Excelligence Learning Corporation Announces First Quarter 2005 Results.MONTEREY Monterey (mŏntərā`), city (1990 pop. 31,954), Monterey co., W Calif., a port on Monterey Bay; founded 1770, inc. 1850. It is a popular resort, the home of many artists and writers, and one of California's oldest cities. , Calif. -- Excelligence Learning Corporation (Nasdaq:LRNS) --Revenues Up 13.0% to $22.4 Million --1st Quarter Net Loss Improves by 45.4%, to $515,000 Excelligence Learning Corporation (Nasdaq:LRNS), a leader in developing, manufacturing and distributing educational products to the early childhood and elementary school elementary school: see school. markets, today reported financial and operating results for the first quarter ending March 31, 2005. The Company's Early Childhood division grew by 15.6% over the prior-year period, to $21.0 million, compared to $18.2 million for 2004. Revenues in the Company's Elementary School division declined by $0.3 million from $1.7 million for the first quarter of 2004 to $1.4 million for the first quarter of 2005. Total revenues for the first quarter of 2005 increased 13.0% to $22.4 million, compared to $19.8 million for the same period last year. Ron Noun 1. Ron - a Chadic language spoken in northern Nigeria Bokkos, Daffo West Chadic - a group of Chadic languages spoken in northern Nigeria; Hausa in the most important member Elliott Elliott may refer to: possessing the best body in the whole world. like the hottest, sexiest body ever! the feeling of his skin kills me and sends me straight to heaven. , CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Excelligence, remarked, "We are happy to report 13.0% growth on our top line, driven by improvements in the Early Childhood division's circulation strategy, the rebranding Rebranding is the process by which a product or service developed with one brand or company or product line affiliation is marketed or distributed with a different identity. of our in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. brand, Colorations, and the introduction of more high-value products sourced from China. While our Elementary School business is behind where it was a year ago, we are on target under the internal plan that we have in place for the division for 2005." The Early Childhood division realized an increase in gross profit of 17.3% to $7.6 million for the quarter, compared to $6.5 million from a year earlier. The Elementary School division's gross profit decreased by a smaller percentage basis than did its revenue, declining 12.1% to $392,000, compared to $446,000 a year earlier. As a whole, the Company's gross profit for the quarter advanced by 15.4% to $8.0 million, compared to $6.9 million for the same period a year earlier. On a 13.0% increase in revenues, SG&A expenses for the first quarter of 2005 increased only 5.9% or $504,000, to $9.0 million, compared to $8.5 million for the same period in 2004. SG&A would have increased by only 3.1% excluding a $240,000 charge related to a legal settlement. Due to the seasonal nature of its business, the Company's first quarter has historically operated at a loss. The Early Childhood division showed an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $635,000 for the first quarter of 2005. Excluding the charge related to the legal settlement, the division had an operating profit of $875,000. The Company's consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: loss, net of tax benefit, for the first quarter was $515,000, or $(0.06) per share, compared to net loss of $943,000, or $(0.11) per share, for the prior year. Excluding the charge related to the legal settlement, the Company's consolidated net loss for the first quarter would have been $375,000, or $(0.04) per share. "We are ahead of our internal budget for the first quarter and are benefiting from all the programs put in place during 2004, a result of a thorough examination of our operating infrastructure. We believe that our success is demonstrated by the dramatic improvement in our operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. on a year-over-year basis. Additionally, our gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improvement reflects the increased emphasis we placed on proprietary products during 2004, including the expansion of our in-house Colorations brand, sourcing from lower cost countries as well as our internal efforts to better manage freight-out expenses," said Mr. Elliott. Business Outlook For the full fiscal year 2005, the Company continues to expect net revenues of between $125 and $135 million, with operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. expected to fall between $5 and $8 million. "2005 is off to a terrific start. In our Early Childhood division, sales and gross profit are trending up and expenses as a percentage of sales are trending down due to the strategies we put in place in 2004. After a difficult consolidation process caused our Elementary School division to miss its revenue and earnings objectives for 2004, we have regrouped and are now back on target. Taken together, we believe that 2005 will be the year the Company begins a sustained upward level of profitability. We are excited to see the year unfold unfold - inline ," concluded Mr. Elliot Elliot is a common last name, and may refer to any one of the various people bearing that name. See . It is also a first name, once rare, now becoming more common. As a first or last name, it can be spelled Elliot, Eliott, Eliot, or Elliott. . Conference Call The Company will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-356-3926. International callers should dial 706-679-5291. There is no pass code required for this call. If you are unable to participate in the call at this time, a replay will be available on Wednesday Wednesday: see week. , May 11 at 3:00 p.m. Pacific Time, through Wednesday, May 18 at 9:00 p.m. Pacific Time. To access the replay, dial 800-642-1687 and enter the conference ID number 6065393. This conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed by all interested parties on Excelligence's website at www.excelligencelearning.com. To listen to the live call, please go to Excelligence's website at least fifteen minutes prior to the start of the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call on Excelligence's website for 90 days. About Excelligence Learning Corporation Excelligence Learning Corporation is a developer, manufacturer and retailer of educational products, which are sold to child care programs, preschools, elementary schools and consumers. The Company serves early childhood professionals, educators This is a list of educators. See also: Education, List of education topics.
