net
Income (loss) | — | — | — | — | — | — | ( i 58.5 | ) | — | ( i 58.5 | ) | — | ( i 58.5 | ) | |||||||||||||||||
Foreign
currency translation adjustment | — | — | — | — | — | ( i 2.0 | ) | — | — | ( i 2.0 | ) | — | ( i 2.0 | ) | |||||||||||||||||
Pension
and post-retirement adjustments (net of tax of $0.0) | — | — | — | — | — | i 0.2 | — | — | i 0.2 | — | i 0.2 | ||||||||||||||||||||
Stock-based
compensation | — | — | — | — | i 1.5 | — | — | — | i 1.5 | — | i 1.5 | ||||||||||||||||||||
Purchases
of treasury stock at cost | — | — | ( i 0.3 | ) | — | — | — | — | ( i 12.6 | ) | ( i 12.6 | ) | — | ( i 12.6 | ) | ||||||||||||||||
Treasury
stock issued pursuant to equity-based plans | — | — | i 0.0 | — | ( i 0.1 | ) | — | — | i 0.6 | i 0.5 | — | i 0.5 | |||||||||||||||||||
Dividends
($0.15 per share) | — | — | — | — | — | — | ( i 5.2 | ) | — | ( i 5.2 | ) | — | ( i 5.2 | ) | |||||||||||||||||
Noncontrolling
interest in Make Believe Ideas | — | — | — | — | — | — | — | — | — | ( i 0.0 | ) | i — | |||||||||||||||||||
Balance
at August 31, 2019 | i 1.7 | $ i 0.0 | i 33.1 | $ i 0.4 | $ i 622.2 | $( i 61.5) | $ i 948.9 | $( i 314.6) | $ i 1,195.4 | $ i 1.3 | $ i 1,196.7 | ||||||||||||||||||||
Net
Income (loss) | — | — | — | — | — | — | i 71.0 | — | i 71.0 | — | i 71.0 | ||||||||||||||||||||
Foreign
currency translation adjustment | — | — | — | — | — | i 3.9 | — | — | i 3.9 | — | i 3.9 | ||||||||||||||||||||
Pension
and post-retirement adjustments (net of tax of $0.0) | — | — | — | — | — | i 0.2 | — | — | i 0.2 | — | i 0.2 | ||||||||||||||||||||
Stock-based
compensation | — | — | — | — | i 0.9 | — | — | — | i 0.9 | — | i 0.9 | ||||||||||||||||||||
Proceeds
pursuant to stock-based compensation plans | — | — | — | — | i 0.3 | — | — | — | i 0.3 | — | i 0.3 | ||||||||||||||||||||
Purchases
of treasury stock at cost | — | — | ( i 0.1 | ) | — | — | — | — | ( i 7.1 | ) | ( i 7.1 | ) | — | ( i 7.1 | ) | ||||||||||||||||
Treasury
stock issued pursuant to equity-based plans | — | — | i — | — | ( i 2.1 | ) | — | — | i 2.7 | i 0.6 | — | i 0.6 | |||||||||||||||||||
Dividends
($0.15 per share) | — | — | — | — | — | — | ( i 5.2 | ) | — | ( i 5.2 | ) | — | ( i 5.2 | ) | |||||||||||||||||
Noncontrolling
interest in Make Believe Ideas | — | — | — | — | — | — | — | — | — | i 0.0 | i — | ||||||||||||||||||||
Balance
at November 30, 2019 | i 1.7 | $ i 0.0 | i 33.0 | $ i 0.4 | $ i 621.3 | $( i 57.4) | $ i 1,014.7 | $( i 319.0) | $ i 1,260.0 | $ i 1.3 | $ i 1,261.3 | ||||||||||||||||||||
Net
Income (loss) | — | — | — | — | — | ( i 43.3 | ) | — | ( i 43.3 | ) | — | ( i 43.3 | ) | ||||||||||||||||||
Foreign
currency translation adjustment | — | — | — | — | — | ( i 2.3 | ) | — | — | ( i 2.3 | ) | — | ( i 2.3 | ) | |||||||||||||||||
Pension
and post-retirement adjustments (net of tax of $0.0) | — | — | — | — | — | i 0.3 | — | — | i 0.3 | — | i 0.3 | ||||||||||||||||||||
Stock-based
compensation | — | — | — | — | i 0.7 | — | — | — | i 0.7 | — | i 0.7 | ||||||||||||||||||||
Proceeds
pursuant to stock-based compensation plans | — | — | — | — | 0.4 | — | — | — | 0.4 | — | 0.4 | ||||||||||||||||||||
Purchases
of treasury stock at cost | — | — | ( i 0.4 | ) | — | — | — | — | ( i 13.0 | ) | ( i 13.0 | ) | — | ( i 13.0 | ) | ||||||||||||||||
Treasury
stock issued pursuant to equity-based plans | — | — | i 0.0 | — | ( i 0.5 | ) | — | — | i 0.8 | i 0.3 | — | i 0.3 | |||||||||||||||||||
Dividends
($0.15 per share) | — | — | — | — | — | — | ( i 5.2 | ) | — | ( i 5.2 | ) | — | ( i 5.2 | ) | |||||||||||||||||
Noncontrolling
interest in Make Believe Ideas | — | — | — | — | — | — | — | — | — | i 0.1 | i 0.1 | ||||||||||||||||||||
