Q4 2022 Scholastic Corp Earnings Call
Okay.
Good day, and thank you for standing by and welcome to the Scholastic reports Q4 and fiscal year 2022 result conference call. At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today.
Speaker 2: participants on a listen only mode. Please be advised that today's conference is being recorded. But now like the hand the conference over to your speaker today, Paul Hucknen, you may begin.
Paul Hawken Lynn you may begin.
Hello, and welcome everyone to Scholastics fourth quarter and fiscal 2022 earnings call. Joining me on the call today are Peter work, our President and Chief Executive Officer, and Ken Cleary, Our Chief Financial Officer as usual we have.
Speaker 3: Hello and welcome everyone to Scholastic's fourth quarter and fiscal 2022 earnings call. Joining me on the call today are Peter Wark, our president and chief executive officer, and Ken Cleary, our chief financial officer. As usual, we have posted the accompanying investor presentation on our IR website at investor.scolastic.com, which you may download now if you have not already done so. Thank you very much.
Posted the accompanying investor presentation on our IR website at Investor Scholastic Dot Com, which you may download now if you have not already done so.
We would like to point out that certain statements made today will be forward looking these forward looking statements by their nature are subject to various risks and uncertainties and actual results may differ materially from those currently anticipated.
Speaker 3: We would like to point out that certain statements made today will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipated.
In addition, we will be discussing some non-GAAP financial measures as defined in regulation G.
Speaker 3: In addition, we will be discussing some non- GAAP financial measures as defined in regulation G. The reconciliation of those measures to the most directly comparable GAAP measures may be found in the company's earnings release and accompanying financial tables filed this afternoon on a form 8K.
The reconciliations of those measures to the most directly comparable GAAP measures may be found in the company's earnings release and accompanying financial tables filed this afternoon on a form 8-K.
This earnings release has also been posted to our Investor Relations website we.
We encourage you to review the disclaimers in our release and Investor presentation.
Speaker 3: This earnings release has also been posted to our Investor Relations website.
To review the risk factors disclosed in the company's annual and quarterly reports filed with the SEC.
Speaker 3: We encourage you to review the disclaimers in the release and investor presentation, and to review the risk factors disclosed in the company's annual and quarterly reports filed with the SCC.
Should you have any questions. After todays call. Please send them directly to our IR E Mail address investor underscore relations at Scholastic Dot com.
Speaker 3: Should you have any questions after today's call, please send them directly to our IR email address, and investor-underscore-relations at scholastic.com. For more information, visit www.schoolastic.com.
And now I'd like to turn the call over to Peter work to begin this afternoon's presentation.
Good afternoon, everyone and thank you for joining today's call for fiscal year 2022 came to a close with a strong fourth quarter, which built upon three solid quarters to secure impressive results for the full year and established positive momentum for moving forward phase.
Speaker 3: And now I'd like to turn the call over to Peter Warwick to begin this afternoon's presentation.
Speaker 4: Good afternoon everyone and thank you for joining today's call. Our fiscal year 2022 came to a close with a strong fourth quarter, which builds upon three solid quarters to secure impressive results for the full year and establish positive momentum for moving forward. These results are a direct reflection of the adaptability, which solves an unparalleled dedication of scholastic employees.
These results are a direct reflection of the adaptability resolve an unparalleled dedication of scholastic employees to that point, we delivered more than 500 million units of books and educational materials in the United States. This past fiscal year. It takes strong teamwork at every level to accomplish that.
Speaker 4: To that point, we delivered more than 500 million units of books and educational materials in the United States this past fiscal year. It takes strong teamwork at every level to accomplish that. As usual, Ken will provide greater detail later in the call, but at a high level our results exceeded expectations for this rebuilding year, particularly for book fairs, which was initially the area most affected by COVID. Overall, full year revenues grew 26%
As usual Ken will provide greater detail later in the call, but at a high level our results exceeded expectations for this rebuilding yeah, particularly for book fast, which was initially the area most affected by Covid.
Overall full year revenues grew 26% operating income increased by $120 million and free cash flow increased by 162 million base.
Speaker 4: Operating income increased by $120 million and free cash flow increased by $162 million.
Based on our strong performance and our optimism for the future. We were pleased to announce yesterday, a 33% increase in our regular quarterly dividend. The first change in nearly a decade.
Speaker 4: Based on our strong performance and our optimism for the future, we were pleased to announce yesterday a 33% increase in our regular quarterly dividend, the first change in nearly a decade.
Further we're resuming guidance for our new fiscal year, which were suspended in 2020 due to the uncertainties of the pandemic.
Speaker 4: Further, we're resuming guidance for our new fiscal year, which we've suspended in 2020 due to the uncertainties of the pandemic.
We expect fiscal year 2023 revenue growth in the range of 8% to 10% and adjusted EBITDA is expected to be $195 million to $205 million up from $108 million to $9 million in 2022.
Speaker 4: We expect fiscal year 2023 revenue growth in the range of 8 to 10 percent and adjusted EBITDA is expected to be 195 to 205 million up from 189 million in 2022.
If we learned anything over the past two years. It's the change is a certainty and the pace of that change is more rapid than previous generations have ever experienced.
Speaker 4: If we learned anything over the past two years, it's that change is a certainty, and the pace of that change is more rapid than previous generations have ever experienced.
Confidence moving forward is rooted in that knowledge and fueled by our proactive work to prepare for and to embrace the future.
Speaker 4: Our confidence moving forward is rooted in that knowledge and fuel by our proactive work to both prepare for and to embrace the future.
