Good day and thank you for standing by. Welcome to the Scholastic Report's fourth quarter fiscal year 2026 results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised. To withdraw other questions, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeffrey Matthews, Executive Vice President, Chief Growth Officer, and President Scholastic Education. Please go ahead, sir.

Hello, and welcome everyone to Scholastic's Fiscal 2026 Fourth Quarter Earnings Call. Today on the call, I'm joined by Peter Wark, our President and Chief Executive Officer, and Haji Glover, our Chief Financial Officer. As usual, we've posted the companion investor presentation on our IR website at investor.scholastic.com, which you may download now if you've not already done so. We would like to point out that certain statements made today will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipated. In addition, we will be discussing some non-GAAP financial measures that are defined in Regulation G. The reconciliation of those measures to the most directly comparable GAAP measures may be found in the company's earnings release in the company's financial tables, filed this afternoon on a Form 8 . The earnings release has also been posted to our Investor Relations website. We encourage you to review the disclaimers in the release and investor presentation and to review the risk factors disclosed in the company's annual and quarterly reports filed with the SEC. Should you have any questions after today's call, please send them directly to our IR email address, investor-relations at scholastic.com. Now I'd like to turn the call over to Peter Wark to begin this afternoon's presentation.

Thank you, Jeff, and good afternoon, everyone. Thank you for joining us. Fiscal 2026 was an important year for Scholastic. It demonstrated the earnings power of the more focused company we've been building and the progress we've made evolving a trusted, century-old company to scale its impact and create long-term value for our shareholders and all stakeholders. This progress reflects a multi-year transformation of Scholastic's governance, organization, strategy, and balance sheet. Last year, we refreshed our board, strengthened our management team. we organized to unlock efficiencies and create more integrated growth platforms, sharpened accountability across the company, and took major steps to make our balance sheet more efficient and enhance our shareholder returns. First, let me begin with a review of our key gap and non-gap financial metrics for the full year. Fiscal 2026 revenue decreased 3%, and operating income was $15.2 million, approximately in line with the prior year period. Adjusted operating income was $47.1 million, up 32% from $35.8 million a year ago. Adjusted EBITDA was $151.5 million, up 4%, in line with our guidance. On a comparable basis, reflecting the full-year impact of the same leaseback transactions, which we closed last December in both periods, adjusted EBITDA grew 15% year-over-year. In the fourth quarter, adjusted EBITDA also increased year-over-year on that same basis. Higher results were achieved despite lower revenue, which reflected comparisons against a strong prior year quarter in trade and continuing funding volatility in education. This achievement demonstrates the operating leverage in the Scholastic's model. Last quarter, book fairs continued to perform well, entertainment returned to growth, and education showed improving trends, even as headwinds continued. As we simplified the business and sharpened execution, disciplined cost management across the company supported stronger underlying profitability. Together, these performance trends reinforce our confidence in our long-term strategy. Fiscal 2026 was also a major year for capital deployment and balance sheet optimisation. The sale leaseback transactions unlocked over $400 million in net proceeds from our real estate assets, and we used that increased liquidity to accelerate shareholder returns through open market repurchases, a modified Dutch auction tender offer, and dividends. During the year, we returned over $285 million to shareholders, substantially accelerated by the sale-leaseback transactions and subsequent repurchase activity, while establishing a long-term leverage framework that supports disciplined investment and continued capital returns. Yesterday, we announced a 25% increase in our regular dividend. The strategy through this transformation is simple, grounded in Scholastic's mission and trusted brand. Scholastic brings children to reading. We do that through the books and stories we publish, the school channels that give millions of kids access to books, creating moments of discovery and engagement, the media and digital platforms that extend engagement with our IP, and the science-based literacy solutions that support reading achievement in classrooms, homes, and communities. The market is aligning with this direction. Families, educators, and policymakers are increasingly focused on children's reading achievement, trusted content, sustained attention, print-rich experiences, and healthier screen balance. Schools are looking for coherent literacy solutions that are practical to implement and grounded in evidence. Parents are looking for content and tools they can trust. At the same time, children are discovering stories and information across more formats, while technology and AI are ballooning the volume of children's content available, much of it low quality from unvetted or unknown sources, and changing how it's discovered, accessed, and used. In this moment, Scholastic's distinctive strengths, our authentic stories, human creativity, editorial and curatorial expertise, respect for children, trusted brand, and direct reach to families and schools become more valuable. What further differentiates Scholastic is our ability to connect these capabilities across the company. Technology and AI present an opportunity to move faster, reduce complexity, and support educators and parents, while preserving what makes Scholastic distinctive. Across our businesses, we're using these tools thoughtfully to improve processes and productivity, including in areas such as animation workflows and go-to-market functions, while preserving the human creativity, editorial expertise, and deep care that define our stories, characters, and learning experiences. We believe children need real stories, created and curated by humans, that help them build imagination, knowledge, confidence, and a lasting relationship with reading. Fiscal 2026 showed our progress in bringing