Balance
at February 29, 2020 | i 1.7 | $ i 0.0 | i 32.6 | $ i 0.4 | $ i 621.9 | $( i 59.4) | $ i 966.2 | $( i 331.2) | $ i 1,197.9 | $ i 1.4 | $ i 1,199.3 |
SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED (Dollar amounts in millions) |
Nine
months ended | |||||
February 29, | |||||
2020 | 2019 | ||||
Cash flows - operating activities: | |||||
Net
income (loss) attributable to Scholastic Corporation | $( i 30.8) | $( i 2.3) | |||
Adjustments
to reconcile Net income (loss) to net cash provided by (used in) operating activities: | |||||
Provision for losses on accounts receivable | i 7.3 | i 5.7 | |||
Provision
for losses on inventory | i 13.7 | i 12.2 | |||
Provision
for losses on royalty advances | i 3.8 | i 3.0 | |||
Amortization
of prepublication and production costs | i 19.7 | i 16.6 | |||
Depreciation
and amortization | i 48.1 | i 43.7 | |||
Amortization
of pension and postretirement actuarial gains and losses | i 0.7 | i 0.5 | |||
Deferred
income taxes | ( i 0.2) | ( i 2.6) | |||
Stock-based
compensation | i 3.1 | i 6.8 | |||
Income
from equity investments | ( i 3.6) | ( i 5.7) | |||
Non
cash write off related to asset impairments and write downs | i 40.0 | i — | |||
Changes
in assets and liabilities, net of amounts acquired: | |||||
Accounts receivable | ( i 38.9) | ( i 87.9) | |||
Inventories | ( i 36.2) | ( i 77.9) | |||
Prepaid
expenses and other current assets | ( i 35.9) | ( i 24.5) | |||
Royalty
advances | ( i 9.1) | ( i 10.7) | |||
Accounts
payable | ( i 0.1) | i 29.4 | |||
Accrued
income taxes | i 2.3 | i 0.2 | |||
Accrued
royalties | i 35.6 | i 42.5 | |||
Deferred
revenue | i 27.5 | i 43.9 | |||
Other
assets and liabilities | ( i 3.0) | i 67.6 | |||
Net
cash provided by (used in) operating activities | i 44.0 | i 60.5 | |||
Cash
flows - investing activities: | |||||
Prepublication and production expenditures | ( i 21.5) | ( i 32.3) | |||
Additions
to property, plant and equipment | ( i 48.4) | ( i 71.0) | |||
Acquisition
of land | ( i 3.3) | i — | |||
Other
investment and acquisition-related payments | ( i 1.2) | ( i 0.5) | |||
Net
cash provided by (used in) investing activities | ( i 74.4) | ( i 103.8) | |||
Cash
flows - financing activities: | |||||
Proceeds from long-term debt | i 6.4 | i — | |||
Repayments
of long-term debt | i — | i — | |||
Borrowings
under lines of credit | i 22.5 | i 48.5 | |||
Repayments
of lines of credit | ( i 19.7) | ( i 46.6) | |||
Repayment
of capital lease obligations | ( i 1.5) | ( i 1.1) | |||
Reacquisition
of common stock | ( i 32.2) | ( i 2.0) | |||
Proceeds
pursuant to stock-based compensation plans | i 0.7 | i 5.8 | |||
Payment
of dividends | ( i 15.7) | ( i 15.8) | |||
Other | ( i 0.2) | i 1.3 | |||
Net
cash provided by (used in) financing activities | ( i 39.7) | ( i 9.9) | |||
Effect
of exchange rate changes on cash and cash equivalents | ( i 0.2) | ( i 0.6) | |||
Net
increase (decrease) in cash and cash equivalents | ( i 70.3) | ( i 53.8) | |||
Cash
and cash equivalents at beginning of period | i 334.1 | i 391.9 | |||
Cash
and cash equivalents at end of period | $ i 263.8 | $ i 338.1 |
SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
• | 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, intangible 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 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) |
Three months ended | Nine months ended | |||||
February 29, | February 28, | February 29, | ||||
2020 | 2019 | 2020 | 2019 | |||
U.S. Book Clubs | $ i 43.4 | $ i 55.0 | $ i 137.3 | $ i 165.4 | ||
U.S.
Book Fairs | i 100.1 | i 97.4 | i 351.7 | i 343.3 | ||
U.S.