Our highly skilled management team is working effectively to better tap the full expertise and passion of our employees to benefit from a more streamlined operations.
Speaker 4: Our highly skilled management team is working effectively to better tap the full expertise and passion of our employees who benefit from our more streamlined operations.
And we've continued to better our strategies to serve our staff by adding a new key role of Chief people Officer, which was announced will fill by Christina Zhu VA. This past April .
Speaker 4: And we've continued to better our strategies to serve our staff by adding a new key role of Chief People Officer, which was announced and filled by Christina Juvier this past April . We're also using changes to our deeply engaged board as an opportunity to broaden the business backgrounds of our members.
We're also using changes try deeply engaged board has an opportunity to broaden the business backgrounds of our lenders.
You all know Mary Beech stepped down earlier this year to contribute her expertise to the company in a new role as our chief marketing and transformation officer and we've since welcome to the Board Linda Lee Senior Vice President and General manager of wire cut the New York Times Company Linda.
Speaker 4: As you all know, Mary Beach stepped down earlier this year to contribute her expertise to the company in a new role as our Chief Marketing and Transformation Officer.
Speaker 4: And we've since welcomed to the board, Linda Lee, Senior Vice President and General Manager of Wirecutter at the New York Times Company. Linda is bringing her nimble sensibility to our digital growth strategy based on her extensive experience in both technology and media companies.
Linda is bringing a nimble sensibility to our digital growth strategy based on her extensive experience in both technology and media companies.
Together, we're all embracing new approaches to enterprise strategy in order to best unlock the full potential of all our businesses and finally I'd like to thank Maggie Williams for his 12 years of dedicated service on our board.
Speaker 4: Together, we're all embracing new approaches to enterprise strategy in order to best unlock the full potential of all our businesses. And finally, I'd like to thank Maggie Williams for her 12 years of dedicated service on our board. I personally much enjoyed serving alongside her and Scholastic has benefited a great deal from her insights developed by her distinguished career experience.
Much enjoyed serving alongside her and scholastic has benefited a great deal from her insights developed by her distinguished career experience.
Maggie recently announced that she will not stand for reelection this coming September and will shine use of high replacement in the coming weeks.
Speaker 4: Maggie recently announced that she will not stand for re-election this coming September , and we will share news of her replacement in the coming weeks.
I'd now like to walk you through the positive trends displayed by our results and that we see ahead of us.
Speaker 4: I'd now like to walk you through the positive trends displayed by our results and that we see ahead of us.
<unk> book publishing and distribution had a very strong fourth quarter as the dedication solutions with increases in revenue year over year of 42% and 26% respectively.
Speaker 4: Children's book publishing and distribution had a very strong fourth quarter as the education solutions with increases in revenue year over year of 42% and 26% respectively.
Trade Cessna exemplary story of how the best content rises to the top of all platforms. All beginning with books a runaway success was a young adult graphic novel series Hap stockpile by Alice Arismun, which this past year reached the New York Times bestseller list and was further bolstered by the Netflix.
Speaker 4: In trade, there's an exemplary story of how the best content rises to the top of all platforms, all beginning with books. A runaway success was a young adult graphic novel series heart stopper by Alice Osman, which this past year reached the New York Times bestseller list and was further bolstered by the Netflix series adaptation that was quickly renewed for two more seasons.
Sirius adaptation that was quickly renewed for two more seasons.
We also saw another blockbuster and the feature animated film from Dreamworks, The bad guys, which heightened interest in iron Blade. These new book in the series and keeps the backlist titles at the forefront.
Speaker 4: We also saw another blockbuster in the feature animated film from Dreamworks, The Bad Guys, which heightened interest in Aaron Blabey's new book in the series and keeps the backlist titles at the forefront. And of course we must applaud the success of Dave Pilkey's latest series of Cat Kid Comic Club, where book after book reaches the top of bestseller lists and who has a feature film based on the Dogman series in development with Dreamworks.
Of course, we must applaud the successive Dave Pill Kids latest series of cap Kids comic clubs.
Book After book reaches the top a best seller lists and who has a feature film based on the documentary series in development with Dreamworks.
Virtuous circle of content revolving from the page to screen to license merchandise is being utilized in ground by our Scholastic Entertainment Division.
Speaker 4: This virtuous circle of content revolving from the page to screen to licensed merchandise is being utilized and grown by a scholastic entertainment division. Apple TV Plus, Tremendous Partners, since the division relaunch, recently announced that the animated series, Eva the Owlet, based on our highly successful Owld Areas, will launch in the spring of 2023.
Apple TV plus tremendous partners since the division's relaunch recently announced that the animated series Eva the outlet based on a highly successful owl diaries were launched in the spring of 2023.
This will be hard on the heels of the announced season two of Stillwater on Apple TV, plus and from Disney plus the live action Goosebumps series.
Speaker 4: This will be hard on the heels of the announced Season 2 of Stillwater on Apple TV Plus, and from Disney Plus, the live action Goosebumps series.
Better scale, we anticipate that this momentum is just the first chapter in our intellectual property growth story for context consider that in 2015 Scholastic Entertainment had five projects in development today that number exceeds 35 and is further fueled by expanding life.
Speaker 4: But still, we anticipate that this momentum is just the first chapter in our intellectual property growth story. For context, consider that in 2015, Scholastic Entertainment had five projects in development. Today, that number exceeds 35, and is further fuel by expanding licensing opportunities for partners of witness the merchandising success of projects such as the Cliff at the Big Red.feature film and animated series.
