UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM .................... TO ....................
COMMISSION FILE NUMBER: 0-22187
RENAISSANCE LEARNING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WISCONSIN 39-1559474
(STATE OR OTHER (IRS EMPLOYER
JURISDICTION OF INCORPORATION) IDENTIFICATION NO.)
PO BOX 8036
2911 PEACH STREET
WISCONSIN RAPIDS, WISCONSIN
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
54495-8036
(ZIP CODE)
(715) 424-3636
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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.
Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
OUTSTANDING AT
CLASS APRIL 30, 2002
----- --------------
Common Stock, $0.01 par value 34,676,633
RENAISSANCE LEARNING, INC.
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002
PART I - FINANCIAL INFORMATION
Page
Number
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at March 31, 2002 (unaudited)
and December 31, 2001....................................1
Consolidated Statements of Income for the Three Months
Ended March 31, 2002 and 2001 (unaudited)................2
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2002 and 2001 (unaudited)................3
Notes to Unaudited Consolidated Financial Statements..............4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..............................6
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK......................................................8
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................9
- Index -
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
RENAISSANCE LEARNING, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2002 2001
------------ ------------
(UNAUDITED) (AUDITED)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 31,226 $ 35,904
Investment securities 50,370 49,288
Accounts receivable, less allowance of
$1,461 in 2002 and $1,709 in 2001 15,769 12,397
Inventories 1,547 1,648
Prepaid expenses 939 1,063
Deferred tax asset 3,581 3,606
Other current assets 1,691 1,312
-------- --------
Total current assets 105,123 105,218
Investment securities 36,843 24,364
Property, plant and equipment, net 22,553 23,007
Deferred tax asset 2,312 2,238
Goodwill 2,313 2,313
Other intangibles, net 1,277 1,412
Capitalized software, net 444 506
Other non-current assets 650 903
-------- --------
Total assets $171,515 $159,961
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,422 $ 2,769
Deferred revenue 6,526 7,184
Payroll and employee benefits 3,608 3,845
Income taxes payable 6,488 4,196
Other current liabilities 4,582 4,143
-------- --------
Total current liabilities 24,626 22,137
Deferred revenue 982 1,097
-------- --------
Total liabilities 25,608 23,234
Minority interest 198 196
Shareholders' equity 145,709 136,531
-------- --------
Total liabilities and shareholders' equity $171,515 $159,961
======== ========
See accompanying notes to consolidated financial statements.
- 1 -
RENAISSANCE LEARNING, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31,
2002 2001
---- ----
(In thousands, except per share amounts)
Net sales:
Products $ 28,885 $ 24,362
Services 5,804 5,819
-------- --------
Total net sales 34,689 30,181
-------- --------
Cost of sales:
Products 2,864 3,297
Services 3,232 3,674
-------- --------
Total cost of sales 6,096 6,971
-------- --------
Gross profit 28,593 23,210
Operating expenses:
Product development 4,446 4,392
Selling and marketing 8,491 7,992
General and administrative 3,963 3,414
-------- --------
Total operating expenses 16,900 15,798
-------- --------
Operating income 11,693 7,412
Other income (expense):
Interest income 862 1,014
Other, net 96 (25)
-------- --------
Income before taxes 12,651 8,401
Income tax provision 4,896 3,234
-------- --------
Net income $ 7,755 $ 5,167
======== ========
Basic earnings per share $ 0.22 $ 0.15
Diluted earnings per share 0.22 0.15
See accompanying notes to consolidated financial statements.
