EX-99.1 2 dex991.htm PRESENTATION Presentation
NASDAQ: REVU
Corporate Presentation
September 2010
©
2010 The Princeton Review, Inc. –
All Rights Reserved
Exhibit 99.1


Safe Harbor Statement
2
All statements in this presentation that are not historical are forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934.  Such forward-looking
statements may be identified by words such as "believe," "intend," "expect," "may," "could,"
"would," "will," "should," "plan," "project," "contemplate," "anticipate," or similar statements.
Because these statements reflect The Princeton Review's current views concerning future
events, these forward-looking statements are subject to risks and uncertainties. The Princeton
Review's actual results could differ materially from those anticipated in these forward-looking
statements as a result of many factors, including, but not limited to, demand for the company's
products and services; the company's ability to compete effectively and adjust to rapidly
changing
market
dynamics;
the
timing
of
revenue
recognition
from
significant
contracts
with
schools
and
school
districts;
market
acceptance
of
the
company's
newer
products
and
services;
continued federal and state focus on assessment and remediation in K-12 education; and the
other factors described under the caption "Risk Factors" in The Princeton Review's most recent
Form 10-K filed with the Securities and Exchange Commission, and in its other filings. The
Princeton
Review
undertakes
no
obligation
to
update
publicly
any
forward-looking
statements
contained in this presentation.
In addition, in this presentation we use two non-GAAP financial measures: combined adjusted
EBITDA and combined adjusted EBITDA margin.  Please see the appendix at the end of this
presentation for discussion of the use of non-GAAP measures and reconciliation of non-GAAP
measures to GAAP.
NASDAQ: REVU


Investment Highlights
Well positioned
in a growing education
space
Two strong, industry-leading brands
in
the education market
Investing heavily in game-changing
strategic growth initiatives
Lower regulatory risk
than other
education companies due to limited
exposure to Title IV & gainful employment
regulations
Solid financial platform
with strong cash
flow and significant liquidity
3
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NASDAQ: REVU


Online Education: Double-Digit
Growth Continues
4
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Source: Eduventures. (12/9/09). Hot Programs and Hot Markets – Pearson Learning Solutions Summit. Las Vegas, NV. 


Two Strong Brands, Plus
New Partnerships
5
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Segment
Career training &
enhancement
Career training
partnerships
Test prep & college-
readiness
Core
Competencies
Online distribution
& marketing
Student acquisition,
delivery & retention
Highly recurring
revenue model
Leverage the
competencies of
legacy businesses
Insulated from gov’t
policy regarding
tuition assistance
Comprehensive,
diverse, high-quality
solutions
“Stable”
business
National
distribution
TTM
Rev
¹
$98
million
²
NA
$111
million
³
Founded
1890
2010
1981
A Leader in Test Prep & Online Education
6
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¹
Trailing 12 months through Q2 2010.      
²
2009 quarterly revenues are pre-acquisition estimates.        
³
Test Prep Services segment revenues only


Leading Online Career Education
Oldest, largest, most recognized online career education provider in the country
7
Serve students through three schools:
1.Career School
Programs in allied health, business, technology &
trade
100+ diploma/certificate programs in 9 categories
2.College
Bachelor degrees: criminal justice, business mgmt.
Also 21 associate degrees in 9 categories
3.Virtual High School
One of the largest regionally accredited virtual
high schools in country
~50,000 students enrolled in core, elective, AP
courses
NASDAQ: REVU


