• Book Fairs revenues were $102.7 million, down slightly from the prior year period. The third fiscal quarter is a seasonally smaller quarter for the U.S. school channels.
• Book Clubs revenues were $13.3 million, a decline of 52% from the prior year period reflecting the impact of lower planned promotional spending on unprofitable offers.
• Consolidated Trade revenues were $77.6 million, up 7% from the prior year period primarily due to the continued positive impact from backlist sales from bestselling series like Hunger Games® and Five Nights at Freddy’sTM. New releases in popular graphic novel series as well as new titles from proven Scholastic authors drove improved frontlist sales. This was partially offset by lower revenues from the prior year delivery of the animated TV show "Eva the Owlet"TM based on the Owl DiariesTM book series.

Adjusted segment operating income was $2.7 million, excluding $3.5 million in one-time charges, compared to $1.9 million in the prior period, primarily related to lower freight costs and promotional spending. 

Education Solutions

Education Solutions revenues were $68.5 million, a slight decrease from the prior year period, reflecting lower sales of supplemental instructional materials partially offset by higher state-sponsored program revenues.

Segment operating loss was $0.8 million, compared to operating income of $0.7 million in the prior period. The decrease was primarily due the on-going impact of increased spending on growth initiatives, partially offset by lower promotional spending.

International

Excluding the impact of foreign currency exchange, which on a net basis was insignificant for the quarter, International revenues increased 16% or $8.2 million as trade channel revenues in Canada and the U.K. improved on the strong performance of series titles including Hunger Games, Heartstopper, Five Nights at Freddy’s and Dog Man. Canada’s Book Fairs channel experienced increased fair count and improved revenue per fair, and India continued to experience modest growth.

Segment operating loss was $5.9 million, compared to $9.0 million in the prior period. The improvement was primarily driven by higher sales.

Overhead

Adjusted overhead costs were $26.6 million, excluding $0.8 million in one-time charges, compared to $21.3 million in the prior period. This increase primarily reflects favorable litigation settlements and certain legacy sales tax items, both of which benefited the prior year, partially offset by higher rental income.

Net cash provided by operating activities increased $5.5 million compared to the prior period, primarily driven by lower inventory purchasing and working capital usage, partially offset by lower customer remittances. Lower inventory spend reflects lower freight and manufacturing costs in addition to lower purchased quantities. Free cash flow use (a non-GAAP measure of operations explained in the accompanying tables) was $7.1 million in fiscal 2024, compared to free cash flow use of $11.9 million in the prior period, reflecting the lower working capital usage.

The Company distributed $6.1 million in dividends and repurchased 1,404,716 shares of its common stock for $54.2 million in the third quarter. 

The Company’s Board of Directors has authorized an additional $54.6 million for repurchases of its common stock under the Company’s stock repurchase program, increasing the authorization to $100.0 million. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions for the foreseeable future.

Revenues decreased 5% to $1,114.8 million year-to-date, primarily due to the headwinds in the retail market in the first quarter, which impacted  the domestic and international trade publishing revenues, and the shifting timing of sales in Education Solutions. Revenues were also impacted by the strategic plan to reposition Book Clubs to a smaller, more profitable core.

Operating loss was $32.7 million year-to-date, including $10.6 million in one-time charges related to restructuring, cost-savings activities and acquisition costs, compared to operating income of $14.3 million a year ago, which did not include any one-time charges. Excluding one-time charges in the current period, operating loss in the year-to-date period increased $36.4 million from a year ago. Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) decreased $35.1 million to $46.2 million. As expected, the continued shift in the overall seasonality of the Education Solutions segment sales, which significantly impacted the first quarter performance of this segment, coupled with continued investment in strategic initiatives and increased spending in the Book Fairs business to facilitate increased fair count resulted in the reduction in operating income.