Renaissance Learning (NASDAQ:RLRN)
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Renaissance Learning(R) Announces Third Quarter Financial Results
WISCONSIN RAPIDS, Wis., Oct. 20 /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 nine month periods ended September 30,
2004. Revenues for the third quarter of 2004 were $25.5 million, a decrease of
18.4% from third quarter 2003 revenues of $31.3 million. Net income for the
quarter was $3.9 million, or $0.12 per share, compared to net income of $8.3
million, or $0.27 per share for the third quarter of 2003, which included a
one-time tax benefit of $0.04 per share related to income tax credits for
research activities.
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Revenues for the nine-month period ended September 30, 2004 were $88.3 million,
down 11.0% from the 2003 revenues of $99.2 million. Net income for the
nine-month period was $17.5 million, or $0.56 per share, compared to net income
of $24.9 million, or $0.80 per share for 2003.
"Third quarter results were very close to our projections announced three weeks
ago," stated John R. Hickey, President and Chief Executive Office of
Renaissance Learning, Inc. "Order rates were essentially flat but revenue
declined for the third quarter mainly due to the $3.3 million increase in
deferred revenue. Our original expectations for stronger order rates have been
impacted by customers delaying orders as they take the time to assess the
benefits of Renaissance Place and by the fact that district solutions take
longer to sell. Despite these delays, we are pleased with the interest that
Renaissance Place has generated and are optimistic about the marketplace's
acceptance of this revolutionary product. When combined with the exciting
district opportunities in our pipeline and new product offerings like English
in a Flash, we remain optimistic about the company's long-term growth
prospects."
Renaissance Learning added about 500 new customer schools in the U.S. and
Canada during the quarter, bringing total North American schools using Company
products to over 67,000. Of these, about 63,000 use the Company's reading
products and about 25,000 use math. The company also added almost 1,000 new
Renaissance Place customers in the quarter, bringing the total customer schools
using Renaissance Place to over 3,100.
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 October
20, 2004 at 8:00 p.m. through October 27, 2004 at 11:59 p.m. The replay
dial-in is 877-519-4471. The conference ID number to access the replay is
5224832.
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 67,000 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 Nine Months
ended September 30, ended September 30,
2004 2003 2004 2003
Net sales:
Products $20,315 $25,640 $71,714 $81,528
Services 5,227 5,675 16,542 17,629
Total net sales 25,542 31,315 88,256 99,157
Cost of sales:
Products 1,564 2,581 5,151 8,605
Services 2,191 2,510 8,129 7,911
Total cost of sales 3,755 5,091 13,280 16,516
Gross profit 21,787 26,224 74,976 82,641
Operating expenses:
Product development 4,391 4,262 12,842 12,926
Selling and marketing 8,486 7,866 25,503 22,718
General and
administrative 3,292 3,172 10,055 10,577
Total operating
expenses 16,169 15,300 48,400 46,221
Operating income 5,618 10,924 26,576 36,420
Other income (expense),
net 522 541 1,195 1,985
Income before taxes 6,140 11,465 27,771 38,405
Income taxes 2,272 3,187 10,275 13,492
Net income $3,868 $8,278 $17,496 $24,913
Earnings per share:
Basic $0.12 $0.27 $0.56 $0.80
Diluted $0.12 $0.27 $0.56 $0.80
Weighted average
shares outstanding:
Basic 31,126,343 30,826,913 31,055,595 31,163,711
Diluted 31,276,621 31,066,216 31,236,305 31,335,294
RENAISSANCE LEARNING(R), INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
September 30, December 31,
2004 2003
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $23,271 $62,524
Investment securities 28,786 42,825
Accounts receivable, net 12,725 13,182
Inventories 2,710 2,354
Prepaid expenses 712 1,352
Deferred tax asset 4,054 3,743
Other current assets 578 889
Total current assets 72,836 126,869
Investment Securities 17,142 6.485
Property, plant and equipment, net 19,442 20,536
Deferred tax asset 1,742 1,795
Other assets 3,580 3,746
Total assets $114,742 $159,431
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $3,335 $3,144
Deferred revenue 16,105 10,705
Payroll and employee benefits 2,373 3,153
Income taxes payable 910 2,295
Other current liabilities 4,279 4,869
Total current liabilities 27,002 24,166
Deferred revenue 685 800
Deferred compensation 1,184 958
Total liabilities 28,871 25,924
Minority interest 167 177
Total shareholders' equity 85,704 133,330
Total liabilities and shareholders' equity $114,742 $159,431
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DATASOURCE: Renaissance Learning, Inc.
CONTACT: Susan Sutherland of Renaissance Learning, Inc., Toll free ofc.,
+1-877-988-8048, Fax +1-715-424-3414,
Web site: http://www.renlearn.com/