DALLAS, Nov. 5 /PRNewswire-FirstCall/ -- Voyager Learning Company (OTC: VLCY) ("the Company"), a publisher of education materials and provider of education solutions in the K-12 market, today reported financial results for its third quarter and year-to-date periods ended September 30, 2009. All results should be considered preliminary pending the Company's filing of its quarterly report on Form 10-Q.
Net sales for the three months and nine months ended September 30, 2009 were $32.6 million and $79.6 million, respectively, compared to net sales for the three months and nine months ended September 30, 2008 of $27.3 million and $76.4 million, respectively. Adjusted EBITDA for the three months and nine months ended September 30, 2009 was $8.6 million and $17.4 million, respectively, compared to Adjusted EBITDA for the three months and nine months ended September 30, 2008 of $5.2 million and $10.3 million, respectively.
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA are measures that are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures have been included in this announcement because the Company believes they provide useful information to investors because they reflect the underlying performance of the ongoing operations of the Company from management's perspective. Investors are encouraged to review the reconciliations attached to this announcement of the non-GAAP financial measures used in this announcement to their most directly comparable GAAP financial measures.
Investor Conference Call
The Company will hold a conference call today at 4:00 p.m. Eastern Time. The call will address the Company's unaudited financial results through September 30, 2009, as well as Amendment No. 2 to the Registration Statement on Form S-4 (the "Amended Form S-4") filed by Cambium Learning Group, Inc. (formerly known as Cambium-Voyager Holdings, Inc.), in connection with the Company's proposed business combination with Cambium Learning, Inc. Cambium Learning Group, Inc. filed the Amended Form S-4 with the Securities and Exchange Commission on October 30, 2009.
To listen to the Company's upcoming conference call, please dial (888) 688-0384 and enter ID # 36039794 at 4:00 p.m. Eastern Time on Thursday, November 5, 2009. The call will be recorded and archived until November 19, 2009, and can be replayed by calling (800) 642-1687 and entering ID # 36039794. The conference call will also be webcast and archived on the Company's website at www.voyagercompany.com under the heading "Investor Relations" and then under the tab "Events and Company Presentations."
About Voyager Learning Company
Voyager Learning Company (OTC: VLCY.PK) is based in Dallas, Texas, and is a publisher of education materials and provider of education solutions serving the K-12 market. Through its product lines, which include Voyager Expanded Learning, ExploreLearning and Learning A-Z, the Company is a leading provider of K-12 curriculum products, in-school core reading programs, reading and math intervention programs, and professional development programs for school districts throughout the United States.
Additional Information
On August 6, 2009, Cambium Learning Group, Inc. filed with the SEC a registration statement on Form S-4 (the "Form S-4") containing a preliminary proxy statement/prospectus regarding the proposed business combination of the Company and Cambium Learning, Inc. On October 9, 2009 and October 30, 2009, Cambium Learning Group, Inc. filed Amendment No. 1 and Amendment No. 2 to the Form S4, respectively. This material is not a substitute for the final proxy statement/prospectus regarding the proposed business combination. Investors and stockholders are urged to read carefully the preliminary proxy statement/prospectus and the final proxy statement/prospectus when available because they contain and will contain important information about Cambium Learning Group, Inc., Cambium Learning, Inc., the Company, the business combination and related matters. The Company will mail the final proxy statement/prospectus to each of its stockholders. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC's website (www.sec.gov). You may also obtain documents filed by the Company with the SEC regarding this transaction, free of charge, from the Company's website (www.voyagercompany.com) under the heading "Investor Relations" and then under the tab "SEC Filings."
Cambium Learning Group, Inc., the Company, Cambium Learning, Inc. and their respective directors, executive officers and various other members of management and employees may be soliciting proxies from the Company's stockholders in favor of the merger agreement entered into in connection with the proposed business combination. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the Company's stockholders is included in the preliminary proxy statement/prospectus described above and will be included in the final proxy statement/prospectus when available.
