Scholastic Corporation reported financial results for the 2015 third quarter ended February 28, 2015. Revenue was $382.1 million, compared to $373.5 million a year ago, an increase of 2%.
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The company reported a third quarter loss per share of $0.68, versus a loss of $0.38 a year ago, when the company recorded a one-time tax benefit as a result of a favorable settlement of outstanding federal tax audits. Results for the third quarter of the current fiscal year include one-time expenses of $0.09 per share, which are detailed below.
The prior year period included a one-time net benefit of $0.30 per share. Excluding one-time items, third quarter loss per share was $0.59 compared to a loss of $0.68 in the prior year period.
The year-over-year improvement in third quarter operating results was largely driven by stronger sales in children's books, especially in the company's school-based distribution channels, higher circulation of the company's classroom magazines, and increased sales of the company's classroom books and literacy initiatives.
These gains were partially offset by the adverse effect of foreign exchange on the company's international business, as well as lower sales in the company's educational technology and services business and reduced local currency revenues in the United Kingdom and Canada.
During the third quarter, free cash use (as defined) was $4.6 million, compared to a use of $17.0 million in the prior year period. At quarter-end, the company's net debt (as defined) was $69.5 million, compared to $157.7 million a year ago.
Non-recurring items reflected in the company's pre-tax results for the third quarter include $2.9 million of one-time severance charges primarily associated with the restructuring of the company's interactive business in the media segment, non-cash asset write-downs of $1.5 million related to a warehouse consolidation project in Canada, and a non-cash settlement charge of $0.6 million connected to the company's defined benefit pension plan as a result of lump sum payments made to certain participants during the quarter.
Scholastic affirmed its fiscal 2015 outlook for total revenue of approximately $1.9 billion and earnings per diluted share from continuing operations in the range of $1.8 to $2, before the impact of one-time items associated with cost reduction programs and non-cash, non-operating items. The company continues to expect free cash flow in the range of $65 to $85 million. ■