Cambium Learning Group Reports Second Quarter 2018 Financial Results

Aug 13, 2018

Bookings Trends Accelerate into Important Back-to-School Selling Season

Learning A-Z Bookings Up 26% for Q2 Year-over-Year, Up 13% Year-to-Date

ExploreLearning Bookings Up 15% for Q2 Year-over-Year, Up 14% Year-to-Date

Reiterating Full-Year Outlook

DALLAS, Aug. 13, 2018 (GLOBE NEWSWIRE) -- Cambium Learning®Group, Inc. (Nasdaq: ABCD, the "Company"), a leading educational technology solutions company committed to helping all students reach their full potential, announced today financial results for its second quarter ended June 30, 2018.

SECOND QUARTER 2018 RESULTS

"Cambium Learning Group's first half results were strong, trending well as we head into the crucial third quarter back-to-school selling season," stated John Campbell, Chief Executive Officer. "Second quarter Bookings grew 11% compared to the second quarter of 2017, led by double-digit increases in our SaaS segments of 26% at Learning A-Z and 15% at ExploreLearning. We executed well in the quarter on our planned strategic investments in development, marketing and sales initiatives to support the long-term growth of our digital solutions, which are reflected as expected in first half results. Two of our Learning A-Z solutions earned prestigious Software and Information Industry Association CODiE Awards: Raz-Plus, for Best Solution for Special Needs Students, and Science A-Z, for Best Science Instruction Solution, marking the seventh consecutive year that one of our products has won. Overall, we are well-positioned heading into the second half selling season."

Financial Snapshot

For the quarter ended June 30, 2018, the Company reported the following financial results:

  Three Months Ended June 30,   Six Months Ended June 30,
(in millions) 2018   2017   $ Change   2018   2017   $ Change
GAAP net revenues $ 41.0     $ 40.4     $ 0.6     $ 77.6     $ 76.3     $ 1.3  
GAAP net income 4.4     5.8     (1.4 )   7.0     8.3     (1.3 )
Net income margin % 11 %   14 %       9 %   11 %    
EBITDA 11.1     12.5     (1.3 )   19.7     21.1     (1.5 )
Adjusted EBITDA 12.7     12.9     (0.2 )   21.5     21.9     (0.4 )
Adjusted EBITDA margin % 31 %   32 %       28 %   29 %    
                       
Bookings $ 33.1     $ 29.7     $ 3.4     $ 53.0     $ 48.9     $ 4.1  
Cash income 1.9     (0.8 )   2.7     (8.7 )   (11.6 )   2.9  
Cash income margin % 6 %   (3 )%       (16 )%   (24 )%    
                               

First Half 2018 Financial Highlights

  • Generally Accepted Accounting Principles (GAAP) net revenues for the first half of 2018 increased by $1.3 million, or 2%, to $77.6 million compared with $76.3 million in 2017. GAAP net revenues by segment for the six months ended June 30, 2018, and the change from the same period of 2017, were as follows:

    ○  Learning A-Z® - $39.6 million, increased $2.7 million or 7%

    ○  ExploreLearning® - $15.2 million, increased $1.7 million or 13%

    ○  Voyager Sopris Learning® - $22.8 million, decreased $(3.2) million or (12)%

  • Bookings for the first half of 2018 increased by 8% to $53.0 million, compared with $48.9 million in the first half of 2017, with growth in all three segments.

  • The Company reported GAAP net income of $7.0 million during the first half of 2018, decreasing $1.3 million compared to net income of $8.3 million during the first half of 2017. Net income includes expenses of $1.1 million related to the Company's definitive agreement to acquire VKIDZ Holdings Inc. ("VKidz") and its review of strategic alternatives in addition to higher tax expense. The Company's effective tax rate for the first half of 2018 is higher than the effective tax rate for the first half of 2017 as a result of reducing most of the valuation allowance against most of the Company's deferred tax assets in the fourth quarter of 2017.