these capabilities together more effectively. fiscal 2027 is about translating that progress into stronger performance as i'll discuss now tadji will then review our financial results in fiscal 2027 outlook in greater detail let me begin with our children's book group or cbg which brings together our leading children's publishing business and proprietary school-based channels and is a central pillar for scholastics growth operating leverage and impact the children's book group strategic logic is straightforward great stories create demand and our school-based channels create access discovery and engagement which in turn informs our publishing by managing publishing merchandising marketing distribution and franchise planning as a more integrated platform we can create greater impact for readers and more consistent value across the business in fiscal 2026 book fairs remained a core earnings engine and one of scholastic's clearest operating advantages with growth supported by higher fair count improved revenue per fair stronger marketing execution and product mix and continued innovation in the fair experience book fairs are in person school-based celebrations of reading for kids educators and families physical social trusted and centered on choice they create excitement around books in schools give children a direct role in choosing what they read and connect families to the reading experience they also help schools earn funds and rewards that support classroom libraries school resources and broader access to books in fiscal 2026 alone book fairs helped raise approximately 250 million dollars in cash and in-kind reading resources for schools scholastic has the scale infrastructure product depth and trust relationships to serve schools of different sizes and needs including those where access to books is most limited That reach is both mission aligned and a competitive advantage, expanding access to books across a wide range of school communities efficiently and profitably. Looking ahead, we continue to see opportunities to grow book fairs and expand the addressable market by increasing fair count, improving merchandising and marketing, increasing adoption of digital tools such as eWallet, and continuing to enhance the overall fair experience. We're building on momentum from recent pilots to reach new kinds of school communities and test-adjacent formats. That includes expanding our presence in Christian schools, further developing discovery fairs, which create additional opportunities for schools to host fairs while bringing science, curiosity and hands-on learning into the fair environment, and continuing to pilot sponsored, corporate and early childhood formats outside of schools where Scholastic's brand, curation and infrastructure give us the right to win. Given Book Fair's significant purchasing scale, including exclusive access to Scholastic titles, an established national selling and delivery infrastructure and the best known and most trusted name in the Book Fair category, We believe these opportunities can expand the addressable market for fairs, support higher revenue per fair in the short and long term, and translate into meaningful operating leverage. Alongside fairs, book clubs remain another important direct connection to teachers, kids, and classrooms. In fiscal 2027, we'll continue to improve the experience for teachers, families and students, so that together with book fairs, Scholastic's proprietary reach into schools and classrooms becomes even more valuable when connected to our publishing engine. The other key part of our children's book group, Scholastic Trade Publishing, creates stories, authors and franchises that engage children around the world and remain relevant across generations. fiscal 2026 reflected the natural variability associated with the timing of major releases relative to an exceptionally strong prior year fourth quarter comparison with the publication of sunrise on the reaping the latest book in the hunger games series however the continued strength of our publishing program anchored by major franchises reinforces the durability and long-term value of the portfolio beyond any single quarters publishing schedule looking ahead we have a strong pipeline of new publishing and franchise activity to drive front list sales support our backlist and extend major franchises across channels generations and global markets dave pilkey's universe remains an important driver of reading engagement with kids around the world eagerly awaiting the next Dogman title this November and continued activity across his broader portfolio. The Hunger Games and Harry Potter have also significant media events ahead, each matched with robust publishing plans. This fall's release of the Lionsgate film adaptation of Sunrise on the Reaping, together with Tyne Publishing, is expected to sustain momentum, support demand, and bring new readers to the series. The new Harry Potter series on HBO, launching this Christmas around the world, also creates a significant opportunity to introduce the world of Hogwarts to a new generation supported by new publishing this year. Fiscal 2027 also includes new publishing in best-selling series, including The Babysitter's Club, Wings of Fire, and I Survived, creating new moments for kids to engage with these enduring franchises this pipeline illustrates why the connection between scholastics publishing and scholastics broader reach is so important the successful title or enduring franchise can create value well beyond our trade business supporting demand across retail our book fairs and education channels international licensing and media our partnership with Mark Rober and Crunch Labs, illustrates the broader children's book group model in action. Through exclusive publishing and our book fairs, we bring this highly engaging STEM brand to children in ways that connect curiosity, reading, and hands-on learning. In fiscal 2027, our priority is to translate stronger publishing activity, deeper integration, and continued execution in book fairs into more consistent growth and profitability across cbg turning to scholastic entertainment with books and reading at the center of scholastics model our entertainment division broadens how children and families discover scholastic stories and increases the value of our brands across media and other formats a child can encounter a scholastic character in a book on a screen, at a book fair, in a classroom, or through a recommendation from friend or family. By making these touch points reinforce one another, we strengthen our franchise