Scholastic Stock

Scholastic Corporation and its subsidiaries (Scholastic) operate as a publisher and distributor of children’s books worldwide.

The company is a provider of print and digital instructional materials for grades pre-kindergarten (‘pre-K’) to grade 12 and a producer of educational and entertaining children’s media. The company creates quality books and ebooks, print and technology-based learning materials and programs, classroom magazines and other products that, in combination, offer schools, as well as parents and children, customized and comprehensive solutions to support children’s learning and reading both at school and at home. Since its founding in 1920, Scholastic has emphasized quality products and a dedication to reading, learning and literacy.

The company is the leading operator of school-based book club and book fair proprietary channels. It distributes its products and services through these channels, as well as directly to schools and libraries, through retail stores and through the internet.

The company’s website, scholastic.com, is a leading site for teachers, classrooms and parents and an award-winning destination for children. Scholastic has operations in the United States and throughout the world, including Canada, the United Kingdom, Australia, New Zealand and Asia and, through its export business, sells products in approximately 120 international locations.

Segments

The company categorizes its businesses into three reportable segments: Children’s Book Publishing and Distribution; Education Solutions; and International.

Children’s Book Publishing and Distribution segment

The company’s Children’s Book Publishing and Distribution segment includes the publication and distribution of children’s books, ebooks, media and interactive products in the United States through its school book clubs and school book fairs channels and through the trade channel.

The company is the world’s largest publisher and distributor of children’s books and is the leading operator of school-based book clubs and school-based book fairs in the United States. The company is also a leading publisher of children’s print books, ebooks and audiobooks distributed through the trade channel. Scholastic offers a broad range of children’s books through its school and trade channels, many of which have received awards for excellence in children’s literature, including the Caldecott and Newbery Medals.

The company obtains titles for sale through its distribution channels from three principal sources. The first source for titles is the company’s publication of books created under agreements with authors, illustrators, book packagers or other media companies. Scholastic generally controls the exclusive rights to sell and distribute these titles through all channels of distribution in the United States and, to a lesser extent, internationally. Scholastic’s second source of titles is through obtaining licenses to sell books exclusively in specified channels of distribution, including reprints of books originally published by other publishers for which the company acquires rights to sell in the school market. The third source of titles is the company’s purchase of finished books from other publishers.

School-Based Book Clubs

The company’s school-based book clubs consist of reading clubs for pre-K through grade 8. In addition to its regular reading club offerings, the company creates special theme-based and seasonal offers targeted to different grade levels during the year.

The company distributes promotional materials containing order forms to classrooms in the vast majority of the pre-K to grade 8 schools in the United States. Classroom teachers who wish to participate in a school-based book club provide the promotional materials to their students, who may choose from curated selections at substantial reductions from list prices. Approximately 37% of kindergarten (‘K’) to grade 5 elementary school teachers in the United States who received promotional materials in fiscal 2023 participated in the Company’s school-based book clubs. In fiscal 2023, approximately 97% of total book club revenues were placed via the internet through the Company’s online ordering platform, which allows parents, as well as teachers, to order online, with approximately 57% of such revenues being placed by parents via the Company's online ordering platform. Alternatively, the teacher may manually aggregate the students’ orders and forward them to the Company. Products are typically shipped to the classroom for distribution to the students. Teachers who participate in book clubs receive bonus points and other promotional incentives, which may be redeemed from the company for additional books and other resource materials and items for their classrooms or the school.

School-Based Book Fairs

The company is the leading distributor of school-based book fairs in the United States serving schools in all 50 states. Book fairs provide children access to hundreds of popular, quality books and educational materials, increase student reading and help book fair organizers raise funds for the purchase of school library and classroom books, supplies and equipment. Book fairs have traditionally been weeklong events where children and families peruse and purchase their favorite books together. The company typically delivers book fairs product from its warehouses to schools principally by a fleet of company-owned and leased vehicles. Sales and customer service representatives, working from the company’s regional offices, distribution facilities and national distribution facility in Missouri, along with local area field representatives, provide support to book fair organizers. Physical book fairs are conducted by school personnel, volunteers and parent-teacher organizations, from which the schools may receive either books, supplies and equipment or a portion of the proceeds from every book fair.

Effective June 1, 2023, the company has combined the school-based book fairs and book clubs businesses into the newly formed reading events business.

Trade

Scholastic is a leading publisher of children’s books sold through bookstores, on-line retailers and mass merchandisers primarily in the United States. Scholastic’s original publications include Harry Potter, The Hunger Games, The Bad Guys, The Baby-Sitters Club, The Magic School Bus, Captain Underpants, Dog Man, Wings of Fire, Cat Kid Comic Club, I Survived, Goosebumps and Clifford The Big Red Dog; and licensed properties, such as Peppa Pig and Pokemon. In addition, Klutz and Make Believe Ideas publish and create ‘books plus’ and novelty products for children, including Klutz titles, such as Ink and Paint Manga, Mini Clay World Puppy Treat Truck, and LEGO Race Cars; and titles in the Never Touch series from Make Believe Ideas.

