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From: mikejones (Rep: 0)Date: 01/09/2013 09:55
Forum: Stockmania Plays - Msg #145 - List SCHS msgs Thread #673490320 (Rec: 0)
SCHS NET INCOME PER 6 MONTHS 1.72$ PER SHARE STOCK SELLING FOR 70 CENTS A SHARE THESE RETARDS ARE DUMB AS HELL THE COMPANY MADE 75 CENTS PER SHARE IN EARNINGS FOR THE QRT THEY ARE SELLING THE STOCK FOR LESS THEN WHAT THE COMPANY JUST REPORTED IN PROFITS FOR THE QRT THATS IS REALLY REALLY STUPID

Revenue for the six months of fiscal 2013 was $489.0 million compared with $527.5 million last year, a decline of 7.3 percent. Net income for the six months increased to $32.5 million or $1.72 per diluted share, versus $22.4 million or $1.18 per diluted share in the comparable period last year.

School Specialty Announces Fiscal 2013 Second Quarter Results
8:30a ET November 20, 2012 (GlobeNewswire)
- Reports Revenue of $236.9 Million and Net Income of $14.1 Million - Operating Income Increases 17 Percent to $25.3 Million - Gross Margin Improves in Quarter and Six Months Results

GREENVILLE, Wis., Nov. 20, 2012 (GLOBE NEWSWIRE) -- School Specialty (Nasdaq:SCHS), a leading K-12 education company with the broadest array of products in the market, today reported second quarter and six months results for the period ending October 27, 2012. Revenue for the second quarter of fiscal 2013 was $236.9 million, compared with $251.4 million in the prior year, a decline of 5.8 percent. Net income for the second quarter of fiscal 2013 was $14.1 million or $0.75 per diluted earnings per share compared with $8.9 million or $0.47 per diluted share last year.

Revenue for the six months of fiscal 2013 was $489.0 million compared with $527.5 million last year, a decline of 7.3 percent. Net income for the six months increased to $32.5 million or $1.72 per diluted share, versus $22.4 million or $1.18 per diluted share in the comparable period last year.

"Despite the challenging marketplace, we continued to make progress on our turnaround strategy and mid and long term initiatives while staying focused on managing costs," said Michael P. Lavelle, President and Chief Executive Officer. "Revenue declines in the second quarter were reduced from earlier this year with continued improvement in our operating performance. Our immediate priorities remain improving EBITDA and working capital while we focus our marketing and sales strategies to support our revenue goals," he added.

Second Quarter Financial Results


-- Revenue for fiscal 2013 second quarter was $236.9 million, compared with
$251.4 million in fiscal 2012, a decline of 5.8 percent. The decline in
sales reflects the continued impact of industry-wide soft educational
spending on curriculum products.

-- Educational Resources revenue was $171.1 million in the quarter compared
with $173.2 million in the prior year and Accelerated Learning revenue
declined 15.9 percent to $65.6 million from $78.0 million last year.

-- Gross profit was $92.7 million compared with $95.1 million last year, a
decline of 2.5 percent. Consolidated gross margin improved to 39.1
percent, an increase of 130 basis points, primarily due to margin
improvement in both Educational Resources and Accelerated Learning.

-- Selling, general and administrative (SG&A) expenses were $67.4 million
compared with $73.4 million in the prior year's second quarter, a
decline of 8.2 percent, reflecting strong cost controls. Lower overall
sales levels also reduced the variable cost component which reduced
expenses.

-- During the second quarter, the company also recorded a $1.4 million
impairment charge related to the receipt of $3 million in settlement of
a note issued to the company with the divestiture of a business in 2008.


-- Interest expense for the second quarter was $9.3 million compared with
$6.9 million in the previous year. This increase is largely driven by
higher interest rates on our term loan and a prepayment charge on a term
loan principal payment.

-- The provision for income taxes in the second quarter of fiscal 2013 was
$0.3 million compared with $6.0 million in the previous year. The
decline in taxes was related to projected annual tax losses for fiscal
2013.

-- Earnings before interest, taxes, depreciation, amortization and
impairment charges (EBITDA) improved 9.3 percent to $34.2 million
compared with $31.3 million in the previous year.

-- Net income was $14.1 million compared with $8.9 million last year.
Diluted earnings per share increased 59.7 percent in this year's second
quarter to $0.75 from $0.47 in the comparable period last year.

-- The second quarter of fiscal 2013 included the previously mentioned
impairment charge of $1.4 million or $0.07 per diluted share. The prior
year included restructuring charges of $0.9 million or $0.05 per diluted
share. Excluding these charges, adjusted net income for this year's
second quarter was $15.5 million or $0.82 per diluted share compared
with $9.7 million or $0.51 per diluted share in the prior year's second
quarter.



