Cambium Learning Group, Inc.
TWST: Please begin with a brief overview of each of your three main business segments.
Mr. Klausner: We are a company at its highest order that focuses primarily on at-risk kids, the 23 million children in this country who are not proficient in reading. And generally these are poor kids, children with disabilities, special-education students and English-language learners. We focus on bringing these children up to proficiency in reading and math. And as one of our authors and arguably one of the leading literacy experts in our nation, Dr. Louisa Moats, says, "Reading is rocket science." If you look at the brain and the evolution of the human brain, the human brain has evolved to do three things: reasoning, vision and language. There is nothing in the human brain that naturally has evolved to teach children how to read. Reading needs to be taught. Some kids will get it, some kids won't get it. For those that don't get it, we need to intervene. How do we enable educators, and how do we ultimately get outcomes where children can learn at a higher trajectory with greater learning proficiency?
So when we organized with these three units, we looked at what problems we were trying to solve, we looked at placing the interest of our customers first, focusing on student outcomes and the result was the three business units. First, Voyager, which represents about 60% of the company and serves the kids that have the most intense intervention needs. So think medical, think of a debilitating disease or illness. Generally somebody will go to a specialist, and usually expects that it's going to be invasive. And usually expects it's going to be intense, and usually expects that the duration is going to be long, it's going to be comprehensive. Our Voyager unit blends raising teacher effectiveness, increasing student practice through technology, and measuring progress or lack of progress through a transparent, robust data-management system. The Sopris unit represents about 13% of the overall company. And again, think medical. You might have an ailment that you are looking to remedy in short order. So you may go to a general practitioner maybe for a sore shoulder, maybe something is bothering you, but it's not acute in nature, and Sopris has various capabilities that focus on specific skills that a child may be lacking. It may be writing, it may be a specific area in reading, but it's not usually the intensity and the comprehensiveness of Voyager.
And finally, Cambium Learning Technologies represents now about 27% of our business. This unit focuses specifically on technology-enabled solutions. So while the others have a blended model, the Technologies unit is all technology-based capabilities - anything from sizzling, sexy mathematical simulations to Web-based leveled books, to assistive technology that will enable a person to access text that they might not have been able to access. A recent illustrative example of that is, there was a lawsuit in Vermont where a woman who was taking the law bar exam and wanted to use our tools - and if I recall correctly, she was blind - and she argued that based on the American Disabilities Act, she was not being allowed access to pass the bar. So each of the three units have sales, marketing and R&D, and everything else is or eventually will be a shared service.
TWST: You released your second-quarter results recently. Would you give us an overview of this quarter and share with us a few highlights from your earnings call?