August 30, 2014

Report: “Cengage CEO Seeking Restructuring, May File Bankruptcy”

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Update May 14: More on This Story in a New Library Journal Article by Meredith Schwartz

From Bloomberg:

Cengage Learning Inc., the educational publisher owned by Apax Partners LLP, said it’s seeking to negotiate with creditors on a restructuring plan and may need to file bankruptcy as part of its turnaround efforts.

“We will seek to negotiate the terms of a comprehensive restructuring transaction with our key creditor constituents and quickly implement the restructuring plan,” Chief Executive Officer Michael Hansen said today on a conference call after the company reported third-quarter results.

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“The Chapter 11 process can be an effective way of achieving a fast and efficient debt restructuring with minimal disruption to the business, particularly where agreement is reached with key financial stakeholders on a plan — on the outlines of a plan –prior to the filing,” Hansen said.

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Hansen, who joined the publisher in September, has revamped management and shifted to more digital products and subscriptions to help revive revenue as students increasingly move away from buying new textbooks. The company is cutting costs and ending some incentives that encouraged early ordering, Hansen said today. That decision will hurt fiscal fourth-quarter sales, he said.

Read the Complete Article
Note: This article also appears on the BusinessWeek Website

Additional Resources

See Also: Here’s the Cengage Quarterly Earnings Report that’s Referenced in the Article (46 pages)

See Also: Michael Hansen’s Prepared Remarks from the Call are Online (PDF)
Also Embedded Below

See Also: Audio of the Complete Conference Call is Available (Including Q&A)

See Also: Apax Buys $800M in Cengage Debt Ahead of Publisher’s Possible Bankruptcy (via Dow Jones; April 26, 2013)

See Also: Cengage Draws on Credit Line, Hires Restructuring Advisers (via WSJ; March 24, 2013)

Prepared Remarks for May 13, 2013 Conference Call by Michael Hansen, CEO, Cengage Learning

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Gary Price About Gary Price

Gary Price (gprice@mediasourceinc.com) is a librarian, writer, consultant, and frequent conference speaker based in the Washington D.C. metro area. Before launching INFOdocket, Price and Shirl Kennedy were the founders and senior editors at ResourceShelf and DocuTicker for 10 years. From 2006-2009 he was Director of Online Information Services at Ask.com, and is currently a contributing editor at Search Engine Land.