HAWTHORNE, N.Y., Aug. 7, 2008 (PRIME NEWSWIRE) -- SmartPros Ltd. (Nasdaq:SPRO), a leader in the field of accredited professional education and corporate training, today announced its second quarter financial results for the three and six months ended June 30, 2008.
Financial results for the three months ended June 30, 2008,
compared to the same period in 2007
-----------------------------------------------------------
* Net revenues increased 17% to $4.1 million, up from $3.5 million.
* Net income was $230,000, or $0.05 per diluted share, down from
$511,000, or $0.10 per diluted share.
* Online sales grew 22% in the second quarter of 2008, attributable
to revenue from recent acquisitions.
Financial results for the six months ended June 30, 2008,
compared to the same period in 2007
---------------------------------------------------------
* Net revenues increased 10% to $7.9 million from $7.2 million.
* Net income was $110,000, or $0.02 per diluted share, down from
$1.1 million, or $0.22 per diluted share.
Other financial highlights
--------------------------
As of June 30, 2008, the company had:
* $10 million in cash and cash equivalents;
* $1.7 million in accounts receivable;
* $5.3 million of working capital;
* $10.8 million in total stockholders' equity; and
* $6 million of deferred revenue (primarily subscription products
sold but not yet earned), up from $5.3 million on December 31,
2007.
Operational highlights
----------------------
* SmartPros recently acquired Loscalzo Associates, a leading
provider of live accounting- and auditing-related CPE programs,
conferences and seminars. Loscalzo develops and delivers live
seminars to CPA firms directly or through co-sponsorship with
state CPA societies and associations of accounting firms.
* SmartPros continues its development of The Hawthorne Center of
Excellence, which will encompass a new series of advanced
professional certificate programs developed by well-known college
professors.
* SmartPros continues to move towards the launch of a customer-
branded newsletter program that allows professional services
firms to easily publish branded online and offline newsletters for
their own clients.
* The Engineering division is preparing to debut a new catalog
of "green" engineering modules, designed to meet the growing
demands for eco-friendly engineering processes.
* In the first six-months of 2008, SmartPros paid $329,000 to
repurchase 81,094 shares of its common stock as part of its
previously announced stock buy-back program.
"SmartPros is pleased to have accomplished its goal of increasing sales and reducing overhead to maintain the company's commitment of continued profitability," stated Allen Greene, Chairman and CEO of SmartPros. "As noted in our first quarter earnings, we are undergoing changes in our infrastructure with the integrations of the Financial Campus and WatchIT product lines acquired late last summer. Those integrations have led to increased expenses resulting in a reduction in our profitability. As also stated in our first quarter earnings call, we began cutting overhead from those integrations, and other non-essential areas. To date, we have cut between $800,000 to $1 million in annualized costs with plans in place to cut additional overhead. You can see the effect already taking hold as our gross margins begin to make their way back to historical levels. It should be noted that we believe we are not cutting costs in areas that would affect our future growth."
Greene added: "There are a lot of positive initiatives going on right now. First, the recent acquisition of Loscalzo Associates is a perfect addition to the SmartPros portfolio of companies and will greatly enhance our live seminar offerings in the accounting and finance markets. We expect this acquisition to contribute positively to earnings as early as the third quarter of this year. In addition, our first advanced certificate programs, customer-branded newsletter product, and our new 'green' engineering courses are expected to launch later this year. These are all new revenue areas for us with good potential."
As previously announced, SmartPros will host a teleconference today, beginning at 4:30 p.m. Eastern, and invites all interested parties to join management in a discussion regarding the Company's financial results, corporate progress and other meaningful developments. The conference call can be accessed via telephone by dialing toll free 1-800-240-8658
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," "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
June 30, December 31,
2008 2007
(Unaudited) (Audited)
------------ -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 10,004,501 $ 10,072,338
Accounts receivable, net of allowance
for doubtful accounts of $39,677 at
June 30, 2008 and $39,842 at
December 31, 2007 1,741,600 1,964,483
Prepaid expenses and other current
assets 227,360 237,097
------------ ------------
Total Current Assets 11,973,461 12,273,918
------------ ------------
Property and equipment, net 700,491 630,857
Goodwill 145,684 145,684
Other intangibles, net 3,471,010 3,296,538
Other assets, including restricted
cash of $150,000 154,673 154,673
Deferred tax asset 1,013,000 978,000
------------ ------------
5,484,858 5,205,752
------------ ------------
Total Assets $ 17,458,319 $ 17,479,670
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 453,870 $ 786,781
Accrued expenses 119,070 419,886
Other liabilities 40,040 40,040
Deferred revenue 6,033,028 5,318,382
------------ ------------
Total Current Liabilities 6,646,008 6,565,089
------------ ------------
Long-Term Liabilities:
Other liabilities - net of
current portion 20,013 40,041
------------ ------------
Total Long-Term Liabilities 20,013 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 4,921,956
outstanding at June 30, 2008; and
5,304,698 issued and 4,993,967
outstanding at December 31, 2007 531 530
Additional paid-in capital 17,051,290 16,925,314
Accumulated (deficit) (4,997,302) (5,106,459)
Common stock in treasury, at cost -
391,825 and 310,731 shares (1,251,717) (922,625)
Deferred compensation (10,504) (22,220)
------------ ------------
Total Stockholders' Equity 10,792,228 10,874,540
------------ ------------
Total Liabilities and Stockholders'
Equity $ 17,458,319 $ 17,479,670
============ ============
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
---------- ---------- ---------- ----------
2008 2007 2008 2007
------------------------ ---------- ---------- ---------- ----------
Net revenues $7,937,534 $7,210,161 $4,061,871 $3,486,530
Cost of revenues 3,555,961 2,684,317 1,673,385 1,215,404
---------- ---------- ---------- ----------
Gross profit 4,381,573 4,525,844 2,388,486 2,271,126
---------- ---------- ---------- ----------
Operating Expenses:
Selling, general
and administrative 4,050,167 3,540,640 2,018,911 1,814,459
Depreciation and
amortization 405,842 327,264 161,795 202,954
---------- ---------- ---------- ----------
4,456,009 3,867,904 2,221,865 1,976,254
---------- ---------- ---------- ----------
Operating (loss) income (74,436) 657,940 166,621 294,872
---------- ---------- ---------- ----------
Other Income:
Interest income, net
of expense 148,593 189,767 28,568 101,055
---------- ---------- ---------- ----------
148,593 189,767 28,568 101,055
---------- ---------- ---------- ----------
Income before benefit
for income taxes 74,157 847,707 195,189 395,927
Add: income tax benefit 35,000 250,000 35,000 115,000
---------- ---------- ---------- ----------
Net income $ 109,157 $1,097,707 $ 230,189 $ 510,927
========== ========== ========== ==========
Net income per common share
Basic net income per
common share $ .02 $ .23 $ .05 $ .10
========== ========== =====================
Diluted net income
per common share $ .02 $ .22 $ .05 $ .10
========== ========== ========== ==========
Weighted average number
of shares outstanding
Basic 4,974,721 4,876,384 4,955,678 4,876,988
========== ========== ========== ==========
Diluted 5,027,312 4,934,757 4,990,698 4,949,568
========== ========== ========== ==========