Six Months Results


-- Revenue for the first six months of fiscal 2013 was $489.0 million,
compared with $527.5 million in the same period of the prior year, a
decline of 7.3 percent.

-- Educational Resources revenue in the first six months of fiscal 2013
declined 4.0 percent to $344.8 million compared with $359.3 million in
fiscal 2012. Accelerated Learning revenue declined 14.3 percent to
$143.9 million in the first six months of fiscal 2013 compared with
$167.8 million in the prior year.

-- Gross profit for the first six months of the fiscal year was $196.3
million compared with $206.3 million last year. The consolidated gross
margin increased 100 basis points to 40.1 percent from 39.1 percent in
the comparable six month period of fiscal 2012.

-- SG&A expenses declined 7.0 percent to $142.5 million compared with the
prior year's $153.2 million. The decline is due to a combination of
decreased variable costs associated with the revenue decline and lower
compensation costs.

-- Interest expense in the six months of the current fiscal year was $19.3
million compared with last year's $14.8 million. Fiscal 2013 interest
expense was higher due to costs related to the debt refinancing, higher
interest rates on our term loan and a prepayment charge on term loan
principal.

-- During the first half of fiscal 2012, $57.5 million of outstanding 3.75%
convertible subordinated debentures were exchanged and refinanced with
new debentures. Expenses of $1.1 million associated with this
convertible debt exchange were recognized in last year's first six
months.

-- EBITDA for the six months was $71.8 million compared with $71.7 million
in the previous year's six month period.

-- Net income was $32.5 million or $1.72 per diluted share in the first
half of fiscal 2013, compared with net income of $22.4 million or $1.18
per diluted share last year.

-- For the first six months of fiscal 2013, one-time costs included the
previously mentioned $1.4 million or $0.07 per diluted share impairment
charge, $2.5 million or $0.13 per diluted share related to debt
refinancing expenses, and $1.1 million or $0.06 per diluted share in
restructuring charges. For the six month comparable period last year,
results included a $0.7 million or $0.04 per diluted share expense
associated with the exchange of convertible debt and $0.9 million or
$0.05 per diluted share from restructuring charges. On an adjusted basis
for the six months, fiscal 2013 adjusted net income would have been
$37.5 million or $1.98 per diluted share compared with $23.9 million or
$1.26 per diluted share in fiscal 2012.

-- Free cash flow in the first half of fiscal 2013 increased $28.1 million
to $13.9 million compared to negative free cash flow of $14.2 million in
fiscal 2012's first half.



Financial Outlook

"We believe that given the challenging market this school season, fiscal year 2013 revenues are likely to decline in the mid-single digit range compared with fiscal 2012. Although revenue is softer than our previously anticipated performance levels for fiscal 2013, given our margin and cost reduction actions, we continue to believe that fiscal 2013 will look similar to fiscal 2012 actual results in terms of EBITDA," said Lavelle.

Conference Call

The second quarter earnings conference call is scheduled for today at 11 a.m. ET/10 a.m. CT. The live audio webcast will include accompanying slides and is available on the Investors section of School Specialty's web site at www.schoolspecialty.com under Presentations. The presentation will be archived on the company's website and available later in the day.

About School Specialty, Inc.

School Specialty is a leading education company that provides innovative and proprietary products, programs and services to help educators engage and inspire students of all ages and abilities to learn. The company designs, develops, and provides preK-12 educators with the latest and very best curriculum, supplemental learning resources, and school supplies. Working in collaboration with educators, School Specialty reaches beyond the scope of textbooks to help teachers, guidance counselors and school administrators ensure that every student reaches his or her full potential.

Accelerated Learning's major products include: Wordly Wise 3000(R), Premier(TM) Agenda, Delta Education(TM), FOSS(R), CPO Science (TM), Frey Scientific (R), Educator's Publishing Service, Academy of Reading(R), Think Math!(TM), MCI(R), S.P.I.R.E.(R) and SPARK(TM). Educational Resources proprietary brands include: Education Essentials(R), Sportime(R), Childcraft(R), Sax(R) Arts & Crafts, Califone(R), abc(R), Abilitations(R), School Smart(R), Classroom Select(TM) and Projects by Design(R).

For more information about School Specialty, visit www.schoolspecialty.com.

