What changed in this filing

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Item 1. Financial Statements

2024-12-20 compared with 2024-09-27 · 255 added, 128 removed, 612 unchanged (38% of the section changed)

3 unchanged sentences

(Dollar amounts in millions, except per share data)

Three months ended

Three months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Revenues $ 544.6 $ 562.6 $ 781.8 $ 791.1

3 unchanged sentences

Depreciation and amortization 16.3 14.1 31.6 27.5

Asset impairments and write downs 0.1 — 0.1 —

Total operating costs and expenses 469.9 461.3 795.6 788.9

12 unchanged sentences

(Dollar amounts in millions)

Three months ended

Three months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Net income (loss) $ 48.8 $ 76.9 $ ( 13.7 ) $ 2.7

8 unchanged sentences

(Dollar amounts in millions, except per share data)

August 31, 2024 May 31, 2024 August 31, 2023

November 30, 2024 May 31, 2024 November 30, 2023

(unaudited) (audited) (unaudited)

82 unchanged sentences

Balance at August 31, 2023 1.7 $ 0.0 29.3 $ 0.4 $ 632.7 $ ( 53.8 ) $ 955.1 $ ( 479.8 ) $ 1,054.6 $ — $ 1,054.6

Net Income (loss) — — — — — — 76.9 — 76.9 — 76.9

Foreign currency translation adjustment — — — — — 0.2 — — 0.2 — 0.2

Pension and post-retirement adjustments (net of tax of $ 0.0 )

— — — — — 0.1 — — 0.1 — 0.1

Stock-based compensation — — — — 4.1 — — — 4.1 — 4.1

Proceeds pursuant to stock-based compensation plans — — — — 0.6 — — — 0.6 — 0.6

Purchases of treasury stock at cost — — ( 1.4 ) — — — — ( 52.3 ) ( 52.3 ) — ( 52.3 )

Treasury stock issued pursuant to equity-based plans — — 0.3 — ( 6.6 ) — — 7.5 0.9 — 0.9

Dividends ($ 0.20 per share)

— — — — — — ( 6.0 ) — ( 6.0 ) — ( 6.0 )

Balance at November 30, 2023 1.7 $ 0.0 28.2 $ 0.4 $ 630.8 $ ( 53.5 ) $ 1,026.0 $ ( 524.6 ) $ 1,079.1 $ — $ 1,079.1

Class A Stock Common Stock Additional Paid-in Capital Accumulated

19 unchanged sentences

Balance at August 31, 2024 0.8 $ 0.0 27.3 $ 0.4 $ 606.3 $ ( 44.1 ) $ 955.6 $ ( 560.9 ) $ 957.3 $ — $ 957.3

Net Income (loss) — — — — — — 48.8 — 48.8 — 48.8

Foreign currency translation adjustment — — — — — ( 11.9 ) — — ( 11.9 ) — ( 11.9 )

Pension and post-retirement adjustments (net of tax of $ 0.0 )

— — — — — 0.2 — — 0.2 — 0.2

Stock-based compensation — — — — 2.1 — — — 2.1 — 2.1

Proceeds pursuant to stock-based compensation plans — — — — ( 0.5 ) — — — ( 0.5 ) — ( 0.5 )

Purchases of treasury stock at cost — — ( 0.1 ) — — — — ( 5.0 ) ( 5.0 ) — ( 5.0 )

Treasury stock issued pursuant to equity-based plans — — 0.1 — ( 4.4 ) — — 5.1 0.7 — 0.7

Dividends ($ 0.20 per share)

— — — — — — ( 5.7 ) — ( 5.7 ) — ( 5.7 )

Balance at November 30, 2024 0.8 $ 0.0 27.3 $ 0.4 $ 603.5 $ ( 55.8 ) $ 998.7 $ ( 560.8 ) $ 986.0 $ — $ 986.0

See accompanying notes

2 unchanged sentences

(Dollar amounts in millions)

Three months ended

August 31, August 31,

Six months ended

November 30, November 30,

Cash flows - operating activities:

41 unchanged sentences

Payment of dividends ( 11.3 ) ( 12.8 )

Other 0.2 0.1

Net cash provided by (used in) financing activities 214.5 ( 97.8 )

31 unchanged sentences

Education channel revenues are generally higher in the fourth quarter.

Trade channel and Entertainment segment revenues can vary throughout the year due to the timing of published titles' release dates and program production deliveries and distribution license period start dates.

Trade channel and Entertainment segment revenues can vary throughout the year due to the timing of published titles' release dates and program production deliveries and the start dates of distribution license agreements.

Use of estimates

15 unchanged sentences

• Expected economic useful life of film and television program assets

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

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

• Assets and liabilities acquired in business combinations

27 unchanged sentences

New Accounting Pronouncements

There were no new accounting pronouncements issued in the first quarter of fiscal 2025 which would impact the Company.

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

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In November 2024, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

This ASU is effective for the Company's fiscal year 2028, and interim periods starting in fiscal year 2029.

4 unchanged sentences

The amendments in this ASU require more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This ASU will be effective for the Company's fiscal year 2026.

This ASU is effective for the Company's fiscal year 2026.

Early adoption is permitted.

1 unchanged sentence

The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for the Company's fiscal year 2025, and interim periods starting in fiscal year 2026.

