Chegg and Ingram Content Group Announce Agreement in Principle Setting Chegg on Path Towards 100% Digital Revenue

SANTA CLARA, Calif., Feb. 23, 2015 /PRNewswire/ -- Chegg, The Student Hub, today announced an agreement in principle to establish a multi-year renewable agreement with Ingram Content Group Inc. for Ingram to be responsible for purchasing all textbook inventory which Chegg will continue to market under its brand.

As part of the proposed relationship, Ingram would have responsibility for all new net book investments starting on May 1, 2015, and Chegg would exit its warehouse operations by the end of this year.

"This deal represents a significant milestone for Chegg that we expect will pay big dividends for students and shareholders alike. Students will gain the benefit of Ingram's world-class logistical capabilities and network of warehouses which means they will get their books faster while still receiving all of the benefits of working with Chegg, a brand that they know and trust for textbooks and a lot more," said Dan Rosensweig, Chairman and CEO of Chegg. "For our shareholders, this is very positive news as it means Chegg will no longer invest our capital in physical textbooks, while maintaining all of the benefits and leverage our other businesses receive from textbooks. Our free cash flow and overall gross margin picture will change dramatically for the better, and we will have the flexibility on our balance sheet to accelerate our investments in the high growth, high margin digital services that enable today's self-directed learners."

"We are pleased to enter into this long-term relationship with Chegg based on the shared success we've had during the past two semester's textbook rushes," said John Ingram, Chairman and CEO of Ingram Content Group. "The capacity of both companies to quickly integrate complex systems while improving the overall customer experience has been tested and confirmed and we stand ready with Chegg to help every student in America save time and save money on their textbooks."

Chegg expects the final binding terms of the proposed agreement, which remain subject to the preparation, negotiation and execution of an enforceable definitive amendments to existing agreements and the approval of the definitive amendments by the respective boards of directors of Chegg and Ingram, will be ratified by the boards of both companies before the end of Q1 2015. When and if definitive amendments are executed by the parties, Chegg will file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission describing the material terms of the amendments.

Chegg will discuss the proposed amendments  in more detail on its earnings call today, February 23, 2015, at 2:00 p.m. PST (5:00 p.m. EST). A live webcast of the call will be available online at http://investor.chegg.com under the Events & Presentations menu.

About Chegg
Chegg puts students first and is proud to have saved students and their families more than $500 million in 2014 alone. As the leading student-first connected learning platform, Chegg's Student Hub makes higher education more affordable and more accessible, all while improving student outcomes. Chegg is a publicly-held company based in Santa Clara, California and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com  

About Ingram
Ingram Content Group Inc. is a subsidiary of Nashville-based Ingram Industries Inc. The company got its start in 1964 as a textbook depository and has since grown and transformed into a comprehensive publishing industry services company that offers numerous solutions, including physical book distribution, print-on-demand and digital services. Committed to the success of its partners, Ingram works closely with publishers, retailers, libraries and schools around the world to provide them with the right products and services to help them succeed in the dynamic and increasingly complex world of content publishing. Ingram's operating units are Ingram Book Company, Lightning Source Inc., Vital Source Technologies, Inc., Ingram Periodicals Inc., Ingram International Inc., Ingram Library Services Inc., Spring Arbor Distributors Inc., Ingram Publisher Services Inc., Tennessee Book Company LLC, Coutts Information Services, and ICG Ventures Inc.  Learn more about Ingram Content Group at www.ingramcontent.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.  In some cases you can identify forward-looking statements by use of terminology such as "expects," "will," "subject to," and "if," or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters.  These forward-looking statements include, without limitation those regarding Chegg's proposed strategic partnership with Ingram and the anticipated benefits of such a partnership. Forward-looking statements are not guarantees of future performance, and are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, contingencies and other factors that may cause actual results, to differ materially from those expressed in any forward-looking statement. The following important factors, among others, could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this press release : Chegg and Ingram's ability to convert the nonbinding agreement in principle into an enforceable definitive agreement for the strategic partnership; the parties' ability to obtain the requisite approvals for the definitive agreement; the risk that the binding definitive agreement contains terms that are less beneficial than originally anticipated; Chegg's ability to exits its warehouse operations; the performance of Ingram's logistical and fulfillment activities; failure to achieve the anticipated benefits of the strategic alliance for Chegg and for students; and the general effect of the announcement of the nonbinding agreement in principle on the parties, their businesses and the negotiations. Additional information will also be set forth in Chegg's Annual Report on Form 10-K for the quarter ended December 31, 2014. All information provided in this release and in the conference call is as of the date hereof and Chegg undertakes no duty to update this information except as required by law.

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