Attached files
| file | filename |
|---|---|
| 8-K - SCIENTIFIC LEARNING CORPORATION 8-K - SCIENTIFIC LEARNING CORP | a6699714.htm |
Exhibit 99.1
Scientific Learning Reports First Quarter 2011 Financial Results
OAKLAND, Calif.--(BUSINESS WIRE)--April 27, 2011--Scientific Learning Corporation (NASDAQ:SCIL), a leading provider of technologies for accelerated learning, today announced financial results for the first quarter ended March 31, 2011.
Total revenue in the first quarter of 2011 was $10.4 million, compared to $11.1 million in the first quarter of 2010. Total booked sales for the first quarter were $8.1 million, an increase from $8.0 million in the first quarter 2010.
Earnings before interest, taxes, depreciation, amortization, and stock compensation (EBITDAS) were a loss of $1.4 million in the first quarter of 2011 compared to an EBITDAS loss of $800,000 in the first quarter of 2010. Net loss in the first quarter of 2011 was $2.4 million, or $0.13 per share, compared to net loss of $1.9 million, or $0.10 per share, in the first quarter of 2010.
“We fell just short of last year’s record first quarter in several financial metrics, however we are pleased with the overall progress we’re making in our business,” said Andy Myers, Chief Executive Officer. “As a result of the great strides we have made in development, we are accelerating the release of our SciLEARN On-Demand offering from the third quarter to the second quarter of this year. This hosted platform, coupled with a new per-student pricing option, will give our customers greater flexibility in both purchasing and deploying our Fast ForWord program.
“For the year, we are focused on achieving several other product launch deadlines and implementing the right business processes to fully leverage our improved technology. We are very excited about the opportunities our SciLEARN platform will create as we look to innovate around existing solutions, develop new offerings, and expand our business.”
The company believes that booked sales and EBITDAS (both non-GAAP measures) are important measures of operating performance and has chosen to disclose these figures as part of the earnings results. EBITDAS and booked sales should not be considered in isolation from net income and revenue and are not intended to represent substitute measures of performance calculated under GAAP. Reconciliations of booked sales, revenue and deferred revenue, and EBITDAS and net income (net loss) are included at the end of this earnings release and in the investor information section of our website, www.scientificlearning.com.
Conference Call Information
A conference call to discuss first quarter 2011 financial results is scheduled for today, April 27, 2011 at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. Investors and analysts interested in participating in the call are invited to dial (866) 652-3154 (domestic) or (706) 634-7311 (international), Conference ID # 57471403, approximately 10 minutes prior to the start of the call. The conference call will be available live on the Investor Information portion of the Company’s website at http://www.scilearn.com/investorinfo. A replay of this teleconference will be made available on the Scientific Learning website approximately two hours following the conclusion of the call. To hear the replay by phone, please call (800) 642-1687 (domestic) and (706) 645-9291 (international) and enter conference id number 57471403.
About Scientific Learning Corporation
We accelerate learning by applying proven research on how the brain learns. Scientific Learning’s results are demonstrated in over 200 research studies and protected by over 55 patents. Learners can realize achievement gains of 1 - 2 years in as little as 8 - 12 weeks and maintain an accelerated rate of learning even after the programs end.
Today, learners have used nearly 3 million Scientific Learning software products, which apply “Brain Fitness” principles to the areas of English language and reading. We provide our offerings directly to parents, K–12 schools and learning centers, and in more than 40 countries around the world. For more information, visit http://www.scilearn.com/ or call toll-free (888) 358-0212.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to the safe harbor created by the federal securities laws. Such statements include, among others, statements relating to our future financial results, our new product release plans and schedule, our planned new pricing and the impact and potential of the current and planned future releases of the new SciLEARN platform, including SciLearn Enterprise and SciLEARN ON-Demand. Such statements are subject to substantial risks and uncertainties. Actual events or results may differ materially as a result of many factors, including but not limited to: general economic and financial conditions (including current adverse conditions in government budgets and the general economy); availability of funding to purchase the Company's products and generally available to schools, including the amount and duration of federal stimulus funding; unexpected challenges in product development; the acceptance of new products and product changes in existing and new markets; acceptance of subscription and other recurring offerings; seasonality and sales cycles in Scientific Learning's markets; competition; the extent to which the Company's marketing, sales and implementation strategies are successful; personnel changes; the Company's ability to continue to demonstrate the efficacy of its products, and other risks detailed in the Company's SEC reports, including but not limited to the Report on Form 10-K for the year ended December 31, 2010 (Part II, Item 1A, Risk Factors), filed March 4, 2011. The Company disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise.