and create more paths back to books and reading. With the successful integration of Nine Story Media Group, Scholastic has a more complete platform to develop trusted children's content and reach more audiences across diverse formats and markets. Entertainment built momentum in fiscal 2026 With production revenues growing at a double-digit rate year over year And continued activity across major scholastic franchises A new Clifford the Big Red Dog animated series Is expected to premiere on PBS Kids in 2027 Continuing the beloved franchise's long-standing connection With young children and families With multiple contracted series underway we have high visibility into continued production growth in fiscal 2027. Last month, we also announced the development of a new live-action feature film adaptation of The Magic School Bus with legendary entertainment, with Elizabeth Banks attached to star as Miss Frizzle. With more than 90 million copies in print, The Magic School Bus is another example of the power of Scholastic's purposeful children's content connecting storytelling and discovery in a way that has engaged children and families for generations. Digital platforms also play an important role in keeping Scholastic's enduring franchises relevant and discoverable for families today. In fiscal 2026, Scholastic branded hub and single IP channels on YouTube generated 547 million views and over 6 billion minutes of watch time, representing a 13% and 63% increase year over year, respectively. The Scholastic TV app has also scaled quickly since launch, reaching more than 530,000 downloads and over 226 million minutes watched. Clifford and the Magic School Bus remain the top performing Scholastic properties across these platforms, as families increasingly seek trusted programming in a more curated environment. Together, these developments demonstrate how entertainment reinforces Scholastic's broader franchise strategy, building audience engagement across formats while keeping books and reading at the centre. Turning now to Scholastic Education, which connects our mission directly to one of the most important needs facing children in schools, helping more children become strong, confident readers. With reading scores continuing to decline, despite a renewed focus on the science of reading and especially on foundational phonics skills across school districts in the country, there's increasing recognition among educators, policymakers and funders of the need to build background knowledge, decrease digital distraction and improve students' attention and reading stamina, also as critical components of reading ability. All of this is based in learning science and best addressed by getting kids to read more whole books and texts in print at school and at home. This long term macro shift in literacy instruction is strongly aligned with scholastic strengths. Schools and districts are looking for coherent solutions that are practical to implement, grounded in evidence and supported by high quality books and authentic texts. In the short term, however, education continues to operate in a pressured purchasing environment, particularly across supplemental curriculum and district funding. At the same time, performance improved in the second half versus first half trends as we made meaningful progress transforming and repositioning the business around the areas where Scholastic is most differentiated. While funding conditions remain volatile and difficult for schools, our education business today is more focused. The cost structure is better aligned and execution is improving as we enter fiscal 2027. This year, our priorities are to stabilize revenue, strengthen commercial performance and improve profitability. while building on Scholastic's core literacy strengths to position education for a return to growth as our strategy advances and market conditions stabilize. Our international business extends Scholastic's publishing, franchises, school channels, and literacy expertise across key markets around the world. Many of the same trends supporting our U.S. businesses also benefit Scholastic internationally by bringing our strongest publishing and franchise activity to more readers and schools in major English-speaking markets, as well as applying our expertise where customer needs and market conditions are most attractive. Our international subsidiaries also constitute one of Scholastic's key competitive advantages, our ability to combine locally developed publishing with global franchise strength. In major markets, our publishing teams support globally best-selling authors and creators, for example, the best-selling UK-based Julia Donaldson, whose next picture book, Winifred Duck, illustrated by Jim Field, is expected to release globally in February 2027. Our largest franchises also continue to perform well internationally, including Dogman and The Hunger Games, with Sunrise on the Reaping performing especially well across major markets in fiscal 2026. In fiscal 2027, our international publishing rights for The Hunger Games gives us another opportunity to benefit from renewed global demand for the franchise. Scholastic's international strength was recognised this year when we were awarded Children's Publisher of the Year at the British Book Awards. Dave Bilkey was named Illustrator of the Year and Sunrise on the Reaping won Children's Fiction Book of the Year and Marketing Strategy of the Year. Looking ahead, we see opportunities to expand our major franchises and build on demand for trusted literacy content in priority markets, while continuing to improve operating efficiency and profitability. To wrap up, we ended fiscal 2026 a more focused company with stronger alignment across businesses, a more efficient balance sheet and a clearer operating foundation. Building on our multi-year transformation, fiscal 2027 is an execution year as we focus on translating the progress we made into renewed revenue growth and higher adjusted EBITDA on a comparable basis. We're optimistic, entering the year with a strong publishing pipeline, continued momentum in book fairs, expanded media capabilities, and a transformed education business. Scholastic's mission and strategy remain closely connected by helping more children discover books, engage with trusted stories, and build the skills to become confident readers, we believe we can deepen our impact and create sustained value for shareholders. So with that, I'll turn the call over to Hadji to discuss our fourth quarter and full year results in more detail, including our fiscal 2027 outlook.

