8-K 1 artlfeb288k.htm 8-K SECURITIES AND EXCHANGE COMMISSION

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): February 28, 2003

 

THE ARISTOTLE CORPORATION

(Exact name of registrant as specified in its charter)

 

DELAWARE                                                     0-14669                                                   06-116854

(State or other                                    (Commission File Number)                                (IRS Employer

jurisdiction of incorporation)                                                                                          Identification No.)

 

                  96 Cummings Point Road, Stamford, CT                                                    06902

                    (Address of principal executive offices)                                                 (Zip Code)

 

Registrant's telephone number, including area code: (203) 324-5466

 

(Former name or former address, if changed since last report)

Page 1 of 2 Pages

 

Page 2 of 2 Pages

Item 5. Other Events and Regulation FD Disclosure

On February 27, 2003, the Company announced (i) its financial results for the fiscal year ended December 31, 2002 and (ii) that it had declared a dividend on its Series I and J Preferred Stock payable on March 31, 2003 to holders of record on March 14, 2003. The press release regarding the foregoing is incorporated into this Item 5 by reference to the press release attached hereto as an exhibit.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

    1. Exhibits

99.1 Fourth Quarter and 2002 year end financial information and press release dated February 27, 2003 for The Aristotle Corporation.

SIGNATURES

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.

                                                                                          THE ARISTOTLE CORPORATION

                                                                                                            (Registrant)

Date: February 28, 2003                                                By: /s/ H. William Smith

                                                                                           Name: H. William Smith

                                                                                           Title: Vice President, General Counsel

                                                                                                     and Secretary

 

EXHIBITS

Exhibit 99.1 Fourth Quarter and 2002 year end financial information and press release dated February 27, 2003 for The Aristotle Corporation.

 

EXHIBIT 99.1

For Immediate Release News Release

Contacts:

Bill Smith or Dean Johnson

The Aristotle Corporation

Phone: 1-203-324-5466 or 1-920-563-2446

Fax: 1-203-358-0179 or 1-920-563-0234

wsmith@ihc-geneve.com

int@enasco.com

 

The Aristotle Corporation Announces

Fiscal 2002 Results and Declares Semi-Annual Preferred Dividends

Stamford, CT, February 27, 2003 - The Aristotle Corporation (NASDAQ: ARTL; ARTLP) today announced its fiscal 2002 operating results. These are the first fiscal results following the June 17, 2002 merger of Aristotle with Nasco International, Inc. ("Nasco"). Since the transaction was accounted for as a reverse merger, the historical information is that of Nasco. In addition, Aristotle has adopted Nasco's fiscal year-end of December 31.

Fiscal 2002 Results

For the twelve months ended December 31, 2002, revenue increased to $165.9 million from $162.0 million for the twelve months of 2001. Net income from operations before extraordinary gain increased to $10.1 million from $8.8 million. Net income applicable to common shareholders before extraordinary gain but after the accretion of preferred dividends from the June 17th merger date to December 31, 2002 was $5.4 million, or $.33 per diluted share, compared with $8.8 million, or $.59 per diluted share, in 2001. The extraordinary gain of $20.2 million resulted principally from the recognition through purchase accounting of $30.7 million of tax benefits, partially offset by the elimination of Aristotle's pre-merger goodwill and long-term assets of $8.3 million. On a pro forma basis as if the merger had been consummated on January 1, 2001, net income applicable to common shareholders for the twelve months ended December 31, 2002 would have been $2.3 million, or $.14 per diluted share, compared with $1.2 million, or $.07 per diluted share, for the same period of 2001.

For the three months ended December 31, 2002, revenue was $32.6 million compared to $33.0 million for the fourth quarter of 2001, while net income from operations was $1.0 million versus $1.5 million. After providing for preferred dividends in the 2002 quarter of $2.1 million, Aristotle showed a fourth quarter loss applicable to common shareholders of $1.1 million, or ($.07) per diluted share, compared to a profit applicable to common shareholders of $1.5 million, or $.10 per diluted share in the 2001 fourth quarter during which no preferred stock was outstanding. As part of the merger agreement between Aristotle and Nasco, $72.0 million of preferred stock was issued on June 17, 2002 to both Aristotle and Nasco shareholders. On a pro forma basis as if the merger had been consummated on January 1, 2001, Aristotle would have shown a net loss of $.2 million, or ($.01) per diluted share, for the three months ended December 31, 2001.

In the 2002 second quarter, Aristotle adopted a change in accounting principles to recognize the fair value of stock options granted on or after January 1, 2002 as an expense on its income statement. The change reduced net income applicable to common shareholders in the twelve months and three months ended December 31, 2002 by $.2 million and $.1 million, respectively. The 2002 results also include expenses of $.9 million related to purchase accounting valuations of certain inventories which had been written-up to fair market value at the date of merger, and $.4 million related to payments due in connection with previously announced management changes.

"Although results were negatively impacted in the 2002 fourth quarter as Nasco faced continuing concerns over state education budgets," said Steven B. Lapin, Aristotle's President and Chief Operating Officer, "the diversity of Aristotle's product lines, extending into other markets, such as its highly profitable Nasco and Simulaids health care training units, and the continued success of Spectrum's Canadian education operations, provided alternative sources of revenue and income growth throughout the year." Mr. Lapin also indicated that "Aristotle's 2002 results include Simulaids for only the post-merger period, and, further, that Aristotle had, as of the end of 2002, sold its interest in Safe Passage International, a computer-based training company which had burdened Aristotle's income stream during the year."

