Alphasmart (NASDAQ:ALSM)
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AlphaSmart Announces Financial Results for First Quarter of 2005
LOS GATOS, Calif., April 14 /PRNewswire-FirstCall/ -- AlphaSmart, Inc.
(NASDAQ:ALSM) today announced its financial results for the first quarter ended
March 31, 2005.
AlphaSmart's first quarter 2005 net revenue was $7.0 million, compared with
$8.8 million for the first quarter of 2004. Net loss under generally accepted
accounting principles (GAAP) was $1.2 million, or a loss of $0.08 per share on
a fully diluted basis, compared with net income of $63,000, or $0.00 per share
on a fully diluted basis, for the first quarter of 2004. Weighted average
shares outstanding on a fully diluted basis for the first quarter were 14.9
million, compared with 13.8 million for the same quarter a year earlier.
On January 25, 2005, AlphaSmart announced a definitive agreement to merge with
Renaissance Learning, Inc., a leading provider of learning information systems
and school improvement programs for pre-K-12 schools, in a tax-free
reorganization valued at approximately $57 million. The two companies filed a
Form S-4, including a proxy statement/prospectus and other relevant materials
in connection with the proposed merger transaction, with the Securities and
Exchange Commission (SEC) on February 25, 2005 and are awaiting SEC approval.
The transaction is expected to close in the second quarter of 2005, subject to
approval by AlphaSmart stockholders and other customary closing conditions
described in the definitive merger agreement.
AlphaSmart's net loss under GAAP for the first quarter of 2005 included the
effect of $990,000 in costs related to the proposed merger and $417,000 in
costs related to litigation and settlement of a lawsuit with Wolf Electronix,
Inc. In the aggregate, these one-time costs totaled $1.4 million. AlphaSmart's
net income under GAAP for the first quarter of 2004 included the effect of
$588,000 in interest and a premium paid on the redemption of mandatorily
redeemable preferred stock.
AlphaSmart plans to conduct a management teleconference on its first quarter
results at 2:00 p.m. PDT / 5:00 p.m. EDT today. This call will be webcast live
and archived for all investors on the AlphaSmart website at
http://www.alphasmart.com/ir/ . In addition, a phone replay of the call will
be available at 719-457-0820, access code 4868811, through April 21, 2005.
AlphaSmart intends to discuss financial and other statistical information on
today's teleconference. This information will also be available on the
company's website at http://www.alphasmart.com/ir/ in the webcast described
above.
AlphaSmart, Inc.
AlphaSmart, Inc. is a provider of affordable, portable personal learning
solutions for the K-12 classroom. Its portable computer-companion products are
used by students to enhance writing, keyboarding and comprehension, and have
been adopted by more than 8,500 school districts in the United States and other
countries. Based in Los Gatos, California, the company was founded in 1992 by
former Apple Computer engineers.
Forward-Looking Statements Safe Harbor
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements related to AlphaSmart's definitive
agreement to merge with Renaissance Learning, Inc. and the expected closing of
that merger. Any such forward-looking statements may involve risks and
uncertainties that could cause actual results or events to differ materially
from any future results or events encompassed within the forward-looking
statements. Factors that could cause or contribute to such differences include
failure to satisfy the closing conditions of the merger agreement, and
unexpected delays in closing the merger. AlphaSmart expressly disclaims a duty
to provide updates to forward-looking statements, whether as a result of new
information, future events or other occurrences.
Additional Information and Where to Find It
Renaissance Learning filed a registration statement on Form S-4, which included
a proxy statement/prospectus and other relevant materials in connection with
the proposed merger transaction involving AlphaSmart and Renaissance Learning,
with the Securities and Exchange Commission (SEC) on February 25, 2005, as
amended on April 13, 2005 (File No. 333-122993). INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THIS FILING BECAUSE IT CONTAINS IMPORTANT INFORMATION
REGARDING THE PROPOSED MERGER TRANSACTION. Investors and security holders may
obtain free copies of these documents and other documents filed with the SEC at
the SEC's website at http://www.sec.gov/. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC by
AlphaSmart at AlphaSmart's website at http://www.alphasmart.com/ or by
contacting AlphaSmart investor relations at or via telephone at 408-355-1029.
Investors and security holders may obtain free copies of the documents filed
with the SEC by Renaissance Learning by directing such requests to Renaissance
Learning, Inc., Attention: Corporate Secretary, 2911 Peach Street, P.O. Box
8036, Wisconsin Rapids, Wisconsin 54995 or via telephone at 715-424-3636.
Renaissance Learning, AlphaSmart and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of AlphaSmart in connection with the merger transaction.
Information regarding directors and executive officers of AlphaSmart and
Renaissance Learning and their respective interests in the proposed transaction
will be available in the proxy statement/prospectus of AlphaSmart and
Renaissance Learning described above and other relevant materials to be filed
with the SEC.
NOTE: AlphaSmart is a registered trademark of AlphaSmart, Inc. in the United
States and other countries. All other trademarks are the property of their
respective owners.
ALPHASMART, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
March 31, December 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $2,884 $4,070
Accounts receivable, net 3,645 4,052
Inventory 3,601 4,087
Deferred tax assets 498 498
Other current assets 4,599 3,225
Total current assets 15,227 15,932
Property and equipment, net 480 572
Deferred tax assets, net of current portion 285 285
Other assets 2,581 2,193
Total assets $18,573 $18,982
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $504 $750
Accrued liabilities 3,339 2,171
Income taxes payable 348 642
Capital lease obligations, current portion 87 92
Total current liabilities 4,278 3,655
Capital lease obligations, net of current
portion 7 24
Other long-term liabilities 18 18
Total liabilities 4,303 3,697
Stockholders' equity 14,270 15,285
Total liabilities and stockholders' equity $18,573 $18,982
ALPHASMART, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2005 2004
Net revenue $6,989 $8,786
Cost of revenue 3,653 4,281
Gross margin 3,336 4,505
Operating expenses:
Research and development 505 614
Sales and marketing 1,807 1,846
General and administrative 2,332 977
Total operating expenses 4,644 3,437
Income (loss) from operations (1,308) 1,068
Other expenses (20) (623)
Profit (loss) before provision for income taxes (1,328) 445
Benefit from (provision for) income taxes 166 (382)
Net income (loss) $(1,162) $63
Net income (loss) per share:
Basic $(0.08) $0.01
Diluted $(0.08) $0.00
Shares used in computing per share amounts:
Basic 14,870 11,630
Diluted 14,870 13,840
DATASOURCE: AlphaSmart, Inc.
CONTACT: Gary Lewis, Corporate Controller of AlphaSmart, Inc., or
+1-408-355-1029, or
Web site: http://www.alphasmart.com/