Excelligence Learning Corporation Announces Record First Quarter 2004 Results.Business Editors 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.--(BUSINESS WIRE)--May 6, 2004 Company Revenues Increased 13.8%, Early Childhood Revenues Up 17.2% Over Q1 2003 Revenues Excelligence Learning Corporation (Nasdaq:LRNS), a fast-growing adj. 1. tending to spread quickly; - used mostly of plants. Adj. 1. fast-growing - tending to spread quickly; "an aggressive tumor" strong-growing, aggressive leader in developing, manufacturing and distributing educational products to the early childhood and elementary school elementary school: see school. markets, announced results for the first quarter of 2004 and offered its revised outlook for the 2004 fiscal year. First Quarter 2004 Results 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: Company Revenues Increased 13.8% Over Q1 2003 Revenues 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. , President and 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. , in discussing the company's first quarter 2004 results, commented, "With a 13.8% revenue increase, 17.2% for our Early Childhood segment, our performance was impressive. Consolidated revenue was $19.8 million for the first quarter of 2004, an increase of $2.4 million over the $17.4 million we reported for the first quarter of 2003. Our increase this quarter demonstrates, once again, our ability to grow and to continue to perform successfully against our competition." Net Loss Improves 17.8% Over Net Loss Reported in Q1 2003 "Our business is seasonal. We typically report losses in the first quarter of the year. Our net loss for the first quarter of 2004 was $943,000, or $(0.11) per common share, compared with our net loss of $1.1 million, or $(0.14) per common share, for the same period in 2003. Our increased revenues helped us to decrease this quarter's net loss as compared to 2003." Operating and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Loss Improved 16.8% and 21.8%, Respectively "Our EBITDA loss was $1.2 million for the first quarter of 2004. This is an improvement of 21.8% over the EBITDA loss of $1.6 million reported for the first quarter of 2003." EBITDA, a non-GAAP financial measure, is calculated by adding back to net income (loss): net interest, income taxes, deprecation dep·re·cate tr.v. de·pre·cat·ed, de·pre·cat·ing, de·pre·cates 1. To express disapproval of; deplore. 2. To belittle; depreciate. and amortization. There is more information on EBITDA, as well as a reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss to EBITDA, in the schedules attached to this press release. Q1 2004 Results for Individual Business Segments Early Childhood Segment Grows 17.2% Compared to Q1 2003; EBITDA Loss Swings From Negative to Positive "Excelligence Learning Corporation has two business segments, Early Childhood and Elementary School. For the Early Childhood segment, our net revenue for the first quarter of 2004 was $18.2 million, a 17.2% increase over the $15.5 million generated in first quarter of 2003. EBITDA for the Early Childhood segment for the first quarter of 2004 was $240,000, compared to an EBITDA loss of $271,000 for the same period in 2003. Our sales increase and resulting EBITDA improvement were primarily due to a new marketing strategy that better leverages our unique multi-channel See multichannel. distribution structure, something we believe our competition would find very expensive to match." Elementary School Segment's Operations Consolidation Affects EBITDA, Paves Way for Lower Future Costs "The Elementary School segment is more seasonal than our Early Childhood segment. Net revenue for the Elementary School segment was $1.7 million for the first quarter of 2004. This is a decrease of 13.2% from the $1.9 million reported in the first quarter of 2003. The Elementary School segment's EBITDA loss for the first quarter of 2004 was $1.5 million, compared to a $1.3 million EBITDA loss for the first quarter of 2003. While the decrease in sales for the first quarter affected EBITDA loss, the segment also incurred $50,000 in one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges, primarily freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or costs associated with the transfer of inventory, as it worked to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. its principal warehouse and production operations into our newly-automated Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. facilities. We believe that the consolidation will lower operating costs operating costs npl → gastos mpl operacionales in the future and should have a positive effect on EBITDA as we approach our busy season." Business Outlook Second Quarter 2004 Expectations: Net revenues are expected to be between $24 million and $27 million. EBITDA is expected to be between $700,000 and $1.7 million. 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. is expected to be between $200,000 and $1.2 million. Full Year 2004 Expectations (revised): Net revenues are expected to be between $115 and $125 million. EBITDA is expected to be between $7 and $12 million. Operating income is expected to be between $5 and $9 million. "We believe that our performance during the traditionally slow first quarter indicates that we can expect to perform very well throughout the remainder of 2004. Conditions in our marketplace are also improving, which should enable us to meet our expectations in the next two quarters, our busiest time of the year." For a more detailed explanation of the items contained in this press release, please refer to Excelligence Learning Corporation's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2004, to be filed with the Securities and Exchange Commission early next week. 