"Effective management of operating expenses at all business units continued to provide an economic cost structure, yielding extremely favorable returns for shareholders in 2002," said Dean Johnson, Aristotle's Chief Financial Officer, who added that "the reported income is shown after-tax, but approximately $3.5 million of cash from 2002 post-merger operations was retained in Aristotle as a result of the utilization of federal net operating tax loss carryforwards which are recognized on Aristotle's year-end balance sheet as an asset of $27.7 million ." Mr. Johnson further noted that "during 2002, Aristotle had reduced its long-term debt by $8.4 million, and recorded a charge against earnings applicable to common shareholders of $4.6 million for cash dividends on its outstanding preferred stock."

Declaration of Semi-Annual Dividend

Aristotle also announced today that it has declared the semi-annual cash dividends of $.33 and $.36 per share, respectively, on its outstanding shares of Series I Preferred Stock and Series J Preferred Stock. The dividends are payable on March 31, 2003, to holders of record on March 14, 2003. Dividends are payable on Aristotle's Preferred Stock on March 31 and September 30, if and when declared by Aristotle's Board of Directors.

About Aristotle

The Aristotle Corporation, founded in 1986, and headquartered in Stamford, CT, is a leading manufacturer and global distributor of education, health and agricultural products. A selection of over 80,000 items is offered, primarily through catalogs carrying the brand of Nasco (founded in 1941), as well as those bearing the brands of Simulaids, Triarco, Summit Learning, Hubbard Scientific, Scott Resources and Spectrum Educational Supplies. Products include educational materials and supplies for substantially all K-12 curricula, molded plastics, biological materials and items for the agriculture, senior care, cardiopulmonary resuscitation, fire and emergency rescue and food industries. Aristotle has approximately 750 employees at its operations in Fort Atkinson, WI, Modesto, CA, Fort Collins, CO, Plymouth, MN, Woodstock, NY, Chippewa Falls, WI, and Aurora, Ontario, Canada.

There are approximately 17 million shares outstanding of Aristotle common stock (NASDAQ: ARTL) and 1 million shares outstanding of 11%, cumulative, convertible, voting, Series I preferred stock (NASDAQ: ARTLP); there are also approximately 11 million privately-held shares outstanding of 12%, cumulative, non-convertible, non-voting shares of Series J preferred stock. Aristotle has approximately 4,000 shareholders of record.

Further information about Aristotle can be obtained on its website, at www.aristotlecorp.net.

Safe Harbor Under 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. 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 companies; (iv) the ability of Aristotle to retain and utilize its federal net operating tax loss carryforward position; and (v) general economic conditions. 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-Q and 8-K.

THE ARISTOTLE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION

(Unaudited)

 

 

Three Months Ended

December 31,

(In Thousands*)

Twelve Months Ended

December 31,

(In Thousands*)

Net revenue

Costs of goods sold

Gross profit

$32,610

20,537

12,073

33,004

20,845

12,159

$165,947

107,005

58,942

$161,960

105,447

56,513

Operating expenses

Operating income

10,064

2,009

9,060

3,099

40,644

18,298

39,273

17,240

Other income (expense), net

Income before income

taxes and minority interest

(233)

1,776

(386)

2,713

(1,631)

16,667

(2,704)

14,536

Income tax expense

(738)

(1,245)

(6,594)

(5,860)

Income before minority interest

Minority interest

Income before extraordinary gain

1,038

____--

1,038

1,468

___31

1,499

10,073

____--

10,073

8,676

___99

8,775

Preferred dividends

Income (loss) available to common

shareholders before extraordinary gain

Extraordinary gain

Net income (loss) available to common

shareholders

2,149

(1,111)

--

_______

$(1,111)

____--

1,499

--

______

$1,499

4,647

5,426

20,237

______

$25,663

____--

8,775

--

______

$8,775

Basic earnings per common share:

       

Income (loss) before extraordinary gain

Extraordinary gain

Net income (loss) per share - Basic

$(0.07)

___--

$(0.07)

$0.10

___--

$0.10

$0.34

1.26

$1.60

$0.59

___--

$0.59

Diluted earnings per common share:

       

Income (loss) before extraordinary gain

Extraordinary gain

Net income (loss) per share - Diluted

$(0.07)

___--

$(0.07)

$0.10

___--

$0.10

$0.33

1.25

$1.58

$0.59

___--

$0.59

Weighted average share:

Basic

Diluted

17,031,687

17,031,687

15,000,000

15,000,000

16,102,121

16,205,602

15,000,000

15,000,000

*Except share and per share amounts

THE ARISTOTLE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

December 31

2002

(In Thousands)

December 31

2001

(In Thousands)

ASSETS

Cash, cash equivalents & marketable securities

Accounts receivable

Inventories

Deferred income taxes

Other current assets

Total current assets

 

$11,299

12,452

27,941

7,251

7,766

66,709

$4,465

13,661

24,326

1,176

6,363

49,991

Deferred income taxes

Property, plant and equipment

Goodwill and other assets

Total assets

21,761

9,153

7,438

$105,061

423

9,561

7,461

$67,436

LIABILITIES AND STOCKHOLDERS EQUITY

Current maturities of long term debt

Other liabilities

Accrued dividends payable

Total current liabilities

$9,108

10,506

2,150

21,764

8,403

9,079

____--

17,482

Long-term debt, less current maturities

27,579

36,027

Stockholders' equity

Total liabilities and stockholders' equity

55,718

$105,061

13,927

$67,436