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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 2000
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WRC MEDIA INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-96119 13-4066536
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1 Rockefeller Plaza, 32nd Floor, New York, NY 10020
(Address of principal executive offices) (Zip Code)
(212) 582-6700
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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<PAGE>
Item 5. Other Events.
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On March 31, 2000, WRC Media Inc. reported the results for fiscal
year 1999 which are set forth in the press release in the Exhibit hereto.
Item 7. Exhibits.
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Exhibit No. Exhibit
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99.1 Press release issued by WRC Media Inc. on March 31, 2000
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WRC MEDIA INC.
By: /s/ Charles L. Laurey
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Name: Charles L. Laurey
Title: Secretary
Date: May 1, 2000
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INDEX TO EXHIBITS
Exhibit No. Exhibit
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99.1 Press release issued by WRC Media Inc. on March 31, 2000
WRC Media, Inc.
One Rockefeller Plaza, 32nd Floor
New York, NY 10020
CONTACT: Michele Norris
WRC Media Inc.
908-654-3891
For Immediate Release
WRC MEDIA INC., A LEADING SUPPLEMENTARY EDUCATION
PUBLISHER, REPORTS EARNINGS FOR YEAR ENDING 1999
March 31, 2000 - WRC Media Inc. (or the "Company"), a newly formed publisher
of supplemental educational materials, reported results for fiscal year 1999.
Pro forma revenues for fiscal year 1999 increased 3.6% to $214.1 million as
compared to the prior year, calculated on a pro forma basis to include the
full year results of CompassLearning Inc., which it acquired in July 1999, and
of the Weekly Reader Corporation, World Almanac Education Group and American
Guidance Service, a group of companies it acquired in November 1999. Pro forma
EBITDA for fiscal year 1999 grew over the prior year by 52.8%, and pro forma
EBITDA, adjusted for non-recurring items, grew by 26.4% to $49.6 million.
The increase in pro forma revenues and EBITDA were primarily due to increases
in sales of core product lines. Revenue growth of 4.7% at Weekly Reader was
due to growth in our subscription sales to schools, including Lifetime
Learning and Skills Books. Based on strong supplemental testing materials, the
American Guidance Service revenues grew by 7.4% and sales at the World Almanac
Education Group grew by 10.5%, principally due to the Millennium Almanac and
licensing revenues. Finally, the growth of new software sales at
CompassLearning was offset by an anticipated erosion of service-related
revenue streams supporting older software versions.
WRC Media Inc., a publishing and media company, creates and distributes
innovative quality supplementary educational materials for use in schools,
technology software, testing materials, reference products and teacher
materials, and appropriate products for the home and library market. WRC Media
Inc. has four principal operating subsidiaries.
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2
CompassLearning, Inc. is a leading provider of electronically delivered
instruction and assessment with over 7,000 hours of instruction and an
installed base of over 20,000 schools.
Weekly Reader Corporation publishes Weekly Reader periodicals serving over 7
million school children. It also publishes other branded periodicals and
instructional materials, including Teen Newsweek, published for middle and
high school students.
World Almanac Education Group, publishes the World Almanac, Facts on File,
Gareth Stevens and Funk and Wagnalls, and has a large subscriber base of many
school, public, and private libraries.
American Guidance Service, Inc. is a leader in individually administered
assessments to evaluate learner traits and publishes a variety of
high-interest, low reading-level instructional products.
Information in this press release contains forward-looking statements based on
current expectations that involve a number of risks, uncertainties, and
assumptions. Such forward-looking statements are not guarantees of future
performance. Important factors that may cause actual outcomes and results to
differ materially from what is expressed in such forward-looking statements
are difficult to predict, and include but are not limited to: leverage and
debt service; restrictive covenants on debt instruments; a history of losses
at CompassLearning; no prior operations as an independent company; ability to
implement the business plan; increases in paper and postage costs; customer
purchasing power and dependence on various sources of government funding;
ability to successfully compete; seasonality; dependence on intellectual
property; dependence on key management and highly skilled personnel; ownership
of the Company which may conflict with the interests of the holders of the
notes; the operating units ability to introduce new products, product
extensions and enhancements; the level of future cash flow, debt levels, and
capital expenditures and pre-publication cost investment.
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<TABLE>
<CAPTION>
WRC Media Inc.
Audited 12-Months Ended
(Amounts in Millions)
Actual Increase/(Decrease)
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12/31/98 12/31/99 $ %
-------- -------- ----- ----
<S> <C> <C> <C> <C>
Revenue
Weekly Reader 43.7 45.7 2.0 4.7%
American Guidance Service 46.2 49.6 3.4 7.4%
World Almanac Education 47.9 52.9 5.0 10.5%
Compass Learning 68.9 65.8 (3.1) -4.5%
- -------------------------------------------- --------------- --------------- --------------- ----------------
Total Revenue 206.7 214.1 7.4 3.6%
Costs and Expenses 193.7 200.8 7.1 3.6%
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Operating Income 13.0 13.3 0.3 2.4%
Interest Expense 13.6 25.0 11.4 84.2%
Other, Net (Income)/Exp 0.2 0.1 (0.0) -1.3%
Taxes 4.3 2.2 (2.1) -49.5%
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Net Income -5.0 -14.0 (9.0) -177.9%
EBITDA
Operating Income 13.0 13.3 0.3 2.4%
Depreciation and Amortization 16.6 31.9 15.3 91.6%
Other, Net (Income)/Exp 0.2 0.1 (0.0) -1.3%
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EBITDA 29.5 45.1 15.6 52.8%
Adjusted EBITDA* 39.2 49.6 10.4 26.4%
</TABLE>
* Adjusted primarily for non-recurring overhead and restructuring charges.