Thank you, Peter, and good afternoon, everyone. As usual, I'll refer to our adjusted results, excluding one-time items, unless otherwise indicated. please refer to our press release tables and SEC filings for a complete discussion of one-time items and a reconciliation with related gap figures. To facilitate consistent year-over-year comparisons following the sale-leaseback transactions completed in December, I will also discuss certain operating results on a comparable basis, reflecting the full period impact of additional lease expense and the loss of rental income in each period presented. Let me begin with our consolidated financial results for the quarter and full fiscal year. Revenues decreased 6% to $476.1 million in the fourth quarter, and 3% to $1.6 billion in the full fiscal year. The trend last quarter largely reflected challenging prior-year publishing comparisons in trade and lower revenues and education related to continuing funding volatility, partly offset by growth in book fairs and higher entertainment revenues. Adjusted operating income was $58.3 million in the fourth quarter, compared to $63.4 million in the prior year period. On a comparable basis with respect to the sale leasebacks, as just described, adjusted operating income decreased $1.2 million from $59.5 million in the prior year period. For the full year, adjusted operating income increased $11.3 million to $47.1 million, compared to $35.8 million in the prior year period. On the same comparable basis, adjusted operating income increased $15.4 million to $35.3 million from $19.9 million. Adjusted EBITDA was $84.7 million in the fourth quarter, compared to $91.2 million in the prior year period. On the same comparable basis, fourth-quarter adjusted EBITDA increased $1 million. This increase primarily reflected improved profitability in children's book publishing and distribution and entertainment, partly offset by lower results in education and international. For the full year, adjusted EBITDA increased 4% to $151.5 million, in line with our guidance. On the same comparable basis, adjusted EBITDA increased 15% for the year. The improvement largely reflected higher profitability in children's book publishing and distribution and international, as well as lower adjusted overhead costs, which more than offset lower results in education. We were also able to reduce tariff-related costs versus our initial estimate through targeted mitigation actions and refunds received during the year, as well as the suspension of tariffs earlier than initially assumed. Adjusted net income was $45.9 million in the fourth quarter, compared to $22.9 million in the prior year period. On a per-diluted share basis, adjusted earnings were $2.19, compared to $0.87 last year. The increase primarily reflects the benefit of strategies to reduce the tax impact of the gain on the sale-leaseback transaction, while fewer shares outstanding following share repurchase activity also benefited adjusted earnings per share. For the full year, adjusted net income was $45.4 million compared to $13.3 million in fiscal 2025. On a per-diluted share basis, adjusted earnings were $1.87 compared to $0.48 in the prior year. The increase largely reflects the gain of the sale-leaseback transactions and higher adjusted operating income. Fewer shares outstanding also benefited adjusted earnings per share. Turning to our segment results. In the children's book publishing and distribution, revenues for the fourth quarter decreased 4% to $276.3 million, and for the full year, revenues were $964.2 million, approximately in line with prior year. Within school reading events, book fairs' revenues increased 5% in the fourth quarter to $186.6 million, and 5% for the full year to $576 million. Both the fourth quarter and full-year results benefited from higher fare count, with over 103,000 case and shippable fares held during the fiscal year. Full-year performance also benefited from higher revenue per fare. Book club's revenue were $12.2 million in the fourth quarter, a decrease of 7%, and $57.1 million for the full year, a decrease of 11%. This reflected lower sponsor participation throughout the year. We remain focused on simplifying the program and improving execution as teachers' engagement patterns continue to evolve. In our trade publishing division, revenues in the fourth quarter decreased 20% to $77.5 million and decreased 6% for the full year to $331.1 million. These results permanently reflected a challenging comparison with the prior year fourth quarter publishing schedule, which included the release of The Sunrise on the Reaping, the best-selling fifth book in Suzanne Collins' Hunger Games series, as Peter described. Children's book publishing and distribution segment-adjusted operating income increased $2.1 million to $60.3 million in the quarter. For the full year, it increased $12.4 million to $143.7 million. This improvement primarily reflected stronger operating leverage in book fairs and improved probability from continued cost discipline into segment, partly offset by lower results in trade publishing. Turning to our education segment, fourth quarter revenues were $109.2 million, down 13% from the prior year period, and full year revenues were $267.6 million, a decrease of 14%. The decline largely reflected ongoing funding volatility and continued pressure on school and district spending for supplemental curriculum materials. While revenues remained below prior year, the rate of decline decelerated in the second half of fiscal 2026 compared to the first half, as