Early adoption is permitted.

The amendments in this ASU are to be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

SCHOLASTIC CORPORATION

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

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2024 2023 2024 2023

Book Clubs - U.S.

$ 33.2 $ 32.4 $ 35.9 $ 35.0

Book Fairs - U.S.

231.0 242.1 259.8 269.4

91.0 100.6 149.2 162.7

Trade - International (2)

11.8 17.3 27.5 27.7

Total Children's Book Publishing and Distribution $ 367.0 $ 392.4 $ 472.4 $ 494.8

3 unchanged sentences

Entertainment - U.S.

$ 1.3 $ 0.4 $ 2.9 $ 0.8

Entertainment - International (3)

15.5 — 30.5 —

Total Entertainment (1)

$ 16.8 $ 0.4 $ 33.4 $ 0.8

International - Major Markets (4)

1 unchanged sentence

International - Other Markets (5)

11.1 11.1 19.8 20.5

Total International $ 86.7 $ 86.5 $ 143.5 $ 143.7

$ 2.9 $ 2.3 $ 5.6 $ 4.8

Total Overhead $ 2.9 $ 2.3 $ 5.6 $ 4.8

1 unchanged sentence

(1) The newly formed Entertainment segment includes the operations of SEI, which were included in the Children’s Book Publishing and Distribution segment in prior periods, and 9 Story.

The financial results for SEI for the three months ended August 31, 2023 have been reclassified to Entertainment to reflect this change.

The financial results for SEI for the three and six months ended November 30, 2023 have been reclassified to Entertainment to reflect this change.

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

4 unchanged sentences

Estimated Returns

A liability for expected returns of $ 30.7 , $ 33.1 , and $ 33.1 is recorded within Other accrued expenses as of August 31, 2024, May 31, 2024, and August 31, 2023, respectively.

In addition, a return asset of $ 3.9 , $ 4.2 , and $ 5.4 is recorded within Prepaid expenses and other current assets as of August 31, 2024, May 31, 2024, and August 31, 2023, respectively, for the recoverable cost of product estimated to be returned by customers.

A liability for expected returns of $ 34.8 , $ 33.1 , and $ 37.7 is recorded within Other accrued expenses as of November 30, 2024, May 31, 2024, and November 30, 2023, respectively.

In addition, a return asset of $ 4.0 , $ 4.2 , and $ 5.4 is recorded within Prepaid expenses and other current assets as of November 30, 2024, May 31, 2024, and November 30, 2023, respectively, for the recoverable cost of product estimated to be returned by customers.

SCHOLASTIC CORPORATION

3 unchanged sentences

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

August 31, 2024 May 31, 2024 August 31, 2023

November 30, 2024 May 31, 2024 November 30, 2023

Book fairs incentive credits $ 120.8 $ 114.2 $ 114.1

Magazines+ subscriptions

48.3 4.6 53.3

digital subscriptions 17.9 15.6 24.6

7 unchanged sentences

The Company's contract liabilities consist of advance billings and payments received from customers in excess of revenue recognized and revenue allocated to outstanding book fairs incentive credits.

Contract liabilities of $ 173.9 , $ 161.1 and $ 171.1 as of August 31, 2024, May 31, 2024 and August 31, 2023, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year.

The remaining $ 6.3 , $ 6.5 and $ 10.6 of contract liabilities as of August 31, 2024, May 31, 2024 and August 31, 2023, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheet as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year.

The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $ 29.2 and $ 32.3 for the three months ended August 31, 2024, and August 31, 2023, respectively.

Contract liabilities of $ 225.0 , $ 161.1 and $ 225.0 as of November 30, 2024, May 31, 2024 and November 30, 2023, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year.

The remaining $ 5.9 , $ 6.5 and $ 9.5 of contract liabilities as of November 30, 2024, May 31, 2024 and November 30, 2023, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheet as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year.

The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $ 41.9 and $ 71.1 for the three and six months ended November 30, 2024, respectively, and $ 48.4 and $ 80.7 for the three and six months ended November 30, 2023, respectively.

Allowance for Credit Losses

9 unchanged sentences

Balance as of August 31, 2024 $ 15.4

SEGMENT INFORMATION

The Company categorizes its businesses into four reportable segments:

Children’s Book Publishing and Distribution, Education Solutions, Entertainment and International .

Provision (benefit) 2.1

Write-offs and other ( 2.6 )

Balance as of November 30, 2024 $ 14.9

SCHOLASTIC CORPORATION

1 unchanged sentence

(Dollar amounts in millions, except per share data)

United States through its school reading events business, which includes the book clubs and book fairs channels, and through the trade channel.

SEGMENT INFORMATION

The Company categorizes its businesses into four reportable segments:

Children’s Book Publishing and Distribution, Education Solutions, Entertainment and International .

• Children’s Book Publishing and Distribution operates as an integrated business which includes the publication and distribution of children’s books, ebooks, media and interactive products primarily in the United States through its school reading events business, which includes the book clubs and book fairs channels, and through the trade channel.

This segment is comprised of two operating segments.