- 2 -
RENAISSANCE LEARNING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31,
2002 2001
---- ----
(In thousands)
Reconciliation of net income to net cash provided by operating activities:
Net income $ 7,755 $ 5,167
Noncash (income) expenses included in net income -
Depreciation and amortization 1,216 1,422
Deferred income taxes (49) 151
Change in assets and liabilities -
Accounts receivable (3,372) (976)
Inventories 101 (84)
Prepaid expenses 124 (208)
Accounts payable and other current liabilities 3,298 3,123
Deferred revenue (773) (490)
Other (268) (98)
-------- --------
Net cash provided by operating activities 8,032 8,007
======== ========
Cash flows from investing activities:
Purchase of property, plant and equipment (469) (658)
Purchase of investment securities, net (13,561) (297)
Capitalized software development costs (104) (216)
Acquisitions -- (704)
-------- --------
Net cash used in investing activities (14,134) (1,875)
======== ========
Cash flows from financing activities:
Proceeds from issuance of stock 1,066 815
Proceeds from exercise of stock options 358 1,175
Purchase of treasury stock -- --
-------- --------
Net cash provided by financing activities 1,424 1,990
-------- --------
Net increase (decrease) in cash (4,678) 8,122
Cash and cash equivalents, beginning of period 35,904 24,655
-------- --------
Cash and cash equivalents, end of period $ 31,226 $ 32,777
======== ========
See accompanying notes to consolidated financial statements.
- 3 -
RENAISSANCE LEARNING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONSOLIDATION
The consolidated financial statements include the financial
results of Renaissance Learning, Inc. ("Renaissance Learning") and our
subsidiaries. Our significant subsidiaries include Renaissance Corporate
Services, Inc. and Generation21 Learning Systems, LLC ("Generation21"). School
Renaissance Institute, Inc., formerly a wholly-owned subsidiary of Renaissance
Learning, was merged into Renaissance Learning on December 31, 2001, and is
currently doing business under the name Renaissance Learning Madison. All
significant intercompany transactions have been eliminated in the consolidated
financial statements.
2. BASIS OF PRESENTATION
The consolidated financial statements reflect all adjustments
(consisting only of normal recurring adjustments) which are, in our opinion,
necessary for a fair presentation of the results of the interim periods, and are
presented on an unaudited basis. These financial statements should be read in
conjunction with the financial information contained in our Annual Report on
Form 10-K, which is on file with the U.S. Securities and Exchange Commission.
The results of operations for the three-month periods ended March 31,
2002 and 2001 are not necessarily indicative of the results to be expected for
the full year.
3. EARNINGS PER COMMON SHARE
Basic earnings per common share has been computed based on the weighted
average number of common shares outstanding. Diluted earnings per common share
has been computed based on the weighted average number of common shares
outstanding, increased by the number of additional common shares that would have
been outstanding if the dilutive potential common shares had been issued.
On January 3, 2000, our Board of Directors authorized the repurchase of
up to 1,000,000 shares of our common stock. As of March 31, 2002, we had
repurchased 25,100 shares under this repurchase program.
On April 17, 2002, our Board of Directors authorized a new repurchase
program which provides for the repurchase of up to 5,000,000 shares of our
common stock. No time limit was placed on the duration of the repurchase
program. Repurchased shares will become treasury shares and will be used for
stock-based employee benefit plans and for other general corporate purposes.
The weighted average shares outstanding during the three months ended
March 31, 2002 and 2001 are as follows:
<Caption>
Three Months Ended Three Months Ended
March 31, 2002 March 31, 2001
----------------------- ------------------
Basic weighted average shares 34,644,242 34,430,922
Dilutive effect of stock options 274,205 333,565
Diluted weighted average shares 34,918,447 34,764,487
- 4 -
4. SEGMENT REPORTING
Our reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technology and marketing strategies. We have two
reportable segments: software and training.
The software segment produces learning information system software
primarily for the K-12 school market in the United States, Canada, the United
Kingdom and Australia. The software assists educators in assessing and
monitoring student development by increasing the quantity, quality and
timeliness of student performance data in the areas of reading, math and
writing. The software segment also includes training and knowledge management
enterprise software, which is currently sold primarily to corporate customers
and electronic assessment products and services sold to educational publishers.
Revenue from the software segment includes product revenue principally from the
sale of software, product revenue from scanners sold with software and sold
separately, and service revenue from the sale of software support agreements.
