スコラスティックの四半期報告

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended

February 28, 2025

Commission File No.

000-19860

SCHOLASTIC CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware		13-3385513
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
557 Broadway,
New York,	New York	10012
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (212) 343-6100


Title of Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	SCHL	The NASDAQ Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date:


Title of each class						Number of shares outstanding as of February 28, 2025
Common Stock, $0.01 par value						25,858,399
Class A Stock, $0.01 par value						828,100

SCHOLASTIC CORPORATION

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED February 28, 2025

INDEX



Part I - Financial Information		Page

Item 1.	Financial Statements

	Condensed Consolidated Statements of Operations (Unaudited)	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	4

	Condensed Consolidated Balance Sheets (Unaudited)	5

	Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows (Unaudited)	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4.	Controls and Procedures	35

Part II - Other Information

Item 1.	Business	36

Item 1a.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 5.	Other Information	39

Item 6.	Exhibits	37

Signatures		42

PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED (Dollar amounts in millions, except per share data)


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Revenues	$	335.4	$	323.7	$	1,117.2	$	1,114.8
Operating costs and expenses:
Cost of goods sold		154.6		148.7		511.5		512.8
Selling, general and administrative expenses		187.5		194.8		594.5		592.1
Depreciation and amortization		16.9		14.6		48.5		42.1

Asset impairments and write downs		0.3		0.5		0.4		0.5
Total operating costs and expenses		359.3		358.6		1,154.9		1,147.5
Operating income (loss)		(23.9)		(34.9)		(37.7)		(32.7)
Interest income (expense), net		(4.3)		0.6		(11.7)		2.4
Other components of net periodic benefit (cost)		(0.2)		(0.3)		(0.8)		(0.8)

Earnings (loss) before income taxes		(28.4)		(34.6)		(50.2)		(31.1)
Provision (benefit) for income taxes		(24.8)		(8.1)		(32.9)		(7.3)
Net income (loss)	$	(3.6)	$	(26.5)	$	(17.3)	$	(23.8)


Basic and diluted earnings (loss) per share of Class A and Common Stock
Basic	$	(0.13)	$	(0.91)	$	(0.61)	$	(0.80)
Diluted	$	(0.13)	$	(0.91)	$	(0.61)	$	(0.80)

See accompanying notes


SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - UNAUDITED (Dollar amounts in millions)


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Net income (loss)	$	(3.6)	$	(26.5)	$	(17.3)	$	(23.8)
Other comprehensive income (loss), net:
Foreign currency translation adjustments		(8.0)		(0.4)		(11.7)		1.6
Pension and postretirement adjustments (net of tax)		0.1		0.2		0.5		0.5
Total other comprehensive income (loss), net	$	(7.9)	$	(0.2)	$	(11.2)	$	2.1
Comprehensive income (loss)	$	(11.5)	$	(26.7)	$	(28.5)	$	(21.7)

See accompanying notes


SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (Dollar amounts in millions, except per share data)


	February 28, 2025		May 31, 2024		February 29, 2024
	(unaudited)		(audited)		(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	94.7	$	113.7	$	110.4
Accounts receivable, net		255.9		235.0		253.0
Inventories, net		270.8		264.2		282.5
Income tax receivable		51.6		15.2		29.9
Tax credit receivable		19.8		—		—
Prepaid expenses and other current assets		64.2		48.8		52.9

Total current assets		757.0		676.9		728.7
Noncurrent Assets:
Property, plant and equipment, net		517.1		511.9		512.6
Prepublication costs, net		47.6		49.5		54.0
Investment in film and television programs, net		37.5		—		—
Operating lease right-of-use assets, net		98.8		99.1		91.6
Royalty advances, net		85.9		57.8		56.2
Goodwill		200.0		132.8		132.8
Other intangible assets, net		83.4		10.3		14.0
Noncurrent deferred income taxes		23.0		23.1		21.0
Other assets and deferred charges		111.0		109.8		104.3
Total noncurrent assets		1,204.3		994.3		986.5
Total assets	$	1,961.3	$	1,671.2	$	1,715.2

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Lines of credit and current portion of long-term debt	$	5.8	$	6.0	$	31.5
Film related obligations		18.8		—		—
Accounts payable		133.5		138.5		126.1
Accrued royalties		85.1		48.5		75.1
Deferred revenue		205.2		161.1		193.8
Other accrued expenses		140.2		156.3		156.7
Accrued income taxes		2.6		1.9		2.7
Operating lease liabilities		25.5		22.4		22.6
Total current liabilities		616.7		534.7		608.5
Noncurrent Liabilities:
Long-term debt		275.0		—		—
Operating lease liabilities		84.4		89.2		79.4

Other noncurrent liabilities		43.9		29.2		29.7
Total noncurrent liabilities		403.3		118.4		109.1
Commitments and Contingencies (see Note 5)		—		—		—
Stockholders’ Equity:
Preferred Stock, $1.00 par value: Authorized, 2.0 shares; Issued and Outstanding, none	$	—	$	—	$	—
Class A Stock, $0.01 par value: Authorized, 3.2 shares; Issued and Outstanding, 0.8 shares		0.0		0.0		0.0
Common Stock, $0.01 par value: Authorized, 70.0 shares; Issued, 42.9 shares; Outstanding, 25.9, 27.4, and 27.8 shares, respectively		0.4		0.4		0.4
Additional paid-in capital		605.3		604.6		603.0
Accumulated other comprehensive income (loss)		(63.7)		(52.5)		(53.7)
Retained earnings		989.5		1,023.7		993.5
Treasury stock, at cost: 17.1, 15.5 and 15.1 shares, respectively		(590.2)		(558.1)		(545.6)



Total stockholders’ equity		941.3		1,018.1		997.6
Total liabilities and stockholders’ equity	$	1,961.3	$	1,671.2	$	1,715.2

See accompanying notes


SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED (Dollar amounts in millions, except per share data)


	Class A Stock			Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Treasury Stock At Cost			Total Stockholders' Equity of Scholastic Corporation			Noncontrolling Interest		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at June 1, 2023	1.7	$	0.0	30.0	$	0.4		$	632.2		$	(55.8)	$	1,035.6		$	(449.5)		$	1,162.9	$	1.6	$	1,164.5
Net Income (loss)	—	—		—	—			—			—		(74.2)			—			(74.2)		—		(74.2)
Foreign currency translation adjustment	—	—		—	—			—			1.8		—			—			1.8		—		1.8
Pension and post-retirement adjustments (net of tax of $0.1)	—	—		—	—			—			0.2		—			—			0.2		—		0.2
Stock-based compensation	—	—		—	—			2.3			—		—			—			2.3		—		2.3
Proceeds pursuant to stock-based compensation plans	—	—		—	—			3.0			—		—			—			3.0		—		3.0
Purchases of treasury stock at cost	—	—		(0.8)	—			—			—		—			(36.2)			(36.2)		—		(36.2)
Treasury stock issued pursuant to equity-based plans	—	—		0.1	—			(4.3)			—		—			5.9			1.6		—		1.6
Dividends ($0.20 per share)	—	—		—	—			—			—		(6.3)			—			(6.3)		—		(6.3)
Other (noncontrolling interest)	—	—		—	—			(0.5)			—		—			—			(0.5)		(1.6)		(2.1)
Balance at August 31, 2023	1.7	$	0.0	29.3	$	0.4		$	632.7		$	(53.8)	$	955.1		$	(479.8)		$	1,054.6	$	—	$	1,054.6
Net Income (loss)	—	—		—	—			—			—		76.9			—			76.9		—		76.9
Foreign currency translation adjustment	—	—		—	—			—			0.2		—			—			0.2		—		0.2
Pension and post-retirement adjustments (net of tax of $0.0)	—	—		—	—			—			0.1		—			—			0.1		—		0.1
Stock-based compensation	—	—		—	—			4.1			—		—			—			4.1		—		4.1
Proceeds pursuant to stock-based compensation plans	—	—		—	—			0.6			—		—			—			0.6		—		0.6
Purchases of treasury stock at cost	—	—		(1.4)	—			—			—		—			(52.3)			(52.3)		—		(52.3)
Treasury stock issued pursuant to equity-based plans	—	—		0.3	—			(6.6)			—		—			7.5			0.9		—		0.9
Dividends ($0.20 per share)	—	—		—	—			—			—		(6.0)			—			(6.0)		—		(6.0)

Balance at November 30, 2023	1.7	$	0.0	28.2	$	0.4		$	630.8		$	(53.5)	$	1,026.0		$	(524.6)		$	1,079.1	$	—	$	1,079.1
Net Income (loss)	—	—		—	—			—			—		(26.5)			—			(26.5)		—		(26.5)
Foreign currency translation adjustment	—	—		—	—			—			(0.4)		—			—			(0.4)		—		(0.4)
Pension and post-retirement adjustments (net of tax of $0.1)	—	—		—	—			—			0.2		—			—			0.2		—		0.2
Stock-based compensation	—	—		—	—			2.3			—		—			—			2.3		—		2.3
Proceeds pursuant to stock-based compensation plans	—	—		—	—			2.5			—		—			—			2.5		—		2.5
Purchases of treasury stock at cost	—	—		(1.4)	—			—			—		—			(54.2)			(54.2)		—		(54.2)
Treasury stock issued pursuant to equity-based plans	—	—		0.1	—			(4.0)			—		—			4.6			0.6		—		0.6
Dividends ($0.20 per share)	—	—		—	—			—			—		(6.0)			—			(6.0)		—		(6.0)
Other (share conversion)	(0.9)	—		0.9	—			(28.6)			—		—			28.6			—		—		—
Balance at February 29, 2024	0.8	$	0.0	27.8	$	0.4		$	603.0		$	(53.7)	$	993.5		$	(545.6)		$	997.6	$	—	$	997.6



	Class A Stock			Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Treasury Stock At Cost			Total Stockholders' Equity of Scholastic Corporation			Noncontrolling Interest		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at June 1, 2024	0.8	$	0.0	27.4	$	0.4		$	604.6		$	(52.5)	$	1,023.7		$	(558.1)		$	1,018.1	$	—	$	1,018.1
Net Income (loss)	—	—		—	—			—			—		(62.5)			—			(62.5)		—		(62.5)
Foreign currency translation adjustment	—	—		—	—			—			8.2		—			—			8.2		—		8.2
Pension and post-retirement adjustments (net of tax of $0.1)	—	—		—	—			—			0.2		—			—			0.2		—		0.2
Stock-based compensation	—	—		—	—			2.2			—		—			—			2.2		—		2.2
Proceeds pursuant to stock-based compensation plans	—	—		—	—			0.1			—		—			—			0.1		—		0.1
Purchases of treasury stock at cost	—	—		(0.2)	—			—			—		—			(5.0)			(5.0)		—		(5.0)
Treasury stock issued pursuant to equity-based plans	—	—		0.1	—			(0.6)			—		—			2.2			1.6		—		1.6
Dividends ($0.20 per share)	—	—		—	—			—			—		(5.6)			—			(5.6)		—		(5.6)

Balance at August 31, 2024	0.8	$	0.0	27.3	$	0.4		$	606.3		$	(44.1)	$	955.6		$	(560.9)		$	957.3	$	—	$	957.3
Net Income (loss)	—	—		—	—			—			—		48.8			—			48.8		—		48.8
Foreign currency translation adjustment	—	—		—	—			—			(11.9)		—			—			(11.9)		—		(11.9)
Pension and post-retirement adjustments (net of tax of $0.0)	—	—		—	—			—			0.2		—			—			0.2		—		0.2
Stock-based compensation	—	—		—	—			2.1			—		—			—			2.1		—		2.1
Proceeds pursuant to stock-based compensation plans	—	—		—	—			(0.5)			—		—			—			(0.5)		—		(0.5)
Purchases of treasury stock at cost	—	—		(0.1)	—			—			—		—			(5.0)			(5.0)		—		(5.0)
Treasury stock issued pursuant to equity-based plans	—	—		0.1	—			(4.4)			—		—			5.1			0.7		—		0.7
Dividends ($0.20 per share)	—	—		—	—			—			—		(5.7)			—			(5.7)		—		(5.7)

Balance at November 30, 2024	0.8	$	0.0	27.3	$	0.4		$	603.5		$	(55.8)	$	998.7		$	(560.8)		$	986.0	$	—	$	986.0
Net Income (loss)	—	—		—				—			—		(3.6)			—			(3.6)				(3.6)
Foreign currency translation adjustment	—	—		—	—			—			(8.0)		—			—			(8.0)		—		(8.0)
Pension and post-retirement adjustments (net of tax of $0.1)	—	—		—	—			—			0.1		—			—			0.1		—		0.1
Stock-based compensation	—	—		—	—			2.4			—		—			—			2.4		—		2.4
Proceeds pursuant to stock-based compensation plans	—	—		—	—			0.1			—		—			—			0.1		—		0.1
Purchases of treasury stock at cost	—	—		(1.5)	—			—			—		—			(30.6)			(30.6)		—		(30.6)
Treasury stock issued pursuant to equity-based plans	—	—		0.1	—			(0.7)			—		—			1.2			0.5		—		0.5
Dividends ($0.20 per share)	—	—		—	—			—			—		(5.6)			—			(5.6)		—		(5.6)

Balance at February 28, 2025	0.8	$	0.0	25.9	$	0.4		$	605.3		$	(63.7)	$	989.5		$	(590.2)		$	941.3	$	—	$	941.3

See accompanying notes


SCHOLASTIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED (Dollar amounts in millions)


	Nine months ended
	February 28,		February 29,
	2025		2024
Cash flows - operating activities:
Net income (loss)	$	(17.3)	$	(23.8)
Adjustments to reconcile Net income (loss) to net cash provided by (used in) operating activities:
Provision for losses on accounts receivable		3.9		4.0
Provision for losses on inventory		12.6		15.7
Provision for losses on royalty advances		2.4		2.2
Amortization of prepublication costs		16.4		19.9
Amortization of film and television programs		8.2		—
Depreciation and amortization		57.8		49.2
Amortization of pension and postretirement plans		0.3		0.3
Deferred income taxes		0.0		0.2
Stock-based compensation		6.7		8.7
Income from equity-method investments		(0.8)		(0.1)
Non cash write off related to asset impairments and write downs		0.4		0.5