Trade | i 70.4 | i 65.6 | i 231.6 | i 222.9 | ||
U.S.
Education | i 74.3 | 60.3 | i 192.5 | i 179.7 | ||
Non-U.S.
Major Markets(1) | i 59.2 | i 54.0 | i 210.1 | i 192.2 | ||
Non-U.S.
Other Markets(2) | i 25.9 | i 27.8 | i 79.9 | i 79.7 | ||
Total
Revenues | $ i 373.3 | $ i 360.1 | $ i 1,203.1 | $ i 1,183.2 |
• | 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 i 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 i three
operating segments. |
SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
• | 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 i three operating segments. |
Children’s Book Publishing & Distribution | Education | Overhead (1) | Total Domestic | International | Total | ||||||||||||
Three months ended February 29, 2020 | |||||||||||||||||
Revenues | $ i 220.2 | $ i 74.3 | i — | $ i 294.5 | $ i 78.8 | $ i 373.3 | |||||||||||
Bad
debt expense | i 1.2 | i 0.7 | i — | i 1.9 | i 1.1 | i 3.0 | |||||||||||
Depreciation
and amortization (2) | i 6.7 | i 3.3 | i 10.8 | i 20.8 | i 1.9 | i 22.7 | |||||||||||
Asset
impairments and write downs | i — | i — | i 40.0 | i 40.0 | i — | i 40.0 | |||||||||||
Segment
operating income (loss) | i 2.2 | i 9.8 | ( i 68.3) | ( i 56.3) | ( i 3.7) | ( i 60.0) | |||||||||||
Expenditures
for other noncurrent assets (3) | i 11.5 | i 5.4 | i 19.4 | i 36.3 | i 5.4 | i 41.7 | |||||||||||
Three
months ended February 28, 2019 | |||||||||||||||||
Revenues | $ i 218.0 | $ i 60.3 | i — | $ i 278.3 | $ i 81.8 | $ i 360.1 | |||||||||||
Bad
debt expense | i 0.8 | i 0.5 | i — | i 1.3 | i 0.3 | i 1.6 | |||||||||||
Depreciation
and amortization (2) | i 5.9 | i 2.6 | i 10.4 | i 18.9 | i 1.6 | i 20.5 | |||||||||||
Asset
impairments and write downs | i — | i — | i — | i — | i — | i — | |||||||||||
Segment
operating income (loss) | i 4.4 | i 0.3 | ( i 23.1) | ( i 18.4) | ( i 3.0) | ( i 21.4) | |||||||||||
Expenditures
for other noncurrent assets (3) | i 17.3 | i 5.5 | i 15.3 | i 38.1 | i 2.7 | i 40.8 |
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 29, 2020 | |||||||||||||||||
Revenues | $ i 743.4 | $ i 192.6 | i — | $ i 936.0 | $ i 267.1 | $ i 1,203.1 | |||||||||||
Bad
debt expense | i 2.8 | i 1.5 | i — | i 4.3 | i 3.0 | i 7.3 | |||||||||||
Depreciation
and amortization (2) | i 19.9 | i 9.8 | i 32.7 | i 62.4 | i 5.4 | i 67.8 | |||||||||||
Asset
impairments and write downs | i — | i — | i 40.0 | i 40.0 | i — | i 40.0 | |||||||||||
Segment
operating income (loss) | i 70.1 | i 2.6 | ( i 119.3 | ) | ( i 46.6 | ) | i 4.3 | ( i 42.3 | ) | ||||||||
Segment
assets at February 29, 2020 | i 594.1 | i 208.5 | i 853.9 | i 1,656.5 | i 291.9 | i 1,948.4 | |||||||||||
Goodwill
at February 29, 2020 | i 47.1 | i 68.2 | i — | i 115.3 | i 10.0 | i 125.3 | |||||||||||
Expenditures
for other noncurrent assets (3) | i 40.2 | i 15.0 | i 37.6 | i 92.8 | i 18.1 | i 110.9 | |||||||||||
Other
noncurrent assets at February 29, 2020 (3) | $ i 183.0 | $ i 123.1 | $ i 499.1 | $ i 805.2 | $ i 76.6 | $ i 881.8 | |||||||||||
Nine
months ended February 28, 2019 | |||||||||||||||||
Revenues | $ i 731.6 | $ i 179.7 | i — | $ i 911.3 | $ i 271.9 | $ i 1,183.2 | |||||||||||
Bad
debt expense | i 3.2 | i 1.2 | i — | i 4.4 | i 1.3 | i 5.7 | |||||||||||
Depreciation
and amortization (2) | i 17.5 | i 6.7 | i 31.1 | i 55.3 | i 5.0 | i 60.3 | |||||||||||
Asset
impairments and write downs | i — | i — | i — | i — | i — | i — | |||||||||||
Segment
operating income (loss) | i 64.7 | ( i 6.3 | ) | ( i 73.4 | ) | ( i 15.0 | ) | i 8.0 | ( i 7.0 | ) | |||||||
Segment
assets at February 28, 2019 | i 585.2 | i 173.6 | i 977.9 | i 1,736.7 | i 286.4 | i 2,023.1 | |||||||||||
Goodwill
at February 28, 2019 | i 40.9 | i 68.2 | i — | i 109.1 | i 10.0 | i 119.1 | |||||||||||
Expenditures
for other noncurrent assets (3) | i 48.3 | i 15.6 | i 55.9 | i 119.8 | i 10.1 | i 129.9 | |||||||||||
Other
noncurrent assets at February 28, 2019 (3) | $ i 170.4 | $ i 112.3 | $ i 502.8 | $ i 785.5 | $ i 80.3 | $ i 865.8 |
