Current Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2009
THE PRINCETON REVIEW, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-32469 | 22-3727603 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
111 Speen Street, Suite 550
Framingham, Massachusetts 01701
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (508) 663-5050
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
Attached as Exhibit 99.1 is a copy of a press release of The Princeton Review, Inc. (the “Company”) dated August 6, 2009, announcing certain financial results for the Company’s fiscal period ended June 30, 2009.
The information set forth under this “Item 2.02 - Results of Operations and Financial Condition,” including the exhibit attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
| (d) | Exhibits. |
| 99.1 | Press release dated August 6, 2009. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE PRINCETON REVIEW, INC. | ||||||
| Dated: August 6, 2009 | ||||||
|
/s/ Neal S. Winneg |
||||||
| Name: | Neal S. Winneg | |||||
| Title: | Executive Vice President | |||||
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Exhibit 99.1
| Contact: | ||||
| Stephen C. Richards | ||||
| The Princeton Review, Inc. | ||||
| (508) 663-5053 | ||||
| srichards@review.com |
FOR IMMEDIATE RELEASE
The Princeton Review Reports Second Quarter and Six Month Financial Results
| • |
Revenue increased 9.3% over 2008 to $76.3 million for six month period |
| • |
Loss per share from continuing operations for six month period of $0.06 compared to loss per share of $0.03 in 2008 |
FRAMINGHAM, MA – August 6, 2009 - The Princeton Review, Inc. (Nasdaq: REVU), a leading provider of test preparation and supplemental educational services, today announced revenue of $76.3 million and operating income from continuing operations of $0.7 million for the six months ended June 30, 2009.
For the six months ended June 30, 2009, revenue increased 9.3% to $76.3 million, from $69.8 million in the six month period ended June 30, 2008. The Company’s operating income from continuing operations was $0.7 million in 2009 compared to $1.8 million in 2008. The 2009 six month results include restructuring charges of $4.0 million compared to $1.8 million in 2008.
For the quarter ended June 30, 2009, revenue decreased 7.6% to $31.5 million, compared to $34.1 million in 2008. The Princeton Review reported an operating loss from continuing operations of $1.8 million compared to operating income of $1.6 million in 2008.
CEO Comment
“Our revenue growth for the six months ended June 30, 2009, while positive, has been negatively affected by continuing macro-economic challenges and industry pricing pressures. Despite this our earnings growth reflects the continued effective execution of our strategy. Both our test prep and supplemental educational services businesses are subject to seasonality and a greater proportion of our first half revenues fell in our first quarter this year as opposed to our second quarter. This was especially true for our SES division,” said Michael Perik, CEO and President. “Our test prep enrollments are up, which we believe is an indicator that consumer awareness of The Princeton Review and our overall brand presence in the marketplace continues to grow.”
Test Preparation Services
For the second quarter of 2009, Test Preparation Services division revenue decreased by $3.1 million, or 11%, to $25.2 million in 2009, from $28.3 million in the second quarter of 2008. For the six month period, Test Preparation Services revenue increased by $1.2 million, or 2.3%, to $52.6 million in 2009, from $51.4 million in 2008. Revenue for our second quarter and six month period include incremental revenue from our 2008 acquisitions of the Test Services, Inc. and Southern California franchises, which were completed in March and July 2008, respectively, which were offset by lower franchise fees and lower revenue per enrollment due to lower prices and shifts in product mix compared to 2008. The second quarter revenue is also impacted by earlier start dates for May and June SAT courses, which shifted some revenue from the second quarter to the first quarter of this year as compared to 2008.
Operating income in the Test Preparation Services division was $2.2 million for the second quarter of 2009, compared to $6.5 million for the second quarter of 2008. For the six month period, operating income in the Test Prep division was $5.7 million in 2009 compared to $9.4 million in 2008. Lower gross margin due to a decline in average revenue per enrollment and incremental amortization and depreciation due to 2008 acquisitions are the primary reasons for the decline in Test Preparation Services division operating income.
Supplemental Educational Services (SES)
For the second quarter of 2009, SES revenues increased by $0.5 million, or 8.6%, to $6.3 million compared to $5.8 million in the second quarter of 2008. For the six month period, SES revenue increased by $5.3 million, or 28.8%, to $23.7 million, from $18.4 million in 2008. The 2009 increases resulted from new market expansion.
Operating loss in the SES division was $0.4 million for the second quarter of 2009 compared to operating income of $1.1 million in the second quarter of 2008. The operating loss is due to lower student attendance and associated administrative expenses in new markets in 2009. For the six month period, SES division operating income was $5.7 million compared to $4.5 million in 2008 due to increased revenue from new market expansion.
