Table of Contents
Washington, D.C. 20549
OF THE SECURITIES EXCHANGE ACT OF 1934
(Exact name of Registrant as specified in its charter)
Delaware | 36-3660532 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
10801 Nesbitt Avenue South, Bloomington, MN | 55437 | ||||
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: | (952)832-1000 | |
Not Applicable |
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common stock, $.01 par value | 8,348,630 shares | |
Class | Outstanding as of February 28, 2001 |
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Page | ||||||
Number | ||||||
PART I | FINANCIAL INFORMATION | |||||
Item 1. | Condensed Consolidated Financial Statements (Unaudited): | |||||
Condensed Consolidated Statements of Earnings for the | ||||||
Three Months Ended January 31, 2001 and 2000 | 3 | |||||
Condensed Consolidated Balance Sheets as of | ||||||
January 31, 2001 and October 31, 2000 | 4 | |||||
Condensed Consolidated Statements of Cash Flows for the | ||||||
Three Months Ended January 31, 2001 and 2000 | 5 | |||||
Notes to Condensed Consolidated Financial Statements | 6 | |||||
Item 2. | Management’s Discussion and Analysis of | |||||
Results of Operations and Financial Condition | 10 | |||||
PART II. | OTHER INFORMATION | |||||
Item 1. | Legal Proceedings | 15 | ||||
Item 2. | Changes in Securities | 15 | ||||
Item 3. | Defaults Upon Senior Securities | 15 | ||||
Item 4. | Submission of Matters to a Vote of Security Holders | 15 | ||||
Item 5. | Other Information | 15 | ||||
Item 6. | Exhibits and Reports on Form 8-K | 15 | ||||
SIGNATURES | 17 |
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Three Months Ended | |||||||||||
January 31, | |||||||||||
2001 | 2000 | ||||||||||
Revenues | $ | 9,754 | $ | 7,525 | |||||||
Cost of revenues | 1,479 | 1,357 | |||||||||
Gross profit | 8,275 | 6,168 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 8,945 | 6,744 | |||||||||
Product development and customer support | 1,787 | 1,549 | |||||||||
Special charges | 1,260 | — | |||||||||
Total operating expenses | 11,992 | 8,293 | |||||||||
Operating loss | (3,717 | ) | (2,125 | ) | |||||||
Interest expense | 84 | 232 | |||||||||
Other expense, net | 53 | 34 | |||||||||
Loss before income taxes | (3,854 | ) | (2,391 | ) | |||||||
Income tax benefit | (1,503 | ) | (897 | ) | |||||||
Net loss | (2,351 | ) | (1,494 | ) | |||||||
Preferred stock accretion | — | (129 | ) | ||||||||
Net loss available to common stockholders | $ | (2,351 | ) | $ | (1,623 | ) | |||||
Loss per share: | |||||||||||
Basic and diluted | $ | (0.28 | ) | $ | (0.23 | ) | |||||
Weighted average common shares outstanding: | |||||||||||
Basic and diluted | 8,270 | 6,933 | |||||||||
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January 31, | October 31, | |||||||||||
2001 | 2000 | |||||||||||
(Unaudited) | (See Note) | |||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 2,959 | $ | 6,415 | ||||||||
Accounts receivable, less allowances of $1,902 | ||||||||||||
and $2,308, respectively | 19,513 | 21,829 | ||||||||||
Inventories | 539 | 615 | ||||||||||
Prepaid expenses and other current assets | 1,005 | 627 | ||||||||||
Deferred income taxes | 2,315 | 2,315 | ||||||||||
Total current assets | 26,331 | 31,801 | ||||||||||
Equipment and leasehold improvements, less accumulated | ||||||||||||
depreciation of $3,046 and $2,882, respectively | 2,245 | 1,495 | ||||||||||
Product development costs, less accumulated amortization | ||||||||||||
of $9,565 and $9,072, respectively | 8,333 | 7,921 | ||||||||||
Deferred income taxes, net | 5,732 | 4,229 | ||||||||||
Other assets | 5,111 | 5,144 | ||||||||||
Total assets | $ | 47,752 | $ | 50,590 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt | $ | 140 | $ | 600 | ||||||||
Accounts payable | 1,322 | 1,502 | ||||||||||
Accrued employee salaries and benefits | 2,460 | 4,087 | ||||||||||
Accrued liabilities | 1,913 | 2,129 | ||||||||||
Deferred revenue | 5,532 | 5,980 | ||||||||||
Total current liabilities | 11,367 | 14,298 | ||||||||||
Long-term debt | 529 | — | ||||||||||
Deferred revenue | 778 | 287 | ||||||||||
Other liabilities | 142 | 160 | ||||||||||