Cautionary Statement Concerning Forward-Looking Information

Any statements made in this press release about future results of operations, expectations, plans, or prospects, including but not limited to statements included under the heading "Financial Outlook," constitute forward-looking statements. Forward-looking statements also include those preceded or followed by the words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "should," "plans," "targets" and/or similar expressions. These forward-looking statements are based on School Specialty's current estimates and assumptions and, as such, involve uncertainty and risk. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those contemplated by the forward-looking statements because of a number of factors, including the factors described in Item 1A of School Specialty's Annual Report on Form 10-K for the fiscal year ended April 28, 2012, which factors are incorporated herein by reference. Except to the extent required under the federal securities laws, School Specialty does not intend to update or revise the forward-looking statements.


SCHOOL SPECIALTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Unaudited


Three Months Ended Six Months Ended
---------------------- ----------------------

October October October October
27, 2012 29, 2011 27, 2012 29, 2011
---------- ---------- ---------- ----------

Revenues $ 236,866 $ 251,375 $ 489,005 $ 527,459

Cost of revenues 144,166 156,315 292,708 321,123
---------- ---------- ---------- ----------
Gross profit 92,700 95,060 196,297 206,336
Selling, general and
administrative expenses 67,364 73,405 142,480 153,181
---------- ---------- ---------- ----------
Operating income 25,336 21,655 53,817 53,155

Other expense:
Impairment of long-term
asset 1,414 -- 1,414 --
Interest expense 9,315 6,867 19,281 14,779
Expense associated with
convertible debt exchange -- -- -- 1,090
---------- ---------- ---------- ----------
Income before provision for
income taxes 14,607 14,788 33,122 37,286

Provision for income taxes 343 6,044 602 14,972
---------- ---------- ---------- ----------
Income before investment
in unconsolidated
affiliate $ 14,264 $ 8,744 $ 32,520 $ 22,314
---------- ---------- ---------- ----------
Equity in income/(losses)
of investment in
unconsolidated affiliate (137) 135 (18) 115
---------- ---------- ---------- ----------

Net income $ 14,127 $ 8,879 $ 32,502 $ 22,429
========== ========== ========== ==========

Weighted average shares outstanding:
Basic 18,930 18,880 18,915 18,877
Diluted 18,946 19,020 18,926 18,972

Net Income Per Share:
Basic $ 0.75 $ 0.47 $ 1.72 $ 1.19
Diluted $ 0.75 $ 0.47 $ 1.72 $ 1.18

Earnings before interest,
taxes, depreciation,
amortization and
impairment charges
(EBITDA) reconciliation:
Net income $ 14,127 $ 8,879 $ 32,502 $ 22,429
Equity in (income)/losses
of unconsolidated
affiliate 137 (135) 18 (115)
Provision for income taxes 343 6,044 602 14,972
Expense associated with
convertible debt exchange -- -- -- 1,090
Impairment charge 1,414 -- 1,414 --
Depreciation and
amortization expense 6,969 7,319 13,985 14,536
Amortization of
development costs 1,926 2,356 3,994 3,959

Interest expense 9,315 6,867 19,281 14,779
---------- ---------- ---------- ----------

EBITDA $ 34,231 $ 31,330 $ 71,796 $ 71,650
========== ========== ========== ==========





SCHOOL SPECIALTY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
Unaudited

October April 28, October
27, 2012 2012 29, 2011
---------- ---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 5,577 $ 484 $ 4,141
Restricted cash 2,708 -- --
Accounts receivable, net 119,275 62,826 127,722
Inventories 84,769 100,504 77,253
Deferred catalog costs 3,377 11,737 7,079
Prepaid expenses and other
current assets 13,371 11,111 14,218
Refundable income taxes 3,520 3,570 --

Deferred taxes 4,797 4,797 1,700
---------- ---------- ----------
Total current assets 237,394 195,029 232,113
Property, plant and
equipment, net 50,836 57,491 59,962
Goodwill 41,093 41,263 127,990
Intangible assets, net 119,120 124,242 150,521
Development costs and other 35,807 35,206 35,054
Deferred taxes long-term 390 390 7,218
Investment in unconsolidated
affiliate 9,882 9,900 20,515
---------- ---------- ----------

Total assets $ 494,522 $ 463,521 $ 633,373
========== ========== ==========

LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current maturities -
long-term debt $ 10,833 $ 955 $ 43,272
Accounts payable 63,770 74,244 40,816
Accrued compensation 10,974 8,094 12,284
Deferred revenue 3,481 3,095 4,389
Accrued income taxes -- -- 13,122

Other accrued liabilities 20,423 18,932 29,223
---------- ---------- ----------
Total current liabilities 109,481 105,320 143,106
Long-term debt - less current
maturities 284,519 289,668 266,350
Deferred taxes -- -- --