Changes in assets and liabilities, net of amounts acquired:
Accounts receivable		(11.0)		21.2
Inventories		(22.1)		36.7
Income tax receivable		(36.0)		(21.0)
Tax credit receivable		12.1		—
Prepaid expenses and other current assets		(13.8)		(5.8)
Investment in film and television programs		(8.2)		—
Royalty advances		(30.8)		(1.5)
Accounts payable		(6.4)		(44.6)
Accrued royalties		30.8		22.3
Deferred revenue		34.1		24.7
Other accrued expenses		(25.0)		(15.3)
Accrued income taxes		0.7		(10.6)
Other, net		2.3		1.8
Net cash provided by (used in) operating activities		17.3		84.7

Cash flows - investing activities:
Prepublication expenditures		(15.8)		(17.2)
Additions to property, plant and equipment		(39.9)		(43.8)


Acquisitions, net of cash acquired		(176.2)		(6.4)
Purchase of noncontrolling interest		—		(2.1)
Other		(0.1)		—
Net cash provided by (used in) investing activities		(232.0)		(69.5)

Cash flows - financing activities:
Borrowings under lines of credit and long-term debt, net of debt issuance costs		303.1		52.9
Repayments of lines of credit and long-term debt		(29.6)		(27.5)
Borrowings under film related obligations		14.8		—
Repayments of film related obligations		(33.4)		—
Repayments of capital lease obligations		(1.4)		(1.7)
Reacquisition of common stock		(40.0)		(143.0)
Proceeds pursuant to stock-based compensation plans		1.2		8.7
Payment of dividends		(17.0)		(18.9)
Other		(0.1)		0.1
Net cash provided by (used in) financing activities		197.6		(129.4)

Effect of exchange rate changes on cash and cash equivalents		(1.9)		0.1

Net increase (decrease) in cash and cash equivalents		(19.0)		(114.1)
Cash and cash equivalents at beginning of period		113.7		224.5
Cash and cash equivalents at end of period	$	94.7	$	110.4

See accompanying notes


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

1. BASIS OF PRESENTATION

Principles of consolidation

The accompanying condensed consolidated interim financial statements (referred to as the “Financial Statements” herein) include the accounts of Scholastic Corporation (the “Corporation”) and all wholly-owned and majority-owned subsidiaries (collectively, “Scholastic” or the “Company”). The Company reviews its relationships with other entities to identify whether it is the primary beneficiary of a variable interest entity (“VIE”). If the determination is made that the Company is the primary beneficiary, then the entity is consolidated. Intercompany transactions are eliminated in consolidation.

The Company’s fiscal year is not a calendar year. Accordingly, references in this document to fiscal 2025 relate to the twelve-month period ending May 31, 2025. Certain prior period amounts have been reclassified to conform with the current year presentation.

Noncontrolling Interest

On June 1, 2023, the Company acquired the remaining shares of Make Believe Ideas Limited ("MBI"), a UK-based children's book publishing company, which represented a 5.0% noncontrolling interest, increasing the Company's total ownership from 95.0% to 100%.

Prior to June 1, 2023, the founder and chief executive officer of MBI retained a 5.0% noncontrolling ownership interest in MBI. The Company fully consolidated MBI as of the acquisition date and the 5.0% noncontrolling interest was classified within stockholder's equity.

Interim Financial Statements

The accompanying Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024. The Financial Statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, the Financial Statements reflect all adjustments, consisting solely of normal, recurring adjustments, necessary for the fair presentation of the Financial Statements for the periods presented.

Seasonality

The Company’s Children’s Book Publishing and Distribution school-based book club and book fair channels and most of its Education Solutions businesses operate on a school-year basis; therefore, the Company’s business is highly seasonal. As a result, the Company’s revenues in the first and third quarters of the fiscal year generally are lower than its revenues in the other two fiscal quarters. Typically, school-based channels and magazine revenues are minimal in the first quarter of the fiscal year as schools are not in session. Education channel revenues are generally higher in the fourth quarter. Trade channel and Entertainment segment revenues can vary throughout the year due to the timing of published titles' release dates and program production deliveries and the start dates of distribution license agreements.

Use of Estimates

The preparation of these Financial Statements involves the use of estimates and assumptions by management, which affects the amounts reported in the Financial Statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions believed to be reasonable under the circumstances, all of which are necessary in order to form a basis for determining the carrying values of certain assets and liabilities. Actual results may differ from those estimates and assumptions. On an on-going basis, the Company evaluates the adequacy of its reserves and the estimates used in these calculations, including, but not limited to:

•Accounts receivable allowance for credit losses

•Pension and postretirement benefit plans


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

•Uncertain tax positions

•The timing and amount of future income taxes and related deductions

•Inventory reserves

•Cost of goods sold from book fair operations during interim periods based on estimated gross profit rates

•Sales tax contingencies

•Royalty advance reserves and royalty expense accruals

•Expected economic useful life of film and television program assets

•Impairment testing for goodwill, other intangibles and other long-lived assets and investments

•Assets and liabilities acquired in business combinations

•Variable consideration related to anticipated returns

•Allocation of transaction price to contractual performance obligations

Summary of Significant Accounting Policies

In Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024 the Company included a description of its significant accounting policies. Except as set forth below, as of the date of this Quarterly Report on Form 10-Q there have been no material changes to the significant accounting policies described in the Company’s Annual Report for the fiscal year ended May 31, 2024.

The below significant accounting policies relate to the Company's entertainment business, which includes the operations of 9 Story and Scholastic Entertainment Inc. ("SEI"). Refer to Note 7, "Acquisitions" for further details regarding the acquisition of 9 Story.

Revenue recognition

The Company’s revenue recognition policies for its entertainment business include the following:

Film and TV production - Revenue is deferred during production and recognized when the film or episodes have been delivered and are available for showing or exploitation.

Production services - Revenue is recognized using the percentage-of-completion method based on the proportion of costs incurred in the current period to total expected costs.

Licensing - Revenue from the sale or granting of broadcast license rights to third parties is recognized when the licensed content is available to the customer and the customer has the contractual right to broadcast or stream the content.

Royalty income - Revenue from sales and usage-based royalties related to licenses is generally recognized when the subsequent sale or usage occurs.

Investment in film and television programs

Investments in film and television programs are stated at the lower of cost or net realizable value. Investment in film and television programs includes all direct production and financing costs incurred during production and minimum guarantee payments made to acquire distribution rights. Interest costs are capitalized to the cost of the film or television program until substantially all of the activities required for delivery are complete. Investments in film and television programs are amortized using the declining-balance method with rates ranging from 50% to 90% at the time of initial episodic delivery and at rates ranging from 10% to 25% annually thereafter. The determination of the rates is based on the expected economic useful life of the film or television program and includes factors such as rights retained by the Company, the availability of rights to renew licenses for episodic television programs in various territories, and the availability of secondary market revenue. The Company regularly reviews the recoverability of these capitalized costs based on expected future cash flows.

Government financing and assistance

The Company has access to government programs and tax credits that are designed to assist film, television and digital media production and distribution. Amounts received and amounts receivable which relate to the Company's film and television program assets are recorded as a reduction in the production costs of the related asset.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

New Accounting Pronouncements

In November 2024, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB issued ASU 2025-01,""Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Clarifying the Effective Date" to clarify the effective date of ASU 2024-03 for non-calendar year-end entities. ASU 2024-03 is effective for the Company's fiscal year 2028, and interim periods starting in fiscal year 2029. Early adoption is permitted. The amendments in this ASU are to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740)." The amendments in this update enhance the transparency and decision usefulness of income tax disclosures to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The amendments in this ASU require more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This ASU is effective for the Company's fiscal year 2026. The amendments are to be applied prospectively, but may be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for the Company's fiscal year 2025, and interim periods starting in fiscal year 2026. The amendments in this ASU are to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024 for more information on current applicable authoritative guidance and its impact on the Company's financial statements.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

2. REVENUES

Disaggregated Revenue Data

The following table presents the Company’s segment revenues disaggregated by region and domestic channel:


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Book Clubs - U.S.	$	15.2	$	13.3	$	51.1	$	48.3
Book Fairs - U.S.		110.7		102.7		370.5		372.1
Trade - U.S. (1)		68.9		69.5		218.1		232.2
Trade - International (2)		8.5		7.6		36.0		35.3
Total Children's Book Publishing and Distribution	$	203.3	$	193.1	$	675.7	$	687.9

Education Solutions - U.S.	$	57.2	$	68.5	$	184.1	$	215.5
Total Education Solutions	$	57.2	$	68.5	$	184.1	$	215.5

Entertainment - U.S.	$	1.0	$	0.5	$	3.9	$	1.3
Entertainment - International (3)		11.8		—		42.3		—
Total Entertainment (1)	$	12.8	$	0.5	$	46.2	$	1.3

International - Major Markets (4)	$	49.7	$	48.0	$	173.4	$	171.2
International - Other Markets (5)		9.6		11.1		29.4		31.6
Total International	$	59.3	$	59.1	$	202.8	$	202.8

Overhead (6)	$	2.8	$	2.5	$	8.4	$	7.3
Total Overhead	$	2.8	$	2.5	$	8.4	$	7.3

Total	$	335.4	$	323.7	$	1,117.2	$	1,114.8

(1) The newly formed Entertainment segment includes the operations of SEI, which were included in the Children’s Book Publishing and Distribution segment in prior periods, and 9 Story. The financial results for SEI for the three and nine months ended February 29, 2024 have been reclassified to Entertainment to reflect this change.

(2) Primarily includes foreign rights and certain product sales in the UK.

(3) Primarily includes production, distribution and licensing revenues in Canada, Ireland and Indonesia.

(4) Includes Canada, UK, Australia and New Zealand.

(5) Primarily includes markets in Asia.

(6) Overhead includes rental income related to leased space in the Company's headquarters.

Estimated Returns

A liability for expected returns of $33.3, $33.1, and $38.3 is recorded within Other accrued expenses as of February 28, 2025, May 31, 2024, and February 29, 2024, respectively. In addition, a return asset of $3.8, $4.2, and $4.4 is recorded within Prepaid expenses and other current assets as of February 28, 2025, May 31, 2024, and February 29, 2024, respectively, for the recoverable cost of product estimated to be returned by customers.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

Contract Liabilities

The following table presents further detail regarding the Company's contract liabilities as of the dates indicated:


	February 28, 2025		May 31, 2024		February 29, 2024
Book fairs incentive credits	$	116.8	$	114.2	$	109.9
Magazines+ subscriptions		28.1		4.6		30.5
U.S. digital subscriptions		15.3		15.6		16.8
U.S. education-related (1)		9.5		10.1		10.6
Media-related		7.3		0.0		0.1
Stored value cards		25.8		16.7		20.1
Other (2)		7.5		6.4		12.1
Total contract liabilities	$	210.3	$	167.6	$	200.1

(1) Primarily includes contract liabilities related to contracts with school districts and professional services.

(2) Primarily includes contract liabilities related to various international products and services.

The Company's contract liabilities consist of advance billings and payments received from customers in excess of revenue recognized and revenue allocated to outstanding book fairs incentive credits. Contract liabilities of $205.2, $161.1 and $193.8 as of February 28, 2025, May 31, 2024 and February 29, 2024, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year. The remaining $5.1, $6.5 and $6.3 of contract liabilities as of February 28, 2025, May 31, 2024 and February 29, 2024, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheet as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year. The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $35.1 and $106.2 for the three and nine months ended February 28, 2025, respectively, and $33.0 and $113.7 for the three and nine months ended February 29, 2024, respectively.

Allowance for Credit Losses

The Company recognizes an allowance for credit losses on customer receivables that are expected to be incurred over the lifetime of the receivable. Reserves for estimated credit losses are established at the time of sale and are based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability, including specific reserves on a customer-by-customer basis, creditworthiness of the Company’s customers and prior collection experience. The Company reviews new information as it becomes available and makes adjustments to the reserves accordingly. At the time the Company determines that a receivable balance, or any portion thereof, is deemed to be permanently uncollectible, the balance is then written off.

The following table presents the change in the allowance for credit losses, which is included in Accounts Receivable, net on the Condensed Consolidated Balance Sheets:


	Allowance for Credit Losses
Balance as of June 1, 2024	$	14.9
Provision (benefit)		0.9
Write-offs and other		(0.4)
Balance as of August 31, 2024	$	15.4
Provision (benefit)		2.1
Write-offs and other		(2.6)
Balance as of November 30, 2024	$	14.9
Provision (benefit)		0.9
Write-offs and other		(1.9)
Balance as of February 28, 2025	$	13.9


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

3. SEGMENT INFORMATION

The Company categorizes its businesses into four reportable segments: Children’s Book Publishing and Distribution, Education Solutions, Entertainment and International.

•Children’s Book Publishing and Distribution operates as an integrated business which includes the publication and distribution of children’s books, ebooks, media and interactive products primarily in the United States through its School Reading Events business, which includes the book clubs and book fairs channels, and through the trade channel. This segment is comprised of two operating segments.

•Education Solutions includes the publication and distribution to schools and libraries of children’s books, classroom magazines, print and digital supplemental and core classroom materials and related support services and print and online reference and non-fiction products for grades pre-kindergarten to 12 in the United States. This segment is comprised of one operating segment.

•Entertainment includes the development, production, distribution and licensing of children and family film and television content. This segment is comprised of one operating segment.

•International includes the publication and distribution of products and services outside the United States by the Company’s international operations and its export businesses. This segment is comprised of three operating segments.

