Cengage Group Announces Strong Fourth Quarter Results and Successful Fiscal Year 2023
BOSTON, June 8, 2023 /PRNewswire/ -- Cengage Group, a leading global education and technology company, reported its financial results for the fourth quarter and full year ended March 31, 2023. Adjusted Cash Revenue for fiscal year 2023 was $1.48 billion, an 8% increase as reported and a 6% increase on a pro forma basis over the prior fiscal year. Adjusted Cash EBITDA less pre-publication costs (Adjusted Cash ELPP) was $351 million, up 8% as reported and 7% on a pro forma basis over fiscal year 2022.
Additionally, on May 22, 2023, the company closed its previously announced $530 million Series A Convertible Preferred Stock issuance led by an entity managed by affiliates of Apollo Global Management. The transaction raised proceeds of $525 million after 1% OID, used to redeem $500 million of senior unsecured notes on June 7, 2023, replacing debt with equity capital and thereby strengthening the company's capital structure. As part of the transaction, Itai Wallach, Partner, Private Equity, Apollo Global Management and Vikram Mahidhar, Data and Digital Transformation Operating Partner in the Apollo Portfolio Performance Solutions Group, were appointed to the company's Board of Directors.
"We are pleased to finish the fiscal year 2023 ahead of our financial expectations. Our solid financial performance reflects the strength and scale of our portfolio, and resilience of our business in an uncertain macroeconomic environment. In fiscal 23, our digital sales grew 6% and surpassed $1 billion for the first time. The investment from Apollo is testament to our performance and confidence in our strategy. This significant cash infusion meaningfully reduces our outstanding debt while providing financial flexibility to continue investing in future growth opportunities," said Michael Hansen, Chief Executive Officer, Cengage Group. "We enter fiscal 2024 excited by the momentum we've generated in the business and look forward to pursuing future growth opportunities."
Financial & Business Highlights
FY23 Adjusted Cash Revenue $1,476M up +6% on proforma basis
FY23 Adjusted Cash ELPP $351M up +7% on proforma basis
Strengthened & deleveraged balance sheet
1. Proforma Net Leverage reflects $532M redemption of senior notes outstanding with net proceeds from issuance of preferred equity ($500M) and cash on balance sheet ($32M) as at March 31 2023
About Cengage Group
With more than 100 years of serving learners, Cengage Group is a global edtech company that enables student choice. No matter how, where, when or why someone wants to learn, our portfolio of education businesses supports all students, from middle school through graduate school and skills education, with quality content and technology. Collectively, our three business units – Cengage Academic, Cengage Work, and Cengage Select – help millions of students each year in more than 125 countries achieve their education and career goals and lead choice-filled lives. Visit us at www.cengagegroup.com or find us on LinkedIn and Twitter.
This press release, the investor presentation and related discussion on the investor call contain "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "assess," "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "project," "foresee," "likely," "focus," "grow," "achieve," "deliver," "execute," "gain," or "anticipate" or similar expressions that concern our strategies, objectives, plans or goals. All statements that are not strictly historical in nature are forward-looking. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Many factors could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. You should consider such factors, many of which are outlined in the "Risk Factors" section of our FY22 Annual Report for the fiscal year ended March 31, 2022, and in our quarterly reports for the quarters ended June 30, 2022, September 30, 2022, and December 31, 2022, and the "Special Note Regarding Forward-Looking Statements" section of the same report. The Company's Fiscal Year 2023 Annual Report for the fiscal year ended March 31, 2023 will be posted to the Company's website shortly. Such reports can be accessed at cengagegroup.com/investors. We cannot assure you that forward-looking statements will prove to be accurate, as actual actions, results and future events could differ materially from those anticipated or implied by such statements. Any forward-looking statement made by us in this press release, the investor presentation and related discussion on the investor call, is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.
This release contains non-GAAP financial measures. See the appendix in the investor presentation available at cengagegroup.com/investors for a definition of these non-GAAP financial measures and the rationale for their use.
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SOURCE Cengage Group