Learning Tree (NASDAQ:LTREE)
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Learning Tree International, Inc. (NASDAQ:LTREE)
announced today its revenues and results of operations for its fourth
quarter and fiscal year ended September 30, 2005. The results for the
fiscal year include the impact of the previously announced restatement
of Learning Tree's consolidated financial statements for fiscal years
ended September 30, 2001, September 30, 2002, September 30, 2003 and
October 1, 2004, and the consolidated quarterly periods within the
fiscal year ended October 1, 2004 and the first three quarters in the
fiscal year ended September 30, 2005.
Revenues for the quarter ended September 30, 2005 were $36.5
million, a 2% decline from the same quarter of the prior year. The
Company reported a loss from operations for the quarter of $0.5
million compared with income from operations of $0.5 million
(restated) for the same quarter of the prior year. Net income for the
quarter was breakeven compared to a net loss of $1.0 million
(restated) for the same quarter of the prior year. Earnings per share
for the fourth quarter were breakeven compared with a loss per diluted
share of $0.06 (restated) for the same quarter of the prior year.
Revenues for Learning Tree's fiscal year ended September 30, 2005
were $151.6 million compared with $152.1 million for the fiscal year
ended October 1, 2004. Loss from operations for the fiscal year ended
September 30, 2005 was $1.1 million compared with a loss from
operations of $1.6 million (restated) for the prior year. Net loss for
fiscal 2005 was $0.7 million compared to a restated net loss for
fiscal 2004 of $0.5 million. Loss per share -- basic for the fiscal
year ended September 30, 2005 was $0.04, compared to a loss per share
-- basic of $0.03 for the prior year. The accompanying Table 1
presents Learning Tree's results of operations for the fourth quarter
and the fiscal year ended September 30, 2005.
As previously announced, the fiscal year 2005 provision for income
taxes included a $1.1 million tax expense resulting from the Company's
inability to amend its fiscal year 2001 federal income tax return for
an understated income tax deduction after the statute of limitations
for that return expired in June 2005. This expense caused fiscal year
2005 earnings per share to decrease by $0.06 per share. The Company
also noted that it spent $1.7 million during fiscal year 2005 on
external costs associated with the first year of its Sarbanes-Oxley
compliance program, and expects to spend substantially less in future
years.
As noted above, the results for periods other than the fourth
quarter of fiscal year 2005 reflect the previously announced
restatement, which related principally to: (a) Learning Tree's
accounting for leases and leasehold improvements, primarily the
recording of asset retirement obligations for those leases where
Learning Tree has a contractual commitment to restore a leased
facility to a specified condition; (b) the accounting for income
taxes; (c) the quarterly recording and adjustment of certain expense
items within different quarters than originally reported in fiscal
years 2004 and 2005; and (d) recording certain other smaller
adjustments to properly state previously presented financial
statements from fiscal year 2001 through the present. The impact of
the restatement on the affected line items in Learning Tree's
consolidated statements of operations for certain periods is set forth
in the accompanying Table 2.
Learning Tree International is a leading worldwide provider of
vendor-independent education and training to IT professionals and
managers in business and government organizations. Learning Tree
develops, markets and delivers a broad, proprietary library of
instructor-led courses focused on Web development, operating systems,
programming languages, databases, computer networks, computer and
network security, object-oriented technology, applied management,
project management and key business skills. Learning Tree also tests
and certifies IT and business professionals, and Learning Tree courses
are recommended for college credit by the American Council on
Education. In addition, Learning Tree is on the National Association
of State Boards of Accountancy National Registry of CPE sponsors and
is a Registered Education Provider of the Project Management Institute
(PMI). For more information about Learning Tree products and services,
call 1-800-THE-TREE (1-800-843-8733), or visit the Learning Tree Web
site at www.learningtree.com.
Except for historical information contained herein, the matters
addressed in this press release are forward-looking statements. Please
do not put undue reliance on these forward-looking statements, since
they are based on key assumptions about future risks and
uncertainties. Although Learning Tree believes that its assumptions
are reasonable, inevitably some will prove to be incorrect. As a
result, Learning Tree's actual future results can be expected to
differ from those in the discussion that follows, and those
differences may be material. Learning Tree is not undertaking any
obligation to update forward-looking statements.
In order to help the reader assess the major risks in Learning
Tree's business, Learning Tree has identified many, but not all, of
these risks in Exhibit 99.1, "Risk Factors" to Learning Tree's Annual
Report on Form 10-K ("Exhibit 99.1"). Please read that exhibit
carefully. Some of the factors discussed in Exhibit 99.1 that could
affect Learning Tree include: risks associated with the timely
development, introduction, and customer acceptance of Learning Tree's
courses; competition; international operations, including currency
fluctuations; changing economic and market conditions; technology
development and new technology introduction; efficient delivery and
scheduling of Learning Tree's courses; adverse weather conditions,
strikes, acts of war or terrorism and other external events; and
attracting and retaining qualified personnel.
