Q3 2025 Scholastic Corp Earnings Call

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Operator: 🎵 Mysterious Music 🎵 Good day and thank you for standing by.

Good day, and thank you for standing by and welcome to the Scholastic reports third quarter fiscal year 2025 results.

Operator: Welcome to the Scholastic Report's third quarter fiscal year 2025 results. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded.

At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded after the speaker's presentation there'll be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again I would now like to hand, the conference over to your speaker today Jeffrey Matthews.

Jeffrey Mathews: I would now like to hand the conference over to your speaker today, Jeffrey Mathews. Hello and welcome everyone to Scholastic's Fiscal 2025 Third Quarter Earnings Call. Today on the call, I'm joined by Peter Warwick, our President and Chief Executive Officer, and Haji Glover, our Chief Financial Officer and the Executive Vice President.

Jeffrey Matthews: Hello, and welcome everyone to Scholastics fiscal 2025 third quarter earnings call today on the call I'm joined by Peter work, our President and Chief Executive Officer, and RG cover our Chief Financial Officer, and Executive Vice President.

Jeffrey Mathews: As usual, we posted the accompanying investor presentation on our IR website at investor.scholastic.com, which you may download now if you've 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. 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.

Jeffrey Matthews: As usual we've posted the accompanying investor presentation on our IR website at Investor Scholastic Dot Com, which you may download now if you've not already done so.

Jeffrey Matthews: I'd 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.

Jeffrey Matthews: In addition, we will be discussing some non-GAAP financial measures.

Jeffrey Matthews: Regulation G.

Jeffrey Matthews: A reconciliation of those measures to the most directly comparable GAAP measures maybe found in the company's earnings release and accompanying financial tables filed this afternoon on a form 8-K.

Jeffrey Mathews: This earnings release has also been posted to our investor relations website.

Jeffrey Matthews: This earnings release has also been posted to our Investor Relations website.

Jeffrey Mathews: 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 SEC.

Jeffrey Matthews: Encourage you to review the disclaimers in our release and Investor presentation and to review the risk factors disclosed in the company's annual and quarterly reports filed with the SEC.

Jeffrey Mathews: Should you have any questions after today's call, please send them directly to our IR email address, investor underscore relations at scholastic.com.

Jeffrey Matthews: 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.

Peter Warwick: And now I'd like to turn the call over to Peter Warwick to begin this afternoon's presentation. Thanks, Jeff, and good afternoon, everyone. Thank you for joining us. Scholastic performed solidly in our third quarter. We achieved modest revenue growth and improved operating results relative to a year ago. Strong performance in our children's book segment and the addition of nine-story media group contributed to these positive results, in spite of increasing pressure on spending by families and schools on books and educational material. Overall, these results reflected Scholastic's unique strengths in engaging kids with great books and quality children's media.

And now I'd like to turn the call over to Peter work to begin this afternoon's presentation. Thanks, Jess and good afternoon, everyone and thank you for joining us.

Jeffrey Matthews: Scholastic performed solidly in our third quarter, we achieved modest revenue growth and improved operating results relative to a year ago.

Jeffrey Matthews: Performance in our children's book segment, and the addition of nine story Media group contributed to these positive results in spite of increasing pressure on spending by families and schools on books and educational materials overall.

Jeffrey Matthews: Overall these results reflected scholastics unique strengths and engaging kids with great books in quality children's media.

Peter Warwick: We remain committed to our capital allocation priorities, investing in our growth initiatives and returning over $35 million to shareholders through share repurchases and dividends last quarter. Scholastic maintains a strong balance sheet with modest debt and significant options to unlock additional liquidity for debt reduction and enhancing shareholder returns, including through our significant owned real estate assets.

Jeffrey Matthews: We remain committed to our capital allocation priorities investing in our growth initiatives and returning over $35 million to shareholders through share repurchases and dividends last quarter.

Scholastic maintains a strong balance sheet with modest debt and significant options to unlock additional liquidity for debt reduction and enhancing shareholder returns, including through a significant ground real estate assets How'd, you will expand on this topic later.

Peter Warwick: Haji will expand on this topic later. Looking ahead, we now forecast full-year adjusted EBITDA of approximately $140 million, consistent with the low end of our fiscal 2025 guidance. Revenue is forecast to be up modestly year over year, reflecting the intensifying spending headwinds that we saw last quarter and that we expect to continue into the fourth quarter. As we manage these external factors, we've executed cost-saving actions that we expect to benefit both this fiscal year and fiscal 2020.

Jeffrey Matthews: Looking ahead, we now forecast full year adjusted EBITDA of approximately $140 million consistent with the low end of our fiscal 2025 guidance revenue is forecast to be up modestly year over year, reflecting the intensifying spending headwinds that we saw last quarter and we expect to continue into the <unk>.

Jeffrey Matthews: Fourth quarter <unk>.

Jeffrey Matthews: We manage these external factors, we've executed cost saving actions that we expect to benefit this fiscal year and fiscal 2026.

Peter Warwick: Before going into our operating results, I'd like to comment on the macro environment and the headwinds that Scholastic and many of our peers are navigating. First, as many major U.S. retailers have recently reported, consumers have begun taking a more cautious approach to spending in today's environment, including in discretionary categories like children's book purchases, as seen when analyzing Cercana book scan data. Second, recent uncertainty around federal education policy and funding mechanisms is causing some schools and school districts to delay or pause purchases of instructional material. This has contributed to a further cyclical slowdown in the supplemental curriculum market where Scholastic's education business focuses.

Jeffrey Matthews: Before going into our operating results I'd like to comment on the macro environment and the headwinds that scholastic in many of our peers are navigating fast as many major U S. Retailers have recently reported consumers have begun taking a more cautious approach to spending in today's environment.

Jeffrey Matthews: <unk> and discretionary categories like children's book purchases I've seen when analyzing second at book scan data.

Jeffrey Matthews: Second recent uncertainty around federal education policy and funding mechanisms is causing some schools and school districts to delay or pause purchases of instructional materials.

Jeffrey Matthews: This contributed to a further cyclical slowdown in the supplemental curriculum market West Classics educational business focuses.

Peter Warwick: We expect both trends to continue into our current fourth quarter.

Jeffrey Matthews: We expect both trends to continue into our current fourth quarter.

Peter Warwick: Third, we've been actively navigating fast-changing U.S. trade policy and global tariffs, like many other retailers and manufacturers, with global supply chains and full... As we outlined last quarter, our supplier diversification and flexible sourcing processes give us distinct advantages as we mitigate and hedge against tariffs and other risks today. Where we are not able to avoid tariffs, we have opportunities to protect gross margins through modest and targeted pricing. For the remainder of this fiscal year and the first half of fiscal 2026, we still expect minimal tariff-related exposure on our inventory costs, as we have already purchased most inventory needs for this time period.