(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) | Other
noncurrent assets include property, plant and equipment, prepublication assets, production assets, cloud computing costs, royalty advances, goodwill, intangible assets and investments. Expenditures for other noncurrent assets for the International segment include expenditures for long-lived assets of $ i 4.3 and $ i 1.5
for the three months ended February 29, 2020 and February 28, 2019, respectively, and $ i 14.2 and $ i 5.9
for the nine months ended February 29, 2020 and February 28, 2019, respectively. Other noncurrent assets for the International segment include long-lived assets of $ i 44.1 and $ i 36.3
as of February 29, 2020 and February 28, 2019, respectively. |
SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Revolving Loan | i — | i — | i — | |||||
Unsecured
lines of credit (weighted average interest rates of 4.6%, 4.1% and 4.3%, respectively) | $ i 9.7 | $ i 7.3 | $ i 11.0 | |||||
UK
long-term debt (average interest rate of 2.5%, n/a and n/a, respectively) | i 6.4 | i — | i — | |||||
Total
debt | $ i 16.1 | $ i 7.3 | $ i 11.0 | |||||
Less
lines of credit, short-term debt and current portion of long-term debt | ( i 9.7 | ) | ( i 7.3 | ) | ( i 11.0 | ) | ||
Total
long-term debt | $ i 6.4 | $ i 0.0 | $ i 0.0 |
• | the borrowing limit was reduced to $ i 375.0
from $ i 425.0; |
• | A
Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus i 0.50% or (iii) the Eurodollar Rate for a one month interest period plus i 1%
plus, in each case, an applicable spread ranging from i 0.175% to i 0.60%,
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) |
• | A
Eurodollar Rate equal to the London interbank offered rate (LIBOR) plus an applicable spread ranging from i 1.175% to i 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 | Nine months ended | ||||||||||
February 29, | February 28, | February 29, | |||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net
income (loss) attributable to Class A and Common Stockholders | $( i 43.3) | $( i 12.6) | $( i 30.8) | $( i 2.3) | |||||||
Weighted
average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions) | i 34.5 | i 35.3 | i 34.8 | i 35.2 | |||||||
Dilutive
effect of Class A Stock and Common Stock potentially issuable pursuant to stock-based compensation plans (in millions) * | i — | i — | i — | i — | |||||||
Adjusted
weighted average Shares of Class A Stock and Common Stock outstanding for diluted earnings (loss) per share (in millions) | i 34.5 | i 35.3 | i 34.8 | i 35.2 | |||||||
Earnings
(loss) per share of Class A Stock and Common Stock: | |||||||||||
Basic | $( i 1.25) | $( i 0.36) | $( i 0.89) | $( i 0.07) | |||||||
Diluted
| $( i 1.25) | $( i 0.36) | $( i 0.89) | $( i 0.07) |
Options outstanding pursuant to stock-based compensation plans (in millions) | i 3.0 | i 2.9 |
SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar
amounts in millions, except per share data) |
Gross beginning balance | $ i 164.8 | $ i 158.8 | $ i 158.8 | |||||
Accumulated
impairment | ( i 39.6 | ) | ( i 39.6 | ) | ( i 39.6 | ) | ||
Beginning
balance | $ i 125.2 | $ i 119.2 | $ i 119.2 | |||||
Additions | i — | i 6.3 | i — | |||||
Foreign
currency translation | i 0.1 | ( i 0.3 | ) | ( i 0.1 | ) | |||
Ending
balance | $ i 125.3 | $ i 125.2 | $ i 119.1 |
Beginning balance other intangibles subject to amortization | $ i 12.2 | $ i 10.1 | $ i 10.1 | |||||
Additions
| i 1.6 | i 4.5 | i 0.6 | |||||
Amortization
expense | ( i 2.4 | ) | ( i 2.8 | ) | ( i 2.0 | ) | ||
Foreign
currency translation | i 0.1 | ( i 0.2 | ) | i 0.0 | ||||
Other | i — | i 0.6 | i — | |||||
Total
other intangibles subject to amortization, net of accumulated amortization of $29.3, $26.9 and $26.1, respectively | i 11.5 | i 12.2 | i 8.7 | |||||
Total
other intangibles not subject to amortization | i 2.1 | i 2.1 | i 2.1 | |||||
Total
other intangibles | $ i 13.6 | $ i 14.3 | $ i 10.8 |
