EX-99.1 2 exh991.htm PRESS RELEASE - FINANCIALS


Exhibit 99.1


[exh991001.jpg]

NEWS RELEASE

For release at 4:00 p.m. EDST, 10/19/05

Contact:  Julie Blystone

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® Announces Third Quarter Revenue Increases 26%,

Earnings 27%; Declares Quarterly Dividend


WISCONSIN RAPIDS, Wis., — October 19, 2005 — Renaissance Learning, Inc., (Nasdaq: RLRN), a leading provider of computerized assessment and progress monitoring tools for pre-K-12 schools and districts, today announced financial results for the three- and nine-month periods ending September 30, 2005.   Revenues for the third quarter of 2005 were $31.4 million, an increase of 25.5% from third quarter 2004 revenues of $25.0 million.  Net income was $4.9 million compared to net income of $3.9 million for the third quarter of 2004, an increase of 27.1%.   Earnings per share for the quarter were $0.16, compared to the $0.12 per share earned in the prior year.  The third quarter results include the first full quarter impact of the acquisition of AlphaSmart, Inc. which was finalized in late June 2005.


Revenues for the nine-month period ended September 30, 2005 were $87.3 million, up 1% from the 2004 revenues of $86.5 million.  Net income was $18.7 million for the nine-month period, up 7.0% from the prior year net income of $17.5 million.  Earnings per share for the first nine months of 2005 were $0.60 compared to $0.56 earned in 2004.

 

“We are pleased to report solid increases in both sales and earnings for the third quarter,” commented John R. Hickey, president and chief executive officer of Renaissance Learning, Inc.  “There also has been an improvement in order rates and we are optimistic about our growth prospects for the rest of the 2005/2006 school year and beyond.”


Excluding AlphaSmart products, Renaissance Learning added about 500 new customer schools in the U.S. and Canada during the quarter, bringing total North American schools that have adopted Company products to more than 68,000.  Of these, more than 65,000 have adopted the Company’s reading products and more than 26,000 have adopted the Company’s math products.


The company also announced that its Board of Directors declared a quarterly cash dividend of $.05 per share, payable December 1, 2005 to shareholders of record as of November 11, 2005.

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page 2 of 4

RLI Q3 Earnings


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 888-335-6680 at 4:00 p.m. CDST.  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 19, 2005 at 8:00 p.m. through October 26, 2005 at 11:59 p.m.  The replay dial-in is 877-519-4471.  The conference ID number to access the replay is 6485140.


Renaissance Learning, Inc.


Renaissance Learning, Inc. is a leading provider of computerized assessment and progress monitoring tools for 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 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 growth initiatives, management’s revenue expectations and growth prospects for future periods, the introduction and the acceptance of new products and services.  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 2004 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 Q3 Earnings


RENAISSANCE LEARNING®, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollar amounts in thousands, except per share amounts)

(unaudited)

  

Three Months

 

Nine Months

  

Ended September 30,

 

Ended September 30,

  

2005

2004

 

2005

2004

       

Net sales:

      

  Products

 

$25,615

$20,164

 

$70,375

$71,051

  Services

 

5,774

4,847

 

16,918

15,415

     Total net sales

 

31,389

25,011

 

87,293

86,466

       

Cost of sales:

      

  Products

 

5,297

1,525

 

8,812

5,017

  Services

 

2,100

2,003

 

6,672

7,461

     Total cost of sales

 

7,397

3,528

 

15,484

12,478

       

Gross profit

 

23,992

21,483

 

71,809

73,988

       

Operating expenses:

      

  Product development

 

4,927

3,841

 

12,583

10,997

  Selling and marketing

 

8,325

7,868

 

22,432

23,433

  General and administrative

 

3,341

2,970

 

9,370

9,189

  

  

    

     Total operating expenses

 

16,593

14,679

 

44,385

43,619

       

Operating income

 

7,399

6,804

 

27,424

30,369

       

Other income (expense), net

 

404

531

 

1,363

1,215

       

Income  - continuing operations before income taxes

 

7,803

7,335

 

28,787

31,584

       

Income taxes – continuing operations

 

2,887

2,739

 

10,651

11,764

       

Income – continuing operations

 

4,916

4,596

 

18,136

19,820

       

Income (loss) on discontinued operations,

net of tax benefit of $0 and $467 for the three months ended September 30, 2005 and 2004, respectively; and $1,417 and $1,489 for the nine months ended September 30, 2005 and 2004, respectively

 

-

(728)

 

584

(2,324)

       

Net income

 

$4,916

$3,868

 

$18,720

$17,496

     

 

   

Earnings per share:

      

Basic:

      

  Continuing Operations

 

$0.16

$0.14

 

$0.58

$0.64

  Discontinuing operations

 

0.00

(0.02)

 

0.02

(0.08)

  Net income

 

$0.16

$0.12

 

$0.60

$0.56

Diluted:

      

  Continuing Operations

 

$0.16

$0.14

 

$0.58

$0.63

  Discontinuing operations

 

0.00

(0.02)

 

0.02

(0.07)

  Net income

 

$0.16

$0.12

 

$0.60

$0.56

       

Weighted average shares outstanding:

      

Basic

 

31,598,830

31,126,343

 

31,013,660

31,055,595

Diluted

 

31,696,291

31,276,621

 

31,083,752

31,236,305


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page 4 of 4

RLI Q3 Earnings


RENAISSANCE LEARNING®, INC.

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

(unaudited)

     
  

September 30,

 

December 31,

  

2005

 

2004

     

ASSETS:

    

Current assets:

    

Cash and cash equivalents

 

$15,789

 

$27,460

Investment securities

 

22,833

 

25,103

Accounts receivable, net

 

14,985

 

8,441

Inventories

 

3,547

 

2,364

Prepaid expenses

 

1,114

 

1,194

Deferred tax asset

 

6,904

 

3,800

Assets of discontinued operations

 

-

 

1,149

Other current assets

 

1,012

 

453

   Total current assets

 

66,184

 

69,964

     

Investment securities

 

5,045

 

21,003

Property, plant and equipment, net

 

11,267

 

18,552

Real estate held for sale

 

7,584

 

-

Deferred tax asset

 

-

 

1,620

Goodwill

 

46,627

 

2,757

Other assets

 

8,647

 

828

     

    Total assets

 

$145,354

 

$114,724

     


LIABILITIES AND SHAREHOLDERS’ EQUITY:

    

Current liabilities:

    

Accounts payable

 

$4,178

 

$1,226

Deferred revenue

 

17,415

 

16,484

Payroll and employee benefits

 

3,642

 

3,983

Income taxes payable

 

2,326

 

925

Liabilities of discontinued operations

 

-

 

1,650

Other current liabilities

 

5,514

 

3,881

   Total current liabilities

 

33,075

 

28,149

Deferred revenue

 

724

 

620

Deferred compensation

 

1,463

 

1,354

Deferred tax liability

 

444

 

-

Other noncurrent liabilities

 

51

 

-

   Total liabilities

 

35,757

 

30,123

     

   Minority interest

 

243

 

184

     

   Total shareholders' equity

 

109,354

 

84,417

     

   Total liabilities and shareholders' equity

 

$145,354

 

$114,724


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