Good day, ladies and gentlemen, and welcome to the Scholastic Reports Q4 and Fiscal 2017 Results and Fiscal 2018 Outlook Conference Call. At this time, all participants are in a listen-only mode. Following managements prepared remarks we will host a question-and-answer session and our instructions will follow at that time. [Operator Instructions] As a reminder, to our audience today this conference is being recorded for replay purposes. Now it’s my pleasure to hand the conference over to Mr. Gil Dickoff, Senior Vice President and Treasurer. Sir, you may go ahead.

Thank you very much, Brian, and good morning, everyone. Before we begin, I would like to point out that the slides of this presentation are available on our Investor Relations website at investor.scholastic.com. I would also like to note that this presentation contains certain forward-looking statements, which are subject to the various risks and uncertainties, including the condition of the children’s book and educational materials markets and the acceptance of the company’s products in those markets as well as other risks and factors identified from time-to-time in the company’s filings with the SEC. Actual results can differ materially from those currently anticipated. Our comments today include references to certain non-GAAP financial measures as defined in Regulation G. The reconciliation of these non-GAAP financial measures with the relevant GAAP financial information and other information required by Regulation G is provided in the company’s earnings release, which is also posted on the Investor Relations website at investor.scholastic.com. Now, I would like to introduce Dick Robinson, the Chairman, CEO, and President of Scholastic to begin today’s presentation.

Good morning and thank you for joining us today. We had a solid year in 2017 helped by strong trade and publishing especially as we had two new Harry Potter titles for the first time since the conclusion of the original book series in 2007 as well as the first two titles and the successful new graphic novel franchise, Dog Man by Dav Pilkey. We also continued to build momentum in Scholastic Education with market share growth in Pre-K to 6 core literacy as well as summer reading. Maureen will review our 2017 year in a few minutes. I will talk briefly now about our outlook for the future as we reach towards Scholastic's 100th anniversary in October 2020. To drive our future growth and profitability, we are launching a 3-year plan called Scholastic 2020, the goal of which is to build substantially increased operating income for the company over the three year period. This plan particularly addresses the operations and fulfilment side of our clubs and fair distribution business which are labor and freight intensive. The Scholastic 2020 process also directly links our transformational type technology work to the operating work of the publishing units ensuring that the new systems will provide the business leaders expanded and focused information about product, content, customer data and manufacturing and fulfilment cost. This direct linkage will result in reduced operating cost by simplifying business processes and will result in improved revenue through better targeted marketing and sales initiatives. Overtime, we will also reduce technology costs through centering on a single enterprise architecture for the company and we will drive significant operating efficiencies through lower cost of inventory and distribution, including improved procurement and the optimization of our U.S. clubs and fairs distribution network. Our new product information systems for example will help…

Thank you, Maureen. Brian, we are now ready to open the lines for questions.

Absolutely. [Operator Instructions] Our first question will come from Drew Crum with Stifel. Please proceed.

Okay. Thanks. Good morning everyone. Can you remind us what your expectations are for CapEx beyond fiscal 2018? Obviously, $66 million in fiscal 2017 expected to step up in fiscal 2018. But if you look back prior to fiscal 2017, it was kind of in that $25 million to $35 million run rate. And I guess I’m asking if we should expect to see that by fiscal 2019 or will be a gradual step down? Maureen O’Connell: So, Drew, at this point we’re not giving guidance for capital and pre-pub into the future. But I can say that we will complete the building construction in 2018, and the building construction is about a use of cash of $50 million in capital, so that you can expect that that will come down for that. The technology spend now will become more and more capital as we put technology and services, but I can't give you specific guidance for that today.

Okay. And then on the Children's Book business any more comment or detail you can provide around your expectations for the trade business? I think you characterize it as returning to more normalized levels. Now if you exclude Harry Potter, is this the business that should grow at low to mid single-digit in fiscal 2018 or any detail or parameters you can give us to work with there?

Yes. I think that’s right, Drew, obviously, the Harry Potter was a significant increase in revenues in 2017. We still continue to sell Harry Potter very well, but in backlist primarily. But we should have I would say, mid single-digit trade revenue improvement in 2018.

Okay. Got it. And then also with fairs, just any comments you guys can provide on the fiscal fourth quarter performance in fiscal 2017. It was a year in which sales decline, which wasn’t a significant decline, but this is a business that’s grown, looking at my model in the last 10 plus years, every year. So just wondering if you could offer little more detail on what happened in fiscal 2017 and confidence you can get back to growth in fiscal 2018?

Yes. Well, we have strong growth projected for fiscal 2018. Our growth did decline in 2017 as you say. This primarily stems from our – I think well thought out plan to focus on revenue per fairs as opposed to fair count. Our business has grown significantly by fair count, but that means that we’re probably delivering unprofitable fairs at the low end, that’s the low end of revenue. So, we took the bold step in 2017, reducing fairs by 10,000 or 8.8% and we’re focused on revenue per fair to offset the decline in number of fairs. We did a good job of this transition, but we probably missed the few steps that we have now analyzed and understand. And so as we look at 2018 we see a much stronger focus on improving the revenue per fair particularly in our custom fairs which is the $8,000 to $12,000 segment and is a significant part of our total revenue. And we have a whole new plan in that area which is very exciting with a stronger increased merchandising and a whole new fair build up from the bottom rather than just adding components to our core fairs, there’s a little more detail perhaps is needed, but that's the general strategy there. And we see very good signs of getting that through our sales organization. Everybody understands it. And we are very confident that we can rebuild growth without adding numbers of fairs.

