Scholastic's Q1 loss widens to $3.77 a share
The quarter included $110.8 million of free cash flow use; Scholastic affirmed its fiscal 2027 revenue and Adjusted EBITDA outlook.
Rhea-AI Filing Summary
Scholastic Corporation reported fiscal 2027 first-quarter revenue of $216.8 million, down 4% from $225.6 million a year earlier. Operating loss was $92.2 million, unchanged; net loss was $71.2 million versus $71.1 million, and diluted loss per share widened to $3.77 from $2.83. Adjusted EBITDA loss was $63.6 million versus $55.7 million; on the company’s comparable basis, it was $63.6 million versus $64.2 million.
Education revenue fell to $30.4 million from $40.1 million, while Entertainment revenue rose to $20.1 million from $13.6 million. Cash used in operating activities was $94.6 million versus $81.8 million, and free cash flow use was $110.8 million versus $100.2 million. Net debt was $86.8 million versus $242.8 million. Scholastic returned approximately $29.6 million to shareholders, including $25.8 million to repurchase 630,850 shares and $3.8 million in dividends; $157.4 million remained authorized for repurchases as of August 31, 2026. It affirmed fiscal 2027 outlook for revenue growth of approximately 2% to 4%, Adjusted EBITDA of approximately $135 million to $145 million, and Free Cash Flow of approximately $35 million to $40 million.
Positive
- Net debt declined 64% to $86.8 million.
Negative
- Adjusted EBITDA loss widened 14% to $63.6 million.
- Net cash used in operations increased 16% to $94.6 million.
- Diluted loss per share widened 33% to $3.77.
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Revenue: $216.8 million
Operating loss: $92.2 million
Diluted loss per share: $3.77
+5 more
8 metrics
Revenue
$216.8 million
Fiscal 2027 first quarter; $225.6 million in the prior-year quarter
Operating loss
$92.2 million
Fiscal 2027 first quarter; unchanged from the prior-year quarter
Diluted loss per share
$3.77
Fiscal 2027 first quarter; compared with $2.83 in the prior-year quarter
Adjusted EBITDA
$63.6 million loss
Fiscal 2027 first quarter; compared with a $55.7 million loss in the prior-year quarter
Net cash used in operating activities
$94.6 million
Fiscal 2027 first quarter; compared with $81.8 million in the prior-year quarter
Free cash flow use
$110.8 million
Fiscal 2027 first quarter; compared with $100.2 million in the prior-year quarter
Net debt
$86.8 million
At August 31, 2026; compared with $242.8 million at August 31, 2025
Fiscal 2027 outlook
Revenue growth of approximately 2% to 4%; Adjusted EBITDA of approximately $135 million to $145 million; Free Cash Flow of approximately $35 million to $40 million
Affirmed
Key Terms
Adjusted EBITDA, Free cash flow (use), sale-leaseback transactions, pro forma adjusted EBITDA
4 terms
Adjusted EBITDA financial
"Adjusted EBITDA (a non-GAAP measure of operations)"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Free cash flow (use) financial
"Free cash flow (use) was $110.8 million"
sale-leaseback transactions financial
"full-period impact of the sale-leaseback transactions"
A sale-leaseback transaction is when an owner sells a property or asset and immediately rents it back from the buyer, like selling your house and signing a lease to keep living in it. For investors, it matters because the seller converts a fixed asset into cash while taking on a new rent expense, which can boost short-term liquidity but change long-term earnings, debt levels and risk profiles that affect valuation and creditworthiness.
pro forma adjusted EBITDA financial
"Pro forma adjusted EBITDA reflect the net impact"
Pro forma adjusted EBITDA is a customized profit measure that starts with earnings before interest, taxes, depreciation and amortization and then removes one-off, unusual or noncash items (and sometimes shows results under assumed changes like an acquisition or cost-cutting). Investors use it as a “cleaned-up” view of a company’s core cash-generating ability to compare performance and value businesses without short-term noise, but the exclusions can be selective so details matter.
Earnings Snapshot
Revenue: $216.8 million · Guidance included
Fiscal 2027 first quarter ended August 31, 2026
Revenue
$216.8 million
Down 4% from $225.6 million
Operating loss
$92.2 million loss
Unchanged from $92.2 million loss
Net income (loss)
$71.2 million loss
Compared with a $71.1 million loss
Diluted earnings (loss) per share
$3.77 loss per share
Compared with a $2.83 loss per share
Adjusted EBITDA
$63.6 million loss
Compared with a $55.7 million loss
Net cash used in operating activities
$94.6 million
Compared with $81.8 million
Guidance
Affirmed fiscal 2027 outlook for revenue growth of approximately 2% to 4%, Adjusted EBITDA of approximately $135 million to $145 million, and Free Cash Flow of approximately $35 million to $40 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did SCHL perform in fiscal 2027 Q1?