SCHOLASTIC
CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Segment | ||||||||
Equity method investments | $ i 26.4 | $ i 23.4 | $ i 36.7 | International | ||||
Other
equity investments | i 6.0 | i 6.0 | i — | Children's
Book Publishing & Distribution | ||||
Total Investments | $ i 32.4 | $ i 29.4 | $ i 36.7 |
UK Pension Plan | Postretirement Benefits | ||||||||||
Three
months ended | Three months ended | ||||||||||
February 29, | February 28, | February 29, | |||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Components
of net periodic benefit cost: | |||||||||||
Service cost | i — | i — | i — | i — | |||||||
Interest
cost | i 0.2 | i 0.3 | i 0.2 | i 0.2 | |||||||
Expected
return on assets | ( i 0.3 | ) | ( i 0.3 | ) | i — | i — | |||||
Net
amortization of prior service (credit) cost | i 0.0 | i — | i 0.0 | i 0.0 | |||||||
Amortization
of (gains) losses | i 0.3 | i 0.2 | i — | i — | |||||||
Total | $ i 0.2 | $ i 0.2 | $ i 0.2 | $ i 0.2 |
SCHOLASTIC
CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
UK Pension Plan | Postretirement
Benefits | ||||||||||
Nine months ended | Nine months ended | ||||||||||
February 29, | February 28, | February 29, | |||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Components
of net periodic benefit cost: | |||||||||||
Service cost | i — | i — | i — | $ i 0.0 | |||||||
Interest
cost | i 0.6 | i 0.8 | i 0.5 | i 0.6 | |||||||
Expected
return on assets | ( i 0.8) | ( i 0.8) | i — | i — | |||||||
Net
amortization of prior service (credit) cost | i 0.0 | i — | ( i 0.1) | ( i 0.1) | |||||||
Amortization
of (gains) losses | i 0.8 | i 0.6 | i — | i — | |||||||
Total | $ i 0.6 | $ i 0.6 | $ i 0.4 | $ i 0.5 |
SCHOLASTIC
CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Location within Condensed Consolidated Balance Sheet | |||
Operating
leases | $ i 71.7 | Operating lease right-of-use assets, net | |
Finance leases | i 11.4 | Property,
plant and equipment, net | |
Total lease assets | $ i 83.1 | ||
Operating
leases : | |||
Current portion | i 22.7 | Current portion of operating lease liabilities | |
Non-current
portion | i 52.0 | Long-term operating lease liabilities | |
Total operating lease liabilities | $ i 74.7 | ||
Finance
leases : | |||
Current portion | i 2.1 | Other accrued expenses | |
Non-current portion | i 10.0 | Other
noncurrent liabilities | |
Total finance lease liabilities | $ i 12.1 | ||
Total lease liabilities | $ i 86.8 |
Three Months Ended February 29, 2020 | Nine Months Ended February 29, 2020 | Location
within Condensed Consolidated Statements of Operations | ||||
Operating lease expense | $ i 7.1 | $ i 21.3 | Selling,
general and administrative expenses | |||
Finance lease costs : | ||||||
Depreciation of leased assets | i 0.6 | i 1.5 | Selling,
general and administrative expenses | |||
Accretion of lease liabilities | i 0.1 | i 0.3 | Interest
income (expense), net | |||
Total lease expense | $ i 7.8 | $ i 23.1 |
Nine Months Ended February 29, 2020 | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating
leases | $ i 3.0 | |
Operating cash flows from finance leases | i 0.3 | |
Financing
cash flows from finance leases | i 1.5 |
SCHOLASTIC
CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Operating | Finance | ||
Leases | Leases | ||
Remainder
of Fiscal 2020 (1) | $ i 7.1 | $ i 0.6 | |
Fiscal
2021 | i 23.6 | i 2.5 | |
Fiscal
2022 | i 19.1 | i 2.4 | |
Fiscal
2023 | i 13.0 | i 2.3 | |
Fiscal
2024 | i 7.2 | i 2.1 | |
Fiscal
2025 and thereafter | i 11.4 | i 3.7 | |
Total
lease payments | i 81.4 | i 13.6 | |
Less:
interest | ( i 6.7) | ( i 1.5) | |
Total
lease liabilities | $ i 74.7 | $ i 12.1 |
Operating | Finance | ||
Leases | Leases | ||
Weighted-average
remaining lease term (years) | i 4.2 | i 6.2 | |
Weighted-average
discount rate | i 4.0% | i 3.8% |
Three months ended | Nine months ended | ||||||
February 29, | February
28, | February 29, | |||||
2020 | 2019 | 2020 | 2019 | ||||