Sensing opportunities as partners of witness the merchandise success of projects such as the Clifford the Big Red Dot feature film and animated series, perhaps you've called the new Geico commercial featuring Clifford as the neighbors friendly dog.
Speaker 4: Perhaps you've caught the new Geico commercial featuring Clifford as the neighbor's friendly dog. FESS closed out this past fourth quarter with clear and sustainable strength.
<unk> closed out this past fourth quarter with clear and sustainable strength.
The school year, we maintained a healthy percentage of pre pandemic fan count levels, while managing the ongoing supply chain and labor challenges.
Speaker 4: Throughout the school year, we maintained a healthy percentage of pre-pandemic fair count levels while managing the ongoing supply chain and labour challenges affecting the industry.
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Infinitely we closely fiscal year with 72% of pre pandemic impactful fact count levels.
Speaker 4: Ultimately, we close the fiscal year with 72% of pre-pandemic in-person fair count levels, and perhaps more impressively the division drove record levels of revenue per fair.
More impressively the division drove record levels of revenue per fab.
Drivers of this success include increased participation rates by children and in the number of books per transaction as well as permanent operational cost savings.
Speaker 4: The drivers of this success include increased participation rates by children and in the number of books per transaction as well as permanent operational cost savings.
We also have exciting momentum in our equity initiatives to ensure that every child no matter. The circumstances leaves the fab with a book of their own from 700 sponsored phase in recent months to new digital funding pathways to allow the community to more easily support it sounds students to grow home libraries.
Speaker 4: We also have exciting momentum in our equity initiatives to ensure that every child, no matter their circumstances, leaves the fair with a book of their own, from 700 sponsored fairs in recent months to new digital funding pathways to allow the community to more easily support its own students to grow home libraries. Clubs were able to rebound from the challenges presented in the first half of fiscal year 2022.
Clubs were able to rebound from the challenges presented in the first half of fiscal year 2022, and we've done significant work to alleviate the previously disclosed systems issues and labor shortage and our team is poised to begin. This next school year with a renewed focus on engaging with teachers and doing all that we can to assist them in over.
Speaker 4: And we've done significant work to alleviate the previously disclosed systems issues and labor shortage. Our team's poised to begin this next school year with a renewed focus on engaging with teachers and doing all that we can to assist them in overcoming the challenges they face in these times. With our education businesses now fully integrated under one leader, during the past fiscal year, the newly formed management team fostered connectivity between the best for all, and the own success they far and det Estimated Information. Thisveh ideal Ad of
Coming the challenges they face in these times with our education business is now fully integrated under one leader during the past fiscal year. The newly formed management team fostered connectivity between the best most relevant and important content for children with services and tools to improve student reading right.
Speaker 4: most relevant and important content for children with services and tools to improve student reading, writing and comprehension, including as part of state and district shifts to the signs of reading. including as part of state and district shifts to the signs of reading.
And comprehension, including as part of state and district shifts to the signs the rating.
A source of Pride trial, the company comes from our founding offering of magazines for the classroom recently rebranded magazines, plus which are designed to develop reading and writing skills in the context of helping children build knowledge and understand our complex world.
Speaker 4: The source of pride throughout the company comes from our founding offering of magazines for the classroom, recently rebranded magazines plus, which are designed to develop reading and writing skills in the context of helping children build knowledge and understand our complex world.
A prime example of combining digital teaching and learning and print magazines plus does return to pre pandemic levels of engagement.
Speaker 4: A prime example of combining digital teaching and learning and print, magazine's plus has returned close to pre-pandemic levels of engagement, as reflected in subscription count and revenue across titles. Our supplemental curricula and collections team has a keen and advancing ability to nimbly meet the needs of our customers, the modular print and digital libraries, summer programs, skills practice, and independent reading.
As reflected in subscription count and revenue across titles.
Supplemental curriculum and collections team has a keen in advancing ability to nimbly meet the needs of our customers and modular print and digital libraries summer programs scales practice, an independent rating of <unk>.
Future investments could include targeted acquisitions for key capabilities, greater development and digital content and functionality data analytics and staff to enable these innovations. Accordingly. This division will report increases in capital spending prepublication costs and selling general and admin.
Speaker 4: A future investments could include targeted acquisitions for key capabilities, greater development in digital content and functionality, data analytics, and staff to enable these innovations. Accordingly, this division will report increases in capital spending, pre-publication costs, and selling general and administrative expenses in the coming year. While education solutions are certainly benefited from some strategic investments by schools using asset funds.
<unk> expenses in the coming year, while education solutions has certainly benefited from some strategic investments by schools using asset levels. It is important to note that our family engagement offerings are a key driver in our results and are more typically funded by traditional lines of title one funding and locally.
Speaker 4: It is important to note that our family engagement offerings are a key driver in our results and are more typically funded by traditional lines of Title I funding and locally, giving us a strong and sustainable base of home literacy initiatives beyond the current groundswell, the federal support of schools. The
Giving us a strong and sustainable base of home literacy initiatives beyond the current groundswell of federal support of schools.
In international markets continue to vary based on the degree of local impact of the ongoing pandemic.
Speaker 4: In international, our markets continue to vary based on the degree of local impact of the ongoing pandemic.
Beyond our trade publishing which remains strong within the global recovery from Covid, we see the success of book fast in Canada, and the U K.
Speaker 4: Beyond our trade publishing, which remains strong, within the global recovery from COVID, we see the success of book fairs in Canada and the UK.
A review of our business in Asia has led us to refocus our strategy and exit from our direct sales business through a sale to new owners overall.
Speaker 4: A review of our business in Asia has led us to refocus our strategy and exit from our direct sales business through a sale to new owners.
