WISCONSIN RAPIDS, Wis., April 15 /PRNewswire-FirstCall/ --
Renaissance Learning(R), Inc. (NASDAQ:RLRN), a leading provider of
technology to support personalized practice, differentiated
instruction, and progress monitoring in reading, math and writing
for pre K-12 schools and districts, today announced financial
results for the quarter ended March 31, 2008. Revenues for the
first quarter of 2008 were $29.4 million, an increase of 10.1% from
first quarter 2007 revenues of $26.7 million. Net income for the
first quarter of 2008 was $2.6 million, or $.09 per share, compared
to net income of $1.3 million, or $.05 per share, for the first
quarter last year. First quarter 2007 results included pre-tax
restructuring costs of approximately $0.5 million, or $.01 per
share. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001108/RENAISSANCELOGO)
"First quarter revenue and earnings growth is a good start to
2008," commented Terrance D. Paul, Chief Executive Officer. "This
growth reflects both the strong Accelerated Reader and Accelerated
Math Enterprise subscription orders from the second and third
quarter last year, which are being recognized as revenue now, and
laptop order growth of 6% this quarter compared to the same quarter
last year, the second consecutive quarter of growth for the laptop
product line. "We continue to see the positive impact of our
Enterprise offering, with revenue to same school AR customers
increasing by over $1,200 per year and software subscription
revenue growing to 40% of total software revenue in the first
quarter compared to 22% last year. There is also considerable
customer excitement over our recent release of the new Home Connect
feature of Enterprise," continued Paul. "However, as we have
indicated previously, Enterprise also has some near-term negative
effects. It is causing orders to shift to the second and, even more
so, the third quarters as schools align their subscriptions with
budget cycles. It is also causing customers to hold off purchasing
quizzes as they consider upgrading. Thus, orders were down 10.9%
for the quarter, and deferred revenue decreased by $5.0 million in
the first quarter of 2008 versus a $0.5 million increase in 2007.
"We expect that the economic downturn will hurt school funding and
our sales in a number of states, particularly California and
Florida, and now believe that our initial order projections of
15-20% growth for the full year may be too aggressive," added Paul.
"It is too early to predict the full year impact. However, we
continue to expect orders in the second and third quarters to be
strong, and with the recent release of Home Connect, we are
confident of achieving solid results in 2008." Renaissance Learning
added approximately 500 new customer schools in the U.S. and Canada
during the quarter, bringing total North American schools that are
actively using the Company's products to over 74,000. Of these,
over 63,000 are using the Company's reading products, over 29,000
are using the Company's math products, and over 22,000 are using at
least one Renaissance Place product. The Company will hold a
conference call at 4:00 p.m. CDT today to discuss its financial
results, quarterly highlights, and business outlook. The
teleconference may be accessed in listen-only mode by dialing
888-603-6873, ID number 41088150 at 4:00 p.m. CDT. 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 April 15, 2008 at 8:00 p.m. through April 22, 2008 at
11:59 p.m. The replay dial-in is 800-642-1687. The conference ID
number to access the replay is 41088150. Renaissance Learning, Inc.
Renaissance Learning, Inc. is the world's leading provider of
computer-based assessment technology for pre-K-12 schools. Adopted
by more than 74,000 North American 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 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 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,
India, 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 growth initiatives, growth prospects
and management's expectations regarding orders and financial
results for 2008 and future periods. These forward-looking
statements are based on current expectations and various
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 AR and AM Enterprise and laptop orders to achieve expected
growth targets, a decline in quiz sales that exceeds forecasts,
risks associated with the implementation of the Company's strategic
growth plan, 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 2007 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) RENAISSANCE
LEARNING(R), INC. CONSOLIDATED STATEMENTS OF INCOME (dollar amounts
in thousands, except per share amounts) (unaudited) Three Months
Ended March 31, 2008 2007 Net sales: Products $22,205 $21,701
Services 7,181 4,987 Total net sales 29,386 26,688 Cost of sales:
Products 4,035 3,703 Services 3,762 2,867 Total cost of sales 7,797
6,570 Gross profit 21,589 20,118 Operating expenses: Product
development 4,032 5,065 Selling and marketing 9,373 9,406 General
and administrative 4,129 3,842 Total operating expenses 17,534
18,313 Operating income 4,055 1,805 Other income (expense), net 168
302 Income before income taxes 4,223 2,107 Income taxes 1,605 790
Net Income $2,618 $1,317 Income per share: Basic $0.09 $0.05
Diluted $0.09 $0.05 Weighted average shares outstanding: Basic
28,759,046 28,858,799 Diluted 28,842,931 28,881,276 RENAISSANCE
LEARNING(R), INC. CONSOLIDATED BALANCE SHEETS (dollar amounts in
thousands) (unaudited) March 31, December 31, 2008 2007 ASSETS:
Current assets: Cash and cash equivalents $7,975 $7,337 Investment
securities 7,786 8,136 Accounts receivable, net 9,477 8,791
Inventories 5,981 6,273 Prepaid expenses 1,976 2,197 Income taxes
receivable 137 1,450 Deferred tax asset 4,432 4,406 Other current
assets 268 300 Total current assets 38,032 38,890 Investment
securities 6,955 8,982 Property, plant and equipment, net 10,186
10,578 Goodwill 47,241 47,065 Other noncurrent assets 7,808 7,785
Total assets $110,222 $113,300 LIABILITIES AND SHAREHOLDERS'
EQUITY: Current liabilities: Accounts payable $3,193 $2,011
Deferred revenue 30,682 35,675 Payroll and employee benefits 4,424
4,184 Other current liabilities 3,693 3,563 Total current
liabilities 41,992 45,433 Deferred revenue 2,723 2,707 Deferred
compensation and other employee benefits 1,543 1,933 Income taxes
payable 4,721 5,104 Other non-current liabilities 100 136 Total
liabilities 51,079 55,313 Total shareholders' equity 59,143 57,987
Total liabilities and shareholders' equity $110,222 $113,300
http://www.newscom.com/cgi-bin/prnh/20001108/RENAISSANCELOGO
http://photoarchive.ap.org/ DATASOURCE: Renaissance Learning, Inc.
CONTACT: Susan Sutherland of Renaissance Learning, Inc.,
1-877-988-8048, fax, +1-715-424-3414, Web site:
http://www.renlearn.com/
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