Stock option expense | $ i 0.4 | $ i 0.7 | $ i 1.4 | $ i 4.3 | |||
Restricted
stock unit expense | i 0.3 | i 0.7 | i 1.5 | i 2.0 | |||
Management
stock purchase plan | i 0.0 | i 0.0 | i 0.0 | i 0.2 | |||
Employee
stock purchase plan | i 0.0 | i 0.2 | i 0.2 | i 0.3 | |||
Total
stock-based compensation expense | $ i 0.7 | $ i 1.6 | $ i 3.1 | $ i 6.8 |
Three months ended | Nine months ended | ||||||
February 29, | February
28, | February 29, | |||||
2020 | 2019 | 2020 | 2019 | ||||
Common Stock issued pursuant to stock-based
compensation plans (in millions) | i 0.0 | i 0.1 | i 0.1 | i 0.4 |
SCHOLASTIC
CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Authorizations
| Amount |
July 2015 | $ i 50.0 |
March 2018 | i 50.0 |
Total
current Board authorizations at June 1, 2019 | $ i 100.0 |
Less repurchases made under these authorizations | ( i 79.9) |
Remaining
Board authorization at February 29, 2020 | $ i 20.1 |
Three months ended February 29, 2020 | ||||||||
Foreign currency translation adjustments | Retirement benefit plans | Total | ||||||
Beginning
balance at December 1, 2019 | $( i 45.2) | $( i 12.2) | $( i 57.4) | |||||
Other
comprehensive income (loss) before reclassifications | ( i 2.3 | ) | i — | ( i 2.3 | ) | |||
Less
amount reclassified from Accumulated other comprehensive income (loss): | ||||||||
Amortization of gains and losses (net of tax of $0.0) | — | i 0.3 | i 0.3 | |||||
Amortization
of prior service credit (net of tax of $0.0) | — | i 0.0 | i 0.0 | |||||
Other
comprehensive income (loss) | ( i 2.3 | ) | i 0.3 | ( i 2.0 | ) | |||
Ending
balance at February 29, 2020 | $( i 47.5) | $( i 11.9) | $( i 59.4) | |||||
Three
months ended February 28, 2019 | ||||||||
Foreign currency translation adjustments | Retirement benefit plans | Total | ||||||
Beginning balance at December 1, 2018 | $( i 45.6) | $( i 10.9) | $( i 56.5) | |||||
Other
comprehensive income (loss) before reclassifications | i 1.7 | i — | i 1.7 | |||||
Less
amount reclassified from Accumulated other comprehensive income (loss): | ||||||||
Amortization of gains and losses (net of tax of $0.0) | — | i 0.2 | i 0.2 | |||||
Amortization
of prior service credit (net of tax of $0.0) | — | i 0.0 | i 0.0 | |||||
Other
comprehensive income (loss) | i 1.7 | i 0.2 | i 1.9 | |||||
Ending
balance at February 28, 2019 | $( i 43.9) | $( i 10.7) | $( i 54.6) |
SCHOLASTIC
CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Nine months ended February 29, 2020 | |||||||
Foreign currency
translation adjustments | Retirement benefit plans | Total | |||||
Beginning balance at June 1, 2019 | $( i 47.1) | $( i 12.6) | $( i 59.7) | ||||
Other
comprehensive income (loss) before reclassifications | ( i 0.4) | i — | ( i 0.4) | ||||
Less
amount reclassified from Accumulated other comprehensive income (loss): | |||||||
Amortization of gains and losses (net of tax of $0.0) | — | i 0.8 | i 0.8 | ||||
Amortization
of prior service credit (net of tax of $0.0) | — | ( i 0.1) | ( i 0.1) | ||||
Other
comprehensive income (loss) | ( i 0.4) | i 0.7 | i 0.3 | ||||
Ending
balance at February 29, 2020 | $( i 47.5) | $( i 11.9) | $( i 59.4) | ||||
Nine
months ended February 28, 2019 | |||||||
Foreign currency translation adjustments | Retirement benefit plans | Total | |||||
Beginning balance at June 1, 2018 | $( i 41.9) | $( i 13.8) | $( i 55.7) | ||||
Other
comprehensive income (loss) before reclassifications | ( i 2.0) | i — | ( i 2.0) | ||||
Less
amount reclassified from Accumulated other comprehensive income (loss): | |||||||
Amortization of gains and losses (net of tax of $0.0) | — | i 0.6 | i 0.6 | ||||
Postretirement
benefit plan remeasurement (net of tax of $0.8) | — | i 2.0 | i 2.0 | ||||
Amortization
of prior service credit (net of tax of $0.0) | — | ( i 0.1) | ( i 0.1) | ||||
Other
reclassifications (net of tax of $0.0) | — | i 0.6 | i 0.6 | ||||
Other
comprehensive income (loss) | ( i 2.0) | i 3.1 | i 1.1 | ||||
