HAWTHORNE, N.Y., Aug. 7, 2014 (GLOBE NEWSWIRE) -- SmartPros Ltd. (Nasdaq:SPRO), a leader in the field of accredited professional education and corporate training, today announced its financial results for the three and six months ended June 30, 2014.
Financial results for the three months ended June 30, 2014, compared to 2013
- Net revenues of $4.0 million, compared to $4.5 million,
- Operating loss of $238,000 compared to operating income of $107,000
- Net loss of $234,000 or $.05 per diluted share, compared to net income of $68,000, or $.01 per diluted share
Financial results for the six months ended June 30, 2014, compared to 2013
- Net revenues of $7.0 million, compared to $7.8 million
- Operating loss of $874,000 compared to an operating loss of $471,000
- Net loss of $618,000, or $.13 per diluted share, compared to a net loss of $288,000, or $.06 per diluted share
| SIX MONTHS ENDED | THREE MONTHS ENDED | |||
| RECONCILIATION OF NET (LOSS) INCOME TO EBITDA | June 30, | June 30, | ||
| 2014 | 2013 | 2014 | 2013 | |
| Net (loss) income | $ (617,555) | $ (288,174) | $ (233,954) | $68,308 |
| Income tax (benefit) provision | (245,831) | (176,972) | 388 | 41,625 |
| Depreciation and amortization | 522,752 | 544,288 | 265,992 | 275,775 |
| Interest and dividend income, (net) | (11,909) | (11,478) | (5.336) | (4,983) |
| EBITDA | $ (352,543) | $67,664 | $27,450 | $380,725 |
As of June 30, 2014, the Company had approximately $4.4 million in cash and cash equivalents, $1.9 million in accounts receivable, $4.4 million in deferred revenue, stockholders' equity of $9.0 million, and no debt.
"We are extremely disappointed with the results for the quarter and the year so far, and as previously announced, have instituted a 'Back-to-Basics' plan," said Allen Greene, Chairman and CEO of SmartPros. "Hopefully with the economy turning, and upon the full execution of our plan, SmartPros can start to grow both our revenue and bottom line. As noted in our June 16, 2014 Statement on Operational Changes, our 'Back-to-Basics' program focuses our attention on the areas of our business with the best ROI, and includes reducing, discontinuing or selling certain under-achieving businesses or assets. This will result in a reduction in personnel, both outsourced and internal. We intend to use some of these savings to increase sales and marketing efforts for both our technology products and our core business of providing high quality continuing professional education."
Greene continued: "As outlined in our most recent 10Q filing, we anticipate our annualized cash savings from net personnel reductions will be substantial and have a positive effect on our net income. As a large portion of these personnel costs were for capitalized software development we estimate that exclusive of possible reductions in revenues and related costs our operating costs will be reduced by approximately $750,000 per annum. We anticipate cash savings from personnel and out-sourced labor for the remainder of 2014 to be approximately $500,000 of which approximately $300,000 should have a positive effect on our net income. Although subsequent quarters should begin to reflect the effect of these savings, the full impact will not be realized until the 2015 fiscal year. We must caution that these estimates can be greatly affected by many factors as our 'Back-to-Basics' plan is implemented."
In addition, SmartPros' Board of Directors declared the Company's 19th consecutive quarterly dividend. The $.015 per share dividend is payable on October 7, 2014, to shareholders of record as of September 19, 2014. The Company cautions that any future dividend will be affected by ongoing results.