Penn Foster: Differentiated
Approach to Online Education
8
Online
degree,
diploma
&
certificate
programs
for
~207,000
students
worldwide
Business model NOT dependant on students receiving Title IV Federal
Student
Loans.
Shielded
from
changes
in
gov’t
policy
regarding
tuition
assistance.
Positioned as value alternative to other for-profit schools:
Courses are instructor-supported, not instructor-led
Reduces costs of delivery, keeps prices low
Targets “non-traditional”
students 25 and older
~80% enrollments generated online
Highly recurring revenue business model
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Penn Foster Creates the Platform to Leverage
Strategic Ventures
9
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National Labor College Joint Venture
“The College for Working Families”
10
Online college for AFL-CIO’s 11.5 MM members
and their families
plus 4 MM+
other union members
Technical & financial resources of REVU, with educational
experience of NLC, creates affordable/accessible programs
Exclusive access to sell Penn Foster programs
Not subject to 90/10 rule or gainful employment restrictions due
to
ownership interest
Typical student will take 15 -
20 units per year at $250 -
$300 per
unit
Signed April 2010; enrollments expected to begin 2011
NASDAQ: REVU


Community College Allied Health
Care Partnership
11
Partnership with community colleges to expand
distance & hybrid learning opportunities
Resolves pressing issues of:
1.
Long waiting lists
2.
No capital to expand facilities
3.
No resources to invest in distance learning
Example: Bristol Community College, Mass.
Offers degree programs in general health
science, medical info & coding, massage
therapy
Enrollments have begun for Fall 2010
Negotiations with other community colleges
underway
NASDAQ: REVU


The Preeminent Name in Test Prep
The
Princeton
Review
is
one
of
the
most
widely
recognized
brands
in
test
prep
12
Centers covering 70% of nation in all major categories:
Classroom -based
18-30 hours, instructor-led
Sold direct to consumer & K-12 institutions
Tutoring
Includes both private & small group sessions
Highest-end offering for all admission tests
Online
Online only, or online w/ classroom or tutoring
Ideal for flexibility & expedited courses
Other
Royalties from ~170 print/software titles & international franchises
Test Prep Segment Revenue
Contribution - YTD 2010
Online
4%
Other
8%
Class-
based
65%
Tutoring
23%
NASDAQ: REVU


An Under-penetrated Test Prep
Market
13
Two lead players, The Princeton Review and Kaplan, collectively
have ~ 45% market share, while third largest player has < 3%
Historically, The Princeton Review has served ~2% of test takers
through higher-end preparation products and ~25% of test takers
through book sales
Opportunity to drive significant growth through innovative
products that address the needs of a larger set of students
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Financial Review
14


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$90
$93
$109
$110
$111
$75
$81
$89
$96
$98
2006
2007
2008
2009
TTM
Jun 2010
Penn Foster
Revenues¹
Princeton
Review Test
Prep
Revenues²
$165
$174
$198
$209
$206
Two Stable, Steady-Growth Businesses
15
1
2006 -
2009 Penn Foster revenues are based on pre-acquisition stand-alone results.  Penn Foster revenues for 2006, 2007 and for the six months ended
December 31, 2009 (as included in the TTM June 2010 results) are
estimated
based on unaudited financial results.
2
Represents stand-alone Test Preparation Services revenue.
3
Guidance issued 3/11/2010. Includes 2010 revenue from SES Services.
2010 Guidance³:
$225 -
$230 MM
($ in MM)


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Increased Company Profitability
16
Combined Adj. EBITDA¹
1
Refer to slides 21-to-23 for discussion of use of non-GAAP measures and reconciliation of Non-GAAP measures to GAAP.
2
2006 -2009 results are based on Penn Foster pre-acquisition stand-alone results and The Princeton Review stand-alone results. Penn Fosters
financial results for fiscal 2006, 2007 and quarterly results for six months ended December 31, 2009 (as included in the TTM 10 results above)
are estimated based on unaudited financial results.
3
Guidance issued 3/11/2010.  Includes financial results of SES Services.
Combined
Adj. EBITDA1
($ in MM)
Combined Adj.
EBITDA Margin1
(%)
2010 Guidance³:
12
14% Adj.
EBITDA Margin


Liquidity
Aug 2010 refinancing of revolver:
Increased liquidity
Lowered interest rate
Provided additional covenant flexibility
Debt
Q2 2010 net debt¹
of $97 MM is 3.7x TTM
combined adjusted EBITDA
Capex
Large 2010 capex
to support
infrastructure build and Penn Foster
integration
Capex
in core businesses expected to
decline significantly in 2011
Solid Financial Condition
Capital Structure Supports Growth Initiatives
17
¹Total debt less cash and cash equivalents.
NASDAQ: REVU


