Scholastic Corp (NASDAQ: SCHL) stock rose over 3.8% on 20th September, 2019 (as of 10:05 am GMT-4; Source: Google finance) as the company posted better than expected earnings for the first quarter of FY 20.
Net loss for the current period was $58.5 million, compared to a net loss in the prior year period of $61.3 million, an improvement of 5%. The company has improved operating loss in the first quarter to $87.4 million from an operating loss of $83.8 million a year ago, mainly due to higher technology-related overhead expense, which was however partially offset due to the contribution on higher revenues. The company’s adjusted EBITDA for the first fiscal quarter of 2020 increased by 5% to a loss of $61.0 million.
Net cash used in operating activities was $97.6 million in the first fiscal quarter compared to net cash used in operating activities of $89.0 million in the first quarter of fiscal 2019. At the first quarter 2020 end, the Company’s cash and cash equivalents had exceeded total debt by $186.4 million, compared to $254.1 million a year ago. The decline in net cash position is mainly due to planned capital spending on technology investments that is associated with the Company’s Scholastic 2020 margin improvement initiatives and seasonal working capital usage in advance of the back-to-school selling season.
The Company during the first fiscal quarter distributed $5.3 million in dividends and reacquired $12.6 million of its common stock. Capital expenditures in the first quarter were $13.5 million, which is $14.6 million lower than the prior year period, due to lower facilities-related spend.
SCHL in the first quarter of FY 20 has reported the adjusted loss per share of $1.59, beating the analysts’ estimates for the adjusted loss per share of $1.80. The company had reported the adjusted revenue growth of 6.5 percent to $232.6 million in the first quarter of FY 20, beating the analysts’ estimates for revenue of $217.60 billion.
For FY 20, the company expects revenues to be in the range of $1.67 to $1.70 billion, up from $1.65 billion in fiscal 2019, and Adjusted EBITDA to be in the range of $140 to $160 million, up from $121.3 million in fiscal 2019. The Company expects the capital expenditures to be in the range of $75 to $85 million in fiscal 2020, compared to $95.0 million in fiscal 2019.