The following table sets forth the Company's revenue and operating income (loss) by segment for the periods indicated:


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Revenues
Children's Book Publishing and Distribution (1)	$	203.3	$	193.1	$	675.7	$	687.9
Education Solutions		57.2		68.5		184.1		215.5
Entertainment (1)		12.8		0.5		46.2		1.3
International		59.3		59.1		202.8		202.8
Overhead (2)		2.8		2.5		8.4		7.3
Total	$	335.4	$	323.7	$	1,117.2	$	1,114.8

Operating income (loss)
Children's Book Publishing and Distribution (1)	$	7.6	$	2.3	$	73.1	$	72.9
Education Solutions		(6.9)		(0.8)		(24.4)		(13.7)
Entertainment (1)		(3.9)		(3.1)		(9.1)		(4.4)
International		(2.1)		(5.9)		(4.7)		(6.1)
Overhead (2)		(18.6)		(27.4)		(72.6)		(81.4)
Total	$	(23.9)	$	(34.9)	$	(37.7)	$	(32.7)

(2) Overhead includes all domestic corporate amounts not allocated to segments, including expenses and costs related to the management of corporate assets and rental income related to leased space in the Company's headquarters.

4. DEBT

The following table summarizes the carrying value of the Company's debt, excluding film related obligations, as of the dates indicated:



	February 28, 2025		May 31, 2024		February 29, 2024
US Revolving Credit Agreement	$	275.0	$	—	$	25.0
Unsecured lines of credit		5.8		6.0		6.5
Total debt	$	280.8	$	6.0	$	31.5
Less lines of credit, short-term debt and current portion of long-term debt		(5.8)		(6.0)		(31.5)
Total long-term debt	$	275.0	$	—	$	—

The following table sets forth the maturities of the carrying values of the Company's debt obligations, excluding film related obligations, as of February 28, 2025 for the twelve month periods ended February 28:


2026	$	5.8
2027	—
2028	—
2029	—
2030	275.0
Thereafter	—
Total Debt	$	280.8

US Revolving Credit Agreement

On November 26, 2024, Scholastic Corporation and its principal operating subsidiary, Scholastic Inc., entered into a Third Amendment to Amended and Restated Credit Agreement (the “Amendment”) with a syndicate of banks and Bank of America, N.A., as administrative agent, and Truist Bank and Wells Fargo Bank, National Association, as co-syndication agents (as amended by the Third Amendment, the “Credit Agreement”). The arrangement was accounted for as a debt modification. The revised terms of the amended Credit Agreement include the following:

•an increase in borrowing limits to $400.0 from $300.0, as amended on October 27, 2021;

•an increase in the interest pricing margins for SOFR loans to a range of 1.625% to 1.875% from a range of 1.35% to 1.75% and for Base Rate loans to a range of 0.625% to 0.875% from a range of 0.35% to 0.75%;

•the elimination of the credit spread adjustment of 0.10% applicable to Term SOFR loans; and

•the extension of the maturity date to November 26, 2029.

The Company incurred debt issuance costs of $1.6 in connection with the Amendment which are amortized over the term of the Credit Agreement. The current portion of these costs is recorded within Prepaid expenses and other current assets and the noncurrent portion is recorded within Other assets and deferred charges on the Company's Condensed Consolidated Balance Sheet.

The Credit Agreement provides for a $400.0 unsecured revolving credit facility and allows the Company to borrow, repay or prepay and reborrow at any time prior to the November 26, 2029 maturity date. The Credit Agreement also provides an unlimited basket for permitted payments of dividends and other distributions in respect of capital stock so long as the Corporation’s pro forma Consolidated Net Leverage Ratio, as defined in the Credit Agreement, is not in excess of 2.75:1.

Under the Credit Agreement, interest on (i) Base Rate Advances (as defined in the Credit Agreement) is due and payable in arrears quarterly on the last day of each February, May, August and November, and (ii) Term SOFR Advances (as defined in the Credit Agreement) is due and payable in arrears on the last day of the interest period (defined as the period commencing on the date of the advance and ending on the last day of the period selected by the Borrowers at the time each advance is made). The interest pricing under the Credit Agreement is dependent upon the Company’s election of a rate that is either:

•a Base Rate Advance equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.50% or (iii) the Term SOFR Rate plus 1.00% plus, in each case, an applicable margin ranging from 0.625% to 0.875%, as determined by the Company’s prevailing Consolidated Net Leverage Ratio (as defined in the Credit Agreement);

- or -

•a Term SOFR Advance equal to the Term SOFR rate plus an applicable margin ranging from 1.625% to 1.875%, as determined by the Company’s prevailing Consolidated Net Leverage Ratio (as defined in the Credit Agreement).

As of February 28, 2025, the applicable margin on Base Rate Advances was 0.75% and the applicable margin on SOFR Advances was 1.75%.

The Credit Agreement provides for payment of a commitment fee in respect of the aggregate unused amount of revolving credit commitments ranging from 0.20% to 0.30% per annum based upon the Corporation’s then prevailing Consolidated Net Leverage Ratio. As of February 28, 2025, the commitment fee rate was 0.25%.

A portion of the revolving credit facility, up to a maximum of $50.0, is available for the issuance of letters of credit. In addition, a portion of the revolving credit facility, up to a maximum of $15.0, is available for swingline loans. The Credit Agreement has an accordion feature which permits the Company, provided certain conditions are satisfied, to increase the facility by up to an additional $150.0.

As of February 28, 2025, the Company had outstanding borrowings of $275.0 under the Credit Agreement at a weighted average interest rate of 6.1%. While this obligation is not due until the November 26, 2029 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose. As of February 29, 2024, outstanding borrowings under the Credit Agreement were $25.0 at a weighted average interest rate of 6.8%.

The Credit Agreement contains certain financial covenants related to leverage and interest coverage ratios (as defined in the Credit Agreement), limitations on the amount of dividends and other distributions, and other limitations on fundamental changes to the Company or its business. The Company was in compliance with required covenants for all periods presented.

At February 28, 2025, the Company had open standby letters of credit totaling $4.0 issued under certain credit lines, including $0.4 under the Credit Agreement and $3.6 under the domestic credit lines discussed below.

Unsecured Lines of Credit

As of February 28, 2025, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $10.0. There were no outstanding borrowings under these credit lines as of February 28, 2025, May 31, 2024 and February 29, 2024. As of February 28, 2025, availability under these unsecured money market bid rate credit lines totaled $6.4, excluding commitments of $3.6. All loans made under these credit lines are at the sole discretion of the lender and at an interest rate and term agreed to at the time each loan is made, but not to exceed 365 days. These credit lines may be renewed, if requested by the Company, at the option of the lender.

As of February 28, 2025, the Company had various local currency international credit lines totaling $15.6 underwritten by banks primarily in the United States and the United Kingdom. Outstanding borrowings under these facilities were $5.8 at February 28, 2025 at a weighted average interest rate of 4.9%, compared to outstanding borrowings of $6.0 at May 31, 2024 at a weighted average interest rate of 4.5%, and $6.5 at February 29, 2024 at a weighted average interest rate of 3.8%. As of February 28, 2025, the amounts available under these facilities totaled $9.8. These credit lines are typically available for overdraft borrowings or loans up to 364 days and may be renewed, if requested by the Company, at the sole option of the lender.

Film Related Obligations

The Company's entertainment business enters into credit facilities with third-party banks to obtain interim financing for certain productions. The interim production credit facilities are secured by an assignment and direction of specific production financing including tax credits and license contract receivables and are due on demand. As of February 28, 2025, interest is charged at the following rates:

•the bank prime rate plus a margin ranging from 0.50% to 0.75% for Canadian dollar loans;

•SOFR plus a margin ranging from 2.25% to 3.00% for U.S. dollar loans; and

•Euribor plus 2.00% for Euro loans.

As of February 28, 2025, outstanding borrowings under these facilities were $18.8 at a weighted average interest rate of 6.3%.

5. COMMITMENTS AND CONTINGENCIES

Legal Matters

Various claims and lawsuits arising in the normal course of business are pending against the Company. The Company accrues a liability for such matters when it is probable that a liability has occurred and the amount of such liability can be reasonably estimated. When only a range can be estimated, the most probable amount in the range is accrued unless no amount within the range is a better estimate than any other amount, in which case the minimum amount in the range is accrued. Legal costs associated with litigation are expensed in the period in which they are incurred. The Company does not expect, in the case of those various claims and lawsuits arising in the normal course of business where a loss is considered probable or reasonably possible, that the reasonably possible losses from such claims and lawsuits (either individually or in the aggregate) would have a material adverse effect on the Company’s consolidated financial position or results of operations.

The Company expects to receive additional recoveries from its insurance programs related to an intellectual property legal settlement accrued during fiscal 2021, however, it is premature to determine with any level of probability or accuracy the amount of those recoveries at this time.

6. EARNINGS (LOSS) PER SHARE

The following table summarizes the reconciliation of the numerators and denominators for the basic and diluted earnings (loss) per share computation for the periods indicated:


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Net income (loss) attributable to Class A and Common Stockholders	$	(3.6)	$	(26.5)	$	(17.3)	$	(23.8)
Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions)		27.8		29.1		28.1		29.9
Dilutive effect of Common Stock potentially issuable pursuant to stock-based compensation plans (in millions)*		—		—		—		—
Adjusted weighted average Shares of Class A Stock and Common Stock outstanding for diluted earnings (loss) per share (in millions)		27.8		29.1		28.1		29.9
Earnings (loss) per share of Class A Stock and Common Stock:
Basic	$	(0.13)	$	(0.91)	$	(0.61)	$	(0.80)
Diluted	$	(0.13)	$	(0.91)	$	(0.61)	$	(0.80)
Anti-dilutive shares pursuant to stock-based compensation plans*		1.9		1.1		1.7		0.7

* The Company experienced a net loss for the three and nine months ended February 28, 2025 and therefore did not report any dilutive share impact. The following potential common shares were excluded from the loss per diluted share computation: outstanding options and restricted stock units of 2.7 million and 0.5 million, respectively.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

The following table sets forth options outstanding pursuant to stock-based compensation plans as of the dates indicated:


	February 28, 2025	February 29, 2024
Options outstanding pursuant to stock-based compensation plans (in millions)	2.7	3.0

As of February 28, 2025, $46.6 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date. See Note 12, "Treasury Stock", for a more complete description of the Company’s share buy-back program and Note 18, "Subsequent Events" for additional Board authorization for common share repurchases.

7. ACQUISITIONS

9 Story Acquisition

On June 20, 2024, the Company completed the acquisition of 100% of the economic interests in the form of non-voting shares and 25% of the voting shares of 9 Story, a leading independent creator, producer and distributor of premium children’s content based in Toronto, Canada, with studios or offices in New York, United States, Dublin, Ireland and Bali, Indonesia. The aggregate purchase price was $193.7, subject to further adjustment based on the final determination of purchase price adjustments, and was funded through borrowings under the U.S. Credit Agreement incurred during the first quarter of fiscal 2025. The acquisition of 9 Story further enhances the Company's development, production and licensing interests, expanding opportunities to leverage its brand and best-selling publishing and global children's franchises across print, screen and merchandising.

Pursuant to ASC Topic 810, Consolidation, 9 Story was determined to be a variable interest entity (VIE) and the Company was determined to be its primary beneficiary and therefore obtained a controlling financial interest over 9 Story. Accordingly, 9 Story has been consolidated into the Company's financial results.

9 Story met the definition of a business pursuant to ASC 805, Business Combinations, and the acquisition was accounted for as a business combination under the acquisition method of accounting. The Company estimated the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on currently available information. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. Refer to Note 8, Goodwill and Other Intangibles, for details regarding measurement period adjustments recorded during the nine months ended February 28, 2025. The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition, inclusive of measurement period adjustments:


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)


Cash and cash equivalents	$	17.5
Accounts receivable		15.9
Investment in film and television programs		42.9
Property, plant and equipment (1)		6.0
Operating lease right-of-use assets		6.1
Other Intangible assets:
Existing content/IP		16.0
Customer contracts/relationships		51.5
Trade names		16.5
Internally developed software		1.3
Other assets (2)		35.8
Total assets acquired		209.5
Accounts payable		2.3
Accrued expenses		16.3
Deferred revenue		10.9
Film related obligations		34.9
Operating lease liabilities		7.7
Other liabilities		14.7
Total liabilities assumed		86.8
Preliminary fair value of net assets acquired		122.7
Goodwill		71.0
Preliminary purchase price consideration	$	193.7

(1) Includes a preliminary step-up adjustment of $1.8.

(2) Includes $31.9 of receivables related to government tax incentives.

The intangible assets acquired include intellectual property ("IP") related to 9 Story's existing and recognized program titles, customer contracts/relationships related to licensing, distribution and service arrangements, the trade names associated with 9 Story and Brown Bag Films, its animation studio, and internally developed software. The intellectual property and customer contracts/relationships were valued using the multi-period excess earnings valuation method and are being amortized over 10 years, with the exception of contracts/relationships for service arrangements which are being amortized over 5 years. The trade names were valued using the relief-from-royalty valuation method and are being amortized over 10 years. The internally developed software was valued using the replacement cost method and is being amortized over 3 years. The Company classified these fair value measurements as Level 3 due to the significant unobservable inputs used in the analyses, such as internally-developed discounted cash flow forecasts. The difference between the purchase price over the net identifiable tangible and intangible assets acquired was allocated to goodwill, which is not deductible for tax purposes. The goodwill balance is primarily attributable to the expected synergies from the business combination and acquired workforce. The goodwill and intangible assets acquired were allocated to the Entertainment segment.

The financial results of 9 Story, since the date of acquisition, were included in the Company's Condensed Consolidated Financial Statements as of February 28, 2025. 9 Story contributed total revenue of $44.2 and net loss of $8.3 from the date of acquisition on June 20, 2024 through February 28, 2025. The operations of 9 Story are reported in the Entertainment segment.

The following table summarizes the unaudited pro-forma consolidated results of operations for the three and nine months ended February 28, 2025 and February 29, 2024 as if the acquisition had occurred on June 1, 2023, the beginning of fiscal 2024:


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Revenues	$	335.4	$	341.9	$	1,122.9	$	1,169.0
Net income (loss)		(3.6)		(29.3)		(19.1)		(34.2)


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and 9 Story and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of fiscal 2024 and are not indicative of the future operating results of the combined entities. The financial information for 9 Story prior to the acquisition includes certain adjustments to 9 Story's historical consolidated financial statements to align with U.S. GAAP and the Company's accounting policies. The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the finite-lived intangible assets acquired, fair value adjustments relating to leases and fixed assets, and the related tax effects assuming that the business combination occurred on June 1, 2023.