Total liabilities | 12,816 | 14,745 | ||||||||||
Stockholders’ equity: | ||||||||||||
Common stock, $.01 par value, 25,000 shares | ||||||||||||
authorized; 8,466 shares issued and 8,343 shares | ||||||||||||
outstanding at January 31, 2001; 8,348 shares issued | ||||||||||||
and 8,225 shares outstanding at October 31, 2000 | 83 | 82 | ||||||||||
Paid-in capital | 37,013 | 35,526 | ||||||||||
Treasury stock at cost, 123 shares | (1,209 | ) | (1,209 | ) | ||||||||
Retained earnings (accumulated deficit) | (70 | ) | 2,281 | |||||||||
Accumulated other comprehensive loss | (881 | ) | (835 | ) | ||||||||
Total stockholders’ equity | 34,936 | 35,845 | ||||||||||
Total liabilities and stockholders’ equity | $ | 47,752 | $ | 50,590 | ||||||||
Note: The balance sheet at October 31, 2000 has been derived from the audited financial statements at that date. See Notes to Condensed Consolidated Financial Statements. |
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Three Months Ended | ||||||||||||
January 31, | ||||||||||||
2001 | 2000 | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (2,351 | ) | $ | (1,494 | ) | ||||||
Adjustments to reconcile net loss to net cash provided by | ||||||||||||
(used in) operating activities: | ||||||||||||
Deferred income taxes | (1,503 | ) | (897 | ) | ||||||||
Depreciation and amortization | 946 | 700 | ||||||||||
Provision for doubtful accounts | 250 | 300 | ||||||||||
Stock-based compensation | 516 | 32 | ||||||||||
Loss on disposal of fixed assets | 17 | 2 | ||||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | 2,066 | 4,017 | ||||||||||
Inventories | 76 | (58 | ) | |||||||||
Prepaid expenses and other current and noncurrent assets | (553 | ) | 58 | |||||||||
Accounts payable | (180 | ) | 44 | |||||||||
Accrued liabilities, accrued employee salaries and benefits | ||||||||||||
and other liabilities | (1,863 | ) | (1,254 | ) | ||||||||
Deferred revenue | 43 | (138 | ) | |||||||||
Total adjustments | (185 | ) | 2,806 | |||||||||
Net cash provided by (used in) operating activities | (2,536 | ) | 1,312 | |||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (306 | ) | (229 | ) | ||||||||
Capitalization of product development costs | (885 | ) | (673 | ) | ||||||||
Net cash used in investing activities | (1,191 | ) | (902 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Payment of long-term debt | (52 | ) | — | |||||||||
Net repayments of short-term borrowings | — | (202 | ) | |||||||||
Net proceeds from issuance of common stock | 372 | 19 | ||||||||||
Net cash provided by (used in) financing activities | 320 | (183 | ) | |||||||||
Effect of foreign currency on cash | (49 | ) | (17 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | (3,456 | ) | 210 | |||||||||
Cash and cash equivalents at beginning of period | 6,415 | 63 | ||||||||||
Cash and cash equivalents at end of period | $ | 2,959 | $ | 273 | ||||||||
Cash paid for interest | $ | 81 | $ | 279 | ||||||||
Cash paid for income taxes | $ | 191 | $ | 71 | ||||||||
Non-cash financing activities: | ||||||||||||
Capital lease obligations incurred | $ | 722 | $ | — | ||||||||
Debt converted to common stock | $ | 600 | $ | — | ||||||||
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1. | NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of Business
PLATO Learning, Inc. and its subsidiaries (the “Company”) provide computer-based and e-learning instruction and related services, offering basic to advanced level courseware in reading, writing, math, science, and life and job skills. The Company’s PLATO® Learning System and PLATO® Web Learning Network provide more than 2,000 hours of objective-based, problem solving courseware and include assessment, alignment, and management tools to facilitate the learning process. PLATO courseware is delivered via networks, CD-ROM, private intranets, and the Internet. In addition, single topic PLATO courseware is available through the Company’s e-commerce Web site and distributors. PLATO courseware is marketed to middle and high schools, colleges, job training programs, correctional institutions, military education programs, corporations and consumers.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2000.
