The Aristotle (MM) (NASDAQ:ARTLP)
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The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its
results of operations for the second quarter and six months ended June
30, 2008.
For the second quarter ended June 30, 2008, net earnings applicable to
common stockholders were $4.5 million, or $.25 per diluted common share,
versus $3.9 million, or $.23 per diluted common share, in the second
quarter of 2007. Net earnings applicable to common stockholders for the
first six months of 2008 were $7.3 million, or $.41 per diluted common
share, compared to $6.3 million, or $.36 per diluted common share, for
the comparable six months of 2007.
Second quarter net sales in 2008 increased 1.1% to $56.8 million from
$56.2 million in the second quarter of 2007. Earnings from operations
improved by 9.2% in the second quarter of 2008 to $10.5 million
(including a $.7 million insurance recovery), equating to 18.6% of net
sales. In the same quarter of 2007, earnings from operations totaled
$9.7 million, or 17.2% of net sales.
For the six months ended June 30, 2008, net sales increased 2.7% to
$107.2 million from $104.4 million for the six months ended June 30,
2007. Earnings from operations increased 9.6% to $18.6 million
(including the insurance recovery) in the first six months of 2008, or
17.4% of net sales. In comparison, earnings from operations for the
first six months of 2007 were $17.0 million, or 16.3% of net sales.
Steven B. Lapin, Aristotle’s President and
Chief Operating Officer, stated, “Your Company
is pleased to report net sales increases for the 2008 second quarter and
year-to-date versus the comparable 2007 periods despite this year’s
general economic slowdown throughout the U.S., and that, as a result of
management’s diligent attention to cost
controls, the growth in operating income has continued to exceed the
growth in net sales.”
Dean T. Johnson, Aristotle’s Chief Financial
Officer, added, “Gross margins for the three
and six month periods ended June 30, 2008 were 39.3% and 39.4%,
respectively, compared to 38.4% and 38.8% in the same periods of 2007.
The improvement in 2008 is primarily due to management’s
purchasing strategies implemented in the fourth quarter of 2007 and
first quarter of 2008 which have been designed to maximize returns on
inventory investments and to limit effects of petroleum-related cost
increases.”
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 18.0 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, at 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
Six Months Ended
June 30,
June 30,
2008
2007
2008
2007
Net sales
$
56,794
56,202
107,226
104,426
Cost of sales
34,457
34,631
64,993
63,892
Gross profit
22,337
21,571
42,233
40,534
Selling and administrative expense
11,791
11,917
23,617
23,544
Earnings from operations
10,546
9,654
18,616
16,990
Other (expense) income:
Interest expense
(285)
(363)
(573)
(689)
Other, net
358
412
590
763
73
49
17
74
Earnings before income taxes
10,619
9,703
18,633
17,064
Income tax expense (benefit):
Current
4,006
2,383
6,334
3,906
Deferred
(14)
1,220
673
2,539
3,992
3,603
7,007
6,445
Net earnings
6,627
6,100
11,626
10,619
Preferred dividends
2,156
2,157
4,312
4,316
Net earnings applicable to common stockholders
$
4,471
3,943
7,314
6,303
Earnings per common share:
Basic
$
.25
.23
.41
.36
Diluted
$
.25
.23
.41
.36
Weighted average common shares outstanding:
Basic
17,962,706
17,454,704
17,961,873
17,361,153
Diluted
17,971,444
17,487,936
17,972,490
17,392,101
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Assets
June 30,
2008
December 31,
2007
June 30,
2007
(unaudited)
(unaudited)
Current assets:
Cash and cash equivalents
$
6,444
5,604
7,423
Marketable securities
3,195
3,335
1,910
Investments
21,656
18,150
15,423
Accounts receivable, net
20,902
15,631
21,934
Inventories, net
48,215
42,297
45,618
Prepaid expenses and other
5,034
9,611
5,080
Deferred income taxes
1,879
2,484
2,680
Total current assets
107,325
97,112
100,068
Property, plant and equipment, net
28,603
27,476
26,839
Goodwill
14,358
14,476
14,185
Deferred income taxes
5,646
5,646
8,188
Investments
4,318
4,279
-
Other assets
604
446
332
Total assets
$
160,854
149,435
149,612
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt
$
303
305
294
Trade accounts payable
11,762
10,500
12,040
Accrued expenses
7,191
6,765
6,743
Income Taxes
240
-
922
Accrued dividends payable
2,156
2,156
2,157
Total current liabilities
21,652
19,726
22,156
Long term debt, less current installments
11,506
8,655
15,317
Long term pension obligations
2,617
2,944
4,303
Other long term accruals
2,449
2,429
2,410
Stockholders' equity:
Preferred stock, Series I
6,489
6,489
6,549
Preferred stock, Series J
65,760
65,760
65,760
Common stock
180
179
179
Additional paid-in capital
7,683
7,580
6,606
Retained earnings
42,278
34,964
26,360
Accumulated other comprehensive earnings (loss)
240
709
(28)
Total stockholders' equity
122,630
115,681
105,426
Total liabilities and stockholders' equity
$
160,854
149,435
149,612