The Aristotle (MM) (NASDAQ:ARTLP)
Historical Stock Chart
From May 2019 to May 2024
The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its
results of operations for the second quarter and six months ended June
30, 2007.
For the second quarter ended June 30, 2007, net sales increased 5.1% to
$56.2 million from $53.5 million in the second quarter of 2006, and
earnings before income taxes increased 8.3% to $9.7 million from $9.0
million. For the six months ended June 30, 2007, net sales increased
4.8% to $104.4 million from $99.6 million for the six months ended June
30, 2006, and earnings before income taxes increased 10.6% to $17.1
million from $15.4 million.
Net earnings applicable to common stockholders in the second quarter of
2007 were $3.9 million, or $.23 per diluted common share, versus $3.3
million, or $.19 per diluted common share, in the second quarter of
2006. Net earnings applicable to common stockholders for the first six
months of 2007 were $6.3 million, or $.36 per diluted common share,
compared to $5.1 million, or $.29 per diluted common share, for the
comparable six months of 2006.
The reported net earnings are shown after deduction for Federal, state
and foreign income tax provisions. Approximately $2.6 million in
deferred income tax expense in the 2006 second quarter relates to the
non-cash charge for utilization of Federal net operating tax loss
carryforwards (“NOLs”).
For the first six months of 2007 and 2006, respectively, $1.3 million
and $4.5 million of the reported deferred income tax expense relate to
NOL utilization. The utilization of NOLs for the reported quarters and
year to date periods reduced Aristotle’s
current Federal tax liability. In the first quarter of 2007, the
remaining balance of NOLs available as of December 31, 2006,
approximately $3.6 million, was utilized from income generated by the
Company.
Steven B. Lapin, Aristotle’s President and
Chief Operating Officer, stated, “In
presenting these results for the second quarter of 2007, I am
particularly pleased to report that earnings per share for the quarter,
on a fully diluted basis, have increased more than 20% compared to the
second quarter of 2006, primarily as a result of organic revenue growth
of 5.1% and strengthening of gross profit margins through cost control
and promotion of proprietary products. EBITDA growth for the second
quarter was 6.7% compared to the second quarter of 2006, reaching $10.1
million for the quarter ended June 30, 2007.”
Mr. Lapin noted, “The number of proprietary
items in the Company’s catalogs, including
those geared to the K-12 and health care training markets, continues to
increase. The unique features of these products demonstrate Aristotle’s
acknowledged ability to create custom designs to meet evolving needs. A
principal focus of the Company’s business
strategy is the continued enhancement of its proprietary lines so as to
provide highly competitive offerings carrying stronger gross margins.”
Dean T. Johnson, Aristotle’s Chief Financial
Officer, added, “Working capital increased
$6.4 million to $77.9 million at June 30, 2007, compared to $71.5
million at June 30, 2006. Within working capital, inventory increased
$3.5 million to $45.6 compared to last year. The Company has enhanced
its inventory at June 30, 2007 in preparation of the peak shipping
months for the K-12 school market, and to strengthen stock levels
related to the health care training market to meet expected domestic and
international demand for the remainder of 2007.”
In providing EBITDA information, Aristotle offers a non-GAAP financial
measure to complement its condensed consolidated financial statements
presented in accordance with GAAP. This non-GAAP financial measure is
intended to supplement the reader’s overall
understanding of the Company’s current
financial performance. However, this non-GAAP financial measure is not
intended to supercede or replace Aristotle’s
GAAP results. A reconciliation of the non-GAAP results to the GAAP
results is provided in the “Reconciliation of
GAAP Net Earnings to EBITDA” schedule below.
EBITDA is defined as earnings before income taxes, interest expense,
other income and expense, depreciation and amortization.
About Aristotle
The Aristotle Corporation, founded in 1986, and headquartered in
Stamford, CT, is a leading manufacturer and global distributor of
educational, health, medical technology and agricultural products. A
selection of over 80,000 items is offered, primarily through more than
45 separate catalogs carrying the brand of Nasco (founded in 1941), as
well as those bearing the brands of Life/Form®,
Whirl-Pak®, Simulaids, Triarco, Spectrum
Educational Supplies, Hubbard Scientific, Scott Resources, Haan Crafts,
To-Sew, CPR Prompt®, Ginsberg Scientific and
Summit Learning. Products include educational materials and supplies for
substantially all K-12 curricula, molded plastics, biological materials,
medical simulators, health care products and items for the agricultural,
senior care and food industries. Aristotle has approximately 850
full-time employees at its operations in Fort Atkinson, WI, Modesto, CA,
Fort Collins, CO, Plymouth, MN, Saugerties, NY, Chippewa Falls, WI,
Otterbein, IN and Newmarket, Ontario, Canada.
There are approximately 17.9 million shares outstanding of Aristotle
common stock (NASDAQ: ARTL) and approximately 1.1 million shares
outstanding of 11%, cumulative, convertible, voting Series I preferred
stock (NASDAQ: ARTLP); there are also approximately 11.0 million
privately-held shares outstanding of 12%, cumulative, non-convertible,
non-voting Series J preferred stock. Aristotle has about 4,000
stockholders of record.