The company’s trade organization focuses on publishing, marketing and selling books to bookstores, on-line retailers, mass merchandisers, specialty sales outlets and other book retailers; and also supplies books for the company’s proprietary school channels. Top selling new release titles in the trade division during fiscal 2023 included Dog Man #11: Twenty Thousand Fleas Under the Sea, Cat Kid Comic Club: Collaborations, Harry Potter and the Order of the Phoenix: The Illustrated Edition, Wings of Fire Graphix #6: Moon Rising, The Baby-Sitters Club Graphic Novel #13: Mary Anne's Bad Luck Mystery and Nick and Charlie: A Heartstopper Novella.

Also included in the company's trade organization are Weston Woods Studios, Inc. (‘Weston Woods’) and Scholastic Audio, as well as Scholastic Entertainment Inc. (‘SEI’). Weston Woods creates audiovisual adaptations of classic children's picture books distributed through the school and retail markets. Scholastic Audio provides audiobook productions of popular children's titles. SEI is responsible for exploiting the company's film and television assets, which include a large television programming library based on the company's properties, and for developing new programming. During fiscal 2023, the company produced the animated series ‘Eva the Owlet,’ based on the Owl Diaries books, which was released on AppleTV+ in March 2023.

Education Solutions segment

The Education Solutions segment includes the publication and distribution to schools and libraries of children’s books, other print and on-line reference, non-fiction and fiction focused products, classroom magazines and classroom materials for literacy instruction, as well as consulting services and related products supporting professional development for teachers and school and district administrators, including professional books, coaching, workshops and seminars which in combination cover grades pre-K to 12 in the United States.

Classroom Libraries and Collections

The company is a leading provider of classroom libraries and paperback collections, including best-selling titles, to individual teachers and other educators and schools and school district customers. Scholastic helps schools build classroom and library collections with high quality, award-winning books for every grade, reading level and multicultural background, including the company’s Rising Voices Library offering, which meets the increasing demand for culturally responsive content and instruction. In addition, the company provides books to students for summer reading through its Grab and Go reading packs.

Instructional Products and Programs

Scholastic serves customer needs with customized support for literacy instruction, by providing comprehensive core and supplemental literacy and reading programs, which include print and digital content, as well as providing assessment tools. These materials are designed to support instruction-based teaching and learning, and are generally purchased by district and school leadership, both directly from the company and through teacher stores and booksellers.

The company’s offerings include comprehensive reading programs such as Scholastic Bookroom and Guided Reading, early childhood programs, such as PreK On My Way and comprehensive literacy programs, such as Scholastic Literacy. In addition, the company offers summer learning products to provide students with increased access to books and learning opportunities over the summer. During fiscal 2023, the company acquired Learning Ovations, Inc., a U.S.-based education technology business and developer of a literacy assessment and instructional system, and integrated the acquired technology into its new K-3 phonic program, Ready4Reading, which was launched in June 2023.

Teaching Resources and Professional Learning

The company provides a variety of resources to teachers and school leadership, including lesson planning, reading management, classroom management, classroom organization, and other instructional resources. These products are available on the company's on-line teacher store (www.scholastic.com/teacherstore), which provides professional books and other educational materials to teachers and other educators. Professional consulting services are also provided to support academic leadership with training on a multitude of topics, ranging from product implementation to engaging with families and communities.

Literacy Initiatives

The company provides books to community-based organizations and other groups engaged in literacy initiatives through Scholastic Family and Community Engagement (FACE). The company also partners with mission-driven organizations to support literacy by increasing children's access to books through the Scholastic Literacy Partners program.

Scholastic Magazines+

Scholastic is the leading publisher of classroom magazines, Scholastic Magazines+. Teachers in grades pre-K to 12 use the company’s 33 classroom magazines, including Scholastic News, Scholastic Scope, Storyworks, Let's Find Out and Junior Scholastic, to supplement formal learning programs by bringing subjects of current interest into the classroom, including current events, literature, math, science, social studies and foreign languages. These offerings provide schools with substantial non-fiction material, which is required to meet new higher educational standards. Each magazine has its own website with online digital resources that supplement the print materials, as well as providing access to the magazine in a digital format. A ‘digital only’ subscription to the magazine is also offered.

Scholastic’s classroom magazine circulation in the United States in fiscal 2023 was approximately 13.3 million, with approximately 80% of the circulation in grades pre-K to 6. The majority of magazines purchased are paid for with school or district funds, with parents and teachers paying for the balance.

Sponsored Programs

The company works with state partners to provide books to eligible students, generally those reading below grade level, at no cost to the student. The books are purchased with state funds and typically shipped directly to students’ homes.

International segment

The International segment includes the publication and distribution of products and services outside the United States by the company’s international operations, and its export and foreign rights businesses.

