Cengage Learning Holdings II Inc (NASDAQ:CNGO) Q4 2020 Earnings Conference Call - Final Transcript

Jun 18, 2020 • 08:30 am ET

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Cengage Learning Holdings II Inc (NASDAQ:CNGO) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Cengage Fiscal 2020 Fourth Quarter and Full-Year Investor Update. Participating on the call will be Michael Hansen, Chief Executive Officer; Bob Munro, Chief Financial Officer; and Richard Veith, Senior Vice President, Treasurer. At this time, all participants are in listen-only mode. Following today's prepared remarks, we will open the call for questions. As a reminder, this conference is being recorded.

It is now my pleasure to introduce Richard Veith.

Executive
Richard Veith

Good morning and welcome to Cengage's fiscal 2020 fourth quarter investor update. A copy of the slide presentation for today's call has been posted to the Company's website at cengage.com/investor.

The following discussion may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future results and events and they are based on Cengage's current expectations and assumptions. Actual results may differ materially from those currently expected and are subject to the risks and uncertainties discussed in the Risk Factors section of our fiscal 2019 annual report for the year ended March 31, 2019, the special note regarding forward-looking statements section of the same report and the Risk Factors section of our fiscal 2020 third quarter report for the three and nine months ended December 31, 2019. The Company's FY '20 annual report will be posted to the Company website shortly.

The Company disclaims any duty or intention to update or revise any forward-looking statements. This presentation, including the appendix, contains disclosures of adjusted revenue, adjusted cash revenue, adjusted EBITDA, adjusted cash EBITDA, adjusted EBITDA less prepub and adjusted cash EBITDA less prepub on a quarterly and year-to-date basis, and free cash flow and levered cash flow on a year-to-date basis, all of which are non-GAAP financial measures. Adjusted revenues and adjusted EBITDA measures are on a constant currency basis.

Definitions, rationale for the use of these measures and reconciliations of each to its most directly comparable GAAP financial measure is provided in the appendix to today's slide deck. Our investor presentation may also contain discussions of gross sales measures by markets, which represent amounts invoiced to our customers. Consequently, gross sales are before any adjustments for sales returns provision or revenue deferral. We believe this measure provides investors with a more comprehensive understanding of our underlying revenue results and trends by presenting amounts invoiced on a consistent basis. We may also discuss net sales, which represents gross sales less actual returns of product.

And now turn to Slide 3 for today's agenda. Michael Hansen, Chief Executive Officer, will provide an update on the business followed by Bob Munro, Chief Financial Officer, who will take you through the details of our financial results before we open the call for questions.

Let me now introduce the Chief Executive Officer of Cengage, Michael Hansen.

Executive
Michael E. Hansen

Thank you, Richard. Good morning, everyone. At our last call on May 4, when we announced the termination of the merger with McGraw-Hill, we also shared our preliminary