EX-99.1 2 exh991.htm EARNINGS PRESS RELEASE

Exhibit 99.1

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  NEWS RELEASE

   For release at 4:00 p.m. EST, 01/24/08

   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 First Quarter, 2008 Results

WISCONSIN RAPIDS, WI — April 15, 2008 — 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 March 31, 2008.  Revenues for the first quarter of 2008 were $29.4 million, an increase of 10.1% from first quarter 2007 revenues of $26.7 million.  Net income for the first quarter of 2008 was $2.6 million, or $.09 per share, compared to net income of $1.3 million, or $.05 per share, for the first quarter last year.  First quarter 2007 results included pre-tax restructuring costs of approximately $0.5 million, or $.01 per share.

“First quarter revenue and earnings growth is a good start to 2008,” commented Terrance D. Paul, Chief Executive Officer.  “This growth reflects both the strong Accelerated Reader and Accelerated Math Enterprise subscription orders from the second and third quarter last year, which are being recognized as revenue now, and laptop order growth of 6% this quarter compared to the same quarter last year, the second consecutive quarter of growth for the laptop product line.

“We continue to see the positive impact of our Enterprise offering, with revenue to same school AR customers increasing by over $1,200 per year and software subscription revenue growing to 40% of total software revenue in the first quarter compared to 22% last year. There is also considerable customer excitement over our recent release of the new Home Connect feature of Enterprise,” continued Paul.  “However, as we have indicated previously, Enterprise also has some near-term negative effects.  It is causing orders to shift to the second and, even more so, the third quarters as schools align their subscriptions with budget cycles.  It is also causing customers to hold off purchasing quizzes as they consider upgrading.  Thus, orders were down 10.9% for the quarter, and deferred revenue decreased by $5.0 million in the first quarter of 2008 versus a $0.5 million increase in 2007.

“We expect that the economic downturn will hurt school funding and our sales in a number of states, particularly California and Florida, and now believe that our initial order projections of 15-20% growth for the full year may be too aggressive,” added Paul.  “It is too early to predict the full year impact.  However, we continue to expect orders in the second and third quarters to be strong, and with the recent release of Home Connect, we are confident of achieving solid results in 2008.”

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Renaissance Learning added approximately 500 new customer schools in the U.S. and Canada during the quarter, bringing total North American schools that are actively using the Company’s products to over 74,000.  Of these, over 63,000 are using the Company’s reading products, over 29,000 are using the Company’s math products, and over 22,000 are using at least one Renaissance Place product.  

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 888-603-6873, ID number 41088150 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 April 15, 2008 at 8:00 p.m. through April 22, 2008 at 11:59 p.m.  The replay dial-in is 800-642-1687.  The conference ID number to access the replay is 41088150.

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 74,000 North American 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, 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 growth initiatives, growth prospects and management’s expectations regarding orders and financial results for 2008 and future periods.  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 AR and AM Enterprise and laptop orders to achieve expected growth targets, a decline in quiz sales that exceeds forecasts, risks associated with the implementation of the Company’s strategic growth plan, dependence on educational institutions and government funding, 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 2007 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.


(tables to follow)


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RENAISSANCE LEARNING®, INC.

CONSOLIDATED STATEMENTS OF INCOME
(dollar amounts in thousands, except per share amounts)
(unaudited)


 

Three Months                
Ended March 31,             

 

 

 

 

 

2008  

 

2007  

Net sales:

 

 

 

Products

$22,205

 

$21,701

Services

7,181

 

4,987

Total net sales

29,386

 

26,688

 

 

 

 

Cost of sales:

 

 

 

Products

4,035

 

3,703

Services

3,762

 

2,867

Total cost of sales

7,797

 

6,570

 

 

 

 

Gross profit

21,589

 

20,118

 

 

 

 

Operating expenses:

 

 

 

Product development

4,032

 

5,065

Selling and marketing

9,373

 

9,406

General and administrative

4,129

 

3,842

 

 

 

 

Total operating expenses

17,534

 

18,313

 

 

 

 

Operating Income

4,055

 

1,805

 

 

 

 

Other income (expense), net

168

 

302

 

 

 

 

Income before income taxes

4,223

 

2,107

 

 

 

 

Income taxes

1,605

 

790

 

 

 

 

Net Income

$2,618

 

$1,317

 

 

 

 

Income per share:

 

 

 

Basic

$0.09

 

$0.05

Diluted

$0.09

 

$0.05

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

28,759,046

 

28,858,799

Diluted

28,842,931

 

28,881,276






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RENAISSANCE LEARNING®, INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
(unaudited)

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

2008

 

2007

ASSETS:

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$7,975

 

$7,337

Investment securities

 

7,786

 

8,136

Accounts receivable, net

 

9,477

 

8,791

Inventories

 

5,981

 

6,273

Prepaid expenses

 

1,976

 

2,197

Income taxes receivable

 

137

 

1,450

Deferred tax asset

 

4,432

 

4,406

Other current assets

 

268

 

300

   Total current assets

 

38,032

 

38,890

 

 

 

 

 

Investment securities

 

6,955

 

8,982

Property, plant and equipment, net

 

10,186

 

10,578

Goodwill

 

47,241

 

47,065

Other noncurrent assets

 

7,808

 

7,785

 

 

 

 

 

    Total assets

 

$110,222

 

$113,300

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$3,193

 

$2,011

Deferred revenue

 

30,682

 

35,675

Payroll and employee benefits

 

4,424

 

4,184

Other current liabilities

 

3,693

 

3,563

   Total current liabilities

 

41,992

 

45,433

 

 

 

 

 

Deferred revenue

 

2,723

 

2,707

Deferred compensation and other

 

 

 

 

   employee benefits

 

1,543

 

1,933

Income taxes payable

 

4,721

 

5,104

Other non-current liabilities

 

100

 

136

   Total liabilities

 

51,079

 

55,313

 

 

 

 

 

   Total shareholders' equity

 

59,143

 

57,987

 

 

 

 

 

   Total liabilities and shareholders' equity

 

$110,222

 

$113,300