the segment advanced its product, marketing, and sales strategy following its repositioning. Segment adjusted operating income was $27.9 million in the fourth quarter, compared to $31.3 million in the prior year period. For the full year, adjusted operating income for the segment was $0.2 million, compared to $6.9 million in the prior year period. Lower revenues pressured profitability in both periods. This was partially offset by the benefits of improved cost structure and operating discipline following the division's restructuring. In Scholastic Entertainment, fourth quarter revenues increased 42% to $21 million compared to $14.8 million in the prior year period, reflecting higher production revenues. Full-year revenues increased 8% to $65.7 million compared to $61 million in the prior year period. Segment-adjusted operating income improved $2.9 million to $0.8 million in the fourth quarter, compared to a loss of $2.1 million a year ago, reflecting higher revenues. For the full year, segment-adjusted operating loss was $9.3 million, compared to a loss of $7.2 million a year ago, reflecting the time of production activity and revenue recognition. In the international segment, revenues were $69.6 million in the fourth quarter, compared to $76.8 million in the prior year period. Excluding a $3.1 million favorable impact of foreign currency exchange in the quarter, the decline mostly reflected lower trade revenues against a more challenging prior year comparison, which included some rise on the reaping in the fourth quarter. For the full year, international segment revenues decreased 1% to $277.2 million. Excluding a favorable foreign currency exchange impact of $6.3 million, The decline primarily reflected the comparison with the prior year publishing schedule, partly offset by the strength of our global publishing and franchise activity across key markets. Segment-adjusted operating income was $3.1 million in the fourth quarter compared to $6.1 million in the prior year period, largely reflecting lower revenues. Full-year adjusted operating income increased to $7.1 million compared to $2.9 million a year ago, reflecting operating improvements and continued cost discipline across the business. Adjusted unallocated overhead costs were $33.8 million in the fourth quarter, compared to $30.1 million in the prior year period. On a comparable basis, assuming a full-year impact of sell-leaseback in both periods, adjusted overhead costs were approximately in line with the prior year period. For the full year, adjusted unallocated overhead costs decreased $3.5 million, to 94.6 million compared to 98.1 million last year on the same comparable basis adjusted overhead costs decreased 7.6 million to 106.4 million from 114 million in the prior year reflecting the benefits of cost saving initiatives lower employee expenses and continued efforts to streamline corporate functions now turning to cash flow and the balance sheet. For the full year, net cash provided by operating activities were $50.9 million compared to $124.2 million in the prior year period. This decreased mostly driven by higher tax payments associated with the sell-leaseback transactions, as well as higher severance-related payments. Free cash flow was $436 million in fiscal 2026 compared to $29.2 million in the prior year. The increase largely reflected the over $400 million in net proceeds from the sell-leaseback transactions completed in December. At the end of fiscal 2026, net cash was $48.9 million compared to a net debt position of $136.6 million at the end of fiscal 2025, primarily reflecting the net proceeds from the sell-leaseback transactions, partly offset by significant capital returns to shareholders during the year. At the end of the year, the company had $75 million outstanding under its $400 million unsecured revolving credit facility. As Peter discussed, fiscal 2026 was an important year in the execution of our capital allocation strategy. During the year, we returned over $285 million to shareholders, including over $140 million in the fourth quarter. Over the full year, this included the repurchase of approximately 7.3 million shares of common stock for $268.6 million, including shares purchased through the open market repurchases and a modified Dutch auction tender offer completed in the fourth quarter, as well as $20 million in regular dividends, including $4.6 million in the fourth quarter. As of May 31, 2026, $183 million remain authorized for the future repurchase under our stock repurchase program. We expect to continue purchasing shares from time to time as conditions allow on the open market or in negotiated private transactions. Yesterday, we announced a 25% increase in our regular quarterly dividend, from $0.20 to $0.25 per share, commissing with the first quarter of fiscal 2027. This increase reflects the Board's confidence in the company's long-term cash generation and our continued commitment to returning capital to shareholders while investing in the business. Taken together, these actions were completed in fiscal 2026, representing an important milestone in the balance sheet optimization work we have discussed over the past several quarters. We unlocked significant value from our real estate assets, stricken our liquidity position, accelerate capital returns to our shareholders, and establish a long-term net leverage framework of two to two-and-a-half times adjusted EBITDA. As we have said before, that leverage range is a long-term target. We will continue to manage our balance sheet efficiently while maintaining