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Cambium Learning Group Reports Fourth Quarter 2016 Financial Results

Digital Segments Learning A-Z and ExploreLearning Record Double-Digit Full Year Top-Line Growth
2016 Net Income Improves by $11.8 Million, with Positive Impact from 2015 Debt Refinancing
Adjusted EBITDA and Cash Income Results Show Growth, Margins Expand
Company Makes Fourth Quarter Debt Prepayment of $25 Million

DALLAS, March 14, 2017 (GLOBE NEWSWIRE) -- Cambium Learning® Group, Inc. (NASDAQ:ABCD) (the “Company”), a leading educational solutions and services company committed to helping all students reach their full potential, announced today financial results for the year ended December 31, 2016.

“Our top-line growth in 2016 was more modest than we planned, but we nevertheless made strong progress on all aspects of our strategic plan that we fully expect to drive ongoing improvements in our financial results,” said John Campbell, Chief Executive Officer of Cambium Learning Group. “In 2016, on the strength of double-digit Bookings growth in our 100% digital segments, we were able to expand our profit margins, dollars, and free cash flow while we continued to make strategic investments in growth. We continued to revolutionize our business model and our role in the educational marketplace as technology-enabled Bookings increase as a percentage of our mix. Finally, we were able to further strengthen the company by prepaying a portion of our debt. We are excited by the progress we made in 2016, and remain confident that we are moving the company forward with solutions that leverage technology to dramatically improve the learning trajectory of every student we reach. We look forward to extending our educational impact and further growing our company in 2017.”

Financial Snapshot

For the year ended December 31, 2016, the Company reported the following financial results:

  Three Months Ended December 31,   Year Ended December 31,
(in millions) 2016   2015   $ Change   2016   2015   $ Change
GAAP net revenues $ 37.5     $ 35.7     $ 1.8     $ 152.4     $ 144.9     $ 7.4  
GAAP net income 2.9     (2.8 )   5.7     10.4     (1.3 )   11.8  
Net income margin % 8 %   (8 )%       7 %   (1 )%    
EBITDA 10.7     5.5     5.2     39.5     34.1     5.4  
Adjusted EBITDA 11.9     9.6     2.4     42.8     38.5     4.3  
Adjusted EBITDA margin % 32 %   27 %       28 %   27 %    
                                               
Bookings $ 34.6     $ 36.6     $ (2.0 )   $ 161.8     $ 159.1     $ 2.7  
Cash income 6.3     5.8     0.5     31.8     29.7     2.1  
Cash income margin % 18 %   16 %       20 %   19 %    
                               

Year Ended December 31, 2016 Financial Highlights

  • Generally Accepted Accounting Principles (GAAP) net revenues for the year ended December 31, 2016 increased by 5% to $152.4 million compared with $144.9 million in 2015. GAAP net revenues by segment for the year ended December 31, 2016 compared to prior year were as follows:
    - Learning A-Z® $66.0 million, increased $10.9 million or 20%
    - Voyager Sopris Learning® $62.6 million, decreased $(7.0) million or (10)%
    - ExploreLearning® $23.7 million, increased $3.6 million or 18%
  • Bookings for the year ended December 31, 2016 increased by 2% to $161.8 million compared with $159.1 million in 2015, with growth of $8.1 million at Learning A-Z and $5.1 million at ExploreLearning, partially offset by a Voyager Sopris Learning Bookings decline of $10.4 million.
  • Technology-enabled Bookings represented 73% of total 2016 Bookings compared with 67% of the 2015 Bookings, and grew 11% compared to 2015.
  • Net interest expense was $7.2 million for the year ended December 31, 2016, down $6.8 million from 2015 as a result of the debt refinancing completed in December 2015.
  • Net income was $10.4 million during the year ended December 31, 2016, up $11.8 million when compared to a net loss of $1.3 million during the year ended December 31, 2015. Adjusted EBITDA was $42.8 million, up $4.3 million from 2015. Both net income and Adjusted EBITDA reflect the increase in GAAP net revenues, partially absorbed by strategic investments into high-return, technology-enabled opportunities through segment-specific development, marketing, and sales programs to support full-year and long-term growth. Net income (loss) includes a loss on extinguishment of debt of $0.7 million in 2016 related to the prepayments of principal made in the fourth quarter 2016 and $4.0 million in 2015 related to the debt refinancing completed in December 2015.
  • At Voyager Sopris Learning, management made some tactical decisions in the third quarter to right-size costs and accelerate this segment’s transformation from slower-growing legacy products toward newer and technology-enabled solutions. As a result, net income for 2016 includes restructuring costs of $1.1 million, representing severance charges. These restructuring costs are excluded from Adjusted EBITDA and Cash Income.
  • Cash Income was $31.8 million, an increase of $2.1 million compared to $29.7 million reported in the year ended December 31, 2015. Capital expenditures reflect planned investments in product development and totaled $20.1 million in the year ended December 31, 2016 versus $19.9 million in the year ended December 31, 2015.
  • The Company had cash and cash equivalents of $4.9 million at December 31, 2016. For the year ended December 31, 2016, cash provided by operations was $44.5 million, cash used in investing activities was $20.1 million, and cash used in financing activities was $28.1 million. During the fourth quarter of 2016, the Company made voluntary debt prepayments totaling $25.0 million. At December 31, 2016, the principal amount of term loans outstanding was $76.2 million, and there were no borrowings outstanding under the Company's revolving credit facility.