Certain reclassifications of previously reported amounts have been made to conform to the current year presentation.
Revenue Recognition
Revenue is recognized in accordance with the provisions of Statement of Position No. 97-2, “Software Revenue Recognition”, as amended and modified. Revenue from the sale of courseware licenses, computer hardware and related services is recognized upon meeting the following criteria: (i) execution of a written customer order, (ii) delivery of the courseware, hardware and related services, (iii) the license fee is fixed or determinable and (iv) collectibility of the proceeds is probable. For software arrangements that include more than one element, the Company allocates the total arrangement fee among each deliverable based on the relative fair value of each deliverable determined on vendor-specific objective evidence. Upon delivery, future service costs, if any, are accrued. Future service costs represent the Company’s problem
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(Dollars in thousands, except per share data)
1. | NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued |
Revenue Recognition, Continued
resolution and support “hotline” service for a one-year period. Service revenue includes software support, which is deferred and recognized ratably over the support period, and revenue from installation and training services, which is recognized as services are performed. Installation and training services are customarily billed at a fixed daily rate. Deferred revenue represents the portion of billings made or payments received in advance of services being performed or products being delivered.
In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (“SAB 101”), “Revenue Recognition in Financial Statements”. SAB 101 provides guidance for revenue recognition under various circumstances. The accounting and disclosures prescribed by SAB 101 will be effective in the fourth quarter of fiscal year 2001, and retroactive to the beginning of that fiscal year. The Company is reviewing the requirements of SAB 101 and has not yet determined the impact on its consolidated financial statements.
Product Development, Enhancement and Maintenance Costs
Costs incurred in the development, enhancement and routine maintenance of the Company’s current generation courseware products are expensed as incurred. Costs incurred in establishing the technological feasibility of new courseware products are expensed as incurred. Once technological feasibility has been established, costs incurred in the development of new generation courseware products are capitalized.
Capitalized costs are amortized to product development and customer support expense using the straight-line method over the estimated useful life of the new courseware products, which is generally three years. Amortization begins when the product is available for general release to customers. Unamortized costs determined to be in excess of the net realizable value of the product, if any, are expensed at the date of such determination.
Earnings (Loss) Per Share
Basic earnings (loss) per share is calculated by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) available to common stockholders, adjusted to add back any convertible preferred stock accretion and convertible debt interest (if those securities are dilutive), by the weighted average number of common and, where dilutive, potential common shares outstanding during the period. Potential common shares include options, warrants and convertible securities.
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(Dollars in thousands, except per share data)
2. | ACCOUNTS RECEIVABLE |
Accounts receivable include installment receivables of $9,845 and $13,040 at January 31, 2001 and October 31, 2000, respectively. Installment receivables to be billed beyond one year from the balance sheet date were $379 and $193 at January 31, 2001 and October 31, 2000, respectively, and are included in other assets on the consolidated balance sheets.
3. | DEBT |
Revolving Loan
At January 31, 2001, there were no borrowings outstanding under the Company’s revolving loan agreement. The unused borrowing capacity was approximately $11,700.
10% Subordinated Convertible Debentures
In November 2000, the remaining $600 of debentures were converted into approximately 66,000 shares of the Company’s common stock.
Capital Lease Obligations
At January 31, 2001, the Company’s debt consisted of various capital lease obligations for equipment. Amounts due in the next twelve months under these leases are classified as a current liability in the consolidated balance sheets.
4. | STOCKHOLDERS’ EQUITY |
In November 2000, the remaining $600 of 10% subordinated convertible debentures were converted by the holders into approximately 66,000 shares of the Company’s common stock.
In January 2001, the Company issued approximately 7,700 shares of common stock pursuant to the adjustment warrants issued in connection with the private placement of common stock in July 2000.
The Company issued approximately 42,000 shares of common stock for the exercise of outstanding stock options, and approximately 3,400 shares of common stock for the exercise of outstanding stock warrants during the three months ended January 31, 2001.
Stock-based compensation for the three months ended January 31, 2001 includes non-cash charges of $489 for the accelerated vesting of stock options related to the Company’s succession plans and $27 for restricted stock compensation.