Got it. Okay. And then just last question from me, Dick, any updated thoughts on returning cash to shareholders? You know nearly $440 million of net cash sitting on the balance sheet. Any updated thoughts there you can share?

Sure. I think Maureen is going to tackle that one, Drew.

Okay.

Thank you. Maureen O’Connell: Well, I think Drew, as you know, we continue to have discussions in each and every quarter with our board about opportunities to return share, cash to shareholders. And we have been under an open-to-buy program. We bought $7 million for stock back this year in ranges between $38 and $42 a share. We still have $38 million remaining under that capacity and we will continue to buy in the open market. And then we had conversations every quarter with our board about whether there are more aggressive programs and we’ll continue to have those conversations.

Okay. Very good. Thank you.

Thank you, Drew. Maureen O’Connell: Thank you.

Thank you. Our next question will come from the line of Barry Lucas with Gabelli & Company. Please proceed.

Thank you and good morning. I’ve got several if I may. If we could start with the growth target post the year that we’re in now double digits, any way either to refine that a little bit further or maybe even think about what a margin target might look like as we get it to see the benefits of Scholastic 2020?

I think our three-year plan, Barry, we definitely have a margin target. We’re not going to announce it, but we have that in mind. The reason we’re not going to announce it is that the 2020 plan is kind of an iterative plan where we’re evolving it over three-year period, but the overall goal is to improve our margin by 2020 significantly. And we expect as we said operating income improvement in double digits in fiscal 2019 through 2021.

All right. If -- maybe switch gears to the real estate a bit. Just wondering, is Sephora [ph], the tenant that you alluded to earlier, I mean if there was kind of an unnamed tenant that you were talking about. So was that's LVMH and Sephora?

Yes.

Okay. And is the plan that they will take more square footage or just remain in roughly the comparable amount of footage that they are in now?

They are in a comparable amount of footage, but it’s a premium space that’s been all redeveloped for them in the front of 557 building on Broadway-facing. The back of that space will be our new Scholastic corporate entrance to our building.

So, is there room for another tenant on the ground floor?

Yes, absolutely. We’re cleaning out the Sephora space, which enables us to have 20,000 of contiguous ground-floor space available for either a significant tenant or for a series of smaller tenants and we have lots of interest. As you know the retail market right now is under attack by the press and everybody is talking about the decline of bricks and mortar. We don’t see you on Broadway at all. We are – [Indiscernible] which is from your retailer just down the block is having sales records in this billing which is just about 200 yards away from ours. And we believe that the retail rent will return on Broadway and it will make a comeback in the next few months once some of the negative publicity on bricks and mortar is behind us. And we’re having dialogue with lots of valuable tenants about the combined 20,000 foot space at 555 Broadway.

Okay. I want to come back to Drew's comment on cap spending. It just feels like if I’ve got the numbers right. Roughly $40 million to spend on building this year, 30, 40-ish on technology which would suggest that kind of maintenance level is back at that 20 million, 25 million. Are those numbers about right, Maureen? Maureen O’Connell: So, the building in total is between 65 million and 70 million of which we spent 20 in fiscal 2017. So the remainder will be spent in fiscal 2018 and will be completed at that point. So there will be no future spending on the building. As far as the technology part of the spent, as we said this year we spent 30 million. We expect something comparable or a little bit higher next year, and that will continue until we complete the full Oracle implementation and we complete the complete CRM implementation and that's part of our Scholastic 2020 plan, because these will lead to benefits in the organization, make our -- streamline our distribution and as Dick said, leverage our school network. And so at this point I’m not in a position to give you capital year by year, obviously we’ll do that as we get to give guidance in those years but I think the capital that we are spending now is part of the 2020 plan because it will really allow us to get those benefits once it’s complete.

Okay. Thanks. One more, a little bit [ph] if I can. You discontinued the software distribution business in Australia which I think contributed to the lower international revenues in the quarter but your operating income was cut in half and I would have thought that eliminating a low margin business it might have atleast improved the profitability instead, you know your margins went from 4.3% in the quarter to 2.4 and just wondering if you could provide a little more color or insight into what transpired? Maureen O’Connell: So we did exit the software distribution business in Australia and that was about half of the revenue declines say $4 million of the revenue decline when you factor out FS. And that was a very low margin business. It did not impact profitability whatsoever, that’s why we exited the business. We did see an impact in profitability for the year within Asia. And so in Asia, it was another decline and we are obviously we are having challenges in the Philippines where they are in a volatile state and also in Thailand and has also led to higher bad debt in that region, so we’ve enhanced our collection efforts and put in more collectors to make sure that that is not a situation going into 2018, we are starting to see that improvement already. But the bad debt impact affected the profitability and then also we increased our reserves for obsolescence in Canada and the U.K. and that had an impact on profitability, part of that was as we launched new titles in the Harry Potter series like the paperback we won’t be selling the older titles and coloring books had an impact on obsolescence as well.

Okay, thanks for that. Thanks for the detail Maureen. Maureen O’Connell: You’re welcome.

Thank you. Ladies and gentlemen, this concludes our question and answer session for today. So now, it’s my pleasure to hand the conference back over to Mr. Richard Robinson Chairman, President and Chief Executive Officer for some closing comments and remarks.

Well thank you all for listening to our year end call today. But more important, the announcement of our 2020 plan, which we believe will add significant operating income over the next several years and we look forward to updating you on that plan and our progress over the next month. Thank you.

Ladies and gentlemen, thank you for your participation on today’s conference. This does conclude the program and you may all disconnect. Everybody have a wonderful day.