Jeffrey Matthews: Third we've been actively navigating fast changing U S trade policy and global tariffs like many other retailers and manufacturers with global supply chains and footprints.

Jeffrey Matthews: As we outlined last quarter, a supply diversification and flexible sourcing processes gives us distinct advantages as we mitigate and hedge against tariffs and other risks today.

Jeffrey Matthews: While we are not able to avoid tariffs we have opportunities to protect gross margins through modest and targeted price increases.

Jeffrey Matthews: For the remainder of this fiscal year and the first half of fiscal 2026, we still expect minimal tariff related exposure on our inventory costs as we have already purchased most inventory needs for this time period how.

Peter Warwick: Haji will discuss further the expected impact of tariffs next fiscal year and beyond.

Speaker Change: How'd, you will discuss further the expected impact of tariffs next fiscal year and beyond.

Peter Warwick: With that, I'll turn to the highlights across our business segment. In the children's book publishing and distribution segment, revenues and profits increased, driven by improved results in both book fairs and book clubs within our School Reading Events, or SRE, division. Fairs benefited from higher fair count in the quarter, as we remain on track to meet this year's target of 90,000 fairs. Notwithstanding the impact of increasing pressure on consumer spending, which we saw slightly impact transaction volumes, revenue per fare was in line with prior year, reflecting higher transaction sizes driven by our strong merchandising capability. We were encouraged by increased participation in our new Share the Fair programme last quarter.

Speaker Change: With that I'll turn to the highlights across our business segments in.

Speaker Change: In the children's book publishing and distribution segment revenues and profits increased driven by improved results in both book fairs and book clubs within our school reading events or SRA Division.

Speaker Change: <unk> benefited from higher site counts in the quarter as we remain on track to meet this year's target of 90000 fast now.

Speaker Change: Notwithstanding the impact of increasing pressure on consumer spending, which we saw slightly impact transaction volumes revenue per fab was in line with prior year, reflecting higher transaction sizes, driven by our strong merchandising capabilities.

Speaker Change: We were encouraged by increased participation in on you share the FAP program last quarter shatter fat enable schools to collect contributions digitally from the school community to support students who need help buying books.

Peter Warwick: Share the Fair enables schools to collect contributions digitally from the school community to support students who need help buying books. We see this as a long-term opportunity to increase student and family participation, ultimately contributing to the size and impact of Scholastic Book Fair.

Speaker Change: We see this as a long term opportunity to increase student and family participation ultimately contributing to the size and impact of scholastic book fairs.

Peter Warwick: Looking ahead, we continue to expect modest growth in fiscal 2025, driven by higher fare counts and new merchandising and sales initiatives, partly offset by modestly lower participation, reflecting continued pressure on families' discretionary spending in Quarter 4. In book clubs, also within SRE, we continue to benefit from new strategies implemented at the start of the school year. In quarter three, student participation and revenue per sponsor, as well as order volumes, rose year over year, demonstrating positive engagement from the teachers and families who participate in our club. We remain focused on continuing this momentum and enhancing our offerings to increase teacher participation in the 2025-26 school year.

Speaker Change: Looking ahead, we continue to expect modest growth in fiscal 2025, driven by higher site counts and new merchandising and sales initiatives, partly offset by modestly lower participation, reflecting continued pressure on families discretionary spending from quarter four.

Speaker Change: In book clubs also within that salary, we continued to benefit from new strategies implemented at the start of the school year.

Speaker Change: In quarter, three student participation and revenue per sponsor as well as order volumes rose year over year, demonstrating positive engagement from the teachers and families who participate in our clubs.

Speaker Change: We remain focused on continuing this momentum and enhancing our offerings to increase teacher participation in the 2025 26 school year.

Peter Warwick: Turning to our trade publishing division, which is also within the children's book segment, results were in line with the prior year, driven by the global success of new best-selling titles, offset by a modest decline in backlist sales, consistent with industry trends, as I previously mentioned. Upon its publication at the beginning of last quarter, the thirteenth book in Dave Pilkey's best-selling Dogman series, Dogman, Big Jim Begins, immediately became the number one best-selling book across all categories in the US and Canada, and the number one best-selling children's book in the UK and Australia. It has remained at the top of bestseller lists, already selling almost two and a half million copies globally.

Speaker Change: Turning to our trade publishing division, which is also within the children's books segment results were in line with the prior year driven by the global success of new best selling titles offset by a modest decline in backlist sales consistent with industry trends as I previously mentioned.

Speaker Change: Upon its publication at the beginning of last quarter.

Speaker Change: 13th Broken day, Turkeys best selling Dog Man series Dog-paddle Big Jim begins immediately became the number one best selling book across all categories in the U S and Canada and the number one best selling children's book in the UK and Australia.

Speaker Change: It has remained at the top of bestseller lists already selling almost two and a half million copies globally.

Peter Warwick: Dave Pilkey's worldwide author tour, the January release of the Dogman movie, and extensive promotion in school book fairs, including specially branded Dogman events, boosted sales of Big Jim Begins and earlier titles in the Dogman series, as well as Dave's other best-selling series, Captain Underpants and Cat Kid Comic Club. In the midst of this global phenomenon, we're very excited about the 14th Dogman book, Big Jim Believes, which we will publish globally this coming fall. Other newly published Scholastic titles added to our presence on bestseller lists last quarter, including the new Hunger Games deluxe editions and box set, and our new graphic novel, Wings of Fire number eight, Escaping Peril.

Speaker Change: <unk> worldwide author tour. The January release of the Dog Man movie and extensive promotion in school book fairs, including specialty branded dog man events boosted sales of Big Jim begins and earlier titles and the dog Man series as well as Dave's other best selling series Captain Underpants and cap kit.

Speaker Change: <unk> club.

Speaker Change: In the midst of this global phenomenon, we're very excited about the 14th Stockman book Big Jim believes which we will publish globally this coming fall.

Speaker Change: Other newly published scholastic titles added to our presence on best seller list last quarter.

Speaker Change: <unk>, the new hunger games deluxe editions and box set and our new graphic novel wings of fire number eight escaping peril.

Peter Warwick: Given their ability to engage kids, particularly striving readers, graphic novels are dominating children's publishing, and Scholastic dominates graphic novels, currently holding 12 of the top 15 spots on the New York Times Graphic Novel Bestseller List.

Speaker Change: Given their ability to engage kids, particularly striving readers graphic novels, a dominating children's publishing and scholastic dominates graphic novels currently holding 12 of the top 15 spots on the New York Times graphic novel bestseller list.