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 PROVIDES A "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. " FOR 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. . CERTAIN INFORMATION INCLUDED IN THIS PRESS RELEASE (AS WELL AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER WRITTEN STATEMENTS MADE OR TO BE MADE BY EXCELLIGENCE, ITS DIRECTORS AND/OR and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. ITS EXECUTIVE OFFICERS) CONTAINS STATEMENTS THAT ARE FORWARD-LOOKING for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , INCLUDING SECOND QUARTER AND FULL YEAR 2004 EXPECTATIONS, FINANCIAL PROJECTIONS, SUCH AS PROJECTIONS OF REVENUE, STATEMENTS OF MANAGEMENT'S PLANS, OBJECTIVES OR EXPECTATIONS, INFORMATION REGARDING NEW PRODUCTS OR SERVICES, STATEMENTS OF BELIEF AND OTHER MATTERS RELATING TO relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc EXPECTATIONS AND STRATEGIES REGARDING THE FUTURE. ALTHOUGH EXCELLIGENCE BELIEVES THAT THE CURRENT EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, SUCH FORWARD-LOOKING INFORMATION IS SUBJECT TO IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ANTICIPATED RESULTS AND THERE CAN BE NO ASSURANCE THAT ITS EXPECTATIONS WILL BE ACHIEVED. ACCORDINGLY, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY EXCELLIGENCE. CERTAIN FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM EXCELLIGENCE'S EXPECTATIONS ARE SET FORTH AS RISK FACTORS IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION REPORTS AND FILINGS, INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. FOR THE FISCAL YEAR ENDED DECEMBER December: see month. 31, 2003. THESE FILINGS MAY BE VIEWED FREE OF CHARGE AT WWW WWW or W3: see World Wide Web. (World Wide Web) The common host name for a Web server. The "www-dot" prefix on Web addresses is widely used to provide a recognizable way of identifying a Web site. .SEC.GOV. THE COMPANY DOES NOT UNDERTAKE TO UPDATE ITS FORWARD-LOOKING STATEMENTS, EXCEPT TO THE EXTENT THAT THE COMPANY IS REQUIRED TO DO SO UNDER APPLICABLE LAW. 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
v. 1. To give more force or effectiveness to something; strengthen. 2. To reward an individual, especially an experimental subject, with a reinforcer subsequent to a desired response or performance. 3. the connection between children's learning at school and at home. 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 to early childhood professionals and parents. 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. These products are then resold 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.
EXCELLIGENCE LEARNING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share amounts)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2004 2003
----------- -----------
Revenues $ 19,836 $ 17,418
Cost of goods sold 12,928 11,290
----------- -----------
Gross profit 6,908 6,128
----------- -----------
Operating expenses:
Selling, general and administrative 8,506 8,027
Amortization of other intangible assets 43 75
----------- -----------
Operating loss (1,641) (1,974)
----------- -----------
Other (income) expense:
Interest expense 5 32
Interest income (2) (5)
----------- -----------
Loss before income taxes (1,644) (2,001)
Income tax benefit 701 853
----------- -----------
Net loss $ (943) $ (1,148)
=========== ===========
Net Loss Per Share Calculation:
Net loss per share - basic and diluted $ (0.11) $ (0.14)
=========== ===========
Weighted average shares used in net loss
per share calculation - basic and diluted 8,688,474 8,471,463
Segment Information and Reconciliation of Net Loss to EBITDA
(unaudited - in thousands):
Early Childhood Elementary School
----------------- -----------------
Three Months
Ended March 31,
----------------- -----------------
2004 2003 2004 2003
-------- -------- -------- --------
Net revenues $18,172 $15,501 $ 1,664 $ 1,917
======== ======== ======== ========
EBITDA:
Net loss $ (17) $ (351) $ (926) $ (797)
Net interest charges 3 26 -- 1
Income taxes (12) (240) (689) (613)
Depreciation and amortization 266 294 161 127
-------- -------- -------- --------
EBITDA (loss) $ 240 $ (271) $(1,454) $(1,282)
======== ======== ======== ========
Consolidated
------------------
2004 2003
--------- --------
Net revenues $ 19,836 $17,418
========= ========
EBITDA:
Net loss $ (943) $(1,148)
Net interest charges 3 27
Income taxes (701) (853)
Depreciation and amortization 427 421
--------- --------
EBITDA (loss) $( 1,214) $(1,553)
========= ========
Note: Excelligence Learning Corporation's supplemental profit measure
is EBITDA, which is calculated by adding back to net income (loss):
net interest, income taxes, deprecation and amortization. EBITDA
information should not be considered as an alternative to any measure
of performance as promulgated under generally accepted accounting
principles (such as operating income or net income), nor should it be
considered as an indicator of the Company's overall financial
performance. The Company's calculations of EBITDA may be different
from the calculations used by other companies and, therefore,
comparability may be limited.
