March 30 – April 6, 2006 Edition

Scholastic Closes

Troll, Trumpet Clubs

Lays Off Personnel

NEW YORK, NY/3/24/2006–Scholastic, Inc. yesterday stepped up staff layoffs as a result of disappointing sales for the third quarter ended February 28. Projected that it will not achieve its projections for the fiscal year, the company will close its Troll and Trumpet book clubs, and will outsource its remaining outbound telemarketing.

The company plans to further streamline its operations and probably will cut more jobs over the next two years to save an estimated $40 million. The Troll and Trumpet closings will eliminate about 12 staff positions.

Net losses for the most recent quarter increased from $800,000 to $15.5 million. Scholastic reduced its earnings projections for the full year to $1.70 per share on sales of $2.3 billion, down from the original $1.80 per share.

Third quarter sales for children’s books dropped 1%, to $270.9 million, but trade sales increased 6%. Third quarter operating losses mounted to $3.2 million, compared with an income of $14.7 million in the same period last year.

Sluggish library and technology sales of $73.5 million contributed to a 7% decline in the educational segment. But international sales increased 5% to $96.9 million. Growth in Canada and Australia offset lower sales in the UK.