School Specialty, Inc. reported unaudited consolidated earnings results for the second quarter and six months ended July 1, 2017. For the quarter, the company reported revenues of $160,177,000 against $145,858,000 for the same period a year ago. Operating income was $8,730,000 against $2,004,000 for the same period a year ago. Income before benefit for income taxes was $235,000 against loss of $2,360,000 for the same period a year ago. Net income was $0.1 million or net income per diluted share of $0.13. This compares to a net loss of $2.0 million or a net loss per diluted share of $1.99 in the fiscal 2016 second quarter. The company recorded a benefit from income taxes in the fiscal 2017 second quarter of $0.1 million, as compared to an expense from income taxes of $0.4 million in the second quarter of fiscal 2016. Adjusted EBITDA was $14.6 million, as compared to Adjusted EBITDA of $9.4 million in the comparable 2016 period. Revenue grew almost 10%, gross margins were fairly stable and expenses continue to decline, resulting in significant increases in operating income, net income and Adjusted EBITDA.

For the six months, the company reported revenues of $257,288,000 against $239,583,000 for the same period a year ago. Operating loss was $4,387,000 against $10,008,000 for the same period a year ago. Loss before benefit for income taxes was $16,932,000 against $18,677,000 for the same period a year ago. Net loss was $16.6 million or net loss per basic and diluted share of $16.64. This compares to a net loss of $14.3 million or a net loss per basic and diluted share of $14.29 in the fiscal 2016 second quarter. The company recorded a benefit from income taxes in the fiscal 2017 first half of $0.3 million, as compared to a benefit from income taxes of $4.4 million in the second half of fiscal 2016. Adjusted EBITDA was $7.6 million, as compared to Adjusted EBITDA of $3.8 million in the comparable 2016 period.

For the full year 2017, the company remains confident that it can deliver EBITDA within original guidance range of $51 million to $54 million. The company projects full year cash income tax rate to remain consistent with previously communicated cash tax projections or approximately 5%.

Beginning with fiscal 2018, cash tax rate is expected to increase into the low to mid-20% range and further increase in 2019 to the low 30% range. Thereafter, current projections estimate that cash taxes will approximate the statutory rate.