Cambium Learning Group (ABCD) Reports Q1 EPS of $0.05; Initiates Review of Strategic Alternatives

Cambium Learning Group (NASDAQ: ABCD) reported Q1 EPS of $0.05, versus $0.05 reported last year. Revenue for the quarter came in at $36.6 million, versus $36 million reported last year.

REVIEW OF STRATEGIC ALTERNATIVES

The Company announced today that it has initiated a review of strategic alternatives to maximize shareholder value. Such strategic alternatives could include a sale of the Company or a sale of a division or divisions thereof, a strategic merger, a business combination or continuing as a standalone entity executing on its business plan. The Company has engaged Macquarie Capital as financial advisor and Lowenstein Sandler LLP as legal advisor to assist in its review.

Mr. Campbell stated, “We remain confident in our ability to execute on our strategic plan and in the significant growth opportunities available to us. At the same time, management and our Board believe it is in the best interest of shareholders to conduct a thorough evaluation of strategic opportunities that could accelerate value recognition or unlock additional value.”

The Company has not set a definitive timetable for completion of its review of strategic alternatives, nor has it made any decisions related to any such strategic alternative at this time, and there can be no assurances that the process will result in any transaction being announced or completed in the future. The Company does not intend to make any further announcements related to its review unless and until its Board of Directors has approved a specific transaction or otherwise determined that further disclosure is appropriate.

First Quarter 2018 Segment Results

Net Revenues, Bookings, Net Income, and Cash Income changes by segment for the three months ended March 31, 2018, compared to the same period of 2017 were as follows:

2018 Outlook

Mr. Campbell stated, “In 2018, we are focused on driving Bookings growth of higher-margin SaaS solutions and making careful investments in development, marketing and sales, coupled with strong expense discipline, to drive expansion in Cash Income, Adjusted EBITDA, cash flow generation, and long-term value delivery to our stakeholders. Cambium Learning’s competitive edge centers on our personalized, adaptive, scalable, technology-based solutions that are proven to achieve results in the classroom and can change the trajectory of students’ lives. We are executing well to deliver a strong year and we are reaffirming our outlook.”

Management's outlook for company-wide 2018 Bookings growth at a higher percentage than 2017, with most of the growth expected in the second half of the year during the Company's seasonally strong periods, is unchanged. Cambium Learning Group's business is highly seasonal, with Bookings historically peaking during the third quarter, which represents by far the preponderance of Bookings, revenue and income each year.

The Company continues to expect its 2018 Bookings growth to be driven by its two 100% digital subscription businesses Learning A-Z and ExploreLearning. Voyager Sopris Learning is expected to build on the momentum of the LANGUAGE! Live solution and continue to make progress on repositioning the segment's role in the intervention marketplace.

Capital expenditures in 2018 are expected to be roughly consistent with 2017 and the Company expects growth in its Cash Income margin from 2017, with the impact of spending on strategic investments in its technology subscription products offset by the ongoing benefit of the transition in mix to these higher margin product lines. The Company continues to expect to generate enough cash during the year from normal operations that would enable it to be substantially debt free by the end of 2018. The Company will assess the impact of expected cash expenditures on the strategic alternatives process and the VKidz acquisition as the year progresses.

For earnings history and earnings-related data on Cambium Learning Group (ABCD) click here.

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