Shareholders and other interested parties are encouraged to contact the Company with any specific questions relating to the Company's public filings. Investor-related questions can be addressed by calling 914-829-4974, or by visiting SmartPros' Investor Relations site at http://ir.smartpros.com
| SMARTPROS LTD. AND SUBSIDIARIES | ||
| Condensed Consolidated Balance Sheets | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| (Unaudited) | (Audited) | |
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 4,391,241 | $ 5,303,657 |
| Accounts receivable, net of allowance for doubtful accounts of approximately $20,000 at June 30, 2014 and December 31, 2013, respectively | 1,924,693 | 2,430,495 |
| Prepaid expenses and other current assets | 337,107 | 340,463 |
| Deferred income tax - current | 250,000 | — |
| Total Current Assets | 6,903,041 | 8,074,615 |
| Property and equipment, net | 519,029 | 566,475 |
| Goodwill | 2,807,257 | 2,807,257 |
| Other intangibles, net | 3,676,310 | 3,516,411 |
| Other assets, including restricted cash of $75,000 | 104,165 | 104,515 |
| Deferred tax asset | 600,000 | 600,000 |
| Investment in joint venture | 1,447 | 2,268 |
| 7,708,208 | 7,596,926 | |
| Total Assets | $ 14,611,249 | $ 15,671,541 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable | $ 911,803 | $ 1,203,222 |
| Accrued expenses | 200,239 | 234,863 |
| Dividend payable | 70,267 | 70,289 |
| Deferred revenue | 4,393,671 | 4,395,166 |
| Total Current Liabilities | 5,575,980 | 5,903,540 |
| Other liabilities | 68,242 | 70,378 |
| Commitments and contingencies | ||
| Stockholders' Equity: | ||
| 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, 5,665,433 shares issued as of June 30, 2014 and December 31, 2013, respectively; and 4,684,441 shares outstanding as of June 30, 2014 and December 31, 2013, respectively | 567 | 567 |
| Additional paid-in capital | 17,103,967 | 17,217,008 |
| Accumulated deficit | (5,451,775) | (4,834,220) |
| Common stock in treasury, at cost – 980,992 shares at June 30, 2014 and December 31, 2013 respectively | (2,685,732) | (2,685,732) |
| Total Stockholders' Equity | 8,967,027 | 9,697,623 |
| Total Liabilities and Stockholders' Equity | $ 14,611,249 | $ 15,671,541 |
| SMARTPROS LTD. AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of | ||||
| Operations (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net revenues | $ 3,988,360 | $ 4,531,688 | $ 6,976,363 | $ 7,750,355 |
| Cost of revenues | 1,955,906 | 2,059,453 | 3,501,574 | 3,486,907 |
| Gross profit | 2,032,454 | 2,472,235 | 3,474,789 | 4,263,448 |
| Operating Expenses: | ||||
| Selling, general and administrative | 2,004,558 | 2,089,528 | 3,826,511 | 4,190,555 |
| Depreciation and amortization | 265,992 | 275,775 | 522,752 | 544,288 |
| 2,270,550 | 2,365,303 | 4,349,263 | 4,734,843 | |
| Operating (loss) income | (238,096) | 106,932 | (874,474) | (471,395) |
| Other Income (Expense): | ||||
| Interest income (net) | 5,336 | 4,983 | 11,909 | 11,478 |
| Equity loss from joint venture | (446) | (1,982) | (821) | (5,229) |
| 4,890 | 3,001 | 11,088 | 6,249 | |
| (Loss) income before income taxes | (233,206) | 109,933 | (863,386) | (465,146) |
| (Provision) benefit for income taxes | (388) | (41,625) | 245,831 | 176,972 |
| Net (loss) income | $ (233,594) | $ 68,308 | $ (617,555) | $ (288,174) |
| Net (loss) income per common share: | ||||
| Basic net (loss) income per common share | $ (0.05) | $ 0.01 | $ (0.13) | $ (0.06) |
| Diluted net (loss) income per common share | $ (0.05) | $ 0.01 | $ (0.13) | $ (0.06) |
| Weighted Average Number of Shares Outstanding: | ||||
| Basic | 4,684,441 | 4,680,941 | 4,684,441 | 4,701,245 |
| Diluted | 4,684,441 | 4,683,785 | 4,684,441 | 4,701,245 |
About SmartPros
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, video and live seminars and events. Our subscription libraries feature hundreds of course titles and 2,800+ 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 Web sites averages more than 1 million monthly visits, serving a user base of more than 1.5 million profiled members. Visit: www.smartpros.com.
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.