Fourth Quarter 2016 Financial Highlights

  • GAAP net revenues for the fourth quarter of 2016 increased by 5% to $37.5 million compared with $35.7 million in the fourth quarter of 2015. GAAP net revenues by segment for the three months ended December 31, 2016, and the change from the same period of 2015, were as follows:
    - Learning A-Z – $17.9 million, increased $2.7 million or 18%
    - Voyager Sopris Learning – $13.3 million, decreased $(1.4) million or (10)%
    - ExploreLearning – $6.2 million, increased $0.6 million or 10%
  • Bookings for the fourth quarter of 2016 decreased by 5% to $34.6 million compared with $36.6 million in the fourth quarter of 2015.
  • The Company reported a net income of $2.9 million during the fourth quarter of 2016 compared to a net loss of $2.8 million during the fourth quarter of 2015, an increase of $5.7 million. Adjusted EBITDA was $11.9 million, increasing $2.4 million from $9.6 million in 2015. Both net income and Adjusted EBITDA reflect the increase in GAAP net revenues, partially offset by strategic investments into high-return, technology-enabled opportunities through segment-specific development, marketing, and sales programs to support full-year and long-term growth. Net income (loss) includes a loss on extinguishment of debt of $0.7 million in the fourth quarter of 2016 related to the prepayments of principal made in the fourth quarter 2016 and $4.0 million in the fourth quarter of 2015 related to the debt refinancing completed in December 2015.
  • Net interest expense was $1.6 million for fourth quarter of 2016, down $1.5 million from the fourth quarter of 2015 as a result of the debt refinancing completed in December 2015.
  • Cash Income was $6.3 million, an increase of $0.5 million compared to Cash Income of $5.8 million in the fourth quarter of 2015. Capital expenditures totaled $3.9 million in the fourth quarter of 2016 versus $4.8 million in the fourth quarter of 2015.

Fiscal Year 2016 Segment Discussion

Net Revenues, Bookings, Net Income, and Cash Income changes by segment for the three months and year ended December 31, 2016, compared to the same period of 2015 were:

  Q4 - 2016
% Change
  YTD - 2016
% Change
  Net
Revenues
Bookings Net Income Cash
Income
  Net
Revenues
Bookings Net Income Cash
Income
Learning A-Z 18 % (5 )% 26 % (1 )%   20 % 12 % 18 % 13 %
Voyager Sopris Learning (10 )% (24 )% 1 % (55 )%   (10 )% (14 )% (21 )% (37 )%
ExploreLearning 10 % 36 % (3 )% 66 %   18 % 24 % 22 % 48 %
Shared Services         24 % 8 %           16 % (5 )%
Cambium Learning Group, Inc. 5 % (5 )% 205 % 8 %   5 % 2 % 887 % 7 %
                                   

Bookings increased 2% for the year ended December 31, 2016 compared to 2015. By segment:

  • Learning A-Z reported Bookings growth of $8.1 million for the year ended December 31, 2016 compared to 2015, representing a double-digit year over year growth rate of 12%.
  • Voyager Sopris Learning reported a $10.4 million, or 14%, Bookings decrease for the year ended December 31, 2016 compared to 2015, with the segment’s newer, strategic product lines falling short of expectations and the segment’s legacy print and transactional solutions declining in line with expectations.
  • ExploreLearning reported Bookings growth of $5.1 million for the year ended December 31, 2016 compared to 2015. This represents growth of 24%, as ExploreLearning continued to show strong momentum in the Reflex® math product and in the Gizmos® online math and science simulations which were upgraded to HTML5 in early 2016.