6 unchanged sentences

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

Three months ended

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November 30, November 30,

2024 2023 2024 2023

Children's Book Publishing and Distribution (1)

2 unchanged sentences

Entertainment (1)

16.8 0.4 33.4 0.8

International 86.7 86.5 143.5 143.7

2.9 2.3 5.6 4.8

Total $ 544.6 $ 562.6 $ 781.8 $ 791.1

9 unchanged sentences

(1) The newly formed Entertainment segment includes the operations of SEI, which were included in the Children’s Book Publishing and Distribution segment in prior periods, and 9 Story.

The financial results for SEI for the three months ended August 31, 2023 have been reclassified to Entertainment to reflect this change.

The financial results for SEI for the three and six months ended November 30, 2023 have been reclassified to Entertainment to reflect this change.

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

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

August 31, 2024 May 31, 2024 August 31, 2023

November 30, 2024 May 31, 2024 November 30, 2023

US Revolving Credit Agreement $ 250.0 $ — $ —

3 unchanged sentences

Total long-term debt $ 250.0 $ — $ —

The following table sets forth the maturities of the carrying values of the Company's debt obligations, excluding film related obligations, as of August 31, 2024 for the twelve month periods ended August 31:

The following table sets forth the maturities of the carrying values of the Company's debt obligations, excluding film related obligations, as of November 30, 2024 for the twelve month periods ended November 30:

Total Debt $ 256.2

US Revolving Credit Agreement

On October 27, 2021, Scholastic Corporation and its principal operating subsidiary, Scholastic Inc., entered into an amended and restated 5-year credit agreement with a syndicate of banks and Bank of America, N.A., as administrative agent and Truist Bank and Wells Fargo Bank, National Association, as co-syndication agents (the “Credit Agreement”).

The Credit Agreement provides for a $ 300.0 unsecured revolving credit facility and allows the Company to borrow, repay or prepay and reborrow at any time prior to the October 27, 2026 maturity date.

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

The arrangement was accounted for as a debt modification.

The revised terms of the amended Credit Agreement include the following:

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

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

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

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

The Credit Agreement provides for a $ 400.0 unsecured revolving credit facility and allows the Company to borrow, repay or prepay and reborrow at any time prior to the November 26, 2029 maturity date.

The Credit Agreement also provides an unlimited basket for permitted payments of dividends and other distributions in respect of capital stock so long as the Corporation’s pro forma Consolidated Net Leverage Ratio, as defined, is not in excess of 2.75 :1.

On February 28, 2023, the Company entered into the First and Second Amendments to the Credit Agreement (collectively the "Amendments").

The Amendments, among other things, (i) adjusted the credit spread adjustment for SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York) to 0.10 % (10 basis points) and (ii) transitioned the reference rate under the Credit Agreement for borrowings from LIBOR (the London interbank offered rate) to SOFR, together with various other conforming changes to accommodate such replacement.

Under the Credit Agreement, interest on amounts borrowed thereunder is due and payable in arrears on the last day of the interest period (defined as the period commencing on the date of the advance and ending on the last day of the period selected by the Borrower at the time each advance is made).

The interest pricing under the Credit Agreement is dependent upon the Borrower’s election of a rate that is either:

• a Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.50 % or (iii) the Term SOFR Rate plus 1.00 % plus, in each case, an applicable margin ranging from 0.35 % to 0.75 %, as determined by the Company’s prevailing Consolidated Leverage Ratio (as defined in the Credit Agreement);

• a SOFR (Daily Simple or Term), plus a SOFR adjustment of 0.10 % per annum and an applicable margin ranging from 1.35 % to 1.75 %, as determined by the Company’s prevailing Consolidated Leverage Ratio.

As of August 31, 2024, the applicable margin on Base Rate Advances was 0.35 % and the applicable margin on SOFR Advances was 1.35 %, both based on the Company’s prevailing Consolidated Leverage Ratio.

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

As of August 31, 2024, the commitment fee rate was 0.20 %.

Under the Credit Agreement, interest on (i) Base Rate Advances (as defined in the Credit Agreement) is due and payable in arrears quarterly on the last day of each February, May, August and November, and (ii) Term SOFR Advances (as defined in the Credit Agreement) is due and payable in arrears on the last day of the interest period (defined as the period commencing on the date of the advance and ending on the last day of the period selected by the Borrowers at the time each advance is made).

The interest pricing under the Credit Agreement is dependent upon the Company’s election of a rate that is either:

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

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

As of November 30, 2024, the applicable margin on Base Rate Advances was 0.625 % and the applicable margin on SOFR Advances was 1.625 %.

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

As of November 30, 2024, the commitment fee rate was 0.20 %.

A portion of the revolving credit facility, up to a maximum of $ 50.0 , is available for the issuance of letters of credit.

1 unchanged sentence

The Credit Agreement has an accordion feature which permits the Company, provided certain conditions are satisfied, to increase the facility by up to an additional $ 150.0 .

As of August 31, 2024, the Company had outstanding borrowings of $ 225.0 under the Credit Agreement at a weighted average interest rate of 6.8 %.

While this obligation is not due until the October 27, 2026 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose.

No borrowings were outstanding under the Credit Agreement as of August 31, 2023.

As of November 30, 2024, the Company had outstanding borrowings of $ 250.0 under the Credit Agreement at a weighted average interest rate of 6.8 %.

While this obligation is not due until the November 26, 2029 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose.

No borrowings were outstanding under the Credit Agreement as of November 30, 2023.