Scholastic reported fiscal 2027 first-quarter revenue of $216.8 million, down 4% from $225.6 million. Operating loss was $92.2 million, and Adjusted EBITDA loss was $63.6 million, compared with $55.7 million a year earlier.
What guidance did SCHL affirm for fiscal 2027?
Scholastic affirmed fiscal 2027 outlook for revenue growth of approximately 2% to 4%, Adjusted EBITDA of approximately $135 million to $145 million, and Free Cash Flow of approximately $35 million to $40 million.
Why did SCHL revenue decline in fiscal 2027 Q1?
The revenue decrease primarily reflected lower Education and Children’s Book Publishing and Distribution revenues and the elimination of rental income recorded in Overhead after the December 2025 sale-leaseback transactions, partly offset by higher Entertainment revenues.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | |||||
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
(212 ) 343-6100
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
1
Item 2.02 Results of Operations and Financial Condition
On September 24, 2026, Scholastic Corporation (the "Company") issued the press release attached hereto as Exhibit 99.1 announcing its results of operations for its quarter ended August 31, 2026.
The information in this Current Report on Form 8-K, including Exhibits, is being furnished to the Securities and Exchange Commission (the “SEC”) and shall not be deemed to be incorporated by reference into any of Scholastic’s filings with the SEC under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
| (a) | Not applicable | ||||||||||
| (b) | Not applicable | ||||||||||
| (c) | Not applicable | ||||||||||
| (d) | The following exhibits are filed as part of this report: | ||||||||||
| 99.1 | Press release of the Company dated September 24, 2026. | ||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||||||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SCHOLASTIC CORPORATION | |||||||||||
| Date: September 24, 2026 | By: | /s/ Haji L. Glover | |||||||||
| Name: | Haji L. Glover | ||||||||||
| Title: | Executive Vice President and Chief Financial Officer | ||||||||||
3
Scholastic Reports Fiscal 2027 First Quarter Results
Company Affirms Fiscal 2027 Guidance
New York – September 24, 2026 – Scholastic Corporation (NASDAQ: SCHL), the global children’s publishing, education and media company, today reported financial results for the Company’s fiscal first quarter ended August 31, 2026.
Peter Warwick, President and Chief Executive Officer, said, “Scholastic continued to advance its fiscal 2027 priorities during the seasonally small first quarter, with strong early indicators across our businesses reinforcing our confidence entering the important back-to-school and fall season. As we indicated in July, our operating loss for the quarter included the full-period impact of the sale-leaseback transactions. During the quarter, we also sustained investments to support our growth priorities in the quarters ahead.
“In Children’s Books, we begin the second quarter with positive momentum, with Book Fair bookings ahead of prior year and a publishing and franchise schedule that positions us well for the year ahead, both domestically and internationally. During the first quarter, Entertainment’s production activity and pipeline continued to grow strongly, as we expanded capabilities to extend Scholastic IP across formats and platforms. In Education, though increased pressure on school and district budgets impacted sales, we continued to make progress aligning the cost structure and advancing the business’s transformation to support improved performance and long-term growth.
“Our fiscal 2027 priorities remain focused on translating the strategic and operating progress achieved last year to drive further performance gains. We remain confident in the growth trajectory we outlined at year-end and are affirming our full-year guidance as we continue to execute against that plan and create long-term value for shareholders.”
Outlook
The Company affirmed its fiscal 2027 outlook for revenue growth of approximately 2% to 4% and Adjusted EBITDA (a non-GAAP measure, explained in the accompanying tables) of approximately $135 million to $145 million. The Adjusted EBITDA range represents growth compared with fiscal 2026 Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods.
The Company also continues to expect Free Cash Flow (a non-GAAP financial measure, explained in the accompanying tables) of approximately $35 million to $40 million.
