Document and Entity Information
Document and Entity Information | 3 Months Ended |
Aug. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Aug. 31, 2021 |
Entity File Number | 000-19860 |
Entity Registrant Name | SCHOLASTIC CORPORATION |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 13-3385513 |
Entity Address, Address Line One | 557 Broadway, |
Entity Address, City or Town | New York, |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10012 |
City Area Code | 212 |
Local Phone Number | 343-6100 |
Title of 12(b) Security | Common Stock, $0.01 par value |
Trading Symbol | SCHL |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Central Index Key | 0000866729 |
Current Fiscal Year End Date | --05-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Common Stock | |
Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 32,753,797 |
Common Class A | |
Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 1,656,200 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 259.8 | $ 215.2 |
Operating costs and expenses: | ||
Cost of goods sold | 133.3 | 115 |
Selling, general and administrative expenses | 143.6 | 141.7 |
Depreciation and amortization | 14.9 | 15.5 |
Total operating costs and expenses | 291.8 | 272.2 |
Operating income (loss) | (32) | (57) |
Interest income (expense), net | (1.3) | (1.2) |
Other components of net periodic benefit (cost) | 0 | (0.2) |
Gain (loss) on sale of assets and other | 0 | 6.6 |
Earnings (loss) before income taxes | (33.3) | (51.8) |
Provision (benefit) for income taxes | (8.9) | (12) |
Net income (loss) | (24.4) | (39.8) |
Less: Net income (loss) attributable to noncontrolling interest | (0.2) | 0 |
Net income (loss) attributable to Scholastic Corporation | $ (24.2) | $ (39.8) |
Basic and diluted earnings (loss) per share of Class A and Common Stock | ||
Basic (in Dollars per share) | $ (0.70) | $ (1.16) |
Diluted (in Dollars per share) | $ (0.70) | $ (1.16) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (24.4) | $ (39.8) |
Other comprehensive income (loss), net: | ||
Foreign currency translation adjustment | (5.8) | 10.7 |
Pension and postretirement adjustments (net of tax) | 0.1 | 0.1 |
Total other comprehensive income (loss), net | (5.7) | 10.8 |
Comprehensive income (loss) | (30.1) | (29) |
Less: Net income (loss) attributable to noncontrolling interest | (0.2) | 0 |
Comprehensive income (loss) attributable to Scholastic Corporation | $ (29.9) | $ (29) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Aug. 31, 2021 | May 31, 2021 | Aug. 31, 2020 |
Current Assets: | |||
Cash and cash equivalents | $ 308.6 | $ 366.5 | $ 355.5 |
Accounts receivable, net | 244.3 | 256.1 | 219.6 |
Inventories, net | 298.1 | 269.7 | 323.2 |
Income tax receivable | 35.4 | 88.8 | 103.2 |
Prepaid expenses and other current assets | 71.7 | 47.2 | 53.7 |
Total current assets | 958.1 | 1,028.3 | 1,055.2 |
Property, plant and equipment, net | 550.6 | 556.9 | 573 |
Prepublication costs, net | 63 | 65.7 | 69.7 |
Operating lease right-of-use assets, net | 71.7 | 78.6 | 96.4 |
Royalty advances, net | 47.8 | 43.8 | 42 |
Goodwill | 125.9 | 126.3 | 125.6 |
Noncurrent deferred income taxes | 25.1 | 25.4 | 19.1 |
Other assets and deferred charges | 83.1 | 83.3 | 75.3 |
Total noncurrent assets | 967.2 | 980 | 1,001.1 |
Total assets | 1,925.3 | 2,008.3 | 2,056.3 |
Current Liabilities: | |||
Lines of credit and current portion of long-term debt | 89.5 | 182.9 | 19.9 |
Accounts payable | 185.6 | 138 | 168.3 |
Accrued royalties | 65.8 | 45.5 | 56.2 |
Deferred revenue | 125.5 | 99.1 | 127.6 |
Other accrued expenses | 168.2 | 202 | 166.6 |
Accrued income taxes | 3.2 | 3 | 1.8 |
Operating lease liabilities | 23.8 | 25 | 23.1 |
Total current liabilities | 661.6 | 695.5 | 563.5 |
Noncurrent Liabilities: | |||
Total long-term debt | 0 | 7.3 | 200 |
Operating lease liabilities | 60 | 67.4 | 77.1 |
Other noncurrent liabilities | 54.1 | 55.8 | 68.3 |
Total noncurrent liabilities | 114.1 | 130.5 | 345.4 |
Commitments and Contingencies (see Note 5) | 0 | 0 | 0 |
Stockholders’ Equity: | |||
Preferred Stock, $1.00 par value: Authorized, 2.0 shares; Issued and Outstanding, none | 0 | 0 | 0 |
Common Stock, value | 0.4 | 0.4 | 0.4 |
Additional paid-in capital | 627.6 | 626.5 | 622.8 |
Accumulated other comprehensive income (loss) | (40.4) | (34.7) | (47.5) |
Retained earnings | 887 | 916.4 | 903.1 |
Treasury stock, at cost: 10.2, 10.2 and 10.4 shares, respectively | (326.3) | (327.8) | (332.8) |
Total stockholders’ equity of Scholastic Corporation | 1,148.3 | 1,180.8 | 1,146 |
Noncontrolling interest | 1.3 | 1.5 | 1.4 |
Total stockholders’ equity | 1,149.6 | 1,182.3 | 1,147.4 |
Total liabilities and stockholders’ equity | 1,925.3 | 2,008.3 | 2,056.3 |
Common Class A | |||
Stockholders’ Equity: | |||
Common Stock, value | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Aug. 31, 2021 | May 31, 2021 | Aug. 31, 2020 |
Preferred stock at par value per share (in dollars per share) | $ 1 | $ 1 | $ 1 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | |
Common Stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 70,000,000 | 70,000,000 | 70,000,000 |
Common stock, shares issued | 42,900,000 | 42,900,000 | 42,900,000 |
Common stock, shares outstanding | 32,800,000 | 32,500,000 | 32,700,000 |
Treasury stock (in shares) | 10,200,000 | 10,200,000 | 10,400,000 |
Common Class A | |||
Common Stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 4,000,000 | 4,000,000 | 4,000,000 |
Common stock, shares issued | 1,700,000 | 1,700,000 | 1,700,000 |
Common stock, shares outstanding | 1,700,000 | 1,700,000 | 1,700,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Statement - USD ($) | Total | Common Stock | Common StockCommon Class A | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock At Cost | Total Stockholders' Equity of Scholastic Corporation | Noncontrolling Interest |
Beginning balance at May. 31, 2020 | $ 1,180,600,000 | $ 400,000 | $ 0 | $ 622,400,000 | $ (58,300,000) | $ 948,000,000 | $ (333,300,000) | $ 1,179,200,000 | $ 1,400,000 |
Balance (in shares) at Aug. 31, 2020 | 32,500,000 | 1,700,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net Income (loss) | (39,800,000) | (39,800,000) | (39,800,000) | ||||||
Foreign currency translation adjustment | 10,700,000 | 10,700,000 | 10,700,000 | ||||||
Pension and post-retirement adjustments (net of tax of $0.0) | 100,000 | 100,000 | 100,000 | ||||||
Stock-based compensation | 600,000 | 600,000 | 600,000 | ||||||
Treasury stock issued pursuant to equity-based plans (in shares) | 0 | ||||||||
Treasury stock issued pursuant to equity-based plans | 300,000 | (200,000) | 500,000 | 300,000 | |||||
Dividends ($0.15 per share) | (5,100,000) | (5,100,000) | (5,100,000) | ||||||
Ending Balance at Aug. 31, 2020 | 1,147,400,000 | $ 400,000 | $ 0 | 622,800,000 | (47,500,000) | 903,100,000 | (332,800,000) | 1,146,000,000 | 1,400,000 |
Balance (in shares) at May. 31, 2020 | 32,500,000 | 1,700,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (39,800,000) | 0 | |||||||
Beginning balance at May. 31, 2021 | 1,182,300,000 | $ 400,000 | $ 0 | 626,500,000 | (34,700,000) | 916,400,000 | (327,800,000) | 1,180,800,000 | 1,500,000 |
Balance (in shares) at Aug. 31, 2021 | 32,800,000 | 1,700,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net Income (loss) | (24,400,000) | (24,200,000) | (24,200,000) | ||||||
Foreign currency translation adjustment | (5,800,000) | (5,800,000) | (5,800,000) | ||||||
Pension and post-retirement adjustments (net of tax of $0.0) | 100,000 | 100,000 | 100,000 | ||||||
Stock-based compensation | 1,500,000 | 1,500,000 | 1,500,000 | ||||||
Proceeds pursuant to stock-based compensation plans | $ 500,000 | 500,000 | 500,000 | ||||||
Purchases of treasury stock at cost (in shares) | 0 | ||||||||
Treasury stock issued pursuant to equity-based plans (in shares) | 100,000 | ||||||||
Treasury stock issued pursuant to equity-based plans | $ 600,000 | (900,000) | 1,500,000 | 600,000 | |||||
Dividends ($0.15 per share) | (5,200,000) | (5,200,000) | (5,200,000) | ||||||
Ending Balance at Aug. 31, 2021 | 1,149,600,000 | $ 400,000 | $ 0 | $ 627,600,000 | $ (40,400,000) | $ 887,000,000 | $ (326,300,000) | $ 1,148,300,000 | 1,300,000 |
Balance (in shares) at May. 31, 2021 | 32,700,000 | 1,700,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | $ (24,400,000) | $ (200,000) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Pension and postretirement adjustments, tax portion | $ 0.1 | $ 0 |
Common Class A | ||
Dividends declared per class A and common share (in Dollars per share) | $ 0.15 | $ 0.15 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Cash flows - operating activities: | ||
Net income (loss) | $ (24.2) | $ (39.8) |
Adjustments to reconcile Net income (loss) to net cash provided by (used in) operating activities: | ||
Provision for losses on accounts receivable | 1.6 | 1.4 |
Provision for losses on inventory | 4.5 | 2.9 |
Provision for losses on royalty advances | 0.9 | 1.3 |
