Asset Write Down

9 Months Ended

Feb. 28, 2021

Asset Impairment Charges [Abstract]

Asset Write Down

ASSET WRITE DOWNDuring the third quarter of fiscal 2021, the Company committed to a plan to cease use of certain leased office space in New York City and consolidate into the company-owned New York headquarters building. The right-of-use (ROU) assets and the other long-lived assets associated with these operating leases are included in the Overhead segment. An impairment expense of $8.5 was recognized in the current period, of which $7.0 related to the ROU assets and $1.5 related to other long-lived assets, primarily leasehold improvements. Also during the third quarter of fiscal 2021, the Company committed to a plan to permanently close 12 of the 54 book fairs warehouses in the U.S. as part of a branch consolidation project. The ROU assets and the other long-lived assets

associated with these warehouse operating leases are included in the Children’s Book Publishing and Distribution segment. An impairment expense of $2.4 was recognized in the current period, primarily related to the ROU assets. The impact of the total $10.9 impairment was a loss per basic and diluted share of Class A and Common Stock of $0.23 in the three and nine month periods ended February 28, 2021.

During the third quarter of fiscal 2020, the Company implemented new systems, processes and a centralized management structure to better coordinate demand planning and procurement activity across North America, and optimized inventory utilization and management. As a result of the foregoing, the Company determined that substantial quantities of inventory were not required to meet future profitable demand, and were donated, liquidated or disposed. Accordingly, a $40.0 non cash write down was recognized in the prior period for this excess inventory and associated costs. The inventory cost, net of reserves, was $37.6. In addition, $1.6 and $0.8 of author advances and prepublication costs, respectively, were written down as they were directly related to the inventory. The related impact was a loss per basic and diluted share of Class A and Common Stock of $0.84 in the three and nine month periods ended February 29, 2020.