| SCIENTIFIC LEARNING CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,387 | $ | 5,415 | ||||
| Short-term investments | 9,005 | 9,631 | ||||||
| Accounts receivable, net | 3,342 | 5,053 | ||||||
| Prepaid expenses and other current assets | 2,083 | 2,206 | ||||||
| Total current assets | 17,817 | 22,305 | ||||||
| Property and equipment, net | 2,546 | 2,497 | ||||||
| Goodwill | 4,568 | 4,568 | ||||||
| Other intangible assets, net | 907 | 1,034 | ||||||
| Other assets | 1,328 | 1,399 | ||||||
|
Total assets |
$ | 27,166 | $ | 31,803 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 514 | $ | 543 | ||||
| Accrued liabilities | 3,527 | 4,198 | ||||||
| Deferred revenue | 14,364 | 16,388 | ||||||
| Total current liabilities | 18,405 | 21,129 | ||||||
| Deferred revenue, long-term | 5,533 | 5,483 | ||||||
| Other liabilities | 827 | 857 | ||||||
| Total liabilities | 24,765 | 27,469 | ||||||
| Stockholders' equity: | ||||||||
| Common stock and additional paid in capital | 89,711 | 89,277 | ||||||
| Accumulated deficit | (87,306 | ) | (84,943 | ) | ||||
| Accumulated other comprehensive loss | (4 | ) | - | |||||
| Total stockholders' equity | 2,401 | 4,334 | ||||||
| Total liabilities and stockholders' equity | $ | 27,166 | $ | 31,803 | ||||
| SCIENTIFIC LEARNING CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except per share data) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Revenues: | ||||||||
| Products | $ | 5,477 | $ | 5,502 | ||||
| Service and support | 4,958 | 5,563 | ||||||
| Total revenues | 10,435 | 11,065 | ||||||
| Cost of revenues: | ||||||||
| Cost of products | 315 | 519 | ||||||
| Cost of service and support | 2,293 | 2,434 | ||||||
| Total cost of revenues | 2,608 | 2,953 | ||||||
| Gross profit | 7,827 | 8,112 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 4,916 | 5,950 | ||||||
| Research and development | 2,904 | 1,968 | ||||||
| General and administrative | 2,343 | 2,063 | ||||||
| Total operating expenses | 10,163 | 9,981 | ||||||
| Operating loss | (2,336 | ) | (1,869 | ) | ||||
| Interest and other income, net | 12 | 16 | ||||||
| Loss before income tax | (2,324 | ) | (1,853 | ) | ||||
| Provision for income taxes | 39 | 46 | ||||||
| Net loss | $ | (2,363 | ) | $ | (1,899 | ) | ||
| Net loss per share: | ||||||||
| Basic net loss per share | $ | (0.13 | ) | $ | (0.10 | ) | ||
| Diluted net loss per share | $ | (0.13 | ) | $ | (0.10 | ) | ||
| Weighted average share used in computation of per share data: | ||||||||
| Basic weighted average shares outstanding | 18,749 | 18,338 | ||||||
| Diluted weighted average shares outstanding | 18,749 | 18,338 | ||||||
| SCIENTIFIC LEARNING CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | (2,363 | ) | $ | (1,899 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||
| Depreciation and amortization | 475 | 622 | ||||||
| Stock-based compensation | 456 | 479 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,711 | 2,972 | ||||||
| Prepaid expenses and other current assets | 124 | (180 | ) | |||||
| Other assets | 46 | (21 | ) | |||||
| Accounts payable | (29 | ) | (355 | ) | ||||
| Accrued liabilities | (671 | ) | (3,733 | ) | ||||
| Deferred revenue | (1,974 | ) | (1,708 | ) | ||||
| Other liabilities | (30 | ) | 50 | |||||
| Net cash used in operating activities | (2,255 | ) | (3,773 | ) | ||||
| Investing Activities: | ||||||||
| Purchases of property and equipment, net | (372 | ) | (642 | ) | ||||
| Purchases of short-term investments | (2,379 | ) | (8,112 | ) | ||||
| Sales and maturities of short-term investments | 3,000 | - | ||||||