Overall, I believe you'll agree that across our core businesses as a connective thread of a clear demand for high quality content and an overall deeper appreciation of the importance of children's book ownership through home libraries.
Speaker 4: Overall, I believe you'll agree that across our core businesses, there's a connective thread of a clear demand for high quality content and an overall deep appreciation of the importance of children's book ownership through home libraries.
Ken I'll now turn the call over to you, Brian detailed results and outlook.
Thank you Peter and good afternoon today, I will refer to our adjusted results for the fourth quarter and full fiscal year, excluding onetime items unless otherwise indicated.
Speaker 4: Ken, and I've turned the call over to you for our detailed results and outlook.
Speaker 3: Thank you, Peter, and good afternoon. Today, I will refer to our adjusted results for the fourth quarter and full fiscal year, excluding one time items unless otherwise indicated.
Please refer to our press release tables, and SEC filings for a complete discussion of one time items.
Focus this afternoon will be primarily on the full year results given the backlog seasonality of our business. We have performed well in this transitional year coming out of the pandemic under Peter's leadership.
Speaker 3: Please refer to our press release tables and SEC filings for a complete discussion of one-time items.
Speaker 5: My focus this afternoon will be primarily on the full year results, given the backload seasonality of our business.
The operating leverage we created through our cost savings programs. During the pandemic are evidenced in our EBITDA results for the year.
Speaker 5: We have performed well in this transitionary year coming out of the pandemic under Peter's leadership. The operating leverage we created through our cost savings programs during the pandemic are evidence in our EBITDA results for the year.
Set the stage for future growth, while ensuring current operations provide substantial returns for our investors.
Speaker 5: We have set the stage for future growth while ensuring current operations provide substantial returns for our investors.
Overall, we are pleased with our performance.
For the fourth quarter was $514 4 million.
Speaker 5: Are we all we are pleased with our performance?
Compared to $401 $4 million in the prior year period.
Speaker 5: Revenue for the fourth quarter was $514.4 million, compared to $401.4 million in the prior year period.
For the full fiscal year revenue was 1.64 billion compared to $1 $3 billion in the prior fiscal year.
Speaker 5: For the full fiscal year, revenue was $1.64 billion compared to $1.3 billion in the prior fiscal year.
Operating income in the quarter was $66 1 million versus $41 $6 million in the fourth quarter last year.
Speaker 5: Operating income in the quarter was $66.1 million versus $41.6 million in the fourth quarter last year.
For the full year operating income was $97 $5 million versus $39 million last year.
Speaker 5: For the full year, operating income was $97.5 million versus $39 million last year. $39 million last year.
Full year operating income increased $58 5 million on incremental revenues of $342 6 million.
Speaker 5: Fully your operating income increase $58.5 million, and incremental revenues $342.6 million.
Demonstrating the high operating leverage the company created through the prior years cost savings initiatives.
Speaker 5: Demonstrating the high operating leverage the company created through the prior years cost savings initiatives.
Likewise full year adjusted EBITDA increased from $139 6 million in fiscal 2021 to $188 9 million in fiscal 2022, an increase of $49 3 million and diluted EPS for the full year more than doubled to $2 38.
Speaker 5: Likewise, foliar adjusted ebitda increase from $139.6 million in fiscal 2021 to $188.9 million in fiscal 2022, an increase of $49.3 million, and dilute EPS for the foliar more than doubled to $2.38 from $1.02. That's it. Thanks.
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Net cash provided by operating activities was $47 $5 million in the quarter compared to $34 5 million in the prior year's fourth quarter free.
Speaker 5: Net cash provided by operating activities was $47.5 million in the quarter compared to $34.5 million in the previous fourth quarter. In the previous fourth quarter. In the previous fourth quarter.
Free cash flow for the quarter was $34 9 million compared to $19 million last year for the full year net cash provided by operating activities was $226 million compared to $71 million in the prior year and free cash flow was $182 8 million.
Speaker 5: Free cash flow for the quarter was $34.9 million compared to $19 million last year.
Speaker 5: For the full year, net cash provided by operating activities was $226 million, compared to $71 million in the prior year. Free cash flow was $182.8 million in the current year compared to $20.5 million last year, an improvement of $162.3 million, reflecting the company's continued recovery from the pandemic, the permanent cost savings previously mentioned, and a first quarter tax refund of $63.1 million.
In the current year compared to $25 million last year, an improvement of $162 3 million.
Reflecting the company's continued recovery from the pandemic the permanent cost savings previously mentioned in our first quarter tax refund of $63 1 million docs.
At the end of the fiscal year cash and cash equivalents exceeded total debt by $310 1 million compared.
Speaker 5: At the end of the fiscal year, cash and cash equivalents exceeded total debt by $310.1 million compared to $176.3 million at the end of the prior year.
Compared to $176 3 million at the end of the prior year.
Capital expenditures and capitalized prepublication costs in the fourth quarter were $18 2 million compared to $15 $5 million last year.
Speaker 5: Capital expenditures and capitalized pre-publication costs in the fourth quarter were $18.2 million compared to $15.5 million last year. And full year capital expenditures and pre-publication costs total $59.2 million this year compared to $67.9 million in the prior fiscal year. We expect catbacks and pre-publication costs to increase this year as we invest in upgrades to our Jefferson City Missouri distribution equipment and we continue to broaden our education solutions offerings.
Full year capital expenditures and prepublication costs totaled $59 $2 million this year compared to $67 $9 million in the prior fiscal year, we expect capex in prepublication cost to increase this year as we invest in upgrades to our Jefferson City, Missouri distribution equipment, and we continue to broaden our education solutions offerings.
