Business Editors/Education Writers/High-Tech Writers
PHOENIX--(BUSINESS WIRE)--May 16, 2003
ProsoftTraining (Nasdaq:POSO) today reported financial results for its third fiscal quarter, which ended April 30, 2003.
Revenues for the third quarter of fiscal 2003 were $2.70 million, compared to $4.57 million in the previous year's third quarter. Net income for the third quarter of fiscal 2003 was $0.36 million or $0.01 per share, compared to net loss of $27.33 million or $1.13 per share for the third quarter of fiscal 2002.
Revenues for the first nine months of fiscal 2003 were $9.26 million, compared to $13.58 million in the previous year's first nine months. Net loss for the first nine months of fiscal 2003 was $2.47 million or $0.10 per share, compared to net loss of $32.69 million or $1.36 per share for the first nine months of fiscal 2002.
Gross profit (total revenues less costs of revenues) as a percentage of revenue was 64 percent for the third quarter of fiscal year 2003, compared to 56 percent for the second quarter of fiscal 2003 and 43 percent for the third quarter of the previous fiscal year.
Selling, marketing, and general and administrative expenses were $0.84 million in the third quarter of fiscal 2003, down 63 percent from the previous quarter and down 72 percent from the third quarter in fiscal 2002. Content development expenses were $0.29 million in the quarter, down 30 percent from the previous quarter and down 43 percent from the third quarter in fiscal 2002. The reductions in reported operating expenses are the direct result of the company's ongoing workforce reduction program, a decrease in the allowance for doubtful accounts, a reduction in commissionable sales, salary reductions for senior executives, and the settlement of a liability during the period.
The cash balance at April 30, 2003, was $1.63 million, compared to $1.58 million for the previous quarter. Cash provided by operating activities during the third quarter of fiscal 2003 was $0.04 million. Days sales outstanding of receivables were at 32 days, an improvement of 10 days when compared to recent prior quarters.
"This quarter, we were able to reduce expenses sharply without materially impacting run-rate revenue. Our revenue during the period reflected the benefit of recent partnering transactions we've entered into, though our traditional content business continues to show weakness in the current economic environment. Although our quarterly profit was driven by non-cash transactions, we accomplished our goal of achieving a cash profit in April, which enabled us to increase our cash balance slightly quarter-over-quarter," stated Robert Gwin, Prosoft's chairman and CEO.
Gwin concluded, "Though we continue to face many challenges in the current environment, we are now focused on achieving sustained profitability and meaningful growth in our business. Our management team is encouraged by the pace of our turnaround and by our future prospects."
Recent Development
-- Per NASDAQ rules, the company has been provided a grace period
through May 19, 2003, to regain compliance with the $1.00
minimum bid price listing maintenance requirement to remain
listed. NASDAQ announced on January 30, 2003, an extension of
its pilot program governing bid price rules whereby issuers
that meet heightened financial requirements may be granted
extensions of existing grace periods. The company believes it
qualifies for an additional extension of the current grace
period based on NASDAQ's announced criteria. NASDAQ will
review the company's status on May 20, 2003.
The company announced that it expects to file its third quarter fiscal 2003 Form 10-Q with the SEC on June 10, 2003. No conference call to discuss the quarterly results was announced.
About ProsoftTraining
ProsoftTraining (Nasdaq:POSO) offers content and certifications to help individuals develop and validate critical Information and Communications Technology (ICT) workforce skills. Prosoft is a leader in the workforce development arena, working with state and local governments and school districts to provide ICT education solutions for high school and community college students. Prosoft has created and distributes a complete library of classroom and e-learning courses. Prosoft distributes its content through its ComputerPREP division to individuals, schools, colleges, commercial training centers and corporations worldwide. Prosoft owns the CIW job-role certification program for Internet technologies and the CCNT (Certified in Convergent Network Technologies) certification, and manages the CTP (Convergence Technologies Professional) vendor-neutral certification for telecommunications. To find out more, visit www.ProsoftTraining.com, www.ComputerPREP.com, www.CIWcertified.com, and www.CTPcertified.com.
