The Aristotle Corporation Form 8-K




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): NOVEMBER 14, 2008



THE ARISTOTLE CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



DELAWARE

0-14669

06-1165854

(STATE OR OTHER JURISDICTION

(COMMISSION FILE

(I.R.S. EMPLOYER

OF INCORPORATION)

NUMBER)

IDENTIFICATION NO.)



96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT

 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)



06902

(ZIP CODE)



(203) 358-8000

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))












Page 1 of 2 Pages







Page 2 of 2 Pages


Item 2.02 Results of Operations and Financial Condition.


On November 14, 2008, The Aristotle Corporation issued a press release announcing financial results for the quarter ended September 30, 2008, a copy of which is attached as Exhibit 99.1.


Item 9.01 Financial Statements and Exhibits


(d)

Exhibits


Exhibit 99.1 - Press release of The Aristotle Corporation, dated November 14, 2008.



The information in this Form 8-K and the Exhibit attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, unless expressly set forth by specific reference in such filing.




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)

 

By:  /s/  H. William Smith

 

Name:  H. William Smith

Title:    Vice President, General Counsel

 

and Secretary

  


Date: November 14, 2008





EXHIBITS


Exhibit 99.1 Press release issued November 14, 2008.





Exhibit 99.1

For Immediate Release

News Release

Contacts:

Bill Smith or Dean Johnson

The Aristotle Corporation

Phone: (203) 358-8000 or (920) 563-2446

Fax: (203) 358-0179 or (920) 563-0234

wsmith@ihc-geneve.com

int@enasco.com


The Aristotle Corporation Announces

2008 Third Quarter and Nine Month Results


Stamford, CT, November 14, 2008 - The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its results of operations for the third quarter and nine months ended September 30, 2008.


For the third quarter ended September 30, 2008, net earnings applicable to common stockholders were $4.7 million, or $.26 per diluted common share, versus $5.5 million, or $.31 per diluted common share, for the third quarter of 2007.  Net earnings applicable to common stockholders for the first nine months of 2008 were $12.0 million, or $.67 per diluted common share, compared to $11.8 million, or $.67 per diluted common share, for the comparable nine months of 2007.  


Third quarter net sales in 2008 increased 2.3% to $65.0 million from $63.5 million in the third quarter of 2007.  Earnings from operations, equating to 18.0% of net sales, declined 5.6% to $11.7 million from $12.4 million in the same quarter of 2007 (including an insurance recovery of $.4 million), or 19.5% of net sales.


For the nine months ended September 30, 2008, net sales increased 2.5% to $172.2 million from $168.0 million for the nine months ended September 30, 2007.  Earnings from operations increased 3.2% to $30.3 million (including a $.7 million insurance recovery) in the first nine months of 2008, or 17.6% of net sales, compared to $29.4 million (including the $.4 million insurance recovery) in the 2007 period, or 17.5% of net sales.


Steven B. Lapin, Aristotle’s President and Chief Operating Officer, stated, “Aristotle’s balance sheet is exceptionally strong, with stockholders’ equity having increased by 13.3% to $127.0 million at September 30, 2008 from $112.1 million at September 30, 2007, and current outstanding bank debt of a modest $5.0 million on its $45.0 million revolving line of credit. Although volatility in the equity markets did have a negative impact on diluted earnings per common share in the three and nine month periods ended September 30, 2008 of approximately $.02 and $.01, respectively, the change in value of Aristotle’s short-term investments is not material to your Company’s available working capital or financial condition.  While I am pleased to report your Company’s sales growth and significant profitability in the third quarter and first nine months of 2008, optimism must be tempered in view of unprecedented challenges now facing local, state, federal and global economies.”