Ending
balance at February 28, 2019 | $( i 43.9) | $( i 10.7) | $( i 54.6) |
Three months ended | Nine months ended | Condensed Consolidated Statements of Operations line item | ||||||
February
29, | February 28, | February 29, | ||||||
2020 | 2019 | 2020 | 2019 | |||||
Employee
benefit plans: | ||||||||
Amortization of unrecognized (gain) loss | $ i 0.3 | $ i 0.2 | $ i 0.8 | $ i 0.6 | Other
components of net periodic benefit (cost) | |||
Amortization of prior service credit | i 0.0 | i 0.0 | ( i 0.1) | ( i 0.1) | Other
components of net periodic benefit (cost) | |||
Less: Tax effect | i 0.0 | i 0.0 | i 0.0 | i 0.0 | Provision
(benefit) for income taxes | |||
Total cost, net of tax | $ i 0.3 | $ i 0.2 | $ i 0.7 | $ i 0.5 |
• | 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 acquired in a business combination |
• | Impairment
assessment of Goodwill and intangible assets |
• | Long-lived assets held for sale |
SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
Accrued payroll, payroll taxes and benefits | $ i 39.6 | $ i 41.2 | $ i 45.2 | |||||
Accrued
bonus and commissions | i 18.2 | i 13.7 | i 13.0 | |||||
Returns
liability | i 40.6 | i 34.5 | i 97.3 | |||||
Accrued
other taxes | i 24.6 | i 29.3 | i 23.5 | |||||
Accrued
advertising and promotions | i 11.0 | i 9.6 | i 10.2 | |||||
Other
accrued expenses | i 36.9 | i 36.5 | i 47.0 | |||||
Total
accrued expenses | $ i 170.9 | $ i 164.8 | $ i 236.2 |
SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data) |
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 | Nine months ended | ||||||||||||||||||
February 29, | February 28, | February 29, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
($
amounts in millions) | $ | % of Revenue | $ | % of Revenue | $ | % of Revenue | $ | %
of Revenue | |||||||||||
Product, service and production costs | $99.6 | 26.7 | % | $95.4 | 26.5 | % | $320.3 | 26.6 | % | $304.0 | 25.7 | % | |||||||
Royalty
costs | 28.5 | 7.6 | 24.5 | 6.8 | 91.3 | 7.6 | 87.7 | 7.4 | |||||||||||
Prepublication
and production amortization | 6.9 | 1.8 | 6.2 | 1.7 | 20.6 | 1.7 | 17.2 | 1.4 | |||||||||||
Postage,
freight, shipping, fulfillment and other | 48.0 | 12.9 | 50.8 | 14.1 | 152.2 | 12.7 | 155.7 | 13.2 | |||||||||||
Total | $183.0 | 49.0 | % | $176.9 | 49.1 | % | $584.4 | 48.6 | % | $564.6 | 47.7 | % |
SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
Three months ended | Nine
months ended | ||||||||||||||||||||||||
February 29, | February 28, | $ | % | February 29, | February
28, | $ | % | ||||||||||||||||||
($ amounts in millions) | 2020 | 2019 | change | change | 2020 | 2019 | change | change | |||||||||||||||||
Revenues | $220.2 | $218.0 | $2.2 | 1.0 | % | $743.4 | $731.6 | $11.8 | 1.6 | % | |||||||||||||||
Cost
of goods sold | 106.1 | 101.4 | 4.7 | 4.6 | 343.1 | 325.6 | 17.5 | 5.4 | |||||||||||||||||
Other
operating expenses (1) | 111.9 | 112.2 | (0.3 | ) | (0.3 | ) | 330.2 | 341.3 | (11.1 | ) | (3.3 | ) | |||||||||||||
Operating
income (loss) | $2.2 | $4.4 | $(2.2) | (50.0 | )% | $70.1 | $64.7 | $5.4 | 8.3 | % | |||||||||||||||
Operating
margin | 1.0 | % | 2.0 | % | 9.4 | % | 8.8 | % |
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 | Nine months ended | ||||||||||||||||||||||
February 29, | February 28, | $ | % | February
29, | February 28, | $ | % | ||||||||||||||||
($ amounts in millions) | 2020 | 2019 | change | change | 2020 | 2019 | change | change | |||||||||||||||
Revenues | $74.3 | $60.3 | $14.0 | 23.2 | % | $192.6 | $179.7 | $12.9 | 7.2 | % | |||||||||||||
Cost
of goods sold | 23.9 | 20.6 | 3.3 | 16.0 | 68.0 | 62.5 | 5.5 | 8.8 | |||||||||||||||
Other
operating expenses (1) | 40.6 | 39.4 | 1.2 | 3.0 | 122.0 | 123.5 | (1.5) | (1.2 | ) | ||||||||||||||
Operating
income (loss) | $9.8 | $0.3 | $9.5 | * | $2.6 | $(6.3) | $8.9 | * | |||||||||||||||
Operating
margin | 13.2 | % | 0.5 | % | 1.3 | % | — | % |
SCHOLASTIC
CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