Further information about Aristotle can be obtained on its website, at
www.aristotlecorp.net.
Safe Harbor under the Private Securities Litigation Reform Act of
1995
To the extent that any of the statements contained in this release are
forward-looking, such statements are based on current expectations that
involve a number of uncertainties and risks that could cause actual
results to differ materially from those projected or suggested in such
forward-looking statements. Aristotle cautions investors that there can
be no assurance that actual results or business conditions will not
differ materially from those projected or suggested in such
forward-looking statements as a result of various factors, including,
but not limited to, the following: (i) the ability of Aristotle to
obtain financing and additional capital to fund its business strategy on
acceptable terms, if at all; (ii) the ability of Aristotle on a timely
basis to find, prudently negotiate and consummate additional
acquisitions; (iii) the ability of Aristotle to manage any to-be
acquired businesses; (iv) there is not an active trading market for the
Company’s securities and the stock prices
thereof are highly volatile, due in part to the relatively small
percentage of the Company’s securities which
is not held by the Company’s majority
stockholder and members of the Company’s
Board of Directors and management; (v) the ability of Aristotle to
retain its Federal net operating tax loss carryforward position and
other deferred tax positions; and (vi) other factors identified in Item
1A, Risk Factors, contained in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2006. As a
result, Aristotle’s future development
efforts involve a high degree of risk. For further information, please
see Aristotle’s filings with the Securities
and Exchange Commission, including its Forms 10-K, 10-K/A, 10-Q and 8-K.
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share and
per share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2007
2006
2007
2006
Net sales
$
56,202
53,481
104,426
99,645
Cost of sales
34,631
33,086
63,892
61,651
Gross profit
21,571
20,395
40,534
37,994
Selling and administrative expense
11,917
11,359
23,544
22,441
Earnings from operations
9,654
9,036
16,990
15,553
Other (expense) income:
Interest expense
(363
)
(501)
(689
)
(948
)
Other, net
412
425
763
830
49
(76)
74
(118
)
Earnings before income taxes
9,703
8,960
17,064
15,435
Income tax expense:
Current
2,383
1,033
3,906
1,755
Deferred
1,220
2,427
2,539
4,219
3,603
3,460
6,445
5,974
Net earnings
6,100
5,500
10,619
9,461
Preferred dividends
2,157
2,159
4,316
4,318
Net earnings applicable to common stockholders
$
3,943
3,341
6,303
5,143
Earnings per common share:
Basic
$
.23
.19
.36
.30
Diluted
$
.23
.19
.36
.29
Weighted average common shares outstanding:
Basic
17,454,704
17,266,513
17,361,153
17,257,955
Diluted
17,487,936
17,516,190
17,392,101
17,503,199
RECONCILIATION OF GAAP NET EARNINGS TO EBITDA
(in thousands)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2007
2006
2007
2006
Net earnings
$
6,100
5,500
10,619
9,461
Add:
Income tax expense
3,603
3,460
6,445
5,974
Interest expense
363
501
689
948
Other (income) expense
(412
)
(425
)
(763
)
(830
)
Depreciation and amortization
480
460
921
895
EBITDA
$
10,134
9,496
17,911
16,448
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Assets
June 30,2007
December 31,2006
June 30,2006
(unaudited)
(unaudited)
Current assets:
Cash and cash equivalents
$
7,423
5,814
3,671
Marketable securities
1,910
-
-
Investments
15,423
14,586
13,669
Accounts receivable, net
21,934
15,458
20,898
Inventories, net
45,618
37,487
42,108
Prepaid expenses and other
5,080
8,123
4,896
Deferred income taxes
2,680
4,051
7,088
Total current assets
100,068
85,519
92,330
Property, plant and equipment, net
26,839
25,426
23,215
Goodwill
14,185
13,860
14,033
Deferred income taxes
8,188
8,188
2,712
Other assets
332
328
351
Total assets
$
149,612
133,321
132,641
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt
$
294
287
599
Trade accounts payable
12,040
9,440
12,362
Accrued expenses
6,743
6,729
5,312
Income Taxes
922
1,478
386
Accrued dividends payable
2,157
2,159
2,159
Total current liabilities
22,156
20,093
20,818
Long term debt, less current installments
15,317
11,985
24,322
Long term pension obligations
4,303
4,469
1,306
Other long term accruals
2,410
2,383
-
Stockholders' equity:
Preferred stock, Series I
6,549
6,601
6,601
Preferred stock, Series J
65,760
65,760
65,760
Common stock
179
172
173
Additional paid-in capital
6,606
3,106
3,299
Retained earnings
26,360
20,057
10,034
Accumulated other comprehensive earnings (loss)
(28
)
(1,305
)
328
Total stockholders' equity
105,426
94,391
86,195
Total liabilities and stockholders' equity
$
149,612
133,321
132,641