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

The Company was in compliance with required covenants for all periods presented.

At August 31, 2024, the Company had open standby letters of credit totaling $ 4.0 issued under certain credit lines, including $ 0.4 under the Credit Agreement and $ 3.6 under the domestic credit lines discussed below.

At November 30, 2024, the Company had open standby letters of credit totaling $ 4.0 issued under certain credit lines, including $ 0.4 under the Credit Agreement and $ 3.6 under the domestic credit lines discussed below.

Unsecured Lines of Credit

As of August 31, 2024, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $ 10.0 .

There were no outstanding borrowings under these credit lines as of August 31, 2024, May 31, 2024 and August 31, 2023.

As of August 31, 2024, availability under these unsecured money market bid rate credit lines totaled $ 6.4 , excluding commitments of $ 3.6 .

As of November 30, 2024, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $ 10.0 .

There were no outstanding borrowings under these credit lines as of November 30, 2024, May 31, 2024 and November 30, 2023.

As of November 30, 2024, availability under these unsecured money market bid rate credit lines totaled $ 6.4 , excluding commitments of $ 3.6 .

All loans made under these credit lines are at the sole discretion of the lender and at an interest rate and term agreed to at the time each loan is made, but not to exceed 365 days.

These credit lines may be renewed, if requested by the Company, at the option of the lender.

As of August 31, 2024, the Company had various local currency international credit lines totaling $ 14.0 underwritten by banks primarily in the United States and the United Kingdom.

Outstanding borrowings under these facilities were $ 6.1 at August 31, 2024 at a weighted average interest rate of 4.3 %, compared to outstanding borrowings of $ 6.0 at May 31, 2024 at a weighted average interest rate of 4.5 %, and $ 5.9 at August 31, 2023 at a weighted average interest rate of 4.4 %.

As of August 31, 2024, the amounts available under these facilities totaled $ 7.9 .

As of November 30, 2024, the Company had various local currency international credit lines totaling $ 16.9 underwritten by banks primarily in the United States and the United Kingdom.

Outstanding borrowings under these facilities were $ 6.2 at November 30, 2024 at a weighted average interest rate of 4.2 %, compared to outstanding borrowings of $ 6.0 at May 31, 2024 at a weighted average interest rate of 4.5 %, and $ 6.3 at November 30, 2023 at a weighted average interest rate of 3.9 %.

As of November 30, 2024, the amounts available under these facilities totaled $ 10.7 .

These credit lines are typically available for overdraft borrowings or loans up to 364 days and may be renewed, if requested by the Company, at the sole option of the lender.

Film Related Obligations

The Company's entertainment business enters into credit facilities to obtain interim financing for certain productions.

The interim production credit facilities are secured by an assignment and direction of specific production financing including tax credits and license contract receivables and have varying maturity dates between September 9, 2024 and July 31, 2026.

The Company's entertainment business enters into credit facilities with third-party banks to obtain interim financing for certain productions.

Interest is charged at rates ranging from the bank prime rate plus 0.75 % for Canadian dollar loans, SOFR plus 3.0 % or U.S.

1 unchanged sentence

dollar loans and Euribor plus 2.0 % for Euro loans.

As of August 31, 2024, outstanding borrowings under these facilities were $ 34.1 at a weighted average interest rate of 7.8 %, of which $ 20.5 were classified as current obligations.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

As of November 30, 2024, outstanding borrowings under these facilities were $ 21.6 at a weighted average interest rate of 6.9 %, of which $ 8.3 were classified as current obligations.

COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

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

Three months ended

Three months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Net income (loss) attributable to Class A and Common Stockholders $ 48.8 $ 76.9 $ ( 13.7 ) $ 2.7

6 unchanged sentences

Anti-dilutive shares pursuant to stock-based compensation plans*

* The Company experienced a net loss for all periods presented and therefore did not report any dilutive share impact

1.8 1.1 — 0.7

* The Company experienced a net loss for the six months ended November 30, 2024 and therefore did not report any dilutive share impact.

The following potential common shares were excluded from the loss per diluted share computation:

outstanding options and restricted stock units of 2.8 million and 0.4 million, respectively.

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

August 31, 2024 August 31, 2023

November 30, 2024 November 30, 2023

Options outstanding pursuant to stock-based compensation plans (in millions) 2.8 3.1

As of August 31, 2024, $ 81.6 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date.

As of November 30, 2024, $ 76.6 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date.

See Note 12, "Treasury Stock", for a more complete description of the Company’s share buy-back program.

9 Story Acquisition

On June 20, 2024, the Company completed the acquisition of 100 % of the economic interests in the form of non-voting shares and 25 % of the voting shares of 9 Story Media Group Inc.

("9 Story"), a leading independent creator, producer and distributor of premium children’s content based in Toronto, Canada, with studios or

SCHOLASTIC CORPORATION

1 unchanged sentence

(Dollar amounts in millions, except per share data)

offices in New York, United States, Dublin, Ireland and Bali, Indonesia.

9 Story Acquisition

On June 20, 2024, the Company completed the acquisition of 100 % of the economic interests in the form of non-voting shares and 25 % of the voting shares of 9 Story Media Group Inc.