Fiscal 2027 Q1 Review
In $ millions (except per share data) | First Quarter | Change | |||||||||||||||||||||||||||
Fiscal 2027 | Fiscal 2026 | $ | % | ||||||||||||||||||||||||||
| Revenues | $ | 216.8 | $ | 225.6 | $ | (8.8) | (4) | % | |||||||||||||||||||||
| Operating income (loss) | $ | (92.2) | $ | (92.2) | $ | — | — | % | |||||||||||||||||||||
| Earnings (loss) before income taxes | $ | (93.7) | $ | (97.0) | $ | 3.3 | 3 | % | |||||||||||||||||||||
| Diluted earnings (loss) per share | $ | (3.77) | $ | (2.83) | $ | (0.94) | (33) | % | |||||||||||||||||||||
| Adjusted operating income (loss)* | $ | (88.7) | $ | (81.9) | $ | (6.8) | (8) | % | |||||||||||||||||||||
| Adjusted diluted earnings (loss) per share* | $ | (3.63) | $ | (2.52) | $ | (1.11) | (44) | % | |||||||||||||||||||||
| Adjusted EBITDA* | $ | (63.6) | $ | (55.7) | $ | (7.9) | (14) | % | |||||||||||||||||||||
Pro forma adjusted operating income (loss)* (1) | $ | (88.7) | $ | (86.7) | $ | (2.0) | (2) | % | |||||||||||||||||||||
Pro forma adjusted EBITDA* (1) | $ | (63.6) | $ | (64.2) | $ | 0.6 | 1 | % | |||||||||||||||||||||
* Excludes one-time items. Please refer to the non-GAAP financial tables attached. | |||||||||||||||||||||||||||||
(1) Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure) reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental impact to first-quarter fiscal 2026 adjusted operating income (loss) and Adjusted EBITDA was $4.8 and $8.5, respectively. The Company refers to these measures in this release as results “on a comparable basis.” See Table 7 for the reconciliations to Adjusted operating income (loss) and Adjusted EBITDA. | |||||||||||||||||||||||||||||
Revenues decreased 4% to $216.8 million, primarily reflecting lower revenues in Education and Children’s Book Publishing and Distribution and the elimination of rental income, recorded in Overhead, following the sale-leaseback transactions in December 2025, partly offset by higher Entertainment revenues.
Operating loss was $92.2 million in the quarter, approximately in line with the prior year period, including one-time charges of $3.5 million and $10.3 million in each period, respectively. Excluding one-time charges in both periods, adjusted operating loss (a non-GAAP measure) increased $6.8 million to $88.7 million. On a comparable basis, after reflecting the full-period impact of the sale-leaseback transactions in the prior year period, adjusted operating loss increased $2.0 million from $86.7 million in the prior-year period.
Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) was a loss of $63.6 million, compared to a loss of $55.7 million in the prior year period. On the same comparable basis, Adjusted EBITDA improved $0.6 million to a loss of $63.6 million from a loss of $64.2 million in the prior year period, as improved results in Entertainment and International more than offset higher Overhead costs.
Quarterly Results
Children’s Book Publishing and Distribution
In the fiscal first quarter, the Children’s Book Publishing and Distribution segment’s revenues decreased $3.6 million to $105.8 million.
In School Reading Events, activity is minimal during the first quarter due to the seasonality of the business. Book Fairs revenues were $33.2 million, down $0.9 million from $34.1 million in the prior year period. Book Clubs revenues were $2.1 million, up $0.3 million compared to $1.8 million in the prior year period.
Consolidated Trade revenues decreased $3.0 million to $70.5 million, primarily reflecting higher international co-edition sales in the prior year period that did not recur in the quarter.
Segment operating loss was $38.2 million, which included one-time charges of $0.4 million, compared to an operating loss of $35.1 million in the prior year period, which included one-time charges of $0.8 million. Excluding one-time charges, adjusted operating loss increased $3.5 million to $37.8 million. On a comparable basis, adjusted operating loss increased $0.6 million.
Education
Education revenues decreased $9.7 million to $30.4 million during the segment’s seasonally smallest quarter, reflecting continued pressure on school and district funding and spending on supplemental curriculum materials. Segment operating loss was $23.3 million, compared to $21.2 million in the prior year period. On a comparable basis, adjusted operating loss increased $1.3 million, primarily reflecting lower revenues, partly offset by benefits from the segment’s improved cost structure.
Entertainment
Entertainment revenues increased $6.5 million to $20.1 million, primarily reflecting higher production revenues. Segment operating loss was $1.8 million, which included one-time charges of $0.2 million, compared to a loss of $4.0 million in the prior year period. Excluding one-time charges, adjusted operating loss improved $2.4 million to $1.6 million, primarily reflecting higher revenues.
International
International revenues increased $1.1 million to $60.5 million. Excluding favorable foreign currency exchange of $1.2 million, revenues were approximately in line with the prior-year period. Segment operating loss was $2.9 million, which included one-time charges of $0.2 million, compared to an operating loss of $4.2 million in the prior year period, which included one-time charges of $0.1 million. Excluding one-time charges, adjusted operating loss improved by $1.4 million to $2.7 million, primarily reflecting cost management and operational efficiencies.
