Scholastic spent the latest fiscal year converting its two largest owned properties into cash and shrinking the common share count by more than a quarter. The operating company still earns roughly one cent of operating profit on each dollar of sales. Book Fairs grew through more school events and better merchandising, while Education kept shrinking under weak supplemental-curriculum budgets. The investment debate is whether a smaller share base and a cleaner net-cash position can turn a modest revenue recovery into a durable earnings compounder, or whether franchise timing and school funding keep the core business stuck at a thin operating margin after the new leases fully load.
The December sale-leaseback of the SoHo headquarters and the Jefferson City distribution center produced $452 million of net proceeds and a pretax gain near $100 million. Management recycled most of that liquidity into $269 million of share repurchases plus $20 million of dividends, and later lifted the quarterly payout from twenty cents to twenty-five cents. Reported adjusted EBITDA rose to $152 million. On a comparable basis that strips the old rental income and loads a full year of new rent, the figure is $132 million. Headline free cash flow of $436 million is almost entirely the property sale. Operating cash fell to $51 million after extra tax and severance payments. The cash story and the operating story are not the same thing.
Fourth-quarter revenue slipped to $476 million as Trade faced the prior-year Hunger Games title and Education stayed soft. Book Fairs still rose, and Entertainment returned to growth on production services. Management now targets low single-digit revenue growth. Adjusted EBITDA is guided between $135 million and $145 million. Organic free cash flow is guided between $35 million and $40 million. The next test is whether Education stops shrinking and Book Fairs keep compounding without another franchise-year Trade print.