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(Dollars in thousands, except per share data)
5. | EARNINGS (LOSS) PER SHARE |
Basic and diluted loss per share is the same for the three months ended January 31, 2001 and for the three months ended January 31, 2000. The Company incurred a net loss for all periods presented and potential common shares are antidilutive and excluded from the calculation of diluted loss per share. The number of potential common shares excluded from the diluted loss per share calculations were approximately 579,000 and 897,000 for the three months ended January 31, 2001 and 2000, respectively.
6. | SPECIAL CHARGES |
The consolidated statement of earnings for the three months ended January 31, 2001 includes special charges of $1,260. These charges represent costs associated with the retirement of William R. Roach, the Company’s founder and former chief executive officer, and include non-cash amounts of $463 for the accelerated vesting of stock options (see Note 4).
7. | SUBSEQUENT EVENT |
On January 31, 2001, the Company entered into an Agreement and Plan of Merger with Wasatch Interactive Learning Corporation (“Wasatch”), a provider of multimedia courseware for K-8 education. The Company plans to issue $12 million of its common stock to acquire Wasatch subject to the approval of Wasatch stockholders in the second quarter of fiscal 2001. The acquisition will be accounted for using the purchase method of accounting. Accordingly, the purchase price will be allocated to the estimated fair value of assets acquired, liabilities assumed, identifiable intangible assets and goodwill.
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AND FINANCIAL CONDITION
(Dollars in thousands, except per share data)
RESULTS OF OPERATIONS
Overview
The Company enhances the learning process by providing computer-based and e-learning instruction and related services, and by offering basic to advanced level courseware in reading, writing, math, science and life and job skills. The Company’s PLATO® Learning System and PLATO® Web Learning Network provide more than 2,000 hours of objective-based, problem solving courseware and include assessment, alignment and management tools to facilitate the learning process. PLATO courseware is delivered via networks, CD-ROM, private intranets and the Internet. In addition, single topic PLATO courseware is available through the Company’s e-commerce web site and a growing number of distributors. PLATO courseware is marketed to middle and high schools, colleges, job training programs, correctional institutions, military education programs, corporations and consumers.
Operating Results as a Percentage of Revenue
Three Months Ended | ||||||||
January 31, | ||||||||
2001 | 2000 | |||||||
Revenues | 100.0 | % | 100.0 | % | ||||
Cost of revenues | 15.2 | 18.0 | ||||||
Gross profit | 84.8 | 82.0 | ||||||
Selling, general and administrative expense | 91.7 | 89.6 | ||||||
Product development and customer support expense | 18.3 | 20.6 | ||||||
Special charges | 12.9 | — | ||||||
Total operating expenses | 122.9 | 110.2 | ||||||
Operating loss | (38.1 | ) | (28.2 | ) | ||||
Interest expense | 0.9 | 3.1 | ||||||
Other expense, net | 0.5 | 0.5 | ||||||
Loss before income taxes | (39.5 | ) | (31.8 | ) | ||||
Income tax benefit | (15.4 | ) | (11.9 | ) | ||||
Net loss | (24.1 | )% | (19.9 | )% | ||||
Revenues
The following table highlights revenues by product line:
Three Months Ended | |||||||||
January 31, | |||||||||
2001 | 2000 | ||||||||
Courseware and professional services | $ | 8,818 | $ | 6,495 | |||||
Hardware, third-party courseware and other | 936 | 1,030 | |||||||
Total revenues | $ | 9,754 | $ | 7,525 | |||||
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AND FINANCIAL CONDITION
(Dollars in thousands, except per share data)
RESULTS OF OPERATIONS, Continued
Revenues,Continued
Courseware and professional services revenue, the Company’s core business, increased $2,323 or 36% to $8,818 for the three months ended January 31, 2001 as compared to $6,495 for the same period in 2000. The Company continued to experience increased acceptance of its products and services in its various markets. This revenue growth was achieved primarily through increased sales volume to both new and existing customers. Total revenues were $9,754 for the three months ended January 31, 2001, an increase of $2,229 or 30%, as compared to $7,525 for the same period in 2000.
Gross Profit
Gross profit increased $2,107 or 34% to $8,275 for the three months ended January 31, 2001 as compared to $6,168 for the same period in 2000. This increase was principally due to increased courseware and professional services revenue. Gross margin was 85% for the three months ended January 31, 2001 as compared to 82% for the same period in 2000.