  • Adjusted EBITDA was $21.5 million, decreasing $0.4 million from $21.9 million in 2017, with the growth in GAAP net revenues in the first half more than offset by planned strategic investments made to development, marketing and sales initiatives to support full-year and long-term growth of the Company's digital solutions.

  • Net interest expense was $1.8 million for the first half of 2018, down $0.8 million from the first half of 2017 as a result of the scheduled debt amortization payments and voluntary prepayments made during 2017.

  • Cash Income was $(8.7) million for the first half of 2018 compared to Cash Income of $(11.6) million for the first half of 2017. Cash Income is a highly seasonal metric and is historically in a loss position for the first half of the year. Capital expenditures totaled $8.0 million in the first half of 2018 versus $8.8 million in the first half of 2017.

  • The Company had cash and cash equivalents of $4.7 million at June 30, 2018. For the six months ended June 30, 2018, cash used in operations was $3.9 million, cash used in investing activities was $8.0 million, and cash provided by financing activities was $8.1 million. At June 30, 2018, the principal amount of term loans outstanding was $45.6 million, the revolving credit facility outstanding was $10.0 million and there was $19.8 million available under the revolving credit facility.

  • The Company's technology-enabled products continue to receive industry recognition. Learning A-Z was recently awarded two Software and Information Industry Association (SIIA) CODiE Awards: Raz-Plus™, for Best Solution for Special Needs Students, and Science A-Z®, for Best Science Instruction Solution.

Second Quarter 2018 Financial Highlights

  • GAAP net revenues for the second quarter of 2018 increased by $0.6 million, or 2%, to $41.0 million compared with $40.4 million in 2017. GAAP net revenues by segment for the three months ended June 30, 2018, and the change from the same period of 2017, were as follows:

    •  Learning A-Z - $20.4 million, increased $1.8 million or 10%

    •  ExploreLearning - $7.7 million, increased $1.0 million or 15%

    •  Voyager Sopris Learning - $12.8 million, decreased $(2.1) million or (14)%

  • Bookings for the second quarter of 2018 were $33.1 million, an increase of 11% compared with $29.7 million in the second quarter of 2017.

  • The Company reported net income of $4.4 million during the second quarter of 2018, decreasing $1.4 million compared to net income of $5.8 million during the second quarter of 2017. Net income includes expenses of $1.1 million related to the Company's definitive agreement to acquire VKIDZ Holdings Inc. and its review of strategic alternatives in addition to higher tax expense.

  • Adjusted EBITDA was $12.7 million, decreasing $0.2 million from $12.9 million in 2017, with the growth in GAAP net revenues in the second quarter more than offset by planned strategic investments made to development, marketing and sales initiatives to support full-year and long-term growth of the Company's digital solutions.

  • Cash Income was $1.9 million for the second quarter of 2018 compared to Cash Income of $(0.8) million for the second quarter of 2017. Capital expenditures totaled $4.0 million in the second quarter of 2018 versus $4.3 million in the second quarter of 2017.

Second Quarter 2018 Segment Results

Net Revenues, Bookings, Net Income, and Cash Income changes by segment for the three and six months ended June 30, 2018, compared to the same period of 2017 were as follows:

  Q2 - 2018
% Change
  YTD - 2018
% Change
  Net
Revenues
Bookings Net Income Cash Income   Net
Revenues
Bookings Net Income Cash Income
Learning A-Z 10 % 26 % 2 % 105 %   7 % 13 % 1 % 30 %
ExploreLearning 15 % 15 % (1 )% (19 )%   13 % 14 % (3 )% (208 )%
Voyager Sopris Learning (14 )% (5 )% (14 )% 2,174 %   (12 )% 1 % (6 )% 81 %
Shared Services     (10 )% 3 %       (6 )% (3 )%
Cambium Learning Group, Inc. 2 % 11 % (23 )% 342 %   2 % 8 % (15 )% 25 %
                                   

2018 Outlook

Mr. Campbell stated, "We are on track as we enter the back-to-school selling season and are reiterating our full-year outlook. We target higher Bookings growth than last year's, driven by our SaaS businesses, and expansions in Adjusted EBITDA and Cash Income as we make selected investments in development, marketing and sales. Cambium Learning Group's solutions leverage technology to offer unique, personalized, adaptive, scalable and effective answers to the challenges students face, and we are focused on increasing our share of market to drive returns for all stakeholders."

