Cambium Learning Group Announces First Quarter Earnings

Company Continues to Shift Resources to Engaging, Innovative Technology Product Lines

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May 08, 2014, 04:30 ET

DALLAS, May 8, 2014 /PRNewswire/ --Cambium Learning^® Group, Inc. (NASDAQ: ABCD, the "Company"), a leading educational solutions and services company committed to helping all students reach their full potential by providing evidence-based solutions and expert professional services, announced today its financial results for the first quarter of 2014.

Cambium Learning Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)

	As of
	March 31, 2014		December 31, 2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	41,239	$	67,993
Accounts receivable, net		10,599		15,767
Inventory		8,355		9,221
Restricted assets, current		1,343		1,343
Other current assets		7,175		6,873
Total current assets		68,711		101,197

Property, equipment and software at cost		45,061		43,224
Accumulated depreciation and amortization		(24,865)		(22,909)
Property, equipment and software, net		20,196		20,315

Goodwill		47,842		47,842
Acquired curriculum and technology intangibles, net		7,811		8,719
Acquired publishing rights, net		4,219		4,705
Other intangible assets, net		5,870		6,251
Pre-publication costs, net		14,115		13,401
Restricted assets, less current portion		5,166		5,492
Other assets		10,126		8,288
Total assets	$	184,056	$	216,210

Cambium Learning Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)

	As of
	March 31, 2014		December 31, 2013
	(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Capital lease obligations, current	$	1,026	$	995
Accounts payable		1,701		1,301
Accrued expenses		12,319		25,279
Deferred revenue, current		44,250		53,532
Total current liabilities		59,296		81,107

Long-term liabilities:
Long-term debt		172,536		174,491
Capital lease obligations, less current portion		1,755		2,019
Deferred revenue, less current portion		6,687		7,829
Other liabilities		13,726		13,954
Total long-term liabilities		194,704		198,293


Stockholders' equity (deficit):
Preferred stock ($.001 par value, 15,000 shares authorized, zero shares issued and outstanding at March 31, 2014 and December 31, 2013)		—		—
Common stock ($.001 par value, 150,000 shares authorized, 51,208 and 51,208 shares issued, and 44,874 and 45,042 shares outstanding at March 31, 2014 and December 31, 2013, respectively)		51		51
Capital surplus		283,785		283,673
Accumulated deficit		(339,282)		(332,695)
Treasury stock at cost (6,334 and 6,166 shares at March 31, 2014 and December 31, 2013, respectively)		(12,448)		(12,147)
Other comprehensive income (loss):
Pension and postretirement plans		(2,050)		(2,072)
Accumulated other comprehensive income (loss)		(2,050)		(2,072)
Total stockholders' equity (deficit)		(69,944)		(63,190)
Total liabilities and stockholders' equity (deficit)	$	184,056	$	216,210

Reconciliation Between Net Loss and Cash Income (Loss) for the Three Months Ended March 31, 2014 and 2013
(Unaudited)

	Three Months Ended March 31,
*($ in thousands)*	2014		2013
Net loss	$	(6,587)	$	(9,078)
Reconciling items between net loss and EBITDA:
Depreciation and amortization		5,144		4,923
Net interest expense		4,738		4,576
Income tax expense		71		68
Income (loss) from operations before interest, income taxes, and depreciation and amortization (EBITDA)		3,366		489

Non-operational or non-cash costs included in EBITDA but excluded from Adjusted EBITDA:
Other income, net		(215)		(219)
Loss on extinguishment of debt		213		—
Merger and acquisition activities		150		158
Stock-based compensation and expense		112		229
Adjustments related to purchase accounting		—		29
Adjustments to CVR liability		—		55
Management transition		—		1,501
Adjusted EBITDA		3,626		2,242

Change in deferred revenues		(10,424)		(7,924)
Change in deferred costs		1,100		1,137
Capital expenditures		(3,986)		(3,792)
Cash income (loss)	$	(9,684)	$	(8,337)