Scholastic reported revenue of $1.63 billion in the fiscal year ended May 31, 2015. The company reported earnings from continuing operations of $15.5 million, compared to $13.3 million in fiscal 2014. Total net income in the year was $294.6 million, a figure that includes $279.1 million in earnings from discontinued operations, most notably its educational publishing technology group that was sold in late May to Houghton Mifflin Harcourt.
The divestiture of the group, which had sales of $249 million in fiscal 2014, led to an overhaul in the way Scholastic reports results, and complicates drawing comparisons between fiscal 2014 and 2015. The $1.63 billion in revenue, for example, is actually down from the $1.82 billion Scholastic reported in fiscal 2014, but the revised figure of $1.56 in fiscal 2014 omits revenue from the educational technology group.
In his prepared remarks accompanying the release of the results, Scholastic chairman Dick Robinson said that with the sale of the technology group and the repositioning of the company's media and entertainment division, Scholastic now has “a simplified operating structure with strong recurring revenues, and is better positioned for more effective collaboration on print and digital products and in the use of enterprise-wide data analytics to improve marketing and sales.”
The change in financial reporting also filtered down to Scholastic’s operating segments. In the company’s children’s book publishing and distribution group, revenue rose 7% to $958.7 million. The revenue bump was driven by a 19% increase in book club sales, and a 5% increase in revenue at book fairs. Sales in consolidated trade, which added video and audio book sales to its operations in addition to print books, fell 2%, to $186 million.
In the education group—formerly classroom and supplementary publishing—sales rose 8%, to $275.9 million, due to the strong performance of guided reading and summer reading programs, as well as in-classroom magazines. With the magazines, circulation increased by over one million year-over-year, and now exceeds 14.1 million in total. On the international side, sales fell 3%, to $401.2 million; the company attributed the drop primarily to the strong dollar, which caused revenue to fall by nearly $20 million in the year.
Looking at fiscal 2016, Scholastic said it expects revenue to be approximately $1.7 billion and earnings per diluted share in the range of $1.35 to $1.55, before the impact of one-time items. The company expects to see “steady, but moderate, growth across the majority of its businesses.”