Selling, General and Administrative Expense
Selling, general and administrative expense increased $2,201 or 33% to $8,945 for the three months ended January 31, 2001 as compared to $6,744 for the same period in 2000. Sales and marketing expenses increased $1,625 and general and administrative expenses increased $280 due primarily to infrastructure expansion of the sales and marketing organization. Commissions increased $153 due to the growth in revenue. Goodwill amortization of $208 from the CyberEd acquisition in July 2000 also contributed to the increase. As a percentage of revenue, total selling, general and administrative expense increased to 92% for the three months ended January 31, 2001 from 90% for the same period in 2000.
Product Development and Customer Support Expense
Product development and customer support expense increased $238 or 15% to $1,787 for the three months ended January 31, 2001 as compared to $1,549 for the same period in 2000. Product development expense increased $72, primarily due to increased spending associated with enhanced reading products, simulated test products and the PLATO Web Learning Network, that was partially offset by decreased amortization because certain previously capitalized costs were fully amortized by the end of fiscal year 2000. Amortization expense is expected to increase beginning in the second quarter of 2001 because certain projects will be released to the market. Customer support expense increased $166 primarily as a result of the Company’s expanding customer base. As a percentage of revenue, total product development and customer support expense decreased to 18% for the three months ended January 31, 2001 from 21% for the same period in 2000.
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AND FINANCIAL CONDITION
(Dollars in thousands, except per share data)
RESULTS OF OPERATIONS, Continued
Special Charges
Special charges for the three months ended January 31, 2001 represent costs associated with the retirement of William R. Roach, the Company’s founder and former chief executive officer and include non-cash amounts of $463 for the accelerated vesting of stock options (see Notes 4 and 6 to Consolidated Financial Statements).
Operating Loss
Operating loss for the three months ended January 31, 2001 was $3,717 as compared to $2,125 for the same period in 2000. This change in operating results is due principally to the special charges and increased selling, general and administrative, and customer support expenses, partially offset by the increased courseware and professional services revenue in 2001.
Interest Expense
Interest expense decreased $148 to $84 for the three months ended January 31, 2001 from $232 for the same period in 2000. This was the result of the decreased level of bank borrowings compared to 2000 and the conversion of the 10% subordinated convertible debentures in November 2000 (see Notes 3 and 4 to Consolidated Financial Statements).
Income Taxes
An income tax benefit of $1,503 was recorded for the three months ended January 31, 2001 using the Company’s estimated fiscal year 2001 effective income tax rate of 39%.
FINANCIAL CONDITION
Liquidity and Capital Resources
At January 31, 2001, the Company’s principal sources of liquidity included cash and cash equivalents of $2,959, net accounts receivable of $19,513, and its line of credit. The Company had total installment receivables of $10,224 at January 31, 2001, of which $9,845 are to be billed within one year and are included in net accounts receivable. Working capital was $14,964 at January 31, 2001, a decrease of $2,539 from October 31, 2000, due primarily to decreased cash and cash equivalents, accounts receivable and accrued expenses.
Net cash used in the Company’s operating activities was $2,536 for the three months ended January 31, 2001 as compared to net cash provided by operating activities of $1,312 for the same period in 2000. Cash flows from operations were used principally to fund the Company’s working capital requirements.
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AND FINANCIAL CONDITION
(Dollars in thousands, except per share data)
FINANCIAL CONDITION, Continued
Liquidity and Capital Resources,Continued
Net cash used in the Company’s investing activities was $1,191 for the three months ended January 31, 2001 as compared to $902 for the same period in 2000. Net cash used included $306 for capital expenditures and $885 for capitalized product development costs.
Net cash provided by the Company’s financing activities was $320 for the three months ended January 31, 2001, primarily from the exercise of stock options, as compared to net cash used of $183 for the same period in 2000. The Company has resources available under its revolving loan agreement to provide borrowings of up to $15 million, as determined by the available borrowing base. At January 31, 2001, there were no borrowings outstanding and the unused borrowing capacity was approximately $11,700.