REVU Key Takeaways
Well positioned
in a growing education
space
Two strong, industry-leading brands
in
the education market
Investing heavily in game-changing
strategic growth initiatives
Lower regulatory risk
than other
education companies due to limited
exposure to Title IV & gainful employment
regulations
Solid financial platform
with strong cash
flow and significant liquidity
18
NASDAQ: REVU
NASDAQ: REVU


For More Information
19
The Princeton Review, Inc.
111 Speen
Street, Suite 550
Framingham, MA 01701
Tel 508.663.5050
Company Contact
Chris Kasper, CFO
Tel 508.663.5146
Investor Relations
Liolios
Group
Scott Liolios
or Cody Slach
Tel 949.574.3860
info@liolios.com
NASDAQ: REVU


Appendix
20
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NASDAQ: REVU
Use of Non-GAAP Financial Measures
21
The Princeton Review (the “Company”) presented the following non-GAAP financial measures within this presentation: Combined Adjusted
EBITDA and Combined Adjusted EBITDA Margin percentage.  The Company defines Adjusted EBITDA as operating income (expense) from
continuing operations before depreciation and amortization, restructuring expense, acquisition expense, stock-based compensation and other non-
cash income and expense items, plus cash other income (expense) items. Combined Adjusted EBITDA within this presentation for periods prior to
the Company’s acquisition of Penn Foster Education Group, Inc. (“Penn Foster”) is based on the stand-alone results of the Company and Penn
Foster, respectively.  Combined Adjusted EBITDA Margin percentage is determined by dividing Combined Adjusted EBITDA by the sum of stand-
alone revenues of the Company and Penn Foster for the periods presented.  
Penn Foster’s financial results for fiscal 2006, 2007 and quarterly results for the six months ended December 31, 2009 included in this
presentation are estimated results and have not been audited or included in any filing with the SEC.  The combined, non-GAAP results should not
be used as substitute to any unaudited pro-forma combined statements of operations presented in our filings with the SEC which are prepared in
accordance with GAAP.
We believe that Adjusted EBITDA can facilitate operating performance comparisons from period to period and company to company by backing
out potential differences caused by variations in tax positions, capital structures (affecting interest expense), the lives, methods and purchase
accounting impact on fixed and intangible assets (affecting depreciation and amortization expense) and one-time charges not expected to reoccur
in the future. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to
net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from
operating activities as a measure of our profitability or liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider
them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: 
Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; 
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; 
Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on
our debts; 
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced
in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and 
Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.


NASDAQ: REVU
GAAP to Non-GAAP Reconciliation: 2006-
2007
22
The Princeton Review, Inc. and
Subsidiaries
Penn Foster Education Group,
Inc.
Combined (Non-GAAP)
Year ended
December 31,
2006
Year ended
December 31,
2007
Year ended
December 31,
2006
Year ended
December 31,
2007
Year ended
December 31,
2006
Year ended
December 31,
2007
(8,110)
(23,515)
(358)
1,531
(8,468)
(21,984)
Depreciation and amortization
4,962
4,330
2,155
6,228
7,117
10,558
Restructuring
-
8,853
-
-
-
8,853
Stock based compensation
791
3,459
-
-
791
3,459
Impairment of investment
300
1,000
-
-
300
1,000
Transition and other costs (1)
-
4,237
104
599
104
4,836
Management fees (2)
-
-
1,772
743
1,772
743
Penn Foster expenses associated with divestitures (3)
-
-
2,652
1,547
2,652
1,547
Other income, excluding items (see reconciliation below)
(34)
57
-
-
(34)
57
Adjusted EBITDA
(2,091)
(1,579)
6,325
10,648
4,234
9,069
Reconciliation of other (expense) income, net to other
(expense) income, excluding items:
Other (expense) income, net
(34)
(7,558)
-
-
(34)
(7,558)
Loss from change in fair value of derivatives
-
7,615
-
-
-
7,615
Other (expense) income, excluding items
(34)
57
-
-
(34)
57
(1)
The Princeton Review incurred certain transition costs as a result of changing audit firms and moving certain functions from New York City to Boston that did not qualify as restructuring
charges for GAAP purposes, including consultants utilized to assist in moving finance operations to the Boston area and non-cash charges recorded due to the new management team’s decision
not to continue certain projects in progress. 
(2)
Monthly fees charged Penn Foster by its previous owners for services provided by its affiliated private equity interests.  Similar fees were not incurred following the acquisition by The
Princeton Review.
(3)    Expenses totaling $1,547 and $2,652 for the years ended December 31, 2007 and 2006, respectively, consisted primarily of legal and accounting fees associated with matters related to
Penn Foster’s sale on March 27, 2007.
Operating (loss) income from continuing operations


