The Princeton Review, Inc. Q4 2008 Earnings Call Transcript

  • download
  • Print
  • Recommend
  • 0

2009-03-12 20:52:21.0

Tags: Revenue, Acquisition, Call Transcript, Operating Income, Earnings, Franchise, Princeton Review Inc., Mergers & Acquisitions, Corporate Law, Operational Accounting, Investment, Finance, Business Operations, Seeking Alpha

Question-and-Answer Session

Operator

(Operator's instruction) Your first question comes from the line of Jerry Herman - Stifel Nicolaus.

Jerry Herman - Stifel Nicolaus

Steve, I might have missed this, you said the acquisition contribution in revenue for the full year, I heard $15.1 million and then I heard $17 million, clarify please.

Steve Richards

That $17 million there is about $3.6 million of revenue that goes away that related to your franchise fees so the net impact would be $17 million less $3.6.

Jerry Herman - Stifel Nicolaus

Okay, great. Okay, very helpful and then with regard to operating income, can you give us some similar feel for what the operating income contribution was from acquisition in the fourth quarter and full year?

Steve Richards

Well, we do it from the full year's perspective and the reason I say that is because the ratio between the franchises and the timing of the question of franchises which are paid on a cash basis as opposed to GAAP revenue recognition can have an impact on the quarter more so that it could over the full year period. When you take out the franchisee and the EBITDAS, there will be loss between the franchisee and the sale of goods to them, in 2008; it looks like the acquisitions had contributed about $1.8 million in EBITDA.

Jerry Herman - Stifel Nicolaus

And then, I mean one of the things that struck me, if you look at the fourth quarter relative to the full year and this applies to the Company and specifically the test prep business, the revenue growth was less in the fourth quarter than it was for the full year despite the acquisitions being part of the fourth quarter. Is there something happening from a timing perspective? I guess what we will be concerned about is certain loss of momentum in the business or from Mike's comment, something going on with mix given that the lower price products seem to be selling better.

Michael Perik

I think part of it actually has to do with timing of tests that is one thing to keep in mind. It is historically among the quieter of the quarters in the test prep business and I think when you, I think one thing that you might want to focus on, it is a point that Steve just made, you are not really getting an apples to apples comparison there because the prior year would have had Princeton Review recognizing 100% of the licensing revenue from the franchises so that is not in this quarter and even though it is a slower quarter, it does have a little bit impact when you speak to the profitability of that business.

 

BNET TalkbackShare your ideas and expertise on this topic

Please add your comment:

  1. You are currently: a Guest |
  2.  

Basic HTML tags that work in comments are: bold (<b></b>), italic (<i></i>), underline (<u></u>), and hyperlink (<a href></a)

advertisement
advertisement
  • Click Here
  • Click Here
  • Click Here
advertisement