disciplined investment in growth opportunities and returning capital to shareholders as we move toward that framework over time. Now turning to our outlook for the year. For fiscal 2027, we expect revenue growth of approximately 2% to 4% compared to fiscal 2026 reported revenue and adjusted EBITDA of approximately $135 to $145 million. The midpoint of the range represents approximately 6% growth compared to fiscal 2026 adjusted EBITDA of $132.4 million on the same comparable basis with respect to the sale-leaseback transactions in both periods, driven by higher revenue, continued cost discipline, and target investment in areas with the strongest return potential. For the fiscal year, we currently expect a full-year effective tax rate of approximately 27% to 30%, excluding discrete items primarily reflecting state income taxes of approximately 4% to 6%. Given the seasonality and geographic mix of our earnings, the effective tax rate may vary meaningfully from quarter to quarter. Our outlook reflects current tariff rates and expected inflation in product and manufacturing costs, as well as the continued benefit from the sourcing, inventory, and pricing actions we implemented over the past year. Our outlook does not currently assume a material impact from additional tariff actions. While we may receive additional refunds related to prior periods, we do not expect tariff-related refunds to provide a meaningful net benefit in fiscal 2027. Turning to our segment outlook, in children's book publishing and distribution, we expect full-year revenue growth and improved profitability, led by continued strong performance in book fairs and growth in trade publishing. In fairs, growth is expected to be driven by higher fair count, continued opportunity for modest revenue per fair growth, and initiatives to reach additional schools and communities. Given the operating leverage in this business, revenue growth is expected to support margin expansion. We expect book clubs to remain a smaller but important school-based channel as we continue to simplify the program and improve execution to engage teachers and families. In trade publishing, we expect stronger revenues compared to fiscal 2026, supported by publishing pipeline and major franchise activity Peter discussed earlier. More broadly, we expect the Integrated Children's Book Group model to help us activate titles and franchises more effectively across retail and our proprietary school-based channels, supporting growth and profitability across the segment. In education, we are targeting improved performance compared to fiscal 2026. Our outlook assumes stabilization and revenue trends, especially in the second half of the year, and improved profitability supported by a more focused product portfolio, a better aligned cost structure, and continued progress in marketing and sales execution. At the same time, our outlook assumes that school and district funding conditions remain volatile, particularly in supplemental curriculum. In entertainment, we expect revenue growth and improved profitability compared to fiscal 2026, supported by increased production activity and a growing slate of green light projects. In international, we expect growth supported by our publishing and franchise activity across key markets, including the global benefit of major scholastic franchises and modestly lower operating income, partly reflecting inflation and higher fuel, freight, and labor costs in some markets. Unallocated overhead costs will reflect the full-year impact of the sell-lease-back transaction, including a loss of rental income and a portion of additional lease expense, partly offset by continued cost discipline. Additional lease expense will also be reflected across our operating segments, with children's book and education segments absorbing a greater portion. As a reminder, scholastic results are highly seasonal. The first quarter is typically our smallest revenue quarter, reflecting the summer period when schools are not in session and our school reading events business has minimal sales. Looking ahead, we expect first quarter revenues to be slightly down versus prior year period, given the expected pace of improvement in education and the timing factors in children's books. Year-over-year revenue growth is expected to begin in the second quarter and continue through the balance of the year. We also expect a seasonal operating loss modestly greater than the prior year period, primarily reflecting the sale-leaseback impact. The prior year quarter benefited from rental income and lower lease expense before the transactions were completed in December. Our outlook for free cash flow in fiscal 2027 is approximately $35 million to $40 million. As a reminder, our fiscal 2026 free cash flow included significant benefit of net proceeds from the sell-leaseback transaction completed in December. Our fiscal 2027 outlook represents a modest improvement on a normalized basis, driven by higher operating performance, lower cash taxes, and lower cash severance and other one-time payments compared to fiscal 2026, partly offset by plan increases in capital expenditures and prepublication spend. In summary, our outlook reflects revenue growth, adjusted EBITDA growth, compared to fiscal 2026 on a comparable basis, continue cost discipline, and target investments in our key growth priorities, while maintaining financial flexibility to invest in the business and return capital to shareholders. Thank you for your time today, and I will now hand the call back to Peter for his final remarks.