Management's outlook for company-wide full-year 2018 Bookings growth at a higher percentage than 2017 is unchanged, with most of the growth expected in the second half of the year during the Company's seasonally strong periods. Cambium Learning Group's business is highly seasonal, with Bookings historically peaking during the third quarter, which represents by far the preponderance of Bookings, revenue and income each year.

The Company continues to expect its full-year 2018 Bookings growth to be driven by its two 100% digital subscription businesses, Learning A-Z and ExploreLearning. Voyager Sopris Learning is expected to build on the momentum of the LANGUAGE! Live solution and continue to make progress on repositioning the segment's role in the intervention marketplace.

Capital expenditures in 2018 are expected to be roughly consistent with 2017, and the Company expects growth in its Cash Income margin from 2017, with the impact of spending on strategic investments in its technology subscription products offset by the ongoing benefit of the transition in mix to these higher margin product lines. The Company continues to expect cash generation during the year from normal operations to be in line with previous guidance. The Company will assess the impact of cash expenditures related to the strategic alternatives process and the VKidz acquisition as the year progresses.

REVIEW OF STRATEGIC ALTERNATIVES and VKIDZ TRANSACTION

As previously announced in May 2018, the Company has an ongoing review of strategic alternatives to maximize shareholder value. Such strategic alternatives could include a sale of the Company or a sale of a division or divisions thereof, a strategic merger, a business combination or continuing as a standalone entity executing on its business plan. The Company has not set a definitive timetable for completion of its review of strategic alternatives, nor has it made any decisions related to any such strategic alternative at this time, and there can be no assurances that the process will result in any transaction being announced or completed in the future. The Company does not intend to make any further announcements related to its review unless and until its Board of Directors has approved a specific transaction or otherwise determined that further disclosure is appropriate.

Also as previously announced, on May 13, 2018, the Company entered into a definitive agreement to acquire VKIDZ Holdings Inc. ("VKidz"), an award winning Florida-based edtech company dedicated to helping deliver the best education to students using digital solutions. Organized in two business units, VKidz serves both school systems and homeschooling families with 100% digital, 100% subscription, innovative, research-based educational products. For the first half of 2018, VKidz reported a Bookings increase of 12% over prior year first half. The acquisition is expected to be consummated, subject to all applicable approvals, after completion of the Company's review of strategic alternatives. The terms of the agreement provide the Company the right to terminate the agreement prior to consummation.

Conference Call

Cambium Learning Group's management team will conduct a conference call at 5 p.m. EDT today (August 13, 2018) to discuss its financial results. In consideration of its review of strategic alternatives, management does not plan to conduct a question and answer session during the call. Participants are encouraged to listen to the presentation via a live web broadcast at www.cambiumlearning.com in the Investor Relations section. In addition, a live dial-in is available at 844.707.0670 or 703.639.1224, passcode #6575109.

A replay will be available by dialing 855.859.2056 or 404.537.3406, passcode #6575109, until August 14, 2018. The webcast will also be archived on the Company's Investor Relations page.

Cambium Learning Group also announces investor information, including news about its business and financial performance, SEC filings, notices of investor events, investor presentations, and press and earnings releases, on its website in the Investor Relations section.

Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, and Cash Income are not prepared in accordance with GAAP and may be different from similarly named, 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. The Company believes these non-GAAP measures provide useful information to investors because they reflect the underlying performance of the ongoing operations of the Company and provide investors with a view of the Company's operations from management's perspective. Adjusted EBITDA and Cash Income remove significant restructuring, non-operational, or certain non-cash items from earnings. The Company uses Adjusted EBITDA and Cash Income to monitor and evaluate the operating performance of the Company and as the basis to set and measure progress toward performance targets. Further, the Cash Income measure directly affects compensation for employees and executives. The Company generally uses these non-GAAP measures as measures of operating performance and not as measures of the Company's liquidity. The Company's presentation of EBITDA, Adjusted EBITDA, and Cash Income should not be construed as an indication that our future results will be unaffected by unusual, non-operational, or non-cash items.

About Cambium Learning Group, Inc.

Cambium Learning® Group (Nasdaq: ABCD) is an award-winning educational technology solutions leader dedicated to helping all students reach their potential through individualized and differentiated instruction. Using a research-based, personalized approach, Cambium Learning Group delivers SaaS resources and instructional products that engage students and support teachers in fun, positive, safe and scalable environments. These solutions are provided through Learning A-Z® (online differentiated instruction for elementary school reading, writing and science), ExploreLearning® (online interactive math and science simulations and a math fact fluency solution) and Voyager Sopris Learning® (blended solutions that accelerate struggling learners to achieve in literacy and math and professional development for teachers). We believe that every student has unlimited potential, that teachers matter, and that data, instruction, and practice are the keys to success in the classroom and beyond.

Come learn with us at www.cambiumlearning.com.

Media and Investor Contact:

Barbara Benson
Cambium Learning Group, Inc.
investorrelations@cambiumlearning.com

LHA
Jody Burfening/Carolyn Capaccio
212.838.3777
ccapaccio@lhai.com

Forward-Looking Statements

Some of the statements contained herein constitute forward-looking statements. These statements relate to future events, including the future financial performance of Cambium Learning Group, Inc., and involve known and unknown risks, uncertainties, and other factors that may cause the markets, actual results, levels of activity, performance, or achievements of Cambium Learning Group, Inc., to be materially different from any actual future results, levels of activity, performance, or achievements. These risks and other factors you should consider include, but are not limited to, the ability to successfully attract and retain a broad customer base for current and future products, changes in customer demands or industry standards, success of ongoing product development, maintaining acceptable margins, the ability to control costs, K-12 enrollment and demographic trends, the level of educational funding, the impact of federal, state, and local regulatory requirements on the business of the company, the loss of key personnel, the impact of competition, the uncertainty of general economic conditions and financial market performance, explorations of possible transactions and other strategic alternatives, and those other risks and uncertainties listed under the heading "RISK FACTORS" in Cambium Learning Group, Inc.'s Form 10-K and other reports filed with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," "projects," "intends," "prospects," or "priorities," or the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Cambium Learning Group, Inc., does not assume or undertake any obligation to update the information contained in this press release, and expressly disclaims any obligation to do so, whether as a result of new information, future events, or otherwise.

 
Cambium Learning Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
       
  Three Months Ended June 30,   Six Months Ended June 30,
  2018   2017   2018
  2017
Net revenues $ 40,996     $ 40,362     $ 77,603     $ 76,332  
Cost of revenues:              
Cost of revenues 7,038     7,215     13,101     13,400  
Amortization expense 4,043     4,328     7,947     8,418  
Total cost of revenues 11,081     11,543     21,048     21,818  
Research and development expense 3,893     3,294     7,619     6,392  
Sales and marketing expense 12,717     12,190     25,520     25,100  
General and administrative expense 6,135     4,900     11,416     9,783  
Shipping and handling costs 186     195     307     313  
Depreciation and amortization expense 718     669     1,435     1,350  
Total costs and expenses 34,730     32,791     67,345     64,756  
Income before interest and income taxes 6,266     7,571     10,258     11,576  
Net interest expense (927 )   (1,336 )   (1,757 )   (2,563 )
Other income (expense), net 118     (109 )   15     (217 )
Income before income taxes 5,457     6,126     8,516     8,796  
Income tax expense (1,022 )   (334 )   (1,474 )   (474 )
Net income $ 4,435     $ 5,792     $ 7,042     $ 8,322  
Net income per common share:              
Basic $ 0.09     $ 0.13     $ 0.15     $ 0.18  
Diluted $ 0.09     $ 0.12     $ 0.15     $ 0.18  
Average number of common shares and equivalents outstanding:              
Basic 47,172     46,283     47,036     46,243  
Diluted 48,385     47,476     48,250     47,460  
                       


