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Scholastic Management Discusses Q4 2012 Results - Earnings Call Transcript

Now I'd like to introduce Dick Robinson, the Chairman, CEO and President of Scholastic, to begin our presentation.

Richard Robinson

Thanks, Jeff. Good morning and thank you for joining our Fiscal 2012 Year End Analyst and Investor Conference Call. For this morning's prepared comments, I'm joined by Maureen O'Connell, CFO and CAO. Other members of the executive team will also be available to answer questions at the end of this call.

With solid results across the company, fiscal 2012 was a good year made great by The Hunger Games. Suzanne Collins' wonderful trilogy emerges yet another Scholastic published global phenomenon, regularly taking the top 3 spots on print and e-book bestseller lists across the English-speaking world and helping drive record earnings for the company. On top of our success for The Hunger Games, good execution delivered strong operating performance across the company. At the same time, we accelerated major digital initiatives in Children's Books, Educational Technology and International. Continued financial discipline produced significant free cash flow and we finished the year with our strongest balance sheet in more than a decade. These great results provide a strong foundation for the future.

Although we will not repeat our record earnings from fiscal 2012, our goal for fiscal 2013 is to sustain last year's momentum while generating strong free cash flow. We have also taken major steps forward in the fast-paced digital transition of our businesses. We expect our substantial investments in e-commerce, e-books and new digital programs and education will generate strong profit growth, largely in fiscal 2014, though earnings in the year ahead will be lower than fiscal 2012's record level.

Now I'd like to discuss our results and our plan in more detail.

In Children's Books, we had a tremendous year in fiscal 2012. Continuing a record of high quality, best-selling Publishing and Trade, and strong results in fairs. At the same time, we successfully introduced Storia, our ereading app and e-book system, which is the central pillar of our digital strategy for this business. These results and investments position our Children's Book business well to grow and maintain market share as more schools and families buy e-books from us.

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