Peter Warwick: Looking at the quarter ahead, earlier this week, Scholastic published the highly anticipated fifth book in Suzanne Collins' worldwide best-selling Hunger Games series, Sunrise on the Reaping, which was released simultaneously in the US, Canada, UK, Australia and New Zealand. The book was already at the top of bestseller lists based on strong pre-orders for print, e-book and audio. Print pre-orders alone were up over 65% compared to the fourth Hunger Games book in spring of 2020. We're optimistic that the excitement around this news title, as well as Lionsgate's movie adaptation scheduled to be released in November 2026, will support strong sales of the entire series in the fourth quarter through fiscal 2027 and beyond, as we continue to bring new fans and readers to the Hunger Games franchise.

Speaker Change: Looking at the quarter ahead earlier this week scholastic published the highly anticipated fifth book and Suzanne Collins worldwide best selling hunger game series Sunrise on the repay which was released simultaneously in the U S, Canada U K, Australia and New Zealand.

Speaker Change: The book was already at the top of bestseller lists based on strong preorders for print E book and audio.

Speaker Change: Preorders alone, we're up over 65% compared to the fourth hunger games book in spring 2020.

Speaker Change: We're optimistic that the excitement around this newest title as well as lines Gates movie adaptation is scheduled to be released in November 2026 will support strong sales of the entire series in the fourth quarter through fiscal 2027 and beyond as we continue to bring new fans and readers to the hunger games.

Speaker Change: Franchise.

Peter Warwick: In the entertainment segment, revenue and adjusted EBITDA benefited from the strategic acquisition of Nine Story Media Group in June. We're excited about the progress and early successes our combined Scholastic Entertainment team has made. As we've discussed previously, major streaming platforms and studios have slowed production spending in green lights, impacting near-term demand for production service work and delaying, but not cancelling, some promising Scholastic-produced projects. Though we're encouraged by recent momentum across the industry, we expect more productions to be green-lit in the year ahead compared to last. With the benefit of nine stories capabilities, we've significantly expanded the reach and monetization of Scholastic's current media library and IP on streaming platforms, especially through dedicated Scholastic IP channels on YouTube, the top platform for kids' media consumption.

Speaker Change: In the entertainment segment revenue and adjusted EBITDA benefited from the strategic acquisition of nine story Media group in June.

We're excited about the progress and the early successes combined scholastic Entertainment team has made.

As we've discussed previously major streaming platforms and studios have slowed production spending and green lights impacting near term demand for production service work and delaying but not canceling some promising scholastic produce projects that we're encouraged by recent momentum across the industry we expect.

Speaker Change: More productions to be green lit in the year ahead compared to last.

Speaker Change: With the benefit of nine stories capabilities, we've significantly expanded the reach and monetization of Scholastics current media library and IP on streaming platforms, especially through dedicated scholastic IP channels on Youtube the top platform for kids media consumption.

Peter Warwick: Across Scholastic channels, Clifford Classic, Goosebumps, The Magic School Bus and our Scholastic Classic Hub channel, Scholastic content had nearly 10 million views on YouTube last month, up almost 40 times from a year ago. and kids and families spent close to three million hours a month watching our high quality beloved stories and animation. In the short time since these channels launched last summer, the strong momentum and engagement has unlocked brand exposure for Scholastic and contributed to incremental advertising revenue and e-commerce sales. In addition to our reach on YouTube, we now have 700 half-hours of Scholastic content on leading video-on-demand platforms, including Peacock, the Roku channel, and Tubi.

Speaker Change: Across scholastic channels Clifford Classic Goose bumps, the Magic School bus and our Scholastic Classic hub channel Scholastic content had nearly 10 million views on Youtube last months up almost 40 times from a year ago.

Speaker Change: And kids and families spend close to 3 million hours amongst watching a high quality beloved stories and animation.

Speaker Change: In the short time since these channels launched last summer the strong momentum in engagement has unlocked brand exposure for scholastic and contributed to incremental advertising revenue and E Commerce sales.

Speaker Change: In addition to our reach on Youtube, we now have 700 half hours of scholastic content on leading video on demand platforms, including Peacock, the roku channel and to be.

Peter Warwick: We've served the tremendous demand for quality content on YouTube, especially among parents for their kids. We've accelerated production and development for that platform. We're especially excited about a new values and faith-based YouTube media property, We Believe Kids, based on the We Believe series of young children's books which our talented Make Believe Ideas team created in-house.

Speaker Change: To serve the tremendous demand for quality content on Youtube, especially among parents for that kids, we've accelerated production and development for that platform.

Speaker Change: We're especially excited about our new values and faith based Youtube media property, we believe kids based on the we believe series of young children's books, which are talented make believe ideas team created in house.

Peter Warwick: We look forward to launching this channel with e-commerce integration in time for the Easter holiday next month.

Speaker Change: We look forward to launching this channel with E Commerce integration in time for the Easter Holiday next month.

Peter Warwick: Turning now to education solutions. As expected, third quarter sales and profits declined, as lower spending on supplemental curriculum remains a headwind for this business. During the quarter, we continue to be encouraged by the strength of our state and community literacy partners business, driven by increased participation in state-sponsored programmes as our partners continue investing to expand kids' access to books outside of school. We remain excited about our product development pipeline of new literacy programs aligned with current reading pedagogy.

Speaker Change: Turning now to education solutions as expected third quarter sales and profits declined as lower spending on supplemental curriculum remains a headwind for this business.

Speaker Change: During the quarter, we continued to be encouraged by the strength of our state and community literacy partners business driven by increased participation in state sponsored programs.

Speaker Change: Partners continue investing to expand kids' access to books outside of school.

Speaker Change: We remain excited about our product development pipeline of new literacy programs aligned with current reading patent garages.

Peter Warwick: reaching the market in time for the 2025-26 school year, which we expect to begin to contribute to results next fiscal year. For the remainder of the year, we expect schools and districts to continue to delay purchases of supplemental materials impacted further by uncertainty around federal education policy and funding, as I discussed earlier.

Speaker Change: Reaching the market in time for the 2025 26 school year, which we expect to begin to contribute to results next fiscal year.

Speaker Change: For the remainder of the year, we expect schools and districts to continue to delay purchases of supplemental materials impacted further by uncertainty around federal education policy and funding as I discussed earlier.

Peter Warwick: In response to the decline in this segment sales and profitability over the past two years, we've begun a strategic review of the education solutions business with a goal of optimizing its long-term potential. I believe in this business, given our deep focus on reading and literacy, and our commitment to serving teachers and schools, as well as a growing number of state, philanthropic and community partners seeking to support literacy.

Speaker Change: In response to the decline in this segment sales and profitability over the past two years, we've begun a strategic review of the education solutions business with the goal of optimizing its long term potential.