Except for historical information contained herein, the matters discussed in this press release are statements of a forward-looking nature that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, without limitation, the Company's dependence on the timely development, introduction and acceptance of courses, proprietary certifications and other products; the continued penetration of the academic market; the maintenance of monthly revenue levels; the ability to continue to manage costs effectively; the ability to maintain the workforce at appropriate levels and retain and compensate executive management at levels commensurate with revenues; the ability to increase revenues; the ability to maintain sufficient operational liquidity; the ability to maintain profitability through the end of this fiscal year and subsequent periods; the ability to maintain the NASDAQ SmallCap listing; the effect of changing economic conditions; the acceptance of ICT certifications; and the other risks and uncertainties outlined in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q. The Company undertakes no obligation to update this forward-looking information.
PROSOFTTRAINING AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Nine Months Ended Ended April 30, April 30, ----------------- ------------------ 2003 2002 2003 2002 ------- --------- -------- --------- Revenues: Content $2,023 $3,538 $7,235 $10,380 Certification 663 924 1,936 2,768 Services 10 104 85 434 ------- --------- -------- --------- Total revenues 2,696 4,566 9,256 13,582 ------- --------- -------- --------- Costs and expenses: Costs of revenues 966 2,610 3,802 7,091 Content development 293 512 1,250 1,577 Sales and marketing 616 1,548 2,806 4,686 General and administrative 592 1,433 2,986 4,545 Depreciation and amortization 165 861 666 2,631 Gain on settlement of liability (370) - - - Impairment of goodwill - 22,500 - 22,500 Write-off of courseware and licenses - 1,452 - 1,452 Restructuring charge - - - 762 ------- --------- -------- --------- Total costs and expenses 2,262 30,916 11,510 45,244 ------- --------- -------- --------- Income (loss) from operations 434 (26,350) (2,254) (31,662) Interest income - 12 5 54 Interest expense (73) (68) (216) (157) ------- --------- -------- --------- Income (loss) before income taxes 361 (26,406) (2,465) (31,765) Income tax benefit - (925) - (925) ------- --------- -------- --------- Net income (loss) $361 $(27,331) $(2,465) $(32,690) ======= ========= ======== ========= Net income (loss) per share: Basic $0.01 $(1.13) $(0.10) $(1.36) ======= ========= ======== ========= Diluted $0.01 $(1.13) $(0.10) $(1.36) ======= ========= ======== ========= Weighted average shares outstanding: Basic 24,209 24,158 24,203 23,958 ======= ========= ======== ========= Diluted 25,033 24,158 24,203 23,958 ======= ========= ======== ========= PROSOFTTRAINING AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) April 30, July 31, 2003 2002 ----------- -------- ASSETS (Unaudited) -------------------------------------------------- Current assets: Cash and cash equivalents $1,625 $3,526 Accounts receivable, net 956 1,995 Prepaid expenses and other current assets 237 379 ----------- -------- Total current assets 2,818 5,900 Property and equipment, net 565 1,166 Goodwill, net 6,745 6,745 Courseware and licenses, net 741 1,296 ----------- -------- Total assets $10,869 $15,107 =========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY -------------------------------------------------- Current liabilities: Accounts payable $1,078 $2,239 Accrued expenses 1,206 2,266 Current portion of capital lease obligations 39 59 Deferred revenue and other 375 151 ----------- -------- Total current liabilities 2,698 4,715 Long-term debt 2,899 2,698 Obligations under capital leases, net of current portion 97 118 ----------- -------- Total liabilities 5,694 7,531 ----------- -------- Stockholders' equity: Common shares, par value $.001 per share; authorized shares: 75,000,000; outstanding: 24,221,326 shares and 24,209,326 shares 24 24 Additional paid-in capital 104,422 104,421 Accumulated deficit (99,317) (96,853) Accumulated other comprehensive income 121 59 Less common stock in treasury, at cost: 11,912 shares (75) (75) ----------- -------- Total stockholders' equity 5,175 7,576 ----------- -------- Total liabilities and stockholders' equity $10,869 $15,107 =========== ========
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