Other liabilities 587 587 688
---------- ---------- ----------

Total liabilities 394,587 395,575 410,144
---------- ---------- ----------

Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.001 par
value per share, 1,000,000
shares authorized; none
outstanding -- -- --
Common stock, $0.001 par
value per share,
150,000,000 authorized and
24,599,159; 24,290,345 and
24,300,545 shares issued,
respectively 24 24 24
Capital paid-in excess of
par value 445,059 444,428 443,293
Treasury stock, at cost
5,420,210; 5,420,210 and
5,420,210 shares,
respectively (186,637) (186,637) (186,637)
Accumulated other
comprehensive income 22,486 23,631 23,603

Accumulated deficit (180,997) (213,500) (57,054)
---------- ---------- ----------

Total shareholders' equity 99,935 67,946 223,229
---------- ---------- ----------
Total liabilities and
shareholders' equity $ 494,522 $ 463,521 $ 633,373
========== ========== ==========





SCHOOL SPECIALTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Unaudited


Six Months Ended
-----------------------

October
27, October 29,
2012 2011
---------- -----------
Cash flows from operating activities:
Net income $ 32,502 $ 22,429
Adjustments to reconcile net income to net cash
provided
by operating activities:
Depreciation and intangible asset
amortization expense 13,985 14,536
Amortization of development costs 3,994 3,959
Amortization of debt fees and other 3,779 1,751
Share-based compensation expense 723 1,181
Impairment of long-term asset 1,414 --
Equity in losses/(income) of investment
in unconsolidated affiliate 18 (115)
Deferred taxes -- (4,246)
Expense associated with convertible
debt exchange -- 1,090
Non-cash convertible debt interest
expense 4,497 5,005
Changes in current assets and
liabilities:
Accounts receivable (56,356) (61,162)
Inventories 15,737 34,000
Deferred catalog costs 8,008 9,560
Prepaid expenses and other current
assets (2,212) 295
Accounts payable (11,001) (45,089)

Accrued liabilities 4,446 10,101
---------- -----------
Net cash provided by/(used in)
operating activities 19,534 (6,705)
---------- -----------

Cash flows from investing activities:
Additions to property, plant and
equipment (2,460) (3,667)
Investment in product development costs (3,182) (3,816)
Change in restricted cash (2,708) --

Proceeds from note receivable 3,000 --
---------- -----------

Net cash used in investing activities (5,350) (7,483)
---------- -----------

Cash flows from financing activities:
Proceeds from bank borrowings 819,753 300,600
Repayment of debt and capital leases (819,591) (290,429)

Payment of debt and other (9,253) (1,663)
---------- -----------
Net cash (used in)/provided by
financing activities (9,091) 8,508
---------- -----------

Net decrease in cash and cash equivalents 5,093 (5,680)
Cash and cash equivalents, beginning of
period 484 9,821
---------- -----------

Cash and cash equivalents, end of period $ 5,577 $ 4,141
========== ===========

Free cash flow reconciliation:
Net cash (used in)/provided by operating
activities $ 19,534 $ (6,705)
Additions to property and equipment (2,460) (3,667)

Investment in product development costs (3,182) (3,816)
---------- -----------

Free cash flow $ 13,892 $ (14,188)
========== ===========





School Specialty, Inc.
Segment Analysis - Revenues and Gross Profit/Margin Analysis
(In thousands)
Unaudited


Segment Revenues and Gross
Profit/Margin Analysis-QTD
-------------------------------------

% of Revenues
------------------

Change
2Q13-QTD 2Q12-QTD Change $ % 2Q13-QTD 2Q12-QTD
---------- ---------- ----------- ------ -------- --------
Revenues
Educational Resources $ 171,089 $ 173,222 $ (2,133) -1.2% 72.2% 68.9%
Accelerated Learning 65,610 77,986 (12,376) -15.9% 27.7% 31.0%
Corporate and Interco
Elims 167 167 -- 0.1% 0.1%
---------- ---------- ----------- -------- --------

Total Revenues $ 236,866 $ 251,375 $ (14,509) 100.0% 100.0%
========== ========== =========== -5.8% ======== ========


% of Gross Profit
------------------

Change
2Q13-QTD 2Q12-QTD Change $ % 2Q13-QTD 2Q12-QTD
---------- ---------- ----------- ------ -------- --------
Gross Profit
Educational Resources $ 57,082 $ 53,481 $ 3,601 6.7% 61.6% 56.3%
Accelerated Learning 35,456 40,825 (5,369) -13.2% 38.2% 42.9%
Corporate and Interco
Elims 162 754 (592) 0.2% 0.8%
---------- ---------- ----------- -------- --------

