Various claims and lawsuits arising in the normal course of business are pending against the Company. The Company accrues a liability for such matters when it is probable that a liability has occurred and the amount of such liability can be reasonably estimated. When only a range can be estimated, the most probable amount in the range is accrued unless no amount within the range is a better estimate than any other amount, in which case the minimum amount in the range is accrued. Legal costs associated with litigation are expensed in the period in which they are incurred. The Company does not expect, in the case of those various claims and lawsuits arising in the normal course of business where a loss is considered probable or reasonably possible, that the reasonably possible losses from such claims and lawsuits (either individually or in the aggregate) would have a material adverse effect on the Company’s consolidated financial position or results of operations.

The Company is a claimant in a class action settlement related to alleged copyright infringement. The settlement has received final court approval, and the Company may be entitled to a distribution from the settlement fund following completion of the claims administration process, resolution of any appeals and validation of eligible claims. As of August 31, 2026, the Company has not recorded any receivable related to this matter, as realization of any proceeds is not yet considered both probable and reasonably estimable. The amount and timing of any potential recovery are subject to significant uncertainty, including the number of valid claims submitted by other claimants and the final allocation of settlement proceeds. The Company will recognize any proceeds upon receipt.

The Company also expects to receive additional recoveries from its insurance programs related to an intellectual property legal settlement accrued during fiscal 2021, however, it is premature to determine with any level of probability or accuracy the amount of those recoveries at this time.

As a result of a Supreme Court ruling issued in February 2026, the Company was entitled to a refund of tariffs previously paid on imported products under the International Emergency Economic Powers Act (IEEPA). As of August 31, 2026, the Company has received $9.4 of refunds related to IEEPA tariffs, of which $6.6 were received during the first quarter of fiscal 2027.

On May 25, 2026, a fire occurred at a book fairs warehouse facility, primarily resulting in damage to inventory. The Company has insurance coverage for property damage and business interruption losses and has filed claims with its insurers. During fiscal 2026, the Company recognized total losses of $0.6, consisting of inventory write-offs, and insurance receivables of $0.6 for insurance recoveries deemed probable, not to exceed the related impairment loss recognized. The ultimate amount and timing of insurance recoveries, including amounts related to business interruption coverage, remain subject to ongoing negotiations with the Company’s insurers. Any additional recoveries will be recognized upon determination that receipt is probable and reasonably estimable. As of August 31, 2026, the Company had not received any proceeds related to its insurance claims.