Excelligence learns profitability lesson

Monterrey, CA-based Excelligence Learning (NASDAQSC: LRNS), which operates online cataloger SmarterKids.com and mails the print catalog Discount School Supply, learned the golden rule in the second quarter: profitability. What’s more, the company’s catalog division helped led the charge.

Thanks to an expanded customer base, more effective catalog distribution, and strategic product marketing and pricing within the catalog, the company’s early childhood segment saw second-quarter net revenue increase 12%, to $16.6 million from $14.8 million last year. The early childhood segment reported adjusted earnings before interest taxes depreciation and amortization (EBITDA) of $831,000, compared with an adjusted EBITDA loss of $957,000 forthe second quarter of 2001.

As a company, Excelligence’s net income on a GAAP basis was $433,000, compared with an adjusted net loss of $4.2 million last year. Consolidated revenue increased 15%, to $22.1 million for the quarter ended June 30 from $19.2 million a year ago.

For the elementary school segment, second-quarter net revenue was $5.5 million, a 23% increase from the $4.5 million. The company attributes the increase to customers ordering and taking delivery of back-to-school products earlier than in the prior year. The elementary school segment’s adjusted EBITDA for the quarter was $287,000, compared to an adjusted EBITDA loss of $490,000 in the second quarter of 2001.