Overhead
Overhead costs were $26.0 million, which included one-time charges of $2.7 million, compared to $27.7 million in the prior year period, which included one-time charges of $9.4 million. Excluding one-time charges, adjusted overhead costs (a non-GAAP measure) increased $5.0 million to $23.3 million.
On a comparable basis, adjusted overhead costs increased $3.9 million, primarily reflecting higher costs related to corporate initiatives and the timing of employee-related expenses.
Capital Position and Liquidity
| In $ millions | First Quarter | Change | |||||||||||||||||||||||||||
Fiscal 2027 | Fiscal 2026 | $ | % | ||||||||||||||||||||||||||
| Net cash (used) provided by operating activities | $ | (94.6) | $ | (81.8) | $ | (12.8) | (16) | % | |||||||||||||||||||||
Additions to property, plant and equipment and prepublication expenditures | (18.1) | (14.9) | (3.2) | (21) | % | ||||||||||||||||||||||||
| Net borrowings (repayments) of film related obligations | 1.9 | (3.5) | 5.4 | NM | |||||||||||||||||||||||||
| Free cash flow (use)* | $ | (110.8) | $ | (100.2) | $ | (10.6) | (11) | % | |||||||||||||||||||||
| Net cash (debt)* | $ | (86.8) | $ | (242.8) | $ | 156.0 | 64 | % | |||||||||||||||||||||
NM - Not meaningful | |||||||||||||||||||||||||||||
| * Please refer to the non-GAAP financial tables attached | |||||||||||||||||||||||||||||
Net cash used in operating activities was $94.6 million, compared to $81.8 million in the prior year period, primarily reflecting higher working capital requirements, as well as higher rent expense and loss of rental income related to the sale-leaseback transactions. Free cash use (a non-GAAP measure of operations explained in the accompanying tables) was $110.8 million in fiscal 2027, compared to free cash use of $100.2 million in the prior period, reflecting increased net cash used by operating activities and higher capital expenditures, partly offset by net borrowings of film-related obligations.
Net debt (a non-GAAP measure explained in the accompanying tables) was $86.8 million compared to net debt of $242.8 million in the prior year period, primarily reflecting net proceeds from the Company’s sale-leaseback transactions completed in December 2025, partly offset by capital returns to shareholders.
In the first quarter, the Company returned approximately $29.6 million to shareholders through share repurchases and dividends. This included the repurchase of 630,850 shares of common stock for $25.8 million and $3.8 million of dividends.
At August 31, 2026, $157.4 million remained authorized for future repurchases under the Company’s stock repurchase program. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions.
Additional Information
To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, “Adjusted EBITDA”, ”Adjusted Operating Income (Loss)”, “Free Cash Flow (Use)” and “Net Cash (Debt)”. Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.
The Company is unable to provide a reconciliation of forward-looking Adjusted EBITDA or Free Cash Flow to the most directly comparable GAAP financial measures, operating income and net cash provided by operating activities, respectively, without unreasonable effort. This is due to the uncertainty and inherent difficulty in predicting the occurrence and financial impact of items that would be excluded from or required to calculate such GAAP measures, including future severance charges, asset impairments, gains or losses on sales of assets and other non-recurring items. These items are uncertain, depend on various factors outside the Company’s control and could be material to the Company’s results computed in accordance with GAAP.
Conference Call
The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, September 24, 2026. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company’s Chief Financial Officer and Executive Vice President, will moderate the call.
A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/vfm3zrk4. To access the conference call by phone, please go to https://register-conf.media-server.com/register/BI6cab45efce9f470c84e69fe7dc11c385, which will provide dial-in details. To avoid delays, participants are encouraged to dial into the conference call five minutes ahead of the scheduled start time. Shortly following the call, an archived webcast and accompanying slides from the conference call will be posted at investor.scholastic.com.
About Scholastic
For more than 100 years, Scholastic Corporation (NASDAQ: SCHL) has been meeting children where they are – at school, at home and in their communities – by creating quality content and experiences, all beginning with literacy. Scholastic delivers stories, characters, and learning moments that empower all kids to become lifelong readers and learners through bestselling children’s books, literacy- and knowledge-building resources for schools including classroom magazines, and award-winning, entertaining children's media. As the world's largest publisher and distributor of children's books through school-based book clubs and book fairs, classroom libraries, school and public libraries, retail, and online, and with a global reach into more than 135 countries, Scholastic encourages the personal and intellectual growth of all children, while nurturing a lifelong relationship with reading, themselves, and the world around them. Learn more at www.scholastic.com.