Inventory levels have increased to 281 $4 million and we will continue to increase throughout the summer months as we procure inventory well in advance of the upcoming fall season, when we expect higher revenues and volumes than last year, notably in our book fairs business.
Speaker 5: Immentory levels have increased to $281.4 million, and will continue increased throughout the summer months as we procure inventory well in advance of the upcoming fall season, when we expect higher revenues and volumes in last year, notably in our book fairs business.
Like everyone else, we were impacted by supply chain issues, we have mitigated the impact by diversifying our vendor footprint, including using more north American printers, increasing lead times for purchase orders and implementing systems and processes to better coordinate our demand with our supply chain as of now we believe our inventory position.
Speaker 5: While like everyone else, we're impacted by supply chain issues, we have mitigated the impact by diversifying our vendor footprint, including using more North American printers, increasing lead times for purchase orders, and implementing systems and processes to better coordinate our demand with our supply chain. As of now, we believe our inventory position is ready for the fall season.
Is ready for the fall season.
For the full fiscal year, we reacquired 870000 shares for $33 $4 million in light of our strong balance sheet. We expect to continue to open market repurchases of our shares for the foreseeable future. Additionally, we have raised our regular quarterly dividend to <unk> 20 per share as we expect our future earnings to remain.
Speaker 5: For the full fiscal year, we required $870,000 shares for $33.4 million. In light of our strong balance sheet, we expect to continue open market repurchases of our shares for the foreseeable future. Additionally, we have raised our regular quarterly dividend to 20 cents per share as we expect our future earnings to remain above historical levels through our low cost-based current revenue projections and future growth opportunities.
And above historical levels due to our low cost base current revenue projections and future growth opportunities now turning to our quarterly segment results.
In children's book publishing and distribution bookstores continued its strong recovery from the pandemic book Fair quarterly revenue of $161 $5 million exceeded the prior period revenue of $76 4 million for.
Speaker 5: Now turn to our quarterly segment results.
Speaker 5: In children's book publishing and distribution, book fairs continued its strong recovery from the pandemic. Book fair quarterly revenue of $161.5 million exceeded the prior period revenue of $76.4 million. For the full year, revenue from book fairs operations increased to $429.7 million from $164.3 million in fiscal 2021. In person fairs execute for the full year to have now reached approximately $16.3 million.
For the full year revenue from book fairs operations increased to $429 7 million from $164 3 million in fiscal 2021 in person fairs execute for the full year have now reached approximately 72% of pre pandemic levels and we expect to achieve approximately 85% of prepaying debt.
Fair Count in fiscal 2023 equally important our revenue per fairs increased 13% on a same payer basis, when compared to pre pandemic levels higher.
Speaker 5: 72% of pre-pandemic levels, and we expect to achieve approximately 85% of pre-pandemic fair count in fiscal 2023. Equally important, our revenue prefers increased 13% on a same fair basis when compared to pre-pandemic levels. Granted, we have really put up the guidance and commitment from our retail würde members in the several States and from which we have made third tax, for both of them. We aim for a complete tariff reviewrable of minimum period, and six of those 7 people usable within fairly 100% in each day. So they are the only cereal price made up by our financial enterprise. Those who are working with those who have over 100% employable samples will be Wash nutritional supplements, first of all, within a minimum period, levels.
Higher revenue per fair greatly improves our profit margins as there is minimal incremental distribution costs.
Speaker 5: Higher revenue per fair greatly improves our profit margins as there is minimal incremental distribution costs.
Per fair May slightly decrease next year as we add more fares at lower revenue levels, but overall profits will increase as a result of the higher number of in person fairs.
Speaker 5: Revenue per fare may slightly decrease next year as we add more fares at lower revenue levels, but overall profits will increase as a result of the higher number of in-person fares.
Fourth quarter book clubs revenue of $27 2 million trailed the prior year's comparable period reported revenue of $37 $5 million due entirely to new system implementation growing pains exacerbated by supply chain difficulties with full year revenues of $126 4 million fell short of lag.
Speaker 5: Fourth quarter book clubs revenue of $27.2 million trailed the prior year's comparable period reported revenue of $37.5 million to entirely to new system implementation growing pains exacerbated by supply chain difficulties.
Last year's revenues of $145 $4 million due to the system issues labor shortages in the fall and impacts from the worldwide supply chain crisis.
Speaker 5: The full year revenues of $126.4 million fell short of last year's revenues of $145.4 million due to the system issues, labor shortages in the fall, and impacts from the worldwide supply chain crisis.
We have dedicated substantial resources to optimizing our distribution efficiency this summer and expect to be ready to meet our teacher and parent demand for back to school.
Speaker 5: We have dedicated substantial resources to optimizing our distribution efficiency this summer, and expect to be ready to meet our teacher and parent-to-man or back to school. We're back to school. We're back to school. We're back to school. We're back to school.
<unk> delivered another strong year as quarterly revenues of $88 5 million exceeded the revenues of $81 9 million in the same quarter, a year ago and full year revenues of $394 million exceeded fiscal 2021 revenues of $365 3 million.
Speaker 5: Trade delivered another strong year as quarterly revenues of $88.5 million exceeded the revenues of $81.9 million in the same quarter a year ago. In full year revenues of $390.4 million exceed fiscal 2021 revenues of $365.3 million.
Strong demand for backlist titles solidified the year sales in the current quarter benefited from the release of the third Thailand, Dave <unk> common clubs series.
