Exhibit 99.1
Cambium Learning Group, Inc. Announces 2009 Earnings
2009 Revenues Up Slightly, While Adjusted EBITDA Improves to $50.8 million
2009 Revenues Up Slightly, While Adjusted EBITDA Improves to $50.8 million
Dallas, March 11, 2010-Cambium Learning Group, Inc. [NASDAQ: ABCD, “the Company”], a leading provider of research-based education solutions for students in Pre-K through 12th grade, including intervention curricula, educational technologies and services, will hold a conference call today at 4:00 p.m. Eastern Time to discuss 2009 financial results. The call will be based on unaudited results through December 31, 2009.
The Company reported sales of $101.0 million for the year ended December 31, 2009, representing an increase of 1.3 percent over sales of $99.7 million for the year ended December 31, 2008. The net loss for the years ended December 31, 2009 and 2008 was $35.8 million and $69.6 million, respectively.
The Company’s financial statements include results from the Voyager Learning Company acquisition beginning on the December 8, 2009 merger date. Adjusted Sales including combined results from both companies (but excluding any pro forma effects of the acquisition) were $201.2 million for 2009 and $198.3 million for 2008. Adjusted EBITDA including combined results from both companies (but excluding any pro forma effects of the acquisition) was $50.8 million for 2009 and $34.7 million for 2008.
View 2009 Earnings Press Release Schedules
Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA and Adjusted Sales are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The Company believes that Adjusted EBITDA and Adjusted Sales provide useful information to investors because they reflect the underlying performance of the ongoing operations of the company, including the recent acquisition of Voyager Learning Company, and provide investors with a view of the combined Company’s operations from management’s perspective. Adjusted EBITDA and Adjusted Sales exclude items that do not reflect the underlying performance of the combined Company by removing significant one-time or certain non-cash items. The Company uses these measures to monitor and evaluate the operating performance of the Company and as the basis to set and measure progress towards performance targets, which directly affect compensation for employees and executives. The Company generally uses these non-GAAP measures as measures of operating performance and not as measures of the Company’s liquidity.
Investor Conference Call
The Company will hold a conference call today at 4:00 p.m. Eastern Time. The call will address unaudited financial results through December 31, 2009.
To listen to the Company’s upcoming conference call, please dial (866) 333-9117 and reference “Cambium” at 4:00 p.m. Eastern Time on Thursday, March 11, 2010. The call will be recorded and archived until Thursday, March 25, 2010, and can be replayed by calling (877) 344-7529 and entering ID# 438319. The conference call will also be Webcast and available on the Company’s website atwww.cambiumlearning.com.
About Cambium Learning Group, Inc.
Cambium Learning Group, Inc. (NASDAQ:ABCD) is based in Dallas, Texas, and operates three business units: Voyager, a comprehensive intervention business; Sopris, a supplemental solutions business; and Cambium Learning Technologies, which includes ExploreLearning, IntelliTools, Kurzweil and Learning A-Z. Through its core divisions, Cambium Learning Group, Inc. provides research-based education solutions for students in Pre-K through 12th grade, including intervention curricula, educational technologies and services primarily focused on serving the needs of the nation’s most challenged learners and those realizing their full potential. The company’s website iswww.cambiumlearning.com.
Media and Investor Contact:
Shannan Overbeck
Cambium Learning Group, Inc.
214.932.9476
shannan.overbeck@cambiumlearning.com
Shannan Overbeck
Cambium Learning Group, Inc.
214.932.9476
shannan.overbeck@cambiumlearning.com
Forward Looking Statements
Some of the statements contained herein constitute forward-looking statements. These statements relate to future events, including the future financial performance of Cambium Learning Group, Inc., and involve known and unknown risks, uncertainties and other factors that may cause the markets, actual results, levels of activity, performance or achievements of Cambium Learning Group, Inc. to be materially different from any actual future results, levels of activity, performance or achievements. These risks and other factors you should consider include, but are not limited to, the ability to successfully attract and retain a broad customer base for current and future products, changes in customer demands or industry standards, success of ongoing product development, maintaining acceptable margins, the ability to control costs, K-12 enrollment and demographic trends, the level of educational and education technology funding, the impact of federal, state and local regulatory requirements on the business of the company, the loss of key personnel, the impact of competition and the risk that competitors will seek to capitalize on the risks and uncertainties confronting the new combined company, the uncertainty of general economic conditions and financial market performance, and those other risks and uncertainties listed under the heading “RISK FACTORS” in Cambium Learning Group, Inc.’s Registration Statement on Form S-4 (File No. 333-161075), as amended In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “projects,” “intends,” “prospects,” or “priorities,” or the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Cambium Learning Group, Inc. does not assume or undertake any obligation to update the information contained in this press release, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise.