Speaker Change: I believe in this business given our deep focus on reading and literacy and our commitment to serving teachers and schools as well as a growing number of states philanthropic and community partners seeking to support literacy, we look forward to providing more details on our year end call.

Peter Warwick: We look forward to providing more details on our year-end call. In the international segment, revenues and profits increased, driven by our major markets including Canada, the UK and New Zealand, all of which benefited from strong sales of Dogman, Big Jim, Big In. We saw success with both print and digital education products, including a new multi-year contract with the Ministry of Education in New Zealand.

Speaker Change: In the international segment revenues and profits increased driven by our major markets, including Canada. The U K and New Zealand all of which benefited from strong sales of dog Man Big Jim begins we.

Speaker Change: We saw success with both print and digital education products, including a new multiyear contract with the Ministry of Education in New Zealand, we continue to pursue opportunities to organize and invest in this business to drive growth, including expanding our education in English language offerings in emerging markets.

Peter Warwick: We continue to pursue opportunities to organise and invest in this business to drive growth, including expanding our education and English language offerings in emerging markets. Looking ahead, we continue to expect modest growth in these major markets relative to fiscal 2024.

Speaker Change: Looking ahead, we continue to expect modest growth in these major markets relative to fiscal 2024.

Haji Glover: And now I'll turn the call over to Haji to review our fiscal 2025 third quarter results and provide additional details around our updated outlook and actions to drive shareholder value for the remainder of the year and beyond. Thank you, Peter, and good afternoon, everyone. Today, I will refer to our adjusted results for the third quarter, excluding one-time items. please refer to our press release tables and SEC filings for a complete discussion of one-time items and a reconciliation with related gap figures. As Peter discussed earlier, third quarter revenues increased, and operating loss improved from a year ago.

Speaker Change: And now I'll turn the call over to <unk> to review, our fiscal 2025 third quarter results and provide additional details around our updated outlook and actions to drive shareholder value for the remainder of the year and beyond.

Speaker Change: Thank you Peter and good afternoon, everyone.

Speaker Change: Today I'll refer to our adjusted results for the third quarter, excluding onetime items.

Speaker Change: Please refer to our press release tables, and SEC filings for complete discussion of onetime items and a reconciliation with related GAAP figures.

Speaker Change: As Peter discussed earlier third quarter revenues increased and operating loss improved from a year ago.

Haji Glover: In the third quarter, revenues increased 4% to $335.4 million, and profitability improved by multiple measures. The company's seasonally adjusted operating loss was $20.9 million, an improvement from $30.6 million in the prior year period. Adjusted EBITDA was $6 million, relative to a loss of $7.2 million a year ago. Net loss improved to $1.3 million from a loss of $23.3 million in the prior year period. on a per diluted share basis, adjusted loss improved to $0.05 compared to a loss of $0.80 last year. Turning to our segment results, in children's books publishing and distribution, revenues for the third quarter increased 5% to $203.3 million, primarily reflecting growth in both book fairs and book club channels.

Speaker Change: Third quarter revenues increased 4% to $335 4 million and profitability improved by multiple measures.

Speaker Change: Company's seasonally adjusted operating loss was $20 9 million an improvement from $30 6 million in the prior year period.

Speaker Change: Adjusted EBITDA was $6 million relative to a loss of $7 2 million a year ago net.

Speaker Change: Net loss improved to $1 3 million from a loss of $23 3 million in the prior year period.

Speaker Change: On a per diluted share basis, adjusted loss improved to five cents compared to a loss of <unk> 80 last year.

Speaker Change: Turning to our segment results.

Speaker Change: In book publishing and distribution revenues for the third quarter increased 5% to $203 3 million, primarily reflecting growth in both book fairs and book club channels.

Haji Glover: Segment-adjusted operating income was $7.6 million, up from $2.8 million in the prior year period, reflecting higher revenues in school reading events. Within SRE, book fair revenues were $110.7 million in the third quarter, an increase of 8%, primarily reflecting the larger number of fairs held in December compared to the prior year period, which contributed to a higher fair count in the third quarter. Revenue per fair was in line with prior year, close to record levels and significantly higher than pre-pandemic levels. We expect fair counts to contribute to modest growth in our book fairs business this school year, offsetting the consumer spending headwinds we expect to continue in the fourth quarter.

Speaker Change: Segment adjusted operating income was $7 6 million up from $2 8 million in the prior year period, reflecting higher revenues in school reading events within FRE book Fair revenues were $110 7 million in the third quarter, an increase of 8% primarily reflecting the larger number of fairs held in December compared to the <unk>.

Speaker Change: Meyer year period, which contributed to higher fair count in the third quarter revenue per fair wasn't in line with prior year close to record levels and significantly higher than pre pandemic levels.

Speaker Change: We expect fair count to contribute to modest growth in our book fairs business. This school year offsetting the consumer spending headwinds, we expect to continue in the fourth quarter.

Haji Glover: Book club revenues were $15.2 million in the quarter, an increase of 14%. We're encouraged by higher order volumes and revenue per sponsor in this business after strategically transitioning book clubs to a smaller, more profitable core business in fiscal 2024. We continue to adapt various offerings to improve teacher engagement for the next school year. In our trade publishing division, revenues were $77.4 million in the third quarter, in line with prior year. We expect new releases in the fourth quarter, especially Sunrise on the Reaping, to positively impact results in the fourth quarter, in spite of the softness in the retail markets as consumers pull back on discretionary spending.

Speaker Change: Book Club revenues were $15 2 million in the quarter, an increase of 14%.

Speaker Change: We're encouraged by higher order volumes and revenue per sponsor in this business after strategically transitioning book clubs to a smaller more profitable core business in fiscal 2024.

Speaker Change: We continue to adapt peers offerings to improve teacher engagement for the next school year.

Speaker Change: And our trade publishing division revenues were $77 4 million in the third quarter in line with prior year.

Speaker Change: We expect new releases in the fourth quarter, especially sunrise on the reaping to possibly impact results in the fourth quarter in spite of the softness in the retail markets as consumers pulled back on discretionary spending.

Haji Glover: Turning to our entertainment segment, revenues were $12.8 million, reflecting the contribution of nine stores. segment adjusted operating loss was 2.4 million compared to 0.1 million a year ago. The current year period includes $2.3 million in incremental amortization expense on intangible assets related to the acquisition. On a pro forma basis, nine-story revenues were down relative to prior year period, primarily driven by anticipated delays in production greenlights. As Peter discussed, we remain encouraged by recent momentum we've seen. and are simultaneously focused on production and development work on video-on-demand platforms. We continue to expect company-wide synergies to benefit this segment and fiscal 2026 and beyond.

Speaker Change: Turning to our entertainment segment revenues were $12 8 million, reflecting the contribution of mine story.

