Q4 2020 Scholastic Corp Earnings Call
Scheduled to begin shortly please continue to stand I think you patients.
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Stick reports Q4 and.
2020 results conference call.
[music] participants I know listen only mode. After the speakers presentation, there will be a question and answer session.
Yes. Good question Damon session you want me to press Star one on your telephone. Please be advised that today's conference is being recorded if you acquire any for this list and please press star Zero I would now like Jim what confidence do your speakers today Gil Dickoff Senior Vice President Treasurer. Please go ahead Sir.
Thank you so much joelle and good afternoon.
I Trust, everyone is successful Easter and clearly harm's way and we welcome you to scholastic <unk> fourth quarter and fiscal Twentytwenty earnings call.
Joining me today are Dick Robinson, our chairman, President and Chief Executive Officer, and can Cleary, the company's Chief Financial Officer.
We have posted an investor presentation on our IR website at Investor Dot Scholastic Dot com, which we encourage you to download if you haven't already done so.
I would also like to point out that certain statements made today will be forward looking such forward looking statements are subject to various risks and uncertainties in putting those are rising from the continuing impact of Kogan 19 on the company's business operations. These forward looking statements by their nature are uncertain and actual results may differ.
Early from those currently anticipated.
In addition, we'll be discussing some non-GAAP financial measures as defined in regulation G and the reconciliations of those measures to the most directly comparable GAAP measures can be found in the company's earnings release filed this afternoon on a form 8-K, which has also been posted to our Investor Relations website, we encourage you to.
Do the disclaimers in our press release and Investor presentation and review the risk factors contained in our annual and quarterly reports filed with the FCC and now I would like to turn call over to pick Robinson.
Thank you all for joining our call today in a quarter when schools and families across the globe, we're dealing with both the pandemic gonna massive economic slowdown we showed the resilience that is to find our companies since our founding 100 years ago.
Amidst the challenges from the impact of the Corona viruses, including school closures in the western globally scholastic demonstrated our value tourist school teacher parent and child customers well also taking substantial action to offset the impact of the pandemic on our operating income and cash flow.
This disruption coincided with our significant fourth quarter a period when the company typically records the majority of our earnings and cash flow for the year.
In response for all of our school facing businesses, we've transitioned scholastic to a more flexible model redesigning clubs and fairs, as well as increasing or focus on digital solutions in education.
We also established rigorous cost reduction program with specific company in divisional targets.
Aimed at 100 million of savings in fiscal 2021 through reducing labor cost an improving processes. This program will enable us to preserve profitability into ramp as demand increases while reducing costs. We also focused on a more streamlined book fair business simplifying.
Fares to adjust to the.
Change school environment.
We also took cost out of our book club process, while improving online ordering.
We expanded digital solutions in education deepening our connection with parents and children through scholastic learn at home.
We answered the need for high quality books to read at home with are engaging trade offerings and schools are also asking for more independent <unk> for more digital curriculum, which we offered through our digital subscription programs for independent reading foundational phonics and vocabulary.
As we look ahead, including continued impact to cope with 19 in the fall and beyond its important to understand the scholastic remains a well capitalized company with a strong balance sheet and net cash position, which we enhanced over the past few months.
We're confident we have the right plan in place to help teachers parents and children thrive and in a challenging situation that will impact schools and our customers for some time, we're prepared to support schools and families as they grapple with the complex matter or reopening schools in to cope with Safeway continuing remote.
Learning, we're implementing various combinations of these models all of which will need to be adjusted based on involving local mandates and current infection rates locally.
Given our position as partner to schools glass, because known for ability to adapt quickly to provide new ways of hoping to true schools and parents in the new circumstances of collaboration between families in schools in support of learning at both school and.
In fiscal 2020, or overall business performed well in ahead of our plan in the first three quarters of fiscal year. However, the overall effective cobot 19.
Here and abroad in the fourth quarter cause substantial declines in our full year revenue and led to this year's operating loss in the fourth quarter with with almost every school, which was 120000 of them close to cross the U.S. between March and May there was a corresponding steep decline in the number.
