The Aristotle Corporation Announces 2008 First Quarter Results

Share Name	Share Symbol	Market	Type
The Aristotle (MM)	NASDAQ:ARTLP	NASDAQ	Common Stock

The Aristotle (MM) (NASDAQ:ARTLP)
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The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its results of operations for the quarter ended March 31, 2008. First Quarter 2008 Results For the quarter ended March 31, 2008, net earnings applicable to common stockholders increased 20.5% to $2.8 million, or $.16 per diluted common share, compared to $2.4 million, or $.13 per diluted common share, for the quarter ended March 31, 2007 (weighted average common shares outstanding were 18.0 million for the first quarter of 2008 versus 17.5 million for the same period in 2007). Earnings before income taxes increased 8.9% to $8.0 million for the current quarter from $7.4 million for last year�s quarter. The results of operations for the quarter ended March 31, 2008 were generated from net sales of $50.4 million, which increased 4.6% compared to $48.2 million in net sales for the quarter ended March 31, 2007. Steven B. Lapin, Aristotle�s President and Chief Operating Officer, stated, �I am pleased to report the solid sales and earnings performance for the first quarter of 2008. The educational segment revenues increased 4.8% compared to the same quarter last year, and the commercial segment experienced a 3.3% increase; this balanced growth confirms the Company�s approach to market the right product with the right value to its customer base. At the same time, effective management efficiencies held the increase in selling and administrative expenses to less than 2%.� Dean T. Johnson, Aristotle�s Chief Financial Officer, commented, �Working capital was $86.2 million at March 31, 2008, compared to $70.3 million at March 31, 2007. Inventory levels related to strategic purchasing activities accounted for $4.5 million of the change in working capital. Substantially all of the remaining increase in working capital was attributed to the aggregate increase in marketable securities and other liquid investments to $27.1 million at March 31, 2008 from $15.0 at the same date last year. The Company maintains a strong and liquid financial position; stated stockholders� equity increased $20.9 million to $118.0 million at March 31, 2008 from $97.1 million at March 31, 2007, while long-term debt increased by only $1.0 million period-to-period.� 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 900 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 17.9 million shares outstanding of Aristotle common stock (NASDAQ: ARTL) and 1.1 million shares outstanding of Series I preferred stock (NASDAQ: ARTLP); there are also 11.0 million privately-held shares outstanding of Series J preferred stock. Aristotle has about 4,000 stockholders of record. Further information about Aristotle can be obtained on its website: 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, 2007. 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 March 31, 2008 � 2007 � Net sales $ 50,432 48,224 Cost of sales 30,536 � 29,261 � Gross profit 19,896 18,963 � Selling and administrative expense 11,826 � 11,627 � Earnings from operations 8,070 7,336 � Other income (expense): Interest expense (288 ) (326 ) Other, net 232 � 351 � (56 ) 25 � Earnings before income taxes 8,014 7,361 � Income taxes: Current 2,328 1,523 Deferred 687 � 1,319 � 3,015 � 2,842 � Net earnings 4,999 4,519 � Preferred dividends 2,156 � 2,159 � Net earnings applicable to common stockholders $ 2,843 � 2,360 � � Earnings per common share: Basic $ .16 .14 Diluted $ .16 .13 � Weighted average common shares outstanding: Basic 17,961,040 17,266,573 Diluted 17,973,632 17,536,665 THE ARISTOTLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) Assets � March 31, 2008 � December 31, 2007 � March 31, 2007 (unaudited) (unaudited) Current assets: Cash and cash equivalents $ 4,514 5,604 2,013 Marketable securities 3,305 3,335 - Investments 19,277 18,150 14,958 Accounts receivable, net 20,481 15,631 19,557 Inventories 44,156 42,297 39,609 Prepaid expenses and other 7,601 9,611 6,581 Deferred income taxes 1,910 2,484 2,774 � Total current assets 101,244 97,112 85,492 � Property, plant and equipment, net 28,193 27,476 26,357 � Goodwill 14,338 14,476 13,890 Deferred income taxes 5,646 5,646 8,188 Investments 4,319 4,279 - Other assets 518 446 311 � Total assets $ 154,258 149,435 134,238 � � Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term debt $ 302 305 288 Trade accounts payable 8,632 10,500 8,495 Accrued expenses 6,100 6,765 6,434 Accrued dividends payable - 2,156 - � Total current liabilities 15,034 19,726 15,217 � Long-term debt, less current installments 16,083 8,655 14,913 Long-term pension obligations 2,704 2,944 4,653 Other long-term accruals 2,439 2,429 2,397 � Stockholders' equity: Preferred stock, Series I 6,489 6,489 6,601 Preferred stock, Series J 65,760 65,760 65,760 Common stock 180 179 173 Additional paid-in capital 7,674 7,580 3,294 Retained earnings 37,807 34,964 22,417 Accumulated other comprehensive loss 88 709 (1,187 ) Total stockholders' equity 117,998 115,681 97,058 � Total liabilities and stockholders' equity $ 154,258 149,435 134,238 �

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ARTLP The Aristotle (MM)