Speaker 5: Strong demand for backless titles solidified the year's sales and the current quarter benefited from the release of the third title in Dave Pilkey's Cat Kid Comic Club series.
The company's focus on series publishing is strategic in a number of ways.
Not only does it provide increased confidence and demand for new releases within existing series. It also drives a higher rate of pull through selling a backlist titles and expands the potential and longevity in our IP licensing and entertainment opportunities total children's book publishing and distribution revenues for the current quarter of 200.
Speaker 5: The company's focus on series publishing is strategic in a number of ways.
Speaker 5: Not only does it provide increased confidence and demand for new releases within existing series, it also drives a higher rate of pull-through selling of backlist titles and expands the potential and longevity in our IP licensing and entertainment opportunities.
Third $77 2 million.
Speaker 5: Total children's book publishing and distribution revenues for the current quarter of $277.2 million exceed the prior peer revenues of $195.8 million. In our full year revenue increased 40% to $946.5 million from $675 million in the prior fiscal year. In our full year revenue increased 40% to $1.2 million. In our full year revenue increased 40% to $1.2 million.
<unk> the prior period revenues of $195 $8 million and our full year revenue increased 40% to $946 5 million from $675 million in the prior fiscal year.
Operating income of $46 8 million for the quarter exceeded the prior year's fourth quarter operating income of $12 $6 million and the full year operating income of $115 3 million exceeded last year's operating income of $14 3 million.
Speaker 5: Operating income of $46.8 million for the quarter exceeded the prior years fourth quarter operating income of $12.6 million and the full year operating income of $115.3 million exceeded last year's operating income of $14.3 million as we recover from the pandemic with higher margins than we entered the pandemic.
As we recover from the pandemic with higher margins than we entered the pandemic.
Education solutions closed out a strong year with a record quarter fourth quarter revenues of $156 8 million exceeded the prior year quarterly revenues of $124 9 million.
Speaker 5: Education Solutions closed out a strong year with a record quarter. Fourth quarter revenues of $156.8 million exceeded the prior year quarterly revenues of $124.9 million.
Quarterly operating income was $45 8 million.
Exceeding the prior year performance of $40 1 million for the full year revenues of $393 $6 million exceed the prior fiscal year's revenue of $312 3 million in full year operating income of $81 $8 million exceeded fiscal 2021 operating income of 50.
Speaker 5: Quarterly operating income was $45.8 million, exceeding the prior year performance of $40.1 million.
Speaker 5: For the full year revenues of $393.6 million exceed the prior fiscal year's revenue of $312.3 million and full year operating income of $81.8 million exceeded fiscal 2021 operating income of $57.7 million.
The $7 7 million.
Much of the year's improvement in revenue and profits came from new sources, some of which were identified during the pandemic and some of which were created this year educators.
Speaker 5: Much of the year's improvement in revenue and profits came from new sources, some of which were identified during the pandemic and some of which were created this year. Educators, administrators, parents, and advocates continue to align to get books in the hands of kids, providing evidence of higher demand for children's book ownership.
Administrators parents and advocates continue to align skip books in the hands of kids, providing evidence of higher demand for children's book ownership.
Higher sales of books and materials through sponsorship programs, such as the Florida, New world's reading initiative, we previously disclosed community engagement organizations on affiliated with schools and larger orders directly from schools and district for submarine and other take home initiatives.
Speaker 5: Higher sales of books and materials through sponsorship programs, such as the Florida New World's Reading Initiative, we previously disclosed, community engagement organizations on affiliate with schools, and larger orders directly from schools and districts for summer reading and other take home initiatives, and have all added to this segment's increased revenues and profits.
All added to this segment's increase revenues and profits our focus on instructional materials for the classroom also drove higher revenues as curriculum products such as pre K on my way performed well highlight the demand for early childhood materials are created with bilingual learners and Mike.
Speaker 5: Our focus on instructional materials for the classroom also drove higher revenues as curriculum products such as Pre-K on my way performed well, highlighted demand for early childhood materials that are created with bilingual learners in mind.,
Fiscal 2021, the increased demand for summary, and other products combined with supply chain issues resulted in a $10 million backlog of orders, but ultimately were delivered in fiscal year 2022.
Speaker 5: In fiscal 2021, the increased demand for summer reading and other products combined with supply chain issues resulted in a 10 million dollar backlog of orders that ultimately were delivered in fiscal year 2022. In fiscal year 2022, we better forecasted the high demand and product mix and were able to ship the majority of summer orders received prior to year end, closing out the year with a substantially lower backlog and return to our typical seasonal timing of delivery and revenue recognition.
Fiscal year 2022, we better forecasted the high demand and product mix and we're able to ship. The majority of summer orders received prior to year end closing out the year with a substantially lower backlog and returned to our typical seasonal timing of delivery and revenue recognition. It's.
As Peter mentioned as their funding will not easily identifiable due to its fungible nature is providing support for education solutions traditional business we.
Speaker 5: As Peter mentioned, S.R. funding will not easily identifyable due to its fundable nature is providing support for education solutions traditional business.
We expect this funding to continue in fiscal 2023 as.
As we continue to expand beyond schools and school districts to sponsored sales and community engagement sales, we expect to become less reliant on this type of funding in the future, but schools and districts will always be this segment's largest customer base.
Speaker 5: We expect this fine to continue in fiscal 2023.
Speaker 5: As we continue to expand beyond schools and school districts to sponsored sales and community engagement sales, we expect to become less reliant on this type of funding in the future, but schools and districts will always be the second largest customer base. But, accordingly, expanding our opportunities through targeted investments, increase market penetration, and the shift to a full solution versus product strategy to schools and districts will be a company focus.
