EX-99.1 2 exh991.htm EARNINGS PRESS RELEASE

Exhibit 99.1

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NEWS RELEASE

For release at 3:00 p.m. CDST, 4/17/07

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, 2007 Results


WISCONSIN RAPIDS, WI — April 17, 2007 — Renaissance Learning®, Inc., (Nasdaq: RLRN), a leading provider of technology for personalizing reading, math, and writing instruction and practice in pre-K-12 schools and districts, today announced financial results for the quarter ended March 31, 2007.  Revenues for the first quarter of 2007 were $26.7 million, a decrease of 14.2% from first quarter 2006 revenues of $31.1 million.  Deferred revenue increased by $0.5 million in the first quarter of 2007 versus a $2.6 million decline in the prior year’s first quarter.  Net income, which included pre-tax restructuring costs of approximately $0.5 million, or $.01 per share, was $1.3 million, or $.05 per share, compared to net income of $3.5 million, or $.12 per share, for the first quarter last year.  2006 first quarter results included pre-tax costs for executive separation expenses of $1.9 million or $.04 cents per share.

“First quarter results, excluding pre-tax restructuring costs, were similar to the trailing fourth quarter,” commented Terrance D. Paul, Chief Executive Officer of Renaissance Learning.  “Although the first quarter is seasonally not our strongest period, we continue to see trends that support our expectation of improved financial results in the future.  Reading orders were strong, the number of new math and reading customers increased year over year for the first time in several years, and laptop sales were down just 6% compared to declines of 18% and 38% in the fourth and third quarters, respectively.  In addition, we have done some restructuring involving our laptop line which will reduce annual operating costs by approximately $1 million.”  

Renaissance Learning added about 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 71,000.  Of these, over 60,000 are using the Company’s reading products, over 27,000 are using the Company’s math products and over 16,000 are using at least one Renaissance Place product.  

The Company will hold a conference call at 4:00 p.m. CDST today to discuss its financial results, quarterly highlights and business outlook.  The teleconference may be accessed in listen-only mode by dialing 888-373-2605, ID number 8623016 at 4:00 p.m. CDST.  Please call a few minutes before the scheduled start time to ensure a proper connection.

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page 2 of 4

RLI Q1 Earnings

A digital recording of the conference call will be made available on April 17, 2007 at 8:00 p.m. through April 24, 2007 at 11:59 p.m.  The replay dial-in is 877-519-4471.  The conference ID number to access the replay is 8623016.

Renaissance Learning, Inc.

Renaissance Learning, Inc. is a leading provider of technology for personalizing reading, math, and writing instruction and practice in pre-K-12 schools and districts.  Renaissance Learning products give students and teachers continuous feedback to inform instruction and help teachers and administrators motivate students, dramatically accelerate learning and improve test scores.  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 2007 financial results, growth initiatives and management’s revenue expectations and growth prospects for future periods.  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 risks associated with the implementation of the Company’s strategic growth plan 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 2006 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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page 3 of 4

RLI Q1 Earnings

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


 

Three Months                    
Ended March 31                  

 

 

 

 

 

2007     

 

2006     

Net sales:

 

 

 

Products

$21,701

 

$25,323

Services

4,987

 

5,794

Total net sales

26,688

 

31,117

 

 

 

 

Cost of sales:

 

 

 

Products

3,703

 

4,328

Services

2,867

 

2,806

Total cost of sales

6,570

 

7,134

 

 

 

 

Gross profit

20,118

 

23,983

 

 

 

 

Operating expenses:

 

 

 

Product development

5,065

 

4,182

Selling and marketing

9,406

 

9,356

General and administrative

3,842

 

5,205

 

 

 

 

Total operating expenses

18,313

 

18,743

 

 

 

 

Operating Income

1,805

 

5,420

 

 

 

 

Other income (expense), net

302

 

282

 

 

 

 

Income before income taxes

2,107

 

5,522

 

 

 

 

Income taxes

790

 

2,043

 

 

 

 

Net Income

$1,317

 

$3,479

 

 

 

 

Income per share:

 

 

 

Basic

$0.05

 

$0.12

Diluted

$0.05

 

$0.12

 

 

 

 

Weighted average shares outstanding

 

 

 

Basic

28,858,799

 

30,144,940

Diluted

28,881,276

 

30,165,995




page 4 of 4

RLI Q1 Earnings

RENAISSANCE LEARNING®, INC.

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

(unaudited)

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

2007

 

2006

 

 

 

 

 

ASSETS:

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$22,123

 

$25,978

Investment securities

 

2,005

 

2,500

Accounts receivable, net

 

11,387

 

10,528

Inventories

 

5,395

 

4,108

Prepaid expenses

 

1,880

 

1,895

Income taxes receivable

 

3,316

 

4,104

Deferred tax asset

 

3,596

 

3,596

Other current assets

 

140

 

97

   Total current assets

 

49,842

 

52,806

 

 

 

 

 

Investment securities

 

6,592

 

1,625

Property, plant and equipment, net

 

11,541

 

11,811

Goodwill

 

46,977

 

46,973

Other noncurrent assets

 

6,750

 

7,308

 

 

 

 

 

    Total assets

 

$121,702

 

$120,523

 

 

 

 

 


LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$3,905

 

$2,782

Deferred revenue

 

23,731

 

23,751

Payroll and employee benefits

 

4,092

 

4,750

Other current liabilities

 

3,663

 

3,429

   Total current liabilities

 

35,391

 

34,712

Deferred revenue

 

1,357

 

885

Deferred compensation and other

 

 

 

 

   employee benefits

 

1,693

 

1,665

Deferred tax liability

 

875

 

878

Income taxes payable

 

3,083

 

2,812

   Total liabilities

 

42,399

 

40,952

 

 

 

 

 

   Total shareholders' equity

 

79,303

 

79,571

 

 

 

 

 

   Total liabilities and shareholders' equity

 

$121,702

 

$120,523