The Company incurred acquisition‑related costs of $0.5 and $2.6 for the three and nine months ended February 28, 2025, respectively, which were included in Selling, general and administrative expenses in the Condensed Consolidated Statement of Operations.

Purchase of Noncontrolling Interest

On June 1, 2023, the Company acquired the remaining shares of Make Believe Ideas Limited, a UK-based children's book publishing company, for $2.1, increasing the Company's total ownership from 95.0% to 100%. The acquisition was accounted for as an equity transaction as there was no change in control. The carrying value of the noncontrolling interest at the acquisition date was $1.6. The difference between the fair value of consideration paid and the carrying value was recognized as an adjustment to Additional paid-in capital of $0.5.

8. GOODWILL AND OTHER INTANGIBLES

The Company assesses goodwill and other intangible assets with indefinite lives for impairment annually or more frequently if indicators arise. The Company monitors impairment indicators in light of changes in market conditions, near and long-term demand for the Company’s products and other relevant factors.

The following table summarizes the activity in Goodwill for the periods indicated:


	February 28, 2025		May 31, 2024		February 29, 2024
Gross beginning balance	$	172.4	$	172.3	$	172.3
Accumulated impairment		(39.6)		(39.6)		(39.6)
Beginning balance	$	132.8	$	132.7	$	132.7
Additions		70.1		—		—
Measurement period adjustments (1)		0.9		—		—
Foreign currency translation		(3.8)		0.1		0.1



Ending balance	$	200.0	$	132.8	$	132.8

(1) Measurement period adjustments for the 9 Story acquisition reflect an increase to goodwill of $0.9 resulting from a net decrease in the estimated fair value of the net assets acquired. The decrease in the estimated fair value of the net assets acquired consisted of an increase to deferred tax liabilities of $1.4, an increase to operating lease right-of-use assets of $0.3, a decrease to lease liabilities of $0.1, and a decrease to the purchase price as a result of a working capital adjustment of $0.1.

In fiscal 2025, the Company completed the 9 Story acquisition which resulted in the recognition of $71.0 of Goodwill, net of measurement period adjustments, included in the Entertainment segment. Refer to Note 7, "Acquisitions", for further details regarding the acquisition.

There were no impairment charges related to Goodwill in any of the periods presented.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

The following table summarizes the activity in Other intangible assets for the periods indicated:


	February 28, 2025		May 31, 2024		February 29, 2024





Beginning balance - Other intangibles subject to amortization	$	8.2	$	7.8	$	7.8
Additions		85.3		6.0		6.0

Amortization expense		(8.1)		(2.6)		(1.9)
Foreign currency translation		(4.1)		0.1		0.0
Impairments		—		(3.1)		—
Total other intangibles subject to amortization, net of accumulated amortization of $47.2, $39.1 and $38.4, respectively	$	81.3	$	8.2	$	11.9


Total other intangibles not subject to amortization	$	2.1	$	2.1	$	2.1
Total other intangible assets, net	$	83.4	$	10.3	$	14.0

In fiscal 2025, the Company completed the 9 Story acquisition which resulted in the recognition of $85.3 of amortizable intangible assets. Refer to Note 7, "Acquisitions", for further details regarding the acquisition.

In fiscal 2024, the Company acquired certain amortizable intangible assets related to educational programs for $5.8 and certain amortizable intangible assets of a U.S.- based children's book publishing business for $0.2. These intangible assets are amortized over the estimated useful life of 8 years and 5 years, respectively.

In fiscal 2023, the Company acquired Learning Ovations, Inc., a U.S.-based education technology business, which resulted in the recognition of $4.1 of amortizable intangible assets. During fiscal 2024, the Company assessed the recoverability of these assets which was impacted by the shift to an evidenced-based approach to literacy instruction within the education market. An asset impairment of $3.1 was recognized in the fourth quarter of fiscal 2024. There were no impairment charges related to Other intangible assets in the nine months ended February 28, 2025 and February 29, 2024.

Other intangible assets with indefinite lives consist principally of trademark and trade name rights. Other intangible assets with definite lives consist principally of customer lists, customer contracts/relationships, intellectual property, trade names and internally developed software. Intangible assets with definite lives are amortized over their estimated useful lives. The weighted-average remaining useful lives of all amortizable intangible assets is approximately 8.6 years.

9. INVESTMENTS

Investments are included in Other assets and deferred charges on the Condensed Consolidated Balance Sheets. The following table summarizes the Company’s investments as of the dates indicated:


	February 28, 2025		May 31, 2024		February 29, 2024		Segment
Equity method investments	$	31.6	$	31.5	$	30.8	International
Equity method and other investments		6.6		6.0		6.0	Entertainment
Total Investments	$	38.2	$	37.5	$	36.8

The Company’s 26.2% equity interest in a children’s book publishing business located in the UK is accounted for using the equity method of accounting. Equity method income from this investment is reported in the International segment.

The Company has a 4.6% ownership interest in a financing and production company that makes film, television, and digital programming designed for the youth market. This equity investment does not have a readily determinable fair value and the Company has elected to apply the measurement alternative and report the investment at cost, less impairment on the Company's Condensed Consolidated Balance Sheets. There have been no impairments or adjustments to the carrying value of the investment. This investment is included in the Entertainment segment.

The Company acquired investments of $0.9 as part of the 9 Story acquisition which are included in the Entertainment segment. Included in these acquired investments, the Company acquired a 50% ownership interest in certain animated television production companies.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

These joint venture investments are accounted for using the equity method of accounting. The Company also acquired a 12% ownership interest in a children's book publishing business located in the UK. This investment is accounted for at cost, less impairment on the Company's Condensed Consolidated Balance Sheets. There have been no impairments or adjustments to the carrying value of the investment.

Income from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and totaled a loss of less than $0.1 and income of $0.8 for the three and nine months ended February 28, 2025, respectively, and a loss of $0.2 and income of $0.1 for the three and nine months ended February 29, 2024, respectively. The Company received dividends of $1.3 in the three and nine months ended February 29, 2024. The Company did not receive any dividends in the nine months ended February 28, 2025.

10. EMPLOYEE BENEFIT PLANS

The following table sets forth the components of net periodic benefit cost for the periods indicated under the Company’s defined benefit pension plan of Scholastic Ltd., an indirect subsidiary of Scholastic Corporation located in the United Kingdom (the “UK Pension Plan”), and the postretirement benefits plan, consisting of certain healthcare and life insurance benefits provided by the Company to its eligible retired United States-based employees (the “US Postretirement Benefits”), for the periods indicated:


	UK Pension Plan				US Postretirement Benefits
	Three months ended				Three months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Components of net periodic benefit cost:

Interest cost	$	0.4	$	0.3	$	0.1	$	0.1
Expected return on assets		(0.3)		(0.2)		—		—
Amortization of prior service (credit) loss		0.0		0.0		(0.3)		(0.3)

Amortization of net actuarial (gain) loss		0.4		0.4		(0.1)		0.0
Total	$	0.5	$	0.5	$	(0.3)	$	(0.2)

	UK Pension Plan				US Postretirement Benefits
	Nine months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Components of net periodic benefit cost:

Interest cost	$	1.0	$	1.0	$	0.3	$	0.3
Expected return on assets		(0.8)		(0.8)		—		—
Amortization of prior service (credit) loss		0.0		0.0		(0.7)		(0.7)

Amortization of net actuarial (gain) loss		1.1		1.0		(0.1)		0.0

Total	$	1.3	$	1.2	$	(0.5)	$	(0.4)

Actuarial gains and losses are amortized using a corridor approach. The gain or loss corridor is equal to 10% of the greater of the projected benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are amortized over the future working lifetime.

The Company’s funding practice with respect to the UK Pension Plan is to contribute on an annual basis at least the minimum amounts required by applicable law. For the nine months ended February 28, 2025, the Company contributed $1.0 to the UK Pension Plan. The Company expects, based on actuarial calculations, to contribute cash of approximately $1.3 to the UK Pension Plan for the fiscal year ending May 31, 2025.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

11. STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense included in Selling, general and administrative expenses for the periods indicated:


	Three months ended				Nine months ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Stock option expense	$	0.2	$	0.6	$	1.0	$	3.6
Restricted stock unit expense		2.1		1.6		5.3		4.5
Management stock purchase plan		0.0		0.0		0.1		0.3
Employee stock purchase plan		0.1		0.1		0.3		0.3
Total stock-based compensation expense	$	2.4	$	2.3	$	6.7	$	8.7

During the second quarter of fiscal 2025, the Company granted performance-based restricted stock units to certain officers and senior management. Compensation expense is recognized over the requisite service period based on expected attainment of pre-established performance goals.

The following table sets forth Common Stock issued pursuant to stock-based compensation plans for the periods indicated:


	Three months ended		Nine months ended
	February 28,	February 29,	February 28,	February 29,
	2025	2024	2025	2024
Common Stock issued pursuant to stock-based compensation plans (in millions)	0.1	0.1	0.3	0.5

12. TREASURY STOCK

The Board has authorized the Company to repurchase Common Stock, from time to time as conditions allow, on the open market or through privately negotiated transactions.

The table below represents the Board authorization at the dates indicated:


Authorization	Amount
December 2023		66.2
March 2024		54.6
Total current Board authorizations	$	120.8
Less repurchases made under these authorizations		(74.2)
Remaining Board authorization at February 28, 2025	$	46.6

Remaining Board authorization at February 28, 2025 represents the amount remaining under the Board authorization for Common share repurchases announced on March 20, 2024, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions. See Note 18, "Subsequent Events", for additional Board authorization for common share repurchases.

Repurchases of the Company's Common Stock were $30.6 and $40.6, including excise tax on share repurchases, during the three and nine months ended February 28, 2025, respectively. The Company's repurchase program may be suspended at any time without prior notice.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the activity in Accumulated other comprehensive income (loss), net of tax, by component, for the periods indicated:


	Three months ended February 28, 2025
	Foreign currency translation adjustments		Retirement benefit plans		Total
Beginning balance at November 30, 2024	$	(50.6)	$	(5.2)	$	(55.8)
Other comprehensive income (loss) before reclassifications		(8.0)		—		(8.0)
Less amount reclassified from Accumulated other comprehensive income (loss):
Amortization of net actuarial (gain) loss (net of tax of $0.0)		—		0.3		0.3
Amortization of prior service (credit) cost (net of tax of $0.1)		—		(0.2)		(0.2)


Other comprehensive income (loss)		(8.0)		0.1		(7.9)
Ending balance at February 28, 2025	$	(58.6)	$	(5.1)	$	(63.7)

	Three months ended February 29, 2024
	Foreign currency translation adjustments		Retirement benefit plans		Total
Beginning balance at November 30, 2023	$	(48.0)	$	(5.5)	$	(53.5)
Other comprehensive income (loss) before reclassifications		(0.4)		—		(0.4)
Less amount reclassified from Accumulated other comprehensive income (loss):
Amortization of net actuarial (gain) loss (net of tax of $0.0)		—		0.4		0.4

Amortization of prior service (credit) cost (net of tax of $0.1)		—		(0.2)		(0.2)

Other comprehensive income (loss)		(0.4)		0.2		(0.2)
Ending balance at February 29, 2024	$	(48.4)	$	(5.3)	$	(53.7)

	Nine months ended February 28, 2025
	Foreign currency translation adjustments		Retirement benefit plans		Total
Beginning balance at June 1, 2024	$	(46.9)	$	(5.6)	$	(52.5)
Other comprehensive income (loss) before reclassifications		(11.7)		—		(11.7)
Less: amount reclassified from Accumulated other comprehensive income (loss)
Amortization of net actuarial (gain) loss (net of tax of $0.0)		—		1.0		1.0

Amortization of prior service (credit) cost (net of tax of $0.2)		—		(0.5)		(0.5)

Other comprehensive income (loss)		(11.7)		0.5		(11.2)
Ending balance at February 28, 2025	$	(58.6)	$	(5.1)	$	(63.7)

	Nine months ended February 29, 2024
	Foreign currency translation adjustments		Retirement benefit plans		Total
Beginning balance at June 1, 2023	$	(50.0)	$	(5.8)	$	(55.8)
Other comprehensive income (loss) before reclassifications		1.6		—		1.6
Less: amount reclassified from Accumulated other comprehensive income (loss)
Amortization of net actuarial (gain) loss (net of tax of $0.0)		—		1.0		1.0

Amortization of prior service (credit) cost (net of tax of $0.2)		—		(0.5)		(0.5)

Other comprehensive income (loss)		1.6		0.5		2.1
Ending balance at February 29, 2024	$	(48.4)	$	(5.3)	$	(53.7)


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

The following table presents the impact on earnings of reclassifications out of Accumulated other comprehensive income (loss) for the periods indicated:


	Three months ended				Nine months ended				Condensed Consolidated Statements of Operations line item
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Employee benefit plans:
Amortization of net actuarial loss	$	0.3	$	0.4	$	1.0	$	1.0	Other components of net periodic benefit (cost)
Amortization of prior service (credit) loss		(0.3)		(0.3)		(0.7)		(0.7)	Other components of net periodic benefit (cost)
Less: Tax effect		0.1		0.1		0.2		0.2	Provision (benefit) for income taxes
Total cost, net of tax	$	0.1	$	0.2	$	0.5	$	0.5

14. FAIR VALUE MEASUREMENTS

The Company determines the appropriate level in the fair value hierarchy for each fair value measurement of assets and liabilities carried at fair value on a recurring basis in the Company’s financial statements. The fair value hierarchy prioritizes the inputs, which refer to assumptions that market participants would use in pricing an asset or liability, based upon the highest and best use, into three levels as follows:

•Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

•Level 2 Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

•Level 3 Unobservable inputs in which there is little or no market data available, which are significant to the fair value measurement and require the Company to develop its own assumptions.

The Company’s financial assets and liabilities measured at fair value consisted of cash and cash equivalents, debt and foreign currency forward contracts. Cash and cash equivalents are comprised of bank deposits and short-term investments, such as money market funds, the fair value of which is based on quoted market prices, a Level 1 fair value measure. The Company employs Level 2 fair value measurements for the disclosure of the fair value of its various lines of credit and long term debt. The fair value of the Company's debt, including film related obligations, approximates the carrying value for all periods presented. The fair values of foreign currency forward contracts, used by the Company to manage the impact of foreign exchange rate changes, are based on quotations from financial institutions, a Level 2 fair value measure.