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Cambium Learning Group, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Unaudited
Consolidated Statements of Operations
(In thousands, except per share data)
Unaudited
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net Sales: | ||||||||||||||||
Product sales | $ | 20,054 | $ | 15,561 | $ | 90,385 | $ | 89,207 | ||||||||
Service revenues | 3,253 | 2,116 | 10,663 | 10,524 | ||||||||||||
Total net sales | 23,307 | 17,677 | 101,048 | 99,731 | ||||||||||||
Cost of sales: | ||||||||||||||||
Cost of product sales | 3,967 | 3,896 | 21,103 | 22,594 | ||||||||||||
Cost of service revenues | 2,109 | 1,816 | 7,257 | 7,463 | ||||||||||||
Amortization expense | 5,020 | 4,023 | 17,527 | 15,966 | ||||||||||||
Total cost of sales | 11,096 | 9,735 | 45,887 | 46,023 | ||||||||||||
Research and development expense | 1,494 | 1,490 | 5,611 | 6,416 | ||||||||||||
Sales and marketing expense | 7,484 | 5,090 | 23,368 | 24,600 | ||||||||||||
General and administrative expense | 17,120 | 3,697 | 30,519 | 16,156 | ||||||||||||
Depreciation and amortization expense | 2,621 | 2,875 | 9,723 | 11,453 | ||||||||||||
Goodwill impairment | — | 75,966 | 9,105 | 75,966 | ||||||||||||
Embezzlement and related expense (recoveries) | 324 | (1,430 | ) | 129 | 7,254 | |||||||||||
Loss before interest, other income (expense) and income taxes | (16,832 | ) | (79,746 | ) | (23,294 | ) | (88,137 | ) | ||||||||
Net interest income (expense): | ||||||||||||||||
Interest income | 4 | 6 | 10 | 86 | ||||||||||||
Interest expense | (4,949 | ) | (4,910 | ) | (19,487 | ) | (18,520 | ) | ||||||||
Net interest income (expense) | (4,945 | ) | (4,904 | ) | (19,477 | ) | (18,434 | ) | ||||||||
Gain from settlement with previous stockholders | — | — | — | 30,202 | ||||||||||||
Loss on extinguishment of debt | — | — | — | (5,632 | ) | |||||||||||
Other income (expense), net | (339 | ) | (524 | ) | (698 | ) | (981 | ) | ||||||||
Loss before income taxes | (22,116 | ) | (85,174 | ) | (43,469 | ) | (82,982 | ) | ||||||||
Income tax benefit | 2,660 | 2,649 | 7,704 | 13,422 | ||||||||||||
Net loss | $ | (19,456 | ) | $ | (82,525 | ) | $ | (35,765 | ) | $ | (69,560 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic net loss per common share | $ | (0.74 | ) | $ | (4.03 | ) | $ | (1.63 | ) | $ | (3.39 | ) | ||||
Diluted net loss per common share | $ | (0.74 | ) | $ | (4.03 | ) | $ | (1.63 | ) | $ | (3.39 | ) | ||||
Average number of common shares and equivalents outstanding: | ||||||||||||||||
Basic | 26,334 | 20,493 | 21,965 | 20,493 | ||||||||||||
Diluted | 26,334 | 20,493 | 21,965 | 20,493 |
Cambium Learning Group, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
Unaudited
Consolidated Balance Sheets
(In thousands, except per share data)
Unaudited
2009 | 2008 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 13,345 | $ | 2,418 | ||||
Accounts receivable, net | 19,127 | 10,550 | ||||||
Inventory | 19,812 | 12,850 | ||||||
Deferred tax assets | 6,267 | 4,618 | ||||||
Restricted assets, current | 9,755 | — | ||||||
Other current assets | 6,010 | 1,181 | ||||||
Total current assets | 74,316 | 31,617 | ||||||
Property, equipment and software at cost | 24,951 | 20,769 | ||||||