EXCELLIGENCE LEARNING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for par value and share amounts)
(Unaudited)
March 31, December 31,
2004 2003*
----------- ------------
ASSETS
Current assets :
Cash and cash equivalents $ 2,857 $ 3,620
Accounts receivable, net 5,259 5,480
Inventories 20,427 15,133
Prepaid expenses and other current assets 3,189 2,937
Deferred income taxes 1,315 1,214
----------- ------------
Total current assets 33,047 28,384
Property and equipment, net 4,493 4,070
Deferred income taxes 6,860 6,367
Other assets 302 307
Goodwill 5,878 5,878
Other intangible assets, net 875 918
----------- ------------
Total assets $ 51,455 $ 45,924
=========== ============
LIABILITIES, REDEEMABLE SECURITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,171 $ 3,018
Accrued expenses 3,094 2,955
Income tax payable 31 234
Other current liabilities 335 186
----------- ------------
Total current liabilities 12,631 6,393
----------- ------------
Redeemable common shares, 100,000 shares
authorized, issued and outstanding at
December 31, 2003 -- 400
----------- ------------
Stockholders' equity:
Common stock, $0.01 par value; 15,000,000
shares authorized; 8,731,287 and 8,549,423
shares issued and outstanding at March 31,
2004 and December 31, 2003, respectively 87 85
Additional paid-in capital 62,849 62,353
Deferred stock compensation (782) (920)
Accumulated deficit (23,330) (22,387)
----------- ------------
Total stockholders' equity 38,824 39,131
----------- ------------
Total liabilities, redeemable securities
and stockholders' equity $ 51,455 $ 45,924
=========== ============
* Derived from audited consolidated financial statements filed in the
Company's 2003 Annual Report on Form 10-K.
EXCELLIGENCE LEARNING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended
March 31,
-----------------
2004 2003
-------- --------
Cash flows from operating activities:
Net loss $ (943) $(1,148)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 427 421
Provision for losses on accounts receivable (115) 25
Equity-based compensation 138 143
Deferred income taxes (594) (853)
Changes in operating assets and liabilities, net
of assets and liabilities assumed in
acquisition:
Accounts receivable 336 (382)
Inventories (5,294) (7,304)
Prepaid expenses and other current assets (252) 258
Other assets 5 18
Accounts payable 6,153 6,526
Accrued expenses 139 (22)
Income tax related liabilities (203) (3)
Other current liabilities 149 (37)
-------- --------
Net cash used in operating activities (54) (2,358)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (807) (323)
Acquisition of Marketing Logistics, Inc. -- (827)
-------- --------
Net cash used in investing activities (807) (1,150)
-------- --------
Cash flows from financing activities:
Borrowings on line of credit -- 12,852
Principal payments on line of credit -- (8,457)
Exercise of employee stock options 98 13
-------- --------
Net cash provided by financing activities 98 4,408
-------- --------
Net increase (decrease) in cash and cash equivalents (763) 900
Cash and cash equivalents at beginning of period 3,620 2,713
-------- --------
Cash and cash equivalents at end of period $ 2,857 $ 3,613
======== ========
Supplemental disclosures of cash flow information:
Issuance of redeemable common shares in
acquisition $ -- $ 400
Cash payments during the period:
Cash paid for interest $ -- $ 2
Cash paid for taxes $ 96 $ 3
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