HAWTHORNE, N.Y., May 7, 2008 (PRIME NEWSWIRE) -- SmartPros Ltd. (Nasdaq:SPRO), a leader in the field of accredited professional education and corporate training, today reported its first quarter financial results for the three months ended March 31, 2008.
For the three months ended March 31, 2008, compared to the three months ended March 31, 2007:
* Revenues of $3.88 million compared to $3.72 million. * Gross profit margin of 50.3%, compared to 60.6%. * Operating loss of $241,000 compared to operating income of $363,000. * Net loss of $121,000, a decrease from net income of $587,000. * Net loss per share of $0.02, basic and diluted, compared to net income per share of $0.12.
As of March 31, 2008, SmartPros had approximately $9.8 million in cash and cash equivalents, working capital of $5.4 million and stockholders' equity of approximately $10.7 million.
SmartPros outlined several new growth initiatives:
* SmartPros recently announced the launch of its iReflect Training Software, enabling companies to easily create, deliver and evaluate custom video role-play training scenarios with all of its employees. * SmartPros is launching a new product brand, The Hawthorne Center of Excellence, to encompass a new series of professional certificate programs developed at the graduate level by leading college professors. * SmartPros will soon launch a customer-branded newsletter program that allows professional services firms to easily publish branded online and offline newsletters for their own clients. * SmartPros recently moved its listing from the American Stock Exchange to the NASDAQ Capital Market Stock Exchange. * In the first quarter of 2008, SmartPros purchased approximately $120,000 worth of its stock as part of its previously announced stock buy-back program. SmartPros will continue to buy its own stock as permitted under certain restricted conditions.
"We are obviously disappointed by showing our first quarterly loss in four years and our first since we became a reporting company. This loss was due to additional operating expenses we incurred in the first quarter as a result of a number of acquisitions and to the cost of developing new products, such as iReflect, and retooling existing products, such as our learning management system, which were expensed rather than capitalized," said Allen Greene, Chairman and Chief Executive Officer of SmartPros. "However, we feel at this time that investing time and energy into our growth is exactly what our shareholders expect of us. We have been aggressive with acquisitions. It should be expected that both product integration and sales cycles for newly acquired product lines require a ramp-up period. The process simply requires an increase in short-term overhead to get the job done. Nevertheless, we continually look at cost controls to ensure our teams are staffed appropriately. We obviously want to watch cost, but not hamper our ability to grow, especially in the new markets we now serve."
Greene continued: "Despite the first quarter loss, we have several growth initiatives in front of us that we expect to capitalize on. We announced the initial launch of our iReflect Training Software early in the quarter, and are seeing a good level of interest from our core clients. We are creating new opportunities in the professional certificate program business, and also in providing a customer-branded newsletter subscription service to professionals in all of our core verticals. These new programs will be launching this year. In addition, we feel our recent move to NASDAQ offers us better market exposure. In the first quarter we also purchased approximately $120,000 worth of our stock, which we feel is significantly undervalued."
SmartPros will host a teleconference on Wednesday, May 7, 2008, beginning at 4:15 p.m. Eastern, 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 toll free 1-800-240-8658. A replay of the call will be available on the Company's Web site approximately one hour after the live broadcast at http://ir.smartpros.com.
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 500,000+ profiled members. Visit: www.smartpros.com
The SmartPros logo is available at http://www.primenewswire.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," and "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.
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 31, December 31,
2008 2007
(Unaudited) (Audited)
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 9,789,001 $10,072,338
Accounts receivable, net of allowance for
doubtful accounts of $39,677 at March 31,
2008 and $39,842 at December 31, 2007 2,004,411 1,964,483
Prepaid expenses and other current assets 210,777 237,097
----------- -----------
Total Current Assets 12,004,189 12,273,918
----------- -----------
Property and equipment, net 637,812 630,857
Goodwill 145,684 145,684
Other intangibles, net 3,422,309 3,296,538
Other assets, including restricted cash of
$150,000 154,673 154,673
Deferred tax asset 978,000 978,000
----------- -----------
5,338,478 5,205,752
----------- -----------
Total Assets $17,342,667 $17,479,670
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 679,228 $ 786,781
Accrued expenses 146,829 419,886
Other liabilities 40,040 40,040
Deferred revenue 5,731,595 5,318,382
----------- -----------
Total Current Liabilities 6,597,692 6,565,089
----------- -----------
Long-Term Liabilities:
Other liabilities-net of current portion 30,027 40,041
----------- -----------
Total Long-Term Liabilities 30,027 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, 5,314,081 issued and
4,978,050 outstanding at March 31, 2008;
and 5,304,698 issued and 4,993,967
outstanding at December 31, 2007 532 530
Additional paid-in capital 17,000,804 16,925,314
Accumulated (deficit) (5,227,492) (5,106,459)
Common stock in treasury, at cost -
336,031 and 310,731 shares (1,042,231) (922,625)
Deferred compensation (16,665) (22,220)
----------- -----------
Total Stockholders' Equity 10,714,948 10,874,540
----------- -----------
Total Liabilities and Stockholders' Equity $17,342,667 $17,479,670
=========== ===========
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended
March 31,
----------------------
2008 2007
-------------------------------------------- ---------- ----------
Net Revenues $3,875,663 $3,723,631
Cost of Revenues 1,924,773 1,468,913
---------- ----------
Gross Profit 1,950,890 2,254,718
---------- ----------
Operating Expenses:
Selling, general and administrative 1,989,060 1,726,181
Depreciation and amortization 202,888 165,469
---------- ----------
2,191,948 1,891,650
---------- ----------
Operating (Loss) Income (241,058) 363,068
---------- ----------
Other Income (Expense):
Interest income 120,079 89,313
Interest expense (54) (601)
---------- ----------
120,025 88,712
---------- ----------
(Loss) income before benefit for income taxes (121,033) 451,780
Add: income tax benefit -- 135,000
---------- ----------
Net (Loss) income $ (121,033) $ 586,780
========== ==========
Net (Loss) income Per Common Share:
Basic net (loss) income per common share $ (.02) $ .12
========== ==========
Diluted net (loss) income per common share $ (.02) $ .12
========== ==========
Weighted Average Number of Shares
Outstanding
Basic 4,993,896 4,875,774
========== ==========
Diluted 4,993,896 4,919,940
========== ==========