General
or primary education Traditionally, the first stage of formal education, beginning at age 5–7 and ending at age 11–13. . The Company is composed of two business segments, Early Childhood and Elementary School. Through its Early Childhood segment, the Company develops, markets and sells educational products through multiple distribution channels primarily to early childhood professionals and, to a lesser extent, consumers. Through its Elementary School segment, the Company sells school supplies and other products specifically targeted for use by children in kindergarten kindergarten [Ger.,=garden of children], system of preschool education. Friedrich Froebel designed (1837) the kindergarten to provide an educational situation less formal than that of the elementary school but one in which children's creative play instincts would be through sixth grade to elementary schools, teachers and other education organizations. Those parties then resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. the products either as a fundraising
The City of Monterey is located on Monterey Bay along the Pacific coast in central California. As of 2005, the city population was 30,641. and its website is www.excelligencelearning.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act of 1995 about matters such as the Company's plans for increasing revenues and gross profit and containing expenses in its Early Childhood and Elementary School business segments, as well as projections of net revenues and operating income. These statements are based on management's current expectations and actual results may differ materially as a result of various risks and uncertainties, including, but not limited to, the Company's ability to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. product offerings or expand in new and existing markets; changes in general economic and business conditions and in the educational products, catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. or e-retailing industry in particular; the impact of competition, specifically, if competitors were to either adopt a more aggressive pricing strategy than the Company or develop a competing line of proprietary products; the level of demand for the Company's products; fluctuations in currency exchange rates, which could potentially result in a weaker U.S. dollar in overseas markets, increasing the Company's cost of inventory purchased; and other factors discussed in the Company's filings with the SEC. The forward-looking statements in this earnings release are made as of May 11, 2005, and Excelligence Learning Corporation does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.
EXCELLIGENCE LEARNING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share amounts)
(Unaudited)
Three Months Ended
March 31,
------------------------
2005 2004
---------- ----------
Revenues $ 22,410 $ 19,836
Cost of goods sold 14,441 12,928
---------- ----------
Gross profit 7,969 6,908
---------- ----------
Operating expenses:
Selling, general and administrative 9,010 8,506
Amortization of intangible assets 43 43
---------- ----------
Operating loss (1,084) (1,641)
---------- ----------
Other (income) expense:
Interest expense 5 5
Interest income (11) (2)
---------- ----------
Loss before income taxes (1,078) (1,644)
Income tax benefit 563 701
---------- ----------
Net loss $ (515) $ (943)
========== ==========
Net Loss Per Share Calculation:
Net loss per share - basic and diluted $ (0.06) $ (0.11)
========== ==========
Weighted average shares used in net loss
per share calculation - basic and
diluted 8,926,231 8,688,474
EXCELLIGENCE LEARNING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for par value and share amounts)
(Unaudited)
March 31, December 31,
2005 2004(a)
--------- ---------
ASSETS
Current assets :
Cash and cash equivalents $ 1,282 $ 2,657
Accounts receivable, net of allowance for
doubtful accounts of $333 and $385 at
March 31, 2005 and December 31, 2004,
respectively 6,237 8,521
Inventories 27,892 16,434
Prepaid expenses and other current assets 4,164 3,281
Deferred income taxes 440 444
-------- --------
Total current assets 40,015 31,338
Property and equipment, net 4,393 4,401
Deferred income taxes 6,306 6,086
Other assets 232 238
Goodwill 5,878 5,878
Other intangible assets, net 702 745
-------- --------
Total assets $ 57,526 $ 48,686
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,971 $ 3,686
Accrued expenses 2,839 2,607
Other current liabilities 612 31
-------- --------
Total current liabilities 15,422 6,324
-------- --------
Stockholders' equity:
Common stock, $0.01 par value; 15,000,000
shares authorized; 8,935,124 and 8,840,354
shares issued and outstanding at March 31,
2005 and December 31, 2004, respectively 89 88
Additional paid-in capital 63,189 63,070
Deferred stock compensation (230) (368)
Accumulated deficit (20,944) (20,428)
-------- --------
Total stockholders' equity 42,104 42,362
-------- --------
Total liabilities and stockholders' equity $ 57,526 $ 48,686
======== ========
(a) Derived from audited consolidated financial statements filed in
the Company's 2004 Annual Report on Form 10-K.
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