The training segment provides professional development training
seminars and district-wide school improvement programs including training,
consulting and educator resource materials. The training programs instruct
educators on how to accelerate learning in the classroom through use of the
information that our learning information systems provide. Revenue from the
training segment includes service revenue from a variety of seminars presented
in hotels and schools across the country and from the annual National
Renaissance Conference, and product revenue from the sale of training materials.
We evaluate the performance of our operating segments based on
operating income before nonrecurring items. Intersegment sales and transfers and
revenue derived outside of the United States are not significant. Summarized
financial information concerning our reportable segments is shown in the
following table:
Three Months Ended
March 31,
2002 2001
-------- --------
(In thousands)
Revenues:
Software $ 29,707 $ 25,453
Training 4,982 4,728
-------- --------
Total revenues $ 34,689 $ 30,181
======== ========
Operating income (loss):
Software $ 12,528 $ 8,478
Training (835) (1,066)
-------- --------
Total operating income $ 11,693 $ 7,412
======== ========
The reported measures are consistent with those used in measuring
amounts in the consolidated financial statements. It is our opinion, however,
that because many flows of value between the segments cannot be precisely
quantified, this information provides an incomplete measure of the training
segment profit or loss, and should not be viewed in isolation. We evaluate the
performance of the training segment based on many factors not captured by the
financial accounting system and often evaluate our financial performance on a
total entity basis.
5. COMPREHENSIVE INCOME
Total comprehensive income was $7,604,000 and $5,279,000 in the first
quarter of 2002 and 2001, respectively. Our comprehensive income includes
foreign currency translation adjustments and the remaining unamortized balance
of unrealized gains and losses on our held-to-maturity securities that were
previously classified as available-for-sale.
- 5 -
6. NEW ACCOUNTING PRONOUNCEMENT
On June 30, 2001, the FASB issued SFAS No. 142 " Goodwill and Other
Intangible Assets". Under this new standard, goodwill acquired after June 30,
2001 is not amortized over its useful life and starting January 1, 2002,
amortization expense is no longer recorded for goodwill acquired on or before
June 30, 2001. SFAS 142 requires that goodwill be assessed at least annually for
impairment by applying a fair-value-based test.
We adopted the provisions of SFAS No. 142 effective January 1, 2002.
Assembled workforce does not meet the criteria of SFAS No. 142 for recognition
apart from goodwill, therefore, as of January 1, 2002, we reclassified the
$441,000 unamortized balance of assembled workforce to goodwill. SFAS 142
requires that a new fair-market-value test be applied to determine if goodwill
and other intangible assets with indefinite lives are impaired based on their
values as of January 1, 2002. We completed this testing in the first quarter of
2002 and found no instances of impairment of our recorded goodwill. All of our
goodwill and other intangible assets are assigned to our software segment.
In accordance with SFAS No. 142, the effect of this accounting change
is reflected prospectively. Supplemental comparative disclosure as if the change
had been retroactively applied to the first quarter of 2001 is as follows:
Three Months Ended
March 31,
2002 2001
------ ------
(In thousands)
Net income:
Reported net income $7,755 $5,167
Goodwill amortization, net of tax -- 86
------ ------
Adjusted net income $7,755 $5,253
====== ======
The adoption of SFAS 142 in fiscal 2001 would not have resulted in a
change to previously reported basic or diluted earnings per share for the first
quarter of 2001.
For the three months ended March 31, 2002, we recognized amortization
expense of $135,000 on other intangibles. No goodwill or other intangibles were
acquired or impaired during the first quarter of 2002. We retired a $210,000
trade name intangible which was fully amortized. Other intangibles consisted of
the following (in thousands):
March 31, 2002 December 31, 2001
---------------------------------------- ---------------------------------------
Gross Other Gross Other
Carrying Accumulated Intangibles Carrying Accumulated Intangibles
Amount Amortization Net Amount Amortization Net
------ ------------ --- ------ ------------ ---
Algorithms and software code $2,124 $1,644 $ 480 $2,124 $1,565 $ 559
Trade name -- -- -- 210 210 --
Non-compete agreement 1,100 303 797 1,100 247 853
------ ------ ------ ------ ------ ------
Other intangibles $3,224 $1,947 $1,277 $3,434 $2,022 $1,412
====== ====== ====== ====== ====== ======
Other intangibles are scheduled to be fully amortized by 2006
with corresponding amortization estimated to be $402,000, $396,000, $286,000,
and $193,000, for the remainder of 2002 and the years ended 2003, 2004, and
2005, respectively.
