10-Q 1 c69528e10-q.txt QUARTERLY REPORT FOR THE QUARTER ENDED 3/31/02 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002. [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM .................... TO .................... COMMISSION FILE NUMBER: 0-22187 RENAISSANCE LEARNING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) WISCONSIN 39-1559474 (STATE OR OTHER (IRS EMPLOYER JURISDICTION OF INCORPORATION) IDENTIFICATION NO.) PO BOX 8036 2911 PEACH STREET WISCONSIN RAPIDS, WISCONSIN (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 54495-8036 (ZIP CODE) (715) 424-3636 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. OUTSTANDING AT CLASS APRIL 30, 2002 ----- -------------- Common Stock, $0.01 par value 34,676,633 RENAISSANCE LEARNING, INC. INDEX TO FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002 PART I - FINANCIAL INFORMATION Page Number ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheets at March 31, 2002 (unaudited) and December 31, 2001....................................1 Consolidated Statements of Income for the Three Months Ended March 31, 2002 and 2001 (unaudited)................2 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2002 and 2001 (unaudited)................3 Notes to Unaudited Consolidated Financial Statements..............4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..............................6 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......................................................8 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................9 - Index - PART I - FINANCIAL INFORMATION Item 1. Financial Statements RENAISSANCE LEARNING, INC. CONSOLIDATED BALANCE SHEETS

MARCH 31, DECEMBER 31, 2002 2001 ------------ ------------ (UNAUDITED) (AUDITED) (In thousands) ASSETS Current assets: Cash and cash equivalents $ 31,226 $ 35,904 Investment securities 50,370 49,288 Accounts receivable, less allowance of $1,461 in 2002 and $1,709 in 2001 15,769 12,397 Inventories 1,547 1,648 Prepaid expenses 939 1,063 Deferred tax asset 3,581 3,606 Other current assets 1,691 1,312 -------- -------- Total current assets 105,123 105,218 Investment securities 36,843 24,364 Property, plant and equipment, net 22,553 23,007 Deferred tax asset 2,312 2,238 Goodwill 2,313 2,313 Other intangibles, net 1,277 1,412 Capitalized software, net 444 506 Other non-current assets 650 903 -------- -------- Total assets $171,515 $159,961 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,422 $ 2,769 Deferred revenue 6,526 7,184 Payroll and employee benefits 3,608 3,845 Income taxes payable 6,488 4,196 Other current liabilities 4,582 4,143 -------- -------- Total current liabilities 24,626 22,137 Deferred revenue 982 1,097 -------- -------- Total liabilities 25,608 23,234 Minority interest 198 196 Shareholders' equity 145,709 136,531 -------- -------- Total liabilities and shareholders' equity $171,515 $159,961 ======== ========

See accompanying notes to consolidated financial statements. - 1 - RENAISSANCE LEARNING, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2002 2001 ---- ---- (In thousands, except per share amounts) Net sales: Products $ 28,885 $ 24,362 Services 5,804 5,819 -------- -------- Total net sales 34,689 30,181 -------- -------- Cost of sales: Products 2,864 3,297 Services 3,232 3,674 -------- -------- Total cost of sales 6,096 6,971 -------- -------- Gross profit 28,593 23,210 Operating expenses: Product development 4,446 4,392 Selling and marketing 8,491 7,992 General and administrative 3,963 3,414 -------- -------- Total operating expenses 16,900 15,798 -------- -------- Operating income 11,693 7,412 Other income (expense): Interest income 862 1,014 Other, net 96 (25) -------- -------- Income before taxes 12,651 8,401 Income tax provision 4,896 3,234 -------- -------- Net income $ 7,755 $ 5,167 ======== ======== Basic earnings per share $ 0.22 $ 0.15 Diluted earnings per share 0.22 0.15

See accompanying notes to consolidated financial statements. - 2 - RENAISSANCE LEARNING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2002 2001 ---- ---- (In thousands) Reconciliation of net income to net cash provided by operating activities: Net income $ 7,755 $ 5,167 Noncash (income) expenses included in net income - Depreciation and amortization 1,216 1,422 Deferred income taxes (49) 151 Change in assets and liabilities - Accounts receivable (3,372) (976) Inventories 101 (84) Prepaid expenses 124 (208) Accounts payable and other current liabilities 3,298 3,123 Deferred revenue (773) (490) Other (268) (98) -------- -------- Net cash provided by operating activities 8,032 8,007 ======== ======== Cash flows from investing activities: Purchase of property, plant and equipment (469) (658) Purchase of investment securities, net (13,561) (297) Capitalized software development costs (104) (216) Acquisitions -- (704) -------- -------- Net cash used in investing activities (14,134) (1,875) ======== ======== Cash flows from financing activities: Proceeds from issuance of stock 1,066 815 Proceeds from exercise of stock options 358 1,175 Purchase of treasury stock -- -- -------- -------- Net cash provided by financing activities 1,424 1,990 -------- -------- Net increase (decrease) in cash (4,678) 8,122 Cash and cash equivalents, beginning of period 35,904 24,655 -------- -------- Cash and cash equivalents, end of period $ 31,226 $ 32,777 ======== ========

See accompanying notes to consolidated financial statements. - 3 - RENAISSANCE LEARNING, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. CONSOLIDATION The consolidated financial statements include the financial results of Renaissance Learning, Inc. ("Renaissance Learning") and our subsidiaries. Our significant subsidiaries include Renaissance Corporate Services, Inc. and Generation21 Learning Systems, LLC ("Generation21"). School Renaissance Institute, Inc., formerly a wholly-owned subsidiary of Renaissance Learning, was merged into Renaissance Learning on December 31, 2001, and is currently doing business under the name Renaissance Learning Madison. All significant intercompany transactions have been eliminated in the consolidated financial statements. 2. BASIS OF PRESENTATION The consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of the interim periods, and are presented on an unaudited basis. These financial statements should be read in conjunction with the financial information contained in our Annual Report on Form 10-K, which is on file with the U.S. Securities and Exchange Commission. The results of operations for the three-month periods ended March 31, 2002 and 2001 are not necessarily indicative of the results to be expected for the full year. 3. EARNINGS PER COMMON SHARE Basic earnings per common share has been computed based on the weighted average number of common shares outstanding. Diluted earnings per common share has been computed based on the weighted average number of common shares outstanding, increased by the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. On January 3, 2000, our Board of Directors authorized the repurchase of up to 1,000,000 shares of our common stock. As of March 31, 2002, we had repurchased 25,100 shares under this repurchase program. On April 17, 2002, our Board of Directors authorized a new repurchase program which provides for the repurchase of up to 5,000,000 shares of our common stock. No time limit was placed on the duration of the repurchase program. Repurchased shares will become treasury shares and will be used for stock-based employee benefit plans and for other general corporate purposes. The weighted average shares outstanding during the three months ended March 31, 2002 and 2001 are as follows:

Three Months Ended Three Months Ended March 31, 2002 March 31, 2001 ----------------------- ------------------ Basic weighted average shares 34,644,242 34,430,922 Dilutive effect of stock options 274,205 333,565 Diluted weighted average shares 34,918,447 34,764,487

- 4 - 4. SEGMENT REPORTING Our reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. We have two reportable segments: software and training. The software segment produces learning information system software primarily for the K-12 school market in the United States, Canada, the United Kingdom and Australia. The software assists educators in assessing and monitoring student development by increasing the quantity, quality and timeliness of student performance data in the areas of reading, math and writing. The software segment also includes training and knowledge management enterprise software, which is currently sold primarily to corporate customers and electronic assessment products and services sold to educational publishers. Revenue from the software segment includes product revenue principally from the sale of software, product revenue from scanners sold with software and sold separately, and service revenue from the sale of software support agreements. The training segment provides professional development training seminars and district-wide school improvement programs including training, consulting and educator resource materials. The training programs instruct educators on how to accelerate learning in the classroom through use of the information that our learning information systems provide. Revenue from the training segment includes service revenue from a variety of seminars presented in hotels and schools across the country and from the annual National Renaissance Conference, and product revenue from the sale of training materials. We evaluate the performance of our operating segments based on operating income before nonrecurring items. Intersegment sales and transfers and revenue derived outside of the United States are not significant. Summarized financial information concerning our reportable segments is shown in the following table:

Three Months Ended March 31, 2002 2001 -------- -------- (In thousands) Revenues: Software $ 29,707 $ 25,453 Training 4,982 4,728 -------- -------- Total revenues $ 34,689 $ 30,181 ======== ======== Operating income (loss): Software $ 12,528 $ 8,478 Training (835) (1,066) -------- -------- Total operating income $ 11,693 $ 7,412 ======== ========

The reported measures are consistent with those used in measuring amounts in the consolidated financial statements. It is our opinion, however, that because many flows of value between the segments cannot be precisely quantified, this information provides an incomplete measure of the training segment profit or loss, and should not be viewed in isolation. We evaluate the performance of the training segment based on many factors not captured by the financial accounting system and often evaluate our financial performance on a total entity basis. 5. COMPREHENSIVE INCOME Total comprehensive income was $7,604,000 and $5,279,000 in the first quarter of 2002 and 2001, respectively. Our comprehensive income includes foreign currency translation adjustments and the remaining unamortized balance of unrealized gains and losses on our held-to-maturity securities that were previously classified as available-for-sale. - 5 - 6. NEW ACCOUNTING PRONOUNCEMENT On June 30, 2001, the FASB issued SFAS No. 142 " Goodwill and Other Intangible Assets". Under this new standard, goodwill acquired after June 30, 2001 is not amortized over its useful life and starting January 1, 2002, amortization expense is no longer recorded for goodwill acquired on or before June 30, 2001. SFAS 142 requires that goodwill be assessed at least annually for impairment by applying a fair-value-based test. We adopted the provisions of SFAS No. 142 effective January 1, 2002. Assembled workforce does not meet the criteria of SFAS No. 142 for recognition apart from goodwill, therefore, as of January 1, 2002, we reclassified the $441,000 unamortized balance of assembled workforce to goodwill. SFAS 142 requires that a new fair-market-value test be applied to determine if goodwill and other intangible assets with indefinite lives are impaired based on their values as of January 1, 2002. We completed this testing in the first quarter of 2002 and found no instances of impairment of our recorded goodwill. All of our goodwill and other intangible assets are assigned to our software segment. In accordance with SFAS No. 142, the effect of this accounting change is reflected prospectively. Supplemental comparative disclosure as if the change had been retroactively applied to the first quarter of 2001 is as follows:

Three Months Ended March 31, 2002 2001 ------ ------ (In thousands) Net income: Reported net income $7,755 $5,167 Goodwill amortization, net of tax -- 86 ------ ------ Adjusted net income $7,755 $5,253 ====== ======

The adoption of SFAS 142 in fiscal 2001 would not have resulted in a change to previously reported basic or diluted earnings per share for the first quarter of 2001. For the three months ended March 31, 2002, we recognized amortization expense of $135,000 on other intangibles. No goodwill or other intangibles were acquired or impaired during the first quarter of 2002. We retired a $210,000 trade name intangible which was fully amortized. Other intangibles consisted of the following (in thousands):

March 31, 2002 December 31, 2001 ---------------------------------------- --------------------------------------- Gross Other Gross Other Carrying Accumulated Intangibles Carrying Accumulated Intangibles Amount Amortization Net Amount Amortization Net ------ ------------ --- ------ ------------ --- Algorithms and software code $2,124 $1,644 $ 480 $2,124 $1,565 $ 559 Trade name -- -- -- 210 210 -- Non-compete agreement 1,100 303 797 1,100 247 853 ------ ------ ------ ------ ------ ------ Other intangibles $3,224 $1,947 $1,277 $3,434 $2,022 $1,412 ====== ====== ====== ====== ====== ======

Other intangibles are scheduled to be fully amortized by 2006 with corresponding amortization estimated to be $402,000, $396,000, $286,000, and $193,000, for the remainder of 2002 and the years ended 2003, 2004, and 2005, respectively. - 6 - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations THREE MONTHS ENDED MARCH 31, 2002 AND 2001 The following table sets forth certain consolidated income statement data in dollars and as a percentage of net sales, except that individual components of costs of sales and gross profit are shown as a percentage of their corresponding component of net sales:

Three Months Ended March 31, 2002 2001 Change -------------------- ---------------------- ----------------------- (Dollars in thousands) Net Sales: Products $ 28,885 83.3% $ 24,362 80.7% $ 4,523 18.6% Services 5,804 16.7% 5,819 19.3% (15) -0.3% -------- -------- -------- -------- -------- Total net sales 34,689 100.0% 30,181 100.0% 4,508 14.9% -------- ======== -------- ======== -------- Cost of sales: Products 2,864 9.9% 3,297 13.5% (433) -13.1% Services 3,232 55.7% 3,674 63.1% (442) -12.0% -------- -------- -------- Total cost of sales 6,096 17.6% 6,971 23.1% (875) -12.6% ======== ======== ======== Gross profit: Products 26,021 90.1% 21,065 86.5% 4,956 23.5% Services 2,572 44.3% 2,145 36.9% 427 19.9% -------- -------- -------- Total gross profit 28,593 82.4% 23,210 76.9% 5,383 23.2% ======== ======== ======== Operating expenses: Product development 4,446 12.8% 4,392 14.6% 54 1.2% Selling and marketing 8,491 24.5% 7,992 26.5% 499 6.2% General and administrative 3,963 11.4% 3,414 11.3% 549 16.1% -------- -------- -------- Total operating expenses 16,900 48.7% 15,798 52.3% 1,102 7.0% -------- -------- -------- Operating income 11,693 33.7% 7,412 24.6% 4,281 57.8% Other income (expense): Interest income 862 2.5% 1,014 3.4% (152) -15.0% Other, net 96 0.3% (25) -0.1% 121 -484.0% -------- -------- -------- Total other income 958 2.8% 989 3.3% (31) -3.1% -------- -------- -------- Income before taxes 12,651 36.5% 8,401 27.8% 4,250 50.6% Income tax provision 4,896 14.1% 3,234 10.7% 1,662 51.4% -------- -------- -------- Net income $ 7,755 22.4% $ 5,167 17.1% $ 2,588 50.1% ======== ======== ========

- 7 - Net Sales. Our net sales increased by $4.5 million, or 14.9%, to $34.7 million in the first quarter of 2002 from $30.2 million in the first quarter of 2001. Product sales increased by $4.5 million, or 18.6%, to $28.9 million in the first quarter of 2002 from $24.4 million in the first quarter of 2001. The increase in product sales is primarily attributable to (i) sales of STAR Early Literacy, which was released late in the second quarter of 2001, (ii) increased sales of Accelerated Reader quizzes, with over 54,000 available book titles, to a larger base of Accelerated Reader schools (iii) increased sales of math products, including follow-on sales of Accelerated Math libraries and optical-mark card scanners. Service revenue, which consists of revenue from sales of training sessions and software support agreements, for the first quarter of 2002 was $5.8 million, the same as in the first quarter of 2001. Relatively flat revenues from our annual National Renaissance Conference are included in both first quarter 2002 and 2001 service revenues. Excluding the National Renaissance Conference, training service revenues declined by about 13% in first quarter 2002 compared to first quarter 2001 mainly due to the effects of state budgetary constraints and restrictions on teacher travel. Software support agreement revenues increased by 16% over the first quarter 2001. We expect continued revenue growth in the second quarter, as schools enter the prime period of their annual purchasing cycle. Six new products are expected to be ready for shipment in the second and third quarters: StandardsMaster instant assessment and Web-based reporting software; Accelerated Writer writing improvement system; Accelerated Vocabulary vocabulary development software; AccelTest test creation, scoring, and gradebook software; Fluent Reader repeated reading software for improving reading fluency, and MathFacts in a Flash software to help educators improve students' computation fluency. We believe continued strong sales of reading and math software will contribute to growth in the second quarter. We are expecting a year-over-year decline in training revenues in the second quarter due to the pressures on school funding. Cost of Sales. The cost of sales of products decreased by $433,000, or 13.1%, to $2.9 million in the first quarter of 2002 from $3.3 million in the first quarter of 2001. As a percentage of product sales, the cost of sales of products decreased to 9.9% in the first quarter of 2002 from 13.5% in the first quarter of 2001. This decrease is primarily the result of the improved margin on our AccelScan optical-mark card scanner and a sales mix weighted more heavily to higher margin products. The cost of sales of services decreased by $442,000, or 12.0%, to $3.2 million in the first quarter of 2002 from $3.7 million in the first quarter of 2001. As a percentage of sales of services, the cost of sales of services decreased to 55.7% in the first quarter of 2002 from 63.1% in the first quarter of 2001. This decrease is attributable to (i) increased software support agreement revenues while service costs remained relatively constant and (ii) lower costs at our annual National Renaissance Conference than the prior year. Our overall gross profit margin improved to 82.4% in the first quarter of 2002, from 76.9% in the first quarter of 2001. Product Development. Product development expenses were $4.4 million in the first quarter of 2002, which was up 1.2% from the first quarter of 2001. We continue to invest in product development related to (i) six new products expected to be ready for shipment in the second and third quarters of 2002, (ii) the development of additional Accelerated Math libraries and Accelerated Reader quizzes, (iii) enhanced versions of our existing products, and (iv) other new products at various stages of development which we expect to announce in the future. As a percentage of net sales, product development costs decreased to 12.8% in the first quarter of 2002 from 14.6% in the first quarter of 2001. We anticipate that product development costs will continue to moderate as a percentage of sales in 2002 compared to the same periods in 2001. Selling and Marketing. Selling and marketing expenses increased by $499,000, or 6.2%, to $8.5 million in the first quarter of 2002 from $8.0 million in the first quarter of 2001. These expenses increased mainly due to (i) costs of marketing our expanded product line, (ii) costs of promoting the district-wide school improvement process, (iii) increased professional fees, and (iv) increased wages and related benefit costs associated with additional personnel. As a percentage of net sales, selling and marketing expenses decreased to 24.5% in the first quarter of 2002 from 26.5% in the first quarter of 2001. We expect the high levels of sales and marketing effort to continue into the second quarter to support our new products and our expanded product line. - 8 - General and Administrative. General and administrative expenses increased by $549,000, or 16.1%, to $4.0 million in the first quarter of 2002 from $3.4 million in the first quarter of 2001. The higher expenses for the first quarter of 2002 are primarily due to increased wages and related benefit costs and increased professional fees. As a percentage of net sales, general and administrative costs increased slightly to 11.4% in the first quarter of 2002 compared to 11.3% in the first quarter of 2001. For the full year 2002, we expect to be able to leverage our administrative infrastructure and reduce general and administrative costs as a percentage of sales compared to 2001 levels. Operating Income. Operating income increased by $4.3 million, or 57.8%, to $11.7 million in the first quarter of 2002 from $7.4 million in the first quarter of 2001. As a percentage of net sales, operating income increased to 33.7% in the first quarter of 2002 compared to 24.6% in the first quarter of 2001. Income Tax Expense. Income tax expense of $4.9 million was recorded in the first quarter of 2002 at an effective income tax rate of 38.7% of pre-tax income, compared to $3.2 million, or 38.5% of pre-tax income in the first quarter of 2001. We expect to maintain our effective tax rate at or below 39% for 2002. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2002, our cash, cash equivalents and investment securities increased to $118.4 million from the December 31, 2001 total of $109.6 million. The increase of $8.8 million in the first quarter of 2002 is primarily due to $8.0 million in net cash provided by operating activities. We believe our strong cash position coupled with cash flow from operations will be sufficient to meet both our short-term and long-term working capital requirements. At March 31, 2002, we had a $15.0 million unsecured revolving line of credit with a bank that is available until March 31, 2004. The line of credit bears interest at either a floating rate based on the prime rate less 1.0%, or a fixed rate for a period of up to 90 days based on LIBOR plus 1.25%. The rate is at our option and is determined at the time of borrowing. We also have a $2.0 million unsecured revolving line of credit with a bank, which is available until January 31, 2003. The line of credit bears interest based on the prime rate less 1.0%. As of March 31, 2002, the lines of credit had not been used. FORWARD-LOOKING STATEMENTS In accordance with the Private Securities Litigation Reform Act of 1995, we can obtain a "safe-harbor" for forward-looking statements by identifying those statements and by accompanying those statements with cautionary statements which identify factors that could cause actual results to differ materially from those in the forward-looking statements. Accordingly, the foregoing "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains certain forward-looking statements relating to growth plans, projected sales, revenues, earnings and costs, and product development schedules and plans. Our actual results may differ materially from those contained in the forward-looking statements herein. Factors which may cause such a difference to occur include (i) a delay or reduction in school purchases of our products due to state budgetary constraints resulting in a reduction in the funds available to schools and (ii) those factors identified in Item 1, Business, Forward-Looking Statements, contained in our Form 10-K for the year ended December 31, 2001, which factors are incorporated herein by reference to such Form 10-K. - 9 - Item 3. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk. Our exposure to market interest rate risk consists of: (i) the increase or decrease in the amount of interest income we can earn on our investment portfolio, and (ii) the decrease or increase in value of our investment security portfolio if market interest rates increase or decrease, respectively. We anticipate that we will have sufficient liquidity to hold our investments to maturity, therefore, we do not expect to recognize any material losses or gains related to an increase or decrease in market interest rates. Foreign Currency Exchange Rate Risk. The financial position and results of operations of our foreign subsidiaries are measured using local currency. Revenues and expenses of such subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange at the balance sheet date. Translation gains or losses are deferred as a separate component of shareholders' equity. Aggregate foreign currency transaction gains and losses are included in determining net earnings. As such, our operating results are affected by fluctuations in the value of the U.S. dollar compared to the Australian dollar, British pound, Canadian dollar, and Indian Rupee. At this time, foreign operations are not significant. - 10 - Part II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Exhibit No. Description 3.1 Fourth Amendment to Credit Agreement dated as of December 31, 1997, by and between Wells Fargo Bank, National Association (as successor in interest to Wells Fargo Bank Wisconsin, National Association) and Registrant. (b) Forms 8-K. We filed no reports on Form 8-K during the quarter covered by this report. - 11 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RENAISSANCE LEARNING, INC. (Registrant) May 13, 2002 /s/ Michael H. Baum -------------- ------------------------------ Date Michael H. Baum Chief Executive Officer (Principal Executive Officer) May 13, 2002 /s/ Steven A. Schmidt -------------- -------------------------------- Date Steven A. Schmidt Secretary, Vice President, and Chief Financial Officer (Principal Financial and Accounting Officer) Index to Exhibits Exhibit No. Description 3.1 Fourth Amendment to Credit Agreement dated as of December 31, 1997, by and between Wells Fargo Bank, National Association (as successor in interest to Wells Fargo Bank Wisconsin, National Association) and Registrant.