EXHIBIT 99.1
Pauline O'Keeffe, pokeeffe@learningstarcorp.com
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781-292-3048
Jennifer Aprile, japrile@learningstarcorp.com
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781-292-3085
SMARTERKIDS.COM, INC. AND EARLYCHILDHOOD LLC FINALIZE COMBINATION TO CREATE
LEARNINGSTAR CORP.
LearningStar Secures a $25 Million Credit Facility with GMAC Business Credit
LEARNINGSTAR COMMON STOCK TO BEGIN TRADING ON THE NASDAQ NATIONAL MARKET
UNDER TICKER SYMBOL LRNS ON TUESDAY, MAY 1, 2001
NEEDHAM, MASS. AND MONTEREY, CALF.-- APRIL 30, 2001 -- SmarterKids.com, Inc., a
Delaware corporation and a leading online educational store and resource for
parents, Earlychildhood LLC, a California limited liability company and a major
retailer of educational products to teachers and parents, and LearningStar
Corp., a Delaware corporation, announced today that the combination of
SmarterKids.com and Earlychildhood has been completed and became effective on
April 30, 2001. As a result of the combination, both SmarterKids.com and
Earlychildhood became wholly-owned subsidiaries of LearningStar, whose shares
will be traded under the symbol "LRNS" on the Nasdaq National Market beginning
on Tuesday, May 1, 2001. Due to the combination, SmarterKids.com common stock
has been delisted from quotation on the Nasdaq National Market effective as of
the close of business on April 30, 2001 and SmarterKids.com ceased to be a
public company. LearningStar is a developer, manufacturer, and retailer of
educational products, serving teachers and parents by providing quality items
and programs for children from infancy to age 12.
LearningStar has secured a $25 million credit facility with GMAC Business Credit
that it intends to use to grow its business and secure its position in
the educational and e-commerce sectors. This asset-based revolving credit
facility will allow LearningStar to execute its business plan and become a
frontrunner in the education commerce space
Effective as of the closing of the combination, LearningStar's management team
was reconfigured. Ronald Elliott became Chief Executive Officer and Al Noyes
became Chairman of the Board of LearningStar.
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LearningStar's newly appointed Chief Executive Officer, Ronald Elliott, said,
"LearningStar will create significant value by realizing the substantial
economies made possible by this combination and by positioning itself for future
growth. The convergence of retail expertise, superior products, complementary
channels, and technology know-how, forms a company with both B-to-B and B-to-C
leadership and a healthy bottom line." Mr. Elliott formerly served as Chief
Executive Officer of Earlychildhood.
INTEGRATION HIGHLIGHTS
o SmarterKids.com has transitioned its entire fulfillment operation from
Mansfield, Massachusetts to Earlychildhood's warehouse system.
o SmarterKids.com has successfully leased its Mansfield Distribution Center
facility to a third party.
o SmarterKids.com's customer service inquiries are now handled by
Earlychildhood's West Coast Call Center.
o Technology integration has been successful in allowing merchandise management
from the West Coast.
o SmarterKids.com has reduced its staff by 60%, and currently employs 45
individuals.
o SmarterKids.com now offers selections from the Earlychildhood product mix,
including proprietary and other items that were previously unavailable direct
to consumers.
BUSINESS OUTLOOK
o LearningStar presently anticipates 2001 consolidated revenue growth to exceed
15% over 2000 revenues of $90.6 million.
o LearningStar presently anticipates 2001 pro forma EBITDA (excluding
restructuring, stock compensation and one-time charges) for 2001 to be
positive.
o LearningStar will release Q1 earnings on May 13th and will host a conference
call on May 14th to provide additional visibility on the business outlook.
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LearningStar is composed of the following businesses:
o Discount School Supply--An innovative developer, manufacturer, and retailer
of educational products and school supplies to child care programs,
preschools, and schools. Sales of Discount School Supply products are
conducted through a catalog, a field sales force and the Web.
o Earlychildhood NEWS--An award-winning magazine focusing on the growth and
development of children ages infancy to 12 offering information, curriculum
and educational programs to teachers and parents.
o Educational Products, Inc.--A premier distributor of custom-packaged school
supplies and educational products to the elementary school market through
school fundraising programs.
o SmarterKids.com- A leading online education store and resource for parents
providing the ability to profile a child's learning needs and goals and match
these profile results to appropriate product and/or activity choices.
