Thank you for standing by, and welcome to today's program entitled Scholastic Reports Fourth Quarter and Fiscal Year 2023 Results. At this time, all participants are in listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Jeffrey Mathews, Executive Vice President, Corporate Development and Investor Relations. Please go ahead.

Hello, and welcome everyone to Scholastic's fiscal 2023 fourth quarter earnings call. Today on the call, I'm joined by Peter Warwick, our President and Chief Executive Officer; and Ken Cleary, our Chief Financial Officer. As usual, we posted the accompanying investor presentation on our IR website at investor.scholastic.com, which you may download now if you've not already done so. We would like to point out that certain statements made today will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties and actual results may differ materially from those currently anticipated. In addition, we will be discussing some non-GAAP financial measures as defined in Regulation G. The reconciliation of those measures to the most directly comparable GAAP measures can be found in the company’s earnings release and accompanying financial tables filed this afternoon on a Form 8-K. This earnings release has also been posted to our Investor Relations website. We encourage you to review the disclaimers in the release and investor presentation and to review the risk factors disclosed in the company’s annual and quarterly reports filed with the SEC. Should you have any questions after today’s call, please send them directly to our IR e-mail, investor_relations@scholastic.com. And now, I’d like to turn the call over to Peter Warwick to begin this afternoon’s presentation.

Thank you, Jeff, and good afternoon, everyone. Thank you for joining us. Scholastic finished fiscal 2023 strongly with fourth quarter operating income up 40% from the prior year quarter's record level on modest revenue growth. Full year results met or exceeded our revised guidance. I’m especially proud of the excellent performance management achieved across Scholastic last quarter. In response to the cost and the selling headwinds that we've experienced this year and which caused us to revise our guidance in March. Thanks to quick actions to align spending with the revised revenue outlook and to unlock sales, including delayed opportunities in our Education Solutions division, margins and profits rose across all business segments in quarter four. The operational efficiencies that Scholastic has achieved since the pandemic, especially in our Book Fairs nationwide operations and in our centralized supply chain and distribution functions also contributed to operating leverage and the considerable flow-through of sales to profits that we saw in quarter four. Thanks to a strong quarter four. Full-year adjusted EBITDA was $196 million, up from $189 million a year ago, and within our original guidance range of $195 million to $205 million. Free cash flow was also robust relative to net income in fiscal 2023, even as we increased investments to grow and maintain our divisions and to rebuild inventory levels post-pandemic. This afternoon, I'd like to review our fiscal 2023 results briefly before turning to our strategy and outlook for 2024 and beyond. Ken will then discuss our financial results in more detail, including our fiscal 2024 guidance. But first, I'd like to spend a few moments discussing the macro environment in which we operate. First, reading, literacy and learning have never been more pressing needs for our kids. Sadly, this was again recently confirmed by nine and 13…

Thank you, Peter, and good afternoon, everyone. Today, I will refer to our adjusted results for the fourth quarter and full fiscal year, excluding onetime items in the prior year period, unless otherwise indicated. There were no onetime items in fiscal 2023. Please refer to our press release tables and SEC filings for a complete discussion of last year's onetime items. As Peter noted, we finished fiscal 2023 strongly generating record operating income in the fourth quarter. On a full year basis, revenues and profits rose despite headwinds in the retail book selling market, longer selling cycles for instructional materials and higher cost and supply chain pressures. We also increased spending on go-to-market capabilities to support long-term growth in education solutions. Our positive results, in spite of these factors, highlight the company's operating leverage and improved efficiencies achieved since the pandemic, which I'd like to discuss before turning to financial results. Over the last 36 months, triggered by the pandemics impact on our business and customers, we have worked and invested to transform key components of Scholastic supply chain, operations, logistics and go-to-market capabilities. As a result, these functions are vastly more resilient, more agile and more efficient today. As Peter just described, we also have additional opportunities that we are pursuing in fiscal 2024. Greater efficiencies in areas we control have partially offset higher costs in other areas, especially paper, manufacturing, shipping and freight. They have also helped preserve the strong variable margins and operating leverage inherent in our businesses as we saw in Book Fairs and in education solutions. Like Peter, I am proud of our team for the hard work and look forward to continuing our progress in the upcoming fiscal year and beyond. Turning to our consolidated financial results. The fourth quarter revenues rose 3% to…

Thank you, Ken. In summary, Scholastic delivered solid results in fiscal 2023, reflecting the unique strength of our businesses and effective performance management in response to market headwinds. We continued our investments in growth opportunities, especially in Education Solutions, while returning substantial capital to our shareholders. We're enthusiastic about our plan for fiscal 2024 as we begin the year and prepare for back-to-school. The new school reading events division has great promise to continue our momentum in schools, while connecting kids to the joy and power of reading with new go-to-market strategies that leverage Scholastic's content and brand as never before. We have exciting new frontlist titles publishing and streaming series launching as well as new products in education solutions like Ready for Reading and our growing state-sponsored programs. This plan aligns with Scholastic's larger multiyear strategy and opportunity as we grow our profitable core Children's Book businesses, build out our blended literacy offering, continue improving efficiencies and allocate our capital to sustainably grow and generate higher shareholder returns. I'm grateful for the hard work of Scholastic's employees and for the support of our shareholders as together we bring the power of reading and books to all kids. Thank you very much. Let me now turn the call over to Jeff.

Thanks, Peter. We appreciate everyone's time today and your continuing support. With that, we will open the call for questions. Operator?

Certainly. [Operator Instructions] And our first question comes from the line of Brendan McCarthy from Sidoti. Your question please.

