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Wednesday November 4, 4:21 pm Eastern Time
Company Press Release
SOURCE: The Learning Company, Inc.
The Learning Company, Inc. Announces Third Quarter 1998 Results of $.37 Per Share
CAMBRIDGE, Mass., Nov. 4 /PRNewswire/ -- The Learning Company, Inc. (NYSE: TLC - news) today announced its financial results for the three and nine month periods ended September 30, 1998. All prior period results have been restated to reflect the merger with Broderbund Software, Inc. on August 31, 1998 using the pooling-of-interest method of accounting.
Revenues for the three and nine month periods ended September 30, 1998 were $212,723,000 and $564,042,000 as compared to the prior year's revenues in the three and nine month periods of $141,737,000 and $401,532,000. Excluding the effect of the one-time Broderbund related restructuring charge of $59,659,000, adjusted net income for the three month period ended September 30, 1998 would have been $38,447,000 as compared to $16,661,000 in the three month period ended September 30, 1997. Earnings per share for the three month period ended September 30, 1998, excluding the effect of the one-time Broderbund related
restructuring related charge, would have been $.37 per share and $.25 per share in the prior year three month period ended September 30, 1997. Reported net loss including the one-time Broderbund related restructuring related charge for the three month period ended September 30, 1998 was $.24 per share.
Excluding the effect of the amortization, acquisition and other charges of $282,852,000, adjusted net income for the nine month period ended September 30, 1998 would have been $71,940,000 as compared to $50,242,000 in the nine month period ended September 30, 1997. Earnings per share for the nine month period ended September 30, 1998, excluding the effect of the amortization, acquisition and other charges, would have been $.77 per share and $.77 per share in the prior year nine month period ended September 30, 1997. Reported net loss including amortization, merger and other costs for the nine month period ended September 30, 1998 was $2.55 per share.
Michael Perik, Chairman and Chief Executive Officer of The Learning Company said, ''The Learning Company continues to experience strong growth in its retail software business with year-over-year dollar sell-through up 27% on a combined basis. We are particularly pleased with the strength of our balance sheet at September 30, 1998. The company ended the quarter with $234,796,000 in cash and has experienced an improvement in its days sales in accounts receivable over June 30, 1998 of nine days. During the third quarter we completed the merger with Broderbund and implemented a swift integration of its operations into those of The Learning Company. This now makes us the largest consumer software company in the country after Microsoft and the premier consumer software company for family enrichment and life long learning.''
Kevin O'Leary, President of The Learning Company said, ''The Learning Company has built one of the largest portfolios of branded digital content in the industry. This puts us in an excellent position to deliver quality educational, enrichment and entertainment experiences to consumers in whatever electronic format they prefer, from CD-ROM to DVD to on-line. In the third quarter, we continued to develop our on-line presence while maintaining strong growth in our core branchises and channels. Among the over 25 new products that were launched in the quarter -- our biggest launch ever -- were The Rugrats Adventure Game, American Greetings Print!, Reader Rabbit's Math Ages 4 to 6, Dr. Seuss Kindergarten and Compton's Encyclopedia 1999 Deluxe. In the fourth quarter, we will continue to leverage our state-of-the art, proprietary development engines that streamline the process of creating new multimedia titles with the release of Total 3D Home, Oregon Trail III for DVD, BodyWorks DVD and DW: The Picky Eater.''
This release contains information forecasting the results in the future, which are ''forward-looking statements'' under the federal securities laws. Actual results could differ materially from those forecasts and there can be no assurance that such results will be achieved. Important factors that could cause actual results to differ
materially from those presently estimated include the ability of the Company to predict with certainty the time and resources necessary to develop and introduce new products and the acceptance by customers of new and additional products sold by the Company.
The Learning Company, Inc. (NYSE: TLC - news) is one of the country's leading developers of consumer software for the entire family. The company publishes some of the best-known education, reference, personal productivity and family entertainment brands in the U.S., including Reader Rabbit, The Oregon Trail, Sesame Street, Carmen Sandiego, National Geographic, American Greetings, The Print Shop, Family Tree Maker and Myst. The company's products are sold in
more than 23,000 retail stores in North America and through multiple distribution channels including school sales, online, direct marketing and OEM. The Learning Company also develops, publishes and distributes products internationally through subsidiaries in France, Germany, the United Kingdom, Holland, Japan and Australia, and with distributors throughout Europe, Latin America and the Pacific Rim. The Company's headquarters are located at One Athenaeum Street, Cambridge, Mass. 02142; telephone 617-494-1200; fax 617-494-1219 and the corporate Web site is located at www.learningco.com.
NOTE: All trademarks are the property of their respective owners
The Learning Company, Inc.
Condensed Consolidated Balance Sheets
September 30, 1998 and December 31, 1997
(in thousands of dollars)
September 30, December 31,
1998 1997(A)
(unaudited)
Assets
Current Assets:
Cash $234,796 $188,956
Accounts receivable, net 117,247 161,927
Inventories 44,507 39,382
Other current assets 51,941 35,863
448,491 426,128
Intangible assets, net 179,404 145,848
Property, equipment and
other 63,711 51,798
243,115 197,646
$691,606 $623,774
Liabilities and stockholders' equity
Current liabilities $252,997 $220,192
Long-term obligations:
Senior Convertible Notes 190,955 293,650
Deferred and accrued
income taxes 70,586 75,167
Other long-term obligations 4,134 8,775
265,675 377,592
Total liabilities 518,672 597,784
Stockholders' equity 172,934 25,990
$691,606 623,774
NOTE(A): Restated to reflect merger with Broderbund.
The Learning Company, Inc.
Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 1998 and 1997
(in thousands of dollars, except share and per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues $212,723 $141,737 $564,042 $401,532
Operating expenses:
Costs of production 63,011 40,326 185,039 118,291
Sales and marketing 54,529 38,746 163,223 103,806 General and
administrative 14,132 10,755 43,668 34,534
Development and
software costs 24,947 25,041 72,809 65,991
Amortization, merger
and other charges 63,659 148,400 282,852 403,058
220,278 263,268 747,591 725,680 Operating loss (7,555) (121,531) (183,549) (324,148)
Interest expense
and other (1,215) (4,798) (4,006) (12,355)
Loss before taxes (8,770) (126,329) (187,555) (336,503)
Provision for income
taxes 12,442 (13,167) 12,442 (8,558)
Net loss $(21,212) $(113,162) $ (199,997) $(327,945)
Net loss per share -
basic and diluted $(0.24) $(1.72) $(2.55) $(5.00)
Shares used in per
share calculation 89,457,000 65,895,000 78,534,000 65,561,000
Supplemental information:
Loss Before Taxes $(8,770) $(126,329) $(187,555) $(336,503)
Amortization, acquisition
and other charges 59,659 148,400 282,852 403,058
50,889 22,071 95,297 66,555
Assumed provision for
income taxes 12,442 5,410 23,357 16,313
Adjusted net income$38,447 $16,661 $71,940 $50,242
Adjusted shares including Series A
Preferred 104,457,000 65,895,000 93,534,000 65,561,000
Adjusted earnings
per share $0.37 $0.25 $0.77 $0.77
SOURCE: The Learning Company, Inc. |
