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Scientific Learning Corp. (SCIL) filed Quarterly Report for the period ended 2011-03-31.
Scientific Learning Corp. has a market cap of $58.4 million; its shares were traded at around $3.12 with and P/S ratio of 1.3.
This is the annual revenues and earnings per share of SCIL over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of SCIL.
Highlight of Business Operations:
In the three months ended March 31, 2011, we closed two transactions in excess of $0.5 million totaling $2.0 million compared to two such transactions totaling $1.3 million in the three months ended March 31, 2010. Non-school booked sales, including private practice, international, direct to consumer, virtual schools and OEM customers, increased by 79% or $0.6 million during the three months ended March 31, 2011 as compared to the three months ended March 31, 2010.
Booked sales in the K-12 sector decreased by 7% to $6.7 million in the three months ended March 31, 2011 compared to $7.3 million in the three months ended March 31, 2010. As described above, state budget pressures continue to cause many school districts to struggle to maintain their core functions. Booked sales to the K-12 sector for the three months ended March 31, 2011 and in the three months ended March 31, 2010 were 83% and 91%, respectively, of total booked sales. “Other adjustments” in the three months ended March 31, 2011and 2010 consists primarily of the recognition of deferred revenue and the related receivable for 2010 booked sales with Free-On-Board (“FOB”) destination delivery terms that were not delivered until 2011.
We believe large booked sales, which we define as transactions totaling more than $0.5 million, are an important indicator of mainstream education industry acceptance and an important factor in reaching our goal of increasing sales force productivity. In the three months ended March 31, 2011and 2010, we closed two transactions in excess of $0.5 million. We believe for 2011, large deals will continue to drive our core K-12 business. Over time as our model shifts, we expect to become less dependent on large deals, and our new on-demand version of the SciLEARN platform should enable us to significantly increase the number of smaller, more predictable transactions and recurring revenue.
Booked sales to non-school customers increased by 79% to $1.3 million in the three months ended March 31, 2011 as compared to $0.8 million in the three months ended March 31, 2010. This increase reflects higher sales to consumers and virtual schools, as well as a non-recurring revenue of $0.7 million associated with an OEM contract related to the Reading Assistant product.
Research and Development Expenses: Research and development expenses principally consist of compensation paid to employees and consultants engaged in research and product development activities and product testing, together with software and equipment costs. Research and development expenses increased $1.0 million in the first quarter of 2011 compared to the same quarter in 2010. During the first quarter of 2011, we continued to make critical investments in product development which resulted in increased headcount of ten employees and an increase of $0.3 million in consulting expenses from the three months ended March 31, 2010. We also continued ramping-up our new development office in Shanghai, China.
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