Yes. Thank you for taking my question and congratulations on the strong results. My question is regarding the new school reading events business. Just wondering if you can provide some color on the timing of that combination? And when we might expect to see margin improvement in the Children's Book Publishing and Distribution segment? I know margins were up in Q4 year-over-year, but I was also wondering if you're able to quantify the margin improvement with that combination.

Thanks, Brendan. I mean, the whole strategy of the school routing events business is really to take two of our activities that have got an awful lot of overlap within the schools and to be able to make much more of a joined-up business with individual schools. And we're had a great start in planning for that, and we'll be underway really from the start of the new school year from sort of mid-August in the South to early September in the North and East. And that we have got a lot of materials ready to go and we would expect to see a really strong start. The clubs part of that business traditionally starts strongly at the beginning of the school year, and we hope that, that obviously is going to continue with the new program that we've got for that. And we're very well set up in the book fairs area to get off to a very, very strong start. So I'm very enthusiastic about this part of our business. And I think that we'll be able to talk very positively about how the team, which is an excellent team, has performed. On the financial side, I'm going to turn that over to Ken just to make some comments.

Thanks, Peter. Hi, Brandon. Nice to meet you. Yes. So Peter -- as Peter talked about, we quickly moved on this, and the team got together and in a very short period of time where put together in tight rooms and in just about 60 days came up with a very tight operating plan. So, we are hitting the ground ready to roll here, and we expect margin improvement this year. It will be on lower clubs revenues clearly as we start to bring this business down to its core. There's a long-term strategy where we think we -- the combined revenues of this business will ultimately be stronger, but we need to break this -- the first part of this down to what we understand to be profitable, and we have to get it down to that first. So Phase 1 is going to be pretty exciting for us. It's certainly more kid centric and customer focused than we were in the past. So, we're excited about it, but we expect margin improvement right out of the gate, although you will see lower clubs revenues.

Got it. That's helpful. And then if I could pivot to the Education Solutions segment. Yes, I know you mentioned in your results, there was some benefit from the state sponsored programs. Were there any additional states added regarding your new state business. I know Florida and Louisiana, I think are the primary two. But were there any additional states added?

Well, we've added really for -- primarily really for next year, but we've also got Tennessee as another state where we’ve got additional new business. We have [some] (ph) business in Tennessee this year, but we've got more coming up. And yes, Louisiana was the big new one. And we've got a lot of, I think, good opportunities in Florida going forward, because we've now been able to add the pre-K kids to the project. And we've also -- we're also making some adjustments to how we do the marketing. And I think that's also going to be beneficial. And a final factor really to emphasize is, there's such a lot of concern amongst parents, teachers, administrators, politicians, everybody about literacy. And this is really a key -- a really key initiative to help that. And I think that that's going to be a big factor. The other key thing to mention is that, we are benefiting quite a lot from a much broader array of opportunities for funding literacy, particularly aimed at those kids from disadvantaged communities, and these are examples of that. But we also have other examples in terms of working with communities to sponsor books in schools, to sponsor book fairs and also increasingly we see that there's going to be more that we can do in that regard. And that was really one of the reasons why we appointed one of our most senior and experienced executives to become a sort of Chief Impact Officer, because we feel that it's really exactly on point for us to be working in this way with providing more literacy to disadvantaged communities but also putting much more effort into finding the funding to be able -- to enable us to do that. And so far, we're very happy overall with what we're able to do in this sponsored area of our business. We see it as one that will grow in the future.

Great. Thank you. One more, if I may. Sorry, go ahead, Ken.

Yes. No, just adding to that, it's nice having the Florida model out there, because now we can replicate it, and that's largely what happened in Louisiana. So, there was a learning curve just to acquire that first business. And now we're out there trying to do this in other places. So having that model is great, and I'll speak as the CFO here. Also, the revenues are not because they are addressing kids who are disadvantaged, are not cannibalistic to our clubs and fairs business, which is really great for us, too, and both on mission and financially beneficial to us as well.

Got it. That's helpful. And then lastly, I know the theme within the Education Solutions segment has been softer spending by schools as they deal with teacher staffing issues. Are you still assuming that trend to kind of soften as we enter the new school year in fiscal 2024? And I guess, secondly, what kind of -- are you seeing that show up in specific data points?

We're not really -- I mean, we expect that the overall environment in FY 2024, for example, in terms of spending in schools is going to be similar to that in FY 2023. But the additional asset funding is coming to an end, the -- in sort of the fall of next year. Whether that will have any impact on using up funds more quickly towards the end of the next school year? We just really don't know at the moment. But certainly, staffing issues are a key issue, but there's also been a real need and a lot of pressure sometimes from parents to make sure that this continuing book buying by schools and that they have that opportunity to do that with the asset funding in our next financial year. And I think when we look going forward, Brendan, at FY 2025 and going forward, you got to remember that asset funding is additional funding. It's not the core funding that's going away. And it's important, I think, that all of those who are concerned about education regardless of their political background, everyone is really, really concerned about literacy. And I think you would be very, very surprising if there weren't continued and indeed additional, perhaps federal and state funding measures to really address that issue, because it's really critical for the success of not just society, but our economy that more people are able to be literate and that's a critical thing for us.

Great. Thank you, Peter. Thank you, Ken. That’s all from me.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks.

Well, thank you, everyone, for joining today's call and for your continued support. I'd like again to thank all of Scholastic employees for their hard work this year. To summarize, we're focused on executing a long-term strategy to drive growth impact and shareholder value creation over the coming years, while protecting margins and sustaining the growth we achieved in fiscal 2023. We're confident about Scholastics opportunities, and we're excited to execute our strategy in fiscal 2024 and beyond.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Good day.