 
Cambium Learning Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
       
  June 30, 2018   December 31, 2017
  (Unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $ 4,680     $ 8,493  
Accounts receivable, net 13,277     12,937  
Inventory 1,813     2,382  
Restricted assets, current 961     961  
Other current assets 9,731     11,193  
Total current assets 30,462     35,966  
Property, equipment and software at cost 62,966     65,250  
Accumulated depreciation and amortization (42,006 )   (43,164 )
Property, equipment and software, net 20,960     22,086  
Goodwill 43,518     43,518  
Other intangible assets, net 3,108     3,607  
Pre-publication costs, net 17,986     17,758  
Restricted assets, less current portion 839     1,293  
Deferred tax assets 30,020     30,614  
Other assets 3,372     3,712  
Total assets $ 150,265     $ 158,554  
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)      
Current liabilities:      
Accounts payable $ 2,075     $ 2,388  
Accrued expenses 13,770     12,121  
Revolving credit facility 10,000      
Current portion of long-term debt 6,651     5,958  
Deferred revenue, current 61,286     86,913  
Total current liabilities 93,782     107,380  
Long-term liabilities:      
Long-term debt 38,477     41,841  
Deferred revenue, less current portion 15,232     13,995  
Other liabilities 9,257     9,630  
Total long-term liabilities 62,966     65,466  
Stockholders' equity (deficit):      
Preferred stock ($.001 par value, 15,000 shares authorized, zero shares issued and outstanding at June 30, 2018 and December 31, 2017)      
Common stock ($.001 par value, 150,000 shares authorized, 53,789 and 53,333 shares issued, and 47,257 and 46,800 shares outstanding at June 30, 2018 and December 31, 2017, respectively) 54     53  
Capital surplus 290,468     289,022  
Accumulated deficit (282,199 )   (288,490 )
Treasury stock at cost (6,532 shares at June 30, 2018 and December 31, 2017) (12,784 )   (12,784 )
Accumulated other comprehensive loss:      
Pension and postretirement plans (2,022 )   (2,093 )
Accumulated other comprehensive loss (2,022 )   (2,093 )
Total stockholders' equity (deficit) (6,483 )   (14,292 )
Total liabilities and stockholders' equity (deficit) $ 150,265     $ 158,554  
               


 
Cambium Learning Group, Inc. and Subsidiaries
Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Cash Income
(unaudited)
       
  Three Months Ended June 30,   Six Months Ended June 30,
(in thousands) 2018   2017   2018   2017
Net income $ 4,435     $ 5,792     $ 7,042     $ 8,322  
Reconciling items between net income and EBITDA:              
Depreciation and amortization expense 4,761     4,997     9,382     9,768  
Net interest expense 927     1,336     1,757     2,563  
Income tax expense 1,022     334     1,474     474  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 11,145     12,459     19,655     21,127  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:              
Income from sale of excess state tax credits (222 )       (222 )    
Merger, acquisition and disposition activities 1,499     212     1,621     339  
Stock-based compensation and expense 252     224     479     424  
Adjusted EBITDA 12,674     12,895     21,533     21,890  
Change in deferred revenues (7,900 )   (10,576 )   (24,814 )   (27,419 )
Change in deferred costs 1,132     1,168     2,589     2,731  
Capital expenditures (3,980 )   (4,284 )   (7,988 )   (8,816 )
Cash income $ 1,926     $ (797 )   $ (8,680 )   $ (11,614 )
                               


