HAWTHORNE, N.Y., Nov. 4, 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 nine months ended September 30, 2014.
Financial results for the three months ended September 30, 2014, compared to 2013
- Net revenues of $3.1 million, compared to $3.8 million
- Operating loss of $404,000 compared to nominal operating income
- Net loss of $632,000 or $.14 per share, compared to a net income of $9,000 or $.00 per share
Financial results for the nine months ended September 30, 2014, compared to 2013
- Net revenues of $10.1 million, compared to $11.5 million
- Operating loss of $1.3 million, compared to an operating loss of $471,000
- Net loss of $1.2 million, or $.27 per share, compared to a net loss of $280,000, or $.06 per share
| NINE MONTHS ENDED | THREE MONTHS ENDED | |||
| RECONCILIATION OF NET INCOME TO EBITDA | SEPTEMBER | SEPTEMBER | ||
| 2014 | 2013 | 2014 | 2013 | |
| Net (loss) income | $ (1,249,610) | $ (279,102) | $ (632,055) | $ 9,072 |
| Income tax (benefit) provision | (13,615) | (178,007) | 232,216 | (1,035) |
| Depreciation and amortization | 794,643 | 855,133 | 271,891 | 310,845 |
| Interest and dividend income, (net) | (16,922) | (19,486) | (5,013) | (8,008) |
| EBITDA | $ (485,504) | $ 378,538 | $ (132,961) | $ 310,874 |
As of September 30, 2014, the Company had approximately $3.9 million in cash and cash equivalents, $1.7 million in accounts receivable, $4.3 million in deferred revenue, stockholders' equity of $8.2 million, and no debt.
"While we are disappointed with our current performance, we are beginning to see positive results from the "Back-to-Basics" plan announced earlier this year," said Allen Greene, Chairman and CEO of SmartPros. "As previously noted, we expected a decline in revenue from some of the underperforming areas of our business, including reductions in our live high-end conferences. However, we are also reducing expenses related to those revenue sources which should result in higher profit margins. In addition, we are finishing up several large development projects which will significantly reduce our capitalized expenses and costs for outsourced labor. Some of this can be seen in the current quarter's reduced capitalization expense. While the full impact of our plan will not be realized until the 2015 fiscal year, we do feel we've put ourselves in a good position as we move into our traditionally strong fourth quarter."
Greene continued: "In conjunction with expense management, we have refocused our efforts on growing revenue opportunities. We recently hired a lead generation firm and have increased our internal sales force with the goal of replacing and generating new revenues to offset revenues lost through those lines of businesses we have terminated as a part of the execution of our Back-to-Basics program which we expect will fuel growth. In addition, we are seeing new opportunities as companies are being forced to move away from open-source Learning Management Systems (LMS) for compliance and security reasons. Our proprietary LMS is not built on open source code putting us in a position to meet the needs of companies looking for a compliant solution. As such, we have recently signed several new firms to multi-year contracts for our LMS and are renewing an existing contract for our Audit Management System. These multi-year contracts are typically larger than our average sale."
The Company also announced that the Board has declared a $.015 dividend per common share payable on January 6, 2015, to shareholders of record on December 19, 2014, marking the Company's 20th consecutive quarterly dividend. The Company cautions that any future dividends will be affected by our ongoing results. In addition, the Board also approved a new stock buyback plan allocating $350,000 for the repurchase of the Company's common shares. This program will expire, unless renewed or modified, at the regularly scheduled meeting of the Board in May 2015.
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 | ||
| September 30, | December 31, | |
| 2014 | 2013 | |
| (Unaudited) | (Audited) | |
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 3,874,708 | $ 5,303,657 |
| Accounts receivable, net of allowance for doubtful accounts of approximately $30,000 and $20,000 at September 30, 2014 and December 31, 2013, respectively | 1,705,072 | 2,430,495 |
| Prepaid expenses and other current assets | 433,391 | 340,463 |
| Total Current Assets | 6,013,171 | 8,074,615 |
| Property and equipment, net | 461,242 | 566,475 |
| Goodwill | 2,807,257 | 2,807,257 |
| Other intangibles, net | 3,555,269 | 3,516,411 |
| Other assets, including restricted cash of $75,000 | 99,152 | 104,515 |
| Deferred tax asset | 600,000 | 600,000 |
| Investment in joint venture | 1,072 | 2,268 |
| 7,523,992 | 7,596,926 | |
| Total Assets | $ 13,537,163 | $ 15,671,541 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable | $ 685,580 | $ 1,203,222 |
| Accrued expenses | 185,473 | 234,863 |
| Dividend payable | 69,877 | 70,289 |
| Deferred revenue | 4,305,282 | 4,395,166 |
| Total Current Liabilities | 5,246,212 | 5,903,540 |
| Other liabilities | 67,174 | 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 September 30, 2014 and December 31, 2013, respectively; and 4,658,482 and 4,684,441 shares outstanding as of September 30, 2014 and December 31, 2013, respectively | 567 | 567 |
| Additional paid-in capital | 17,044,240 | 17,217,008 |
| Accumulated deficit | (6,083,830) | (4,834,220) |
| Common stock in treasury, at cost – 1,006,951 and 980,992 shares at September 30, 2014 and December 31, 2013, respectively | (2,737,200) | (2,685,732) |
| Total Stockholders' Equity | 8,223,777 | 9,697,623 |
| Total Liabilities and Stockholders' Equity | $ 13,537,163 | $ 15,671,541 |
| SMARTPROS LTD. AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of | ||||
| Operations (Unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net revenues | $ 3,101,108 | $ 3,756,349 | $ 10,077,471 | $ 11,506,704 |
| Cost of revenues | 1,566,071 | 1,608,687 | 5,067,645 | 5,095,594 |
| Gross profit | 1,535,037 | 2,147,662 | 5,009,826 | 6,411,110 |
| Operating Expenses: | ||||
| Selling, general and administrative | 1,667,623 | 1,836,413 | 5,494,134 | 6,026,968 |
| Depreciation and amortization | 271,891 | 310,845 | 794,643 | 855,133 |
| 1,939,514 | 2,147,258 | 6,288,777 | 6,882,101 | |
| Operating (loss) income | (404,477) | 404 | (1,278,951) | (470,991) |
| Other Income (Expense): | ||||
| Interest income (net) | 5,013 | 8,008 | 16,922 | 19,486 |
| Equity loss from joint venture | (375) | (375) | (1,196) | (5,604) |
| 4,638 | 7,633 | 15,726 | 13,882 | |
| (Loss) income before income taxes | (399,839) | 8,037 | (1,263,225) | (457,109) |
| (Provision) benefit for income taxes | (232,216) | 1,035 | 13,615 | 178,007 |
| Net (loss) income | $ (632,055) | $ 9,072 | $ (1,249,610) | $ (279,102) |
| Net (loss) income per common share: | ||||
| Basic net (loss) income per common share | $ (0.14) | $ — | $ (0.27) | $ (0.06) |
| Diluted net (loss) income per common share | $ (0.14) | $ — | $ (0.27) | $ (0.06) |
| Weighted Average Number of Shares Outstanding: | ||||
| Basic | 4,675,092 | 4,683,821 | 4,681,325 | 4,695,557 |
| Diluted | 4,675,092 | 4,689,589 | 4,681,325 | 4,695,557 |
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.