Scholastic Revises Fiscal 2012 Q3 Results Following Connecticut Sales Tax Ruling Regarding School Book Clubs
Scholastic Corporation (NASDAQ: SCHL) announced today that it had revised its previously announced results for the third quarter ended February 29, 2012. Subsequent to reporting earnings on March 15, 2012, but prior to the issuance of its financial statements for the quarterly period ended February 29, 2012, the Company received notice that the Supreme Court of Connecticut had reversed an earlier trial court decision and found that Scholastic Book Clubs, Inc., a subsidiary of the Company, was liable for sales taxes relating to the operation of its school book clubs business in Connecticut.
As a result of this decision, the Company increased its sales tax accrual in its consolidated financial statements as of February 29, 2012 by $11.6 million before tax, or $0.23 per diluted share. The revised consolidated loss for the third quarter was $10.3 million, or $0.33 per share, compared to a consolidated loss of $3.2 million, or $0.10 per share, as previously reported in the Company's earnings release dated March 15, 2012, issued prior to the adverse court ruling in Connecticut. For the nine months ended February 29, 2012, the revised consolidated earnings were $45.4 million, or $1.43 per diluted share, compared to consolidated earnings of $52.5 million, or $1.65 per diluted share, as previously reported in the Company's March 15, 2012 earnings release.
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