Non-financial assets for which the Company employs fair value measures on a non-recurring basis include:

•Long-lived assets, including held for sale

•Operating lease right-of-use (ROU) assets

•Investments

•Assets and liabilities acquired in a business combination

•Impairment assessment of goodwill and other intangible assets

Level 2 and Level 3 inputs are employed by the Company in the fair value measurement of these assets. For the fair value measurements employed by the Company for certain property, plant and equipment, investments, prepublication assets and investment in film and television programs, the Company assessed future expected cash flows attributable to these assets. See Note 9, "Investments", for a more detailed description of the fair value measurements employed. See Note 7, "Acquisitions", for a more detailed description of the assets acquired and fair value measurements employed related to the 9 Story acquisition.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

15. INCOME TAXES AND OTHER TAXES

Income Taxes

In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.

The Company's interim effective tax rate, inclusive of discrete items, for the three and nine month periods ended February 28, 2025 was 87.3% and 65.5%, respectively, compared to 23.4% and 23.5%, respectively, for the prior fiscal year period. The interim effective tax rate for the nine months ended February 28, 2025 varies from the statutory rate primarily due to the expected state and local income tax and non-deductible compensation for covered executive employees. Due to the seasonal nature of the business, the tax benefit on the operating loss for the nine months ended February 28, 2025 will be impacted by the Company's typically profitable fourth fiscal quarter.

The Company, including its domestic subsidiaries, files a consolidated U.S. income tax return, and also files tax returns in various states and other local jurisdictions. Also, certain subsidiaries of the Company file income tax returns in foreign jurisdictions. The Company is routinely audited by various tax authorities. The fiscal 2021 through 2024 tax years remain subject to audit.

The Organization for Economic Cooperation and Development (“OECD”) has implemented the global minimum tax rate of at least 15% for large multinational companies as of 2024 (“Pillar Two”). Under Pillar Two, a top-up tax will be required of such companies for any jurisdiction which has enacted Pillar Two if their effective tax rate falls below the 15% global minimum rate. Additionally, the OECD issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. Under the safe harbor, companies would be excluded from Pillar Two requirements provided certain criteria are met. The enactment of Pillar Two legislation does not have a material effect on the Company’s financial position. The Company will continue to monitor and reflect the impact of such legislative changes in future periods, as appropriate.

Non-income Taxes

The Company is subject to tax examinations for sales-based taxes. A number of these examinations are ongoing and, in certain cases, have resulted in assessments from taxing authorities. The Company assesses sales tax contingencies for each jurisdiction in which it operates, considering all relevant facts including statutes, regulations, case law and experience. Where a sales tax liability with respect to a jurisdiction is probable and can be reliably estimated for such jurisdiction, the Company has made accruals for these matters which are reflected in the Company’s Condensed Consolidated Financial Statements. These amounts are included in Selling, general and administrative expenses. Future developments relating to the foregoing could result in adjustments being made to these accruals.

16. DERIVATIVES AND HEDGING

The Company enters into foreign currency derivative contracts to economically hedge the exposure to foreign currency fluctuations associated with the forecasted purchase of inventory, the foreign exchange risk associated with certain receivables denominated in foreign currencies and certain future commitments for foreign expenditures. These derivative contracts are economic hedges and are not designated as cash flow hedges.

The Company marks-to-market these instruments and records the changes in the fair value of these items in Selling, general and administrative expenses and recognizes the unrealized gain or loss in Other current assets or Other current liabilities. The notional values of the contracts were $22.8 as of February 28, 2025 and February 29, 2024.


SCHOLASTIC CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED (Dollar amounts in millions, except per share data)

A net unrealized gain of $0.9 and $0.2 was recognized for the nine months ended February 28, 2025 and February 29, 2024, respectively.

17. OTHER ACCRUED EXPENSES

Other accrued expenses consisted of the following as of the dates indicated:


	February 28, 2025		May 31, 2024		February 29, 2024
Accrued payroll, payroll taxes and benefits	$	28.0	$	32.9	$	32.7
Accrued bonus and commissions		13.6		21.6		18.1
Returns liability		33.3		33.1		38.3
Accrued other taxes		18.7		23.0		19.9
Accrued advertising and promotions		6.2		5.7		7.9
Other accrued expenses		40.4		40.0		39.8
Total accrued expenses	$	140.2	$	156.3	$	156.7

18. SUBSEQUENT EVENTS

On March 19, 2025, the Board declared a quarterly cash dividend of $0.20 per share on the Company’s Class A and Common Stock for the fourth quarter of fiscal 2025. The dividend is payable on June 16, 2025 to shareholders of record as of the close of business on April 30, 2025.

On March 19, 2025, the Board also authorized an increase of $53.4 for Common share repurchases under the Company's share buy-back program, resulting in a current Board authorization of $100.0, which includes $46.6 remaining from the previous Board authorization.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Overview and Outlook

Revenues for the third quarter ended February 28, 2025 were $335.4 million, compared to $323.7 million in the prior fiscal year quarter, an increase of $11.7 million or 4%. The Company reported net loss per diluted share of Class A and Common Stock of $0.13 in the third quarter of fiscal 2025, compared to $0.91 in the prior fiscal year quarter.

During the third fiscal quarter, revenue growth was primarily driven by the contribution of 9 Story within the Entertainment segment. Despite increasing pressure on consumer spending which impacted the Children's Book Publishing and Distribution segment, revenues from School Reading Events increased over the prior year quarter while trade channel revenues remained consistent. The trade channel benefited from the release of the thirteenth book in Dav Pilkey’s global best-selling series, Dog Man®: Big Jim Begins, which also drove higher sales of backlist titles in the series, the benefit of which was offset by the general softness in the retail book market. While Education Solutions continued to be negatively impacted by the continued decline in spending on supplemental materials, the Company expects to launch new supplemental products over the summer for the next school year. Operating loss improved 32%, reflecting a reduction in discretionary overhead expenses and the higher revenues in the Children’s Book Publishing and Distribution segment, which more than offset the impact of lower sales in Education Solutions.

For the remainder of fiscal 2025, the Company expects increasing spending headwinds to continue to impact the trade channel resulting in softness in the retail book market as well as participation at book fairs. The Company expects new releases to benefit the trade channel in the fourth fiscal quarter, including the recently released fifth book in Suzanne Collins’ Hunger Games® series, Sunrise on the Reaping. Within the Entertainment segment, delays in production greenlights from major platforms are expected to impact production work in the near-term, however the Company remains focused on production and development work for video-on-demand platforms and making progress on Company-wide synergies which are expected to benefit the Entertainment segment in fiscal 2026 and beyond.

Results of Operations

Consolidated

Revenues for the quarter ended February 28, 2025 increased by $11.7 million to $335.4 million, compared to $323.7 million in the prior fiscal year quarter. Within the Children's Book Publishing and Distribution segment, revenues increased by $10.2 million, driven by increased revenues from School Reading Events as a result of higher fair count in the book fairs channel and higher revenue per sponsor and an increase in events in the book clubs channel. Trade channel revenues were consistent with the prior year as increased sales from the Dog Man® series, which included the latest release, Dog Man #13: Big Jim Begins, were offset by lower sales of backlist titles due to softness in the retail book market. In the Education Solutions segment, revenues decreased by $11.3 million primarily due to the continued decline in spending on supplemental materials, coupled with lower subscription revenues from Magazines+TM. In the Entertainment segment, revenues increased by $12.3 million, reflecting the addition of 9 Story. In local currency, International segment revenues increased by $2.9 million, primarily reflecting higher sales in Canada, the U.K. and New Zealand. International segment revenues were impacted by unfavorable foreign exchange of $2.7 million in the quarter ended February 28, 2025.

Revenues for the nine months ended February 28, 2025 increased by $2.4 million to $1,117.2 million, compared to $1,114.8 million in the prior fiscal year period. The overall increase in revenues was attributable to the Entertainment segment, which increased $44.9 million, reflecting the addition of 9 Story. Revenues in the Children's Book Publishing and Distribution segment decreased by $12.2 million, primarily driven by lower trade channel revenues which reflected the timing of new releases and softness in the retail book market, partially offset by increased revenues from School Reading Events as a result of higher revenue per sponsor and an increase in events in the book clubs channel. In the Education Solutions segment, revenues decreased by $31.4 million primarily due to the continued decline in spending on supplemental materials and lower subscription revenues from Magazines+. In local currency, International segment revenues increased by $1.0 million, primarily reflecting increased sales in Canada, the U.K. and New Zealand, partly offset by lower sales in Australia due to softness in the retail market. International segment revenues were impacted by unfavorable foreign exchange of $1.0 million in the period ended February 28, 2025.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Components of Cost of goods sold for the three and nine months ended February 28, 2025 and February 29, 2024 are as follows:


	Three months ended								Nine months ended
	February 28, 2025				February 29, 2024				February 28, 2025				February 29, 2024

($ amounts in millions)			% of Revenue				% of Revenue				% of Revenue				% of Revenue
Product, service and production costs and inventory reserves	$	87.4	26.1	%	$	83.5	25.8	%	$	294.4	26.3	%	$	299.3	26.9	%
Royalty and participation costs		28.5	8.5	%		26.9	8.3	%		91.2	8.2	%		90.5	8.1	%
Prepublication and production amortization		7.2	2.1	%		6.7	2.1	%		24.6	2.2	%		20.6	1.8	%
Postage, freight, shipping, fulfillment and other		31.5	9.4	%		31.6	9.7	%		101.3	9.1	%		102.4	9.2	%
Total	$	154.6	46.1	%	$	148.7	45.9	%	$	511.5	45.8	%	$	512.8	46.0	%

Cost of goods sold for the quarter ended February 28, 2025 was $154.6 million, or 46.1% of revenues, compared to $148.7 million, or 45.9% of revenues, in the prior fiscal year quarter. Cost of goods sold was impacted by the addition of production and participation costs which were not present in the prior period as a result of the 9 Story acquisition in fiscal 2025. This increase was largely offset by the favorable mix of product sold in the quarter ended February 28, 2025, which resulted in lower product costs, primarily in the U.K. and New Zealand.

Cost of goods sold for the nine months ended February 28, 2025 was $511.5 million, or 45.8% of revenues, compared to $512.8 million, or 46.0% of revenues, in the prior fiscal year period. Cost of goods sold benefited from favorable product mix in the U.S. trade and book fairs channels as well as in the U.K. and New Zealand, which resulted in lower product costs, partly offset by the addition of production costs as a result of the 9 Story acquisition. The Company does not expect the remainder of fiscal 2025 to be materially impacted by the current tariff increases.

Selling, general and administrative expenses for the quarter ended February 28, 2025 decreased to $187.5 million, compared to $194.8 million in the prior fiscal year quarter. The $7.3 million decrease was primarily attributable to lower employee-related costs within overhead, lower commission expense and external labor costs within Education Solutions and a decrease in transaction costs related to the 9 Story acquisition of $2.5 million. This was partially offset by higher operating expenses from the addition of 9 Story and an increase in severance expense of $1.0 million from the Company's cost-saving initiatives.

Selling, general and administrative expenses for the nine months ended February 28, 2025 increased to $594.5 million, compared to $592.1 million in the prior fiscal year period. The $2.4 million increase was primarily attributable to the addition of 9 Story, which resulted in higher operating expenses in the period ended February 28, 2025, partially offset by $0.3 million of lower severance expense from cost-saving initiatives and lower commission expense and external labor costs within Education Solutions.

Depreciation and amortization expenses for the three and nine months ended February 28, 2025 were $16.9 million and $48.5 million, respectively, compared to $14.6 million and $42.1 million, respectively, in the prior fiscal year periods. The increase in Depreciation and amortization was primarily due to amortization expense on the intangible assets acquired as a result of the 9 Story acquisition. The Company also continues to shift spending to cloud computing arrangements in which the amortization expense is included in Selling, general and administrative expenses rather than Depreciation and amortization. Amortization related to cloud computing arrangements for the nine months ended February 28, 2025 increased by $2.0 million compared to the prior fiscal year period as a result of assets placed into service during fiscal 2024 and during the first half of fiscal 2025.

Asset impairments for the three and nine months ended February 28, 2025 were $0.3 million and $0.4 million, respectively, primarily related to the early exit of leased office space within the Entertainment segment. Asset impairments for the three and nine months ended February 29, 2024 were $0.5 million, primarily related to the early exit of leased sales office space within the Children's Book Publishing and Distribution segment.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Interest expense for the three and nine months ended February 28, 2025 was $4.7 million and $13.4 million, respectively, compared to $0.5 million and $1.3 million, respectively, in the prior fiscal year periods. The increase in interest expense was due to borrowings under the U.S. Credit Agreement incurred during the first quarter of fiscal 2025 to fund the 9 Story acquisition. Interest expense is expected to increase by a similar amount for the fourth quarter of fiscal 2025.

Interest income for the three and nine months ended February 28, 2025 was $0.4 million and $1.7 million, respectively, compared to $1.1 million and $3.7 million, respectively, in the prior fiscal year periods. The decrease in interest income was attributable to lower average short term investment balances in the period ended February 28, 2025. The Company invests excess cash in short term investments which earn competitive interest rates that change directionally in relation to the Federal Funds rate.

The Company's interim effective tax rate, inclusive of discrete items, for the three and nine months ended February 28, 2025 was 87.3% and 65.5%, respectively, compared to 23.4% and 23.5%, respectively, for the prior fiscal year periods. The interim effective tax rate for the nine months ended February 28, 2025 varies from the statutory rate primarily due to the expected state and local income tax and non-deductible compensation for covered executive employees. Due to the seasonal nature of the business, the tax benefit on the operating loss for the nine months ended February 28, 2025 will be impacted by the Company's typically profitable fourth fiscal quarter.