Speaker Change: Adjusted operating loss was $2 4 million compared to zero point $1 million a year ago.

Speaker Change: The current year period includes $2 3 million and incremental amortization expense on intangible assets related to the acquisition.

Speaker Change: On a pro forma basis, <unk> revenues were down relative to prior year period, primarily driven by anticipated delays in production of Green lights as Peter discussed we remain encouraged by recent momentum we've seen.

Speaker Change: Simultaneously focus on production and development work on video on demand platforms.

Speaker Change: We continue to expect companywide synergies to benefit this segment in fiscal 2026 and beyond.

Haji Glover: turning to education solutions. segment revenues were down 16% to $57.2 million in the third quarter, primarily reflecting lower spending by schools and school districts on supplemental curriculum products. segment-adjusted operating loss was $6.9 million in the third quarter, compared to a loss of $0.8 million in the prior year period. Given the high flow-through of revenue in this business, more revenue significantly impacted operating margins and profitability. As Peter noted, our teams are developing new supplemental products for schools, which we expect to begin to contribute to fiscal 2026 results. Looking at the remainder of the year, we anticipate growth in our state and community partnership.

Speaker Change: Turning to education solution set.

Speaker Change: Segment revenues were down 16% to $57 2 million in the third quarter, primarily reflecting lower spending by schools and school districts on supplemental curriculum products set.

Speaker Change: Segment adjusted operating loss was $6 9 million in the third quarter compared to a loss of <unk> 8 million in the prior year period.

Given the high flow through of revenue in this business more revenues significantly impacted operating margins and profitability.

Speaker Change: Peter noted our teams are developing new supplemental products for schools, which we expect to begin to contribute to fiscal 2026 results.

Speaker Change: Looking at the remainder of the year, we anticipate growth in our state and community partnerships driven by expanded participants and state sponsored programs. We continue to move forward with investments in this important business segment.

Haji Glover: driven by expanded participants and state-sponsored programs. We continue to move forward with investments in this important business sector. Given the loss of operating leverage on lower sales, we're focused on accelerating our sales growth, while also aligning spending with our updated top line outlook. Over the long term, we're focused on optimizing the business to reach its potential and position it for success.

Speaker Change: Given the loss of operating leverage on more sales, we're focused on accelerating our sales growth. While also aligning spending with our updated top line outlook.

Over the long term, we're focused on optimizing the business to reach its potential and position it for success.

Haji Glover: Finally, international segment revenues were $59.3 million in the third quarter. Excluding the $2.7 million year-over-year impact of unfavorable foreign currency exchange. segment revenues were up 2.9 million, reflecting higher revenues in major markets, particularly in Canada and the UK. Segment-adjusted operating results improved to a loss of $2 million compared to a loss of $5.9 million in the prior year period, reflecting higher revenues and continued optimization of this business to drive growth. We continue to expect modest growth in our major markets and operational efficiencies to drive improvements in operating margins and contribution in the international segment year over year.

Speaker Change: Finally international segment revenues were $59 3 million in the third quarter.

Speaker Change: <unk> for $2 7 million year over year impact of unfavorable foreign currency exchange segment revenues were up $2 9 million, reflecting higher revenues in major markets, particularly in Canada and the U K.

Speaker Change: Segment, adjusted operating results improved to a loss of $2 million compared to a loss of $5 9 million in the prior year period.

Speaker Change: Selecting higher revenues and continued optimization of this business to drive growth.

We continue to expect modest growth in our major markets and operational efficiencies to drive improvements in operating margins and contribution in the international segment year over year.

Haji Glover: Unallocated overhead costs of $17.2 million in the third quarter decreased from $26.6 million in the prior year period, primarily driven by lower employee-related costs.

Speaker Change: Unallocated overhead cost of $73 2 million in the third quarter decreased from $26 6 million in the prior year period.

Speaker Change: Primarily driven by lower employee related costs.

Haji Glover: Now I'm turning to cash flow in the balance sheet. In the quarter, net cash used by operating activities was $12 million compared to net cash provided of $13.1 million in the prior year period. This decrease was primarily driven by lower customer remittance on decreased sales and higher interest payments related to the company's borrowings, partly offset by lower cash tax. Free cash use in the third quarter was $30.7 million compared to $7.1 million in the prior year period, primarily reflecting lower cash flow from operations. At quarter end, the company had borrowings of $275 million under the recently upsized, unsecured Revolving Credit Facility to fund the acquisition of nine-story media group and working capital needs.

Speaker Change: Now turning to cash flow and the balance sheet.

Speaker Change: In the quarter net cash used by operating activities was $12 million compared to net cash provided of $13 1 million in the prior year period. This decrease was primarily driven by lower customer remains on decreased sales and higher interest payments related to the companys borrowings.

Speaker Change: Partly offset by lower cash taxes.

Speaker Change: Free cash use in the third quarter was $30 7 million compared to $7 1 million in the prior year period, primarily reflecting lower cash flow from operations.

Speaker Change: At quarter end, the company had borrowings of $275 million under the recently Upsized unsecured revolving credit facility to fund the acquisition of nine stores Media group and working capital needs at the end of the quarter net debt was $189 4 million compared to a net cash position of $107 7 million.

Haji Glover: At the end of the quarter, net debt was $189.4 million, compared to a net cash position of $107.7 million at the end of fiscal 2024, primarily reflecting the nine-story media group acquisition and cash return to shareholders through dividends and share repurchase . We believe our strong balance sheet provides significant flexibility with modest debt and non-operating assets that could be monetized and deployed in accordance with our capital allocation priorities, if and when the company chose to, and market conditions permitted.

Speaker Change: At the end of fiscal 2024, primarily reflecting the nice to read meter group acquisition and cash returned to shareholders through dividends and share repurchases.

Speaker Change: We believe our strong balance sheet provides significant flexibility with modest debt and nonoperating assets that could be monetized and deployed in accordance with our capital allocation priorities, if and when the company chose to and market conditions permit.

Haji Glover: As disclosed in our quarterly and annual filings with the SEC, Scholastic owns its 355,000 square foot headquarters building in SoHo, New York City. Within that building, there are 26,600 square feet of premium retail space that are currently under lease and expected to generate $11.1 million in rental revenue in fiscal year 2026 based on currently held lease agreements. of the remaining 328,400 square feet of Class A office space. 108,000 square feet are currently being marketed as we consolidate our use of the building. Offsetting gains on potential monetization transactions, the New York City headquarters has a sizable tax basis reflecting the purchase of 555 Broadway in 2014 for approximately $255 million and subsequent improvements less accumulated depreciation.

Speaker Change: As disclosed in our quarterly and annual filings with the SEC Scholastic owns is 355000 square foot headquarters building in Soho, New York City.

