Company Achieves 26% Increase in Revenue, 23 Percent Increase in
Operating Profits in Third Quarter
Company Authorizes New $750,000 Share Buy-Back Program
HAWTHORNE, N.Y., Nov. 12, 2008 (GLOBE NEWSWIRE) -- SmartPros Ltd. (Nasdaq:SPRO), a leader in the field of accredited professional education and corporate training, today announced its third quarter financial results for the three and nine months ended September 30, 2008. A conference call to discuss earnings is scheduled for Wednesday, November 12, at 8:30 AM ET.
For the three months ended September 30, 2008, and 2007:
* Net revenues increased to $4.6 million from $3.7 million * Gross profit increased to $2.6 million from $2.4 million * Operating income increased to $549,000 from $447,000 * Net income decreased to $727,000, or $0.15 per diluted share from $776,000, or $0.15 per diluted share * Online sales grew 15%
For the nine months ended September 30, 2008, and 2007:
* Net revenues increased to $12.6 million from $10.9 million * Gross profit increased to $7.0 million from $6.9 million * Operating income decreased to $474,000 from $1.1 million * Net income decreased to $836,000, or $0.17 per diluted share, from $1.9 million, or $0.37 per diluted share * Cash flow from operations decreased to $1.7 million from $2.4 million
At September 30, 2008, the Company had $6.2 million in cash and cash equivalents; $1.9 million in accounts receivable; $5.2 million in deferred revenue; $2.4 million in working capital; $0 debt; and $11.5 million in total stockholders' equity.
"SmartPros continues to grow its top line revenue while gradually cutting expenses to ensure continued profitability," stated Allen Greene, Chairman and CEO of SmartPros. "We cut approximately $1 million in annualized costs and will continue to monitor expenses. It should be noted that our acquisition of Loscalzo Associates in the third quarter of this year is already showing a profit and is adding positively to earnings. We are cautiously optimistic that these trends will continue going into the fourth quarter, typically our best selling quarter of the year."
The Company's Board of Directors also approved and today announced a new $750,000 share buy-back program to replace a similar buy-back program that expired on November 6, 2008. SmartPros acquired 86,594 shares of its own stock for $350,790 during in the previous buy-back period. The timing and exact number of shares purchased will be determined at the Company's discretion, and among other things, will depend on market conditions. All repurchases will be in the open market or in private transactions and will be funded from existing cash. The share buy-back program will begin immediately and will be completed or cancelled within 12 months.
"I'm very pleased to announce that our directors have determined that it remains in the best interest of our Company and our stockholders, to authorize an additional $750,000 to buy back SmartPros common stock," said Greene.
SmartPros will host a teleconference this morning, Wednesday, November 12, at 8:30 AM ET, and invites all interested parties to join management in a discussion regarding the Company's financial results, corporate progression and other meaningful developments. The conference call can be accessed via telephone by dialing 1-800-240-8658. A replay of the call will be available on the Company's Web site at http://ir.smartpros.com.