NASDAQ: REVU
GAAP to Non-GAAP Reconciliation: 2008-TTM
Q210
23
The Princeton Review, Inc. and Subsidiaries
Penn Foster Education Group, Inc.
Combined (Non-GAAP)
Year ended
December 31,
2008
Year ended
December 31,
2009
Trailing
Twelve
Months
Ended June
30, 2010
Year ended
December
31, 2008
Period from
January 1,
2009 to
December 7,
2009
Trailing
Twelve
Months
Ended June
30, 2010
Year ended
December
31, 2008
Year ended
December
31, 2009
Trailing
Twelve
Months
Ended June
30, 2010
1,830
(10,100)
(24,854)
8,188
(3,066)
(6,816)
10,018
(13,166)
(31,670)
Depreciation and amortization
4,665
8,347
24,248
6,154
5,822
2,748
10,819
14,169
26,996
Restructuring
2,233
7,711
5,584
-
-
-
2,233
7,711
5,584
Acquisition expenses
-
2,984
5,357
-
-
-
-
2,984
5,357
Stock based compensation
3,868
2,979
3,880
-
-
-
3,868
2,979
3,880
Acquisition related adjustment to revenue
-
135
821
-
-
-
-
135
821
Non-cash inventory write-off to cost of
goods and services sold
-
-
942
-
-
-
-
-
942
Management fees (1)
-
-
-
429
370
155
429
370
155
Penn Foster expenses associated with divestitures (2)
-
-
-
920
14,549
14,289
920
14,549
14,289
Other income, excluding items (see reconciliation below)
81
261
3
-
-
-
81
261
3
Adjusted EBITDA
12,677
12,317
15,981
15,691
17,675
10,376
28,368
29,992
26,357
Reconciliation of other (expense) income, net to other
Other (expense) income, net
81
(517)
(988)
(817)
6
-
(736)
(511)
(988)
Loss from extinguishment of debt
-
878
1,832
-
-
-
-
878
1,832
Gain from change in fair value of derivatives
-
(100)
(795)
-
-
-
-
(100)
(795)
Interest income
-
-
-
(94)
(6)
-
(94)
(6)
-
Loss on sale of investment
-
-
-
926
-
-
926
-
-
Other
(46)
(15)
-
-
(15)
-
(46)
Other income, excluding items
81
261
3
-
-
-
81
261
3
Operating (loss) income from continuing operations
(expense) income, excluding items:
(1)    Monthly fees charged Penn Foster by its previous owners for services provided by its affiliated private equity interests.  Similar fees were not incurred following the acquisition by the Company.
(2)    Includes transaction bonuses, professional fees and other expenses related to Penn Foster’s sale to the Company on December 7, 2009 totaling $13,872 for the period from January 1, 2009 to  
         December 7, 2009, including $13,734 that was funded by Penn Foster’s previous owner.  Expenses totaling $920 for the year ended December 31, 2008 and the remaining $677 for the period from
         January 1, 2009 to December 7, 2009 consisted primarily of legal and accounting fees associated with matters related to Penn Foster’s sale on March 27, 2007.