Haights Cross Communications Reports First Quarter 2008 Results
Haights Cross Communications, Inc. — Saturday, May 17, 2008
White Plains, NY, May 14, 2008 – Haights Cross Communications, Inc. (HCC) today reported results for the first quarter ended March 31, 2008. On January 28, 2008, HCC announced a plan to sell all of its business assets, including its Triumph Learning, Recorded Books and Oakstone Publishing operating businesses. In March 2008, an orderly wind-down of HCC’s Sundance/Newbridge business was initiated. As these processes are still ongoing, HCC does not plan to hold its regular quarterly conference call to discuss operations and financial performance for this reporting period.
First Quarter 2008 Results
Revenue for the first quarter 2008 was $51.8 million, a decrease of $1.1 million, or 2.1%, from revenue of $52.9 million for the first quarter 2007, reflecting declines in the K-12 Supplemental Education and Medical Education segments, partially offset by revenue growth in the Test-prep and Intervention and Library segments.
Revenue for the Library segment, representing our Recorded Books business, increased $0.7 million, or 3.2%, to $21.3 million for the first quarter 2008, resulting primarily from growth in the core public library channel, including increased revenue from our MLDV (My Library Download Video) product line and our new preloaded digital audio player,
Revenue for the Test-prep and Intervention segment grew $0.4 million, or 2.3%, to $20.0 million for the first quarter 2008, reflecting continued growth in our Coach product line (Triumph Learning’s flagship brand), partially offset by a revenue decline in our Buckle Down/Options product lines.
Revenue for the K-12 Supplemental Education segment, reflecting our Sundance/Newbridge business, declined $1.8 million, or 34.0%, to $3.6 million for the first quarter 2008, we believe resulting from substantially increased competition in the supplemental education market as previously reported.
Revenue for the Medical Education segment declined $0.4 million, or 5.1%, to $7.0 million for the first quarter 2008, primarily due to lower revenue for Oakstone Medical resulting from the timing of product releases period versus period, partially offset by growth in our Oakstone Wellness business which includes newsletters, calendars and
other ancillary Wellness products.
Income from operations declined $3.3 million to $2.7 million for the first quarter 2008, primarily reflecting the revenue decline for the quarter, in addition to increased professional fees related to the sale of our businesses and restructuring related costs associated with the wind-down of our Sundance/Newbridge business.
EBITDA, which we define as earnings before interest, taxes, depreciation, amortization, discontinued operations, and asset impairment charges, decreased $2.7 million to $9.2 million for the first quarter 2008, primarily reflecting the quarter revenue decline and increased restructuring and general and administrative costs associated with the winddown of our Sundance/Newbridge business and sale transactions costs associated with the sale of our businesses.
Adjusted EBITDA, which we define as EBITDA excluding non-recurring expenses and restructuring and restructuring related charges, decreased $1.3 million to $10.7 million for the first quarter 2008, primarily reflecting EBITDA declines in the Medical Education and Test-prep and Intervention segments.
Capital expenditures – pre-publication costs relates to costs incurred in the development of new products. For the first quarter 2008, HCC invested $5.3 million in pre-publication costs, compared to $5.5 million during the first quarter 2007.
Capital expenditures – property and equipment relates to the purchase of tangible fixed assets such as computers, software, and leasehold improvements. For the first quarter 2008, HCC invested $0.5 million in property and equipment, compared to $0.6 million during the first quarter 2007.
About Haights Cross Communications:
Founded in 1997 and based in White Plains, NY, Haights Cross Communications is a premier educational and library publisher dedicated to creating the finest books, audio products, periodicals, software and online services, serving the following markets: K-12 supplemental education, public library and school publishing, audio books, and medical
continuing education publishing. Haights Cross companies include: Sundance/Newbridge Educational Publishing (Northborough, MA), Triumph Learning (New York, NY), Buckle Down/Options Publishing (Iowa City, IA), Recorded Books (Prince Frederick, MD), and Oakstone Publishing (Birmingham, AL). For more information, visit