Published:
The Princeton Review Reports First Quarter 2008 Operating Results
NEW YORK, May 8 /PRNewswire-FirstCall/ -- The Princeton Review, Inc.
(Nasdaq: REVU), a leading provider of test preparation and educational support
services, today announced financial results for the three months ended March
31, 2008.
First Quarter Financial Highlights
For the quarter ended March 31, 2008, revenue increased 3.0% to $41.4
million from $40.2 million in the first quarter of 2007. The Company reported
a net loss attributable to common stockholders of $1.7 million, or $0.06 per
share, as compared to net income attributable to common stockholders of $4.4
million, or $0.16 per share, in the year-ago quarter. First quarter 2007
results included a gain of $4.5 million from the sale of the Company's
admissions technology business in February 2007. First quarter 2008 results
include a restructuring charge of $0.4 million. The Company reported a loss
from continuing operations of $0.7 million in the first quarter of 2008,
improving from a loss of $1.0 million in the first quarter of 2007.
"We believe we have made progress in our initiative to return The
Princeton Review to profitability and positive cash flow in the first
quarter," said Michael Perik, CEO and President. "We are pleased with the
revenue performances of the Test Preparation and SES divisions in the first
quarter and continue to identify cost and productivity opportunities across
all our businesses and operations."
Test Preparation Services
For the quarter, Test Preparation Services revenue increased by $2.3
million, or 11.0%, from $20.9 million in 2007 to $23.2 million in 2008. This
increase largely resulted from increases in tutoring and institutional
revenue, while retail revenues were essentially flat compared to the prior
year.
Operating income in the Test Prep division was $2.9 million for the
quarter compared to $1.6 million for the first quarter of 2007. The
improvement is a result of a 1.7% improvement in gross profit margin.
Supplementary Educational Services (SES)
For the quarter, SES revenues increased by $6.4 million, or 102.3%, from
$6.2 million in 2007 to $12.6 million in 2008. This increase is due to
increased market share in existing markets and the entry into two new markets
in connection with the acquisitions of two of the Company's franchises in
2007.
Operating income in the SES division was $3.4 million for the quarter,
compared to $1.9 million in 2007.
K-12 Educational Services
For the quarter, K-12 Services revenue decreased by $7.5 million, or 57%,
from $13.1 million in 2007 to $5.6 million in 2008. The decrease is due to the
loss of a contract in 2007 and the timing of revenue recognition on contracts
that were delayed from 2006 to the first quarter of 2007.
Operating loss in the K-12 Services division was $.7 million for the
quarter, compared to operating income of $1.8 million in the first quarter of
2007.
Other Business Highlights
As previously announced, on March 7, 2008 the Company completed the
acquisition of Test Services, Inc. ("TSI") from Alta Colleges and has included
the operations of TSI from the date of the acquisition.
The Princeton Review will review its first quarter 2008 financial results
and provide additional business highlights on a conference call at 10:00 a.m.
Eastern Standard Time today. A copy of this earnings release is available at
http://ir.princetonreview.com/releases.cfm?type=earnings. To participate on
the live call, investors should dial (719) 325-4754 approximately ten minutes
prior to the start time. In addition, the call will be available via live
webcast over the Internet. To access the live webcast of the conference call,
please go to http://ir.princetonreview.com/medialist.cfm 15 minutes prior to
the start time of the call to register. An archived webcast will be available
on the Company's website at http://ir.princetonreview.com/medialist.cfm.
Additionally, a replay of the call can be accessed by dialing either (888)
203-1112 or (719) 457-0820, passcode 4370407, through May 13, 2008.
About The Princeton Review
The Princeton Review (Nasdaq: REVU) is a pioneer in the world of
education. Founded in 1981 and headquartered inNew York City, the Company
offers private tutoring and classroom and online test preparation to help
students improve their scores in college and graduate school admissions tests.
The Company's free website, www.PrincetonReview.com, helps over half of
university-bound students research, apply to, prepare for, and learn how to
pay for their higher education. In addition, The Princeton Review works with
school districts around the U.S. to measurably strengthen students' academic
skills by connecting ongoing assessment with professional development and
instruction and by providing districts with college and career resources for
both students and guidance counselors. The Company also authors more than 200
print and software titles on test preparation, college and graduate school
selection and admissions, and related topics.
Safe Harbor Statement
All statements in this press release that are not historical are forward-
looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements may be identified by
words such as "believe", "intend," "expect," "may," "could," "would," "will,,
"should,, "plan,, "project," "contemplate,, "anticipate," or similar
statements. Because these statements reflect The Princeton Review's current
views concerning future events, these forward-looking statements are subject
to risks and uncertainties. The Princeton Review's actual results could
differ materially from those anticipated in these forward-looking statements
as a result of many factors, including, but not limited to, demand for the
company's products and services; the company's ability to compete effectively
and adjust to rapidly changing market dynamics; the timing of revenue
recognition from significant contracts with schools and school districts;
market acceptance of the company's newer products and services; continued
federal and state focus on assessment and remediation in K-12 education; and
the other factors described under the caption "Risk Factors" in The Princeton
Review's most recent Form 10-K filed with the Securities and Exchange
Commission. The Princeton Review undertakes no obligation to update publicly
any forward-looking statements contained in this press release.
- Tables to Follow -
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
March 31,
2008 2007
(Unaudited)
Revenue
Test Preparation Services $23,150 $20,863
SES Services 12,592 6,225
K-12 Services 5,629 13,082
Total revenue 41,371 40,170
Cost of revenue
Test Preparation Services 8,887 8,368
SES Services 5,663 2,844
K-12 Services 2,686 6,928
Total cost of revenue 17,236 18,140
Gross Profit 24,135 22,030
Operating expenses
Selling, general and administrative 24, 337 22,652
Restructuring 435 -
Total operating expenses 24,772 22,652
Loss from operations (637) (622)
Interest income (expense), net 99 (344)
Other income (expense), net (38) (75)
Income (loss) before income taxes (576) (1,041)
(Provision) benefit for income taxes (78) 8
Net income (loss) from continuing operations (654) (1,033)
Discontinued operations
Income (loss) from discontinued operations 128 1,198
Gain from disposal of discontinued operations - 4,539
(Provision) benefit for income taxes (51) (178)
Income (loss) from discontinued operations 77 5,559
Net income (loss) (577) 4,526
Dividends and accretion on Preferred Stock (1,149) (103)
Income (loss) attributed to common stockholders $(1,726) $4,423
Earnings (loss) per share
Basic and diluted Income (loss) from
continuing operations $(0.06) $(0.04)
Income (loss) from discontinued operations 0.00 0.20
Net income (loss) attributed to
common stockholders $(0.06) $0.16
Weighted average shares used in computing
income (loss) per share
Basic 29,486 27,576
Diluted 29,486 27,576
See accompanying notes to the condensed consolidated financial statements.
SOURCE The Princeton Review, Inc.
Copyright © 2009, PRNewswire
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