Contact
Investors:
Mary Garofalo
(212) 343-6741, investor_relations@scholastic.com
Media:
Anne Sparkman
(212) 343-6657, asparkman@scholastic.com
Forward-Looking Statements
This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children’s book and educational materials markets generally and acceptance of the Company’s products within those markets, and other risks and factors identified from time to time in the Company’s filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.
SCHL: Financial
1
| Table 1 | ||||||||||||||
| Scholastic Corporation | ||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In $ Millions, except shares and per share data) | ||||||||||||||
| Three months ended | ||||||||||||||
| 08/31/26 | 08/31/25 | |||||||||||||
| Revenues | $ | 216.8 | $ | 225.6 | ||||||||||
| Operating costs and expenses: | ||||||||||||||
| Cost of goods sold | 118.1 | 123.5 | ||||||||||||
| Selling, general and administrative expense | 178.3 | 177.2 | ||||||||||||
| Depreciation and amortization | 12.6 | 16.3 | ||||||||||||
| Asset impairments and write downs | — | 0.8 | ||||||||||||
| Total operating costs and expenses | 309.0 | 317.8 | ||||||||||||
| Operating income (loss) | (92.2) | (92.2) | ||||||||||||
| Interest income (expense), net | (1.6) | (4.5) | ||||||||||||
| Other components of net periodic benefit (cost) | 0.1 | (0.3) | ||||||||||||
| Earnings (loss) before income taxes | (93.7) | (97.0) | ||||||||||||
Provision (benefit) for income taxes | (22.5) | (25.9) | ||||||||||||
| Net income (loss) | (71.2) | (71.1) | ||||||||||||
Basic and diluted earnings (loss) per share of Class A and Common Stock (1) | ||||||||||||||
| Basic | $ | (3.77) | $ | (2.83) | ||||||||||
| Diluted | $ | (3.77) | $ | (2.83) | ||||||||||
| Basic weighted average shares outstanding | 18,862 | 25,161 | ||||||||||||
| Diluted weighted average shares outstanding | 19,589 | 25,410 | ||||||||||||
| (1) Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per share based on numbers rounded to millions may not yield the results as presented. | ||||||||||||||
2
| Table 2 | |||||||||||||||||||||||
| Scholastic Corporation | |||||||||||||||||||||||
Segment Results, Excluding One-Time Items | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| (In $ Millions) | |||||||||||||||||||||||
| Three months ended | Change | ||||||||||||||||||||||
| 08/31/26 | 08/31/25 | $ | % | ||||||||||||||||||||
| Children’s Book Publishing and Distribution | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Book Clubs | $ | 2.1 | $ | 1.8 | $ | 0.3 | 17 | % | |||||||||||||||
| Book Fairs | 33.2 | 34.1 | (0.9) | (3) | % | ||||||||||||||||||
| School Reading Events | 35.3 | 35.9 | (0.6) | (2) | % | ||||||||||||||||||
| Consolidated Trade | 70.5 | 73.5 | (3.0) | (4) | % | ||||||||||||||||||
| Total Revenues | 105.8 | 109.4 | (3.6) | (3) | % | ||||||||||||||||||
| Adjusted operating income (loss)* | (37.8) | (34.3) | (3.5) | (10) | % | ||||||||||||||||||
| Adjusted operating margin* | NM | NM | |||||||||||||||||||||
| Education | |||||||||||||||||||||||
| Revenues | 30.4 | 40.1 | (9.7) | (24) | % | ||||||||||||||||||
| Adjusted operating income (loss)* | (23.3) | (21.2) | (2.1) | (10) | % | ||||||||||||||||||
| Adjusted operating margin* | NM | NM | |||||||||||||||||||||
| Entertainment | |||||||||||||||||||||||
| Revenues | 20.1 | 13.6 | 6.5 | 48 | % | ||||||||||||||||||
| Adjusted operating income (loss)* | (1.6) | (4.0) | 2.4 | 60 | % | ||||||||||||||||||
| Adjusted operating margin* | NM | NM | |||||||||||||||||||||
| International | |||||||||||||||||||||||
| Revenues | 60.5 | 59.4 | 1.1 | 2 | % | ||||||||||||||||||
| Adjusted operating income (loss)* | (2.7) | (4.1) | 1.4 | 34 | % | ||||||||||||||||||
| Adjusted operating margin* | NM | NM | |||||||||||||||||||||
| Overhead | |||||||||||||||||||||||
| Revenues | — | 3.1 | (3.1) | (100) | % | ||||||||||||||||||
| Adjusted operating income (loss)* | (23.3) | (18.3) | (5.0) | (27) | % | ||||||||||||||||||
| Adjusted operating income (loss)* | $ | (88.7) | $ | (81.9) | $ | (6.8) | (8) | % | |||||||||||||||
| Adjusted operating margin* | NM | NM | |||||||||||||||||||||
