UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event Reported): July 12, 2004
SCHOLASTIC CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 000-19860 13-3385513
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
557 BROADWAY, NEW YORK, NEW YORK 10012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 343-6100
SCHOLASTIC CORPORATION
CURRENT REPORT ON FORM 8-K, DATED JULY 12, 2004
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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99.1 Press release of Scholastic Corporation, dated July 12, 2004
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 12, 2004, Scholastic Corporation issued the press release attached
hereto as Exhibit 99.1 announcing that it will record certain charges in the
fourth quarter of its fiscal year ended May 31, 2004 related to its Continuity
business.
The information in this Current Report on Form 8-K, including Exhibits, is being
furnished to the Securities and Exchange Commission (the "SEC") and shall not be
deemed to be incorporated by reference into any of Scholastic's filings with the
SEC under the Securities Act of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCHOLASTIC CORPORATION
(Registrant)
Date: July 12, 2004 /s/ MARY A. WINSTON
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Mary A. Winston
Executive Vice President
& Chief Financial Officer
SCHOLASTIC CORPORATION
CURRENT REPORT ON FORM 8-K, DATED JULY 12, 2004
EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
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Exhibit 99.1 Press release of Scholastic
Corporation, dated July 12, 2004
Exhibit 99.1
CONTACTS:
Investors: Ray Marchuk 212-343-6857
Media: Judy Corman 212-343-6833
SCHOLASTIC ANNOUNCES FOURTH QUARTER CHARGES RELATED TO ITS CONTINUITY BUSINESS;
EXPECTS FISCAL 2004 EPS IN LINE WITH PREVIOUS GUIDANCE
NEW YORK, NY, July 12, 2004 - Scholastic Corporation (NASDAQ: SCHL) today
announced that, in connection with its previously announced review of its
Continuity business, it will record charges of approximately $25 million in the
fourth quarter of its fiscal year ended May 31, 2004 related to that business.
The Company also announced that it will record a fourth quarter gain of $8
million resulting from the termination of a sublease in New York City.
The net effect of these items of $17 million pre-tax, or $0.28 per diluted share
net of tax, will be recorded in the quarter and year ended May 31, 2004.
Including these items and special severance charges principally recorded in
earlier quarters of fiscal 2004 totaling $3.3 million pre-tax or $0.05 per
diluted share net of tax, the Company expects to report Fiscal 2004 EPS of $1.40
to $1.50 per diluted share. These results are in line with Scholastic's prior
guidance. The Company also expects to exceed its previously stated $50 million
cash flow target for Fiscal 2004.
The Continuity-related charges primarily represent write-downs of inventory from
discontinued programs and prepaid promotion costs, as well as small increases in
bad debt expense and provisions for returns, and related severance. These
charges will be recorded primarily as components of Cost of goods sold; Selling,
general and administrative expenses; and Bad debt expense.
Richard Robinson, Chairman, President and CEO, commented, "As we said we would
in March, we thoroughly reviewed our Continuity business in response to the
challenges we faced during Fiscal 2004, including the effects of federal Do Not
Call legislation." Robinson added, "We are adjusting our business model to
strengthen our relationship with our most productive customers through product
and service improvements. While we expect that reducing promotions to our less
productive customers will temporarily reduce revenues, we believe these actions
will improve customer retention, profitability and cash flow in this
strategically important business. Our direct-to-home Continuity business has
generated significant profits and cash flow since its acquisition in June 2000
and is a key part of our plan to reach parents at home and help their children
read and learn."
As a result of actions taken to strengthen the management team of the Continuity
business, the Company will also record a severance charge of $2.3 million, or
$0.04 per diluted share, in the first quarter of Fiscal 2005.
Scholastic will announce Fiscal 2004 results and Fiscal 2005 plans after the
close of market on July 21, 2004 and will hold its year-end investor meeting the
following morning, July 22nd at 8:00 am, EDT, at corporate headquarters in New
York City.
ABOUT SCHOLASTIC
Scholastic Corporation, the world's largest publisher and distributor of
children's books, creates quality educational and entertaining materials and
products for use in school and at home, including children's books, textbooks,
magazines, technology-based products, teacher materials, television programming,
videos and toys. The Company distributes its products and services through a
variety of channels, including proprietary school-based book clubs, school-based
book fairs, school-based and direct-to-home continuity programs; retail stores,
schools, libraries, and television networks; and the Company's Internet Site,
http://www.scholastic.com.