Renaissance Learning (NASDAQ:RLRN)
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Renaissance Learning(R) Announces Second Quarter Financial
Results
WISCONSIN RAPIDS, Wis., July 19 /PRNewswire-FirstCall/ -- Renaissance
Learning(R), Inc. (NASDAQ:RLRN), a leading provider of learning information
systems and school improvement programs for pre-K-12 schools, today announced
financial results for the three and six month periods ended June 30, 2004.
Revenues for the second quarter of 2004 were $31.2 million, a decrease of 7.2%
from second quarter 2003 revenues of $33.6 million. Net income for the quarter
was $7.7 million compared to net income of $9.0 million for the second quarter
2003, a decrease of 14.4%. Earnings per share for the quarter were $0.25,
compared to $0.29 per share for second quarter 2003.
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Revenues for the six-month period ended June 30, 2004 were $62.7 million, down
7.6% from the 2003 revenues of $67.8 million. Net income for the six- month
period of $13.6 million was down by 18.1% from the 2003 net income of $16.6
million. Earnings per share for the first half of 2004 was $0.44 per share
compared to $0.53 per share earned in the first six months of 2003.
"Second quarter financial results continued to be affected by the difficult
school funding environment and the transition to our new subscription based
Renaissance Place platform," commented John R. Hickey, president and chief
executive officer of Renaissance Learning, Inc. "However, with deferred
revenue growth of about $2.1 million over the previous quarter there is strong
evidence we have turned the corner and that our strategies are working. Over
2,200 schools have purchased Renaissance Place and quote activity continues to
be excellent."
"Although it now appears unlikely that we will achieve full year growth for
2004, we expect our second half sales and earnings to grow over the same period
of 2003," continued Hickey. "Even more important, we expect Renaissance Place
and our new services will continue to gain momentum making the longer term look
quite promising."
Renaissance Learning added about 600 new customer schools in the U.S. and
Canada during the quarter, bringing total North American schools using Company
products to over 66,000. Of these, about 63,000 use the Company's reading
products and about 24,000 use math.
The Company will hold a conference call at 4:00 p.m. CDT today to discuss its
financial results, quarterly highlights, and business outlook. The
teleconference may be accessed in listen-only mode by dialing 888-868-9083 at
4:00 p.m. CDT. Please call a few minutes before the scheduled start time to
ensure a proper connection.
A digital recording of the conference call will be made available on July 19,
2004 at 8:00 p.m. through July 26, 2004 at 11:59 p.m. The replay dial-in is
877-519-4471. The conference ID number to access the replay is 4938518.
Renaissance Learning(R), Inc., is a leading provider of research-based learning
information systems software, school improvement programs, teacher training and
consulting. Adopted by over 66,000 schools, Renaissance information technology
products give students and teachers continuous constructive feedback that helps
motivate students, dramatically accelerate learning, improve test scores, and
help students master all standards, while reducing teacher paperwork.
Renaissance Learning has six U.S. locations and subsidiaries in Australia,
Canada, India, and the United Kingdom.
This press release contains forward-looking statements made pursuant to the
safe harbor provision of the Private Securities Litigation Reform Act of 1995,
including statements regarding future financial and operating results, the
introduction and acceptance of new products and services, and new marketing
approaches. Any such forward-looking statements may involve risk and
uncertainties that could cause actual results to differ materially from any
future results encompassed within the forward-looking statements. Factors that
could cause or contribute to such differences include those matters disclosed
in the Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q and
the Company's other Securities and Exchange Commission filings which factors
are incorporated herein by reference.
RENAISSANCE LEARNING(R), INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollar amounts in thousands, except per share amounts)
(unaudited)
Three Months Six Months
ended June 30, ended June 30,
2004 2003 2004 2003
Net sales:
Products $26,315 $28,698 $51,400 $55,888
Services 4,866 4,918 11,314 11,955
Total net sales 31,181 33,616 62,714 67,843
Cost of sales:
Products 1,798 2,856 3,588 6,024
Services 2,191 2,045 5,937 5,402
Total cost of sales 3,989 4,901 9,525 11,426
Gross profit 27,192 28,715 53,189 56,417
Operating expenses:
Product development 4,247 4,201 8,451 8,664
Selling and marketing 7,667 6,748 17,017 14,851
General and administrative 3,366 3,942 6,763 7,405
Total operating expenses 15,280 14,891 32,231 30,920
Operating income 11,912 13,824 20,958 25,497
Other income (expense), net 287 712 672 1,444
Income before taxes 12,199 14,536 21,630 26,941
Income taxes 4,514 5,560 8,003 10,305
Net income $7,685 $8,976 $13,627 $16,636
Earnings per share:
Basic $0.25 $0.29 $0.44 $0.53
Diluted $0.25 $0.29 $0.44 $0.53
Weighted average shares
outstanding:
Basic 31,076,098 30,927,711 31,019,830 31,289,921
Diluted 31,254,214 31,091,949 31,228,966 31,423,459
RENAISSANCE LEARNING(R), INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
June 30, December 31,
2004 2003
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $21,524 $62,524
Investment securities 24,476 42,825
Accounts receivable, net 13,503 13,182
Inventories 2,780 2,354
Prepaid expenses 702 1,352
Deferred tax asset 3,833 3,743
Other current assets 621 889
Total current assets 67,439 126,869
Investment Securities 15,132 6.485
Property, plant and equipment, net 19,765 20,536
Deferred tax asset 1,687 1,795
Other assets 3,710 3,746
Total assets $107,733 $159,431
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $2,457 $3,144
Deferred revenue 12,920 10,705
Payroll and employee benefits 3,250 3,153
Income taxes payable 503 2,295
Other current liabilities 4,357 4,869
Total current liabilities 23,487 24,166
Deferred revenue 576 800
Deferred compensation 1,095 958
Total liabilities 25,158 25,924
Minority interest 154 177
Total shareholders' equity 82,421 133,330
Total liabilities and shareholders' equity $107,733 $159,431
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DATASOURCE: Renaissance Learning, Inc.
CONTACT: Susan Sutherland of Renaissance Learning, Inc.,
+1-877-988-8048, Fax, +1-715-424-3414, Email,
Web site: http://www.renlearn.com/