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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
Quarterly Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
February 28, 2022
Commission File No. 000-19860
 
SCHOLASTIC CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware13-3385513
(State or other jurisdiction of
incorporation or organization)
(IRS Employer Identification No.)
557 Broadway,
New York,New York10012
(Address of principal executive offices)(Zip Code)
 
Registrant’s telephone number, including area code (212) 343-6100
Title of ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, $0.01 par valueSCHLThe NASDAQ Stock Market LLC
 
    Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Yes No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

    Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes No
 
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date:
Title of each class Number of shares outstanding as of February 28, 2022
Common Stock, $0.01 par value 32,763,535
Class A Stock, $0.01 par value 1,656,200
schl-20220228_g1.jpg
1


SCHOLASTIC CORPORATION
 
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2022

INDEX
Page
  
    
 
    
 
    
 
    
 
    
 
    
    
    
    
 
  
    

2


PART I - FINANCIAL INFORMATION
 
Item 1. Financial Statements
SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollar amounts in millions, except per share data)
 
 Three months endedNine months ended
February 28,February 28,
 2022202120222021
Revenues$344.5 $277.5 $1,128.5 $898.9 
Operating costs and expenses:    
  Cost of goods sold 169.6 135.9 540.9 440.6 
  Selling, general and administrative expenses180.8 140.2 512.7 433.8 
  Depreciation and amortization13.6 14.7 43.0 46.0 
  Asset impairments and write downs 10.9  10.9 
Total operating costs and expenses364.0 301.7 1,096.6 931.3 
Operating income (loss)(19.5)(24.2)31.9 (32.4)
Interest income (expense), net(0.4)(1.7)(2.2)(4.1)
Other components of net periodic benefit (cost) 0.1 0.1 0.1 (0.1)
Gain (loss) on sale of assets and other  3.8 6.2 10.4 
Earnings (loss) before income taxes(19.8)(22.0)36.0 (26.2)
Provision (benefit) for income taxes(4.7)(8.0)7.1 (7.6)
Net income (loss)(15.1)(14.0)28.9 (18.6)
Less: Net income (loss) attributable to noncontrolling interest0.2 (0.1)0.1 0.0 
Net income (loss) attributable to Scholastic Corporation$(15.3)$(13.9)$28.8 $(18.6)
Basic and diluted earnings (loss) per share of Class A and Common Stock    
Basic $(0.44)$(0.41)$0.83 $(0.54)
Diluted $(0.44)$(0.41)$0.80 $(0.54)
See accompanying notes    


3


SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - UNAUDITED
(Dollar amounts in millions)
 
 Three months endedNine months ended
February 28,February 28,
 2022202120222021
Net income (loss)$(15.1)$(14.0)$28.9 $(18.6)
Other comprehensive income (loss), net:   
   Foreign currency translation adjustments 1.6 6.3 (8.6)17.4 
   Pension and postretirement adjustments (net of tax)0.0 0.0 0.6 5.5 
Total other comprehensive income (loss), net$1.6 $6.3 $(8.0)$22.9 
Comprehensive income (loss)$(13.5)$(7.7)$20.9 $4.3 
Less: Net income (loss) attributable to noncontrolling interest0.2 (0.1)0.1 0.0 
Comprehensive income (loss) attributable to Scholastic Corporation$(13.7)$(7.6)$20.8 $4.3 
See accompanying notes

