OAKLAND, Calif., Aug. 10, 2020 /PRNewswire/ -- Scientific Learning Corp. (OTC PINK:SCIL), a leading SaaS service provider that delivers neuroscience-based educational technologies, today announced it has released its unaudited financial results for the period ending June 30, 2020. Details of the quarterly results can be found at https://www.otcmarkets.com/stock/SCIL/disclosure.
The company managed through the first six months of the year, including through COVID-19 volatility, to maintain a slight, 1% decline in year to date sales in its most important channel, K-12. After finishing the first quarter with 20% growth in K-12, the second quarter was down 11%, as compared to last year. This sales decline was driven by a challenging purchasing environment in K-12 in April, offset by a gradual recovery in May, and closing with our best June sales in four years.
Engaging with K-12 leadership and decision makers was a challenge early in the quarter, with school administrators scrambling to react to school closures caused by COVID-19. May and June's recovery was spurred by increased engagement through new digital and virtual communications. The strong finish helped the company deliver a strong net dollar renewal rate of over 93% for the first half of 2020.
In response to the impact of COVID-19 on the business, the company closed its offices and has had employees work from home since the closure. Also, the company implemented a reduction in hours during the month of April, which saved the company nearly $0.2 million.
On April 20th, the company received a loan from the Small Business Administration through their Paycheck Protection Program ("PPP") in the amount of $1.9 million. This capital has enabled the company to operate during this critical period of business restrictions and lockdowns, while it pivots to focus on what schools, teachers, and students need right now. The company expects that approximately 75% of the loan will be forgiven pursuant to the PPP's loan forgiveness provisions. It is currently waiting for the SBA to provide guidance to banks and allow forgiveness applications to be processed.
"Obviously, we are in an unprecedented chapter in US history. K-12, our most important customer segment, has been working to deliver education against a COVID backdrop since March, which is leading our company to pivot, adapt and be resourceful as well. Sales in Q2 were a roller coaster, and we found our stride in June, with our highest June sales month in four years. We look forward to working to continue this momentum in Q3 when we launch our first market-expanding product component since 2012, manage a lead pool that is 30% higher than a year ago, and provide a great learning tool for remote students. As always, we appreciate the continued support of our shareholders," stated Jeff Thomas, CEO of Scientific Learning.
About Scientific Learning Corp.
Based in Oakland, Calif., Scientific Learning is a leading SaaS education company that delivers neuroscience-based educational technologies. Scientific Learning's programs have been used by more than 3 million learners in more than 2,300 K-12 schools in the United States and Canada, almost 300 private practice clinicians, thousands of students via a direct-to-consumer channel, and in over 55 countries via value-added resellers. The company's Fast ForWord® programs cross-train foundational language and cognitive skills necessary for rapid English language development. Reading Assistant™ uses speech verification technology to provide real-time corrective feedback to students as they read and speak, in a manner similar to that of an individualized language and reading coach.
Safe Harbor Statement: The information posted in this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions. The forward-looking statements in this release include, among others, statements regarding the potential forgiveness of the PPP loan and the potential benefits of operational gains the company has made. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Factors which could cause results or events to differ from current expectations include, among other things: general economic and business conditions; availability of government funding for the purchase of the Company's educational products; effects of potential geopolitical unrest and regional conflicts; changes in the legal and regulatory environment; competition; and various other factors beyond the Company's control. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.
SOURCE Scientific Learning Corp.