VOYAGER LEARNING COMPANY
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
Net sales $32,575 $27,267 $79,584 $76,418
Cost of sales
(exclusive
of depreciation and
amortization shown
separately below) (10,694) (9,956) (26,298) (27,837)
------- ------ ------- -------
Gross profit 21,881 17,311 53,286 48,581
Research and
development expense (1,274) (1,141) (3,436) (3,743)
Sales and
marketing expense (8,541) (8,005) (22,615) (25,410)
General and
administrative
expense (5,939) (8,077) (18,379) (24,286)
Depreciation and
amortization
expense (4,922) (5,258) (14,605) (16,083)
Goodwill impairment (5,191) - (27,175) -
Lease termination
costs - - - (11,673)
------- ------ ------- -------
Loss before interest,
other income
(expense)
and income
taxes (3,986) (5,170) (32,924) (32,614)
Net interest income
(expense):
Interest income 9 136 70 712
Interest expense (135) (77) (611) (231)
------- ------ ------- -------
Net interest
income (expense) (126) 59 (541) 481
Other income
(expense), net (230) 1 954 790
------- ------ ------- -------
Loss before
income taxes (4,342) (5,110) (32,511) (31,343)
Income tax
benefit (expense) (366) - 81 -
------- ------ ------- -------
Net loss $(4,708) $(5,110) $(32,430) $(31,343)
======= ======= ======== ========
Net loss per
common share:
Basic net loss
per common share $(0.16) $(0.17) $(1.09) $(1.05)
Diluted net loss
per common share $(0.16) $(0.17) $(1.09) $(1.05)
Average number of
common shares and
equivalents
outstanding:
Basic 29,874 29,871 29,874 29,871
Diluted 29,874 29,871 29,874 29,871
VOYAGER LEARNING COMPANY
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
September 30, December 31,
2009 2008
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $85,325 $67,302
Accounts receivable, net 14,789 7,371
Income tax receivable 4,684 19,782
Inventory 12,568 15,196
Other current assets 7,451 33,826
----- ------
Total current assets 124,817 143,477
Property, equipment and software at cost 19,708 16,543
Accumulated depreciation and amortization (12,498) (9,718)
------- ------
Net property, equipment and software 7,210 6,825
Goodwill 72,542 99,717
Acquired curriculum intangibles, net 30,437 38,594
Other intangible assets, net 4,503 5,218
Developed curriculum, net 8,994 8,903
Other assets 1,536 1,363
----- -----
Total assets $250,039 $304,097
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of
capital lease obligations $152 $149
Accounts payable 1,773 1,962
Accrued expenses 14,699 40,866
Deferred revenue, less long-term portion 32,216 27,917
------ ------
Total current liabilities 48,840 70,894
Long-term liabilities:
Capital lease obligations,
less current maturities 63 96
Other liabilities 21,029 20,348
------ ------
Total long-term liabilities 21,092 20,444
------ ------
Commitments and contingencies
Shareholders' equity:
Common stock ($.001 par
value, 50,000 shares
authorized, 30,550 shares
issued and 29,874 shares
outstanding at September 30, 2009,
and December 31, 2008) 30 30
Capital surplus 357,823 357,741
Accumulated earnings (deficit) (161,657) (129,227)
Treasury stock, at cost
(676 shares at September 30, 2009
and at December 31, 2008) (16,836) (16,836)
Other comprehensive income (loss):
Pension and postretirement plans,
net of tax benefit of
$392 and $713 at September 30, 2009 and
December 31, 2008, respectively 788 1,093
Net unrealized gain (loss) on
securities, net of tax
expense of $39 at September 30, 2009
and December 31, 2008 (41) (42)
--- ---
Accumulated other comprehensive income 747 1,051
--- -----
Total shareholders' equity 180,107 212,759
------- -------
Total liabilities and shareholders' equity $250,039 $304,097
======== ========
VOYAGER LEARNING COMPANY
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended
-----------------
Sept. 30, Sept. 30,
2009 2008
---- ----
Operating activities:
Net loss $(32,430) $(31,343)
Adjustments to reconcile net loss
to net cash provided by
(used in) operating activities:
Goodwill impairment 27,175 -
Depreciation and amortization 14,605 16,083
Non-cash lease termination costs - 673
Stock-based compensation 220 688
Loss (gain) on sale of
available for sale securities 1 (136)
Deferred income taxes 60 -
Non-cash tax benefit (321) -
Changes in operating assets and liabilities:
Accounts receivable, net (7,418) (11,329)
Income tax receivable 15,098 1,445
Inventory 2,628 (1,668)
Other current assets 14,707 4,430
Other assets (173) (11)
Accounts payable (189) (360)
Accrued expenses (26,167) (10,004)
Deferred revenue 6,010 7,593
Other long-term liabilities (657) (1,838)
Other, net (16) 53
--- --
Net cash provided by (used in) operating
activities 13,133 (25,724)
Investing activities:
Expenditures for property, equipment,
developed curriculum, and software (6,112) (5,904)
Purchases of equity investments
available for sale (10) (675)
Proceeds from sales of equity
investments available for sale 11,139 1,756
------ -----
Net cash provided by (used in)
investing activities 5,017 (4,823)
Financing activities:
Principal payments under
capital lease obligations (127) (208)
---- ----
Net cash used in financing activities (127) (208)
Increase (decrease) in cash
and cash equivalents 18,023 (30,755)
Cash and cash equivalents,
beginning of period 67,302 53,868
------ ------
Cash and cash equivalents,
end of period $85,325 $23,113
======= =======
VOYAGER LEARNING COMPANY
RECONCILIATION OF NET LOSS TO ADJUSTED LOSS BEFORE INTEREST, OTHER
INCOME (EXPENSE),
INCOME TAXES AND DEPRECIATION AND AMORTIZATION (EBITDA)
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
---- ---- ---- ----
Net loss $(4,708) $(5,110) $(32,430) $(31,343)
Interest (income)
expense, net 126 (59) 541 (481)
Other (income)
expense, net 230 (1) (954) (790)
Income tax (benefit)
expense 366 - (81) -
---- ---- ---- ----
Loss before interest,
other income (expense),
and income taxes (3,986) (5,170) (32,924) (32,614)
Depreciation and
amortization 4,922 5,258 14,605 16,083
----- ----- ------ ------
Loss before interest,
other income (expense),
income taxes and
depreciation and
amortization (EBITDA) 936 88 (18,319) (16,531)
--- -- ------- -------
Non-recurring or non-operating
costs included in EBITDA
but excluded from
Adjusted EBITDA:
Goodwill impairment 5,191 - 27,175 -
Lease termination costs - - - 11,673
Merger related costs 1,043 - 6,146 -
Non-recurring corporate
overhead costs primarily
related to delinquent
SEC filings and transition
of the corporate office 1,394 5,135 2,433 15,122
------ ------ ------- -------
Adjusted EBITDA $8,564 $5,223 $17,435 $10,264
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