Net loss for the quarter ended February 28, 2025 improved by $22.9 million to $3.6 million, compared to a net loss of $26.5 million in the prior fiscal year quarter. Loss per basic and diluted share of Class A and Common Stock was $0.13 for the fiscal quarter ended February 28, 2025, compared to $0.91 in the prior fiscal year quarter.

Net loss for the nine months ended February 28, 2025 improved by $6.5 million to $17.3 million compared to a net loss of $23.8 million in the prior fiscal year period. Loss per basic and diluted share of Class A and Common Stock was $0.61 for the nine months ended February 28, 2025, compared to $0.80 in the prior fiscal year period.

Children’s Book Publishing and Distribution


	Three months ended										Nine months ended
	February 28,			February 29,			$		%		February 28,			February 29,			$		%
($ amounts in millions)	2025			2024			Change		Change			2025			2024		Change		Change
Revenues	$	203.3		$	193.1		$	10.2	5.3	%	$	675.7		$	687.9		$	(12.2)	(1.8)	%
Cost of goods sold		92.0			87.5			4.5	5.1	%		294.2			306.9			(12.7)	(4.1)	%
Other operating expenses (1)		103.7			102.8			0.9	0.9	%		308.4			307.6			0.8	0.3	%
Asset impairments		—			0.5			(0.5)	(100.0)	%		—			0.5			(0.5)	(100.0)	%
Operating income (loss)	$	7.6		$	2.3		$	5.3	NM		$	73.1		$	72.9		$	0.2	0.3	%
Operating margin		3.7	%		1.2	%						10.8	%		10.6	%

(1) Other operating expenses include selling, general and administrative expenses, bad debt expenses and depreciation and amortization.

NM Not meaningful

Revenues for the quarter ended February 28, 2025 increased by $10.2 million to $203.3 million, compared to $193.1 million in the prior fiscal year quarter. The increase in segment revenues was primarily driven by increased revenues from School Reading Events of $9.9 million. Book fairs channel revenues increased $8.0 million, driven by higher fair count as a larger number of fall-season fairs occurred in December compared to the prior year period. Revenue per fair was consistent with the prior fiscal year quarter. Book clubs channel revenues increased $1.9 million as a result of higher revenue per sponsor and an increase in events. Trade channel revenues were relatively consistent with the prior fiscal year quarter, increasing $0.3 million. In the quarter ended February 28, 2025, the Company benefited from increased sales from the Dog Man® series, which included the latest release, Dog Man #13: Big Jim Begins, in addition to sales of deluxe editions of titles in the Hunger Games® series and the release of Wings of Fire GraphixTM Novel #8: Escaping Peril. This was offset by lower sales of backlist titles reflecting continued softness in the retail book market.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Revenues for the nine months ended February 28, 2025 decreased by $12.2 million to $675.7 million, compared to $687.9 million in the prior fiscal year period. Trade channel revenues decreased $13.4 million, primarily due to lower sales of backlist titles reflecting continued softness in the retail book market and the timing of new releases as the prior year period benefited from the release of several frontlist titles, including Cat Kid Comic Club®: Influencers, the interactive edition of Harry Potter and the Prisoner of Azkaban, and the paperback edition of The Ballad of Songbirds and Snakes. This decline was partially offset by increased sales from the Dog Man series, which included the latest release, Dog Man #13: Big Jim Begins, and increased foreign rights sales in the period ended February 28, 2025. The overall decrease in segment revenues was partially offset by increased revenues from School Reading Events of $1.2 million. Book clubs channel revenues increased by $2.8 million, driven by higher revenue per sponsor and an increase in events. Book fairs channel revenues decreased $1.6 million as a result of slightly lower revenue per fair, due to the addition of smaller fairs, and decreased redemptions of book fairs incentive credits, partially offset by higher fair count.

Cost of goods sold for the quarter ended February 28, 2025 was $92.0 million, or 45.3% of revenues, which was comparable to $87.5 million, or 45.3% of revenues, in the prior fiscal year quarter.

Cost of goods sold for the nine months ended February 28, 2025 was $294.2 million, or 43.5% of revenues, compared to $306.9 million, or 44.6% of revenues, in the prior fiscal year period. Cost of goods sold benefited from the mix of product sold in the period ended February 28, 2025, which included higher foreign rights sales in the trade channel and redemptions of book fair incentive credits for lower cost products, as well as lower print costs in the book fairs channel.

Other operating expenses for the three and nine months ended February 28, 2025 were $103.7 million and $308.4 million, respectively, compared to $102.8 million and $307.6 million, respectively, in the prior fiscal year periods. The increase in Other operating expenses was primarily attributable to higher distribution costs within the book fairs channel.

Asset impairments for the three and nine months ended February 29, 2024 were $0.5 million. The Company ceased use of a leased sales office space, as a result of which the Company recognized an impairment expense of $0.5 million in the third quarter of fiscal 2024.

Segment operating income for the quarter ended February 28, 2025 was $7.6 million, compared to $2.3 million in the prior fiscal year quarter. The $5.3 million improvement was primarily attributable to higher revenues from School Reading Events, primarily driven by higher fair count in the book fairs channel.

Segment operating income for the nine months ended February 28, 2025 was $73.1 million, compared to $72.9 million in the prior fiscal year period. Lower revenues, primarily within the trade channel due to softness in the retail book market, were offset by lower product costs associated with the mix of product sold in the period ended February 28, 2025 and lower print costs in the book fairs channel.

Education Solutions


	Three months ended								Nine months ended
	February 28,		February 29,		$		%		February 28,		February 29,			$	%
($ amounts in millions)	2025		2024		Change		Change		2025		2024		Change		Change
Revenues	$	57.2	$	68.5	$	(11.3)	(16.5)	%	$	184.1	$	215.5	$	(31.4)	(14.6)	%
Cost of goods sold		23.0		26.2		(3.2)	(12.2)	%		77.7		89.5		(11.8)	(13.2)	%
Other operating expenses (1)		41.1		43.1		(2.0)	(4.6)	%		130.8		139.7		(8.9)	(6.4)	%

Operating income (loss)	$	(6.9)	$	(0.8)	$	(6.1)	NM		$	(24.4)	$	(13.7)	$	(10.7)	(78.1)	%

(1) Other operating expenses include selling, general and administrative expenses, bad debt expenses and depreciation and amortization.

NM Not meaningful

Revenues for the quarter ended February 28, 2025 decreased by $11.3 million to $57.2 million, compared to $68.5 million in the prior fiscal year quarter. The decrease in segment revenues was primarily driven by the continued impact of market conditions as school districts have decreased spending on supplemental programs due to a focus on the adoption and implementation of new evidence-based core programs. The decrease in revenues was also attributable to lower subscription revenues from Magazines+ and lower revenues from community literacy programs.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Revenues from sponsored programs were consistent with the prior fiscal year quarter.

Revenues for the nine months ended February 28, 2025 decreased by $31.4 million to $184.1 million, compared to $215.5 million in the prior fiscal year period. The decrease in segment revenues was primarily driven by the continued impact of market conditions as school districts focus on adopting and implementing new evidence-based core programs and decrease spending on supplemental materials. In addition, subscription revenues from Magazines+ and revenues from community literacy programs decreased from the prior fiscal year period. Partially offsetting the decline, the segment benefited from increased sales of the Company's Ready4ReadingTM phonics curriculum and increased revenues from sponsored programs in the first quarter.

Cost of goods sold for the quarter ended February 28, 2025 was $23.0 million, or 40.2% of revenues, compared to $26.2 million, or 38.2% of revenues, in the prior fiscal year quarter. Cost of goods sold as a percentage of revenues increased due to higher outbound freight costs related to sponsored programs and higher product costs associated with the mix of products sold during the quarter ended February 28, 2025. This was partially offset by lower prepublication amortization as a result of the impairment of certain education products in fiscal 2024.

Cost of goods sold for the nine months ended February 28, 2025 was $77.7 million, or 42.2% of revenues, compared to $89.5 million, or 41.5% of revenues, in the prior fiscal year period. Cost of goods sold as a percentage of revenues increased due to higher outbound freight costs related to sponsored programs, which was substantially offset by lower prepublication amortization as a result of the impairment of certain education products in fiscal 2024.

Other operating expenses for the three and nine months ended February 28, 2025 were $41.1 million and $130.8 million, respectively, compared to $43.1 million and $139.7 million, respectively, in the prior fiscal year periods. The decrease in Other operating expenses was primarily attributable to lower commission expense driven by the lower revenues, lower external labor costs and decreased marketing spend.

Segment operating loss for the quarter ended February 28, 2025 was $6.9 million, compared to $0.8 million in the prior fiscal year quarter. Segment operating loss for the nine months ended February 28, 2025 was $24.4 million, compared to $13.7 million in the prior fiscal year period. The decline was driven by lower revenues, primarily attributable to the market conditions which resulted in decreased spending on supplemental materials and lower subscription revenues from Magazines+, partially offset by lower external labor costs.

Entertainment


	Three months ended						Nine months ended
	February 28,		February 29,		$		February 28,		February 29,		$
($ amounts in millions)	2025		2024		Change		2025		2024		Change
Revenues	$	12.8	$	0.5	$	12.3	$	46.2	$	1.3	$	44.9
Cost of goods sold		7.2		0.0		7.2		26.1		0.0		26.1
Other operating expenses (1)		9.2		3.6		5.6		28.9		5.7		23.2
Asset impairments		0.3		—		0.3		0.3		—		0.3
Operating income (loss)	$	(3.9)	$	(3.1)	$	(0.8)	$	(9.1)	$	(4.4)	$	(4.7)

(1) Other operating expenses include selling, general and administrative expenses, bad debt expenses, severance and depreciation and amortization.

The Entertainment segment includes the operations of 9 Story and Scholastic Entertainment Inc. ("SEI"). SEI was reported in the Children's Book Publishing and Distribution segment in prior periods. The financial results for SEI for the three months and nine months ended February 29, 2024 have been reclassified to Entertainment to reflect this change. Refer to Note 7 of Notes to Condensed Consolidated Financial Statements - unaudited in Item 1, “Financial Statements" for further details regarding the acquisition of 9 Story.

Revenues for the three and nine months ended February 28, 2025 were $12.8 million and $46.2 million, respectively, compared to $0.5 million and $1.3 million, respectively, in the prior fiscal year period. The increase reflected the addition of 9 Story from the date of acquisition on June 20, 2024 through February 28, 2025 in which a majority of the revenues were driven by production revenue related to episodic deliveries, production services provided to third parties and, to a lesser extent, revenues from royalties and distribution.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Entertainment revenues have been impacted by delays in production greenlights from major platforms.

Cost of goods sold for the three and nine months ended February 28, 2025 was $7.2 million, or 56.3% of revenues, and $26.1 million, or 56.5% of revenues, respectively. Cost of goods sold primarily consists of production costs and amortization, participation expenses and interest on film related obligations.

Other operating expenses for the three months ended February 28, 2025 were $9.2 million, which included transaction costs of $0.5 million related to the 9 Story acquisition and severance expense of $0.7 million related to cost-saving initiatives. Other operating expenses for the three months ended February 29, 2024 were $3.6 million, which included transaction costs of $3.0 million related to the 9 Story acquisition.

Other operating expenses for the nine months ended February 28, 2025 were $28.9 million, which included transaction costs of $2.6 million related to the 9 Story acquisition and severance expense of $1.1 million related to cost-saving initiatives. Other operating expenses for the nine months ended February 29, 2024 were $5.7 million, which included transaction costs of $3.0 million related to the 9 Story acquisition.

Asset impairments for the three and nine months ended February 28, 2025 were $0.3 million. The Company ceased use of a leased office space as a result of which the Company recognized an impairment expense of $0.3 million in the third quarter of fiscal 2025.

Segment operating loss for the three and nine months ended February 28, 2025 was $3.9 million and $9.1 million, respectively.

International


	Three months ended								Nine months ended
	February 28,		February 29,		$		%		February 28,		February 29,		$		%
($ amounts in millions)	2025		2024		Change		Change		2025		2024		Change		Change
Revenues	$	59.3	$	59.1	$	0.2	0.3	%	$	202.8	$	202.8	$	0.0	0.0	%
Cost of goods sold		33.8		36.5		(2.7)	(7.4)	%		118.0		121.3		(3.3)	(2.7)	%
Other operating expenses (1)		27.6		28.5		(0.9)	(3.2)	%		89.5		87.6		1.9	2.2	%

Operating income (loss)	$	(2.1)	$	(5.9)	$	3.8	64.4	%	$	(4.7)	$	(6.1)	$	1.4	23.0	%

(1) Other operating expenses include selling, general and administrative expenses, bad debt expenses, severance and depreciation and amortization.

Revenues for the quarter ended February 28, 2025 increased by $0.2 million to $59.3 million, compared to $59.1 million in the prior fiscal year quarter. Local currency revenues across the Company's foreign operations increased by $2.9 million, excluding unfavorable foreign exchange impact of $2.7 million. In Australia and New Zealand, local currency revenues increased $1.8 million, driven by increased sales of education products in New Zealand, which more than offset lower revenues in Australia. In the U.K., local currency revenues increased $1.2 million, primarily within the trade channel, driven by higher sales of titles within Dav Pilkey's Dog Man series, which included the latest release, Dog Man #13: Big Jim Begins. In Canada, local currency revenues increased $1.2 million driven by higher revenues from the trade and book clubs channels, partially offset by lower book fairs channel sales. The overall increase in segment revenues was partially offset by a $0.6 million decrease in local currency revenues in Asia, primarily within the trade and education channels, partly offset by growth in India, as well as lower export channel sales of $0.7 million.

Revenues for the nine months ended February 28, 2025 and February 29, 2024 were $202.8 million. Local currency revenues across the Company's foreign operations increased by $1.0 million, excluding unfavorable foreign exchange impact of $1.0 million. In the U.K., local currency revenues increased $2.5 million, primarily driven by higher sales in the trade channel which benefited from the release of Jonty Gentoo: The Adventures of a Penguin by Julia Donaldson and Axel Scheffler and Dog Man #13: Big Jim Begins by Dav Pilkey as well as higher fair count in the book fairs channel. In Canada, local currency revenues increased $0.8 million, driven by higher sales from the book clubs channels, partially offset by lower sales of education products. Canada also benefited from lower trade sales returns from its major customers which partially offset the decline in trade channel sales. Partially offsetting the increase in segment revenues, local currency revenues in Australia and New Zealand decreased $0.2 million as increased sales of education products in New Zealand were more than offset by lower revenues in Australia, primarily due to continued softness in the retail market.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

In Asia, local currency revenues decreased $0.5 million due to lower sales within the trade and education channels, partially offset by growth in India. In addition, export channel revenues decreased $1.6 million as compared to the prior fiscal year period.

