Scholastic today reported fourth quarter earnings of $545.8 million, up 1% from 2010, and overall annual revenue for the fiscal year, which ended May 31, of $1.91 billion, roughly level with last year. Results for 2011 reflected lower sales of educational technology in comparison to FY 2010, when earnings were buoyed by federal stimulus dollars, officials said, as well as increased strategic spending on digital initiatives in its children’s book business, including its recently released READ 180 Next Generation reading program.
Scholastic revenues were paced by Children’s Books, the company’s largest segment, which posted revenues of $922.0 million, up from $910.6 million in fiscal 2010, driven by bestselling series The Hunger Games and Harry Potter. Increases in capital expenditures included approximately $30 million for “e-commerce and e-book initiatives.” The report also referenced “a one-time bad debt expense of $3.5 million ($0.06 per share) in the current period related to Borders' bankruptcy filing."
Citing lower sales of educational technology, sales in the educational publishing segment dipped to $428 million in 2011, compared to $476.5 million in 2010, when federal stimulus spending bolstered sales. Media, licensing and advertising revenues dipped slightly for the year, in at $111.2 million, compared to $113.8 million in 2010. International results, meanwhile, rose sharply, with 2011 revenue of $444.9 million, compared to $412.0 million in the prior year, primarily reflecting a $23.9 million positive foreign exchange impact.
In addition to reporting 2011 results, the company also released its 2012 forecast. Scholastic CEO Richard Robinson said that initiatives like READ 180 and an expansion of the school customer base were expected to “drive strong growth in the higher margin education segment,” and that the company would also move forward with e-book and e-commerce strategies, including the “expanded roll-out” of a children’s e-reading app and e-bookstore.
Robinson also said the company was focused on “reducing costs,” with the company “taking steps to reduce costs in non-digital areas across the business…starting in fiscal 2012.”