("9 Story"), a leading independent creator, producer and distributor of premium children’s content based in Toronto, Canada, with studios or offices in New York, United States, Dublin, Ireland and Bali, Indonesia.

The aggregate purchase price was $ 193.7 , subject to further adjustment based on the final determination of purchase price adjustments, and was funded through borrowings under the U.S.

1 unchanged sentence

The acquisition of 9 Story further enhances the Company's development, production and licensing interests, expanding opportunities to leverage its brand and best-selling publishing and global children's franchises across print, screen and merchandising.

Pursuant to ASC Topic 810, Consolidation , 9 Story was determined to be a variable interest entity (VIE) and the Company was determined to be its primary beneficiary and therefore obtained control over 9 Story.

Accordingly, 9 Story has been consolidated into the Company's financial results.

2 unchanged sentences

As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period.

The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

Refer to Note 8, Goodwill and Other Intangibles, for details regarding measurement period adjustments recorded during the six months ended November 30, 2024.

The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition, inclusive of measurement period adjustments:

Cash and cash equivalents $ 17.5

6 unchanged sentences

Customer contracts/relationships 51.5

Tradenames 16.5

Internally developed software 1.3

2 unchanged sentences

Accounts payable 2.3

Other accrued expenses 16.4

Accrued expenses

Deferred revenue 10.9

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

The intangible assets acquired include intellectual property related to 9 Story's existing and recognized program titles, customer contracts/relationships related to licensing, distribution and service arrangements, the trade names associated with 9 Story and Brown Bag Films, its animation studio, and internally developed software.

The intangible assets acquired include intellectual property ("IP") related to 9 Story's existing and recognized program titles, customer contracts/relationships related to licensing, distribution and service arrangements, the trade names associated with 9 Story and Brown Bag Films, its animation studio, and internally developed

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The intellectual property and customer contracts/relationships were valued using the multi-period excess earnings valuation method and are being amortized over 10 years, with the exception of contracts/relationships for service arrangements which are being amortized over 5 years.

3 unchanged sentences

The difference between the purchase price over the net identifiable tangible and intangible assets acquired was allocated to goodwill, which is not deductible for tax purposes.

The goodwill balance is primarily attributable to the expected synergies from the business

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

combination and acquired workforce.

The goodwill balance is primarily attributable to the expected synergies from the business combination and acquired workforce.

The goodwill and intangible assets acquired were allocated to the Entertainment segment.

The financial results of 9 Story, since the date of acquisition, were included in the Company's Condensed Consolidated Financial Statements as of August 31, 2024.

9 Story contributed total revenue of $ 16.0 and net income of $ 0.1 from the date of acquisition on June 20, 2024 through August 31, 2024.

The financial results of 9 Story, since the date of acquisition, were included in the Company's Condensed Consolidated Financial Statements as of November 30, 2024.

9 Story contributed total revenue of $ 31.9 and net loss of $ 4.2 from the date of acquisition on June 20, 2024 through November 30, 2024.

The operations of 9 Story are reported in the Entertainment segment.

The following table summarizes the unaudited pro-forma consolidated results of operations for the three months ended August 31, 2024 and 2023 as if the acquisition had occurred on June 1, 2023, the beginning of fiscal 2024:

Three months ended

The following table summarizes the unaudited pro-forma consolidated results of operations for the three and six months ended November 30, 2024 and 2023 as if the acquisition had occurred on June 1, 2023, the beginning of fiscal 2024:

Three months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Revenues $ 544.6 $

578.8 $ 787.5 $

Net income (loss) 48.8 73.9 ( 15.5 ) ( 4.9 )

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The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the finite-lived intangible assets acquired, fair value adjustments relating to leases and fixed assets, and the related tax effects assuming that the business combination occurred on June 1, 2023.

The Company incurred acquisition‑related costs of $ 1.7 which were included in Selling, general and administrative costs in the Condensed Consolidated Statement of Operations for the three months ended August 31, 2024.

The Company incurred acquisition‑related costs of $ 0.4 and $ 2.1 for the three and six months ended November 30, 2024, respectively, which were included in Selling, general and administrative costs in the Condensed Consolidated Statement of Operations.

Purchase of Noncontrolling Interest

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The Company monitors impairment indicators in light of changes in market conditions, near and long-term demand for the Company’s products and other relevant factors.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

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

August 31, 2024 May 31, 2024 August 31, 2023

November 30, 2024 May 31, 2024 November 30, 2023

Gross beginning balance $ 172.4 $ 172.3 $ 172.3

2 unchanged sentences

Additions 70.1 — —

Measurement period adjustments (1)

Foreign currency translation ( 1.6 ) 0.1 0.1

Ending balance $ 202.2 $ 132.8 $ 132.8

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

In fiscal 2025, the Company completed the 9 Story acquisition which resulted in the recognition of $ 70.1 of Goodwill included in the Entertainment segment.

(1) Measurement period adjustments for the 9 Story acquisition reflect an increase to goodwill of $ 0.9 resulting from a net decrease in the estimated fair value of the net assets acquired.

The decrease in the estimated fair value of the net assets acquired consisted of an increase to deferred tax liabilities of $ 1.4 , an increase to operating lease right-of-use assets of $ 0.3 , a decrease to lease liabilities of $ 0.1 , and a decrease to the purchase price as a result of a working capital adjustment of $ 0.1 .