Accumulated depreciation and amortization | (4,294 | ) | (2,459 | ) | ||||
Net property, equipment and software | 20,657 | 18,310 | ||||||
Goodwill | 151,915 | 116,373 | ||||||
Acquired curriculum and technology intangibles, net | 44,695 | 3,847 | ||||||
Acquired publishing rights, net | 52,312 | 66,261 | ||||||
Other intangible assets, net | 28,133 | 28,488 | ||||||
Pre-publication costs, net | 5,464 | 3,838 | ||||||
Restricted assets, less current portion | 14,930 | — | ||||||
Other assets | 1,419 | 1,743 | ||||||
Total assets | $ | 393,841 | $ | 270,477 | ||||
LIABILITIES AND STOCKHOLDERS’/MEMBERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Notes payable — line of credit | $ | 5,000 | $ | 5,000 | ||||
Current portion of long-term debt | 1,280 | 1,280 | ||||||
Current portion of capital lease obligations | 443 | 375 | ||||||
Accounts payable | 2,308 | 3,035 | ||||||
Contingent value rights, current | 3,950 | — | ||||||
Accrued expenses | 22,928 | 5,190 | ||||||
Deferred revenue, current | 21,465 | 1,480 | ||||||
Total current liabilities | 57,374 | 16,360 | ||||||
Long-term liabilities: | ||||||||
Long-term debt, less current portion | 150,487 | 153,787 | ||||||
Capital lease obligations, less current portion | 12,695 | 12,960 | ||||||
Deferred revenue, less current portion | 2,716 | 430 | ||||||
Contingent value rights, less current portion | 5,649 | — | ||||||
Other liabilities | 25,148 | 18,736 | ||||||
Total long-term liabilities | 196,695 | 185,913 | ||||||
Stockholders’ and members’ equity: | ||||||||
Preferred stock ($.001 par value, 15,000 shares authorized, zero shares issued and outstanding at December 31, 2009) | — | — | ||||||
Common stock ($.001 par value, 150,000 shares authorized, 43,859 shares issued and outstanding at December 31, 2009) | 44 | — | ||||||
Capital surplus | 258,789 | — | ||||||
Members’ interest | — | 151,707 | ||||||
Accumulated deficit | (119,268 | ) | (83,503 | ) | ||||
Other comprehensive income (loss): | ||||||||
Pension and postretirement plans | 206 | — | ||||||
Net unrealized gain on securities | 1 | — | ||||||
Accumulated other comprehensive income (loss) | 207 | — | ||||||
Total stockholders’ and members’ equity | 139,772 | 68,204 | ||||||
Total liabilities and stockholders’/members’ equity | $ | 393,841 | $ | 270,477 | ||||
Cambium Learning Group, Inc.
Reconciliation of Adjusted Sales and Adjusted EBITDA
Year Ended December 31, 2009
(In thousands)
Unaudited
Reconciliation of Adjusted Sales and Adjusted EBITDA
Year Ended December 31, 2009
(In thousands)
Unaudited
Voyager | Non-recurring or non-operating costs excluded from Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||||||||||
Pre-Merger | Total | Legacy | Stock-based | Embezzlement | Adj Related | |||||||||||||||||||||||||||||||||||||||
Total | Results | Combined | Transaction | Integration | Voyager | Comp | and | to Purchase | Goodwill | Adjusted | ||||||||||||||||||||||||||||||||||
GAAP | (342 days) | Results | Costs | Costs | Corporate | Expense | Related | Accounting | Impairment | EBITDA | ||||||||||||||||||||||||||||||||||
Voyager | $ | 52,923 | $ | 77,758 | $ | 130,681 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 509 | $ | — | $ | 131,190 | ||||||||||||||||||||||
