Exhibit 99.1
Contact:
Shannan Overbeck
Investor Relations
(214) 932-9476
soverbeck@voyagerlearning.com
Shannan Overbeck
Investor Relations
(214) 932-9476
soverbeck@voyagerlearning.com
VOYAGER LEARNING COMPANY ANNOUNCES Q3 EARNINGS
DALLAS, November 5, 2009— Voyager Learning Company (OTC: VLCY.PK) (“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 atwww.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 S-4, 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.
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VOYAGER LEARNING COMPANY
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 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)
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)
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended | ||||||||
September 30, | September 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)
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 | |||||||||||||||
September 30, | September 30, | September 30, | September 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 | ||||||||