Earlier today Scholastic reported results for the fiscal 2014 third quarter ended February 28, 2014.
As the press release states, revenue in the third quarter was $373.5 million, compared to $378.6 million a year ago.
Third quarter operating results were largely driven by sales and profit improvement in book clubs, classroom magazines and media, but were more than offset by the lower educational technology sales. The Educational Technology and Services segment experienced softer sales, mainly due to the amount of sales force time and resources devoted to the previously announced integration of the educational technology and classroom and supplemental materials units during the quarter. The Company’s international operations showed improved sales performance when measured in local currencies.
Richard Robinson, Chairman, President and Chief Executive Officer, said, “After a very strong first half, our education business was impacted in the third quarter by the combination of our educational technology and classroom and supplemental materials sales forces. The sales force integration is now largely complete and our team is fully focused on driving profitable sales in the fourth quarter and into the first quarter of next fiscal year. Scholastic’s expanded range of high-quality, effective programs for reading and math intervention, such as MATH 180™ continue to deliver great results in the classroom. With our strong sales and services organizations, we are well-positioned to provide the customized solutions that help boost student achievement at a time when the Common Core State Standards are driving high expectations for schools.”
Mr. Robinson continued, “In our children’s book business, we had a solid third quarter, driven by higher revenues in our school book clubs and book fairs, as well as by popular new trade releases. We are noticing a broad trend of teachers incorporating more independent reading for pleasure into the classroom, which helps children develop higher level thinking skills while also providing an important balance to the complex informational texts required by new, rigorous standards. We are responding to this growing need with our robust line-up of appealing titles and classroom book sets.”
Scholastic affirmed its fiscal 2014 outlook for total revenue of approximately $1.8 billion and earnings per diluted share from continuing operations in the range of $1.40 to $1.80, before the impact of one-time items associated with cost reduction programs or non-cash, non-operating items. The Company continues to expect free cash flow in the range of $60 to $80 million.