Amortization of prepublication costs | 6.8 | 6.3 |
Depreciation and amortization | 16.4 | 16.4 |
Amortization of pension and postretirement plans | 0 | 0.1 |
Deferred income taxes | 0 | 0.1 |
Stock-based compensation | 1.5 | 0.6 |
Income from equity-method investments | (1.1) | (0.8) |
Changes in assets and liabilities, net of amounts acquired: | ||
Accounts receivable | 8.1 | 23.3 |
Inventories | (35.6) | (50) |
Prepaid expenses and other current assets | (25.1) | (12) |
Income tax receivable | 53.4 | (13) |
Royalty advances | (5.2) | (2.8) |
Accounts payable | 48.9 | 13.9 |
Accrued income taxes | 0.3 | 0.3 |
Accrued royalties | 20.8 | 17.5 |
Deferred revenue | 26.9 | 10.1 |
Other accrued expenses | (32.5) | 3.9 |
Other, net | (2.8) | 0.9 |
Net cash provided by (used in) operating activities | 63.6 | (26) |
Cash flows - investing activities: | ||
Prepublication expenditures | (4.3) | (5.2) |
Additions to property, plant and equipment | (10.2) | (16) |
Net proceeds from sale of assets | 0 | 12.3 |
Net cash provided by (used in) investing activities | (14.5) | (8.9) |
Cash flows - financing activities: | ||
Borrowings under lines of credit, credit agreement and revolving loan | 0.9 | 2.2 |
Repayments of lines of credit, credit agreement and revolving loan | (101.3) | (3.8) |
Repayment of capital lease obligations | (0.6) | (0.5) |
Proceeds pursuant to stock-based compensation plans | 0.5 | 0 |
Payment of dividends | (5.2) | (5.1) |
Other | 0.1 | 1.9 |
Net cash provided by (used in) financing activities | (105.6) | (5.3) |
Effect of exchange rate changes on cash and cash equivalents | (1.4) | 1.9 |
Net increase (decrease) in cash and cash equivalents | (57.9) | (38.3) |
Cash and cash equivalents at beginning of period | 366.5 | 393.8 |
Cash and cash equivalents at end of period | 308.6 | 355.5 |
Gain (Loss) on Sale of Assets and Asset Impairment Charges | $ 0 | $ 6.6 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Aug. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 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 acquired in a business combination • Impairment assessment of goodwill and intangible assets |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Aug. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Supplemental Disclosures | 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”). Intercompany transactions are eliminated in consolidation. The Company’s fiscal year is not a calendar year. Accordingly, references in this document to fiscal 2022 relate to the twelve-month period ending May 31, 2022. Certain prior period amounts have been reclassified to conform with the current year presentation. Noncontrolling Interest The Company owns a 95.0% majority ownership interest in Make Believe Ideas Limited ("MBI"), a UK-based children's book publishing company. The founder and chief executive officer of MBI retains a 5.0% noncontrolling ownership interest in MBI. The Company fully consolidated MBI as of the acquisition date, and the 5.0% noncontrolling interest is 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, 2021. 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 first and fourth quarters. Trade sales can vary throughout the year due to varying release dates of published titles. Presently, there remain uncertainties concerning the timing of and any patterns which may emerge with respect to school instruction, whether in-school, remote or hybrid for the school year, and the nature and continuing magnitude of the negative impact of COVID-19 into and beyond the second quarter of fiscal 2022. 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 • 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 • Impairment testing for goodwill, intangible 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 Sale of Long-lived Assets During the first quarter of fiscal 2021, the company-owned facility located in Danbury, Connecticut was sold and the Company relocated the book fairs warehousing and distribution operations conducted in Danbury to a warehouse in Easton, Pennsylvania. The long-lived assets related to the Danbury facility, which consisted of land, building, and building improvements, were included in the Overhead segment. These assets had a carrying value of $5.7 and were classified as held for sale as of the fiscal year ended May 31, 2020. The net proceeds from the sale were $12.3 and the Company recognized a gain on sale of $6.6. This amount is included within Gain (loss) on sale of assets and other within the Company's Condensed Consolidated Statements of Operations. Assets Held For Sale During the third quarter of fiscal 2021, the Company committed to a plan to sell the office building located in Lake Mary, Florida and relocate to a leased office space as part of the initiative to reduce future operating costs. These assets are included in the Children's Book Publishing and Distribution segment. During the third quarter of fiscal 2020, the Company committed to a plan to sell the UK distribution center located in Witney to consolidate the operations into a new facility in Warwickshire. These assets are included in the International segment. The Company expects the sale of these facilities to result in a gain on sale. The long-lived assets which consist of land, building, and building improvements are classified as held for sale. These assets are carried at the lower of carrying value or fair value less costs to sell and no additional depreciation is being recognized. As of August 31, 2021, the carrying amounts were $4.1 and $2.2 for the Lake Mary and Witney facilities, respectively, which are included in Property, plant and equipment, net within the Company's Condensed Consolidated Balance Sheets. New Accounting Pronouncements There were no new accounting pronouncements issued in the first quarter of fiscal 2022 which would impact the Company. Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2021 for more information on current applicable authoritative guidance and its impact on the Company's financial statements. Current Fiscal Year Adoptions: ASU No. 2019-12 The Company adopted ASU No. 2019-12 as of the beginning of the first quarter of fiscal 2022 which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes , and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted the applicable amendments of the ASU using the modified retrospective basis for those amendments that are not applied on a prospective basis. The adoption of ASU No. 2019-12 did not have a material impact on the Company's Condensed Consolidated Financial Statements. Prior Period Adjustments During the first quarter of fiscal 2022, the Company determined that it is more appropriate for certain editorial costs to be included in Selling, general and administrative expenses rather than Cost of goods sold based on the nature of these costs and how management views the business. As a result of this error in classification, Cost of goods sold was overstated and Selling, general and administrative expenses were understated by $37.8 as of May 31, 2021 and $41.7 as of May 31, 2020. In accordance with the provisions of SEC Staff Accounting Bulletin No. 108, the Company assessed the impact of these adjustments on prior period financial statements and concluded that these errors were not material individually or in the aggregate to any of the prior reporting periods. To conform the prior periods to the current period presentation, the Company has adjusted the statement of operations for the periods ended May 31, 2021 and May 31, 2020 for the correction of the error and will make adjustments for future Form 10-Q and 10-K filings that include financial statements for the periods affected. The adjustment resulted in a decrease in Cost of goods sold and an increase in Selling, general and administrative expenses in each of the periods presented. There was no other impact to the financial statements. The following table shows the adjusted Cost of goods sold and Selling, general and administrative expenses for those periods indicated: Fiscal 2021 Fiscal Year Ended Fiscal Year Ended First Quarter Second Quarter Third Quarter Fourth Quarter Cost of goods sold: As previously reported $ 123.2 $ 199.3 $ 146.0 $ 198.0 $ 666.5 $ 751.0 Adjustment (8.2) (9.6) (10.1) (9.9) (37.8) (41.7) As adjusted $ 115.0 $ 189.7 $ 135.9 $ 188.1 $ 628.7 $ 709.3 Selling, general and administrative expenses: As previously reported $ 133.5 $ 142.3 $ 130.1 $ 179.0 $ 584.9 $ 722.5 Adjustment 8.2 9.6 10.1 9.9 37.8 41.7 As adjusted $ 141.7 $ 151.9 $ 140.2 $ 188.9 $ 622.7 $ 764.2 |
Revenues
Revenues | 3 Months Ended |