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, December 31,
2008 2007
(Unaudited) (Audited)
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 6,156,745 $10,072,338
Accounts receivable, net of allowance
for doubtful accounts of $39,677 at
September 30, 2008, and $39,842 at
December 31, 2007 1,921,472 1,964,483
Prepaid expenses and other current
assets 244,884 237,097
----------- -----------
Total Current Assets 8,323,101 12,273,918
----------- -----------
Property and equipment, net 660,490 630,857
Goodwill 3,637,731 145,684
Other intangibles, net 3,585,086 3,296,538
Other assets, including restricted
cash of $150,000 154,673 154,673
Deferred tax asset 1,152,000 978,000
----------- -----------
9,189,980 5,205,752
----------- -----------
Total Assets $17,513,081 $17,479,670
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 398,187 $ 786,781
Accrued expenses 304,399 419,886
Other liabilities 40,040 40,040
Deferred revenue 5,218,811 5,318,382
----------- -----------
Total Current Liabilities 5,961,437 6,565,089
----------- -----------
Long-Term Liabilities:
Other liabilities-net of current
portion 9,999 40,041
----------- -----------
Total Long-Term Liabilities 9,999 40,041
----------- -----------
COMMITMENTS AND CONTINGENCIES
Stockholders' Equity:
Convertible preferred stock, $.001 par
value, authorized 1,000,000 shares,
0 shares issued and outstanding -- --
Common stock, $.0001 par value,
authorized 30,000,000 shares,
5,313,781 issued and 4,916,456
outstanding at September 30, 2008;
and 5,304,698 issued and
4,993,967 outstanding at December
31, 2007 531 530
Additional paid-in capital 17,090,525 16,925,314
Accumulated (deficit) (4,270,742) (5,106,459)
Common stock in treasury, at cost
-397,325 and 310,731 shares (1,273,417) (922,625)
Deferred compensation (5,252) (22,220)
----------- -----------
Total Stockholders' Equity 11,541,645 10,874,540
----------- -----------
Total Liabilities and Stockholders'
Equity $17,513,081 $17,479,670
=========== ===========
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
----------- ----------- ----------- -----------
2008 2007 2008 2007
---------------- ----------- ----------- ----------- -----------
Net revenues $12,579,448 $10,907,885 $ 4,641,915 $ 3,697,724
Cost of revenues 5,557,525 4,009,938 2,001,564 1,325,621
----------- ----------- ----------- -----------
Gross profit 7,021,923 6,897,947 2,640,351 2,372,103
----------- ----------- ----------- -----------
Operating Expenses:
Selling,
general and
administrative 5,929,489 5,287,878 1,879,322 1,747,238
Depreciation and
amortization 618,049 505,021 212,199 177,757
----------- ----------- ----------- -----------
6,547,538 5,792,899 2,091,521 1,924,995
----------- ----------- ----------- -----------
Operating income 474,385 1,105,048 548,830 447,108
----------- ----------- ----------- -----------
Other Income:
Interest income,
net of expense 194,817 302,422 46,224 112,655
----------- ----------- ----------- -----------
194,817 302,422 46,224 112,655
----------- ----------- ----------- -----------
Income before
benefit for
income taxes 669,202 1,407,470 595,054 559,763
Income tax benefit 166,515 465,792 131,515 215,792
----------- ----------- ----------- -----------
Net income $ 835,717 $ 1,873,262 $ 726,569 $ 775,555
=========== =========== =========== ===========
Net income per
common share:
Basic net
income per
common share $ 0.17 $ 0.38 $ 0.15 $ 0.16
=========== =========== =========== ===========
Diluted net
income per
common share $ 0.17 $ 0.37 $ 0.15 $ 0.15
=========== =========== =========== ===========
Weighted
average number
of shares
outstanding
Basic 4,956,732 4,916,823 4,920,755 4,954,854
=========== =========== =========== ===========
Diluted 4,995,932 5,009,132 4,949,992 5,114,285
=========== =========== =========== ===========
About SmartPros Ltd.
Founded in 1981, SmartPros Ltd. is an industry leader in the field of accredited professional education and corporate training. Its products and services are primarily focused in the accredited professional areas of corporate accounting, financial management, public accounting, governmental and not-for-profit accounting, financial services, banking, engineering, legal, ethics and compliance, and information technology. SmartPros is a leading provider of professional education products to Fortune 500 companies, as well as the major firms and associations in each of its professional markets. SmartPros provides education and content publishing and development services in a variety of media including Web, CD-ROM and video. Our subscription libraries feature hundreds of course titles and 2,300+ hours of accredited education. SmartPros' proprietary Professional Education Center (PEC) Learning Management System (LMS) offers enterprise distribution and administration of education content and information. In addition, SmartPros produces a popular news and information portal for accounting and finance professionals serving more than one million ads and distributing more than 200,000 subscriber email newsletters each month. SmartPros' network of sites averages more than 450,000 monthly visits, serving a user base of 350,000+ profiled members. Visit: www.smartpros.com
The SmartPros logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2586
Safe Harbor Statement
Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including activities, events or developments, that the Company expects, believes or anticipates will or may occur in the future. In addition to statements that explicitly describe these risks and uncertainties, readers are urged to consider statements that contain terms such as "believes," "belief," "expects," "expect," "intends," "intend," "anticipate," "anticipates," "plans," "plan," to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's filings with Securities and Exchange Commission. Specifically, results reported within this press release should not be considered an indication of future performance.