- tables follow -
(Table 1--Normal quarterly/annual table)
(Table 2--Restatement adjustments)
Webcast
An investor conference call to discuss fourth quarter and year end
results is scheduled at 8:00 am EST January 13, 2006. Interested
parties are invited to listen to the conference call by accessing the
webcast live on Learning Tree's website www.learningtree.com. The
webcast will also be available at www.learningtree.com for replay.
-0-
*T
Table 1
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the Three Months For the Fiscal Year
Ended Ended
------------------------- ------------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2005 2004 2005 2004
------------ ----------- ---------- ------------
(Restated) (Restated)
Revenues $ 36,457 $ 37,323 $ 151,558 $ 152,058
Cost of revenues 18,401 18,228 76,167 73,755
------------ ----------- ---------- ------------
Gross profit 18,056 19,095 75,391 78,303
------------ ----------- ---------- ------------
Operating
expenses:
Course
development 2,109 1,819 7,952 7,960
Sales and
marketing 9,730 10,534 42,387 47,206
General and
administrative 6,712 6,255 26,111 24,757
------------ ----------- ---------- ------------
Total
operating
expenses 18,551 18,608 76,450 79,923
------------ ----------- ---------- ------------
(Loss) income
from operations (495) 487 (1,059) (1,620)
Other income,
net 591 287 2,263 2,049
------------ ----------- ---------- ------------
Income before
provision for
income taxes 96 774 1,204 429
Provision for
income taxes 70 1,748 1,912 969
------------ ----------- ---------- ------------
Net income
(loss) $ 26 $ (974) $ (708) $ (540)
============ =========== ========== ============
Earnings (loss)
per common
share $ 0.00 $ (0.06) $ (0.04) $ (0.03)
============ =========== ========== ============
Earnings (loss)
per common
share assuming
dilution $ 0.00 $ (0.06) $ (0.04) $ (0.03)
============ =========== ========== ============
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, October 1,
2005 2004
---------------- ---------------
(Restated)
Cash and cash equivalents $ 56,736 $ 70,913
Available for sale securities 18,555 13,000
Accounts receivable, net 15,568 12,902
Prepaid expenses and other 8,078 7,588
-------------- --------------
Total current assets 98,937 104,403
Equipment (net), long-term
investments and other 33,041 33,641
-------------- --------------
Total assets $ 131,978 $ 138,044
============== ==============
Accounts payable and accrued
liabilities $ 11,913 $ 12,570
Deferred revenue 44,956 46,847
Other current liabilities 7,151 5,729
-------------- --------------
Total current liabilities 64,020 65,146
Other liabilities 6,949 6,723
-------------- --------------
Total liabilities 70,969 71,869
-------------- --------------
Stockholders' equity 61,009 66,175
-------------- --------------
Total liabilities and
stockholders' equity $ 131,978 $ 138,044
============== ==============
Table 2
Learning Tree International, Inc. and Subsidiaries
Effects of Restatement on Certain Key Line Items in Consolidated
Statements of Operations
(dollars in millions)
As As Adjustment
originally restated
reported
----------- ----------- ------------
Year ended September 30, 2001:
Revenues 227.2 227.2 0.0
Income before provision for
income taxes 38.7 38.8 0.0
Provision for income taxes 13.8 13.1 (0.7)
Net income (loss) 25.0 25.7 (0.7)
Year ended September 30, 2002:
Revenues 174.2 173.5 (0.7)
Income before provision for
income taxes 12.2 11.9 (0.3)
Provision for income taxes 4.3 3.5 (0.9)
Net income (loss) 7.9 8.4 0.6
Year ended September 30, 2003:
Revenues 151.9 152.6 0.7
Income before provision for
income taxes 7.1 6.8 (0.4)
Provision for income taxes 2.0 2.5 0.6
Net income (loss) 5.2 4.2 (0.9)
Year ended October 1, 2004:
Revenues 152.1 152.1 0.0
Income before provision for
income taxes 0.9 0.4 (0.4)
Provision for income taxes 0.3 1.0 0.7
Net income (loss) 0.6 (0.5) (1.1)
Nine months ended July 1, 2005:
Revenues 115.1 115.1 0.0
Income before provision for
income taxes 1.7 1.1 (0.6)
Provision for income taxes 0.6 1.9 1.3
Net income (loss) 1.2 (0.7) (1.9)
*T