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8-K - RENAISSANCE LEARNING INCrlrn8k.htm
EX-99.2 - TRANSCRIPT OF EARNINGS RELEASE CONFERENCE CALL - RENAISSANCE LEARNING INCexh992.htm

Exhibit 99.1


[exh991001.jpg]

NEWS RELEASE

For release at 4:00 p.m. EDT, 7/21/11

Contact:  Susan Sutherland

Toll free ofc. (877) 988-8048

Fax: (715) 424-3414

Email: pr@renlearn.com


2911 Peach Street • P.O. Box 8036 • Wisconsin Rapids, WI 54495-8036




Renaissance Learning, Inc. Announces Second Quarter, 2011 Results




WISCONSIN RAPIDS, WI — July 21,  2011 — Renaissance Learning, Inc. (Nasdaq: RLRN), a leading provider of technology-based school improvement and student assessment programs for K12 schools, today announced financial results for the quarter ended June 30, 2011. Revenues for the second quarter of 2011 were $35.7 million, an increase of 15.0% from second quarter 2010 revenues of $31.0 million. Net income was $5.3 million, or $0.18 per share, 23.4 % higher than second quarter 2010 net income of $4.3 million, or $0.15 per share.



Revenues for the six-month period ended June 30, 2011 were $69.2 million, up 9.4% from revenues of $63.3 million for the first half of 2010.  Net income was $10.8 million for the first six months of 2011, up 7.1% from the prior year’s net income of $10.1 million.  Earnings per share for the six months ending June 30, 2011 were $0.37 compared to $0.34 for the same period in 2010.   Net income in 2010 included a tax benefit resulting from a tax audit settlement of $1.1 million, or $0.04 per share. Excluding the tax benefit in last year’s results, year over year net income per share for the six month period increased by $0.07.   



“We are pleased to have achieved continued growth and solid financial results for the second quarter, especially considering the challenging funding environment,” commented Glenn R. James, Chief Executive Officer.  “Orders for the quarter were 18% higher than the prior year, offsetting a similar percentage decline in the first quarter and reflecting the continued seasonal shift of orders to Q2 and Q3.



“The strong order performance was highlighted by a solid start to the launch of the STAR Enterprise product line,” continued James.  “Orders also were boosted by a large NEO order and by a number of customers renewing their subscriptions early.



“Despite the strength of our second quarter orders, we remain cautious in the near term as states are continuing to cut or delay education funding, and the third quarter is our largest order period,” added James.  “However, in spite of the school budget challenges, we believe we are well positioned strategically and financially to achieve solid growth over the longer term.”

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Page 2 of 4


Renaissance Learning added approximately 600 new customer schools during the quarter, and total schools worldwide that are actively using the Company’s products number approximately 70,000.  Of these, approximately 36,000 are actively using at least one product running on the Renaissance Place platform.  



The Company expanded the presentation of revenue on its financial statements to make it clearer what portion of both the product and service revenue is generated from subscriptions and other time-based items.  Prior period results have been expanded to conform to the new presentation.



The Company will hold a conference call at 5:00 p.m. EDT today to discuss its financial results, quarterly highlights, and business outlook. The teleconference may be accessed in listen-only mode by dialing 877-869-3847 at 5:00 p.m. EDT. 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 July 21, 2011 at 8:00 p.m. through July 28, 2011 at 11:59 p.m. The replay dial-in is 877-660-6853. The conference account number to access the replay is 350 and replay ID number is 375568.


Renaissance Learning, Inc.


Renaissance Learning, Inc. is a leading provider of technology-based school improvement and student assessment programs for K12 schools.  Adopted by approximately 70,000 schools, Renaissance Learning’s tools provide daily formative assessment and periodic progress-monitoring technology to enhance core curriculum, support differentiated instruction, and personalize practice in reading, writing and math. Renaissance Learning products and school improvement programs help educators make the practice component of their existing curriculum more effective by providing tools to personalize practice and easily manage the daily activities for students of all levels. As a result, teachers using Renaissance Learning products and programs accelerate learning, get more satisfaction from teaching, and help students achieve higher test scores on state and national tests. Renaissance Learning has seven U.S. locations and subsidiaries in Canada 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 management’s expectations regarding future growth and the impact of funding issues on Company results.  These forward-looking statements are based on current expectations and current assumptions which management believes are reasonable.  However, these statements involve risks 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 the failure of orders to achieve expected growth targets, a decline in quiz sales that exceeds forecasts, risks associated with the implementation of the Company’s growth initiatives, dependence on educational institutions and government funding, and other risks affecting the Company’s business as described in the Company’s filings with the Securities and Exchange Commission, including the Company’s 2010 Annual Report on Form 10-K and later filed quarterly reports on Form 10-Q and Current Reports on Form 8-K, which factors are incorporated herein by reference.  The Company expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.






