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%.