2017 Outlook

Mr. Campbell concluded, “Having made important strategic and competitive steps forward in 2016, our focus for 2017 is to further strengthen our platform to achieve accelerated top-line growth, expanded Cash Income profitability and higher cash flow generation. We plan to continue to make investments in products, marketing and sales, and will fine-tune execution company-wide. As a result, we expect Bookings from our higher-margin technology-enabled solutions to approach 80% of our volume. We expect strong Bookings growth – at least 15% year over year – from our two 100% technology subscription businesses Learning A-Z and ExploreLearning. Our goal for Voyager Sopris Learning is to significantly slow the top-line decline in 2017 while the segment’s strategic growth products gain traction and the legacy products become a smaller part of the mix. We estimate a Bookings range in this segment from flat with 2016 at the top end to single digit percentage declines on the low end. Company-wide top-line growth, coupled with continued careful expense management, should drive expansion in our Cash Income, Adjusted EBITDA, and cash flow generation. Cambium Learning’s mission is to leverage technology to create solutions that are personalized, adaptive, scalable, and designed to achieve results in the classroom, and we are poised for a strong 2017.”

The Company expects 2017 company-wide Bookings growth to be in a range from 6% to low double-digit percentage growth, 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 expects 2017 capital expenditures for product development to be roughly consistent with the $17.3 million expended in 2016 and 2017 general capital expenditures to be roughly consistent with the $2.7 million expended in 2016. The Company expects its 2017 Cash Income margin to grow between one and three percentage points compared to 2016, depending on top-line growth. The Company expects its 2017 Adjusted EBITDA margin to be roughly consistent with 2016.

Cambium Learning Group will refine its outlook as the year progresses to the more seasonably significant quarters.

Conference Call

Cambium Learning Group's management team will conduct a conference call at 9 a.m. EDT today (Tuesday, March 14, 2017) to discuss its financial results. 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 703.639.1224 or 844.707.0670, passcode #62458979.

A replay will be available at 404.537.3406 or 855.859.2056, passcode #62458979, until March 15, 2017.

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 is a leading educational solutions and services company committed to helping all students reach their full potential. Cambium Learning accomplishes this goal by providing evidence-based solutions and expert professional services to empower educators and raise the achievement levels of all students. The company’s award-winning brands include: Learning A-Z® (www.learninga-z.com), ExploreLearning® (www.explorelearning.com), Kurzweil Education® (www.kurzweiledu.com), and Voyager Sopris Learning® (www.voyagersopris.com), which, together, provide breakthrough technology solutions for students and teachers—including best-in-class intervention and supplemental instructional programs; gold-standard professional development; valid and reliable assessments; and products that enable access to learning for all students. Cambium Learning Group, Inc. (NASDAQ:ABCD), is based in Dallas, Texas. For more information, visit 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, 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)
 
  Year Ended December 31,
  2016   2015
Net revenues $ 152,358     $ 144,920  
Cost of revenues:      
Cost of revenues 30,122     31,330  
Amortization expense 18,142     17,370  
Total cost of revenues 48,264     48,700  
Research and development expense 12,865     10,924  
Sales and marketing expense 47,238     44,088  
General and administrative expense 21,062     20,098  
Shipping and handling costs 912     1,056  
Depreciation and amortization expense 3,406     3,868  
Total costs and expenses 133,747     128,734  
Income before interest, other income (expense) and income taxes 18,611     16,186  
Net interest expense (7,190 )   (13,981 )
Loss on extinguishment of debt (698 )   (4,016 )
Other income, net     679  
Income (loss) before income taxes 10,723     (1,132 )
Income tax expense (293 )   (193 )
Net income (loss) $ 10,430     $ (1,325 )
Net income (loss) per common share:      
Basic net income (loss) per common share $ 0.23     $ (0.03 )
Diluted net income (loss) per common share $ 0.22     $ (0.03 )
Average number of common shares and equivalents outstanding:      
Basic 45,861     45,550  
Diluted 47,217     45,550  