- 6 -
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
THREE MONTHS ENDED MARCH 31, 2002 AND 2001
The following table sets forth certain consolidated income statement
data in dollars and as a percentage of net sales, except that individual
components of costs of sales and gross profit are shown as a percentage of their
corresponding component of net sales:
Three Months Ended March 31,
2002 2001 Change
-------------------- ---------------------- -----------------------
(Dollars in thousands)
Net Sales:
Products $ 28,885 83.3% $ 24,362 80.7% $ 4,523 18.6%
Services 5,804 16.7% 5,819 19.3% (15) -0.3%
-------- -------- -------- -------- --------
Total net sales 34,689 100.0% 30,181 100.0% 4,508 14.9%
-------- ======== -------- ======== --------
Cost of sales:
Products 2,864 9.9% 3,297 13.5% (433) -13.1%
Services 3,232 55.7% 3,674 63.1% (442) -12.0%
-------- -------- --------
Total cost of sales 6,096 17.6% 6,971 23.1% (875) -12.6%
======== ======== ========
Gross profit:
Products 26,021 90.1% 21,065 86.5% 4,956 23.5%
Services 2,572 44.3% 2,145 36.9% 427 19.9%
-------- -------- --------
Total gross profit 28,593 82.4% 23,210 76.9% 5,383 23.2%
======== ======== ========
Operating expenses:
Product development 4,446 12.8% 4,392 14.6% 54 1.2%
Selling and marketing 8,491 24.5% 7,992 26.5% 499 6.2%
General and administrative 3,963 11.4% 3,414 11.3% 549 16.1%
-------- -------- --------
Total operating expenses 16,900 48.7% 15,798 52.3% 1,102 7.0%
-------- -------- --------
Operating income 11,693 33.7% 7,412 24.6% 4,281 57.8%
Other income (expense):
Interest income 862 2.5% 1,014 3.4% (152) -15.0%
Other, net 96 0.3% (25) -0.1% 121 -484.0%
-------- -------- --------
Total other income 958 2.8% 989 3.3% (31) -3.1%
-------- -------- --------
Income before taxes 12,651 36.5% 8,401 27.8% 4,250 50.6%
Income tax provision 4,896 14.1% 3,234 10.7% 1,662 51.4%
-------- -------- --------
Net income $ 7,755 22.4% $ 5,167 17.1% $ 2,588 50.1%
======== ======== ========
- 7 -
Net Sales. Our net sales increased by $4.5 million, or 14.9%, to $34.7
million in the first quarter of 2002 from $30.2 million in the first quarter of
2001. Product sales increased by $4.5 million, or 18.6%, to $28.9 million in the
first quarter of 2002 from $24.4 million in the first quarter of 2001. The
increase in product sales is primarily attributable to (i) sales of STAR Early
Literacy, which was released late in the second quarter of 2001, (ii) increased
sales of Accelerated Reader quizzes, with over 54,000 available book titles, to
a larger base of Accelerated Reader schools (iii) increased sales of math
products, including follow-on sales of Accelerated Math libraries and
optical-mark card scanners.
Service revenue, which consists of revenue from sales of training
sessions and software support agreements, for the first quarter of 2002 was $5.8
million, the same as in the first quarter of 2001. Relatively flat revenues from
our annual National Renaissance Conference are included in both first quarter
2002 and 2001 service revenues. Excluding the National Renaissance Conference,
training service revenues declined by about 13% in first quarter 2002 compared
to first quarter 2001 mainly due to the effects of state budgetary constraints
and restrictions on teacher travel. Software support agreement revenues
increased by 16% over the first quarter 2001.
