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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (date of earliest event reported): December 11, 1996
SCHOLASTIC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-45022 13-3385513
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
555 Broadway, New York, New York 10012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-343-6100
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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 hereto duly authorized.
SCHOLASTIC CORPORATION
By /s/ Kevin McEnery
----------------------------
Kevin McEnery
Executive Vice President and
Chief Financial Officer
Dated: December 12, 1996
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Item 5. Other Events
Attached as Exhibit 1 hereto and incorporated herein by reference
is a copy of the press release issued by Scholastic Corporation, a Delaware
corporation (the "Registrant"), on December 11, 1996 relating to the second
quarter earnings report of the Registrant.
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EXHIBIT 1
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FOR IMMEDIATE RELEASE Contact - Media: Gabrielle Torello, (212) 343-6897
Investor Relations: Ray Marchuk, (212) 343-6741
SCHOLASTIC CORPORATION ANNOUNCES SECOND QUARTER RESULTS
New York, NY, December 10, 1996 -- Scholastic Corporation (NASDAQ: SCHL) today
reported revenue of $342.2 million for the three months ended November 30, 1996
which was $47.6 million, or 16%, greater than the comparable quarter last year.
Net income in the quarter was $38.5 million, an increase of $7.3 million, or
24%, over the comparable period last year. Fully diluted earnings per share grew
to $2.21 in the second quarter from $1.81 last year, a 22% increase.
Revenue for the six months ended November 30, 1996 totaled $500.8 million, which
was $71.0 million, or 17%, greater than last year, and operating income rose 16%
to $46.4 million. Net income rose 15% to $24.5 million, or $1.47 per share fully
diluted.
Domestic book publishing, up $22.6 million or 11%, was the largest contributor
to the revenue growth in the quarter. The book fair channel had the largest
growth rate resulting from an increased number of fairs and increased revenue
per fair. The Company successfully integrated the Trumpet book club, which was
acquired in January 1996 and provided the increase in total book club sales in
the second quarter. Trade sales equaled last year's strong performance, which
had been up 100% over the prior quarter.
Media, TV/Movie Productions and Licensing realized a 129% increase in revenue
this quarter primarily due to Goosebumps merchandise licensing royalties.
International had a strong quarter with revenues up 27%, aided by good growth in
the UK which benefited from the Pages book fair acquisition in March of 1996.
Operating income grew faster than sales due to significant increase in high
margin merchandise license product royalties, combined with improved
international and children's book publishing margins.
"We are pleased with the solid operating results for the quarter," said Richard
Robinson, President, Chief Executive Officer, and Chairman of the Board of
Scholastic. "In addition to the outstanding results in Scholastic Productions
and International, Literacy Place in its first year of sales continues to be
ranked as one of the top basal reading programs in the US. Indications from
early selling efforts of Literacy Place are very positive in California, our
largest opportunity for next summer."
For more than 75 years, Scholastic has been committed to creating quality
educational materials for students and teachers. The Company is one of the
leading publishers and distributors of children's books, classroom and
professional magazines, and other educational products. Scholastic also
publishes educational software and produces children's and family-oriented video
and television programming. The Company's international operations include
Canada, Australia, New Zealand, the United Kingdom, France and Mexico.
# # #
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SCHOLASTIC CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 1996 AND 1995
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
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THREE MONTHS ENDED
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Increase/(Decrease)
11/30/96 11/30/95 $ %
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Domestic
Book publishing $234,681 $212,096 $22,585 11%
Magazine publishing 28,787 27,861 926 3
Media, TV/Movie Productions
& Licensing 20,995 9,149 11,846 129
International 57,711 45,504 12,207 27
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Total revenues 342,174 294,610 47,564 16
Costs and expenses 276,607 241,400 35,207 15
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Operating income 65,567 53,210 12,357 23
Net interest expense 4,211 3,014 1,197 40
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Earnings before taxes 61,356 50,196 11,160 22
Tax provision 22,886 19,074 3,812 20
=========== ============= ===========
Net income $38,470 $31,122 $7,348 24
=========== ============= ===========
Weighted average shares outstanding
Primary 16,322 16,180
Fully Diluted 17,781 17,661
Net income per share:
Primary $2.36 $1.92 $0.44 23
Fully Diluted $2.21 $1.81 $0.40 22
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<CAPTION>
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SIX MONTHS ENDED
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Increase/(Decrease)
11/30/96 11/30/95 $ %
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Domestic
Book publishing $347,143 $310,071 $37,072 12%
Magazine publishing 35,135 34,011 1,124 3
Media, TV/Movie Productions
& Licensing 28,843 11,476 17,367 151
International 89,642 74,243 15,399 21
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Total revenues 500,763 429,801 70,962 17
Costs and expenses 454,391 389,851 64,540 17
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Operating income 46,372 39,950 6,422 16
Net interest expense 7,582 5,365 2,217 41
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Earnings before taxes 38,790 34,585 4,205 12
Tax provision 14,311 13,255 1,056 8
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Net income $24,479 $21,330 $3,149 15
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Weighted average shares outstanding
Primary 16,254 16,100
Fully Diluted 17,763 17,009
Net income per share:
Primary $1.51 $1.32 $0.19 14
Fully Diluted $1.47 $1.31 $0.16 12
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FORWARD LOOKING STATEMENTS
This press release contains certain forward looking statements. Such forward
looking statements are subject to various risks and uncertainties. Actual
results could differ materially from those currently anticipated.
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