Scholastic has operations in Major Markets, which include Canada, the United Kingdom, Ireland, Australia, and New Zealand, as well as in India, Singapore and other parts of Asia, including Malaysia, Thailand, the Philippines, Indonesia, Hong Kong, Taiwan, Korea and Japan. The company has branches in the United Arab Emirates and Colombia, a business in China that supports English language learning and also sells products in approximately 120 international locations through its export business.

The company’s international operations have original trade and educational publishing programs; distribute children’s books, digital educational resources and other materials through school-based book clubs, school-based book fairs and trade channels; and produce and distribute magazines and on-line subscription services. Many of the company’s international operations also have their own export and foreign rights licensing programs and are book publishing licensees for major media properties. In Asia, the company also operates a franchise program for tutorial centers that provide English language training to students, primarily in China.

Canada

Scholastic Canada is a leading publisher and distributor of English and French language children’s books in Canada. Scholastic Canada is the largest operator of school-based marketing channels in Canada and is one of the leading suppliers of original or licensed children’s books to the Canadian trade market. Scholastic Canada has also produced quality Canadian-authored books and educational materials, including an early reading program sold to schools for grades K to 6.

The United Kingdom

Scholastic UK is the largest operator of school-based marketing channels in the United Kingdom and is a publisher and one of the leading suppliers of original or licensed children’s books to the United Kingdom trade market. Scholastic UK also publishes supplemental educational materials, including professional books for teachers.

Australia

Scholastic Australia is the largest operator of school-based marketing channels in Australia, reaching approximately 90% of the country’s primary schools. Scholastic Australia also publishes quality children’s books supplying the Australian trade market. In addition, Scholastic Australia holds an equity method investment in a publisher and distributor of children's books.

New Zealand

Scholastic New Zealand is the largest children’s book publisher and the leading book distributor to schools in New Zealand. Through its school-based book clubs and book fairs channels, Scholastic New Zealand reaches approximately 90% of the country’s primary schools. In addition, Scholastic New Zealand publishes quality children’s books supplying the New Zealand trade market.

Asia

The company’s Asian operations consist of initiatives for educational publishing programs based out of Singapore. In addition, the company operates school-based marketing channels throughout Asia; publishes original titles in English and Hindi languages in India, including specialized curriculum books for local schools; conducts reading improvement programs inside local schools in the Philippines; and operates a franchise program for English language tutorial centers in China in cooperation with local partners, certain of which were temporarily closed during fiscal 2023 to limit the spread of the coronavirus. All tutorial centers were open as of May 31, 2023.

Foreign Rights and Export

The company licenses the rights to select Scholastic titles in 65 languages to other publishing companies around the world. The company’s export business sells educational materials, digital educational resources and children’s books to schools, libraries, bookstores and other book distributors in approximately 120 international locations that are not otherwise directly serviced by Scholastic subsidiaries. The company also partners with governments and non-governmental agencies to create and distribute books to public schools in developing countries.

Production and Distribution

The company’s books, magazines and other materials are manufactured by the company with the assistance of third parties under contracts entered into through arms-length negotiations and competitive bidding. Paper is purchased directly from paper mills and other third-party sources.

In the United States, the company mainly processes and fulfills orders for school-based book clubs, trade, reference and non-fiction products, educational products and export orders from its primary warehouse and distribution facility in Jefferson City, Missouri. In connection with its trade business, the company may fulfill product orders directly from printers to customers. Magazine orders are processed at the Jefferson City facility and the magazines are shipped directly from printers. School-based book fairs are fulfilled through a network of warehouses across the country, as well as from the company's Jefferson City warehouse and distribution facility. The company’s international school-based book clubs, school-based book fairs, trade and educational operations use distribution systems similar to those employed in the United States.

Seasonality

The company’s Children’s Book Publishing and Distribution school-based book club and book fair channels and most of its Education Solutions businesses operate on a school-year basis; therefore, the company’s business is highly seasonal. As a result, the company’s revenues in the first and third quarters of the fiscal year (year ended May 2023) generally are lower than its revenues in the other two fiscal quarters. Typically, school-based channels and magazine revenues are minimal in the first quarter of the fiscal year as schools are not in session. Education channel revenues are generally higher in the fourth quarter.

Copyright and Trademarks

As an international publisher and distributor of books, Scholastic aggressively utilizes the intellectual property protections of the United States and other countries in order to maintain its exclusive rights to identify and distribute many of its products. Accordingly, SCHOLASTIC is a trademark registered in the United States and in a number of countries where the company conducts business or otherwise distributes its products. The company’s principal operating subsidiary in the United States, Scholastic Inc., and the company’s international subsidiaries, through Scholastic Inc., have registered and/or have pending applications to register in relevant territories trademarks for important services and programs. All of the company’s publications, including books and magazines, are subject to copyright protection both in the United States and internationally. The company also obtains domain name protection for its internet domains.

History

Scholastic Corporation was founded in 1920. The company was incorporated in 1986.