The Aristotle Corporation Announces 2009 Third Quarter and Nine Month Results

November 5, 2009 6:00 AM EST

STAMFORD, Conn.--(BUSINESS WIRE)-- The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its results of operations for the third quarter and nine months ended September 30, 2009.

Net earnings applicable to common stockholders for the first nine months of 2009 were $8.3 million, or $.46 per diluted common share, compared to $12.0 million, or $.67 per diluted common share, for the comparable nine months of 2008. Pursuant to a final settlement with the Internal Revenue Service of an audit previously reported by the Company, the nine months ended September 30, 2009 includes additional Federal income taxes of $.5 million and $1.0 million for the 2006 and 2007 tax years, respectively, plus approximately $.1 million of interest, related to a partial disallowance of the Company's historical Federal net operating tax losses that were utilized. Such amounts reduced net income for the nine months ended September 30, 2009 by approximately $.09 per diluted common share. For the third quarter ended September 30, 2009, net earnings applicable to common stockholders were $4.8 million, or $.27 per diluted common share, compared to $4.7 million, or $.26 per diluted common share, in the third quarter of 2008. An adjustment to the initial IRS settlement reduced the Federal tax expense by $.3 million and the related interest expense by $.1 million, or approximately $.02 per diluted common share, in the three and nine months ended September 30, 2009. No additional taxes were due for any years prior to 2006.

In the nine months ended September 30, 2009, net sales decreased 7.8% to $158.9 million from $172.2 million in the nine months ended September 30, 2008. Earnings from operations decreased by 11.5% in the first nine months of 2009 to $26.8 million, or 16.9% of net sales. In the first nine months of 2008, earnings from operations totaled $30.3 million (including a $.7 million insurance recovery), or 17.6% of net sales. In the third quarter of 2009, net sales decreased 5.9% to $61.1 million from $65.0 million in the third quarter of 2008. Earnings from operations decreased by 2.6% in the third quarter of 2009 to $11.4 million, or 18.6% of net sales. In the same quarter of 2008, earnings from operations totaled $11.7 million, or 17.9% of net sales.

About Aristotle

The Aristotle Corporation, founded in 1986, and headquartered in Stamford, CT, is a leading manufacturer and global distributor of educational, health, medical technology and agricultural products. A selection of over 80,000 items is offered, primarily through 50 separate catalogs carrying the brand of Nasco (founded in 1941), as well as those bearing the brands of Life/Form(R), Whirl-Pak(R), Simulaids, Triarco, Spectrum Educational Supplies, Hubbard Scientific, Scott Resources, Haan Crafts, CPR Prompt(R), Ginsberg Scientific and Summit Learning. Products include educational materials and supplies for substantially all K-12 curricula, molded plastics, biological materials, medical simulators, health care products and items for the agricultural, senior care and food industries. Aristotle has approximately 850 full-time employees at its operations in Fort Atkinson, WI, Modesto, CA, Fort Collins, CO, Plymouth, MN, Saugerties, NY, Chippewa Falls, WI, Otterbein, IN and Newmarket, Ontario, Canada.

There are 18.0 million shares outstanding of Aristotle common stock (NASDAQ: ARTL) and 1.1 million shares outstanding of Series I preferred stock (NASDAQ: ARTLP); there are also 11.0 million privately-held shares outstanding of Series J preferred stock. Aristotle has about 3,600 stockholders of record.

Further information about Aristotle can be obtained on its website, at aristotlecorp.net.

Safe Harbor under the Private Securities Litigation Reform Act of 1995

To the extent that any of the statements contained in this release are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks that could cause actual results to differ materially from those projected or suggested in such forward-looking statements. Aristotle cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the following: (i) the ability of Aristotle to obtain financing and additional capital to fund its business strategy on acceptable terms, if at all; (ii) the ability of Aristotle on a timely basis to find, prudently negotiate and consummate additional acquisitions; (iii) the ability of Aristotle to manage any to-be acquired businesses; (iv) there is not an active trading market for the Company's securities and the stock prices thereof are highly volatile, due in part to the relatively small percentage of the Company's securities which is not held by the Company's majority stockholder and members of the Company's Board of Directors and management; and (v) other factors identified in Item 1A, Risk Factors, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2008. As a result, Aristotle's future development efforts involve a high degree of risk. For further information, please see Aristotle's filings with the Securities and Exchange Commission, including its Forms 10-K, 10-K/A, 10-Q and 8-K.

