Once upon a time, a company grew up to become one of the world's leading children's book publishers. Scholastic Corporation sells books to children in more than 150 countries. It operates through five divisions: Children's Book Publishing and Distribution; Educational Technology and Services; Classroom and Supplemental Materials; Media, Licensing and Advertising; and International. It owns the rights to properties such as Goosebumps and The Baby-Sitters Club and is the US distributor of the Harry Potter books, the best-selling children's series of all time. Known for its school book fairs, Scholastic also publishes magazines, textbooks, and software for students and teachers, and produces children's TV shows.
The company generates about 25% of sales outside of the US. Scholastic has long-established operations in Australia, Canada, New Zealand, and the UK, with newer holdings in China, India, and Ireland. Going forward, Scholastic expects to see strong growth in Asia and improved results in the UK.
Scholastic categorizes its businesses into five reportable segments: Children’s Book Publishing and Distribution; Educational Technology and Services; Classroom and Supplemental Materials Publishing; Media, Licensing and Advertising; and International.
The company gets about half of its revenue from the Children’s Book Publishing and Distribution. Its International segment accounted for about 25% of total sales in fiscal 2014.
Scholastic's revenues increaed by about 2% in fiscal 2014 compared to the prior year, while the company's profits were up nearly 45% in fiscal 2014 compared to fiscal 2013. The company’s revenue increased mainly due to increases in the book clubs and book fairs channels of the Children’s Book Publishing and Distribution segmen combined with the higher revenues driven by changes in marketing strategies.
Scholastic expects growth in fiscal 2014 to be driven new education technology products. Television has been a particular area of focus for Scholastic. Its Media, Licensing and Advertising division has built a library of more than 500 half-hour television productions. Titles include Maya & Miguel and The Magic School Bus. In addition, Scholastic has a partnership with NBC and Telemundo (along with other content and broadcasting companies) to produce and distribute television for children through a venture called Qubo. Spots reinforcing the importance of books and reading play throughout the Qubo programming block, which airs on NBC and Telemundo in English and Spanish.
Mergers and Acquisitions
In order to grow its Children's Book division, Scholastic in 2012 acquired Weekly Reader, an educational magazine designed for the kindergarten through 12th grade classroom. It bought the magazine from Reader's Digest Association for an undisclosed amount, though the price tag was estimated to be less than $5 million.