Total Gross Profit $ 92,700 $ 95,060 $ (2,360) 100.0% 100.0%
========== ========== =========== -2.5% ======== ========



Segment Gross Margin Summary-QTD
-------------------------------------


Gross Margin 2Q13-QTD 2Q12-QTD
---------- ----------
Educational Resources 33.4% 30.9%
Accelerated Learning 54.0% 52.3%
Total Gross Margin 39.1% 37.8%



Segment Revenues and Gross
Profit/Margin Analysis-YTD
-------------------------------------

% of Revenue
------------------

Change
2Q13-YTD 2Q12-YTD Change $ % 2Q13-YTD 2Q12-YTD
---------- ---------- ----------- ------ -------- --------
Revenues
Educational Resources $ 344,776 $ 359,286 $ (14,510) -4.0% 70.5% 68.1%
Accelerated Learning 143,895 167,839 (23,944) -14.3% 29.4% 31.8%
Corporate and Interco
Elims 334 334 -- 0.1% 0.1%
---------- ---------- ----------- -------- --------

Total Revenues $ 489,005 $ 527,459 $ (38,454) 100.0% 100.0%
========== ========== =========== -7.3% ======== ========


% of Gross Profit
------------------

Change
2Q13-YTD 2Q12-YTD Change $ % 2Q13-YTD 2Q12-YTD
---------- ---------- ----------- ------ -------- --------
Gross Profit
Educational Resources $ 117,641 $ 113,918 $ 3,723 3.3% 59.9% 55.2%
Accelerated Learning 78,330 90,982 (12,652) -13.9% 39.9% 44.1%
Corporate and Interco
Elims 326 1,436 (1,110) 0.2% 0.7%
---------- ---------- ----------- -------- --------

Total Gross Profit $ 196,297 $ 206,336 $ (10,039) 100.0% 100.0%
========== ========== =========== -4.9% ======== ========



Segment Gross Margin Summary-YTD
-------------------------------------


Gross Margin 2Q13-YTD 2Q12-YTD
---------- ----------
Educational Resources 34.1% 31.7%
Accelerated Learning 54.4% 54.2%
Total Gross Margin 40.1% 39.1%





School Specialty, Inc.
Reconciliation of GAAP Net Income and Net Income per Share to Adjusted Net Income
and Net Income per Diluted Share
(In Thousands, Except Per Share Amounts)
Unaudited


Three Months Ended Six Months Ended
------------------- --------------------

October October October October
27, 2012 29, 2011 27, 2012 29, 2011
--------- -------- --------- ---------

GAAP Net Income $ 14,127 $ 8,879 $ 32,502 $ 22,429
Special Items, net of tax: -- --
Expense associated with convertible
debt exchange -- -- -- 671
Expense associated with debt
refinancing (included in interest
expense) -- -- 2,490 --
Restructuring (included in SG&A) -- 864 1,103 864

Impairment of long-term asset 1,414 -- 1,414 --
--------- -------- --------- ---------

Adjusted Net Income $ 15,541 $ 9,743 $ 37,509 $ 23,964
========= ======== ========= =========


Three Months Ended Six Months Ended
------------------- --------------------

October October October October
27, 2012 29, 2011 27, 2012 29, 2011
--------- -------- --------- ---------

GAAP Net Income per Diluted Share $ 0.75 $ 0.47 $ 1.72 $ 1.18
Special Items, net of tax:
Expense associated with convertible
debt exchange -- -- -- 0.04
Expense associated with debt
refinancing (included in interest
expense) -- -- 0.13 --
Restructuring (included in SG&A) -- 0.05 0.06 0.05

Impairment of long-term asset 0.07 -- 0.07 --
--------- -------- --------- ---------

Adjusted Net Income per diluted share $ 0.82 $ 0.51 $ 1.98 $ 1.26
========= ======== ========= =========

Note: Totals may not foot due to rounding
differences.

School Specialty's financial results for the three and six months ended October
27, 2012 and October 29, 2011 included certain items that management believes
are not representative of its operating performance. This additional information
and reconciliation is not meant to be considered in isolation or as a substitute
for the company's results of operations as prepared and presented in accordance
with GAAP.


This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: School Specialty, Inc.


CONTACT: David Vander Ploeg
Executive VP and CFO
920-882-5854
Elizabeth M. Higashi, CFA
Investor Relations
920-243-5392

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