Thank you, Hadji. As we enter fiscal 2027, our priorities are clear. Translate the progress of the past several years into more consistent operating performance while remaining grounded in our mission to help more children discover books, build confidence as readers, and develop a lifelong relationship with reading. I'd like to thank our employees for their continued commitment and our customers and shareholders for their continued support. Now let me turn the call over to Jeff.

Thank you, Peter. With that, we will open the call for questions. Operator?

Thank you so much. And as a reminder to ask the question, simply press star, then 1-1 on your telephone and wait for your name to be announced. To remove yourself, press star 1-1 again. One moment for our first question. It comes from Brendan McCarty with CIDOTI. Please proceed. Great.

Good afternoon, everybody. Appreciate you taking my questions here. I just wanted to start off looking at fiscal 2026 revenue. That 3% decline came in a little bit under the expectations and the guidance for the year. Just what were the key variables there that drove that impact? And what were the expectations specifically?

Yeah. It's Peter here. I mean, the two main factors were that in the fourth quarter, we had a very challenging, comparable situation because of the great success that we had with Sunrise on the Reaping in the fourth quarter of 2025, so that was one of the factors that was there. That was a more, shall we say, predictable factor. The less predictable factor was the fact that we also didn't get as much revenue from the education segment as we were expecting because in common with many other providers, particularly supplementary education providers, there wasn't the surge in spending by schools and districts towards the end of their, you know, public sector financial year. So that was really the main surprise that we had, and it was less than we were expecting. I have to say that, you know, the rest of our businesses performed well during the fourth quarter, and, you know, that was very pleasing.

I appreciate the detail there, Peter. And looking at the book fairs business, you know, that's 5% growth there in the fiscal fourth quarter. Was that really driven by a higher fare count, or did more of that growth come from, you know, better economics and revenue per fare?

It was primarily driven by the number of fares that we were able to do, but we also saw a modest increase in revenue per fare as well. So we were extremely pleased with our performance in book fares this year. We also had much more adoption of e-wallets, which is, you know, the way in which parents can provide, as it were, digital money for their kids to spend. Our product mix in book fairs was extremely good. And, you know, we've also been mindful of pricing. And we also had a really good end of the year in our sponsored fairs, whereby we can have, you know, good initiatives for access to books for kids in Title I schools and other areas where, you know, there's less money around. Understood.

And looking into fiscal 27, you know, do you see improved economics there and what's the expectation for total fare count for the fiscal year?

Well, we expect fare count to increase in fiscal 2027. We think that there'll be continuing strong growth. We've had a very strong position in book fares. And, you know, our outlook is looking very promising, you know, for the first, for the fall semester. We've got lower cancellations, and we've done a lot better prospecting efforts. And we'll expect to see revenue for fair grow, maybe in a perhaps similar way to the way in which revenue for fair grew in the last fiscal year.

Understood. And back to the education solutions business, it looks like the year-over-year revenue declined, you know, picked up a little bit from prior quarters. What's the outlook there for fiscal 27? I know it seems like stabilization is the theme, but what really gives you confidence that you can stabilize that segment and maybe quantify what that ultimately looks like?

Well, I think we now have, from a lot of work, which the team have done in fiscal 2026. We're in a position where we have a stronger product portfolio available in education. We've managed our expenses extremely well so that, you know, that is going to improve the bottom line. But above all, we have completely, we're in the final processes now of completely reorganizing much of our go-to-market activities. We have a new Chief Revenue Officer who joined us during the fourth quarter of the last year. And we feel pretty confident that over the full course of the year, not immediately, but over the full course of the year that we will see very improved performance in this area, assuming, you know, that the market doesn't deteriorate any further, which we're not expecting. And, you know, we can see a number of growth opportunities for us going forward.

Understood. And last question for me, just on the entertainment business. It sounds like there's a pretty bright outlook there. It sounds like green lighting is improving. And it looks like, you know, revenue picked up in Q4, fiscal 26. What kind of, you know, maybe revenue run right there in that segment will ultimately lead to sustained profitability? for the entertainment segment?

Well, we've got very strong visibility at the moment into our fiscal 27 because of the, you know, because of the both the contracts that we've signed and the opportunities that we're discussing. We're guiding for long-term growth. I mean, we've got a lot of confidence in that. The entertainment segment that we operate in is one where, you know, without any question we've seen a much better performance during Fiscal 26 and the market is going to perform better in Fiscal 27. So we're feeling pretty confident about that. I mean just in terms of the contracted revenues that we've got at the moment, we're already at over 100% of last year's revenues in terms of what we know we'll be bringing to market and we've got some great opportunities ahead of us as well which I'm hoping that, you You know, perhaps next time we speak or the time after that, we'll be talking to you about new big contracts and new big opportunities that we have, which have been greenlit for some of the major studios and companies. Great.