THE ARISTOTLE
CORPORATION AND
SUBSIDIARIES

CONDENSED
CONSOLIDATED
STATEMENTS OF
OPERATIONS

(In thousands,
except share and
per share data)

(Unaudited)

                         Three Months Ended           Nine Months Ended

                         September 30,                September 30,

                         2009          2008           2009          2008

Net sales              $ 61,128        64,976         158,854       172,202

Cost of sales            37,089        40,123         95,440        105,116

Gross profit             24,039        24,853         63,414        67,086

Selling and
administrative           12,669        13,178         36,607        36,795
expense

Earnings from            11,370        11,675         26,807        30,291
operations

Other (expense)
income:

Interest expense         (104       )  (260       )   (733       )  (833       )

Other, net               167           (428       )   448           162

                         63            (688       )   (285       )  (671       )

Earnings before          11,433        10,987         26,522        29,620
income taxes

Income tax expense
(benefit):

Current                  4,371         4,234          11,616        10,568

Deferred                 95            (109       )   156           564

                         4,466         4,125          11,772        11,132

Net earnings             6,967         6,862          14,750        18,488

Preferred dividends      2,155         2,155          6,467         6,467

Net earnings
applicable to          $ 4,812         4,707          8,283         12,021
common stockholders

Earnings per common
share:

Basic                  $ .27           .26            .46           .67

Diluted                $ .27           .26            .46           .67

Weighted average
common shares
outstanding:

Basic                    17,962,875    17,962,875     17,962,875    17,962,209

Diluted                  17,962,875    17,968,921     17,962,875    17,971,305

THE ARISTOTLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

Assets                               September 30,  December 31,  September 30,
                                     2009           2008          2008

                                     (unaudited)                  (unaudited)

Current assets:

Cash and cash equivalents          $ 29,690         15,290        7,138

Marketable securities                4,220          4,437         2,480

Investments                          2,996          2,876         21,991

Accounts receivable, net             24,065         14,048        26,175

Inventories, net                     39,716         44,653        42,388

Prepaid expenses and other           4,478          8,542         4,000

Income tax receivable                -              5,396         -

Deferred income taxes                4,070          4,644         1,788

Total current assets                 109,235        99,886        105,960

Property, plant and equipment,       27,530         27,808        28,429
net

Goodwill                             14,162         13,712        14,186

Deferred income taxes                6,668          6,668         5,646

Investments                          4,318          4,318         4,318

Other assets                         1,127          884           817

Total assets                       $ 163,040        153,276       159,356

Liabilities and Stockholders'
Equity

Current liabilities:

Current installments of            $ 309            294           299
long-term debt

Trade accounts payable               7,820          9,576         9,331

Accrued expenses                     12,907         11,641        7,537

Income taxes                         2,057          -             184

Accrued dividends payable            -              2,156         -

Total current liabilities            23,093         23,667        17,351

Long term debt, less current         10,126         10,364        10,434
installments

Long term pension obligations        5,587          5,891         2,115

Other long term accruals             2,489          2,467         2,458

Stockholders' equity:

Preferred stock, Series I            6,489          6,489         6,489

Preferred stock, Series J            65,760         65,760        65,760

Common stock                         180            180           180

Additional paid-in capital           7,690          7,690         7,685

Retained earnings                    43,262         34,979        46,985

Accumulated other comprehensive      (1,636  )      (4,211  )     (101    )
loss

Total stockholders' equity           121,745        110,887       126,998

Total liabilities and              $ 163,040        153,276       159,356
stockholders' equity

    Source: The Aristotle Corporation

Related Categories

Press Releases

Stocks Mentioned

Related Entities

• Dividend

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?