School Specialty, Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 24, 2016; Revises Earnings Guidance for the Year Ending December 31, 2016
November 01, 2016 at 04:05 pm EDT
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School Specialty, Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 24, 2016. For the quarter, the company's revenues were $301.6 million, an increase of $2.2 million or 0.7%, as compared to revenues of $299.4 million. Operating income was $47.0 million as compared to $46.9 million in the comparable year-ago period. Net income was $42.9 million or $42.90 per basic and diluted share as compared to net income of $38.9 million or $38.90 per basic and diluted share a year ago. Adjusted earnings before interest, taxes, depreciation and amortization were $52.9 million, as compared to adjusted EBITDA of $54.3 million in the comparable 2015 period. Income before provision for income taxes was $51.7 million compared with $40.8 million a year ago. The year-to-date spending through third quarter is very consistent with prior year, $11.6 million compared to $11.2 million.
For the nine months, the company's revenues were $541.2 million, an increase of $9.2 million or 1.7%, as compared to revenues of $531.9 million. Operating income was $37.0 million, as compared to operating income of $21.0 million in the comparable year-ago period, an improvement of $16.0 million. Net income was $28.6 million or $28.61 per basic and diluted share, as compared to net income of $3.1 million or $3.09 per basic and diluted share a year ago. Adjusted EBITDA was $56.7 million, as compared to adjusted EBITDA of $55.9 million, an improvement of $0.8 million or 1.4%. Income before provision for income taxes was $33.0 million compared with $5.5 million a year ago.
The company updated its earnings guidance for the year ending December 31, 2016. Total revenues are now anticipated to increase by approximately 2.1% - 2.3%. Reported gross profit margins are anticipated to improve by 20 to 40 bps, driven by lower product development amortization costs. The company's updated adjusted EBITDA guidance is approximately $49 million - $51 million, representing year-over-year improvement of 8.9% - 13.3%. The company expects continued strong leveraged free cash flow of approximately $27.0 million to $29.0 million for fiscal year 2016, an update from prior guidance. The company expects operating income in the range of $23.1 million to $24.6 million, depreciation and amortization in the range of $20.3 million to $20.3 million, cash provided by operations in the range of $34.0 million to $37.0 million and leveraged free cash flow in the range of $27.0 million to $29.0 million. The company expects full year 2016 tax rate to be between 3.5% and 5%.
SSI Liquidating, Inc., formerly School Specialty, Inc. (SSI), is a distributor of supplies, furniture, technology products, supplemental learning products (instructional solutions) and curriculum solutions, primarily to the education marketplace. It designs, develops and provides educators with its own products and services. Its segments include Distribution and curriculum. Distribution segment offers products that include basic classroom supplies and office products, supplemental learning materials, physical education equipment and classroom technology. Curriculum segment is a PreK-12 curriculum-based publisher of products in the categories of science and reading and literacy. Through its SSI Guardian subsidiary, the Company provides curriculum, training and safety and security products for school, healthcare and corporate workplace. Its SOAR life products are a customized offering for hospitals, long-term care, therapeutic facilities, home care, surgery centers and clinics.
School Specialty, Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 24, 2016; Revises Earnings Guidance for the Year Ending December 31, 2016