Thanks, Peter. I'll hop back in the queue. Appreciate the answers.

Thanks, Brandon.

Bye.

Thank you so much. One moment for our next question that comes from Drew Crum with Be Riley Securities. Please proceed. Okay, thank you. Good afternoon, everyone.

So, Peter, maybe a big-picture question. As you enter a new fiscal year, how would you assess the health of your consumer?

I think we're feeling pretty good about particularly the consumer market because one thing that we're feeling very strongly about is the strength of our publishing, the strength of our book fairs, the opportunities that we have with things like the release of the Sunrise on on the reaping film, and the HBO Harry Potter series, all those things are looking good. Our book fair bookings are good, our scholastic dollar catalogs have been doing well, and all the indicators are that we're going to have strong consumer demand in FY27 for particularly our children's book group, both in terms of the school market through the book fairs, but also through the trade. Got it.

And then, you know, in your preamble, you talked a little bit about the Harry Potter series. You know, are you able to provide any more detail around your plans to support that? You know, I think you mentioned some new publishing programs.

Yeah, we have publishing programs around it, Drew. And we're working so closely with the book trade here in the U.S. I mean, we see this as a big opportunity for the book trade, for us, and, you know, I think what we're going to find is that, I'm hoping this is true, but we're certainly putting a lot of work into it and investing in this, is that we can see a rising tide of foot traffic in the book trade because of things like the Hunger Games series, is Sunrise on the Reaping, but above all, by bringing Harry Potter to a completely new generation of kids. And we've got a lot of retail activations, coordinated campaigns, and, you know, we're feeling very, very good about it.

Got it. And I want to go back to the education business. You know, it sounds like the inflection for that segment in fiscal 27 is in the second half. I just want to make sure I'm interpreting that correctly. And are you assuming revenue can grow year-on-year in 3Q, 4Q? And what do you see as the key drivers to catalyze the top line?

Well, I think the assumption that you're making, I think, is correct, which is to say that the education revenues and performance will improve as the year goes on. We'll begin, I think, to see improvement in terms of revenues and higher profitability. You'll be able to see that in the second half of the year. And I think that, you know, with the steps that we've taken in terms of how we're changing our go-to-market, how we're being, you know, we've got a set of products which we think are particularly well aligned with the new science of reading and with everything else that's going on in that space, we can see, you know, improvements in that area. I mean, there's an extraordinary amount of effort going into it. There's also a fair amount of uncertainty in funding in the education space, which all the education players are experiencing, as you know. But I think we're set up, just because of the way in which books are so important in the education space. People are really worried. Parents are worried. Teachers are worried. Education administrators are worried about the amount of screen time and the backlash that we've seen for that. And I think we're particularly well suited and particularly with the other company that can really be, you know, a major player here to deal with that.

Got it. Okay, and maybe just one last one from me. You know, on the share repurchases, I think the comment was that you intend to be opportunistic in fiscal 27. Is your plan to, if you do so, fund buybacks with cash on the balance sheet, or would you consider tapping a revolver using debt to repurchase shares?

I'll let – since I've been hogging the phone, let me pass it over to – I'll pass it over to Haji.

Hey, Drew. How are you doing? Hi, Haji. How are you doing? Yes, so we are strong on cash, but we also have our long-term net leverage target, which is two to two-and-a-half. So we are, as of the end of the year, we had only used $100 million of our credit facility, and that was for the Dutch tender, modified Dutch tender that we did. So ultimately, we'll pull from both sources, if needed. But we feel very confident we have enough cash to fund our $183 million. of potential opportunity. Understood. Okay. Thank you.

And of course, Drew, you know, we get very good, as it were, you know, shareholder returns from what we're doing with these shared buybacks and so on. You see we've really benefited from that and we're, we don't want to see it going away. So we are going to be focusing on that going forward continuously.

Understood. Okay. Thank you.

Thank you, and this will conclude our Q&A session for today. I will pass the call back to Peter Warwick for any closing remarks.

Well, thank you, Operator, and thank you all for joining the call today. We appreciate your support. In fiscal 2027, we're going to continue to execute our strategy to strengthen Scholastic's operating performance and create long-term value, and we look forward to updating you on that on our first quarter call. so for now thank you all and goodbye and ladies and gentlemen this concludes today's conference call thank you for participating and you may now disconnect