"Adjusted operating loss increased to $24.3 million from $20.9 million, reflecting expenses tied to the sale-leaseback and timing-related revenue declines. Net cash used by operating activities rose to $30.5 million from $12 million, primarily due to higher tax payments from sale-leaseback proceeds."
"Company ended the quarter in a net cash position of $90.6 million, eliminating prior reliance on its credit line and lowering interest expense. Greenlighting and production activity grew meaningfully in the Entertainment segment, setting expectations for profitability in the coming quarter and further growth into fiscal 2027."
"Management introduced a long-term targeted net leverage range of 2.0x-2.5x adjusted EBITDA, signaling ongoing balance sheet optimization and prioritization of future capital returns. Management confirmed incremental tariff costs of $10 million for the year, stating continued review of policy changes that could further affect cost of goods."
Scholastic Corporation reported adjusted operating losses increasing to $24.3 million from $20.9 million, driven by sale-leaseback expenses and revenue timing declines. Operating cash outflows rose to $30.5 million from $12 million due to higher tax payments from sale-leaseback proceeds. The International segment's adjusted operating loss increased to $4.7 million from $2 million reflecting lower revenues. Trade Publishing revenue is expected to end slightly below prior year due to challenging fourth-quarter comparisons and retail book demand headwinds. However, the company achieved a net cash position of $90.6 million, eliminating prior credit line reliance and reducing interest expense. Entertainment segment greenlighting and production activity grew meaningfully, positioning the segment for profitability. Management introduced a long-term net leverage target of 2.0x-2.5x adjusted EBITDA. Supplemental curriculum demand declined, though teacher and community-oriented revenue streams remain less volatile. Incremental tariff costs of $10 million were confirmed for the year.
#financial-results #balance-sheet-optimization #entertainment-growth #tariff-impact #education-segment
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