 
Cambium Learning Group, Inc. and Subsidiaries
Reconciliation of Bookings to Net Revenues by Segment – 2018
(unaudited)
   
  Three Months Ended June 30, 2018
(in thousands) Learning A-Z   ExploreLearning   Voyager Sopris
Learning
  Consolidated
Bookings $ 14,683     $ 6,797     $ 11,636     $ 33,116  
Change in deferred revenues 5,752     991     1,157     7,900  
Other     (56 )   36     (20 )
Net revenues $ 20,435     $ 7,732     $ 12,829     $ 40,996  
                               


  Six Months Ended June 30, 2018
(in thousands) Learning A-Z   ExploreLearning   Voyager Sopris
Learning
  Consolidated
Bookings $ 24,282     $ 9,970     $ 18,717     $ 52,969  
Change in deferred revenues 15,289     5,338     4,187     24,814  
Other     (72 )   (108 )   (180 )
Net revenues $ 39,571     $ 15,236     $ 22,796     $ 77,603  
                               


 
Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Cash Income by Segment – 2018
(unaudited)
   
  Three Months Ended June 30, 2018
(in thousands) Learning A-Z   Explore
Learning
  Voyager Sopris
Learning
  Other   Consolidated
Net income $ 9,888     $ 2,776     $ 2,937     $ (11,166 )   $ 4,435  
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             4,761     4,761  
Net interest expense             927     927  
Income tax expense             1,022     1,022  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 9,888     2,776     2,937     (4,456 )   11,145  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Income from sale of excess state tax credits             (222 )   (222 )
Merger, acquisition and disposition activities             1,499     1,499  
Stock-based compensation and expense 70     55     59     68     252  
Adjusted EBITDA 9,958     2,831     2,996     (3,111 )   12,674  
Change in deferred revenues (5,752 )   (991 )   (1,157 )       (7,900 )
Change in deferred costs 597     282     253         1,132  
Capital expenditures - product development (2,006 )   (1,017 )   (548 )       (3,571 )
Capital expenditures - general expenditures (318 )   (65 )   (9 )   (17 )   (409 )
Cash income $ 2,479     $ 1,040     $ 1,535     $ (3,128 )   $ 1,926  
                                       


  Six Months Ended June 30, 2018
(in thousands) Learning A-Z   Explore
Learning
  Voyager Sopris
Learning
  Other   Consolidated
Net income $ 18,777     $ 5,347     $ 3,790     $ (20,872 )   $ 7,042  
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             9,382     9,382  
Net interest expense             1,757     1,757  
Income tax expense             1,474     1,474  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 18,777     5,347     3,790     (8,259 )   19,655  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Income from sale of excess state tax credits             (222 )   (222 )
Merger, acquisition and disposition activities             1,621     1,621  
Stock-based compensation and expense 127     100     118     134     479  
Adjusted EBITDA 18,904     5,447     3,908     (6,726 )   21,533  
Change in deferred revenues (15,289 )   (5,338 )   (4,187 )       (24,814 )
Change in deferred costs 1,292     657     640         2,589  
Capital expenditures - product development (3,874 )   (2,036 )   (1,195 )       (7,105 )
Capital expenditures - general expenditures (576 )   (161 )   (115 )   (31 )   (883 )
Cash income $ 457     $ (1,431 )   $ (949 )   $ (6,757 )   $ (8,680 )
                                       


 
Deferred Revenue by Segment – 2018
(unaudited)
   
  June 30, 2018
(in thousands) Learning A-Z   ExploreLearning   Voyager Sopris
Learning
  Consolidated
Deferred revenue, current $ 36,251     $ 13,432     $ 11,603     $ 61,286  
Deferred revenue, less current portion 7,533     3,802     3,897     15,232  
Deferred revenue $ 43,784     $ 17,234     $ 15,500     $ 76,518  
                               