| NM - Not meaningful | |||||||||||||||||||||||
* Excludes one-time items. Please refer to Table 4 for one-time items and a reconciliation of the non-GAAP financials and Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions. | |||||||||||||||||||||||
3
| Table 3 | ||||||||||||||
| Scholastic Corporation | ||||||||||||||
| Supplemental Information | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In $ Millions) | ||||||||||||||
| Selected Balance Sheet Items | ||||||||||||||
| 08/31/26 | 08/31/25 | |||||||||||||
| Cash and cash equivalents | $ | 106.8 | $ | 94.3 | ||||||||||
| Accounts receivable, net | 186.6 | 187.0 | ||||||||||||
| Inventories, net | 315.3 | 322.2 | ||||||||||||
| Accounts payable | 150.2 | 175.8 | ||||||||||||
| Deferred revenue | 171.6 | 181.0 | ||||||||||||
| Accrued royalties | 68.0 | 86.6 | ||||||||||||
Film related obligations | 19.3 | 14.7 | ||||||||||||
| Lines of credit and long-term debt | 184.8 | 331.2 | ||||||||||||
Net cash (debt) (1) | (86.8) | (242.8) | ||||||||||||
| Total stockholders’ equity | 656.5 | 878.0 | ||||||||||||
| Selected Cash Flow Items | ||||||||||||||
| Three months ended | ||||||||||||||
| 08/31/26 | 08/31/25 | |||||||||||||
| Net cash provided by (used in) operating activities | $ | (94.6) | $ | (81.8) | ||||||||||
Property, plant and equipment additions | (14.1) | (10.0) | ||||||||||||
Prepublication expenditures | (4.0) | (4.9) | ||||||||||||
| Net borrowings (repayments) of film related obligations | 1.9 | (3.5) | ||||||||||||
Free cash flow (use) (2) | $ | (110.8) | $ | (100.2) | ||||||||||
(1) Net cash (debt) is defined by the Company as cash and cash equivalents less production cash of $8.8 and $5.9 as of August 31, 2026 and August 31, 2025, respectively, net of lines of credit and short-term and long-term-debt. Film related obligations are not included. The Company utilizes this non-GAAP financial measure, and believes it is useful to investors, as an indicator of the Company’s effective leverage and financing needs. | ||||||||||||||
| (2) Free cash flow (use) is defined by the Company as net cash provided by or used in operating activities (which includes royalty advances) and cash acquired through acquisitions and from the sale of assets, reduced by spending on property, plant and equipment and prepublication costs and adjusted for net cash flows from film related obligations. The Company believes that this non-GAAP financial measure is useful to investors as an indicator of cash flow available for debt repayment and other investing activities, such as acquisitions. The Company utilizes free cash flow as a further indicator of operating performance and for planning investing activities. | ||||||||||||||
4
| Table 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scholastic Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Results - Excluding One-Time Items | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In $ Millions, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 08/31/2026 | 08/31/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported | One-time items | Adjusted | Reported | One-time items | Adjusted | ||||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share (1) | $ | (3.77) | $ | 0.14 | $ | (3.63) | $ | (2.83) | $ | 0.31 | $ | (2.52) | |||||||||||||||||||||||||||||||||||||||||
Net income (loss) (2) | $ | (71.2) | $ | 2.6 | $ | (68.6) | $ | (71.1) | $ | 7.8 | $ | (63.3) | |||||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | (93.7) | $ | 3.5 | $ | (90.2) | $ | (97.0) | $ | 10.3 | $ | (86.7) | |||||||||||||||||||||||||||||||||||||||||
Children’s Book Publishing and Distribution (3) | $ | (38.2) | $ | 0.4 | $ | (37.8) | $ | (35.1) | $ | 0.8 | $ | (34.3) | |||||||||||||||||||||||||||||||||||||||||
| Education | (23.3) | — | (23.3) | (21.2) | — | (21.2) | |||||||||||||||||||||||||||||||||||||||||||||||
Entertainment (4) | (1.8) | 0.2 | (1.6) | (4.0) | 0.0 | (4.0) | |||||||||||||||||||||||||||||||||||||||||||||||
International (5) | (2.9) | 0.2 | (2.7) | (4.2) | 0.1 | (4.1) | |||||||||||||||||||||||||||||||||||||||||||||||