Three
months ended | Nine months ended | ||||||||||||||||||||||
February 29, | February 28, | $ | % | February
29, | February 28, | $ | % | ||||||||||||||||
($ amounts in millions) | 2020 | 2019 | change | change | 2020 | 2019 | change | change | |||||||||||||||
Revenues | $78.8 | $81.8 | $(3.0) | (3.7 | )% | $267.1 | $271.9 | $(4.8) | (1.8 | )% | |||||||||||||
Cost
of goods sold | 43.1 | 44.1 | (1.0) | (2.3 | ) | 141.1 | 142.8 | (1.7) | (1.2 | ) | |||||||||||||
Other
operating expenses (1) | 39.4 | 40.7 | (1.3) | (3.2 | ) | 121.7 | 121.1 | 0.6 | 0.5 | ||||||||||||||
Operating
income (loss) | $(3.7) | $(3.0) | $(0.7) | (23.3 | )% | $4.3 | $8.0 | $(3.7) | (46.3 | )% | |||||||||||||
Operating
margin | — | % | — | % | 1.6 | % | 2.9 | % |
SCHOLASTIC
CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC
CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC
CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) |
SCHOLASTIC CORPORATION Item 3. Quantitative and Qualitative Disclosures about Market Risk |
($
amounts in millions) | Fiscal Year Maturity | ||||||||||||||||||||
2020(1) | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | Fair Value @ 2/29/2020 | ||||||||||||||
Debt Obligations | |||||||||||||||||||||
Lines
of Credit and current portion of long-term debt | $9.7 | $0.0 | $0.0 | $0.0 | $0.0 | $0.0 | $9.7 | $9.7 | |||||||||||||
Average
interest rate | 4.6 | % | — | — | — | — | — | ||||||||||||||
Long-term
debt | $0.0 | $0.0 | $6.4 | $0.0 | $0.0 | $0.0 | $6.4 | $6.4 | |||||||||||||
Average
interest rate | — | — | 2.5 | % | — | — | — |
SCHOLASTIC CORPORATION Item 4. Controls and Procedures |
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 through December 31, 2019 | 31,306 | 37.64 | 31,306 | $32.0 | ||||||||
January 1 through January
31, 2020 | 211,540 | 35.50 | 211,540 | 24.5 | ||||||||
February 1 through February 29, 2020 | 130,122 | 33.32 | 130,122 | 20.1 | ||||||||
Total | 372,968 | 372,968 | $20.1 |
31.1 | |
31.2 | |
32 | |
101 | Financial
Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended February 29, 2020 formatted in Inline Extensible Business Reporting Language: (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements. |
104 | Cover
Page, formatted Inline Extensible Business Reporting Language and contained in Exhibit 101. |
Exhibit Number | Description of Document |
31.1 | Certification of the Chief Executive Officer of Scholastic Corporation filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of the Chief Financial Officer of Scholastic Corporation filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
32 | Certifications of the Chief Executive Officer and Chief Financial Officer of Scholastic Corporation furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | Financial Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended February
29, 2020 formatted in Inline Extensible Business Reporting Language: (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements. |
104 | Cover Page, formatted Inline Extensible Business Reporting Language and contained in Exhibit 101. |
SCHOLASTIC
CORPORATION | |||
(Registrant) | |||
Date: March 20, 2020 | By: | /s/ Richard Robinson | |
Chairman of the Board, President and Chief Executive Officer | |||
Date: March 20, 2020 | By: | ||
Chief Financial Officer (Principal Financial Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/5/22 | ||||
7/31/21 | ||||
6/15/20 | ||||
5/31/20 | 10-K | |||
4/30/20 | ||||
Filed on: | 3/20/20 | |||
3/18/20 | ||||
For Period end: | 2/29/20 | |||
2/28/20 | ||||
1/31/20 | ||||
1/24/20 | ||||
12/31/19 | 11-K | |||
12/1/19 | ||||
11/30/19 | 10-Q | |||
9/23/19 | 4 | |||
8/31/19 | 10-Q | |||
6/1/19 | ||||
5/31/19 | 10-K | |||
3/27/19 | 4 | |||
2/28/19 | 10-Q | |||
1/1/19 | ||||
12/1/18 | ||||
11/30/18 | 10-Q | |||
8/31/18 | 10-Q | |||
6/21/18 | ||||
6/1/18 | 3 | |||
3/21/18 | 8-K | |||
12/5/17 | ||||
1/5/17 | 8-K | |||
List all Filings |