Renaissance Learning(R) Announces Third Quarter Financial Results
WISCONSIN RAPIDS, Wis., Oct. 20 /PRNewswire-FirstCall/ --
Renaissance Learning(R), Inc., (NASDAQ:RLRN), a leading provider of
learning information systems and school improvement programs for
pre-K-12 schools, today announced financial results for the three
and nine month periods ended September 30, 2004. Revenues for the
third quarter of 2004 were $25.5 million, a decrease of 18.4% from
third quarter 2003 revenues of $31.3 million. Net income for the
quarter was $3.9 million, or $0.12 per share, compared to net
income of $8.3 million, or $0.27 per share for the third quarter of
2003, which included a one-time tax benefit of $0.04 per share
related to income tax credits for research activities. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001108/RENAISSANCELOGO )
Revenues for the nine-month period ended September 30, 2004 were
$88.3 million, down 11.0% from the 2003 revenues of $99.2 million.
Net income for the nine-month period was $17.5 million, or $0.56
per share, compared to net income of $24.9 million, or $0.80 per
share for 2003. "Third quarter results were very close to our
projections announced three weeks ago," stated John R. Hickey,
President and Chief Executive Office of Renaissance Learning, Inc.
"Order rates were essentially flat but revenue declined for the
third quarter mainly due to the $3.3 million increase in deferred
revenue. Our original expectations for stronger order rates have
been impacted by customers delaying orders as they take the time to
assess the benefits of Renaissance Place and by the fact that
district solutions take longer to sell. Despite these delays, we
are pleased with the interest that Renaissance Place has generated
and are optimistic about the marketplace's acceptance of this
revolutionary product. When combined with the exciting district
opportunities in our pipeline and new product offerings like
English in a Flash, we remain optimistic about the company's
long-term growth prospects." Renaissance Learning added about 500
new customer schools in the U.S. and Canada during the quarter,
bringing total North American schools using Company products to
over 67,000. Of these, about 63,000 use the Company's reading
products and about 25,000 use math. The company also added almost
1,000 new Renaissance Place customers in the quarter, bringing the
total customer schools using Renaissance Place to over 3,100. 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 888-868-9083 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
October 20, 2004 at 8:00 p.m. through October 27, 2004 at 11:59
p.m. The replay dial-in is 877-519-4471. The conference ID number
to access the replay is 5224832. Renaissance Learning(R), Inc., is
a leading provider of research-based learning information systems
software, school improvement programs, teacher training and
consulting. Adopted by over 67,000 schools, Renaissance information
technology products give students and teachers continuous
constructive feedback that helps motivate students, dramatically
accelerate learning, improve test scores, and help students master
all standards, while reducing teacher paperwork. Renaissance
Learning has six 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 future financial and operating
results, the introduction and acceptance of new products and
services, and new marketing approaches. 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 those matters
disclosed in the Company's Annual Report on Form 10-K, quarterly
reports on Form 10-Q and the Company's other Securities and
Exchange Commission filings which factors are incorporated herein
by reference. RENAISSANCE LEARNING(R), INC. CONSOLIDATED STATEMENTS
OF INCOME (dollar amounts in thousands, except per share amounts)
(unaudited) Three Months Nine Months ended September 30, ended
September 30, 2004 2003 2004 2003 Net sales: Products $20,315
$25,640 $71,714 $81,528 Services 5,227 5,675 16,542 17,629 Total
net sales 25,542 31,315 88,256 99,157 Cost of sales: Products 1,564
2,581 5,151 8,605 Services 2,191 2,510 8,129 7,911 Total cost of
sales 3,755 5,091 13,280 16,516 Gross profit 21,787 26,224 74,976
82,641 Operating expenses: Product development 4,391 4,262 12,842
12,926 Selling and marketing 8,486 7,866 25,503 22,718 General and
administrative 3,292 3,172 10,055 10,577 Total operating expenses
16,169 15,300 48,400 46,221 Operating income 5,618 10,924 26,576
36,420 Other income (expense), net 522 541 1,195 1,985 Income
before taxes 6,140 11,465 27,771 38,405 Income taxes 2,272 3,187
10,275 13,492 Net income $3,868 $8,278 $17,496 $24,913 Earnings per
share: Basic $0.12 $0.27 $0.56 $0.80 Diluted $0.12 $0.27 $0.56
$0.80 Weighted average shares outstanding: Basic 31,126,343
30,826,913 31,055,595 31,163,711 Diluted 31,276,621 31,066,216
31,236,305 31,335,294 RENAISSANCE LEARNING(R), INC. CONSOLIDATED
BALANCE SHEETS (dollar amounts in thousands) September 30, December
31, 2004 2003 (unaudited) ASSETS: Current assets: Cash and cash
equivalents $23,271 $62,524 Investment securities 28,786 42,825
Accounts receivable, net 12,725 13,182 Inventories 2,710 2,354
Prepaid expenses 712 1,352 Deferred tax asset 4,054 3,743 Other
current assets 578 889 Total current assets 72,836 126,869
Investment Securities 17,142 6.485 Property, plant and equipment,
net 19,442 20,536 Deferred tax asset 1,742 1,795 Other assets 3,580
3,746 Total assets $114,742 $159,431 LIABILITIES AND SHAREHOLDERS'
EQUITY: Current liabilities: Accounts payable $3,335 $3,144
Deferred revenue 16,105 10,705 Payroll and employee benefits 2,373
3,153 Income taxes payable 910 2,295 Other current liabilities
4,279 4,869 Total current liabilities 27,002 24,166 Deferred
revenue 685 800 Deferred compensation 1,184 958 Total liabilities
28,871 25,924 Minority interest 167 177 Total shareholders' equity
85,704 133,330 Total liabilities and shareholders' equity $114,742
$159,431
http://www.newscom.com/cgi-bin/prnh/20001108/RENAISSANCELOGO
http://photoarchive.ap.org/ DATASOURCE: Renaissance Learning, Inc.
CONTACT: Susan Sutherland of Renaissance Learning, Inc., Toll free
ofc., +1-877-988-8048, Fax +1-715-424-3414, Web site:
http://www.renlearn.com/
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