Cambium Learning Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
 
  December 31,
  2016   2015
ASSETS      
Current assets:      
Cash and cash equivalents $ 4,930     $ 8,645  
Accounts receivable, net 13,378     14,640  
Inventory 2,864     4,694  
Restricted assets, current 988     1,265  
Other current assets 11,235     9,981  
Total current assets 33,395     39,225  
Property, equipment, and software at cost 62,885     55,824  
Accumulated depreciation and amortization (39,378 )   (33,284 )
Property, equipment, and software, net 23,507     22,540  
Goodwill 47,842     47,842  
Acquired curriculum and technology intangibles, net 1,266     2,731  
Acquired publishing rights, net 585     1,459  
Other intangible assets, net 2,150     3,231  
Pre-publication costs, net 17,397     16,441  
Restricted assets, less current portion 2,278     3,099  
Other assets 3,520     4,817  
Total assets $ 131,940     $ 141,385  


Cambium Learning Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
 
  December 31,
  2016   2015
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)      
Current liabilities:      
Accounts payable $ 2,172     $ 1,993  
Accrued expenses 11,720     14,224  
Current portion of long-term debt 7,350     3,850  
Deferred revenue, current 83,318     74,107  
Total current liabilities 104,560     94,174  
Long-term liabilities:      
Long-term debt 67,130     97,872  
Deferred revenue, less current portion 11,395     11,481  
Other liabilities 10,117     12,027  
Total long-term liabilities 88,642     121,380  
Stockholders' equity (deficit):      
Preferred Stock ($0.001 par value, 15,000 shares authorized, zero shares issued and outstanding at December 31, 2016 and 2015)      
Common stock ($0.001 par value, 150,000 shares authorized, 52,738 and 52,268 shares issued, and 46,206 and 45,736 shares outstanding at December 31, 2016 and 2015, respectively) 53     52  
Capital surplus 286,943     285,306  
Accumulated deficit (333,545 )   (343,975 )
Treasury stock at cost (6,532 shares at December 31, 2016 and 2015) (12,784 )   (12,784 )
Accumulated other comprehensive loss:      
 Pension and postretirement plans (1,929 )   (2,768 )
Accumulated other comprehensive loss (1,929 )   (2,768 )
Total stockholders' equity (deficit) (61,262 )   (74,169 )
Total liabilities and stockholders' equity (deficit) $ 131,940     $ 141,385  


Cambium Learning Group, Inc. and Subsidiaries
Reconciliation of Net Income to Adjusted EBITDA and Cash Income
(unaudited)
 
    Three Months Ended December 31,   Year Ended December 31,
(in thousands)   2016   2015   2016   2015
Net income (loss)   $ 2,940     $ (2,799 )   $ 10,430     $ (1,325 )
Reconciling items between net income and EBITDA:                
Depreciation and amortization expense   6,071     5,532     21,548     21,238  
Net interest expense   1,592     3,106     7,190     13,981  
Income tax expense   87     (324 )   293     193  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA)   10,690     5,515     39,461     34,087  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                
Other income, net               (679 )
Loss on extinguishment of debt   698     4,016     698     4,016  
Gain on capital lease disposal       (357 )       (357 )
Restructuring costs   173         1,103      
Merger, acquisition and disposition activities   140     208     585     760  
Stock-based compensation and expense   247     201     928     687  
Adjusted EBITDA   11,948     9,583     42,775     38,514  
Change in deferred revenues   (2,953 )   1,393     9,125     14,391  
Change in deferred costs   1,179     (342 )   (62 )   (3,257 )
Capital expenditures   (3,883 )   (4,830 )   (20,054 )   (19,937 )
Cash income   $ 6,291     $ 5,804     $ 31,784     $ 29,711  


Cambium Learning Group, Inc. and Subsidiaries
Reconciliation of Bookings to Net Revenues by Segment - 2016
(unaudited)
 
    Three Months Ended December 31, 2016
(in thousands)   Learning A-Z   Voyager Sopris
Learning
  ExploreLearning   Consolidated
Bookings   $ 18,427     $ 9,199     $ 7,009     $ 34,635  
Change in deferred revenues   (303 )   3,904     (648 )   2,953  
Other   (202 )   215     (114 )   (101 )
Net revenues   $ 17,922     $ 13,318     $ 6,247     $ 37,487  
                 