Aug. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES Disaggregated Revenue Data Effective June 1, 2021, the former “Education” reportable segment was renamed as the “Education Solutions” reportable segment, in connection with the consolidation of the segment’s multiple channels into a single Education Solutions group. The following table presents the Company’s segment revenues disaggregated by region and domestic channel: Three months ended August 31, August 31, 2021 2020 Book Clubs - U.S. $ 6.8 $ 5.8 Book Fairs - U.S. 16.0 13.2 Trade - U.S. 80.1 65.8 Trade - International (1) 12.9 7.5 Total Children's Book Publishing and Distribution $ 115.8 $ 92.3 Education Solutions - U.S. $ 80.1 $ 53.6 Total Education Solutions $ 80.1 $ 53.6 International - Major Markets (2) $ 47.5 $ 50.0 International - Other Markets (3) 16.4 19.3 Total International $ 63.9 $ 69.3 Total Revenues $ 259.8 $ 215.2 (1) Primarily includes foreign rights and certain product sales in the UK. (2) Includes Canada, UK, Australia and New Zealand. (3) Primarily includes markets in Asia. Estimated Returns A liability for expected returns of $44.9, $45.2, and $43.1 is recorded within Other accrued expenses as of August 31, 2021, May 31, 2021, and August 31, 2020, respectively. In addition, a return asset of $4.2, $3.4, and $4.1 is recorded within Prepaid expenses and other current assets as of August 31, 2021, May 31, 2021, and August 31, 2020, respectively, for the recoverable cost of product estimated to be returned by customers. Deferred Revenue 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. These liabilities 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 Company recognized revenue which was included in the opening deferred revenue balance in the amount of $15.3 and $16.9 for the three months ended August 31, 2021 and August 31, 2020, respectively. Allowance for Credit Losses The Company recognizes an allowance for credit losses on trade 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. 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 Sheet: Allowance for Credit Losses Balance at May 31, 2021 $ 21.4 Current period provision 1.6 Write-offs and other (1.2) Balance at August 31, 2021 $ 21.8 |
Segment Information
Segment Information | 3 Months Ended |
Aug. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company categorizes its businesses into three reportable segments: Children’s Book Publishing and Distribution, Education Solutions 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 in the United States through its book clubs and book fairs in its school channels and through the trade channel. This segment is comprised of three 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 on-line reference and non-fiction products for grades pre-kindergarten to 12 in the United States. 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 fiscal quarters ended August 31, 2021 and August 31, 2020: Three months ended August 31, August 31, 2021 2020 Revenues Children's Book Publishing and Distribution $ 115.8 $ 92.3 Education Solutions 80.1 53.6 International 63.9 69.3 Total $ 259.8 $ 215.2 Operating income (loss) Children's Book Publishing and Distribution $ (21.7) $ (29.0) Education Solutions 7.3 (2.4) International (1.7) 4.8 Overhead (1) (15.9) (30.4) Total $ (32.0) $ (57.0) (1) Overhead includes all domestic corporate amounts not allocated to segments, including expenses and costs related to the management of corporate assets. |
Debt
Debt | 3 Months Ended |
Aug. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The following table summarizes the carrying value of the Company's debt as of the dates indicated: August 31, 2021 May 31, 2021 August 31, 2020 US Revolving Loan $ 75.0 $ 175.0 $ 200.0 Unsecured lines of credit 7.4 7.9 8.5 UK Loan 7.1 7.3 11.4 Total debt $ 89.5 $ 190.2 $ 219.9 Less lines of credit, short-term debt and current portion of long-term debt (89.5) (182.9) (19.9) Total long-term debt $ — $ 7.3 $ 200.0 The Company's debt obligations as of August 31, 2021 have maturities of one year or less. US Loan Agreement Scholastic Corporation and Scholastic Inc. (each, a “Borrower” and together, the “Borrowers”) are parties to a 5-year credit facility with certain banks (the “Loan Agreement”) with a maturity date of January 5, 2022. The Loan Agreement allows the Company to borrow, repay or prepay and reborrow at any time prior to the maturity date. On December 16, 2020, the Company entered into an amendment to the Loan Agreement (the "Amendment") with a syndicate of banks and Bank of America, N.A., as administrative agent (the "Agent"). The Amendment was accounted for as a debt modification. The principal terms of the credit agreement, as modified, include the following: • the aggregate maximum commitments of the lenders is $250.0, a reduction from the $375.0 pre-amendment commitme nts; • in addition to the pre-amendment covenants, the Company is subject to a new covenant requiring Consolidated Liquidity (as defined) of a minimum amount of $200.0; • the securitization of the Company’s inventory and accounts receivable; • a modified limitation on asset sales (not to exceed 10% of Consolidated Total Assets, as defined, excluding sale of collateral); • a facility fee rate of 0.40%; • a limitation on Acquisitions (as defined) to an aggregate amount of $25.0 per fiscal year; • the interest pricing is dependent upon the Borrower’s election of a rate that is either: ◦ a Eurodo llar Rate equal to the London interbank offered rate (LIBOR), subject to a minimum of 0.25%, plu s a spread equal to 1.60% for any Eurodollar Rate Advance; - or - ◦ a Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.50% or (iii) the Eurodollar Rate for a one month interest period plus 1.00% plus, in each case, a spread equal to 0.60% for any Base Rate Advance; • restricted payments (e.g., for dividends and share repurchases, etc.) are limited to the "builder basket" in the amended credit agreement together with an additional requirement that the Company have Consolidated Liquidity (as defined) not less than $300.0. • 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. Under the Loan Agreement, as amended, interest on amounts borrowed 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 Borrower at the time each advance is made). As of August 31, 2021, the all-in borrowing rate on the outstanding borrowings was 1.85%. As of August 31, 2021, the Company had current outstanding borrowings of $75.0 under the Loan Agreement. The Company incurred this obligation in the fourth quarter of fiscal 2020 as a precautionary measure due to the uncertainty resulting from the COVID-19 pandemic. While this obligation is not due until the January 5, 2022 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose. During the first quarter of fiscal 2022, the Company paid down $100.0 of the borrowing. The Company intends to amend and extend the current Loan Agreement prior to its expiration on January 5, 2022. The Company was in compliance with required covenants for all periods presented. At August 31, 2021, the Company had open standby letters of credit totaling $4.3 issued under certain credit lines, including $0.4 under the Loan Agreement and $3.9 under the domestic credit lines discussed below. UK Loan Agreement On January 24, 2020, Scholastic Limited UK entered into a term loan facility with a borrowing limit of £6.6 to fund the construction of the new UK facility in Warwickshire. The loan had an original maturity date of July 31, 2021, which was extended to July 31, 2022 in May 2021. Under the agreement, the principal balance is due in full in a single payment on the last day of the term and interest on the amount borrowed is due and payable quarterly. The interest was charged at 1.77% per annum over the Base Rate until July 31, 2021 and 2.25% per annum over the Base Rate thereafter. The Base Rate is currently equal to 0.10% per annum and is subject to change. As of August 31, 2021, the Company had $4.3 outstanding on the loan and $4.7 remaining available credit under this facility. On September 23, 2019, Scholastic Limited UK entered into a term loan agreement to borrow £2.0 to fund a land purchase in connection with the construction of the new UK facility in Warwickshire. The loan had an original maturity date of July 31, 2021, which was extended to July 31, 2022 in May 2021. Under the agreement, the principal balance is due in full in a single payment on the last day of the term and interest on the amount borrowed is due and payable quarterly. The interest was charged at 1.77% per annum over the Base Rate until July 31, 2021 and 2.25% per annum over the Base Rate thereafter. The Base Rate is currently equal to 0.10% per annum and is subject to change. As of August 31, 2021, the Company had $2.8 outstanding on the loan. Lines of Credit As of August 31, 2021, 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 August 31, 2021, May 31, 2021 and August 31, 2020. As of August 31, 2021, availability under these unsecured money market bid rate credit lines totaled $6.1. 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Aug. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES COVID-19 The COVID-19 pandemic and actions taken, or which may be taken in the future following any changes in restrictions based on the future course of the pandemic, by governments, businesses and individuals to limit the spread of the virus may continue to have an adverse effect on the Company’s results of operations and financial condition. The Company is not currently aware of any loss contingencies related to the foregoing that would require recognition in the first quarter of fiscal 2022. 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. On July 20, 2021, the Company, along with its co-defendants in a certain legal proceeding, executed a settlement agreement regarding certain licenses and trademarks related to intellectual property used in formerly owned products, which were included in the sale of the educational technology and services business that occurred in fiscal 2015. Without admitting to the allegations raised, the agreement requires the Company to pay $20.0 in a one-time cash payment to avoid the uncertainties of trial and the additional costs of preparing for and presenting an on-going legal defense in this matter. The Company recognized an accrual for the settlement amount in fiscal 2021 as the events that gave rise to the litigation had taken place prior to May 31, 2021. As of August 31, 2021, the liability of $20.0 is reflected in Accounts Payable in the Company’s Condensed Consolidated Balance Sheet. The settlement was paid subsequent to quarter end in September 2021. The Company received $6.6 in recoveries from its insurance programs during the first quarter of fiscal 2022 which was recognized as an offset to the legal settlement and is reflected in Selling, general and administrative expenses in the Company's Condensed Consolidated Statement of Operations. While the Company expects to receive additional recoveries from its insurance programs, it is too premature to determine with any level of probability or accuracy the amount of those recoveries at this time. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 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 August 31, August 31, 2021 2020 Net income (loss) attributable to Class A and Common Stockholders $ (24.2) $ (39.8) Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions) 34.4 34.3 Dilutive effect of Class A Stock and 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) 34.4 34.3 Earnings (loss) per share of Class A Stock and Common Stock: Basic $ (0.70) $ (1.16) Diluted $ (0.70) $ (1.16) * The Company experienced a net loss for all periods presented and therefore did not report any dilutive share impact. The Company experienced a loss for the three month periods ended August 31, 2021 and August 31, 2020 and therefore did not allocate any loss to certain participating restricted stock units. The following table sets forth options outstanding pursuant to stock-based compensation plans as of the dates indicated: August 31, 2021 August 31, 2020 Options outstanding pursuant to stock-based compensation plans (in millions) 4.9 3.0 There were 2.1 million of potentially anti-dilutive shares pursuant to stock-based compensation plans as of August 31, 2021. A portion of the Company’s Restricted Stock Units ("RSUs") which are granted to employees participate in earnings through cumulative dividends which are payable and non-forfeitable to the employees upon vesting of the RSUs. Accordingly, the Company measures earnings per share based upon the lower of the Two-class method or the Treasury Stock method. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 3 Months Ended |
Aug. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | 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: August 31, 2021 May 31, 2021 August 31, 2020 Gross beginning balance $ 165.9 $ 164.5 $ 164.5 Accumulated impairment (39.6) (39.6) (39.6) Beginning balance $ 126.3 $ 124.9 $ 124.9 Foreign currency translation (0.4) 1.4 0.7 Ending balance $ 125.9 $ 126.3 $ 125.6 There were no impairment charges related to Goodwill in any of the periods presented. The following table summarizes the activity in other intangibles included in Other assets and deferred charges on the Company’s Financial Statements for the periods indicated: August 31, 2021 May 31, 2021 August 31, 2020 Beginning balance - Other intangibles subject to amortization $ 8.4 $ 10.5 $ 10.5 Adjustments — (0.5) — Amortization expense (0.5) (2.2) (0.6) Foreign currency translation (0.1) 0.6 0.3 Total other intangibles subject to amortization, net of accumulated amortization of $32.8, $32.3 and $30.7, respectively $ 7.8 $ 8.4 $ 10.2 Total other intangibles not subject to amortization $ 2.1 $ 2.1 $ 2.1 Total other intangibles $ 9.9 $ 10.5 $ 12.3 There were no additions to intangible assets within the three months ended August 31, 2021 and August 31, 2020. |
Investments
Investments | 3 Months Ended |
Aug. 31, 2021 | |
Equity Method And Cost Method Investments [Abstract] | |
Investment | 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: August 31, 2021 May 31, 2021 August 31, 2020 Segment Equity method investments $ 34.4 $ 34.3 $ 27.9 International Other equity investments 6.0 6.0 6.0 Children's Book Publishing & Distribution Total Investments $ 40.4 $ 40.3 $ 33.9 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 this 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 this investment. Income from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and totaled $1.1 and $0.8 for the three months ended August 31, 2021 and August 31, 2020, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Aug. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 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 August 31, August 31, August 31, August 31, 2021 2020 2021 2020 Components of net periodic benefit cost: Interest cost $ 0.2 $ 0.2 $ 0.1 $ 0.1 Expected return on assets (0.3) (0.2) — — Amortization of prior service (credit) loss 0.0 0.0 (0.2) 0.0 Amortization of net actuarial (gain) loss 0.2 0.1 0.0 — Total $ 0.1 $ 0.1 $ (0.1) $ 0.1 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. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Aug. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 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 August 31, August 31, 2021 2020 Stock option expense $ 0.7 $ 0.3 Restricted stock unit expense 0.7 0.2 Management stock purchase plan 0.0 — Employee stock purchase plan 0.1 0.1 Total stock-based compensation expense $ 1.5 $ 0.6 The following table sets forth Common Stock issued pursuant to stock-based compensation plans for the periods indicated: Three months ended August 31, August 31, 2021 2020 Common Stock issued pursuant to stock-based compensation plans (in millions) 0.1 0.0 |
Treasury Stock
Treasury Stock | 3 Months Ended |
Aug. 31, 2021 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Treasury Stock | 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 negotiated private transactions. The table below represents the Board authorizations at the dates indicated: Authorizations Amount March 2018 $ 50.0 March 2020 50.0 Total current Board authorizations at June 1, 2021 $ 100.0 Less repurchases made under these authorizations $ (32.7) Remaining Board authorization at August 31, 2021 $ 67.3 Remaining Board authorization at August 31, 2021 represents the amount remaining under the Board authorization for Common share repurchases on March 21, 2018 and the current $50.0 Board authorization for Common share repurchases announced on March 18, 2020, which is available for further repurchases, from time to time as conditions allow, on the open market or through negotiated private transactions, subject to temporary limitations under the amended credit agreement as defined in Note 4, Debt. There were no repurchases of the Company's Common Stock for the three months ended August 31, 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Aug. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | he following tables summarize the activity in Accumulated other comprehensive income (loss), net of tax, by component, for the periods indicated: Three months ended August 31, 2021 Foreign currency translation adjustments Retirement benefit plans Total Beginning balance at June 1, 2021 $ (30.1) $ (4.6) $ (34.7) Other comprehensive income (loss) before reclassifications (5.8) — (5.8) Less amount reclassified from Accumulated other comprehensive income (loss): Amortization of net actuarial (gain) loss (net of tax of $0.0) — 0.2 0.2 Amortization of prior service (credit) cost (net of tax of $0.1) — (0.1) (0.1) Other comprehensive income (loss) (5.8) 0.1 (5.7) Ending balance at August 31, 2021 $ (35.9) $ (4.5) $ (40.4) Three months ended August 31, 2020 Foreign currency translation adjustments Retirement benefit plans Total Beginning balance at June 1, 2020 $ (50.0) $ (8.3) $ (58.3) Other comprehensive income (loss) before reclassifications 10.7 — 10.7 Less amount reclassified from Accumulated other comprehensive income (loss): Amortization of gains and losses (net of tax of $0.0) — 0.1 0.1 Amortization of prior service credit (net of tax of $0.0) — 0.0 0.0 Other comprehensive income (loss) 10.7 0.1 10.8 Ending balance at August 31, 2020 $ (39.3) $ (8.2) $ (47.5) The following table presents the impact on earnings of reclassifications out of Accumulated other comprehensive income (loss) for the periods indicated: Three months ended Condensed Consolidated Statements of Operations line item August 31, August 31, 2021 2020 Employee benefit plans: Amortization of net actuarial (gain) loss $ 0.2 $ 0.1 Other components of net periodic benefit (cost) Amortization of prior service (credit) loss (0.2) 0.0 Other components of net periodic benefit (cost) Less: Tax effect 0.1 0.0 Provision (benefit) for income taxes Total cost, net of tax $ 0.1 $ 0.1 |
Income Taxes and Other Taxes
Income Taxes and Other Taxes | 3 Months Ended |
Aug. 31, 2021 | |
Income Tax And Non Income Tax Disclosure [Abstract] | |
Income Taxes and Other Taxes | INCOME TAXES AND OTHER TAXES Tax Legislation Updates In response to the COVID-19 pandemic, many governments have enacted or are contemplating additional measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws as well as providing direct government assistance through grants and forgivable loans. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company filed its Federal income tax return and benefited from the provisions in the CARES Act to carry back net operating losses generated in the U.S. to previous periods which were taxed at the higher 35% federal corporate tax rate. The Company also took advantage of the provisions related to the Employee Retention Credit, which was created by the CARES Act to encourage entities to keep employees on their payroll despite experiencing economic hardship due to the COVID-19 pandemic. The Company has deferred employer-side social security payments which have resulted in a current liability of $2.8 and a non-current liability of $4.8 as of August 31, 2021. In fiscal 2021, the Company applied for employee retention credits in the U.S. and the related receivable was $11.9 as of August 31, 2021. During the first quarter of fiscal 2022, the Company received a federal tax refund of $63.1 primarily related to the carry back of net operating losses generated in the U.S. 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, was 26.7% for the three month period ended August 31, 2021 as compared to 23.2% for the prior fiscal year quarter. The interim effective tax rate was impacted by anticipated higher profitability domestically and internationally. 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 IRS is currently examining the US income tax returns for the fiscal 2015 through fiscal 2020 tax years. 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 the Financial Statements in Selling, general and administrative expenses. Future developments relating to the foregoing could result in adjustments being made to these accruals. |
Derivatives and Hedging
Derivatives and Hedging | 3 Months Ended |
Aug. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | 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. |
Other Accrued Expenses
Other Accrued Expenses | 3 Months Ended |
Aug. 31, 2021 | |
Other Accrued Expenses Disclosure [Abstract] | |
Other Accrued Expenses | OTHER ACCRUED EXPENSES Other accrued expenses consisted of the following as of the dates indicated: August 31, 2021 May 31, 2021 August 31, 2020 Accrued payroll, payroll taxes and benefits $ 35.1 $ 32.4 $ 41.4 Accrued bonus and commissions 12.1 23.0 11.8 Returns liability 44.9 45.2 43.1 Accrued other taxes 25.3 31.4 21.4 Accrued advertising and promotions 13.5 12.6 10.8 Other accrued expenses 37.3 57.4 38.1 Total accrued expenses $ 168.2 $ 202.0 $ 166.6 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Aug. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Board declared a quarterly cash dividend of $0.15 per share on the Company’s Class A and Common Stock for the second quarter of fiscal 2022. The dividend is payable on December 15, 2021 to shareholders of record as of the close of business on October 29, 2021. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Aug. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of consolidation | 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”). Intercompany transactions are eliminated in consolidation. The Company’s fiscal year is not a calendar year. Accordingly, references in this document to fiscal 2022 relate to the twelve-month period ending May 31, 2022. Certain prior period amounts have been reclassified to conform with the current year presentation. |
Noncontrolling Interest | Noncontrolling Interest The Company owns a 95.0% majority ownership interest in Make Believe Ideas Limited ("MBI"), a UK-based children's book publishing company. The founder and chief executive officer of MBI retains a 5.0% noncontrolling ownership interest in MBI. The Company fully consolidated MBI as of the acquisition date, and the 5.0% noncontrolling interest is classified within stockholder's equity. |
Interim Financial Statements | 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, 2021. 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 | 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 first and fourth quarters. Trade sales can vary throughout the year due to varying release dates of published titles. Presently, there remain uncertainties concerning the timing of and any patterns which may emerge with respect to school instruction, whether in-school, remote or hybrid for the school year, and the nature and continuing magnitude of the negative impact of COVID-19 into and beyond the second quarter of fiscal 2022. |
Use of estimates | 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 • 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 • Impairment testing for goodwill, intangible 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 |
Sale of Long-lived Assets and Assets Held For Sale | Sale of Long-lived Assets During the first quarter of fiscal 2021, the company-owned facility located in Danbury, Connecticut was sold and the Company relocated the book fairs warehousing and distribution operations conducted in Danbury to a warehouse in Easton, Pennsylvania. The long-lived assets related to the Danbury facility, which consisted of land, building, and building improvements, were included in the Overhead segment. These assets had a carrying value of $5.7 and were classified as held for sale as of the fiscal year ended May 31, 2020. The net proceeds from the sale were $12.3 and the Company recognized a gain on sale of $6.6. This amount is included within Gain (loss) on sale of assets and other within the Company's Condensed Consolidated Statements of Operations. |
Assets Held For Sale | Assets Held For Sale During the third quarter of fiscal 2021, the Company committed to a plan to sell the office building located in Lake Mary, Florida and relocate to a leased office space as part of the initiative to reduce future operating costs. These assets are included in the Children's Book Publishing and Distribution segment. During the third quarter of fiscal 2020, the Company committed to a plan to sell the UK distribution center located in Witney to consolidate the operations into a new facility in Warwickshire. These assets are included in the International |
New Accounting Pronouncements | New Accounting Pronouncements There were no new accounting pronouncements issued in the first quarter of fiscal 2022 which would impact the Company. Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2021 for more information on current applicable authoritative guidance and its impact on the Company's financial statements. Current Fiscal Year Adoptions: ASU No. 2019-12 The Company adopted ASU No. 2019-12 as of the beginning of the first quarter of fiscal 2022 which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes , and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted the applicable amendments of the ASU using the modified retrospective basis for those amendments that are not applied on a prospective basis. The adoption of ASU No. 2019-12 did not have a material impact on the Company's Condensed Consolidated Financial Statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of adjusted Cost of goods sold and Selling, general and administrative expense | The following table shows the adjusted Cost of goods sold and Selling, general and administrative expenses for those periods indicated: Fiscal 2021 Fiscal Year Ended Fiscal Year Ended First Quarter Second Quarter Third Quarter Fourth Quarter Cost of goods sold: As previously reported $ 123.2 $ 199.3 $ 146.0 $ 198.0 $ 666.5 $ 751.0 Adjustment (8.2) (9.6) (10.1) (9.9) (37.8) (41.7) As adjusted $ 115.0 $ 189.7 $ 135.9 $ 188.1 $ 628.7 $ 709.3 Selling, general and administrative expenses: As previously reported $ 133.5 $ 142.3 $ 130.1 $ 179.0 $ 584.9 $ 722.5 Adjustment 8.2 9.6 10.1 9.9 37.8 41.7 As adjusted $ 141.7 $ 151.9 $ 140.2 $ 188.9 $ 622.7 $ 764.2 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company’s segment revenues disaggregated by region and domestic channel: Three months ended August 31, August 31, 2021 2020 Book Clubs - U.S. $ 6.8 $ 5.8 Book Fairs - U.S. 16.0 13.2 Trade - U.S. 80.1 65.8 Trade - International (1) 12.9 7.5 Total Children's Book Publishing and Distribution $ 115.8 $ 92.3 Education Solutions - U.S. $ 80.1 $ 53.6 Total Education Solutions $ 80.1 $ 53.6 International - Major Markets (2) $ 47.5 $ 50.0 International - Other Markets (3) 16.4 19.3 Total International $ 63.9 $ 69.3 Total Revenues $ 259.8 $ 215.2 (1) Primarily includes foreign rights and certain product sales in the UK. (2) Includes Canada, UK, Australia and New Zealand. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth the Company's revenue and operating income (loss) by segment for the fiscal quarters ended August 31, 2021 and August 31, 2020: Three months ended August 31, August 31, 2021 2020 Revenues Children's Book Publishing and Distribution $ 115.8 $ 92.3 Education Solutions 80.1 53.6 International 63.9 69.3 Total $ 259.8 $ 215.2 Operating income (loss) Children's Book Publishing and Distribution $ (21.7) $ (29.0) Education Solutions 7.3 (2.4) International (1.7) 4.8 Overhead (1) (15.9) (30.4) Total $ (32.0) $ (57.0) (1) Overhead includes all domestic corporate amounts not allocated to segments, including expenses and costs related to the management of corporate assets. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the carrying value of the Company's debt as of the dates indicated: August 31, 2021 May 31, 2021 August 31, 2020 US Revolving Loan $ 75.0 $ 175.0 $ 200.0 Unsecured lines of credit 7.4 7.9 8.5 UK Loan 7.1 7.3 11.4 Total debt $ 89.5 $ 190.2 $ 219.9 Less lines of credit, short-term debt and current portion of long-term debt (89.5) (182.9) (19.9) Total long-term debt $ — $ 7.3 $ 200.0 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings 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 August 31, August 31, 2021 2020 Net income (loss) attributable to Class A and Common Stockholders $ (24.2) $ (39.8) Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share (in millions) 34.4 34.3 Dilutive effect of Class A Stock and 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) 34.4 34.3 Earnings (loss) per share of Class A Stock and Common Stock: Basic $ (0.70) $ (1.16) Diluted $ (0.70) $ (1.16) * The Company experienced a net loss for all periods presented and therefore did not report any dilutive share impact. |
Schedule of stock option activity | The following table sets forth options outstanding pursuant to stock-based compensation plans as of the dates indicated: August 31, 2021 August 31, 2020 Options outstanding pursuant to stock-based compensation plans (in millions) 4.9 3.0 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Activity in Goodwill for the Periods Indicated | The following table summarizes the activity in Goodwill for the periods indicated: August 31, 2021 May 31, 2021 August 31, 2020 Gross beginning balance $ 165.9 $ 164.5 $ 164.5 Accumulated impairment (39.6) (39.6) (39.6) Beginning balance $ 126.3 $ 124.9 $ 124.9 Foreign currency translation (0.4) 1.4 0.7 Ending balance $ 125.9 $ 126.3 $ 125.6 |
Summary of Activity in Total Other Intangibles for the Periods Indicated | The following table summarizes the activity in other intangibles included in Other assets and deferred charges on the Company’s Financial Statements for the periods indicated: August 31, 2021 May 31, 2021 August 31, 2020 Beginning balance - Other intangibles subject to amortization $ 8.4 $ 10.5 $ 10.5 Adjustments — (0.5) — Amortization expense (0.5) (2.2) (0.6) Foreign currency translation (0.1) 0.6 0.3 Total other intangibles subject to amortization, net of accumulated amortization of $32.8, $32.3 and $30.7, respectively $ 7.8 $ 8.4 $ 10.2 Total other intangibles not subject to amortization $ 2.1 $ 2.1 $ 2.1 Total other intangibles $ 9.9 $ 10.5 $ 12.3 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Equity Method And Cost Method Investments [Abstract] | |
Investments | The following table summarizes the Company’s investments as of the dates indicated: August 31, 2021 May 31, 2021 August 31, 2020 Segment Equity method investments $ 34.4 $ 34.3 $ 27.9 International Other equity investments 6.0 6.0 6.0 Children's Book Publishing & Distribution Total Investments $ 40.4 $ 40.3 $ 33.9 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | 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 August 31, August 31, August 31, August 31, 2021 2020 2021 2020 Components of net periodic benefit cost: Interest cost $ 0.2 $ 0.2 $ 0.1 $ 0.1 Expected return on assets (0.3) (0.2) — — Amortization of prior service (credit) loss 0.0 0.0 (0.2) 0.0 Amortization of net actuarial (gain) loss 0.2 0.1 0.0 — Total $ 0.1 $ 0.1 $ (0.1) $ 0.1 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The following table summarizes stock-based compensation expense included in Selling, general and administrative expenses for the periods indicated: Three months ended August 31, August 31, 2021 2020 Stock option expense $ 0.7 $ 0.3 Restricted stock unit expense 0.7 0.2 Management stock purchase plan 0.0 — Employee stock purchase plan 0.1 0.1 Total stock-based compensation expense $ 1.5 $ 0.6 |
Schedule of Shares Issued Pursuant to Share-based Compensation Activity | The following table sets forth Common Stock issued pursuant to stock-based compensation plans for the periods indicated: Three months ended August 31, August 31, 2021 2020 Common Stock issued pursuant to stock-based compensation plans (in millions) 0.1 0.0 |
Treasury Stock (Tables)
Treasury Stock (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Tabular Disclosure of an Entity's Treasury Stock | The table below represents the Board authorizations at the dates indicated: Authorizations Amount March 2018 $ 50.0 March 2020 50.0 Total current Board authorizations at June 1, 2021 $ 100.0 Less repurchases made under these authorizations $ (32.7) Remaining Board authorization at August 31, 2021 $ 67.3 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Equity [Abstract] | |
Schedule of 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 August 31, 2021 Foreign currency translation adjustments Retirement benefit plans Total Beginning balance at June 1, 2021 $ (30.1) $ (4.6) $ (34.7) Other comprehensive income (loss) before reclassifications (5.8) — (5.8) Less amount reclassified from Accumulated other comprehensive income (loss): Amortization of net actuarial (gain) loss (net of tax of $0.0) — 0.2 0.2 Amortization of prior service (credit) cost (net of tax of $0.1) — (0.1) (0.1) Other comprehensive income (loss) (5.8) 0.1 (5.7) Ending balance at August 31, 2021 $ (35.9) $ (4.5) $ (40.4) Three months ended August 31, 2020 Foreign currency translation adjustments Retirement benefit plans Total Beginning balance at June 1, 2020 $ (50.0) $ (8.3) $ (58.3) Other comprehensive income (loss) before reclassifications 10.7 — 10.7 Less amount reclassified from Accumulated other comprehensive income (loss): Amortization of gains and losses (net of tax of $0.0) — 0.1 0.1 Amortization of prior service credit (net of tax of $0.0) — 0.0 0.0 Other comprehensive income (loss) 10.7 0.1 10.8 Ending balance at August 31, 2020 $ (39.3) $ (8.2) $ (47.5) |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the impact on earnings of reclassifications out of Accumulated other comprehensive income (loss) for the periods indicated: Three months ended Condensed Consolidated Statements of Operations line item August 31, August 31, 2021 2020 Employee benefit plans: Amortization of net actuarial (gain) loss $ 0.2 $ 0.1 Other components of net periodic benefit (cost) Amortization of prior service (credit) loss (0.2) 0.0 Other components of net periodic benefit (cost) Less: Tax effect 0.1 0.0 Provision (benefit) for income taxes Total cost, net of tax $ 0.1 $ 0.1 |
Other Accrued Expenses (Tables)
Other Accrued Expenses (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Other Accrued Expenses Disclosure [Abstract] | |
Schedule of Other Accrued Expenses | Other accrued expenses consisted of the following as of the dates indicated: August 31, 2021 May 31, 2021 August 31, 2020 Accrued payroll, payroll taxes and benefits $ 35.1 $ 32.4 $ 41.4 Accrued bonus and commissions 12.1 23.0 11.8 Returns liability 44.9 45.2 43.1 Accrued other taxes 25.3 31.4 21.4 Accrued advertising and promotions 13.5 12.6 10.8 Other accrued expenses 37.3 57.4 38.1 Total accrued expenses $ 168.2 $ 202.0 $ 166.6 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Long Lived Assets Held-for-sale [Line Items] | ||
Gain (Loss) on Sale of Assets and Asset Impairment Charges | $ 0 | $ 6.6 |
Gain (Loss) on Sale of Assets and Asset Impairment Charges | 0 | 6.6 |
Lake Mary | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Assets held-for-sale | 4.1 | |
Witney Facilities | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Assets held-for-sale | $ 2.2 | |
Land, Buildings and Improvements | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Long-lived assets | 5.7 | |
Proceeds from sale | 12.3 | |
Gain (Loss) on Sale of Assets and Asset Impairment Charges | 6.6 | |
Gain (Loss) on Sale of Assets and Asset Impairment Charges | $ 6.6 |
Basis of Presentation - Prior P
Basis of Presentation - Prior Period Adjustment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Aug. 31, 2021 | May 31, 2021 | Feb. 28, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | May 31, 2021 | May 31, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Cost of goods sold | $ 133.3 | $ 188.1 | $ 135.9 | $ 189.7 | $ 115 | $ 628.7 | $ 709.3 |
Selling, general and administrative expenses | $ 143.6 | 188.9 | 140.2 | 151.9 | 141.7 | 622.7 | 764.2 |
Previously Reported | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Cost of goods sold | 198 | 146 | 199.3 | 123.2 | 666.5 | 751 | |
Selling, general and administrative expenses | 179 | 130.1 | 142.3 | 133.5 | 584.9 | 722.5 | |
Revision of Prior Period, Adjustment | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Cost of goods sold | (9.9) | (10.1) | (9.6) | (8.2) | (37.8) | (41.7) | |
Selling, general and administrative expenses | $ 9.9 | $ 10.1 | $ 9.6 | $ 8.2 | $ 37.8 | $ 41.7 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 259.8 | $ 215.2 |
Children's Book Publishing and Distribution | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 115.8 | 92.3 |
Children's Book Publishing and Distribution | Book Clubs - U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6.8 | 5.8 |
Children's Book Publishing and Distribution | Book Fairs - U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 16 | 13.2 |
Children's Book Publishing and Distribution | Trade - U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 80.1 | 65.8 |
Children's Book Publishing and Distribution | Trade - International | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12.9 | 7.5 |
Education | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 80.1 | 53.6 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 63.9 | 69.3 |
International | Major Markets | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 47.5 | 50 |
International | Other Markets | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 16.4 | $ 19.3 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Returns liability | $ 44.9 | $ 43.1 | $ 45.2 |
Return asset | 4.2 | 4.1 | $ 3.4 |
Contract with Customer, Liability, Revenue Recognized | $ 15.3 | $ 16.9 |
Revenues - Allowance for Credit
Revenues - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Accounts Receivable, Allowance for Credit Loss, Beginning Balance | $ 21.4 | |
Provision for losses on accounts receivable | 1.6 | $ 1.4 |
Write-offs and other | (1.2) | |
Accounts Receivable, Allowance for Credit Loss, Ending Balance | $ 21.8 |
Segment Information - Schedule
Segment Information - Schedule of segment reporting information (Details) $ in Millions | 3 Months Ended | |||
Aug. 31, 2021USD ($)segment | Aug. 31, 2020USD ($) | May 31, 2021USD ($) | May 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Revenues | $ 259.8 | $ 215.2 | ||
Bad debt expense | 1.6 | 1.4 | ||
Segment operating income (loss) | (32) | (57) | ||
Goodwill | $ 125.9 | 125.6 | $ 126.3 | $ 124.9 |
Children's Book Publishing and Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Revenues | $ 115.8 | 92.3 | ||
Education | ||||
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Revenues | $ 80.1 | 53.6 | ||
International | ||||
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Revenues | $ 63.9 | 69.3 | ||
Operating Segments | Children's Book Publishing and Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | (21.7) | (29) | ||
Operating Segments | Education | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | 7.3 | (2.4) | ||
Operating Segments | Overhead | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | (15.9) | (30.4) | ||
Operating Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | $ (1.7) | $ 4.8 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Aug. 31, 2021 | May 31, 2021 | Aug. 31, 2020 |
Debt Instrument [Line Items] | |||
Total Debt | $ 89.5 | $ 190.2 | $ 219.9 |
Less lines of credit, short-term debt and current portion of long-term debt | (89.5) | (182.9) | (19.9) |
Total long-term debt | 0 | 7.3 | 200 |
UK Loan | |||
Debt Instrument [Line Items] | |||
Total Debt | 7.1 | 7.3 | 11.4 |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total Debt | 75 | 175 | 200 |
Line of Credit | Secured Debt | |||
Debt Instrument [Line Items] | |||
Total Debt | $ 7.4 | $ 7.9 | $ 8.5 |
Weighted average interest rate (percentage) | 4.80% | 4.70% | 4.20% |
Debt - Narrative (Details)
Debt - Narrative (Details) | Dec. 16, 2020USD ($) | Aug. 31, 2021USD ($) | Aug. 31, 2021USD ($) | Jul. 31, 2021 | Jul. 31, 2021 | May 31, 2021USD ($) | Aug. 31, 2020USD ($) | Jan. 24, 2020GBP (£) | Sep. 23, 2019GBP (£) | Jan. 05, 2017USD ($) |
Debt (Details) [Line Items] | ||||||||||
Debt | $ 89,500,000 | $ 89,500,000 | $ 190,200,000 | $ 219,900,000 | ||||||
Standby letters of credit | 4,300,000 | 4,300,000 | ||||||||
Revolving Credit Facility | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Debt | 75,000,000 | 75,000,000 | 175,000,000 | 200,000,000 | ||||||
Payment on long term debt | 100,000,000 | |||||||||
Loan Agreement | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||
Borrowing capacity | $ 375,000,000 | |||||||||
Liquidity amount | $ 200,000,000 | |||||||||
Percentage of consolidated assets | 10.00% | |||||||||
Facility fee rate | 0.40% | |||||||||
Acquisition limitation amount | $ 25,000,000 | |||||||||
Minimum liquidity | 300,000,000 | |||||||||
Standby letters of credit | $ 400,000 | $ 400,000 | ||||||||
Loan Agreement | Swingline Facility | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Maximum borrowing capacity | 15,000,000 | |||||||||
Loan Agreement | Revolving Credit Facility | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Maximum borrowing capacity | $ 50,000,000 | |||||||||
Loan Agreement | Eurodollar | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Variable rate (percentage) | 1.00% | |||||||||
Drawn after delivery | 1.60% | |||||||||
Loan Agreement | Base Rate | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Drawn after delivery | 0.60% | |||||||||
Loan Agreement | London Interbank Offered Rate (LIBOR) | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Variable rate (percentage) | 0.25% | |||||||||
All-in borrowing rate | 1.85% | 1.85% | ||||||||
Loan Agreement | Federal Funds Rate | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Variable rate (percentage) | 0.50% | |||||||||
UK Loan | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Debt | $ 7,100,000 | $ 7,100,000 | 7,300,000 | 11,400,000 | ||||||
Short-term debt | 2,800,000 | 2,800,000 | ||||||||
Face amount of debt | £ | £ 2,000,000 | |||||||||
UK Loan | Line of Credit | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Maximum borrowing capacity | £ | £ 6,600,000 | |||||||||
Short-term debt | 4,300,000 | 4,300,000 | ||||||||
Remaining borrowing capacity | $ 4.7 | $ 4.7 | ||||||||
UK Loan | Base Rate | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Variable rate (percentage) | 2.25% | 0.10% | ||||||||
UK Loan | Base Rate | Line of Credit | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Variable rate (percentage) | 2.25% | 0.10% | 1.77% | 1.77% | ||||||
Unsecured Debt | Domestic Line of Credit | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Borrowing capacity | $ 10,000,000 | $ 10,000,000 | ||||||||
Standby letters of credit | 3,900,000 | 3,900,000 | ||||||||
Short-term debt | 0 | 0 | 0 | 0 | ||||||
Available credit | 6,100,000 | $ 6,100,000 | ||||||||
Expiration period (in days) | 365 days | |||||||||
Secured Debt | Line of Credit | ||||||||||
Debt (Details) [Line Items] | ||||||||||
Borrowing capacity | 27,900,000 | $ 27,900,000 | ||||||||
Debt | 7,400,000 | 7,400,000 | $ 7,900,000 | $ 8,500,000 | ||||||
Available credit | $ 20,500,000 | $ 20,500,000 | ||||||||
Expiration period (in days) | 364 days | |||||||||
Weighted average interest rate (percentage) | 4.80% | 4.80% | 4.70% | 4.20% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jul. 20, 2021 | Aug. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation accrued | $ 20 | |
Settlement | $ 20 | |
Insurance recoveries | $ 6.6 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Net income (loss) attributable to Class A and Common Shares | $ (24.2) | $ (39.8) |
Weighted average Shares of Class A Stock and Common Stock outstanding for basic earnings (loss) per share | 34.4 | 34.3 |
Earnings (loss) per share of Class A Stock and Common Stock: | ||
Basic (in Dollars per share) | $ (0.70) | $ (1.16) |
Diluted (in Dollars per share) | $ (0.70) | $ (1.16) |
