The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its
results of operations for the quarter ended March 31, 2008. First
Quarter 2008 Results For the quarter ended March 31, 2008, net
earnings applicable to common stockholders increased 20.5% to $2.8
million, or $.16 per diluted common share, compared to $2.4
million, or $.13 per diluted common share, for the quarter ended
March 31, 2007 (weighted average common shares outstanding were
18.0 million for the first quarter of 2008 versus 17.5 million for
the same period in 2007). Earnings before income taxes increased
8.9% to $8.0 million for the current quarter from $7.4 million for
last year�s quarter. The results of operations for the quarter
ended March 31, 2008 were generated from net sales of $50.4
million, which increased 4.6% compared to $48.2 million in net
sales for the quarter ended March 31, 2007. Steven B. Lapin,
Aristotle�s President and Chief Operating Officer, stated, �I am
pleased to report the solid sales and earnings performance for the
first quarter of 2008. The educational segment revenues increased
4.8% compared to the same quarter last year, and the commercial
segment experienced a 3.3% increase; this balanced growth confirms
the Company�s approach to market the right product with the right
value to its customer base. At the same time, effective management
efficiencies held the increase in selling and administrative
expenses to less than 2%.� Dean T. Johnson, Aristotle�s Chief
Financial Officer, commented, �Working capital was $86.2 million at
March 31, 2008, compared to $70.3 million at March 31, 2007.
Inventory levels related to strategic purchasing activities
accounted for $4.5 million of the change in working capital.
Substantially all of the remaining increase in working capital was
attributed to the aggregate increase in marketable securities and
other liquid investments to $27.1 million at March 31, 2008 from
$15.0 at the same date last year. The Company maintains a strong
and liquid financial position; stated stockholders� equity
increased $20.9 million to $118.0 million at March 31, 2008 from
$97.1 million at March 31, 2007, while long-term debt increased by
only $1.0 million period-to-period.� 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 more than 45
separate catalogs carrying the brand of Nasco (founded in 1941), as
well as those bearing the brands of Life/Form�, Whirl-Pak�,
Simulaids, Triarco, Spectrum Educational Supplies, Hubbard
Scientific, Scott Resources, Haan Crafts, To-Sew, CPR Prompt�,
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 900
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 17.9 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 4,000 stockholders of record. Further
information about Aristotle can be obtained on its website:
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; (v) the ability of Aristotle to
retain its Federal net operating tax loss carryforward position and
other deferred tax positions; and (vi) 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, 2007. 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
March 31, 2008 � 2007 � Net sales $ 50,432 48,224 Cost of sales
30,536 � 29,261 � Gross profit 19,896 18,963 � Selling and
administrative expense 11,826 � 11,627 � Earnings from operations
8,070 7,336 � Other income (expense): Interest expense (288 ) (326
) Other, net 232 � 351 � (56 ) 25 � Earnings before income taxes
8,014 7,361 � Income taxes: Current 2,328 1,523 Deferred 687 �
1,319 � 3,015 � 2,842 � Net earnings 4,999 4,519 � Preferred
dividends 2,156 � 2,159 � Net earnings applicable to common
stockholders $ 2,843 � 2,360 � � Earnings per common share: Basic $
.16 .14 Diluted $ .16 .13 � Weighted average common shares
outstanding: Basic 17,961,040 17,266,573 Diluted 17,973,632
17,536,665 THE ARISTOTLE CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) Assets � March 31, 2008
� December 31, 2007 � March 31, 2007 (unaudited) (unaudited)
Current assets: Cash and cash equivalents $ 4,514 5,604 2,013
Marketable securities 3,305 3,335 - Investments 19,277 18,150
14,958 Accounts receivable, net 20,481 15,631 19,557 Inventories
44,156 42,297 39,609 Prepaid expenses and other 7,601 9,611 6,581
Deferred income taxes 1,910 2,484 2,774 � Total current assets
101,244 97,112 85,492 � Property, plant and equipment, net 28,193
27,476 26,357 � Goodwill 14,338 14,476 13,890 Deferred income taxes
5,646 5,646 8,188 Investments 4,319 4,279 - Other assets 518 446
311 � Total assets $ 154,258 149,435 134,238 � � Liabilities and
Stockholders' Equity Current liabilities: Current installments of
long-term debt $ 302 305 288 Trade accounts payable 8,632 10,500
8,495 Accrued expenses 6,100 6,765 6,434 Accrued dividends payable
- 2,156 - � Total current liabilities 15,034 19,726 15,217 �
Long-term debt, less current installments 16,083 8,655 14,913
Long-term pension obligations 2,704 2,944 4,653 Other long-term
accruals 2,439 2,429 2,397 � Stockholders' equity: Preferred stock,
Series I 6,489 6,489 6,601 Preferred stock, Series J 65,760 65,760
65,760 Common stock 180 179 173 Additional paid-in capital 7,674
7,580 3,294 Retained earnings 37,807 34,964 22,417 Accumulated
other comprehensive loss 88 709 (1,187 ) Total stockholders' equity
117,998 115,681 97,058 � Total liabilities and stockholders' equity
$ 154,258 149,435 134,238 �
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