 

 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 18.0 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, at 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

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

Net sales

$

64,976

 

63,524

 

172,202

 

167,950

Cost of sales

 

40,123

 

39,017

 

105,116

 

102,909

 

Gross profit

 

24,853

 

24,507

 

67,086

 

65,041

 

 

 

 

 

 

 

 

 

Selling and administrative expense

 

13,178

 

12,133

 

36,795

 

35,677

 

Earnings from operations

 

11,675

 

12,374

 

30,291

 

29,364

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

Interest expense

 

(260)

 

(393)

 

(833)

 

(1,082)

 

Other, net

 

(428)

 

453

 

162

 

1,216

 

 

(688)

 

60

 

(671)

 

134

 

Earnings before income taxes

 

10,987

 

12,434

 

29,620

 

29,498

 

 

 

 

 

 

 

 

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

 

Current

 

4,234

 

4,690

 

10,568

 

8,596

 

Deferred

 

(109)

 

84

 

564

 

2,623

 

 

 

4,125

 

4,774

 

11,132

 

11,219

 

 

 

 

Net earnings

 

6,862

 

7,660

 

18,488

 

18,279

 

 

 

 

 

 

 

 

 

Preferred dividends

 

2,155

 

2,154

 

6,467

 

6,470

 

Net earnings applicable to common stockholders

$

4,707

 

5,506

 

12,021

 

11,809

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

$

.26

 

.31

 

.67

 

.67

 

Diluted

$

.26

 

.31

 

.67

 

.67

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

17,962,875

 

17,927,671

 

17,962,209

 

17,552,073

 

Diluted

 

17,968,921

 

17,946,013

 

17,971,305

 

17,569,502










THE ARISTOTLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 (in thousands)




Assets

 

September 30,

 2008

 

December 31, 2007

 

September 30,    2007

 

 

 

(unaudited)

 

 

 

(unaudited)

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

Marketable securities

$

7,138

2,480

 

5,604

3,335

 

3,173

2,886

 

 

Investments

 

21,991

 

18,150

 

15,761

 

 

Accounts receivable, net

 

26,175

 

15,631

 

27,975

 

 

Inventories, net

 

42,388

 

42,297

 

40,046

 

 

Prepaid expenses and other

 

4,000

 

9,611

 

5,084

 

 

Deferred income taxes

 

1,788

 

2,484

 

2,634

 

 

Total current assets

 

105,960

 

97,112

 

97,559

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

28,429

 

27,476

 

27,140

 

 

 

 

 

 

 

 

 

Goodwill

 

14,186

 

14,476

 

14,458

 

Deferred income taxes

 

5,646

 

5,646

 

8,188

 

Investments

 

4,318

 

4,279

 

4,000

 

Other assets

 

817

 

446

 

391

 

 

Total assets

$

159,356

 

149,435

 

151,736

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current installments of long-term debt

$

299

 

305

 

300

 

 

Trade accounts payable

 

9,331

 

10,500

 

8,593

 

 

Accrued expenses

 

7,537

 

6,765

 

6,814

 

 

Income Taxes

 

184

 

-

 

4,434

 

 

Accrued dividends payable

 

-

 

2,156

 

-

 

 

Total current liabilities

 

17,351

 

19,726

 

20,141

 

 

 

 

 

 

 

 

 

Long term debt, less current installments

 

10,434

 

8,655

 

14,237

 

Long term pension obligations

 

2,115

 

2,944

 

2,808

 

Other long term accruals

 

2,458

 

2,429

 

2,424

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, Series I

 

6,489

 

6,489

 

6,489

 

 

Preferred stock, Series J

 

65,760

 

65,760

 

65,760

 

 

Common stock

 

180

 

179

 

179

 

 

Additional paid-in capital

 

7,685

 

7,580

 

6,867

 

 

Retained earnings

 

46,985

 

34,964

 

31,866

 

 

Accumulated other comprehensive earnings (loss)

 

(101)

 

709

 

965

 

 

Total stockholders' equity

 

126,998

 

115,681

 

112,126

 

 

Total liabilities and stockholders' equity

$

159,356

 

149,435

 

151,736