Speaker Change: Within that building there are 26600 square feet of Premier retail space that are currently under lease and expected to generate $11 1 million in rental revenue in fiscal year 2026 based on currently held lease agreements.

Speaker Change: The remaining 328400 square feet of class a office space 108000 square feet are currently being marketed as we consolidate our use of the building.

Speaker Change: Offsetting gains on potential monetization transactions, the New York City headquarters has a sizable tax basis, reflecting the purchase of 555 Broadway in 2014 for approximately $255 million and subsequently improvements lots of accumulated depreciation.

Haji Glover: In addition to the New York City headquarters building, Scholastic owns its distribution facilities, including three warehouses with 1,459,000 square feet of space and 162 acres of related land situated in and around Jefferson City, Missouri. These facilities' capacity is approximately 70% utilized at the moment. The tax basis on these assets is low, reflecting many years of accumulated depreciation.

Speaker Change: In addition to the New York City headquarters building Scholastic owns its distribution facilities, including three warehouses with $1 million and 459000 square feet of space and 162 acres of related land.

Speaker Change: Situated in an around Jefferson City, Missouri.

Speaker Change: These facilities capacity is approximately 70% utilized at the moment.

Speaker Change: The tax basis on these assets as low reflecting many years of accumulated depreciation.

Haji Glover: We continue to return excess cash to shareholders in the third quarter through our regular dividend and open market share repurchases, consistent with our capital allocation priorities. We repurchased 1.45 million share the last quarter for $30 million. Together with our regular dividend, we returned over $35 million in the third quarter. Our Board of Directors has authorized an additional $53.4 million for our repurchases, increasing our current share buyback authorization to $100 million. The company expects to continue purchasing shares from time to time as conditions allow on the open market or in negotiated private transactions for the foreseeable future.

Speaker Change: We continue to return excess cash to shareholders in the third quarter through our regular dividend and open market share repurchases consistent with our capital allocation priorities.

Speaker Change: We repurchased 145 million shares last quarter for $30 million.

Speaker Change: Together with our regular dividend, we returned over $35 million in the third quarter. Our board of directors has authorized an additional $53 4 million for repurchases, increasing our current share buyback authorization to $100 million. The company expects to continue to purchasing shares from time to time as conditions allow on the open mark.

Speaker Change: Or in negotiated private transactions for the foreseeable future.

Haji Glover: Turning to our outlook, in the fourth quarter, we expect modest revenue growth compared to the prior year period, supported by the release of the fifth Homework Games book and solid results in school reading and events, as we navigate increasing spending pressures, in particular for education solutions. As Peter noted, we now anticipate adjusted EBITDA of approximately $140 million at the low end of our original guidance range of $140 million to $150 million, and modest revenue growth year-over-year compared to our prior guidance of 4% to 6% growth. The outlook for full-year free cash flow remains between $20 million and $30 million, reflecting our planned cap-backs in this year's larger-than-usual working capital investments.

Speaker Change: Turning to our outlook in the fourth quarter, we expect modest revenue growth compared to the prior year period supported by the release of the hunger games book and solid results in school repayment events as we navigate increasing spending pressures in particular for education solutions.

As Peter noted, we now anticipate adjusted EBITDA of approximately $140 million at the low end of our original guidance range of $140 million to $150 million and modest revenue growth year over year compared to our prior guidance of 4% to 6% growth.

Speaker Change: The outlook for full year free cash flow remains between $20 million and $30 million, reflecting our planned capex and this year's larger than usual working capital investments in the third quarter largely based on the external factors discussed today, we proactively targeted and executed on cost saving initiatives.

Haji Glover: In the third quarter, largely based on the external factors discussed today, we proactively targeted and executed on cost-saving initiatives. As I discussed on December's earnings call, we've reduced discretionary and non-revenue-generating expenses in consulting and non-priority functions in business. We also froze hiring in these areas and executed a series of strategic departmental reorganizations globally. We're taking additional cost actions in the fourth quarter and tightly managing costs as we close out the year. We expect these one-time and ongoing cost actions to benefit results in the current fiscal year and going forward in fiscal 2026. Beyond this fiscal year, we'll continue to focus on optimizing our business and aligning spending with our long-term strategy and growth priorities.

Speaker Change: As I discussed on December earnings call, we've reduced discretionary and non revenue generating expenses and consulting and non priority functions and businesses.

Speaker Change: We also froze hiring in these areas and executed a series of strategic departmental reorganizations globally.

Speaker Change: We're taking additional cost actions in the fourth quarter and tightly managing costs as we close out the year.

Speaker Change: We expect these one time and ongoing cost actions to benefit results in the current fiscal year and going forward in fiscal 2026.

Speaker Change: Beyond this fiscal year, we will continue to focus on optimizing our business and aligning spending with our long term strategy and growth priorities.

Haji Glover: And finally, I would like to address the impact of new tariffs on our business. As Peter noted, we continue to expect minimum tariff-related exposure on our inventory costs for the remainder of fiscal 2025 and the first half of fiscal 2026. Beyond that, we're focused on proactively managing tariff-related costs within the current volatile environment.

Speaker Change: And finally, I would like to address the impact of new tariffs on our business.

Speaker Change: As Peter noted, we continue to expect minimum tariffs related exposure on our inventory cost for the remainder of fiscal 2025 in the first half of fiscal 2026.

Speaker Change: Beyond that we're focused on proactively managing tariff related costs within the current volatile environment.

Haji Glover: Books are generally excluded from the current tariff. Scholastic's primary exposure to these incremental tariffs is on non-book products, including novelty items, which we currently source from countries with tariff increases, including China. Like most U.S. publishers, we also source paper from Canada, which currently is subject to new tariffs. Based on our current sourcing arrangements and implemented or announced tariffs, we currently expect an incremental impact on our cost of product next year in the mid-single-digit millions range. As we've done for the past 10 years, we'll continue to work to actively reduce the tariff impact through alternate sourcing arrangements, changes to our product specifications, and modest price increases as necessary.

Speaker Change: <unk> are currently excluded from the current tariff increases scholastics primary exposure to these incremental tariffs is on non book products, including novelty items, which we currently source from countries with tariff increases, including China like most U S. Publishers. We also source paper from Canada, which currently is subject.

Speaker Change: Two new tariffs.

Based on our current sourcing arrangements and implemented or announced tariffs. We currently expect an incremental impact on our cost of product next year in the mid single digit millions range as we've done for the past 10 years, we will continue to work to actively reduce the tariff impact through alternate sourcing arrangements.

Speaker Change: Changes to our product specifications and modest price increases as necessary.

Haji Glover: Overall, we remain confident that our global-scale, highly-optimized supply chain and pricing power will help mitigate against material tariff-related exposure.

Speaker Change: Overall, we remain confident that our global scale highly optimized supply chain and pricing power will help mitigate against material tariff related exposure. We will continue to monitor the complex situation around tariffs and provide further updates on our year end call.

Haji Glover: We'll continue to monitor the complex situation around tariffs and provide further updates on our year-end call.

Haji Glover: Thank you for your time today.

Peter Warwick: I'll now hand the call back to Peter for his final remarks. Thank you, Haji.

Speaker Change: Thank you for your time today.

Peter Work: I'll now hand, the call back to Peter for his final remarks.

Peter Warwick: In conclusion, after achieving solid results in our third quarter, Scholastic is now focused on achieving modest revenue growth in the fourth quarter and managing costs as we navigate short-term headwinds for the remainder of the fiscal year. Despite these near-term pressures, we remain confident in Scholastic's long-term growth opportunity and are committed to continuing our plans to grow in our core and adjoining markets where Scholastic's brand, IP and distribution channels present compelling growth opportunities to meet kids, families and schools' essential needs to educate, inform and engage kids.

Speaker Change: Thank you <unk> in conclusion after achieving solid results in our third quarter Scholastic is now focused on achieving modest revenue growth in the fourth quarter and managing costs as we navigate short term headwinds for the remainder of the fiscal year <unk>.

Speaker Change: Despite these near term pressures, we remain confident in scholastics long term growth opportunity and are committed to continuing our plans to grow in our core and adjoining markets West Classics brand IP and distribution channels present compelling growth opportunities to meet kids families in the SKU.

Speaker Change: <unk> is essential needs to educate inform and engage kids. Thank.

Peter Warwick: Thank you very much.

Operator: Now let me turn the call over to Thank you, Peter. With that, we will open the call for questions.

Thank you very much now let me turn the call over to Jeff.

Jeffrey Matthews: Thank you Peter with that we will open the call for questions operator.

Operator: Operator? Thank you.

Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again.

Jeffrey Matthews: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Brendan Mccarthy: Our first question comes from the line of Brendan McCarthy with Sidoti, you may proceed. Great, good afternoon, everybody. Thanks for taking my questions here. I just wanted to start off in the trade channel. Yeah, I know you mentioned your pretty, pretty favorable outlook on frontless title sales from from the Hunger Games title and the new Dogman release. Just kind of wondering how we can think about backlist sales given consumer pressure, but also the prospect that some of these frontlist titles may drive stronger backlist sales of earlier titles in the series. Just kind of wondering how we can think about that going forward.

Brendan Mccarthy: Our first question comes from the line of Brendan Mccarthy with Sidoti You May proceed.

Brendan Mccarthy: Great. Good afternoon, everybody. Thanks for taking my questions here.

Brendan Mccarthy: I just wanted to start off in the trade channel I know you mentioned youre pretty pretty favorable outlook on frontlist titles sales from from the hunger games title and the new Dog man release.

Speaker Change: Just kind of wondering how we can think about backlist sales given consumer pressure.

Speaker Change: But also the prospect that some of these frontlist titles May drive stronger backlist sales of earlier titles in the series just kind of wondering how we can think about that going forward.

Peter Warwick: Thank you, it's Peter here. One of the great things about successful frontlist titles, particularly the Dave Pilkey that we've just published and also the Suzanne Collins, is that it drives their backlist sales as well. So one of the ways in which we can improve backlist performance is actually through very successful frontlist performance with with titles from key authors. And I think it's something that we will continue to see, because the great benefit we've got going forward, particularly in the fourth quarter, this fourth quarter with Suzanne Collins, and then with a new Dogman book coming in our next financial year, I think that it's that successful frontlist publishing, which can really help to drive backlist sales.

Peter Work: Hi, Thank you it's Peter here.

Peter Work: One of the great things about successful Frontlist titles, particularly the Dave Pelkey that we've just published <unk> Collins is it drives their backlist sales as well so one of the ways in which we can improve <unk> performance is actually through very successful Frontlist performance.

Peter Work: <unk>.

Peter Work: With titles from from key authors and I think it's something that we will continue to see because the great. The great benefit we've got going forward, particularly in the <unk>.

Peter Work: Fourth quarter this fourth quarter with Suzanne Collins, and then with a new dog Man book coming in our next financial year, I think that it's that successful Frontlist publishing, which can really help too.

Brendan Mccarthy: And that's really what we're focusing on right now. Got it. Thanks for that insight, Peter.

Peter Work: Drive backlist backlist sales and that's really what we're focusing on right now.

Speaker Change: Got it thanks for that insight, Peter and wanted to turn to education solutions.

Brendan Mccarthy: And I wanted to turn to Education Solutions. It sounds like this quarter was impacted by, you know, slowdown in sales at the school level and at the state level. Just curious if you've seen, has there been a change in the funding level for school districts and states, or has it simply just been a case of the states and school districts pausing spending for the moment? I think for the most part it's been a question of schools and districts being more cautious, as you know. Schools funding is 90% of that comes from state and local. Where there's been some concern is about the, you know, the amount of federal funding that there might be going forward.

Peter Work: Sounds like this quarter was impacted by a slowdown in sales.

Peter Work: At the school level and at the state level, just curious if you've seen has there been a change in the funding level.

Peter Work: For school districts and states or is it simply just been a case of.

Peter Work: These statements gold districts pausing spending for the moment.

Peter Work: I think for the most part it's been a question of.

Peter Work: Of schools and districts being more cautious.

Peter Work: <unk>.

Peter Work: As you know.

Peter Work: Schools funding is 90% of that comes from state and local.

Peter Work: Where theres been some concern about the and the amount of federal funding that they might be going forward I think everybody expects it.

Peter Warwick: I think everybody expects that federal funding for things like Title I and so on is going to continue, but I think it is important that a number of these schools are holding onto some of their funds, just as a kind of, you know, pausing so they can see what things work out like during the next few months. And one of the factors that we need to take into account is that schools are putting in quite a lot of focus on their core curriculum needs. We are primarily a supplemental provider, and therefore, in keeping with the other supplemental, you know, education providers that we know, that has also had some impact on purchasing, which has impacted us.

Peter Work: Funding for things like title, one and sell in is going to continue.

Peter Work: But I think it is important that.

Peter Work: A number of these schools.

Peter Work: Holding on to some of that funds just as that kind of.

Peter Work: Pausing, so that I can see what things work out light during the next next few months.

Peter Work: And one other factor that we need to take into account is that.

Peter Work: Schools are putting in a quite a lot of focus on that core curriculum needs.

Peter Work: We are primarily a supplemental provider.

Peter Work: And therefore.

Peter Work: In keeping with the other supplemental.