Clearly expanding our opportunities through targeted investments increased market penetration and the shift to a full solution versus product strategy to schools and districts will be a company focus.
International segment revenues of $80 4 million approximated the prior year's quarterly revenues of $80 7 million.
Speaker 5: International segment revenues of $80.4 million approximated the prior year's quarterly revenues of $80.7 million.
Operating income of $1 9 million for the fourth quarter was unfavorable to the prior year period operating income of $3 9 million.
Speaker 5: Operating income of $1.9 million for the fourth quarter was unfaithable to the prior year of the third quarter. Operating income of $3.9 million.
For the full year revenues of $302 8 million trailed the prior year's revenue of $313 million and operating income of $5 million trailed the prior year operating income of $28 4 million.
Speaker 5: For the full year, revenues of $302.8 million trailed the prior year's revenue of $313 million and operating income of $5 million trailed the prior year operating income of $28.4 million.
The prior year results include $11 2 million of government subsidies, while the current year included $1 2 million. The company's major markets continued to rebound from the pandemic with 10 in the U K operations, largely mirroring U S recovery for book fairs, and other businesses, Australia, and New Zealand were impacted earlier in the year by cohort.
Speaker 5: The prior year results include 11.2 million of government subsidies while the current year included 1.2 million. The company's major markets continue to rebound from the pandemic with Canada, the UK operations, largely mirroring the US recovery for book fairs and other businesses.
Weighted school closures and government lockdowns and restrictions, but have rebounded in the fourth quarter.
Speaker 5: Australian New Zealand were impacted early in the year by COVID-related school closures and government lockdowns and restrictions but have rebounded in the fourth quarter.
Asia continued to struggle with Covid related restrictions and government regulations in China around tutoring and foreign content in the fourth quarter. The company decided to exit its non strategic and low margin direct to consumer business in Asia, which is being sold to a longtime company employee incurring a $15 1 million.
Speaker 5: Asia continued to struggle with COVID-related restrictions and government regulations in China around tutoring and foreign content. In the fourth quarter, the company decided to exit its non-strategic and low-margin direct-to-consumer business in Asia, which is being sold to a long-time company employee, incurring a $15.1 million loss on the expected sale of this business.
Loss on the expected sale of this business, we will continue to assess the region and our strategy throughout this fiscal year.
Unallocated overhead costs of $28 $4 million in this year's fourth quarter were higher than prior year's fourth quarter unallocated costs of $50 million for the full year unallocated overhead cost of $104 6 million were higher than the prior year's full year unallocated overhead costs was $61 4 million.
Speaker 5: We will continue to assess the region and our strategy throughout this fiscal year.
Speaker 5: Unallocated overhead costs of $28.4 million in this year's fourth quarter were higher than prior year's fourth quarter, an allocate cost of $50 million. $25.3 million in the year's fourth quarter, an allocate cost of $50 million.
Speaker 5: For the full year, an allocate overhead costs of $104.6 million, or higher in the prior years, a full year, an allocate overhead costs of $61.4 million.
Company absorbed higher unallocated wages and incentive compensation in the current year compared to the prior year as we look forward to next fiscal year. We are encouraged by our strong customer engagement and demand for our products content and solutions. We expect book fairs to continue their strong pandemic recovery anticipate achieving.
Speaker 5: Company absorbed higher unallocated wages and incentive compensation in the current year compared to the prior year. As we look forward to next fiscal year, we are encouraged by our strong customer engagement and demand for our products, content and solutions. We expect book fairs to continue their strong pandemic recovery, anticipate achieving 85% of pre-pandemic, in-person, fair account levels. We are expanding capacity and procuring incremental inventory to meet this demand.
85% of pre pandemic in person fair count levels, we are expanding capacity in procuring incremental inventory to meet this demand trade will continue to publish titles and current series and will introduce new content, both in traditional print format and other media.
Speaker 5: Trade will continue to publish tiles in current series and will introduce new content, both in traditional print format and other media. We're also excited about the future for our education solutions business as I detailed earlier and are committed to our activity in international. We continue to expect inflationary cost pressures for our product, transportation, labor, and fuel to impact the company for fiscal year 2023. Product costs for printing, paper, and inbound freight have increased our pre-unit cost by approximately.
Also excited about the future for our education solutions business as I detailed earlier and are committed to our activity in international we continue to expect inflationary cost pressures for our product transportation labor and fuel to impact the company for fiscal year 2023 product cost for printing paper and inbound freight <unk>.
<unk> our per unit cost by approximately 16% for purchases made this year.
Specced it to remain at these levels for the foreseeable future Likewise, our variable labor costs for warehouse associates and drivers have increased over 20%.
Bigger increases to our costs were seen last year and were recognized in the second half of fiscal 2022 for.
For fiscal 2023, as we ramp up our distribution efforts, we will see greater impacts from rising fuel costs were addressing these variable cost increases near and longer term through proactive resource allocation diversifying our vendor base automation pricing where necessary product rationalization in the case of fuel.
Speaker 5: fuel costs. We're addressing these variable costs increases near and longer term for proactive resource allocation, diversifying our vendor base, automation, pricing where necessary, product rationalization in the case of fuel consumption, route optimization.
Consumption route optimization.
While internal investment has been low for the past few years in part due to the pandemic and the need to preserve capital. We are now entering into a growth period, requiring further investment.
Speaker 5: While internal investment has been low for the past few years, in part due to the pandemic and the need to preserve capital, we're now entering into a growth period requiring further investment.