4


SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(Dollar amounts in millions, except per share data)
February 28, 2022May 31, 2021February 28, 2021
 (unaudited)(audited)(unaudited)
ASSETS   
Current Assets:   
Cash and cash equivalents$308.9 $366.5 $353.2 
Accounts receivable, net287.7 256.1 238.0 
Inventories, net299.4 269.7 304.8 
Income tax receivable 22.9 88.8 101.3 
Prepaid expenses and other current assets72.4 47.2 61.0 
Total current assets991.3 1,028.3 1,058.3 
Noncurrent Assets:
Property, plant and equipment, net520.7 556.9 561.4 
Prepublication costs, net58.3 65.7 66.7 
Operating lease right-of-use assets, net69.3 78.6 76.8 
Royalty advances, net53.2 43.8 45.1 
Goodwill125.7 126.3 126.0 
Noncurrent deferred income taxes25.3 25.4 19.3 
Other assets and deferred charges96.7 83.3 81.4 
Total noncurrent assets949.2 980.0 976.7 
Total assets$1,940.5 $2,008.3 $2,035.0 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current Liabilities:   
Lines of credit and current portion of long-term debt$13.7 $182.9 $190.7 
Accounts payable173.4 138.0 134.3 
Accrued royalties84.2 45.5 77.6 
Deferred revenue176.8 99.1 121.9 
Other accrued expenses184.8 202.0 177.6 
Accrued income taxes3.9 3.0 3.6 
Operating lease liabilities22.4 25.0 24.3 
Total current liabilities659.2 695.5 730.0 
Noncurrent Liabilities:   
Long-term debt 7.3  
Operating lease liabilities57.1 67.4 67.3 
Other noncurrent liabilities38.9 55.8 60.9 
Total noncurrent liabilities96.0 130.5 128.2 
Commitments and Contingencies (see Note 6)   
Stockholders’ Equity:   
Preferred Stock, $1.00 par value: Authorized, 2.0 shares; Issued and Outstanding, none
$ $ $ 
Class A Stock, $0.01 par value: Authorized, 4.0 shares; Issued and Outstanding, 1.7 shares
0.0 0.0 0.0 
Common Stock, $0.01 par value: Authorized, 70.0 shares; Issued, 42.9 shares; Outstanding, 32.8, 32.7, and 32.7 shares, respectively
0.4 0.4 0.4 
Additional paid-in capital626.9 626.5 625.4 
Accumulated other comprehensive income (loss)(42.7)(34.7)(35.4)
Retained earnings929.5 916.4 913.9 
Treasury stock, at cost: 10.1, 10.2 and 10.2 shares, respectively
(330.3)(327.8)(328.9)
Total stockholders’ equity of Scholastic Corporation1,183.8 1,180.8 1,175.4 
  Noncontrolling interest1.5 1.5 1.4 
Total stockholders’ equity1,185.3 1,182.3 1,176.8 
Total liabilities and stockholders’ equity$1,940.5 $2,008.3 $2,035.0 
See accompanying notes
5


SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED
(Dollar amounts in millions, except per share data)
 Class A StockCommon StockAdditional Paid-in CapitalAccumulated
Other Comprehensive
Income (Loss)
Retained
Earnings
Treasury Stock
At Cost
Total
Stockholders'
Equity of Scholastic Corporation
Noncontrolling InterestTotal
Stockholders'
Equity
 SharesAmountSharesAmount
Balance at June 1, 20201.7$0.0 32.5$0.4 $622.4 $(58.3)$948.0 $(333.3)$1,179.2 $1.4 $1,180.6 
Net Income (loss)— — — — — — (39.8)— (39.8)0.0 (39.8)
Foreign currency translation adjustment— — — — — 10.7 — — 10.7 — 10.7 
Pension and post-retirement adjustments (net of tax of $0.0)
— — — — — 0.1 — — 0.1 — 0.1 
Stock-based compensation— — — — 0.6 — — — 0.6 — 0.6 
Treasury stock issued pursuant to equity-based plans— — 0.0 — (0.2)— — 0.5 0.3 — 0.3 
Dividends ($0.15 per share)
— — — — — — (5.1)— (5.1)— (5.1)
Balance at August 31, 20201.7 $0.0 32.5 $0.4 $622.8 $(47.5)$903.1 $(332.8)$1,146.0 $1.4 $1,147.4 
Net Income (loss)— — — — — — 35.1 — 35.1 0.1 35.2 
Foreign currency translation adjustment— — — — — 0.4 — — 0.4 — 0.4 
Pension and post-retirement adjustments (net of tax of $1.8)
— — — — — 5.4 — — 5.4 — 5.4 
Stock-based compensation— — — — 3.0 — — — 3.0 — 3.0 
Treasury stock issued pursuant to equity-based plans— — 0.1 — (1.5)— — 3.1 1.6 — 1.6 
Dividends ($0.15 per share)
— — — — — — (5.1)— (5.1)— (5.1)
Balance at November 30, 20201.7 $0.0 32.6 $0.4 $624.3 $(41.7)$933.1 $(329.7)$1,186.4 $1.5 $1,187.9 
Net Income (loss)— — — — — — (13.9)— (13.9)(0.1)(14.0)
Foreign currency translation adjustment— — — — — 6.3 — — 6.3 — 6.3 
Pension and post-retirement adjustments (net of tax of $0.1)
— — — — — 0.0 — —  —  
Stock-based compensation— — — — 1.5 — — — 1.5 — 1.5 
Treasury stock issued pursuant to equity-based plans— — 0.1 — (0.4)— — 0.8 0.4 — 0.4 
Dividends ($0.15 per share)
— — — — — — (5.3)— (5.3)— (5.3)
Balance at February 29, 20211.7 $0.0 32.7 $0.4 $625.4 $(35.4)$913.9 $(328.9)$1,175.4 $1.4 $1,176.8 
See accompanying notes

