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January 7 – January 14, 2010 Edition
Scholastic Sees 30 Percent Rise in Profits
NEW YORK, NY/AUTHORLINK/01/06/10–Scholastic Corporation began the 2010 year with a whopping 30% increase in profits for the second quarter of 2010, ended November 30, 2009. The publisher reported in December that it had a nearly 100% increase in higher margin educational technology sales, and margin benefits resulting from targeted price increases and company-wide cost reductions.
Before one-time, mostly non-cash charges, the Company recorded a 30% increase in earnings. On a continuing operations basis, revenue for the quarter was $660.1 million, up 1% from $653.3 million in the prior period.
For the first half of fiscal 2010, revenue from continuing operations was $975.7 million compared to $929.7 million in the prior year period.
In the Children’s Book Publishing and Distribution segment operating income increased 3% to $107.8 million, compared to $105.1 million in the prior year period, while segment revenue declined by 6% to $368.8 million from $392.9million in the prior year period.
Educational Publishing revenue in the quarter rose 35% to $122.6 million from $91.0 million in the prior year period, driven by an almost 100%, or over $25 million, increase in sales of educational technology and related services. READ 180 and System 44(R) delivered over 100% growth combined, while math products and consulting services also achieved substantial gains in the quarter. Sales continued to benefit from the federal stimulus program.
“Last quarter Scholastic delivered substantially higher operating margins, earnings and free cash flow, before one-time, primarily non-cash items, on a slight increase in revenue. These results position us well to achieve our fiscal 2010 plan, reaching 9% operating margins if we attain the upper end of our guidance,” commented Richard Robinson, Chairman, President and Chief Executive Officer.
“In Scholastic Education, sales of READ 180(R) and other educational technology almost doubled compared to the prior year, reflecting strong execution as well as the impact of the federal stimulus program, which is supplementing tight school budgets, “Robinson added. “Pursuing our goal of 9% operating margins, we made significant progress with cost reductions and increased pricing across the Company, particularly in the Children’s Book segment. This yielded higher margins and profits in that segment compared to a year ago, despite lower revenue partially due to planned reductions in promotion spending, as well as the late start of schools this year. Improved cash earnings and working capital improvements resulted in strong free cash flow and lower debt levels.”
Scholastic affirmed its outlook for fiscal 2010 earnings per diluted share from continuing operations in the range of $1.80 to $2.30, before the impact of any one-time items associated with cost reductions or non-cash, non-operating items. Free cash flow continues to be forecast at $90 million to $120 million.
Scholastic Corporation is the world’s largest publisher and distributor of children’s books and a leader in educational technology and children’s media.
For more information see: Scholastic
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