Conference Call Details
The Princeton Review will review its second quarter 2009 financial results and provide additional business highlights on a conference call at 4:30 p.m. Eastern Daylight 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) 325-4943 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/events.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/events.cfm . Additionally, a replay of the call can be accessed by dialing either (888) 203-1112 or (719) 457-0820, passcode 3430511, through September 7, 2009.
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About The Princeton Review, Inc.
The Princeton Review (Nasdaq: REVU) has been a pioneer and leader in helping students achieve their higher education goals for more than 25 years through college and graduate school test preparation and private tutoring. With more than 165 print and digital publications and a free website, www.PrincetonReview.com , the Company provides students and their parents with the resources to research, apply to, prepare for, and learn how to pay for higher education. The Princeton Review also partners with schools and guidance counselors throughout the U.S. to assist in college readiness, test preparation and career planning services, helping more students pursue postsecondary education.
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
- Tables to Follow -
THE PRINCETON REVIEW, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
|
Revenue |
||||||||||||||||
|
Test Preparation Services |
$ | 25,220 | $ | 28,272 | $ | 52,583 | $ | 51,422 | ||||||||
|
SES Services |
6,252 | 5,780 | 23,712 | 18,372 | ||||||||||||
|
Total revenue |
31,472 | 34,052 | 76,295 | 69,794 | ||||||||||||
|
Cost of revenue |
||||||||||||||||
|
Test Preparation Services |
10,024 | 8,971 | 19,482 | 17,858 | ||||||||||||
|
SES Services |
3,661 | 2,392 | 11,562 | 8,055 | ||||||||||||
|
Total cost of revenue |
13,685 | 11,363 | 31,044 | 25,913 | ||||||||||||
|
Gross Profit |
17,787 | 22,689 | 45,251 | 43,881 | ||||||||||||
|
Operating expenses |
||||||||||||||||
|
Selling, general and administrative |
18,451 | 19,747 | 40,547 | 40,341 | ||||||||||||
|
Restructuring |
1,130 | 1,316 | 4,048 | 1,751 | ||||||||||||
|
Total operating expenses |
19,581 | 21,063 | 44,595 | 42,092 | ||||||||||||
|
Operating (loss) income from continuing operations |
(1,794 | ) | 1,626 | 656 | 1,789 | |||||||||||
|
Interest (expense) income, net |
(198 | ) | 34 | (513 | ) | 127 | ||||||||||
|
Other income (expense) |
229 | (2 | ) | 254 | (2 | ) | ||||||||||
|
(Loss) income from continuing operations before income taxes |
(1,763 | ) | 1,658 | 397 | 1,914 | |||||||||||
|
Benefit (provision) for income taxes |
179 | (556 | ) | (121 | ) | (634 | ) | |||||||||
|
(Loss) income from continuing operations |
(1,584 | ) | 1,102 | 276 | 1,280 | |||||||||||
|
Discontinued operations |
||||||||||||||||
|
Loss from discontinued operations |
(168 | ) | (888 | ) | (306 | ) | (1,592 | ) | ||||||||
|
Gain (loss) from disposal of discontinued operations |
(56 | ) | — | 913 | — | |||||||||||
|
Benefit for income taxes |
2 | 51 | 49 | — | ||||||||||||
|
(Loss) income from discontinued operations |
(222 | ) | (837 | ) | 656 | (1,592 | ) | |||||||||
|
Net (loss) income |
(1,806 | ) | 265 | 932 | (312 | ) | ||||||||||
|
Dividends and accretion on Preferred Stock |
(1,208 | ) | (1,149 | ) | (2,415 | ) | (2,298 | ) | ||||||||
|
Net loss attributed to common stockholders |
$ | (3,014 | ) | $ | (884 | ) | $ | (1,483 | ) | $ | (2,610 | ) | ||||
|
Earnings (loss) per share |
||||||||||||||||
|
Basic and diluted: |
||||||||||||||||
|
Loss from continuing operations |
$ | (0.08 | ) | $ | — | $ | (0.06 | ) | $ | (0.03 | ) | |||||
|
Income (loss) from discontinued operations |
(0.01 | ) | (0.03 | ) | 0.02 | (0.05 | ) | |||||||||
|
Loss attributable to common shareholders |
$ | (0.09 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.08 | ) | ||||
|
Weighted average shares used in computing income (loss) per share |
||||||||||||||||
|
Basic and diluted |
33,719 | 32,918 | 33,730 | 31,202 | ||||||||||||