SCHOLASTIC CORP
For the period ended May 31, 2024. Filed Jul 19, 2024.
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FY2024 · Filed Jul 19, 2024
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Item 2. Properties
As of May 31, 2024, the Company operated the following facilities:
| Location | Primary Purpose | Owned Square Footage | Leased Square Footage |
|---|---|---|---|
| Metropolitan NY Area | Principal offices | 355,000 | 19,000 |
| U.S. Various Locations (1) | Book Fairs warehouses | — | 2,274,000 |
| Jefferson City, MO Area | Primary warehouse and distribution facility | 1,459,000 | 30,000 |
| International (2) | Warehouse and office space | 236,000 | 970,000 |
(1) Consists of approximately 40 book fairs warehouses.
(2) Consists of approximately 60 facilities in Canada, the United Kingdom, Australia, New Zealand and Asia.
In fiscal 2024, the Company ceased use of certain leased office space in the U.S. and Canada as part of the Company's efforts to rightsize its real estate footprint to reduce occupancy costs.
In regards to the Jefferson City, MO facility located at 6336 Algoa Road, the Company owns the warehouse, including office space, and related land of approximately 86 acres, in addition to two smaller warehouses in the vicinity, including office space, and related land of approximately 76 acres. In regards to the Company's headquarters in Soho, New York City, the Company owns the land and buildings located at 555/557 Broadway with entrances facing Broadway and Mercer Street. There is leasable space within the Company's headquarters which is detailed in the table below.
| Floor | Primary Use | Square Footage |
|---|---|---|
| 1 | Available for lease (1) | 23,600 |
| 2 | Available for lease (2) | 36,100 |
| 3 | Occupied by Scholastic; available for lease | 37,800 |
| 4 | Occupied by Scholastic; available for lease | 37,100 |
| 5 to 12 (3) | Occupied by Scholastic | 220,400 |
| (1) The first floor is comprised of three rentable spaces with square footage of approximately 13,400, 7,500 and 2,700. All rentable space was leased to tenants as of May 31, 2024. | ||
| (2) Approximately 3,000 sq ft is leased to a tenant as of May 31, 2024. | ||
| (3) Includes the first floor lobby and sub-floors consisting of an auditorium, wellness and fitness center, mail room, storage, etc. | ||
During fiscal 2024, the Company incurred capital expenditures of $6.5 million directly related to its headquarters location, which represents approximately 11% of total capital expenditures. During fiscal 2024, the Company recognized rental income of $9.7 million. The lease terms with the Company's tenants typically range from 10 to 15 years and, with respect to the 26,600 square footage leased as of May 31, 2024, the Company expects annualized straight-line rental income to total approximately $11.1 million.
The Company considers its properties adequate for its current needs. With respect to the Company’s leased properties, no difficulties are anticipated in negotiating renewals as leases expire or in finding other satisfactory space, if current premises become unavailable. For further information concerning the Company’s obligations under its leases, see Note 1, "Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies," and Note 9, "Leases," of Notes to Consolidated Financial Statements in Item 8, “Consolidated Financial Statements and Supplementary Data.”
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