Cost of goods sold for the quarter ended February 28, 2025 was $33.8 million, or 57.0% of revenues, compared to $36.5 million, or 61.8% of revenues, in the prior fiscal year quarter. Cost of goods sold as a percentage of revenues decreased as a result of lower product costs in the U.K. and New Zealand due to the mix of product sold in the quarter ended February 28, 2025, coupled with lower excess and obsolete inventory in Canada as a result of improved inventory usage.

Cost of goods sold for the nine months ended February 28, 2025 was $118.0 million, or 58.2% of revenues, compared to $121.3 million, or 59.8% of revenues, in the prior fiscal year period. Cost of goods sold as a percentage of revenues decreased as a result of lower product costs in the U.K. and New Zealand due to the mix of product sold in the period ended February 28, 2025, partly offset by increased fulfillment costs in Australia on lower revenues.

Other operating expenses for the three months ended February 28, 2025 were $27.6 million, compared to $28.5 million in the prior fiscal year quarter. Excluding favorable foreign exchange impact of $1.2 million, Other operating expenses were consistent with the prior quarter.

Other operating expenses for the nine months ended February 28, 2025 were $89.5 million, compared to $87.6 million in the prior fiscal year period. The $1.9 million increase in Other operating expenses was primarily due to higher general overhead costs and higher severance expense from the Company's cost-saving initiatives of $0.3 million in which the Company incurred $1.5 million in Asia in the period ended February 28, 2025, compared to $1.2 million in Canada in the prior fiscal year period.

Segment operating loss for the quarter ended February 28, 2025 was $2.1 million, compared to an operating loss of $5.9 million in the prior fiscal year quarter. The $3.8 million improvement was primarily attributable to higher revenues in Canada, the U.K. and New Zealand, coupled with lower product costs associated with the mix of product sold in the quarter ended February 28, 2025 and improved profitability in Canada which benefited from operating efficiencies.

Segment operating loss for the nine months ended February 28, 2025 was $4.7 million compared to an operating loss of $6.1 million in the prior fiscal year period. The $1.4 million improvement was primarily attributable to higher revenues in Canada, the U.K. and New Zealand, coupled with lower product costs associated with the mix of product sold in the period ended February 28, 2025 and improved profitability in Canada which benefited from operating efficiencies and lower trade sales returns. This improvement was partially offset by higher general overhead costs and lower profitability from Australia due to lower revenues and higher fulfillment costs.

Overhead

Unallocated overhead expense for the quarter ended February 28, 2025 decreased by $8.8 million to $18.6 million, from $27.4 million in the prior fiscal year quarter. The decrease was primarily attributable to lower employee-related costs, which were partially offset by increased severance expense of $0.2 million related to the Company's cost-savings initiatives and higher medical costs, as well as higher rental income of $0.3 million.

Unallocated overhead expense for the nine months ended February 28, 2025 decreased by $8.8 million to $72.6 million, from $81.4 million in the prior year period. The decrease was primarily attributable to lower employee-related costs, which included lower severance expense of $1.7 million related to the Company's cost-savings initiatives, partially offset by higher medical costs. In addition, the Company benefited from higher rental income of $1.1 million as a result of a new tenant leasing space in the Company's headquarters.

Seasonality


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Liquidity and Capital Resources

Cash provided by operating activities was $17.3 million for the nine months ended February 28, 2025, compared to cash provided by operating activities of $84.7 million for the prior fiscal year period, representing a decrease in cash provided by operating activities of $67.4 million. The decrease in cash provided was primarily driven by lower customer remittances and increased inventory purchases and royalty advance payments in the period ended February 28, 2025, as well as increased medical claim payments, interest payments related to the Company's borrowings and higher spending in Entertainment due to the acquisition of 9 Story in fiscal 2025. This was partially offset by lower tax payments and lower discretionary spending in the period ended February 28, 2025.

Cash used in investing activities was $232.0 million for the nine months ended February 28, 2025, compared to cash used in investing activities of $69.5 million in the prior fiscal year period, representing an increase in cash used in investing activities of $162.5 million. The increase in cash used was driven by the cash paid for the 9 Story acquisition of $176.2 million, net of cash acquired, during the nine months ended February 28, 2025, as compared to the prior year period in which the Company acquired certain amortizable intangible assets related to educational programs and a U.S.-based children's book publishing business for $6.0 million and purchased the remaining noncontrolling interest related to Make Believe Ideas Limited for $2.1 million. This was partially offset by lower capital expenditures of $3.9 million.

Cash provided by financing activities was $197.6 million for the nine months ended February 28, 2025, compared to cash used in financing activities of $129.4 million for the prior fiscal year period, representing an increase in cash provided by financing activities of $327.0 million. The increase in cash provided was primarily attributable to borrowings of $275 million under the U.S. Credit Agreement incurred during the nine months ended February 28, 2025 to fund the 9 Story acquisition and working capital needs. In addition, the Company repurchased common stock of $40.0 million, compared to repurchases of $143.0 million in the prior fiscal year quarter, which also resulted in lower dividends of $1.9 million, partially offset by $18.6 million of net repayments of film related obligations in the nine months ended February 28, 2025.

Cash Position

The Company’s cash and cash equivalents totaled $94.7 million at February 28, 2025, $113.7 million at May 31, 2024 and $110.4 million at February 29, 2024. Cash and cash equivalents held by the Company’s U.S. operations totaled $41.0 million at February 28, 2025, $54.9 million at May 31, 2024 and $66.2 million at February 29, 2024. Due to the seasonal nature of its business as discussed under “Seasonality”, the Company usually experiences negative cash flows in the June through September time period.

The Company’s operating philosophy is to use cash provided by operating activities to create value by paying down debt, reinvesting in existing businesses and, from time to time, making acquisitions that will complement its portfolio of businesses or acquiring other strategic assets, as well as engaging in shareholder enhancement initiatives, such as share repurchases or dividend declarations. Under the Company's open-market buy-back program, $46.6 million remained available for future purchases of common shares as of February 28, 2025. Subsequent to February 28, 2025, the Board authorized an increase of $53.4 million for common share repurchases, resulting in a current Board authorization of $100 million, which includes the remaining amount from the previous Board authorization.


SCHOLASTIC CORPORATION Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

The Company has maintained, and expects to maintain for the foreseeable future, sufficient liquidity to fund ongoing operations, including working capital requirements, pension contributions, postretirement benefits, debt service, planned capital expenditures and other investments, as well as dividends and share repurchases. As of February 28, 2025, the Company’s primary sources of liquidity consisted of cash and cash equivalents of $94.7 million, cash from operations and the Company's U.S. Credit Agreement. On November 26, 2024, the U.S. Credit Agreement was amended, which, among other things, increased the borrowing limit from $300 million to $400 million and extended the maturity to November 26, 2029. See Note 4 of Notes to the Financial Statements - Unaudited in Item 1, "Financial Statements," for more information regarding the U.S. Credit Agreement. The Company expects the U.S. Credit Agreement to provide it with an appropriate level of flexibility to strategically manage its business operations. The Company's U.S. Credit Agreement, less borrowings of $275.0 million and commitments of $0.4 million, has $124.6 million of availability. Additionally, the Company has short-term credit facilities of $25.6 million, less current borrowings of $5.8 million and commitments of $3.6 million, resulting in $16.2 million of current availability under these facilities at February 28, 2025. Accordingly, the Company believes these sources of liquidity are sufficient to finance its currently anticipated ongoing operating needs, as well as its financing and investing activities.

Financing

The Company is party to the U.S. Credit Agreement and certain credit lines with various banks, including those related to film related obligations, as described in Note 4 of Notes to Condensed Consolidated Financial Statements - unaudited in Item 1, “Financial Statements."

New Accounting Pronouncements

Reference is made to Note 1 of Notes to Financial Statements - unaudited in Item 1, “Financial Statements,” for information concerning recent accounting pronouncements since the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. Additional written and oral forward-looking statements may be made by the Company from time to time in Securities and Exchange Commission ("SEC") filings and otherwise. The Company cautions readers that results or expectations expressed by forward-looking statements, including, without limitation, those relating to the Company’s future business prospects and strategic plans, ecommerce and digital initiatives, new product introductions, strategies, new education standards, goals, revenues, improved efficiencies, general operating costs, including transportation and labor costs and the extent such costs are impacted by inflationary pressures, manufacturing costs, medical costs, potential cost savings, tax incentives, merit pay, operating margins, working capital, liquidity, capital needs, the cost and timing of capital projects, interest costs, cash flows and income, are subject to risks and uncertainties, which may have an impact on the Company's operations and could cause actual results to differ materially from those indicated in the forward-looking statements, due to factors including those noted in the Annual Report and this Quarterly Report and other risks and factors identified from time to time in the Company’s filings with the SEC. The Company disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.


SCHOLASTIC CORPORATION Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company conducts its business in various foreign countries, and as such, its cash flows and earnings are subject to fluctuations from changes in foreign currency exchange rates. The Company sells products from its domestic operations to its foreign subsidiaries, creating additional currency risk. The Company manages its exposures to this market risk through internally established procedures and, when deemed appropriate, through the use of short-term forward exchange contracts, which were not significant as of February 28, 2025. The Company does not enter into derivative transactions or use other financial instruments for trading or speculative purposes.

Market risks relating to the Company’s operations result primarily from changes in interest rates in its variable-rate borrowings. The Company is subject to the risk that market interest rates and its cost of borrowing will increase and thereby increase the interest charged under its variable-rate debt.

Additional information relating to the Company’s outstanding financial instruments is included in Note 4 of Notes to Condensed Consolidated Financial Statements - unaudited in Item 1, “Financial Statements.”

The following table sets forth information about the Company’s debt instruments as of February 28, 2025:


($ amounts in millions)	Fiscal Year Maturity
	2025 (1)			2026			2027			2028			2029			Thereafter			Total		Fair Value at 02/28/2025
Debt Obligations
Lines of credit and current portion of long-term debt	$	—		$	5.8		$	—		$	—		$	—		$	—		$	5.8	$	5.8
Average interest rate	—			4.9		%	—			—			—			—

Long-term debt	$	—		$	—		$	—		$	—		$	—		$	275.0		$	275.0	$	275.0

Average interest rate	—			—			—			—			—			6.1		%
Film related obligations (2)	$	1.9		$	6.7		$	7.4		$	0.7		$	2.1		$	—		$	18.8	$	18.8
Average interest rate	5.6		%	6.5		%	6.4		%	6.0		%	5.8		%	—

(1) Fiscal 2025 includes the remaining three months of the current fiscal year ending May 31, 2025.

(2) Film related obligations are due on demand. Outstanding borrowings are presented by fiscal year maturity based on expected repayment dates per loan agreements.


SCHOLASTIC CORPORATION Item 4. Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer of the Corporation, after conducting an evaluation, together with other members of the Company’s management, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures as of February 28, 2025, have concluded that the Corporation’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Corporation in its reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and accumulated and communicated to members of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. There was no change in the Corporation’s internal control over financial reporting that occurred during the quarter ended February 28, 2025 that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

PART II – OTHER INFORMATION

SCHOLASTIC CORPORATION

Item 1. Business

In Item 1 (Business) in Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024, the Company included a description of its business activities. Except as set forth below, as of the date of this Quarterly Report on Form 10-Q there have been no material changes to the business described in the Company’s Annual Report for the fiscal year ended May 31, 2024.

The Company categorizes its businesses into four reportable segments: Children's Book Publishing and Distribution, Education Solutions, International and the newly formed Entertainment segment. The Entertainment segment includes the operations of 9 Story Media Group Inc. as acquired on June 20, 2024, including its studios in Canada, Ireland and Indonesia ("9 Story"), and Scholastic Entertainment Inc. ("SEI"). SEI was reported in the Children's Book Publishing and Distribution segment in prior periods. Refer to Note 7 of Notes to Condensed Consolidated Financial Statements - unaudited in Item 1, “Financial Statements" for further details regarding the acquisition of 9 Story. There have been no other changes to the Company's segments. A description of the Entertainment segment is below.

ENTERTAINMENT

The Entertainment segment includes the development, production, distribution and licensing of kids and family film and television content. This segment creates, develops, and produces award-winning branded properties using owned or licensed IP through its creative affairs group. The Company has an in-house animation studio, Brown Bag Films, which is recognized for producing high-quality and popular programs such as “Doc McStuffins®,” “Daniel Tiger’s Neighborhood®,” “Octonauts®,” “Wild Kratts®,” "Blue's Clue's & You!®," and “The Magic School Bus Rides Again".

This segment is also responsible for exploiting the Company's film and television assets, which include a large television programming library based on the Company's IP as well as third party programs. The Company distributes its animated and, to a lesser extent, live-action programming through various domestic and international channels, including subscription video on demand (SVOD), linear TV (traditional broadcast) and advertising-based video on demand (AVOD) including YouTube.

The Company has a consumer products division which builds global entertainment brands for kids, with expertise across creative, brand marketing, licensing and merchandising, working closely with television and digital distribution teams, as well as third party IP owners, licensees and retailers to ensure coordinated and strategic brand management.

SCHOLASTIC CORPORATION

Item 1a. Risk Factors

In Item 1A (Risk Factors) in Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024, the Company described material risk factors which could affect its business. Except as set forth below, as of the date of this Quarterly Report on Form 10-Q there have been no material changes to the risk factors described in the Company’s Annual Report for the fiscal year ended May 31, 2024. Any of the risks identified in such Annual Report, in this Quarterly Report on Form 10-Q or in other reports the Company files with the SEC, and other risks the Company has not anticipated or discussed, could have a material adverse impact on the Company’s business, financial condition or results of operations.