In fiscal 2025, the Company completed the 9 Story acquisition which resulted in the recognition of $ 71.0 of Goodwill, net of measurement period adjustments, included in the Entertainment segment.

Refer to Note 7, "Acquisitions", for further details regarding the acquisition.

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

August 31, 2024 May 31, 2024 August 31, 2023

November 30, 2024 May 31, 2024 November 30, 2023

Beginning balance - Other intangibles subject to amortization $ 8.2 $ 7.8 $ 7.8

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During fiscal 2024, the Company assessed the recoverability of these assets as impacted by the shift to the science of reading based approach to literacy instruction within the education market.

An asset impairment of $ 3.1 was recognized in fiscal 2024.

Other intangible assets with indefinite lives consist principally of trademark and tradename rights.

Other intangible assets with definite lives consist principally of customer lists, customer contracts/relationships, intellectual property, tradenames and internally developed software.

An asset impairment of $ 3.1 was recognized in the fourth quarter of fiscal 2024.

Other intangible assets with indefinite lives consist principally of trademark and trade name rights.

Other intangible assets with definite lives consist principally of customer lists, customer contracts/relationships, intellectual property, trade names and internally developed software.

Intangible assets with definite lives are amortized over their estimated useful lives.

The weighted-average remaining useful lives of all amortizable intangible assets is approximately 8.8 years.

There were no impairment charges related to Other intangible assets in the three months ended August 31, 2024 and August 31, 2023.

There were no impairment charges related to Other intangible assets in the six months ended November 30, 2024 and November 30, 2023.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Investments are included in Other assets and deferred charges on the Condensed Consolidated Balance Sheets.

The following table summarizes the Company’s investments as of the dates indicated:

August 31, 2024 May 31, 2024 August 31, 2023 Segment

November 30, 2024 May 31, 2024 November 30, 2023 Segment

Equity method investments $ 32.1 $ 31.5 $ 32.4 International

Other equity investments 7.0 6.0 6.0 Entertainment

Equity method and other investments 6.5 6.0 6.0 Entertainment

Total Investments $ 38.6 $ 37.5 $ 38.4

1 unchanged sentence

Equity method income from this investment is reported in the International segment.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The Company has a 4.6 % ownership interest in a financing and production company that makes film, television, and digital programming designed for the youth market.

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This investment is accounted for at cost, less impairment on the Company's Condensed Consolidated Balance Sheets.

There have been no impairments or adjustment to the carrying value of the investment.

Income from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and totaled $ 0.2 and $ 0.2 for the three months ended August 31, 2024 and August 31, 2023, respectively.

There have been no impairments or adjustments to the carrying value of the investment.

Income from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and totaled $ 0.6 and $ 0.8 for the three and six months ended November 30, 2024, respectively, and $ 0.1 and $ 0.3 for the three and six months ended November 30, 2023, respectively.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

EMPLOYEE BENEFIT PLANS

2 unchanged sentences

Three months ended Three months ended

August 31, August 31,

November 30, November 30,

2024 2023 2024 2023

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Total $ 0.4 $ 0.3 $ ( 0.1 ) $ ( 0.1 )

UK Pension Plan US Postretirement Benefits

Six months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Components of net periodic benefit cost:

Interest cost $ 0.6 $ 0.7 $ 0.2 $ 0.2

Expected return on assets ( 0.5 ) ( 0.6 ) — —

Amortization of prior service (credit) loss 0.0 0.0 ( 0.4 ) ( 0.4 )

Amortization of net actuarial (gain) loss 0.7 0.6 0.0 0.0

Total $ 0.8 $ 0.7 $ ( 0.2 ) $ ( 0.2 )

Actuarial gains and losses are amortized using a corridor approach.

2 unchanged sentences

The Company’s funding practice with respect to the UK Pension Plan is to contribute on an annual basis at least the minimum amounts required by applicable law.

For the three months ended August 31, 2024, the Company contributed $ 0.3 to the UK Pension Plan.

For the six months ended November 30, 2024, the Company contributed $ 0.7 to the UK Pension Plan.

The Company expects, based on actuarial calculations, to contribute cash of approximately $ 1.3 to the UK Pension Plan for the fiscal year ending May 31, 2025.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

STOCK-BASED COMPENSATION

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

Three months ended

Three months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Stock option expense $ 0.2 $ 2.4 $ 0.8 $ 3.0

3 unchanged sentences

Total stock-based compensation expense $ 2.1 $ 4.1 $ 4.3 $ 6.4

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

During the second quarter of fiscal 2025, the Company granted performance-based restricted stock units to certain officers and senior management.

Compensation expense is recognized over the requisite service period based on expected attainment of pre-established performance goals.

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

Three months ended

Three months ended Six months ended

November 30, November 30,

2024 2023 2024 2023

Common Stock issued pursuant to stock-based compensation plans (in millions) 0.1 0.3 0.2 0.4

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Less repurchases made under these authorizations ( 44.2 )

Remaining Board authorization at August 31, 2024 $ 81.6

Remaining Board authorization at August 31, 2024 represents the amount remaining under the Board authorization for Common share repurchases announced on December 13, 2023 and the additional $ 54.6 Board authorization for Common share repurchases announced on March 20, 2024, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions.