 
Deferred Costs by Segment – 2018
(unaudited)
   
  June 30, 2018
(in thousands) Learning A-Z   ExploreLearning   Voyager Sopris
Learning
  Consolidated
Deferred costs, current $ 3,499     $ 1,222     $ 1,705     $ 6,426  
Deferred costs, less current portion 492     177     753     1,422  
Deferred costs $ 3,991     $ 1,399     $ 2,458     $ 7,848  
                               


 
Cambium Learning Group, Inc. and Subsidiaries
Reconciliation of Bookings to Net Revenues by Segment – 2017
(unaudited)
   
  Three Months Ended June 30, 2017
(in thousands) Learning A-Z   ExploreLearning   Voyager Sopris
Learning
  Consolidated
Bookings $ 11,661     $ 5,888     $ 12,192     $ 29,741  
Change in deferred revenues 6,990     873     2,713     10,576  
Other (1 )   (26 )   72     45  
Net revenues $ 18,650     $ 6,735     $ 14,977     $ 40,362  
                               


  Six Months Ended June 30, 2017
(in thousands) Learning A-Z   ExploreLearning   Voyager Sopris
Learning
  Consolidated
Bookings $ 21,560     $ 8,764     $ 18,529     $ 48,853  
Change in deferred revenues 15,275     4,854     7,290     27,419  
Other     (105 )   165     60  
Net revenues $ 36,835     $ 13,513     $ 25,984     $ 76,332  
                               


 
Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Cash Income by Segment – 2017
(unaudited)
   
  Three Months Ended June 30, 2017
(in thousands) Learning A-Z   Explore
Learning
  Voyager
Sopris
Learning
  Other   Consolidated
Net income $ 9,688     $ 2,814     $ 3,408     $ (10,118 )   $ 5,792  
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             4,997     4,997  
Net interest expense             1,336     1,336  
Income tax expense             334     334  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 9,688     2,814     3,408     (3,451 )   12,459  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Merger, acquisition and disposition activities             212     212  
Stock-based compensation and expense 53     30     75     66     224  
Adjusted EBITDA 9,741     2,844     3,483     (3,173 )   12,895  
Change in deferred revenues (6,990 )   (873 )   (2,713 )       (10,576 )
Change in deferred costs 547     104     517         1,168  
Capital expenditures - product development (1,869 )   (721 )   (1,316 )       (3,906 )
Capital expenditures - general expenditures (220 )   (77 )   (45 )   (36 )   (378 )
Cash income $ 1,209     $ 1,277     $ (74 )   $ (3,209 )   $ (797 )
                                       


  Six Months Ended June 30, 2017
(in thousands) Learning A-Z   Explore
Learning
  Voyager
Sopris
Learning
  Other   Consolidated
Net income $ 18,556     $ 5,490     $ 4,043     $ (19,767 )   $ 8,322  
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             9,768     9,768  
Net interest expense             2,563     2,563  
Income tax expense             474     474  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 18,556     5,490     4,043     (6,962 )   21,127  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Merger, acquisition and disposition activities             339     339  
Stock-based compensation and expense 100     54     145     125     424  
Adjusted EBITDA 18,656     5,544     4,188     (6,498 )   21,890  
Change in deferred revenues (15,275 )   (4,854 )   (7,290 )       (27,419 )
Change in deferred costs 1,162     493     1,076         2,731  
Capital expenditures - product development (3,798 )   (1,481 )   (2,809 )       (8,088 )
Capital expenditures - general expenditures (393 )   (167 )   (115 )   (53 )   (728 )
Cash income $ 352     $ (465 )   $ (4,950 )   $ (6,551 )   $ (11,614 )
                                       

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Source: Cambium Learning Group, Inc.