(tables to follow)


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RENAISSANCE LEARNING, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollar amounts in thousands, except per share amounts)

(unaudited)


 

Three Months

 

Six Months

 

 Ended June 30,

 

 Ended June 30,

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

Product revenue:

 

 

 

 

 

 

 

    Subscription

 $        14,828

 

 $        12,094

 

 $        29,345

 

 $        23,528

    Non-subscription

10,147

 

9,420

 

18,190

 

19,825

        Total product revenue

24,975

 

21,514

 

47,535

 

43,353

 

 

 

 

 

 

 

 

Service revenue:

 

 

 

 

 

 

 

    Subscription

6,911

 

5,698

 

13,647

 

   11,248

    Non-subscription

3,830

 

3,835

 

8,065

 

  8,669

        Total service revenue

10,741

 

9,533

 

21,712

 

19,917

 

 

 

 

 

 

 

 

Total revenue

35,716

 

31,047

 

69,247

 

63,270

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

    Products

4,858

 

3,700

 

8,173

 

             7,197

    Services

3,131

 

2,948

 

6,570

 

             6,440

 

 

 

 

 

 

 

 

Total cost of sales

7,989

 

6,648

 

14,743

 

13,637

 

 

 

 

 

 

 

 

Gross profit

27,727

 

24,399

 

54,504

 

49,633

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

    Product development

4,257

 

4,197

 

8,476

 

  8,296

    Selling and marketing

10,975

 

10,158

 

21,204

 

  20,504

    General and administrative

4,029

 

3,112

 

7,555

 

  6,513

 

 

 

 

 

 

 

 

Total operating expenses

19,261

 

17,467

 

37,235

 

  35,313

 

 

 

 

 

 

 

 

Operating income

8,466

 

6,932

 

17,269

 

14,320

 

 

 

 

 

 

 

 

Other income, net

30

 

22

 

17

 

261

 

 

 

 

 

 

 

 

Income before income taxes

   8,496

 

   6,954

 

17,286

 

14,581

 

 

 

 

 

 

 

 

Income taxes

3,186

 

   2,650

 

6,482

 

  4,494

 

 

 

 

 

 

 

 

Net income

 $          5,310

 

 $          4,304

 

 $        10,804

 

 $        10,087

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

  Basic and Diluted

 $            0.18

 

 $            0.15

 

 $            0.37

 

 $            0.34

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

  Basic

29,326,158

 

29,309,059

 

29,309,400

 

29,299,214

  Diluted

29,326,353

 

29,309,732

 

29,309,600

 

29,299,854

 

 

 

 

 

 

 

 





Page 4 of 4


RENAISSANCE LEARNING, INC.

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

(unaudited)



 

June 30,

 

December 31,

 

2011

 

2010

 

 

 

 

 

 

 

 

ASSETS:

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

 $             6,702

 

 $            9,845

Investment securities

     2,607

 

             6,630

Accounts receivable, net

  17,942

 

             7,873

Inventories

              3,434

 

             5,042

Prepaid expenses

              1,560

 

             1,668

Income taxes receivable

                     -

 

                327

Deferred tax asset

              4,073

 

             2,615

Other current assets

                 630

 

                711

  Total current assets

            36,948

 

           34,711

 

 

 

 

Investment securities

              2,731

 

             3,661

Property, plant and equipment, net

              6,382

 

             6,720

Goodwill

               2,868

 

             2,854

Other non-current assets

              8,120

 

             5,843

 

 

 

 

  Total assets

 $           57,049

 

 $          53,789

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

Current liabilities:

 

 

 

Accounts payable

 $             3,108

 

 $            2,874

Deferred revenue

            54,323

 

           64,791

Payroll and employee benefits

              7,258

 

             5,609

Income taxes payable

                 432

 

                     -

Other current liabilities

              3,195

 

             2,340

  Total current liabilities

            68,316

 

           75,614

 

 

 

 

Deferred revenue  

              9,963

 

             7,051

Deferred compensation and other employee benefits

              2,731

 

             2,538

Income taxes payable

              3,427

 

             3,426

Other non-current liabilities

                 772

 

                213

  Total liabilities

            85,209

 

           88,842

 

 

 

 

  Total shareholders' equity

          (28,160)

 

         (35,053)

 

 

 

 

  Total liabilities and shareholders' equity

 $           57,049

 

 $          53,789