Repurchases of the Company's Common Stock were $ 5.0 during the three months ende d August 31, 2024.

Remaining Board authorization at November 30, 2024 $ 76.6

Remaining Board authorization at November 30, 2024 represents the amount remaining under the Board authorization for Common share repurchases announced on December 13, 2023 and the additional $ 54.6 Board authorization for Common share repurchases announced on March 20, 2024, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions.

Repurchases of the Company's Common Stock were $ 5.0 and $ 10.0 during the three and six months ende d November 30, 2024, respectively.

The Company's repurchase program may be suspended at any time without prior notice.

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

Three months ended August 31, 2024

Three months ended November 30, 2024

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at June 1, 2024 $ ( 46.9 ) $ ( 5.6 ) $ ( 52.5 )

Beginning balance at September 1, 2024 $ ( 38.7 ) $ ( 5.4 ) $ ( 44.1 )

Other comprehensive income (loss) before reclassifications ( 11.9 ) — ( 11.9 )

4 unchanged sentences

Other comprehensive income (loss) ( 11.9 ) 0.2 ( 11.7 )

Ending balance at August 31, 2024 $ ( 38.7 ) $ ( 5.4 ) $ ( 44.1 )

Three months ended August 31, 2023

Ending balance at November 30, 2024 $ ( 50.6 ) $ ( 5.2 ) $ ( 55.8 )

Three months ended November 30, 2023

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at June 1, 2023 $ ( 50.0 ) $ ( 5.8 ) $ ( 55.8 )

Beginning balance at September 1, 2023 $ ( 48.2 ) $ ( 5.6 ) $ ( 53.8 )

Other comprehensive income (loss) before reclassifications 0.2 — 0.2

4 unchanged sentences

Other comprehensive income (loss) 0.2 0.1 0.3

Ending balance at August 31, 2023 $ ( 48.2 ) $ ( 5.6 ) $ ( 53.8 )

Ending balance at November 30, 2023 $ ( 48.0 ) $ ( 5.5 ) $ ( 53.5 )

Six months ended November 30, 2024

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at June 1, 2024 $ ( 46.9 ) $ ( 5.6 ) $ ( 52.5 )

Other comprehensive income (loss) before reclassifications ( 3.7 ) — ( 3.7 )

amount reclassified from Accumulated other comprehensive income (loss)

Amortization of net actuarial loss (net of tax of $ 0.0 )

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

— ( 0.3 ) ( 0.3 )

Other comprehensive income (loss) ( 3.7 ) 0.4 ( 3.3 )

Ending balance at November 30, 2024 $ ( 50.6 ) $ ( 5.2 ) $ ( 55.8 )

Six months ended November 30, 2023

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at June 1, 2023 $ ( 50.0 ) $ ( 5.8 ) $ ( 55.8 )

Other comprehensive income (loss) before reclassifications 2.0 — 2.0

amount reclassified from Accumulated other comprehensive income (loss)

Amortization of net actuarial loss (net of tax of $ 0.0 )

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

— ( 0.3 ) ( 0.3 )

Other comprehensive income (loss) 2.0 0.3 2.3

Ending balance at November 30, 2023 $ ( 48.0 ) $ ( 5.5 ) $ ( 53.5 )

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

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

Three months ended Condensed Consolidated Statements of Operations line item

August 31, August 31,

Three months ended Six months ended Condensed Consolidated Statements of Operations line item

November 30, November 30, November 30, November 30,

2024 2023 2024 2023

Employee benefit plans:

9 unchanged sentences

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

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The Company’s financial assets and liabilities measured at fair value consisted of cash and cash equivalents, debt and foreign currency forward contracts.

13 unchanged sentences

See Note 7, "Acquisitions", for a more detailed description of the assets acquired and fair value measurements employed related to the 9 Story acquisition.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

INCOME TAXES AND OTHER TAXES

3 unchanged sentences

The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.

The Company's interim effective tax rate, inclusive of discrete items, for the three month period ended August 31, 2024 was 31.9 %, compared to 24.3 %, for the prior fiscal year period.

The interim effective tax rate for the three months ended August 31, 2024 varies from the statutory rate primarily due to expected state and local income tax and non-deductible compensation for covered executive employees.

The Company's interim effective tax rate, inclusive of discrete items, for the three and six month periods ended November 30, 2024 was 30.3 % and 37.2 %, respectively, compared to 24.2 % and 22.9 %, respectively, for the prior fiscal year period.

The interim effective tax rate for the six months ended November 30, 2024 varies from the statutory rate primarily due to expected state and local income tax and non-deductible compensation for covered executive employees.

The Company, including its domestic subsidiaries, files a consolidated U.S.

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The Organization for Economic Cooperation and Development (“OECD”) has implemented the global minimum tax rate of at least 15% for large multinational companies as of 2024 (“Pillar Two”).

Under Pillar Two, a top-up tax will be required for any jurisdiction who has enacted Pillar Two and whose effective tax rate falls below the 15% global minimum rate.

Under Pillar Two, a top-up tax will be required of such companies for any jurisdiction which has enacted Pillar Two if their effective tax rate falls below the 15% global minimum rate.

Additionally, the OECD issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax.