School based book Fair events and book clubs sales, leading to a 151 point sevenmillion reduction in revenue in those school distribution channels and fourth quarter.
As noted we also saw real bright spots with trade publishing performing well throughout the fiscal 2020, but in the fourth quarter.
Mystic trade sales increased 25 million were 45% in the fourth quarter versus the prior year period, even as industry bookstore sales declined as a result brick and mortar store closures in fourth quarter. We had strong sales the favorite series like the hunger games Dog man bad guys and wings and fire.
Our digital connections with parents teachers.
And students are stronger than ever and we have received significant positive feedback on the high quality of our digital education resources, such as our new virtual scholastic learn at home.
This site was an instant success.
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And accumulating nearly 80 million page views from April to June and we tradition to learn at home hub to a paid subscription model as of July one so families can continue to use its resources year round.
His report that the programs are fun easy to use and parents are impressed with how much learning children derived from this engaging program.
The same time, our book fairs team worked diligently to provide flexible streamline solutions to meet the differing needs of individual school return scenarios, including enhanced virtual fares with the leadership of new President of Scholastic book Fairs, who started on January Onest, we redesigned.
Our book Fairs group to become a more nimble and efficient organization focused on making deeper valuable connections within schools.
Book clubs pivoted to redirect booked shipments from schools to teachers homes and Meanwhile, our education Division adopted the take take on book model to support districts and states, but making high quality books and family resources available to children in need of during school closures most notably.
A 185000 kids receiving books at home.
From the state of Connecticut during the Closedown schools.
When the Ken reviews, our financials and a few moments you will also review in detail. The significant actions, we took to curtail operational and capital expenditures in order to mitigate the impact to the school closures. What we're also working proactively we families in schools to support them through this period of disruption.
In short, we froze nonessential spending reduced inventory purchases temporarily closed warehouses and distribution centers in Hangzhou and highly impacted regions and implemented difficult necessary staffing measures, including work reduced work weeks furloughs and job eliminations.
We also took approximately 19.9 million net in noncash charges as a result to cope with 19.
Including higher inventory obsolescence reserves higher customer bad debt by return reserves fire on unearned, author advances and higher vacation accruals. In addition, we also recognize the onetime severance charge from 13.1 million in the year in connection with ongoing restructuring and staffing decisions made.
In response to the impact of Cobas 19.
Excluding onetime items, we recorded an operating loss of 32.3 million in fiscal year 2020 versus operating income positive 41 million in fiscal year 2019.
We also suspended our stock buyback program and had no negligible cash burn in the fourth quarter.
I had been abundance of caution we drew down 200 million on our revolver and the funds were placed in liquid investments investments and remain on used at this time.
We closed the fiscal year with over 175 million in net cash on balance sheet and a strong equity base of 1.2 billion.
I want to reiterate that are more capital light model requires very low levels of maintenance capital expenditures. Therefore, we can flex our discretionary capital expenditures as needed during the year.
This is not the first time in or 100 your history that scholastic is face significant challenges and each time, we have emerged stronger and more resilient, while the scope with this and dynamic is unprecedented we responded swiftly and with purpose across the company or people rose to the occasion to meet the needs of teachers parents and children as the.
Focus shipped as abruptly from schools the home in the fourth quarter and I'm proud I'm extremely proud of the dedication of our scholastic staff. During this period of professional and personal disruption.
As we look to fiscal 2021, we are anticipating a slower start to the year for school distribution channels.
We currently expect most schools to be in session, but following different instruction models from district by district with some schools returning to in person learning others, continuing distance learning and others operating in a hybrid model experts agree that in person learning is the most effective especially for younger children, but we all.
So all appreciate the need to ensure that are learning environments are safe for our children and for our communities. Each district is therefore planning for various contingencies that the take into account potential changes in infectious infection rates in their local areas.
The number of schools planning to open on a remote virtual only basis is a small but growing minority based mesa.
Mostly in bigger districts were infection rates are increasing as of now the large majority of schools have reported that they will have some form of in person classroom instruction with some planning to open five days, a week and others opening in a hybrid manner given plan social distancing measures, we expect that there will be.
Less extra space in schools, given the need for more classrooms space more limited access to visitors in some restrictions on events on school premises and plans for students to stay clustered pause during school day.
We're coordinating with schools to provide events that fit their reopening modes and that make the best use their available space. The sizable majority of schools the decided not to hold in person fares in August.
Either converted to a virtual fair or re scheduled for later in the school year and would there are more flexible model. We can meet the needs of each school in each district, and scope and scale, our operations up or down based on demand.
We also expect the capacity at event restrictions that book brick and mortar book stores to continue which could impact trade sales. Our trade performance has been strong and we're confident in our pipeline, but our planning our launches knowing that circumstances for retail partners may change of infection rates change.
These factors make it difficult to accurately predict continuing impact of Kobin 19 on or business and operations, especially our book clubs and book fairs in fiscal 2021, therefore, we will not be providing in fiscal year 2021 outlook at this time.
I do think it is important to share the steps, we're taking to ensure that our operations and our product offerings are cobot ready in fiscal 2021.
First we are adjusting our up offerings to ensure a safe and easy events.
Book Fairs group is rising to the challenge of being able to provide simplified safe and easy and essential book fairs, and incorporate capacity restrictions social distancing measures increased health and safety protocols.
And further address resource limitations in school.
We are closely following the developments regarding reopening plans for schools and are ready with flexible theaters that are in strict compliance with all local health and safety requirements and best practices, which and will meet the needs of individuals who.
Schools that remain closed we can provide enhance virtual fares and community engagement solutions to connect children to the books, the low and helps schools raise the resources needed now more than ever for fund raising we're also encouraged encouraging teachers and parents to continue to order books online through our.
Clubs ordering platform, which is another safe and easy way to get books directly to kids and should also help that migration of customers to our official digital platform.
Next we are meeting the pent up demand for high quality books educational materials as schools contend with cobot Slide recent study by NW EA projected that students who like study instruction during school shutdowns might return this fall having retained only 70%.
And that would be lucky of their annual reading gains compared to a normal year.
This compounds the the reading skill loss noticed some slide experienced by many school age kids.
The need for affordable high quality books will be greater than ever the schools and families help their children regain academic momentum. This fall scholastic is well positioned as a partner and resource in the suffered through school channels grading access to affordable books, and the opportunity for kids to connect emotionally to the.
Characters and stories, there so meaningful to them and the one thing we hear from all schools. The teachers and parents is social emotional impact of reading.
And of our book programs. Our book clubs are particularly good solution for getting books into the hands of children in school and home and Scholastic magazines also provide digital solutions, which can be used at home.
We're also continuing to fine tune, our digital offerings and virtual scholastic learned at home.
We're well positioned to support schools and families with that home learning programs supplement in school curriculum, our formats of the flexibility to fit with the various schedules and classroom models, which may emerge fall because of the cobot remote learning experience. There is now a greater focus on digital learning whether schools or.
Open remote and we have a number of digital subscription programs that are in demand.
Including lift pro for K to eight independent reading first for K, two foundational phonics and word for vocabulary and elementary School school districts, including Los Angeles or buying these programs and making them available to children for home use for summer School after school and periods when school building.
May be close we're seeing a rapid increase in interest from schools to buy digital programs at home in school learning.
Finally, we have an exciting trade publishing pipeline. We expect continued strong performance from trade in the coming year. Thanks to highly anticipated releases of momentum from the May release.
The balance on birds and snakes much anticipated fourth book in the hunger games series.
As you know valid was an instant number one best seller around the globe and continues to top bestseller list with more than 1 million English language copies sold in the two months since publication.
We expect continued strong performance from this book.
You will buy a new hunger games box that that will be released for the holiday season.
In addition to strong backlist sales valid and Harry Potter, we look forward to date cookies latest installment in the dog Man series with the release of grime and punishment augment number nine in September and Cat Kid comic club, an all new graphic novels series from Dave in December.
Enduring popular day bulky and as characters was evident to spring is millions of young readers logged onto the date built on video series to enjoy his drawing demonstrations read aloud and other activities chosen by Dave to engages fans as they sheltered plays.
This will also brings the release of the ITC above the new fairytale from JK Rolling Andrew first book for children and 13 years.
Our youngest readers will be deleted delighted to meet the newest members of the wonky Donkey Fem family when RIN Rennie Granny Donkey launches. This this November this third title written by Craig Smith, and illustrated by Cats Cali joins last Fall's Sneaky Dagi and the original viral sensation wonky Doug.
Which now has over 4 million copies print.
We expect an enthusiastic reception to the publication of two new Baby Sitters club releases Logan likes Marianne Baby Sitters club number eight and Karen's roller skates babysitters little sister number two the franchises hotter than ever thanks to the July 3rd premiere of Netflix streaming.
Series based on the Baby Sitters club books.
We look forward to the November release of the latest bad guys title Dawn of the under Lord Bad guys number 11, new titles from best selling authors, including Tweety Sutherland, Ellen Gratz, Kelly Yang and very and Johnson. Finally, we're excited to welcome debut talent Leah Johnson, who is why not.
Will you should see me in a crown was published in June and is already exceeding expectations.
In summary, while the impact of Kobin 19 has been significant for sure architect our curtailment actions have helped to mitigate the impact of the endemic on our business and we were executing a targeted plan to reduce 100 million.
<unk> costs in fiscal 2021.
Our business as well capitalized and we have never been more consummated in or by Connick brands are strong partnerships with educators and families across the us and around the world and our ability to provide the books the kids need for education and entertainment.
Scholastic is about to go back to school for the 100 time since our first publication was launched in October 1920.
For all those years.
Teachers and schools and parents of look to scholastic to help them engage children in reading and learning basing the difficulties of this year's returns school Elastics help has never been more necessary than it is right now.
With that I'd like to turn the call over to can Cleary.
Thank you deck and good afternoon.
Revenues in the important fourth quarter fell by $186.7 million or 40% versus the prior year period with revenues from clubs and fairs declining $151.7 million as a result of a decrease in school based book clubs and both parents events.
Fiscal 2020 revenues declined 10% versus last year to 1.49 billion also driven by decreased revenues from clubs and fairs School closings also had an adverse impact on our international school channels and education business as Dick mentioned, we ended the year with strong global trade Paul.
We're seeing sales driven by solid front list, including the balance songbirds and snacks.
Yes, the trade sales increased $25 million or 45% in the fourth quarter and $56.5 million or 20% for the full year. This result was significant given the industry wide bookstore sales declined as a result of brick and mortar store closures in the fourth quarter.
Excluding onetime items for both periods operating loss for the fourth quarter was $39.4 million versus income of $40.1 million in Q4 last year for fiscal year 2020 operating loss, excluding onetime items was $32.3 million for zapping income of 41.
Your dollars in fiscal 2019.
Adjusted EBITDA for the fourth quarter was a loss of $17.3 million compared to $61.2 million last year, while adjusted EBITDA for fiscal 2020 was $56.6 million compared to $121.3 million in fiscal 2019.
These declines of directly attributable to the impact of the krona virus pandemic.
Fourth quarter loss per diluted share was 38 cents compared to earnings of 50 cents in 2019.
Good morning, onetime items fourth quarter loss per diluted share was 23 cents in 2020 versus earnings of 84 cents in 2019 loss per diluted share for the year was $1.27 compared to earnings of 43 cents last year, excluding onetime items loss per diluted share for the year was eight cents versus earns a nine.
The two cents last year.
Turning now to cash in fiscal 2020, net cash provided by operating activities was $2.1 million compared to $116.4 million in fiscal 2019.
Free cash use was $89.1 million and the current fiscal year compared to our free cash use at $12.4 million in fiscal 2019.
During the fourth quarter, we accessed our $375 million committed bank credit facility as precautionary measure we took a U.S. dollar LIBOR based advanced for $200 million, which was placed in liquid investments and remains unused at this time, we distributed $20.8 million in dividends during the year.
And bought back $35.5 million of common stock over the fiscal year through March as a reminder, we put our open market share buyback program on hold in early March we ended the fiscal year with a strong balance sheet and over 175 million in net cash.
Working capital management and access to liquidity remains strong our ongoing cost reduction programs have lowered our vendor payables as of yearend, while we have substantial trade receivables as a result in the strong sales a ballot.
Lower payables and higher trade channel receivables will benefit our cash position in the first half of fiscal 2021.
We will have significantly lower inventory purchases in fiscal 2021, as we re purpose inventory previously procured and implement new procurement procedures, we have $175 million available under our existing credit facility. In addition to $393 million of cash cash equivalent on hand.
As of yearend.
Fiscal year end, we had ample room to financial maintenance covenants contained in the credit agreement terribly debt to total capital and interest coverage.
As a result of the measures we've taken and our typical seasonality, we're not expecting pressure on our net cash position in the first quarter. We will continue to assess funding needs in the context of evolving information on cobot 19, reopening plans and banking market conditions.
Now turning to our segments, where I'll review drivers of our fourth quarter results for fiscal year results are detailed in our tables in our SEC filings.
In children's book publishing and distribution fourth quarter revenue declined 49% to $132 million book clubs revenue fell 59%, while book fairs revenue fell 79% versus the comparable periods in the prior fiscal year Gillihan trade revenues grew 45% in the fourth quarter versus.
The prior year period highlighted by the strong sales about of the balance of songbird snacks.
What flying a book plus activity kits, such as Lego chain reactions and Lego gadgets also performed well in the fourth quarter as they provide fun indoor activities helped children practice teams skills and remote learning environment.
Brick and mortar stores remain closed sales online retailers were strong fourth quarter operating loss was $46.5 million, where is operating income of $18.2 million in 2019 quarter.
In education sales from the important fiscal fourth quarter declined 20% to $94.7 million versus the prior year period education results were impacted by the over 124000.
Pandemic related public and private school closings in us.
However, in the fourth quarter are teaching resources jumbo workforce and some are expressed series performed well these programs offer skill building activities for students learning from home.
Fourth quarter operating income was $27.3 million versus operating income of $36.9 million in the 2019 quarter.
And our international segment fourth quarter revenues were down 39% to $57.3 million, we had lower sales in clubs and fairs, and our major markets direct to consumer selling operations throughout Asia, and our education business in China. All due to actions taken are detailed the spread of the kroner buyers and allow.
Last four months to fiscal year in the fourth quarter International had operating loss of $9.1 million versus income of $6.8 million in the 2019 quarter, excluding onetime items in both periods.
Corporate overhead expense, excluding onetime items was $11.1 million in the fourth quarter, which declined by 49% as a result, the lower technology related spending and cost savings actions taken in the quarter.
Over the fourth quarter, we took action to safeguard our employees and revised processes and protocols to ensure that we can effectively.
Safely execute critical business functions during the crisis without adversely impacting productivity across functional task force is continuing to closely track school reopening plans for the fall a district by district basis, as well as the Corona buys related disruptions to our supply chain.
We have the data analytics and capabilities politicians quickly, enabling us to react to rapidly changing market conditions.
We also accelerated our work to transition to a more efficient flexible model and reduce our cost base in response to lower anticipated revenues, we eliminated all non essential business cost and deferred spending on certain long term projects in order preserve cash in the near term reduced our inventory purchases and fixed administrative costs to preserve cash.
And focused any necessary expenditures on crisis specific customer needs, such as that home wiring materials and ensuring adequate access to capital.
We had to make some tough but necessary staffing decisions, including reduced work weeks furloughs and Jobling nations in response to school and store closings.
In fiscal 2021, we initiated a program targeting to achieve 100 million and cost savings coming both labor and non labor costs and process improvements are using specialty created dashboards and trackers. So identify meyer monitor that realization of savings and sustainability those savings is flamel.
Will enable us to function at a higher operating leverage and scale our resources in response to increasing or decreasing revenues.