This investment will come in the form of increased prepublication costs for education solutions increased capital spending for distribution operations.
Speaker 5: This investment will come in the form of increased pre-publication costs for education solutions, increased capital spending for distribution operations, investments to attract and retain authors and content, and higher S-GNA costs as we continue to transform the organization for the future and focus on growth initiatives.
<unk> to attract and retain authors and content and higher SG&A costs as we continue to transform the organization for the future and focus on growth initiatives.
Under Peter's leadership, we have implemented stringent controls to ensure that one our investment decisions are backed by cross divisional support to our expected ROI and milestones for these investments are monitored essentially and have appropriate accountability at both the divisional and corporate level and three organizational readiness.
Speaker 5: Under Peer's leadership, we have implemented stringing controls to ensure that one, our investment decisions are backed by cross-divisional support. Two, our expected ROI and milestones for these investments are monitored centrally and have appropriate accountability at both a divisional and corporate level. And three, organizational readiness for the investment in place prior to the commencement of spending. The investment is in place prior to the commencement of spending.
As for the investment is in place prior to the commencement of spending.
Accordingly, we will focus on those areas that provide the best overall return on investment for the company.
Speaker 5: Accordingly, we will focus on those areas that provide the best overall return on investment for the company.
While our spending will be higher than fiscal 2021 or fiscal 2022, we do not expect to increase our spending to levels seen in the years prior to fiscal 2020.
Speaker 5: While our spending will be higher than fiscal 2021 or fiscal 2022, we do not expect to increase our spending to the level seen in the years prior to fiscal 2020.
As Peter mentioned, we are reading, stating guidance this year for the upcoming year, we expect revenue to be approximately $1 8 billion and we expect adjusted EBITDA to range between $195 million and $205 million all of course subject to economic and market conditions and the path of the pandemic.
Speaker 5: As Peter mentioned, we are reading state and guidance this year. For the upcoming year, we expect revenue to be approximately 1.8 billion dollars, and we expect adjusted EBITDA to range between 195 million dollars and 205 million dollars. All, of course, subject to economic and market conditions and the path of the pandemic.
Finally, as previously announced the company increased its regular quarterly dividend to <unk> <unk> per share in line with our current earnings and expected future earnings.
Speaker 5: Finally, as previously announced, the company increased its regular quarterly dividend to 20 cents per share, in line with our current earnings and expected future earnings.
Thank you for your time today I will now hand, the call back to Peter for his final remarks.
Thank you Ken for that walk through of our results and future outlook.
Speaker 5: Thank you for your time today. I will now hand the call back to Peter for his final remarks.
Overall, we're extremely pleased with the positive momentum of our strategic and operational initiatives, which have positioned us very favorably for fiscal year 2023 and beyond.
Speaker 4: Thank you, Ken, for that walk through of our results in future outlook.
Speaker 4: Overall, we're extremely pleased with the positive momentum of our strategic and operational initiatives. We should position us very favorably for fiscal year 2023 and beyond.
Importantly, we expect the positive trends my recent performance to continue trends, which in many cases lead the industry in the near term, we anticipate book fast recovery to advance from this year's 72% of pre.
Speaker 4: Importantly, we expect the positive trends from our recent performance to continue, trends which in many cases lead the industry. In the near term, we anticipate our book fairs recovery to advance from this year's 72% of pre-pandemic levels to 85%. And for continuing high levels of government funding into K-12 education post-pandemic that will bolster our sales. We'll also capitalize on sustainable trends long term.
Pre pandemic levels to 85% and for continuing high levels of government funding into K 12 education post pandemic that will bolster our sales will also capitalize on sustainable trends long term, such as recognizing and growing the demand for independent reading and children's book kind of an issue.
Speaker 4: such as recognising and growing the demand for independent reading and children's book ownership, coupled with a need for support to grow students' literacy skills. Advising in the tech industry for a game while in trauma-loving, returning to the industry hoping for a successful And updated version of the Voice of extraction support that has been developed during the present week Mahatmajiyaa started following the labour-based development and encouraged leadership at an confirmation of child literacy. Mahatmajiyaa started following the updates of secondary towards secondary to secondary to secondary speaking you
Coupled with the need for support to grow students literacy skills.
An unparalleled level of trust in our brand and throw a century of partnership with families and schools.
Speaker 4: An unparalleled level of trust in our brand and through a century of partnership with families and schools.
Growing opportunities for IP, the Lyft, App backlist, and finally, ensuring our core businesses remain formidable gives us the flexibility to implement targeted growth investments to increase innovation and opportunity.
Speaker 4: Growing opportunities for our IP that lift our backlist. And finally, ensuring our core businesses remain formidable gives us the flexibility to implement targeted growth investments to increase innovation and opportunity. And finally, ensuring our innovation and opportunity. And finally, ensuring our innovation and opportunity.
With that thank you again for joining us today, Paul and our culture this call for us.
Speaker 4: With that, I thank you again for joining us today. The call will now conclude this call for us.
Thank you Peter and as a reminder, we invite questions to be directed to our IR mailbox Investor underscore relations at Scholastic Dot Com. We appreciate your time and continuing support.
Speaker 3: Thank you, Peter. And as a reminder, we invite questions to be directed to our IR mailbox, investor underscore relations at squalastic.com. We appreciate your time and continuing support.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker 2: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you.
The conference will begin shortly to raise your hand during Q&A you can dial stolen.
Speaker 1: The conference will begin shortly. To raise your hand during Q&A, you can dial star 1. The conference will begin shortly. To raise your hand during Q&A, you can dial star 1.
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