Few publishers in recent years have gone public in a bid to raise funds, but earlier this year, Peoples Educational Holdings had a successful public offering through which the publisher of supplementary materials raised about $3 million. The company, now trading on the Nasdaq SmallCap Market, issued 500,000 shares at $6.30 per share; its shares were selling at $5.80 September 1.
In its offering prospectus, Peoples said most of the new capital will be used to develop new proprietary products, while $500,000 would be committed to expanding its sales and marketing. Peoples has seen strong growth in its business over the past three years, with revenue jumping 73% between 2002 and 2004, hitting $32.5 million. Net income in the period rose to $1.4 million from $575,182. For the first half of 2005, sales increased 3.6%, to $14.4 million, although the company had a net loss of $321,000 compared to an $846,000 profit in last year's first six months.
Peoples is best known for its Measuring Up test preparation products used by schools to help prepare students for standardized tests. The company currently publishes state-specific tests in 11 states and plans to add more states. Peoples attributed its solid gains over the past three years in part to the No Child Left Behind Act, which has led to an increase in state testing programs. In addition to its test prep line, which generated sales of $20.6 million last year, Peoples' other major segment is the development and distribution of college prep materials, a category that generated sales of $11.1 million in 2004.