Overhead (6) | (26.0) | 2.7 | (23.3) | (27.7) | 9.4 | (18.3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) * | $ | (92.2) | $ | 3.5 | $ | (88.7) | $ | (92.2) | $ | 10.3 | $ | (81.9) | |||||||||||||||||||||||||||||||||||||||||
| * Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per share based on rounded numbers may not yield the results as presented. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) In the three months ended August 31, 2026 and August 31, 2025, the Company recognized a benefit of $0.9 and $2.5, respectively, for income taxes in respect to one-time pretax items. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized pretax asset impairment of $0.8 related to a certain product. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.2. In the three months ended August 31, 2025, the Company recognized pretax costs of less than $0.1 related to the acquisition of 9 Story Media Group. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) In the three months ended August 31, 2026 and August 31, 2025, the Company recognized pretax severance of $0.2 and $0.1, respectively, related to cost-savings initiatives. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) In the three months ended August 31, 2026, the Company recognized pretax severance of $2.3 related to cost-savings initiatives and other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized pretax severance of $8.7, related to cost-savings initiatives and other pretax expenses of $0.7. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5
| Table 5 | ||||||||||||||||||||
| Scholastic Corporation | ||||||||||||||||||||
| Consolidated Statements of Operations - Supplemental | ||||||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In $ Millions) | ||||||||||||||||||||
| Three months ended | ||||||||||||||||||||
| 08/31/26 | 08/31/25 | |||||||||||||||||||
| Earnings (loss) before income taxes as reported | $ | (93.7) | $ | (97.0) | ||||||||||||||||
| One-time items before income taxes | 3.5 | 10.3 | ||||||||||||||||||
| Earnings (loss) before income taxes excluding one-time items | (90.2) | (86.7) | ||||||||||||||||||
Interest (income) expense (1) | 1.6 | 4.5 | ||||||||||||||||||
Depreciation and amortization | 25.0 | 26.5 | ||||||||||||||||||
Adjusted EBITDA (2) | $ | (63.6) | $ | (55.7) | ||||||||||||||||
| (1) Amounts include production loan interest amortized into cost of goods sold. | ||||||||||||||||||||
| (2) Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time items, before interest, taxes, depreciation and amortization. The Company believes that Adjusted EBITDA is a meaningful measure of operating profitability and useful for measuring returns on capital investments over time as it is not distorted by unusual gains, losses, or other items. | ||||||||||||||||||||
6
| Table 6 | |||||||||||||||||||||||||||||||||||||||||
| Scholastic Corporation | |||||||||||||||||||||||||||||||||||||||||
| Consolidated Statements of Operations - Supplemental | |||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA by Segment | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (In $ Millions) | |||||||||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||
| 08/31/26 | |||||||||||||||||||||||||||||||||||||||||
CBPD (1) | EDUC (1) | ENT (1) | INTL (1) | OVH (1) | Total | ||||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes as reported | $ | (38.3) | $ | (23.3) | $ | (2.1) | $ | (3.0) | $ | (27.0) | $ | (93.7) | |||||||||||||||||||||||||||||
| One-time items before income taxes | 0.4 | — | 0.2 | 0.2 | 2.7 | 3.5 | |||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes excluding one-time items | (37.9) | (23.3) | (1.9) | (2.8) | (24.3) | (90.2) | |||||||||||||||||||||||||||||||||||
Interest (income) expense (2) | 0.1 | 0.0 | 0.2 | 0.0 | 1.3 | 1.6 | |||||||||||||||||||||||||||||||||||
Depreciation and amortization (3) | 8.0 | 5.3 | 7.4 | 2.1 | 2.2 | 25.0 | |||||||||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | (29.8) | $ | (18.0) | $ | 5.7 | $ | (0.7) | $ | (20.8) | $ | (63.6) | |||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||
| 08/31/25 | |||||||||||||||||||||||||||||||||||||||||