Peter Work: Education providers that we know.

That has also had.

Peter Work: Some impact on purchasing which is.

Peter Work: As impacted as that's a cyclical impact.

Peter Warwick: That's a cyclical impact, because what tends to happen is that once schools get their materials for core curriculum, they then, you know, buy in supplemental materials to suit the particular part of the country or the city or whatever it might happen to be, so that they've got an overall, you know, both curriculum and library resources to support the students that they're actually educating.

Peter Work: Because what tends to happen is that one schools get their materials for core curriculum. They then.

Peter Work: Bye and supplemental materials to suit particular parts of the country or the city or whatever it might happen to be so that they've got an overall.

Both curriculum library resources to support the students that theyre actually educating.

Peter Warwick: Got it. And as a follow-up, looking at, you know, funding on the federal level, we've seen headlines around the Department of Education and cutbacks there. I guess going forward, more from a broad level, do you expect any material changes in funding, I guess, more broadly? Not necessarily, because I think that a lot of funding is congressionally mandated and therefore it's not suddenly going to be turned off, we don't believe, or anything like that. What we are seeing is the continuation of a trend that we've seen, which is more spending is actually being done at a state and local level rather than from federal, so it's continuing that.

Got it and as a follow up looking at funding on the federal level, we've seen headlines around the department of education and cut cutbacks there I.

Speaker Change: I guess going forward more from a broad level do you expect any material changes in funding.

It's more broadly.

Speaker Change: No not necessarily because I think that a lot of funding is congressionally mandated and therefore, its not suddenly going to be turned off we don't believe or anything like that what we are seeing is the continuing the continuation of a trend that we've seen which is more spending is actually being done.

Speaker Change: At the state and local level and.

Speaker Change: Rather than from from federal So escapes continuing that we also see a continuing trend.

Peter Warwick: We also see a continuing trend of really more parent choice in the way that funding is done, so that you will see that in charter schools and private schools and parochial schools, these are opportunities for us going forward because they're more likely to be good hunting grounds, as it were, for our people going forward. That makes sense.

Off.

Speaker Change: Really more parent choice.

Speaker Change: And the way that the funding is done so thats.

Speaker Change: You will see that in charter schools and private schools in the parochial schools. These are opportunities for us going forward because they are more likely to.

Speaker Change: To be good hunting grounds as it were for our firm.

For our people going forward.

Speaker Change: That makes sense and the education solutions business I know you mentioned.

Brendan Mccarthy: And in the education solutions business, you know, I know you mentioned, you know, a strategic review is in the process.

Speaker Change: Our strategic review is in the process.

Peter Warwick: Can you provide additional color on what that might entail? Are you considering a sale or maybe something more internally led? Now, at the moment, this is internally led in the sense that what we want to do is to make sure that we're putting our resources into the right places going forward. We're getting some help in doing that. I mean, we've got a tremendously powerful brand, and this is a business where we believe that we've got the right to win, and I think we just want to make sure, given that we've had these stresses and strains, alongside some other supplemental publishers as well.

Speaker Change: Can you provide additional color on what that might entail are you considering a sale or maybe something more internally led.

Speaker Change: At the moment. This is internally led in the sense that that what we want to do is to make sure that we're putting our resources into the right places going forward.

Speaker Change: We're getting some some some help in doing that I mean, we've got a tremendously powerful brand.

And this is a business, where we believe that we've got the right to win.

Speaker Change: And I think we just want to make sure given that we've had these stresses and strains.

Speaker Change: Alongside some other supplemental publishes as well, but we want to make sure that we are absolutely doing the right thing.

Brendan Mccarthy: But we want to make sure that we're absolutely doing the right thing in order to be successful in part of the market, which is absolutely core to Scholastic's history. Got it.

Speaker Change: Order to be successful in parts of the market, which is absolutely core to scholastic history.

Brendan Mccarthy: And one more question for me on the on the real estate side, I appreciate the color on the asset, on the asset base there.

Speaker Change: Got it and one more question for me on the on the real estate side.

Speaker Change: The color on the asset.

Haji Glover: I'm just curious if you can provide, you know, maybe what a collective fair value might be of the warehouse in Missouri, as well as the New York City headquarter building. Yeah, hey Brandon, this is Haji Glover. How you doing? Hey Haji, good, how are you? All right, so on the real estate, we can't really, well, we won't provide an estimate on the number of what the properties are worth, but what we wanted to do is really give our investor base an opportunity to actually have all the information in one place. So that's the reason why we're putting it out there, but I'm sure that any investor with the information we provided can come up with, based on the rental income and some of the cap rates, they can come up with an evaluation.

Speaker Change: The asset base. There just curious if you can provide maybe what a collective fair value might be.

Speaker Change: <unk> warehouse in Missouri, as well as the New York City.

Speaker Change: Headquarter buildings.

Laura: Hey, Brandon This is heidrick, Laura How're you doing.

Speaker Change: Good how are you alright, so on the real estate.

Speaker Change: We can't really.

Speaker Change: Provide an estimate on the number or what.

Speaker Change: Properties are worth but we.

Speaker Change: We wanted to do was really give our investor base and opportunities are actually have all the information in one place. So that's one reason why we're putting it out there, but I'm sure.

Speaker Change: Any investor who or what the information we can provide it can come up with.

Speaker Change: Based on the rental my comments on cap rates, they can come up with a valuation.

Brendan Mccarthy: understood. That makes sense. Thanks, Haji. Thanks, Peter.

Brendan Mccarthy: Understood that makes sense. Thanks, Thanks, Peter that's all from me.

Brendan Mccarthy: That's all from me. Thank you, Brandon. Thanks. Bye-bye now.

Brendan Mccarthy: Thank you Brendan Thanks, Bye bye now.

Operator: Thank you, and this concludes our Q&A. I will pass the call back to management for any closing remarks. Thank you everyone for joining today's call and for your continued support.

Speaker Change: Thank you and this concludes our Q&A I will pass the call back to management for any closing remarks.

Peter Work: While it's Peter here. Thank you everyone for joining today's call and for your continued support.

Peter Warwick: I'd like to thank all of our Scholastic employees for their great work so far this year and we'd also like to thank our shareholders for their continued support. We look forward to executing on our plan for Fiscal 2025 and continuing to make progress towards realizing Scholastic's long-term opportunities. Thank you.

Peter Work: I'd like to thank all of our scholastic employees for their great work. So far this year and we also like to thank our shareholders for their continued support.

Peter Work: I look forward to executing on our plan for fiscal 2025, and continuing to make progress towards realizing scholastics longterm opportunities. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Peter Work: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Peter Work: Okay.

Peter Work: [music].

Peter Work: Okay.

Peter Work: [music].