6


 Class A StockCommon StockAdditional Paid-in CapitalAccumulated
Other Comprehensive
Income (Loss)
Retained
Earnings
Treasury Stock
At Cost
Total
Stockholders'
Equity of Scholastic Corporation
Noncontrolling InterestTotal
Stockholders'
Equity
 SharesAmountSharesAmount
Balance at June 1, 20211.7 $0.0 32.7 $0.4 $626.5 $(34.7)$916.4 $(327.8)$1,180.8 $1.5 $1,182.3 
Net Income (loss)— — — — — — (24.2)— (24.2)(0.2)(24.4)
Foreign currency translation adjustment— — — — — (5.8)— — (5.8)— (5.8)
Pension and post-retirement adjustments (net of tax of $0.1)
— — — — — 0.1 — — 0.1 — 0.1 
Stock-based compensation— — — — 1.5 — — — 1.5 — 1.5 
Proceeds pursuant to stock-based compensation plans— — — — 0.5 — — — 0.5 — 0.5 
Treasury stock issued pursuant to equity-based plans— — 0.1 — (0.9)— — 1.5 0.6 — 0.6 
Dividends ($0.15 per share)
— — — — — — (5.2)— (5.2)— (5.2)
Balance at August 31, 20211.7 $0.0 32.8 $0.4 $627.6 $(40.4)$887.0 $(326.3)$1,148.3 $1.3 $1,149.6 
Net Income (loss)— — — — — — 68.3 — 68.3 0.1 68.4 
Foreign currency translation adjustment— — — — — (4.4) — (4.4)— (4.4)
Pension and post-retirement adjustments (net of tax of $(0.1))
— — — — — 0.5 — — 0.5 — 0.5 
Stock-based compensation— — — — 3.0 — — — 3.0 — 3.0 
Proceeds pursuant to stock-based compensation plans— — — — 2.1 — — — 2.1 — 2.1 
Purchases of treasury stock at cost— — (0.1)— — — — (4.2)(4.2)— (4.2)
Treasury stock issued pursuant to equity-based plans— — 0.2 — (7.6)— — 8.0 0.4 — 0.4 
Dividends ($0.15 per share)
— — — — — — (5.2)— (5.2)— (5.2)
Other (noncontrolling interest)— — — — — — — — — (0.2)(0.2)
Balance at November 30, 20211.7 $0.0 32.9 $0.4 $625.1 $(44.3)$950.1 $(322.5)$1,208.8 $1.2 $1,210.0 
Net Income (loss)— — — — — (15.3)— (15.3)0.2 (15.1)
Foreign currency translation adjustment— — — — — 1.6 — — 1.6 — 1.6 
Pension and post-retirement adjustments (net of tax of $0.0)
— — — — — 0.0 — — 0.0 — 0.0 
Stock-based compensation— — — — 1.6 — — — 1.6 — 1.6 
Proceeds pursuant to stock-based compensation plans— — — — 7.3 — — — 7.3 — 7.3 
Purchases of treasury stock at cost— — (0.4)— — — — (15.4)(15.4)— (15.4)
Treasury stock issued pursuant to equity-based plans— — 0.3 — (7.1)— — 7.6 0.5 — 0.5 
Dividends ($0.15 per share)
— — — — — — (5.3)— (5.3)— (5.3)
Other (noncontrolling interest)— — — — — — — — — 0.1 0.1 
Balance at February 28, 20221.7 $0.0 32.8 $0.4 $626.9 $(42.7)$929.5 $(330.3)$1,183.8 $1.5 $1,185.3 
See accompanying notes
7


SCHOLASTIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED
(Dollar amounts in millions)
 
 Nine months ended
February 28,February 28,
 20222021
Cash flows - operating activities:  
Net income (loss) attributable to Scholastic Corporation$28.8 $(18.6)
Adjustments to reconcile Net income (loss) to net cash provided by (used in) operating activities:  
   Provision for losses on accounts receivable8.5 3.4 
   Provision for losses on inventory12.7 10.4 
   Provision for losses on royalty advances2.6 4.4 
   Amortization of prepublication costs19.9 19.0 
   Depreciation and amortization49.0 49.3 
   Amortization of pension and postretirement plans(0.0)0.0 
   Deferred income taxes(0.3)0.1 
   Stock-based compensation6.1 5.1