    Year Ended December 31, 2016
(in thousands)   Learning A-Z   Voyager Sopris
Learning
  ExploreLearning   Consolidated
Bookings   $ 73,253     $ 62,488     $ 26,037     $ 161,778  
Change in deferred revenues   (6,913 )   164     (2,376 )   (9,125 )
Other   (291 )   (82 )   78     (295 )
Net revenues   $ 66,049     $ 62,570     $ 23,739     $ 152,358  


Reconciliation of Net Income to Adjusted EBITDA and Cash Income by Segment - 2016
 (unaudited)
 
  Three Months Ended December 31, 2016
(in thousands) Learning
A-Z
  Voyager
Sopris
Learning
  Explore
Learning
  Other   Consolidated
Net income $ 9,732     $ 2,815     $ 2,241     $ (11,848 )   $ 2,940  
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             6,071     6,071  
Net interest expense             1,592     1,592  
Income tax expense             87     87  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 9,732     2,815     2,241     (4,098 )   10,690  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Loss on extinguishment of debt             698     698  
Restructuring costs     173             173  
Merger, acquisition and disposition activities             140     140  
Stock-based compensation and expense 56     80     32     79     247  
Adjusted EBITDA 9,788     3,068     2,273     (3,181 )   11,948  
Change in deferred revenues 303     (3,904 )   648         (2,953 )
Change in deferred costs 712     514     (47 )       1,179  
Adjusted EBITDA excluding effect of deferred revenues and deferred costs 10,803     (322 )   2,874     (3,181 )   10,174  
Capital expenditures - pre-publication costs (1,085 )   (482 )   (245 )       (1,812 )
Capital expenditures - software development costs (589 )   (839 )   (358 )       (1,786 )
Capital expenditures - general expenditures (75 )   (110 )   (69 )   (31 )   (285 )
Cash income $ 9,054     $ (1,753 )   $ 2,202     $ (3,212 )   $ 6,291  


  Year Ended December 31, 2016
(in thousands) Learning
A-Z
  Voyager
Sopris
Learning
  Explore
Learning
  Other   Consolidated
Net income $ 33,679     $ 12,545     $ 8,635     $ (44,429 )   $ 10,430  
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             21,548     21,548  
Net interest expense             7,190     7,190  
Income tax expense             293     293  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 33,679     12,545     8,635     (15,398 )   39,461  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Loss on extinguishment of debt             698     698  
Restructuring costs     1,103             1,103  
Merger, acquisition and disposition activities             585     585  
Stock-based compensation and expense 223     294     124     287     928  
Adjusted EBITDA 33,902     13,942     8,759     (13,828 )   42,775  
Change in deferred revenues 6,913     (164 )   2,376         9,125  
Change in deferred costs 206     98     (366 )       (62 )
Adjusted EBITDA excluding effect of deferred revenues and deferred costs 41,021     13,876     10,769     (13,828 )   51,838  
Capital expenditures - pre-publication costs (5,089 )   (2,456 )   (994 )       (8,539 )
Capital expenditures - software development costs (2,403 )   (4,966 )   (1,433 )       (8,802 )
Capital expenditures - general expenditures (1,027 )   (566 )   (419 )   (701 )   (2,713 )
Cash income $ 32,502     $ 5,888     $ 7,923     $ (14,529 )   $ 31,784  


Deferred Revenue by Segment - 2016
(unaudited)
 
  December 31, 2016
(in thousands) Learning A-Z   Voyager Sopris
Learning
  ExploreLearning   Consolidated
Deferred revenue, current $ 48,479     $ 17,541     $ 17,298     $ 83,318  
Deferred revenue, less current portion 5,085     4,106     2,204     11,395  
Deferred revenue $ 53,564     $ 21,647     $ 19,502     $ 94,713  


Deferred Costs by Segment - 2016
(unaudited)
 
  December 31, 2016
(in thousands) Learning A-Z   Voyager Sopris
Learning
  ExploreLearning   Consolidated
Deferred costs, current $ 4,278     $ 2,728     $ 1,644     $ 8,650  
Deferred costs, less current portion 448     747     210     1,405  
Deferred costs $ 4,726     $ 3,475     $ 1,854     $ 10,055  