As a result of the covert 19 sales decline recognized approximately $19 million and non cash charges in the fourth quarter. This includes increases in inventory obsolescence reserves return reserves, none or an author advances because some author advances did not turn that did not burnt out to the Celtics.
Hi.
We increased reserves for customer bad debts, some customers reschedule payments.
Or could not pass on time, however, our biggest customers are paying us and we have not had significant issues with collections.
Because most employees were neighborhood travel, we also had higher vacation accruals.
In June just after the fiscal year end, we sold our underutilized Danbury, Connecticut facility for approximately $13 million.
The cost we have relatively low maintenance capital expenditure requirements, we can adjust our discretionary capital expenditures as needed based on school and market conditions strong working capital management practices additional levers to pull to preserve profitability and cash flows as we approach the second quarter, depending on how schools are operating.
We are closely coordinate our activities with our customers as they plan or openings.
And just are offering to fit the needs and requirements of each district.
With that I'll hand, the call back to Guilford QNX session.
Thank you Ken Joelle, we're now ready to open the lines for questions.
Thank you as a reminder to ask a question you will need to pass on your telephone.
Your question pest upon key.
Please stand by belly capacity candy roster.
First question comes from come with Stifel.
Your line is now open.
Okay. Thanks, guys good afternoon.
So in the press release, I know, you're not giving formal guidance at this point, but theres a comment about expectations for fiscal 2001 sales to be slightly lower than fiscal 20 offset by the plan cost reductions.
Can we assume based on that that adjusted EBITDA that you reported for fiscal 20 at about 57 million.
Should improve in fiscal 21, and what are your expectations for free cash flow should it be positive this fiscal year.
Let me answer this and then turn it over to count also true.
Yes, we believe.
We believe our sales will be.
So just a little bit lower than sales recorded for the full 2020 year, you'll remember that we discussed out at our.
Call in March.
And.
We.
We believe the the because of the slow returned to schools and adjustments that the fall will probably be a little less strong.
But.
Good up in the second part of the year.
We have focused on a cost reduction plan that is really key to our.
Goal of profitability and cash flow for this coming year and or what we believe will be an increase in EBITDA, but I'll, let can talk about that.
Hey, Joe so.
Sure well by the way.
Likewise, yes. So so we do have a major cost reduction program in place right now as Dick mentioned $100 million. So.
Sure.
Revenues end up being.
As as we thought slightly lower than than last year, then I would expect to see an improvement certainly.
EBITDA.
I think the more important.
Fought around this is is that we're capable of reacting to to a landscape that seems to be changing fairly regularly. If you just watching the news on school openings. So we are really prepared to to meet whatever revenues we can get.
And scale our costs accordingly aboard now and that's really our objective at this point in time its.
Yeah, we're we it's as much a continuum in terms of our management practices right now to be able to adapt to to what we see on the horizon. So yeah. If revenues are as we expect then I would expect an improvement in EBITDA.
Okay and thoughts on pre cash flow.
Okay, Yes.
Yes, just yes.
I don't want to guide too much on free cash flow, but.
We.
Were just based upon our EBITDA and where we know.
Our reductions in cap spending our as well as our working capital management free cash flow will be better and it doesnt cross over into the positive range at this point I'm I'm not ready to go there, but true I'm not ready I don't want to comment I really don't collateral.
Okay, Alright drew it does.
Just a follow up a little bit I mean, it was clear that were with revenue down dramatically in the fourth quarter that we had to prepare for reduced revenue picture for the coming year.
We.
Immediately said on upon looking at all of our costs and reducing those costs. We have a very structured cost management program with trackers as Ken referred to in his talk and we're we're really both our whole strategy is.
Revenues down a little bit.
Reduce costs by 100 million.
We will turn the company around.
Okay. We can help adult revenue, we can't predict the revenue with the uncertain school.
Openings. This fall, okay, I have I have another.
Sales related question not looking for specific numbers, but the trade pipeline that you guys discuss looks quite strong.
You're going to be laughing at comparison, but looks like you've got a number.
New initiatives planned for fiscal 2001.
How are you thinking about growth for for that business in light of some of the bricks and mortar store closures or potential for more store closures.