CBPD (1) | EDUC (1) | ENT (1) | INTL (1) | OVH (1) | Total | ||||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes as reported | $ | (35.1) | $ | (21.2) | $ | (4.5) | $ | (4.7) | $ | (31.5) | $ | (97.0) | |||||||||||||||||||||||||||||
| One-time items before income taxes | 0.8 | — | 0.0 | 0.1 | 9.4 | 10.3 | |||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes excluding one-time items | (34.3) | (21.2) | (4.5) | (4.6) | (22.1) | (86.7) | |||||||||||||||||||||||||||||||||||
Interest (income) expense (2) | 0.0 | 0.0 | 0.5 | (0.0) | 4.0 | 4.5 | |||||||||||||||||||||||||||||||||||
Depreciation and amortization (3) | 7.6 | 6.1 | 4.8 | 1.9 | 6.1 | 26.5 | |||||||||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | (26.7) | $ | (15.1) | $ | 0.8 | $ | (2.7) | $ | (12.0) | $ | (55.7) | |||||||||||||||||||||||||||||
| * Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions. | |||||||||||||||||||||||||||||||||||||||||
(1) The Company’s segments are defined as the following: CBPD - Children's Book Publishing and Distribution segment; EDUC - Education segment; ENT - Entertainment segment; INTL - International segment; OVH - unallocated overhead. | |||||||||||||||||||||||||||||||||||||||||
| (2) Amounts include production loan interest amortized into cost of goods sold. | |||||||||||||||||||||||||||||||||||||||||
(3) Depreciation and amortization in the Children’s Book Publishing and Distribution, Education and International segments includes amounts allocated from overhead. | |||||||||||||||||||||||||||||||||||||||||
7
| Table 7 | |||||||||||||||||||||||||||||||||||
| Scholastic Corporation | |||||||||||||||||||||||||||||||||||
| Supplemental Information (Unaudited) | |||||||||||||||||||||||||||||||||||
| (In $ Millions) | |||||||||||||||||||||||||||||||||||
| Three months ended | Three months ended | Variance on a comparable basis | |||||||||||||||||||||||||||||||||
| 08/31/2026 | 08/31/2025 | ||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) | Adjusted operating income (loss) | Incremental sale-leaseback impact | Pro forma adjusted operating income (loss) (1) | $ | % | ||||||||||||||||||||||||||||||
| Children’s Book Publishing and Distribution | $ | (37.8) | $ | (34.3) | $ | (2.9) | $ | (37.2) | $ | (0.6) | (2) | % | |||||||||||||||||||||||
| Education | (23.3) | (21.2) | (0.8) | (22.0) | (1.3) | (6) | % | ||||||||||||||||||||||||||||
| Entertainment | (1.6) | (4.0) | (0.0) | (4.0) | 2.4 | 60 | % | ||||||||||||||||||||||||||||
| International | (2.7) | (4.1) | — | (4.1) | 1.4 | 34 | % | ||||||||||||||||||||||||||||
| Overhead | (23.3) | (18.3) | (1.1) | (19.4) | (3.9) | (20) | % | ||||||||||||||||||||||||||||
| Total | $ | (88.7) | $ | (81.9) | $ | (4.8) | $ | (86.7) | $ | (2.0) | (2) | % | |||||||||||||||||||||||
| Three months ended | Three months ended | Variance on a comparable basis | |||||||||||||||||||||||||||||||||
| 08/31/2026 | 08/31/2025 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | Adjusted EBITDA | Incremental sale-leaseback impact (2) | Pro forma adjusted EBITDA (1) | $ | % | ||||||||||||||||||||||||||||||
| Children’s Book Publishing and Distribution | $ | (29.8) | $ | (26.7) | $ | (3.5) | $ | (30.2) | $ | 0.4 | 1 | % | |||||||||||||||||||||||
| Education | (18.0) | (15.1) | (1.5) | (16.6) | (1.4) | (8) | % | ||||||||||||||||||||||||||||
| Entertainment | 5.7 | 0.8 | (0.1) | 0.7 | 5.0 | NM | |||||||||||||||||||||||||||||
| International | (0.7) | (2.7) | — | (2.7) | 2.0 | 74 | % | ||||||||||||||||||||||||||||
| Overhead | (20.8) | (12.0) | (3.4) | (15.4) | (5.4) | (35) | % | ||||||||||||||||||||||||||||
| Total | $ | (63.6) | $ | (55.7) | $ | (8.5) | $ | (64.2) | $ | 0.6 | 1 | % | |||||||||||||||||||||||
| NM - Not meaningful | |||||||||||||||||||||||||||||||||||
| (1) Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure) reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental adjustments shown above reflect the impact to the first quarter of fiscal 2026 prior to completion of the transactions. | |||||||||||||||||||||||||||||||||||
(2) The $8.5 incremental impact to Pro forma adjusted EBITDA includes the $4.8 impact to Pro forma adjusted operating income (loss) plus a $3.7 depreciation adjustment. | |||||||||||||||||||||||||||||||||||
8