Scholastic Profit Dips on Severance Costs

Scholastic plans to trim $20 million from its spending plan for the second half of fiscal 2009 by cutting management bonuses and paring down all discretionary spending.

The company reported its loss from discontinued operations grew to $15.3 million, or 40 cents per share, from $6.7 million, or 17 cents per share, in the previous year. Discontinued operations included charges related to Scholastic's exit from Argentinian operations, a Puerto Rican sales group and a trade magazine.

Increased royalty reserves and allowances for doubtful trade publishing accounts hurt operating income by $6.3 million, Scholastic added.

Sales dropped in its trade publishing unit due to fewer Harry Potter shipments, but results for the children's book publishing and distribution division benefited from strong sales of "The 39 Clues," ''The Hunger Games," ''The Invention of Hugo Cabret" and "Too Many Toys."

Educational publishing revenue fell mostly on the earlier timing of classroom library sales when compared with the previous six months.

The company reduced its total debt to $389 million from $414.1 million.