We expect continued revenue growth in the second quarter, as schools
enter the prime period of their annual purchasing cycle. Six new products are
expected to be ready for shipment in the second and third quarters:
StandardsMaster instant assessment and Web-based reporting software; Accelerated
Writer writing improvement system; Accelerated Vocabulary vocabulary development
software; AccelTest test creation, scoring, and gradebook software; Fluent
Reader repeated reading software for improving reading fluency, and MathFacts in
a Flash software to help educators improve students' computation fluency. We
believe continued strong sales of reading and math software will contribute to
growth in the second quarter. We are expecting a year-over-year decline in
training revenues in the second quarter due to the pressures on school funding.
Cost of Sales. The cost of sales of products decreased by $433,000, or
13.1%, to $2.9 million in the first quarter of 2002 from $3.3 million in the
first quarter of 2001. As a percentage of product sales, the cost of sales of
products decreased to 9.9% in the first quarter of 2002 from 13.5% in the first
quarter of 2001. This decrease is primarily the result of the improved margin on
our AccelScan optical-mark card scanner and a sales mix weighted more heavily to
higher margin products. The cost of sales of services decreased by $442,000, or
12.0%, to $3.2 million in the first quarter of 2002 from $3.7 million in the
first quarter of 2001. As a percentage of sales of services, the cost of sales
of services decreased to 55.7% in the first quarter of 2002 from 63.1% in the
first quarter of 2001. This decrease is attributable to (i) increased software
support agreement revenues while service costs remained relatively constant and
(ii) lower costs at our annual National Renaissance Conference than the prior
year. Our overall gross profit margin improved to 82.4% in the first quarter of
2002, from 76.9% in the first quarter of 2001.
Product Development. Product development expenses were $4.4 million in
the first quarter of 2002, which was up 1.2% from the first quarter of 2001. We
continue to invest in product development related to (i) six new products
expected to be ready for shipment in the second and third quarters of 2002, (ii)
the development of additional Accelerated Math libraries and Accelerated Reader
quizzes, (iii) enhanced versions of our existing products, and (iv) other new
products at various stages of development which we expect to announce in the
future. As a percentage of net sales, product development costs decreased to
12.8% in the first quarter of 2002 from 14.6% in the first quarter of 2001. We
anticipate that product development costs will continue to moderate as a
percentage of sales in 2002 compared to the same periods in 2001.
Selling and Marketing. Selling and marketing expenses increased by
$499,000, or 6.2%, to $8.5 million in the first quarter of 2002 from $8.0
million in the first quarter of 2001. These expenses increased mainly due to (i)
costs of marketing our expanded product line, (ii) costs of promoting the
district-wide school improvement process, (iii) increased professional fees, and
(iv) increased wages and related benefit costs associated with additional
personnel. As a percentage of net sales, selling and marketing expenses
decreased to 24.5% in the first quarter of 2002 from 26.5% in the first quarter
of 2001. We expect the high levels of sales and marketing effort to continue
into the second quarter to support our new products and our expanded product
line.
- 8 -
General and Administrative. General and administrative expenses
increased by $549,000, or 16.1%, to $4.0 million in the first quarter of 2002
from $3.4 million in the first quarter of 2001. The higher expenses for the
first quarter of 2002 are primarily due to increased wages and related benefit
costs and increased professional fees. As a percentage of net sales, general and
administrative costs increased slightly to 11.4% in the first quarter of 2002
compared to 11.3% in the first quarter of 2001. For the full year 2002, we
expect to be able to leverage our administrative infrastructure and reduce
general and administrative costs as a percentage of sales compared to 2001
levels.
Operating Income. Operating income increased by $4.3 million, or 57.8%,
to $11.7 million in the first quarter of 2002 from $7.4 million in the first
quarter of 2001. As a percentage of net sales, operating income increased to
33.7% in the first quarter of 2002 compared to 24.6% in the first quarter of
2001.
Income Tax Expense. Income tax expense of $4.9 million was recorded in
the first quarter of 2002 at an effective income tax rate of 38.7% of pre-tax
income, compared to $3.2 million, or 38.5% of pre-tax income in the first
quarter of 2001. We expect to maintain our effective tax rate at or below 39%
for 2002.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2002, our cash, cash equivalents and investment
securities increased to $118.4 million from the December 31, 2001 total of
$109.6 million. The increase of $8.8 million in the first quarter of 2002 is
primarily due to $8.0 million in net cash provided by operating activities. We
believe our strong cash position coupled with cash flow from operations will be
sufficient to meet both our short-term and long-term working capital
requirements.
At March 31, 2002, we had a $15.0 million unsecured revolving line of
credit with a bank that is available until March 31, 2004. The line of credit
bears interest at either a floating rate based on the prime rate less 1.0%, or a
fixed rate for a period of up to 90 days based on LIBOR plus 1.25%. The rate is
at our option and is determined at the time of borrowing. We also have a $2.0
million unsecured revolving line of credit with a bank, which is available until
January 31, 2003. The line of credit bears interest based on the prime rate less
1.0%. As of March 31, 2002, the lines of credit had not been used.
FORWARD-LOOKING STATEMENTS
In accordance with the Private Securities Litigation Reform Act of
1995, we can obtain a "safe-harbor" for forward-looking statements by
identifying those statements and by accompanying those statements with
cautionary statements which identify factors that could cause actual results to
differ materially from those in the forward-looking statements. Accordingly, the
foregoing "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains certain forward-looking statements relating to
growth plans, projected sales, revenues, earnings and costs, and product
development schedules and plans. Our actual results may differ materially from
those contained in the forward-looking statements herein. Factors which may
cause such a difference to occur include (i) a delay or reduction in school
purchases of our products due to state budgetary constraints resulting in a
reduction in the funds available to schools and (ii) those factors identified in
Item 1, Business, Forward-Looking Statements, contained in our Form 10-K for the
year ended December 31, 2001, which factors are incorporated herein by reference
to such Form 10-K.
- 9 -
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk. Our exposure to market interest rate risk consists
of: (i) the increase or decrease in the amount of interest income we can earn on
our investment portfolio, and (ii) the decrease or increase in value of our
investment security portfolio if market interest rates increase or decrease,
respectively. We anticipate that we will have sufficient liquidity to hold our
investments to maturity, therefore, we do not expect to recognize any material
losses or gains related to an increase or decrease in market interest rates.
Foreign Currency Exchange Rate Risk. The financial position and results
of operations of our foreign subsidiaries are measured using local currency.
Revenues and expenses of such subsidiaries have been translated into U.S.
dollars at average exchange rates prevailing during the period. Assets and
liabilities have been translated at the rates of exchange at the balance sheet
date. Translation gains or losses are deferred as a separate component of
shareholders' equity. Aggregate foreign currency transaction gains and losses
are included in determining net earnings. As such, our operating results are
affected by fluctuations in the value of the U.S. dollar compared to the
Australian dollar, British pound, Canadian dollar, and Indian Rupee. At this
time, foreign operations are not significant.
- 10 -
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit No. Description
3.1 Fourth Amendment to Credit Agreement dated
as of December 31, 1997, by and between
Wells Fargo Bank, National Association (as
successor in interest to Wells Fargo Bank
Wisconsin, National Association) and
Registrant.
(b) Forms 8-K. We filed no reports on Form 8-K during the quarter covered by
this report.
- 11 -
SIGNATURES
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.
RENAISSANCE LEARNING, INC.
(Registrant)
May 13, 2002 /s/ Michael H. Baum
-------------- ------------------------------
Date Michael H. Baum
Chief Executive Officer
(Principal Executive Officer)
May 13, 2002 /s/ Steven A. Schmidt
-------------- --------------------------------
Date Steven A. Schmidt
Secretary, Vice President, and Chief Financial Officer
(Principal Financial and Accounting Officer)
Index to Exhibits
Exhibit No. Description
3.1 Fourth Amendment to Credit Agreement dated as of
December 31, 1997, by and between Wells Fargo Bank,
National Association (as successor in interest to Wells
Fargo Bank Wisconsin, National Association) and
Registrant.