Archipelago Learning, Inc.

CIK:0001470699|SEC Filings

Earnings Per Share

3 Months Ended

Mar. 31, 2012

8. EARNINGS PER SHARE

Earnings per share is computed using the two-class method, considering the restricted common shares, due to their participation rights in dividends of the Company. Under this method, the Company’s net income is reduced by the portion of net income attributable to the restricted common shares, and this amount is divided by the weighted average shares of common stock outstanding.

The components of earnings per share are as follows for the three months ended March 31 (in thousands):


	2012						2011
	Net Income			Shares			Net Income			Shares
Net income	$	514			26,346		$	989			26,337
Less: Income attributable to restricted shares		(16	)		(800	)		(36	)		(956	)

Net income available to common stockholders		498			25,546			953			25,381
Basic earnings per share	$	0.02					$	0.04

Dilutive effect of restricted common stock					101						248

Diluted earnings per share	$	0.02			25,647		$	0.04			25,629

For the three months ended March 31, 2012, 8,778 shares of restricted stock and options to purchase 745,294 weighted-average shares of common stock were excluded from the diluted earnings per share calculation, as their effect was antidilutive. For the three months ended March 31, 2011, 3,717 shares of restricted stock and options to purchase 922,212 weighted-average shares of common stock, were excluded from the diluted earnings per share calculation, as their effect was antidilutive.

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net income	$ 514	$ 989
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Amortization of debt financing costs	121	109
Depreciation and amortization	1,609	1,482
Stock-based compensation	620	1,286
Deferred income taxes	32	121
Deferred rent	90	4
Changes in operating assets and liabilities:
Accounts receivable	(1,170)	825
Prepaid expenses and other	(635)	399
Accounts payable and accrued expenses	(696)	(1,281)
Deferred revenue	(3,705)	(1,863)
Other long-term liabilities	(48)	14
Net cash (used in) provided by operating activities	(3,268)	2,085
Cash flows from investing activities:
Purchase of property and equipment	(969)	(1,020)
Purchase of intangible asset	(500)
Net cash used in investing activities	(1,469)	(1,020)
Cash flows from financing activities:
Contribution from member in Reorganization		20
Payments on term note		(212)
Net cash provided by (used in) financing activities		(192)
Effect of foreign exchange on cash and cash equivalents	246	330
Net change in cash and cash equivalents	(4,491)	1,203
Beginning of period	64,628	32,398
End of period	60,137	33,601
Supplemental information:
Cash paid for interest	968	968
Cash paid for income taxes	1,024	13
Non-cash investing and financing activities:
Accrued purchases of property and equipment	$ 65	$ 203

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 60,137	$ 64,628
Accounts receivable, net	10,186	8,942
Deferred tax assets	2,688	2,418
Prepaid expenses and other current assets	1,806	2,049
Total	74,817	78,037
Property and equipment, net	4,901	4,773
Goodwill	168,174	167,761
Intangible assets, net	33,853	34,026
Other long-term assets	2,515	1,747
Total assets	284,260	286,344
Current liabilities:
Accounts payable - trade	1,517	1,730
Accrued employee-related expenses	1,704	3,025
Other accrued expenses	2,439	1,221
Taxes payable	929	1,723
Deferred tax liabilities	245	118
Deferred revenue	44,629	48,915
Current portion of long-term debt	850	850
Other current liabilities	348	450
Total	52,661	58,032
Long-term deferred tax liabilities	15,521	15,222
Long-term deferred revenue	16,307	15,376
Long-term debt, net of current	74,063	74,063
Other long-term liabilities	1,545	1,462
Total liabilities	160,097	164,155
Commitments and contingencies
Stockholders' equity:
Preferred stock ($0.001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2012 and December 31, 2011)
Common stock ($0.001 par value, 200,000,000 shares authorized, 26,344,759 and 26,340,135 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively)	26	26
Additional paid-in capital	98,976	98,356
Accumulated other comprehensive income	2,337	1,497
Retained earnings	22,824	22,310
Total stockholders' equity	124,163	122,189
Total liabilities and stockholders' equity	$ 284,260	$ 286,344