Scholastic got fiscal 2012 off to a strong start, reporting a 9.6% increase in total revenue, to $318 million, while its net loss in the period ended August 31 was cut to $27.1 million from $35.2 million. Stronger results reflected higher sales of educational products and services to schools, as well as higher sales of children’s books in retail trade channels. Scholastic chairman Dick Robinson observed that as its business moves in a more digital direction, Scholastic is funding those initiatives with reductions in other areas and will take a one-time charge of $10 million to $15 million to cover the costs of an early retirement program.
Scholastic’s educational and technology services group had a strong start with sales up 18%, to $96.6 million, led by sales of READ 180 Next Generation. The classroom and supplemental materials publishing group, which is broken out separately for the first time, had a 25% jump in sales to $45.7 million. Scholastic attributed the increase to new contracts for summer reading and custom book collection as well as the launch of Text Type a new guided reading program.
In the children’s book publishing & distribution group, sales rose 6%, to $77.3 million, with the gain coming entirely from the trade segment which posted a 10% increase to $59.6 million. Sales of the Hunger Games in print and e-book formats as well as sales of Harry Potter print titles drove the increase. Revenues fell at book clubs and book fairs in what is traditional a slow quarter for both segments.
International segment revenue was $87.7 million, up from $81.9 million in the prior year period, reflecting a $9.8 million foreign exchange benefit. In local currencies, lower sales in Australia were partially offset by strong growth in Asia. Revenue in the media, licensing and advertising segment fell 37%, to $10.7 million, as a result of a planned decrease in custom marketing programs for third-party sponsors, as well as higher, non-recurring production revenue in the prior year period, Scholastic said.
The company said it still expects revenue for the full fiscal year to be about $1.9 billion and earnings per diluted share from continuing operations in the range of $1.75 to $2.10, before the impact of any one-time items associated with cost reduction programs or non-cash, non-operating items