During our fiscal period.
Let's take the trade is just had a spectacular year.
Increasing.
20% and 45% in the fourth quarter the fourth quarter was helped by the the bell.
And that wonderful performance of the Suzanne columns for booked in the hunger games series, but.
The whole trade business is strong.
Every category is clicking in working.
Dave Gilkey is very very strong we have lots of wonderful new authors, we're winning a lot of auctions for new titles.
So.
And we've expanded our revenues considerably over the past the 24 months as you undoubtedly no. So we feel that that's that businesses.
Moving ahead, we'll continue to grow that supported by our entertainment.
Arm, which is.
Producing television and movies, including the.
Upcoming Clifford movie, which was.
We're still thinking will happen sometime.
This fall, but that is uncertain as well movie distribution, but but the the.
The.
What's going on in that business with the integration with the media.
Also is just very very strong and we're looking forward to continued.
Strong performance and the children's area has has been growing.
More than the industry for sure not too worried about all the book store closures because we.
I think there'll be as many this coming year ever and I believe also that we.
We are obviously offset that with our performance in the fourth quarter.
With the wood.
Direct to the home.
Sales and excellent mass market sales.
Okay.
I have a couple more specific questions on trade continuous comment on your channel inventory for the business.
Is there another print run plan for the hunger games book in fiscal 21.
And as it relates to the JK Rolling book.
What publishing rights will scholastic have.
Well the JK the new weaker bug book, we continue to have a north American rights to that book, Okay, Thats print only Dick.
Yes, that's principally because of.
She continues to retain the.
The.
We'll be offering an ebook version however, yes.
Okay.
No. It's not effective we do have an E book version, which were selling.
Okay.
And then another plant is there another print run plan for the hunger games book and any commentary on channel inventory as we entered the fiscal year.
Well we printed.
A good number and we sold most of them so.
We're not far enough onto a lot of inventory but.
Theres still some out there and we but we're seeing a very very good sales rate on the title, it's holding up extremely well.
Okay.
Alright, and then I guess separately are shifting gears under understanding your cash flow is seasonal on your typically in a use of cash mode. During the fiscal first quarter.
Are you anticipating having to access the 200 million dollar advance that you referenced.
Can you want to handle that one.
At this point in time drew no no. Okay, alright, very good one last question side clubs and fairs.
Any impact or can you talk about the impact of profitability for those channels operating this environment versus.
Normalcy normal operating conditions, and then just any thoughts on revenue per fair for virtual fair versus a normal in person fair.
Yes, the profitability as we operate.
Under the pandemic as.
Back to school issues.
We will will will there will be less people participating unfair.
That is the parents will that will in the community won't be quite as involved we restructuring or fair business to accommodate that we do have on the phone here drew.
The new President of our fair business, social Quintin I think I'll ask are too.
Respond to that question also.
So sure you are you there.
Good afternoon here, so as Marshall Theres, Hi, and revenue per fair as compared to the physical we launch this in the spring and attest about and we actually saw pretty significant range in terms of the performance.
Then the physical parents, so but generally they performed below our from a revenue prepare perspective. So we havent number of enhancements in development and a lot of them are incredibly exciting for the fall season, which we know will offer a much richer more comprehensive virtual fair experiencing for our students and our teachers and parents alike. So we do.
Leave that we can see from improvements there.
Got it okay. Okay guys. Appreciate it thank you stay safe.
Thanks, so much.
Drew for your questions. Thank you very much.
Thank you as a reminder to ask a question because start one on your telephone.
Im not showing any further questions at this time I would now like to turn the call back over to Richard Robinson for closing remarks, well. Thank you all for attending our yearend and fourth quarter call. We obviously had a difficult fourth quarter were.
Being very flexible going back to school, we're very confident in scholastic stability to help teachers and parents and kids.
Schools, and we're looking forward to doing the best we can with the situation, but but ER enduring brand will carry us through as it has for 100 years as well as the skill of all the people in the company, who supported us and our customers in schools. So well. Thank you for listening and we will be back to you.
In September.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Thank you so much show al.
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