On January 31, 2001, the Company entered into an Agreement and Plan of Merger with Wasatch Interactive Learning Corporation (“Wasatch”), a provider of multimedia courseware for K-8 education. The Company plans to issue $12 million of its common stock to acquire Wasatch subject to the approval of Wasatch stockholders in the second quarter of fiscal 2001. The acquisition will be accounted for using the purchase method of accounting.
The Company maintains adequate cash reserves and credit facilities to meet its anticipated working capital, capital expenditure, and business investment requirements.
Factors Affecting Quarterly Operating Results
The Company’s quarterly operating results fluctuate as a result of a number of factors including the business and sales cycle, the amount and timing of new product introductions by the Company, client spending patterns, budget cycles and fiscal year ends and promotional programs. The Company historically has experienced its lowest revenues in the first quarter and increasingly higher levels of revenues in each of the next three quarters. Because of these factors, the results for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year.
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
The Company’s borrowing capacity primarily consists of a revolving loan with interest rates that fluctuate based upon market indexes. At January 31, 2001, the Company did not have any outstanding borrowings under this revolving loan. As a result, risk relating to interest fluctuation is considered minimal.
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AND FINANCIAL CONDITION
(Dollars in thousands, except per share data)
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK, Continued
Foreign Currency Exchange Rate Risk
The Company markets its products worldwide and has operations in Canada and the United Kingdom. As a result, financial results could be affected by changes in foreign currency exchange rates or weak economic conditions in foreign markets. Working funds necessary to facilitate the short-term operations of foreign subsidiaries are kept in local currencies in which they do business. Approximately 6% of total revenues were denominated in currencies other than the U.S. dollar for the three months ended January 31, 2001.
CAUTIONARY STATEMENTS
As provided for in the Private Securities Litigation Reform Act of 1995, the Company cautions investors that a number of factors could cause actual future results of operations to vary from those anticipated in previously made forward-looking statements and any other forward-looking statements made in this document and elsewhere by or on behalf of the Company. Net revenues could be materially affected by products introduced by competitors with advanced technology and better features and benefits or lower prices or government funding priorities. Operations could be affected by the Company’s ability to execute its diversification strategy or to integrate acquired companies.
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Item 1. Legal Proceedings
The Company is not a party to any litigation that is expected to have a material adverse effect on the Company or its business. |
Item 2. Changes in Securities
Not Applicable. |
Item 3. Defaults Upon Senior Securities
Not Applicable. |
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable. |
Item 5. Other Information
Not Applicable. |
Item 6. Exhibits and Reports on Form 8-K
(a) | Exhibits |
2.1 | Agreement and Plan of Merger, dated as of January 31, 2001, by and among PLATO Learning, Inc., WILC Acquisition Corporation and Wasatch Interactive Learning Corporation is incorporated by reference to the Company’s Registration Statement on Form S-4 (File Number 333-56020). | |
2.2 | Amendment No. 1 to Agreement and Plan of Merger, dated as of February 20, 2001, by and among PLATO Learning, Inc., WILC Acquisition Corporation and Wasatch Interactive Learning Corporation is incorporated by reference to the Company’s Registration Statement on Form S-4 (File Number 333-56020). | |
2.3 | Debenture Purchase Agreement, dated as of March 2, 2001, by and among WILC Acquisition Corporation, Wasatch Interactive Learning Corporation and Brock Road LLC is incorporated by reference to the Company’s Registration Statement on Form S-4 (File Number 333-56020). |
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Item 6. Exhibits and Reports on Form 8-K, Continued
(b) | Reports on Form 8-K: |
On November 29, 2000, the Company filed a Current Report on Form 8-K for the announcement of management changes including the resignation of William R. Roach, chairman and chief executive officer and founder of the Company, and the appointment of John M. Buske as chief financial officer. |
On December 29, 2000, the Company filed a Current Report on Form 8-K for the severance arrangements with William R. Roach. |
On February 2, 2001, the Company filed Form 425, in lieu of a Current Report on Form 8-K, for the announcement of the Agreement and Plan of Merger with Wasatch Interactive Learning Corporation. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 14, 2001.
PLATO LEARNING, INC. | |||
By | /s/John Murray | ||
President and Chief Executive Officer (principal executive officer) | |||
/s/John M. Buske | |||
Vice President Finance and Chief Financial Officer (principal financial officer) | |||
/s/Mary Jo Murphy | |||
Vice President, Corporate Controller and Chief Accounting Officer (principal accounting officer) |
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