Weighted Average Number Diluted Shares Outstanding Adjustment | 0 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 34.4 | 34.3 |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Options Outstanding (Details) - shares shares in Millions | Aug. 31, 2021 | Aug. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options outstanding pursuant to stock-based compensation plans (in millions) | 4.9 | 3 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) shares in Millions, $ in Millions | 3 Months Ended |
Aug. 31, 2021USD ($)shares | |
Earnings Per Share [Abstract] | |
Antidilutive shares excluded from calculation of earnings per share | shares | 2.1 |
Remaining authorized stock repurchase amount | $ | $ 67.3 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Schedule of activity in goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | May 31, 2020 | |
Goodwill [Roll Forward] | ||||
Gross goodwill | $ 165.9 | $ 164.5 | ||
Accumulated impairment | (39.6) | $ (39.6) | ||
Beginning balance | $ 126.3 | $ 124.9 | 124.9 | |
Foreign currency translation | (0.4) | 0.7 | 1.4 | |
Ending balance | $ 125.9 | $ 125.6 | $ 126.3 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Goodwill and Other Intangibles (Details) [Line Items] | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Amortizable intangible assets acquired | 0 | 0 | |
Adjustments | $ 0 | 0 | 500,000 |
Useful life | 5 years | ||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles - Schedule of other intangible assets subject to amortization (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance other intangibles subject to amortization | $ 8.4 | $ 10.5 | $ 10.5 |
Additions | 0 | 0 | |
Adjustments | 0 | 0 | (0.5) |
Amortization expense | (0.5) | (0.6) | (2.2) |
Foreign currency translation | (0.1) | 0.3 | 0.6 |
Total other intangibles subject to amortization, net of accumulated amortization of $24.8, $24.1 and $22.5, respectively | 7.8 | 10.2 | 8.4 |
Accumulated amortization of intangible assets | 32.8 | 30.7 | 32.3 |
Total other intangibles not subject to amortization | 2.1 | 2.1 | 2.1 |
Total other intangibles | $ 9.9 | $ 12.3 | $ 10.5 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Investments (Details) [Line Items] | |||
Investments | $ 40,400,000 | $ 33,900,000 | $ 40,300,000 |
Income from equity method investments | 1,100,000 | 800,000 | |
Equity method investment, impairment | $ 0 | ||
Children's Book Publishing and Distribution | |||
Investments (Details) [Line Items] | |||
Equity method ownership percentage | 26.20% | ||
Financing and Production Company | Financing and Production Company | |||
Investments (Details) [Line Items] | |||
Other equity percentage | 4.60% | ||
International | |||
Investments (Details) [Line Items] | |||
Equity method investment | $ 34,400,000 | 27,900,000 | 34,300,000 |
Children's Book Publishing and Distribution | Other Investments | |||
Investments (Details) [Line Items] | |||
Investments | $ 6,000,000 | $ 6,000,000 | $ 6,000,000 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of net periodic costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Pension Plans | Foreign Plan | ||
Components of net periodic benefit (credit) cost: | ||
Interest cost | $ 0.2 | $ 0.2 |
Expected return on assets | (0.3) | (0.2) |
Net amortization of prior service credit | 0 | 0 |
Amortization of (gain) loss | 0.2 | 0.1 |
Net periodic benefit (credit) cost | 0.1 | 0.1 |
Post-Retirement Benefits | ||
Components of net periodic benefit (credit) cost: | ||
Interest cost | 0.1 | 0.1 |
Expected return on assets | 0 | 0 |
Net amortization of prior service credit | (0.2) | 0 |
Amortization of (gain) loss | 0 | 0 |
Net periodic benefit (credit) cost | $ (0.1) | $ 0.1 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - Pension Plans - Foreign Plan - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | May 31, 2022 | |
Employee Benefit Plans (Details) [Line Items] | ||
Pension contributions | $ 0.4 | |
Forecast [Member] | ||
Employee Benefit Plans (Details) [Line Items] | ||
Contributions expected in current fiscal year | $ 1.6 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Stock-based compensation expense | $ 1.5 | $ 0.6 |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 0.1 | 0 |
Stock option expense | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Stock-based compensation expense | $ 0.7 | $ 0.3 |
Restricted stock unit expense | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Stock-based compensation expense | 0.7 | 0.2 |
Management stock purchase plan | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Stock-based compensation expense | 0 | 0 |
Employee stock purchase plan | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Stock-based compensation expense | $ 0.1 | $ 0.1 |
Treasury Stock - Schedule of re
Treasury Stock - Schedule of repurchase of common stock (Details) - USD ($) $ in Millions | 3 Months Ended | 41 Months Ended | ||||
Aug. 31, 2021 | Aug. 31, 2021 | May 31, 2021 | Mar. 31, 2020 | Mar. 18, 2020 | Mar. 21, 2018 | |
Stockholders' Equity Attributable to Parent [Abstract] | ||||||
Authorized amount of stock to be repurchased | $ 100 | $ 50 | $ 50 | $ 50 | ||
Total current Board authorizations | $ (32.7) | |||||
Less repurchases made under these authorizations | $ 67.3 | $ 67.3 | ||||
Number of common stock repurchased (in shares) | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of AOCI Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | May 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,149.6 | $ 1,147.4 | $ 1,182.3 | $ 1,180.6 |
Other comprehensive income (loss) before reclassifications | (5.8) | 10.7 | ||
Amortization of gains and losses, net of tax | 0.2 | 0.1 | ||
Amortization of prior service (credit) cost (net of tax of $0.1) | (0.1) | 0 | ||
Other comprehensive income (loss) | (5.7) | 10.8 | ||
Ending balance | 1,149.6 | 1,147.4 | 1,182.3 | 1,180.6 |
Amortization, Tax | 0 | 0 | ||
Amortization of prior service credit, Tax | 0.1 | 0 | ||
Accumulated other comprehensive income (loss) | (40.4) | (47.5) | (34.7) | |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (40.4) | (47.5) | (34.7) | (58.3) |
Ending balance | (40.4) | (47.5) | (34.7) | (58.3) |
Accumulated other comprehensive income (loss) | (40.4) | (47.5) | (34.7) | (58.3) |
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications | (5.8) | 10.7 | ||
Amortization of gains and losses, net of tax | 0 | 0 | ||
Amortization of prior service (credit) cost (net of tax of $0.1) | 0 | 0 | ||
Other comprehensive income (loss) | (5.8) | 10.7 | ||
Accumulated other comprehensive income (loss) | (35.9) | (39.3) | (30.1) | (50) |
Retirement benefit plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amortization of gains and losses, net of tax | 0.2 | 0.1 | ||
Amortization of prior service (credit) cost (net of tax of $0.1) | (0.1) | 0 | ||
Other comprehensive income (loss) | 0.1 | 0.1 | ||
Accumulated other comprehensive income (loss) | $ (4.5) | $ (8.2) | $ (4.6) | $ (8.3) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Less: Tax effect | $ 8.9 | $ 12 |
Net income (loss) attributable to Scholastic Corporation | 24.2 | 39.8 |
Amount reclassified from Accumulated other comprehensive income (loss) | Retirement benefit plans | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of unrecognized gain (loss) | 0.2 | 0.1 |
Amortization of prior service (credit) loss | (0.2) | 0 |
Less: Tax effect | 0.1 | 0 |
Net income (loss) attributable to Scholastic Corporation | $ 0.1 | $ 0.1 |
Income Taxes and Other Taxes (D
Income Taxes and Other Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Current liability | $ 2.8 | |
Long term liability | $ 4.8 | |
Effective income tax rate (percentage) | 26.70% | 23.20% |
Employee Retention Credits | ||
Operating Loss Carryforwards [Line Items] | ||
Income Taxes Receivable | $ 11.9 | |
Carry Back of Net Operating Losses | ||
Operating Loss Carryforwards [Line Items] | ||
Proceeds from Income Tax Refunds | $ 63.1 |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) - Not Designated as Hedging Instrument - Foreign Exchange Contract - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized gain (loss) | $ (0.1) | $ (1) |
Derivative, Notional Amount | 26.8 | 25.5 |
Derivative, Notional Amount | $ 26.8 | $ 25.5 |
Other Accrued Expenses - Schedu
Other Accrued Expenses - Schedule of accrued expenses (Details) - USD ($) $ in Millions | Aug. 31, 2021 | May 31, 2021 | Aug. 31, 2020 |
Schedule of accrued expenses [Abstract] | |||
Accrued payroll, payroll taxes and benefits | $ 35.1 | $ 32.4 | $ 41.4 |
Accrued bonus and commissions | 12.1 | 23 | 11.8 |
Returns liability | 44.9 | 45.2 | 43.1 |
Accrued other taxes | 25.3 | 31.4 | 21.4 |
Accrued advertising and promotions | 13.5 | 12.6 | 10.8 |
Other accrued expenses | 37.3 | 57.4 | 38.1 |
Total accrued expenses | $ 168.2 | $ 202 | $ 166.6 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Sep. 22, 2021$ / shares |
Common Class A | |
Subsequent Event [Line Items] | |
Dividend declared per share (in Dollars per share) | $ 0.15 |
Common Stock | |
Subsequent Event [Line Items] | |
Dividend declared per share (in Dollars per share) | $ 0.15 |