The combination of SmarterKids.com and Earlychildhood was effected pursuant to
the Contribution Agreement and Plan of Reorganization and Merger by and among
SmarterKids.com, Earlychildhood, LearningStar and S-E Educational Merger Corp.
dated as of November 14, 2000 and as amended as of March 14, 2001. On April 9,
2001, at the special meeting of SmarterKids.com stockholders, the Combination
Agreement and the combination of SmarterKids.com and Earlychildhood were
approved by greater than a majority of the shares of SmarterKids.com common
stock outstanding on the record date for the special meeting of stockholders.
Pursuant to the Combination Agreement (i) holders of Earlychildhood membership
interests and options to purchase membership interests received an aggregate of
5,798,573 shares of LearningStar common stock or options to purchase
LearningStar common stock, as applicable; and (ii) each issued and outstanding
share of SmarterKids.com common stock was converted into the right to receive
one-eighth of one share of LearningStar common stock. Upon completion of the
combination, SmarterKids.com stockholders owned approximately one-third of the
common stock of LearningStar and holders of membership interests in
Earlychildhood owned approximately two-thirds of the LearningStar common stock.
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LearningStar filed a Registration Statement on Form S-4 with the Securities and
Exchange Commission on January 9, 2001 pursuant to which LearningStar will issue
an aggregate of 3,214,232 shares of LearningStar common stock to the holders of
SmarterKids.com common stock in exchange for the SmarterKids.com common stock.
LearningStar will hold a conference call and Web cast to discuss the specifics
of the combination of SmarterKids.com (formerly traded as NASDAQ: SKDS) and
Earlychildhood. The conference call is scheduled for Tuesday, May 1, 2001 at
10:00 a.m. (EST) and the dial-in number is (800) 811-8830, event ID 609739.
The conference call will also be Web cast over the Internet on LearningStar's
investor relations page at http://www.learningstarcorp.com and an online archive
of the broadcast will be available there, within one hour of the completion of
the call, until May 15, 2001. A replay of the call will be available after 1:00
p.m. (EST) and can be accessed at the following replay number: (888) 203-1112,
reservation number 609739 until May 15, 2001.
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ABOUT LEARNINGSTAR CORP.
LearningStar Corp. (NASDAQ: LRNS) is a leading developer, manufacturer, and
retailer of educational products to child care programs, preschools, schools,
and consumers. Formed through the combination of Earlychildhood LLC and
SmarterKids.com, Inc., the company serves early childhood professionals,
educators, and parents by providing quality educational products and programs
for children from infancy to 12-year-olds. With scale, growth potential,
proprietary product offerings, a multi-channel distribution strategy and
extensive management expertise, LearningStar helps to further children's
education and to reinforce the connection between schools and homes. The Company
is composed of four business areas; Discount School Supply, a developer and
multi-channel distributor of educational products and supplies for preschools
and child care programs; Earlychildhood NEWS, an award-winning magazine offering
information, curriculum and educational programs to teachers and parents;
Educational Products, Inc., an innovative distributor of school supplies and
educational products to the elementary school market through school fundraising
programs; and SmarterKids.com, a leading online educational store and resource
for parents. LearningStar is headquartered in Monterey, Calif. and Needham,
Mass. More information on the Company can be found at www.learningstarcorp.com.
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE HARBOR"
FOR FORWARD-LOOKING STATEMENTS. CERTAIN INFORMATION INCLUDED IN THIS PRESS
RELEASE (AS WELL AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER
WRITTENSTATEMENTS MADE OR TO BE MADE BY SMARTERKIDS.COM OR LEARNINGSTAR)
CONTAINS STATEMENTS THAT ARE FORWARD-LOOKING AND OTHER MATTERS. SUCH FORWARD-
LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD
SIGNIFICANTLY AFFECT ANTICIPATED RESULTS IN THE FUTURE AND, ACCORDINGLY, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING
STATEMENTS MADE BY SMARTERKIDS.COM OR LEARNINGSTAR. FOR A DESCRIPTION OF
ADDITIONAL RISKS AND UNCERTAINTIES, PLEASE REFER TO THE SMARTERKIDS.COM AND
LEARNINGSTAR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING
LEARNINGSTAR'S REGISTRATION STATEMENT ON FORM S-4, SMARTERKIDS.COM'S ANNUAL
REPORTS ON FORM 10-K AND QUARTERLY REPORTS ON FORM 10-Q.
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