Cambium Learning Group, Inc. and Subsidiaries
Reconciliation of Bookings to Net Revenues by Segment - 2015
(unaudited)
 
    Three Months Ended December 31, 2015
(in thousands)   Learning A-Z   Voyager Sopris
Learning
  ExploreLearning   Consolidated
Bookings   $ 19,316     $ 12,159     $ 5,162     $ 36,637  
Change in deferred revenues   (4,174 )   2,316     465     (1,393 )
Other   95     285     32     412  
Net revenues   $ 15,237     $ 14,760     $ 5,659     $ 35,656  


    Year Ended December 31, 2015
(in thousands)   Learning A-Z   Voyager Sopris
Learning
  ExploreLearning   Consolidated
Bookings   $ 65,167     $ 72,933     $ 20,982     $ 159,082  
Change in deferred revenues   (10,079 )   (3,488 )   (824 )   (14,391 )
Other   79     146     4     229  
Net revenues   $ 55,167     $ 69,591     $ 20,162     $ 144,920  


Reconciliation of Net Income (Loss) to Adjusted EBITDA and Cash Income by Segment - 2015
 (unaudited)
 
  Three Months Ended December 31, 2015
(in thousands) Learning
A-Z
  Voyager
Sopris
Learning
  Explore
Learning
  Other   Consolidated
Net income (loss) $ 7,702     $ 2,797     $ 2,314     $ (15,612 )   $ (2,799 )
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             5,532     5,532  
Net interest expense             3,106     3,106  
Income tax expense             (324 )   (324 )
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 7,702     2,797     2,314     (7,298 )   5,515  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Loss on extinguishment of debt             4,016     4,016  
Gain on capital lease disposal             (357 )   (357 )
Merger, acquisition and disposition activities             208     208  
Stock-based compensation and expense 49     74     24     54     201  
Adjusted EBITDA 7,751     2,871     2,338     (3,377 )   9,583  
Change in deferred revenues 4,174     (2,316 )   (465 )       1,393  
Change in deferred costs (714 )   258     114         (342 )
Adjusted EBITDA excluding effect of deferred revenues and deferred costs 11,211     813     1,987     (3,377 )   10,634  
Capital expenditures - pre-publication costs (1,213 )   (380 )   (187 )       (1,780 )
Capital expenditures - software development costs (574 )   (1,280 )   (441 )       (2,295 )
Capital expenditures - general expenditures (310 )   (283 )   (33 )   (129 )   (755 )
Cash income $ 9,114     $ (1,130 )   $ 1,326     $ (3,506 )   $ 5,804  


  Year Ended December 31, 2015
(in thousands) Learning
A-Z
  Voyager
Sopris
Learning
  Explore
Learning
  Other   Consolidated
Net income (loss) $ 28,432     $ 15,895     $ 7,102     $ (52,754 )   $ (1,325 )
Reconciling items between net income and EBITDA:                  
Depreciation and amortization expense             21,238     21,238  
Net interest expense             13,981     13,981  
Income tax expense             193     193  
Income from operations before interest, income taxes, and depreciation and amortization (EBITDA) 28,432     15,895     7,102     (17,342 )   34,087  
Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:                  
Other income, net             (679 )   (679 )
Loss on extinguishment of debt             4,016     4,016  
Gain on capital lease disposal             (357 )   (357 )
Merger, acquisition and disposition activities             760     760  
Stock-based compensation and expense 174     232     85     196     687  
Adjusted EBITDA 28,606     16,127     7,187     (13,406 )   38,514  
Change in deferred revenues 10,079     3,488     824         14,391  
Change in deferred costs (1,789 )   (1,409 )   (59 )       (3,257 )
Adjusted EBITDA excluding effect of deferred revenues and deferred costs 36,896     18,206     7,952     (13,406 )   49,648  
Capital expenditures - pre-publication costs (4,804 )   (2,802 )   (675 )       (8,281 )
Capital expenditures - software development costs (2,095 )   (5,225 )   (1,659 )       (8,979 )
Capital expenditures - general expenditures (1,171 )   (785 )   (258 )   (463 )   (2,677 )
Cash income $ 28,826     $ 9,394     $ 5,360     $ (13,869 )   $ 29,711  

 

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