Changes in tax laws or a change in tax status may result in a loss of government tax credits in the Company's entertainment business.

The Company, through its economic control of 9 Story, presently benefits from significant Canadian government tax credits at both the federal and provincial level. The Company's entertainment business finances a significant portion of its production budgets from such government tax credits and certain anticipated government tax credits are used as collateral for the production loans. Pursuant to an opinion issued by the Minister of Canadian Heritage with respect to the Company’s investment in 9 Story, the Company anticipates that 9 Story will continue to be eligible for such tax credits. The Company could lose its Canadian government tax credits and incentives if the Canadian regulated business into which the Company has invested (9 Story) ceases to be controlled by Canadian nationals. In order to preserve the benefits, the Company's voting equity ownership of 9 Story is limited to 25% of the total voting equity shares outstanding. Further, 9 Story’s business is managed by a board of directors, a majority of whose members are Canadian nationals who are not otherwise affiliated with the Company, consistent with the Company’s representations to the Canadian Ministry of Heritage. There can be no assurance that the individual tax incentive programs currently available to the Company will not be reduced, amended, or eliminated or that the Company or any specific production will continue to qualify for them, any of which may have an adverse effect on the Company’s entertainment business, results of operations, or financial condition.

The Company's entertainment business depends on key relationships with buyers of film and television content and uncertainty with buyers or changes in demand for film and television content may impact the financial performance of the entertainment business.

The media and content industry in which the Company's entertainment business operates is rapidly evolving, including the market and demand for film and television content, with the entrance of new major streaming platforms and consolidation of traditional platforms, as well as the changing viewing habits of children and youth. While the Company believes that the demand for high-quality content will continue, industry trends may continue to change and the Company's entertainment business may be adversely affected by such changing industry trends, including potential impacts of mergers and acquisitions in the industry. There can be no certainty that demand for content will be sustained over the long term, that consumers will have an appetite for the programming produced by the Company's entertainment business or that the Company will be able to identify and be responsive to new content trends.

The Company may not be able to sustain, manage or effectively execute on its strategy with respect to its acquisition of 9 Story, which may impact the Company's financial performance.

The expected financial benefits of the Company's acquisition of 9 Story depend, among other things, on its ability to realize synergies with 9 Story and develop new programming utilizing Scholastic's current and future IP that achieves market and audience acceptance. If the Company is unable to do this, the Company's business, financial condition, and performance could be materially and adversely affected.

SCHOLASTIC CORPORATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to repurchases of shares of Common Stock by the Corporation during the three months ended February 28, 2025:

Issuer Purchases of Equity Securities

(Dollars in millions, except per share amounts)


Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares (or approximate dollar value) that may yet be purchased under the plans or programs (i)
December 1, 2024 through December 31, 2024	235,336	$21.23	235,336	$71.6
January 1, 2025 through January 31, 2025	237,344	$21.05	237,344	$66.6
February 1, 2025 through February 28, 2025	977,594	$20.44	977,594	$46.6
Total	1,450,274		1,450,274	$46.6

(i) Represents the amount remaining at February 28, 2025 under the Board authorization for Common share repurchases announced on March 20, 2024, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions. See Note 12 of Notes to Condensed Consolidated Financial Statements - unaudited in Item 1, “Financial Statements,” for a description of the Company’s share buy-back program and share repurchase authorizations. Subsequent to February 28, 2025, the Board authorized an increase of $53.4 million for common stock repurchases, resulting in a current Board authorization of $100 million, which includes the remaining amount from the previous Board authorization.

SCHOLASTIC CORPORATION

Item 5. Other Information

During the three months ended February 28, 2025, none of our directors or officers informed us of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408(a) of Regulation S-K).

SCHOLASTIC CORPORATION

Item 6. Exhibits

Exhibits:


10.1*			Letter Agreement dated January 30 , 202 5 between Peter Warwick and the Company .

10.2			Third Amendment, dated as of November 26, 2024, to the Amended and Restated Credit Agreement dated as of October 27, 2021 (the “Credit Agreement”) by and between Scholastic Corporation and Scholastic Inc., the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Form 8-K filed December 3, 2024).

21			Subsidiaries of the Corporation, as of February 28 , 202 5 .

31.1			Certification of the Chief Executive Officer of Scholastic Corporation filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of the Chief Financial Officer of Scholastic Corporation filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certifications of the Chief Executive Officer and Chief Financial Officer of Scholastic Corporation furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101			Financial Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended February 28, 2025 formatted in Inline Extensible Business Reporting Language: (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.

104			Cover Page, formatted in Inline Extensible Business Reporting Language and contained in Exhibit 101.

*The referenced exhibit is a management contract or compensation plan or arrangement described in Item 601(b) (10) (iii) of Regulation S-K.

SCHOLASTIC CORPORATION

QUARTERLY REPORT ON FORM 10-Q, DATED February 28, 2025

Exhibits Index


Exhibit Number			Description of Document

10.1*			Letter Agreement dated January 30, 2025 between Peter Warwick and the Company.

10.2			Third Amendment, dated as of November 26, 2024, to the Amended and Restated Credit Agreement dated as of October 27, 2021 (the “Credit Agreement”) by and between Scholastic Corporation and Scholastic Inc., the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Form 8-K filed December 3, 2024).

21			Subsidiaries of the Corporation, as of February 28, 2025.

31.1			Certification of the Chief Executive Officer of Scholastic Corporation filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of the Chief Financial Officer of Scholastic Corporation filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certifications of the Chief Executive Officer and Chief Financial Officer of Scholastic Corporation furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101			Financial Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended February 28, 2025 formatted in Inline Extensible Business Reporting Language: (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.

104			Cover Page, formatted in Inline Extensible Business Reporting Language and contained in Exhibit 101.

*The referenced exhibit is a management contract or compensation plan or arrangement described in Item 601(b) (10) (iii) of Regulation S-K.

SCHOLASTIC CORPORATION

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 thereunto duly authorized.


		SCHOLASTIC CORPORATION
		(Registrant)

Date: March 21, 2025	By:	/s/ Peter Warwick


		Peter Warwick
		President and Chief Executive Officer (Principal Executive Officer)

Date: March 21, 2025	By:	/s/ Haji L. Glover


		Haji L. Glover
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-10.1 2 schl-ex101_20250228xq3.htm EX-10.1 Document

Exhibit 10.1

January 30, 2025

Mr. Peter Warwick

CEO, Scholastic

Dear Peter,

This letter will confirm our mutual agreement, in accordance with the terms of the First Amendment to Amended and Restated Employment Agreement, and as approved by Scholastic’s Board in December 2024, to extend the term of the Agreement from August 1, 2025 through July 31, 2026, on the current terms and conditions of your Employment Agreement; except, your Base Salary, which, as agreed, will be increased to US $1,100,000 annually, effective August 1, 2025.

We are grateful for your continued leadership and contributions to Scholastic.

Sincerely,

/s/ Cristina Juvier

Christina Juvier

Chief People Officer

Accepted and agreed:

/s/ Peter Warwick January 30, 2025

Peter Warwick Date

EX-21 3 schl-ex21_20250228xq3.htm EX-21 Document

Exhibit 21

SCHOLASTIC CORPORATION – incorporated in Delaware, USA.

SUBSIDIARY LIST – as of February 28, 2025

(Subsidiaries are indented under its direct parent)


Scholastic Inc.			New York
Scholastic Entertainment Inc.			New York
524 Films L.L.C.			Delaware
Listen Inn LLC (formerly Retroranch L.L.C.)			Delaware
Yellow Bus, LLC			Delaware
Out of the Blue Enterprises LLC dba 9 Story USA			New York
Out of the Blue Worldwide LLC			New York
OOTB Productions Inc.			New York
Colorforms Brand LLC			New York
PT Bali Animasi Solusi Ekakarsa1			Indonesia
PT Bali Animation Studio1			Indonesia
9 Story Media Group Inc.2			Ontario
9 Story Production Holdings 2 Inc.			Ontario
Carl Squared Productions, Inc.			Ontario
CITH Productions Inc.			Ontario
Groundling Marsh Productions Inc.			Ontario
Homeschooled Production Inc.			Ontario
Oliver Fits Productions Inc.			Ontario
Portfolio Completed Projects Inc.			Ontario
Roboroach Productions III Inc.			Ontario
SFN Productions Inc.			Ontario
9 Story Interactive Inc.			Ontario
9 Story Development Inc.			Ontario
9 Story Digital Inc.			Ontario
Banana Productions Inc.			Ontario
BC 4 Productions Inc.			Ontario
BC 5 Productions Inc.			Ontario
Bot Productions Inc.			Ontario
BRB 1 Productions Inc.			Ontario
Camp Wild Productions Inc.			Ontario
D6 Canada Inc.			Ontario
D7 Canada Inc.			Ontario
D8 Canada Inc.			Ontario
DD 1 Productions Inc.			Ontario
DNH 6 Productions Inc.			Ontario
DNH 7 Productions Inc.			Ontario
DNH 8 Productions Inc.			Ontario
ER 1 Productions Inc.			Ontario
FTT 1 Productions Inc.			Ontario
LBL Productions Inc.			Ontario
RS 1 Productions Inc.			Ontario
Ruby Productions Inc. (formerly Alexaland Productions Inc.)			Ontario
Ruby 2 Productions Inc.			Ontario
SG 1 Productions Inc. (formerly RR 1 Productions Inc.)			Ontario
9 Story Distribution (Canada) Inc. (formerly SG 2 Productions Inc.)			Ontario
Why Productions Inc.			Ontario
XR 2 Productions Inc			Ontario
CBRD 1 Productions Inc.			Ontario
Niagara Films Ireland Limited			Ireland
9 Story Distribution International Limited			Ireland
Brown Bag Films Unlimited Company			Ireland
ACBB Productions Limited			Ireland
ADAT Productions DAC			Ireland
ADAT 2 Productions DAC			Ireland
B5 Elk Productions DAC			Ireland
Bhean Productions Limited			Ireland

1 0.5% owned by Scholastic Entertainment Inc.

2 25% voting shares and 100% common shares owned by Scholastic Inc. and accounted for as a variable interest entity whose financial results are consolidated into the financial statements of Scholastic Corporation.

Exhibit 21

SCHOLASTIC CORPORATION – incorporated in Delaware, USA.

SUBSIDIARY LIST – as of February 28, 2025

(Subsidiaries are indented under its direct parent)


BOGO Productions DAC			Ireland
Bolgmor Productions DAC			Ireland
BOZ Productions Limited			Ireland
Brown Bag Films UK Ltd.			England
NK2 Productions Limited			England
PRS Productions Limited			England
The Knight Productions Limited			England
Kind of Productions Limited			England
Cone Productions DAC			Ireland
ERK Film Productions DAC			Ireland
IMNI Productions DAC			Ireland
KOSA Productions DAC			Ireland
KWBB Productions Limited			Ireland
KWD Productions DAC			Ireland
Lubird Productions DAC			Ireland
OG Productions DAC			Ireland
RYD Productions DAC			Ireland
RYD 2 Productions DAC			Ireland
Silver Slipper Productions DAC			Ireland
Scholastic UK Ltd.			England
Scholastic Book Clubs Limited			England
Make Believe Ideas Ltd.			England
Chicken House Publishing Limited			England
Scholastic Limited			England
Scholastic Ireland Ltd.			Ireland
Weston Woods Studios, Inc.			Delaware
Georgetown Studios, Inc.			Connecticut
Children’s Music Library, Inc.			New York
The Scholastic Store, Inc.			New York
Scholastic Distribution Services L.L.C.			Delaware
Klutz			California
Scholastic Export Inc.			Delaware
Scholastic Book Fairs, Inc.			Delaware
Scholastic 557 Broadway, LLC			Delaware
Scholastic Australia Pty. Ltd.			Australia
Scholastic Canada Ltd.			Canada
Ooka Island Inc.			Canada
Scholastic Hong Kong Ltd.			Hong Kong
Scholastic India Private Limited3			India
Scholastic Mexico S. de R. L. de C.V.			Mexico
Scholastic New Zealand Ltd.			New Zealand
Scholastic Argentina S.R.L.			Argentina
Scholastic Education Information Consulting (Shanghai) Co., Ltd.			China
Scholastic International IT Support Centre Private Limited			India
Scholastic Education International (Singapore) Private Limited			Singapore
Scholastic Reading (Beijing) Culture Development Co. Ltd.			China
Scholastic (Asia) SDN. BHD			Malaysia
Grolier Incorporated			Delaware
Scholastic Library Publishing, Inc.			Delaware
Grolier International, Inc.			Delaware
Grolier International Finance Inc. (Philippines)			Philippines
Grolier International Private Limited (India)			India
Grolier Overseas Incorporated			Delaware
Caribe Grolier, Inc.			Puerto Rico

4 1% owned by Scholastic Export Inc.

EX-31.1 4 schl-ex311_20250228xq3.htm EX-31.1 Document

Exhibit 31.1

I, Peter Warwick, the principal executive officer of Scholastic Corporation, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Scholastic Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 21, 2025
			/s/ Peter Warwick
			Peter Warwick
			President and Chief Executive Officer

EX-31.2 5 schl-ex312_20250228xq3.htm EX-31.2 Document

Exhibit 31.2

I, Haji L. Glover, the principal financial officer of Scholastic Corporation, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Scholastic Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 21, 2025
			/s/ Haji L. Glover
			Haji L. Glover
			Executive Vice President and Chief Financial Officer

EX-32 6 schl-ex32_20250228xq3.htm EX-32 Document

Exhibit 32

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

with Respect to the Quarterly Report on Form 10-Q

for the Quarter ended February 28, 2025

of Scholastic Corporation


			Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Scholastic Corporation, a Delaware corporation (the “Company”), does hereby certify, to the best of such officer’s knowledge, that:

			1.			The Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2025 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

			2.			Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: March 21, 2025
			/s/ Peter Warwick
			Peter Warwick
			Chief Executive Officer

Date: March 21, 2025
			/s/ Haji L. Glover
			Haji L. Glover
			Chief Financial Officer

The certification set forth above is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Form 10-Q or as a separate disclosure document of the Company or the certifying officers.