RENAISSANCE LEARNING, INC. 
By WISCONSIN RAPIDS, Wis., Jan. 25 /PRNewswire-FirstCall/ -- Renaissance Learning(TM), 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 December 31, 2009. Revenues for the fourth quarter of 2009 were $32.4 million, an increase of 9.6% from fourth quarter 2008 revenues of $29.6 million. Net income was $6.7 million, or $.23 per share, an increase of 64% from fourth quarter 2008 income of $4.1 million or $.14 per share adjusted to exclude the charges for impairment of intangible assets and restructuring, which resulted in a fourth quarter loss last year of $43.0 million or $1.47 per share.
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Revenues for the twelve-month period ended December 31, 2009 were $121.5 million, up 5.5% from 2008 revenues of $115.2 million. Net income was $19.9 million, or $.68 per share, for the twelve-month period ended December 31, 2009. The net loss for the twelve month period ended December 31, 2008 was $34.4 million, or $1.18 per share. Excluding the fourth quarter charge for impairment and restructuring costs, net income in 2008 was $12.6 million, or $.43 per share.
"The momentum from the third quarter continued and we achieved very solid fourth quarter results," commented Terrance D. Paul, Chief Executive Officer. "Fourth quarter order rates grew by 20%, revenue is the highest quarterly revenue since 2003, and net income was up 64% excluding last year's charge for intangible asset impairment and restructuring. In addition, cash flow continues to be strong.
"While we are pleased with our recent results, we are moving ahead aggressively with initiatives to drive further growth. These include significantly reducing the price of our NEO 2 laptop, a focused effort to better serve large urban accounts, and the introduction of the SetPoint(TM) program aimed at transforming low performing schools," continued Paul. "The one area of concern continues to be the weak state revenue situation that will likely force states to reduce educational spending. However, we believe that our current product offerings and financial strength, along with the new initiatives, should position us well over the next several years, even in the face of a more difficult school funding environment."
Renaissance Learning added approximately 500 new customer schools during the quarter, bringing total schools worldwide that are actively using the Company's products to over 73,000. Of these, more than 31,000 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. EST 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. EST. 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 January 25, 2010 at 8:00 p.m. through February 1, 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 342271.
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 73,000 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 for 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 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 2008 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)
RENAISSANCE LEARNING(R), INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollar amounts in thousands, except per share amounts)
(unaudited)
Three Months
Ended December 31,
2009 2008
Net sales:
Products $22,220 $21,007
Services 10,205 8,583
Total net sales 32,425 29,590
Cost of sales:
Products 3,127 3,319
Services 2,921 3,269
Total cost of sales 6,048 6,588
Gross profit 26,377 23,002
Operating expenses:
Product development 4,006 4,574
Selling and marketing 9,078 9,023
General and administrative 3,083 3,501
Impairment of goodwill and other
intangible assets - 47,945
Total operating expenses 16,167 65,043
Operating income (loss) 10,210 (42,041)
Other income, net 50 204
Income (loss) before income taxes 10,260 (41,837)
Income taxes 3,579 1,125
Net income (loss) $6,681 $(42,962)
Income (loss) per share:
Basic and Diluted $0.23 $(1.47)
Weighted average shares
outstanding:
Basic 29,261,998 29,160,429
Diluted 29,262,154 29,160,429
Twelve Months
Ended December 31,
2009 2008
Net sales:
Products $86,030 $84,540
Services 35,483 30,683
Total net sales 121,513 115,223
Cost of sales:
Products 13,730 14,494
Services 11,691 13,263
Total cost of sales 25,421 27,757
Gross profit 96,092 87,466
Operating expenses:
Product development 16,494 17,396
Selling and marketing 35,960 36,253
General and administrative 13,113 15,283
Impairment of goodwill and other
intangible assets - 47,945
Total operating expenses 65,567 116,877
Operating income (loss) 30,525 (29,411)
Other income, net 452 819
Income (loss) before income taxes 30,977 (28,592)
Income taxes 11,054 5,848
Net income (loss) $19,923 $(34,440)
Income (loss) per share:
Basic and Diluted $0.68 $(1.18)
Weighted average shares
outstanding:
Basic 29,222,327 29,101,765
Diluted 29,222,387 29,103,795
RENAISSANCE LEARNING(TM), INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
(unaudited)
December 31, December 31,
2009 2008
ASSETS:
Current assets:
Cash and cash equivalents $36,207 $9,509
Investment securities 3,278 4,894
Accounts receivable, net 10,535 8,083
Inventories 4,290 5,504
Prepaid expenses 1,962 1,999
Income taxes receivable 3,679 3,301
Deferred tax asset 3,827 4,183
Other current assets 629 144
Total current assets 64,407 37,617
Investment securities 4,650 3,383
Property, plant and equipment, net 6,848 8,621
Goodwill 2,827 2,750
Other non-current assets 4,534 4,555
Total assets $83,266 $56,926
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $921 $1,712
Deferred revenue 54,224 43,975
Payroll and employee benefits 5,404 3,981
Other current liabilities 2,648 3,284
Total current liabilities 63,197 52,952
Deferred revenue 5,262 2,950
Deferred compensation and other employee
benefits 1,871 1,342
Income taxes payable 4,801 4,868
Other non-current liabilities 184 133
Total liabilities 75,315 62,245
Total shareholders' equity 7,951 (5,319)
Total liabilities and shareholders' equity $83,266 $56,926
SOURCE Renaissance Learning, Inc.