2 unchanged sentences

The Company will continue to monitor and reflect the impact of such legislative changes in future periods, as appropriate.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Non-income Taxes

9 unchanged sentences

The Company marks-to-market these instruments and records the changes in the fair value of these items in Selling, general and administrative expenses and recognizes the unrealized gain or loss in Other current assets or Other current liabilities.

The notional values of the contracts were $ 22.8 as of August 31, 2024 and August 31, 2023.

A net unrealized loss of $ 0.3 and a net unrealized gain of $ 0.4 was recognized for the three months ended August 31, 2024 and August 31, 2023, respectively.

The notional values of the contracts were $ 22.8 as of November 30, 2024 and November 30, 2023.

A net unrealized gain of $ 0.6 and $ 0.3 was recognized for the six months ended November 30, 2024 and November 30, 2023, respectively.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

OTHER ACCRUED EXPENSES

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

August 31, 2024 May 31, 2024 August 31, 2023

November 30, 2024 May 31, 2024 November 30, 2023

Accrued payroll, payroll taxes and benefits $ 35.6 $ 32.9 $ 32.8

6 unchanged sentences

SUBSEQUENT EVENTS

On September 18, 2024, the Board declared a quarterly cash dividend of $ 0.20 per share on the Company’s Class A and Common Stock for the second quarter of fiscal 2025.

The dividend is payable on December 16, 2024 to shareholders of record as of the close of business on October 31, 2024.

On December 11, 2024, the Board declared a quarterly cash dividend of $ 0.20 per share on the Company’s Class A and Common Stock for the third quarter of fiscal 2025.

The dividend is payable on March 14, 2025 to shareholders of record as of the close of business on January 31, 2025.

SCHOLASTIC CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Overview and Outlook

Revenues for the second quarter ended November 30, 2024 were $544.6 million, compared to $562.6 million in the prior fiscal year quarter, a decrease of $18.0 million or 3%.

The Company reported net income per diluted share of Class A and Common Stock of $1.71 in the second quarter of fiscal 2024, compared to a net income per diluted share of $2.45 in the prior fiscal year quarter.

During the second fiscal quarter, the Children's Book Publishing and Distribution segment's results reflected timing-related revenue declines, related to the trade publishing plan and book fair deliveries, compared to the prior year period.

Education Solutions continued to be negatively impacted as school districts focus on adopting and implementing new core programs which resulted in a continued decline in spending on supplemental materials.

The Company is developing new supplemental products for schools, which are expected to launch in time for the 2025/2026 school years.

Within the Entertainment segment, the Company benefited from the addition of 9 Story and continued to execute on an integrated development and production slate, including digital-first growth opportunities, and expanded the reach and monetization of Scholastic IP on advertising-supported distribution platforms leveraging 9 Story’s capabilities.

During the remainder of fiscal 2025, revenues are expected to benefit from new releases, including the thirteenth book in Dav Pilkey’s global best-selling series, Dog Man:

Big Jim Begins , which was released in December, and the fifth book in Suzanne Collins’ Hunger Games ® series, Sunrise on the Reaping, which is expected to be released in March 2025.

Fair count for the fall season, which includes June through December, is expected to exceed the prior year period, and full year fair count is expected to achieve 90,000 fairs in fiscal 2025.

The Company's Entertainment segment continues to execute on company-wide synergies which are expected to benefit this segment in fiscal 2026 and beyond.

Results of Operations

Revenues for the quarter ended November 30, 2024 decreased by $18.0 million to $544.6 million, compared to $562.6 million in the prior fiscal year quarter.

Within the Children's Book Publishing and Distribution segment, revenues decreased by $25.4 million, primarily driven by lower trade channel revenues which reflected the timing of new releases, coupled with lower revenues from the book fairs channel as more fairs shifted into December than in the prior fiscal year quarter.

In the Education Solutions segment, revenues decreased by $9.8 million primarily due to the continued decline in spending on supplemental materials, coupled with lower subscription revenues from Magazines+ TM and lower revenues from sponsored programs.

In local currency, the International segment revenues decreased by $1.7 million, primarily reflecting lower sales in Australia due to softness in the retail market.

International segment revenues benefited from favorable foreign exchange of $1.9 million in the quarter ended November 30, 2024.

Partially offsetting the overall decrease in revenues, revenues from the Entertainment segment increased $16.4 million, reflecting the addition of 9 Story.

Revenues for the six months ended November 30, 2024 decreased by $9.3 million to $781.8 million, compared to $791.1 million in the prior fiscal year period.

Revenues in the Children's Book Publishing and Distribution segment decreased by $22.4 million, primarily driven by lower trade channel revenues which reflected the timing of new releases, coupled with lower revenues from the book fairs channel as more fairs shifted into December than in the prior fiscal year period.

In the Education Solutions segment, revenues decreased by $20.1 million primarily due to the continued decline in spending on supplemental materials and lower subscription revenues from Magazines+.

In local currency, the International segment revenues decreased by $1.9 million, primarily reflecting lower sales in Australia due to softness in the retail market, partly offset by higher revenues in the U.K.

International segment revenues benefited from favorable foreign exchange of $1.7 million in the period ended November 30, 2024.

Partially offsetting the overall decrease in revenues, revenues from the Entertainment segment increased $32.6 million, reflecting the addition of 9 Story.

SCHOLASTIC CORPORATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements