EX-99.1 2 exh991.htm EARNINGS PRESS RELEASE

Exhibit 99.1

[exh991001.jpg]

NEWS RELEASE

For release at 4:00 p.m. EDT, 7/19/10

Contact:  Susan Sutherland

Toll free ofc. (877) 988-8048

Fax: (715) 424-3414

Email: pr@renlearn.com


2911 Peach Street • P.O. Box 8036 • Wisconsin Rapids, WI 54495-8036



Renaissance Learning, Inc. Announces Second Quarter, 2010 Results


WISCONSIN RAPIDS, WI — July 19, 2010 — Renaissance Learning, Inc. (Nasdaq: RLRN), a leading provider of technology to support personalized practice, differentiated instruction, and progress monitoring in reading, math, and writing for pre-K-12 schools and districts, today announced financial results for the quarter ended June 30, 2010. Revenues for the second quarter of 2010 were $31.0 million, an increase of 9.1% from second quarter 2009 revenues of $28.5 million. Net income was $4.3 million, or $0.15 per share, an increase of 4.2% from second quarter 2009 income of $4.1 million or $0.14 per share for the second quarter last year.


Revenues for the six-month period ended June 30, 2010 were $63.3 million, up 10.4% from 2009 revenues of $57.3 million. Net income was $10.1 million for the six-month period ended June 30, 2010, up 25.5% from the prior year’s net income of $8.0 million. Earnings per share for the first half of 2010 were $.34, compared to $.28, in the first six months of 2009.


“Second quarter results continue to reflect the underlying strength of our business,” commented Terrance D. Paul, Chairman of the Board.  “Orders increased 11%, reported revenue was up 9% and our cash flow was strong.  We are satisfied with the earnings growth despite being lower than the past several quarters as it was affected by our investments in expanded sales resources and by commissions paid on the order increases which are not yet fully recorded in revenue.”


“Despite state budgets remaining weak which will likely affect education funding for at least the next school year, we remain optimistic about our growth prospects,” added Glenn R. James, Chief Executive Officer.  “All product lines are performing well and we intend to build on that with our planned enhancements to the STARTM assessment products, with our focus on urban districts, and through other initiatives and strategies.  We believe we are well positioned strategically and financially to handle any short-term funding issues and to achieve solid long term growth.”



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Renaissance Learning added approximately 500 new customer schools during the quarter and total schools worldwide that are actively using the Company’s products number over 72,000. Of these, more than 32,000 are actively using at least one product running on the Renaissance Place platform.  


The Company will hold a conference call at 5:00 p.m. EDT today to discuss its financial results, quarterly highlights, and business outlook. The teleconference may be accessed in listen-only mode by dialing 877-869-3847 at 5:00 p.m. EDT. 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, 2010 at 8:00 p.m. through July 26, 2010 at 11:59 p.m. The replay dial-in is 877-660-6853. The conference account number to access the replay is 350 and replay ID number is 352637.


Renaissance Learning, Inc.


Renaissance Learning, Inc. is the world’s leading provider of computer-based assessment technology for pre-K–12 schools. Adopted by more than 72,000 schools, Renaissance Learning’s tools provide daily formative assessment and periodic progress-monitoring technology to enhance core curriculum, support differentiated instruction, and personalize practice in reading, writing and math. Renaissance Learning products help educators make the practice component of their existing curriculum more effective by providing tools to personalize practice and easily manage the daily activities for students of all levels. As a result, teachers using Renaissance Learning products accelerate learning, get more satisfaction from teaching, and help students achieve higher test scores on state and national tests. Renaissance Learning has seven U.S. locations and subsidiaries in Canada 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 management’s expectations regarding future growth and the impact of funding issues on Company results.  These forward-looking statements are based on current expectations and various assumptions which management believes are reasonable.  However, these statements involve risks 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 the failure of orders to achieve expected growth targets, a decline in quiz sales that exceeds forecasts, risks associated with the implementation of the Company’s growth initiatives, dependence on educational institutions and government funding, our ability to successfully implement cost savings measures and achieve cost reductions, and other risks affecting the Company’s business as described in the Company’s filings with the Securities and Exchange Commission, including the Company’s 2009 Annual Report on Form 10-K and later filed quarterly reports on Form 10-Q and Current Reports on Form 8-K, which factors are incorporated herein by reference.  The Company expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.


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RENAISSANCE LEARNING™, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollar amounts in thousands, except per share amounts)

(unaudited)


 

Three Months

 

Six Months

 

 

 Ended June 30,

 

 Ended June 30,

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

    Products

 $        21,514

 

 $        21,208

 

 $        43,353

 

 $        41,870

 

    Services

9,533

 

7,256

 

19,917

 

           15,465

 

        Total net sales

31,047

 

28,464

 

63,270

 

           57,335

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

    Products

3,700

 

3,913

 

7,197

 

             6,910

 

    Services

2,948

 

2,445

 

6,440

 

             5,351

 

        Total cost of sales

6,648

 

6,358

 

13,637

 

           12,261

 

 

 

 

 

 

 

 

 

 

Gross profit

24,399

 

22,106

 

49,633

 

           45,074

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

    Product development

4,197

 

3,927

 

8,296

 

             8,378

 

    Selling and marketing

10,158

 

8,403

 

20,504

 

           17,325

 

    General and administrative

3,112

 

3,170

 

6,513

 

             6,633

 

 

 

 

 

 

 

 

 

 

Total operating expenses

17,467

 

15,500

 

35,313

 

           32,336

 

 

 

 

 

 

 

 

 

 

Operating income

6,932

 

6,606

 

14,320

 

           12,738

 

 

 

 

 

 

 

 

 

 

Other income, net

22

 

34

 

261

 

                183

 

 

 

 

 

 

 

 

 

 

Income before income taxes

             6,954

 

             6,640

 

           14,581

 

           12,921

 

 

 

 

 

 

 

 

 

 

Income taxes

             2,650

 

             2,510

 

             4,494

 

             4,884

 

 

 

 

 

 

 

 

 

 

Net income

 $          4,304

 

 $          4,130

 

 $        10,087

 

 $          8,037

 

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

 

  Basic and Diluted

 $            0.15

 

 $            0.14

 

 $            0.34

 

 $            0.28

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

  Basic

29,309,059

 

29,056,023

 

29,299,214

 

29,056,023

 

  Diluted

29,309,732

 

29,056,039

 

29,299,854

 

29,056,031

 

 

 

 

 

 

 

 

 

 



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RENAISSANCE LEARNING, INC.

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

(unaudited)


 

June 30,

 

December 31,

 

2010

 

2009

 

 

 

 

 

 

 

 

ASSETS:

 

Current assets:

 

 

 

Cash and cash equivalents

 $           41,029

 

 $          36,207

Investment securities

                5,086

 

               3,278

Accounts receivable, net

              13,525

 

             10,535

Inventories

                2,266

 

               4,290

Prepaid expenses

                1,374

 

               1,962

Income taxes receivable

                2,167

 

               3,679

Deferred tax asset

                3,827

 

               3,827

Other current assets

                   597

 

                  629

  Total current assets

              69,871

 

             64,407

 

 

 

 

Investment securities

                3,069

 

               4,650

Property, plant and equipment, net

                6,862

 

               6,848

Goodwill

                2,828

 

               2,827

Other non-current assets

                3,864

 

               4,534

 

 

 

 

  Total assets

 $           86,494

 

 $          83,266

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

Current liabilities:

 

 

 

Accounts payable

 $             2,497

 

 $               921

Deferred revenue

              46,089

 

             54,224

Payroll and employee benefits

                8,017

 

               5,404

Other current liabilities

                2,446

 

               2,648

  Total current liabilities

              59,049

 

             63,197

 

 

 

 

Deferred revenue  

                7,266

 

               5,262

Deferred compensation and other employee benefits

                1,893

 

               1,871

Income taxes payable

                3,765

 

               4,801

Other non-current liabilities

                   264

 

                  184

  Total liabilities

              72,237

 

             75,315

 

 

 

 

  Total shareholders' equity

              14,257

 

               7,951

 

 

 

 

  Total liabilities and shareholders' equity

 $           86,494

 

 $          83,266