Sopris | 25,185 | — | 25,185 | — | — | — | — | — | — | — | 25,185 | |||||||||||||||||||||||||||||||||
Cambium Learning Technologies | 22,940 | 20,970 | 43,910 | — | — | — | — | — | 883 | — | 44,793 | |||||||||||||||||||||||||||||||||
Total net sales | 101,048 | 98,728 | 199,776 | — | — | — | — | — | 1,392 | — | 201,168 | |||||||||||||||||||||||||||||||||
Cost of sales | 28,360 | 32,714 | 61,074 | — | (71 | ) | — | — | — | 148 | — | 61,151 | ||||||||||||||||||||||||||||||||
Cost of sales — amortization | 17,527 | 16,220 | 33,747 | — | — | — | — | — | — | — | 33,747 | |||||||||||||||||||||||||||||||||
Total cost of sales | 45,887 | 48,934 | 94,821 | — | (71 | ) | — | — | — | 148 | — | 94,898 | ||||||||||||||||||||||||||||||||
Research and development expense | 5,611 | 4,331 | 9,942 | — | — | — | — | — | — | — | 9,942 | |||||||||||||||||||||||||||||||||
Sales & Marketing expenses | 23,368 | 28,753 | 52,121 | — | (155 | ) | — | — | — | 108 | — | 52,074 | ||||||||||||||||||||||||||||||||
General and administrative expense | 30,519 | 24,740 | 55,259 | (23,507 | ) | (2,027 | ) | (2,304 | ) | (216 | ) | — | — | — | 27,205 | |||||||||||||||||||||||||||||
Depreciation and Amortization | 9,723 | 2,081 | 11,804 | — | — | — | — | — | — | — | 11,804 | |||||||||||||||||||||||||||||||||
Embezzlement and related | 129 | — | 129 | — | — | — | — | (129 | ) | — | — | — | ||||||||||||||||||||||||||||||||
Goodwill Impairment | 9,105 | 27,175 | 36,280 | — | — | — | — | — | — | (36,280 | ) | — | ||||||||||||||||||||||||||||||||
Income (loss) from operations | (23,294 | ) | (37,286 | ) | (60,580 | ) | 23,507 | 2,253 | 2,304 | 216 | 129 | 1,136 | 36,280 | 5,245 | ||||||||||||||||||||||||||||||
Interest income | 10 | 70 | 80 | — | — | — | — | — | — | — | 80 | |||||||||||||||||||||||||||||||||
Interest expense | (19,487 | ) | (628 | ) | (20,115 | ) | — | — | — | — | — | — | — | (20,115 | ) | |||||||||||||||||||||||||||||
Other income (expense) | (698 | ) | 3,279 | 2,581 | — | — | — | — | — | — | — | 2,581 | ||||||||||||||||||||||||||||||||
Income tax benefit | 7,704 | 190 | 7,894 | — | — | — | — | — | — | — | 7,894 | |||||||||||||||||||||||||||||||||
Net income (loss) | (35,765 | ) | (34,375 | ) | (70,140 | ) | 23,507 | 2,253 | 2,304 | 216 | 129 | 1,136 | 36,280 | (4,315 | ) | |||||||||||||||||||||||||||||
Normal EBITDA Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 27,250 | 18,301 | 45,551 | — | — | — | — | — | — | — | 45,551 | |||||||||||||||||||||||||||||||||
Interest income | (10 | ) | (70 | ) | (80 | ) | — | — | — | — | — | — | — | (80 | ) | |||||||||||||||||||||||||||||
Interest expense | 19,487 | 628 | 20,115 | — | — | — | — | — | — | — | 20,115 | |||||||||||||||||||||||||||||||||
Other income | 698 | (3,279 | ) | (2,581 | ) | — | — | — | — | — | — | — | (2,581 | ) | ||||||||||||||||||||||||||||||
Income tax | (7,704 | ) | (190 | ) | (7,894 | ) | — | — | — | — | — | — | — | (7,894 | ) | |||||||||||||||||||||||||||||
EBITDA | $ | 3,956 | $ | (18,985 | ) | $ | (15,029 | ) | $ | 23,507 | $ | 2,253 | $ | 2,304 | $ | 216 | $ | 129 | $ | 1,136 | $ | 36,280 | $ | 50,796 | ||||||||||||||||||||
Cambium Learning Group, Inc.