| Net cash provided by (used in) investing activities | 249 | (8,754 | ) | |||||
| Financing Activities: | ||||||||
| Proceeds from issuance of common stock | 4 | 129 | ||||||
| Net settlement of common stock | (26 | ) | - | |||||
| Net cash provided by (used in) financing activities | (22 | ) | 129 | |||||
| Decrease in cash and cash equivalents | (2,028 | ) | (12,398 | ) | ||||
| Cash and cash equivalents at beginning of period | 5,415 | 20,679 | ||||||
| Cash and cash equivalents at end of period | $ | 3,387 | $ | 8,281 | ||||
|
Scientific Learning Corporation |
||||||||
| Supplemental Information | ||||||||
| Reconciliation of Booked Sales, Revenue and Change in Deferred Revenue | ||||||||
| $s in thousands | ||||||||
| Three months ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Booked sales | $ | 8,083 | $ | 8,025 | ||||
| Less: revenue | 10,435 | 11,065 | ||||||
| Other adjustments | 378 | 1,332 | ||||||
| Net decrease in current and long-term deferred revenue | $ | (1,974 | ) | $ | (1,708 | ) | ||
| Beginning balance in current and long-term deferred revenue | $ | 21,871 | $ | 22,230 | ||||
| Ending balance in current and long-term deferred revenue | $ | 19,897 | $ | 20,522 | ||||
Booked sales is a non-GAAP financial measure that we believe to be a useful measure of the current level of business activity both for management and for investors. Booked sales equals the total value (net of allowances) of software and services invoiced in the period. Because a significant portion of our revenue is recognized over a period of months, booked sales is a good indicator of current activity. The table above shows the reconciliation of booked sales, revenue, and changes in deferred revenue.
|
Reconciliation of Net Loss to EBITDAS |
||||||||
| $s in thousands | ||||||||
| Three months ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Net loss | $ | (2,363 | ) | $ | (1,899 | ) | ||
| Adjustments to reconcile to EBITDAS: | ||||||||
| Provision for income taxes | 39 | 46 | ||||||
| Interest (income) expense, net | 8 | (11 | ) | |||||
| Depreciation and amortization | 475 | 622 | ||||||
| Stock-based compensation expense | 456 | 479 | ||||||
| Adjusted EBITDAS | $ | (1,385 | ) | $ | (763 | ) | ||
Earnings before interest, taxes, depreciation, amortization and stock-based compensation expense (EBITDAS) is a non-GAAP financial measure we believe to be a useful measure of the resources available to the Company in the current period. We also believe that EBITDAS will be useful in allowing investors to compare our performance with that of other companies. The table above shows a reconciliation of EBITDAS to net loss, the closest GAAP measure.
| Non-Cash Charges | |||||||||
| $s in thousands | Three months ended March 31, 2011 | ||||||||
|
Depreciation & |
Stock-based |
Total |
|||||||
| Included in: | |||||||||
| Cost of products | $ | 138 | $ | - | $ | 138 | |||
| Cost of service and support | - | 9 | 9 | ||||||
| Operating expenses | 337 | 447 | 784 | ||||||
| Total | $ | 475 | $ | 456 | $ | 931 | |||
| $s in thousands | Three months ended March 31, 2010 | ||||||||
|
Depreciation & |
Stock-based |
Total | |||||||
| Included in: | |||||||||
| Cost of Products | $ | 261 | $ | - | $ | 261 | |||
| Cost of Service and Support | 64 | 39 | 103 | ||||||
| Operating Expenses | 297 | 440 | 737 | ||||||
| Total | $ | 622 | $ | 479 | $ | 1,101 | |||
CONTACT:
Scientific Learning Corporation
Jessica Lindl, 510-625-6784 (Media)
Vice
President of Marketing and Product Management
jlindl@scilearn.com
or
The
Blueshirt Group
Stacie Bosinoff, 415-217-7722 (Investor)
investorrelations@scilearn.com
stacie@blueshirtgroup.com