Reconciliation of Adjusted Sales and Adjusted EBITDA
Year Ended December 31, 2008
(In thousands)
Unaudited
Reconciliation of Adjusted Sales and Adjusted EBITDA
Year Ended December 31, 2008
(In thousands)
Unaudited
Voyager | Non-recurring or non-operating costs excluded from Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||||||||||
GAAP | Pre-Merger | Total | Legacy | Stock-based | Embezzlement | Lease | ||||||||||||||||||||||||||||||||||||||
Results | Results | Combined | Transaction | Integration | Voyager | Comp | and | Termination | Goodwill | Adjusted | ||||||||||||||||||||||||||||||||||
Cambium | (FY 2008) | Results | Costs | Costs | Corporate | Expense | Related | Costs | Impairment | EBITDA | ||||||||||||||||||||||||||||||||||
Voyager | $ | 48,348 | $ | 80,743 | $ | 129,091 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 129,091 | ||||||||||||||||||||||
Sopris | 29,712 | — | 29,712 | — | — | — | — | — | — | — | 29,712 | |||||||||||||||||||||||||||||||||
Cambium Learning Technologies | 21,671 | 17,788 | 39,459 | — | — | — | — | — | — | — | 39,459 | |||||||||||||||||||||||||||||||||
Total net sales | 99,731 | 98,531 | 198,262 | — | — | — | — | — | — | — | 198,262 | |||||||||||||||||||||||||||||||||
Cost of sales | 30,057 | 35,939 | 65,996 | — | — | — | — | — | — | — | 65,996 | |||||||||||||||||||||||||||||||||
Cost of sales — amortization | 15,966 | 18,497 | 34,463 | — | — | — | — | — | — | — | 34,463 | |||||||||||||||||||||||||||||||||
Total cost of sales | 46,023 | 54,436 | 100,459 | — | — | — | — | — | — | — | 100,459 | |||||||||||||||||||||||||||||||||
Research and development expense | 6,416 | 5,302 | 11,718 | — | — | — | — | — | — | — | 11,718 | |||||||||||||||||||||||||||||||||
Sales & Marketing expenses | 24,600 | 33,734 | 58,334 | — | — | — | — | — | — | — | 58,334 | |||||||||||||||||||||||||||||||||
General and administrative expense | 16,156 | 30,660 | 46,816 | (26 | ) | (287 | ) | (18,069 | ) | (878 | ) | — | — | — | 27,556 | |||||||||||||||||||||||||||||
Depreciation and Amortization | 11,453 | 2,861 | 14,314 | — | — | — | — | — | — | — | 14,314 | |||||||||||||||||||||||||||||||||
Embezzlement and related | 7,254 | — | 7,254 | — | — | — | — | (7,254 | ) | — | — | — | ||||||||||||||||||||||||||||||||
Goodwill Impairment | 75,966 | 43,141 | 119,107 | — | — | — | — | — | — | (119,107 | ) | — | ||||||||||||||||||||||||||||||||
Lease termination costs | — | 11,673 | 11,673 | — | — | — | — | — | (11,673 | ) | — | — | ||||||||||||||||||||||||||||||||
Income (loss) from operations | (88,137 | ) | (83,276 | ) | (171,413 | ) | 26 | 287 | 18,069 | 878 | 7,254 | 11,673 | 119,107 | (14,119 | ) | |||||||||||||||||||||||||||||
Interest income | 86 | 1,485 | 1,571 | — | — | — | — | — | — | — | 1,571 | |||||||||||||||||||||||||||||||||
Interest expense | (18,520 | ) | (510 | ) | (19,030 | ) | — | — | — | — | — | — | — | (19,030 | ) | |||||||||||||||||||||||||||||
Other income (expense) | 23,589 | (363 | ) | 23,226 | — | — | — | — | — | — | — | 23,226 | ||||||||||||||||||||||||||||||||
Income tax benefit | 13,422 | 1,160 | 14,582 | — | — | — | — | — | — | — | 14,582 | |||||||||||||||||||||||||||||||||
Net loss (income) | (69,560 | ) | (81,504 | ) | (151,064 | ) | 26 | 287 | 18,069 | 878 | 7,254 | 11,673 | 119,107 | 6,230 | ||||||||||||||||||||||||||||||
Normal EBITDA Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 27,419 | 21,358 | 48,777 | — | — | — | — | — | — | — | 48,777 | |||||||||||||||||||||||||||||||||
Interest income | (86 | ) | (1,485 | ) | (1,571 | ) | — | — | — | — | — | — | — | (1,571 | ) | |||||||||||||||||||||||||||||
Interest expense | 18,520 | 510 | 19,030 | — | — | — | — | — | — | — | 19,030 | |||||||||||||||||||||||||||||||||
Other income | (23,589 | ) | 363 | (23,226 | ) | — | — | — | — | — | — | — | (23,226 | ) | ||||||||||||||||||||||||||||||
Income tax | (13,422 | ) | (1,160 | ) | (14,582 | ) | — | — | — | — | — | — | — | (14,582 | ) | |||||||||||||||||||||||||||||
EBITDA | $ | (60,718 | ) | $ | (61,918 | ) | $ | (122,636 | ) | $ | 26 | $ | 287 | $ | 18,069 | $ | 878 | $ | 7,254 | $ | 11,673 | $ | 119,107 | $ | 34,658 | |||||||||||||||||||