HAWTHORNE, N.Y., Nov. 8, 2006 (PRIMEZONE) -- SmartPros Ltd. (AMEX:PED), a leader in the field of accredited professional education and corporate training, today announced its third quarter financial results for the three and nine months ended September 30, 2006.
Financial highlights for the three months ended September 30, 2006
compared to the three months ended September 30, 2005:
-- Net revenues increased 31.4%, rising to $3.17 million from
$2.42 million.
-- Income from operations grew 119.2% to $201,000 compared to
$92,000.
-- Net income rose 123.9% to $330,000, or $0.07 per diluted share,
from $148,000, $0.03 per diluted share.
-- Sales of accounting/finance and related products totaled $2.2
million, a 22% increase over $1.8 million.
-- Sales of subscription-based products increased 5.5% to $1.93
million from $1.83 million.
-- Net revenues from Skye Multimedia, acquired by SmartPros in
March of this year, were $445,000.
-- Net revenues generated from the Sage Online course catalog,
also acquired by the Company in March 2006, totaled $47,000.
-- Working Values' net revenues increased 76.2% to $178,000 from
$102,000.
Financial highlights for the nine months ended September 30, 2006
compared to the nine months ended September 30, 2005:
-- Net revenues rose 8.3% to $8.63 million, up from $7.97 million.
-- Net revenues from accounting/finance and related products
increased 3.3% to $6.2 million compared to $6.0 million.
-- Net income increased 24.3% to $669,000, or $0.13 per diluted
share, from $538,000, or $0.11 per diluted share.
-- Sales of subscription-based products grew 5.8% to $5.5 million
from $5.2 million.
-- Skye Multimedia contributed $875,000 in net revenues in 2006.
-- Sales from the Sage Online course catalog totaled $66,000 in
2006.
-- Working Values contributed $483,000, a 68% improvement over
$287,000.
As of September 30, 2006, the Company had approximately $7.37 million in cash and cash equivalents; $1.5 million in accounts receivable; working capital of $4.43 million; and $7.41 million in total stockholders' equity. For the current nine month reporting period, SmartPros generated net cash of $995,000 from its operating activities, compared to $609,000 for the same nine months in the previous year.
Allen Greene, Chairman and CEO of SmartPros, stated, "By every measure, financial or otherwise, SmartPros is stronger and more successful than at any other time in its history. Marking our tenth consecutive profitable quarter, the third quarter results reflect measurable traction in nearly every area of our business, with the exception of our video production business. However, it is important to note that following the hiring of new leadership for the video production division in the second quarter, we are starting to see a positive sales trend." Continuing, Greene noted, "During the past quarter, we were particularly enthused by the strong results delivered by both Skye Multimedia and Working Values."
"Two weeks ago, SmartPros announced that we completed the share buy-back program approved by our Board of Directors a year ago. I'm very pleased to announce that our directors have once again determined that it is in the best interest of our Company and our stockholders, and represents a prudent use of our cash, to approve the investment of up to an additional $750,000 for the purchase of common stock in the open market or through private purchases pursuant to another share buy-back program," concluded Greene.
The timing and exact number of shares purchased will be determined at the Company's discretion and will depend on market conditions. All repurchases will be in the open market or in private transactions and will be funded from existing cash. Currently, SmartPros has 4,859,274 shares of common stock outstanding. The share buy-back program will begin immediately and will be completed or cancelled within 12 months.
SmartPros will host a teleconference this afternoon beginning at 4:15 p.m. Eastern, and invites all interested parties to join management in a discussion regarding the Company's financial results, operations and other meaningful developments. The conference call can be accessed via telephone by dialing toll free 800-366-3908. 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. A copy of this news announcement is immediately accessible via 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, banking, engineering, and ethics and compliance. 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. SmartPros' subscription libraries feature hundreds of course titles and 1,000+ hours of accredited education and its 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 that services 300,000+ visitors and 100,000+ subscribers per month. Visit: www.smartpros.com
The SmartPros logo is available at http://www.primezone.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. Specially, results reported within this press release should not be considered an indication of future performance. In addition, there can be no assurance regarding the timing of any stock repurchases by the Company or that any such repurchases will, in fact, occur.
SMARTPROS LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
September 30, December 31,
2006 2005
(Unaudited) (Audited)
--------------------------------------- ----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 7,373,899 $ 7,505,691
Accounts receivable, net of allowance
for doubtful accounts of $39,179 and
$40,429 1,499,963 777,122
Prepaid expenses and other current assets 144,515 254,176
----------- -----------
Total Current Assets 9,018,377 8,536,989
----------- -----------
Property and equipment, net 432,222 493,604
Goodwill 53,434 53,434
Other intangibles, net 2,334,162 2,158,593
Other assets, including restricted
cash of $150,000 290,673 150,000
----------- -----------
3,110,491 2,855,631
----------- -----------
Total Assets $12,128,868 $11,392,620
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 425,563 $ 228,629
Accrued expenses 261,313 277,159
Current portion of capital lease and
equipment financing obligations 33,410 38,148
Deferred revenue 3,871,787 3,689,486
----------- -----------
Total Current Liabilities 4,592,073 4,233,422
----------- -----------
Long-Term Liabilities:
Capital lease and equipment financing
obligations -- 25,992
Other liabilities 130,151 160,193
----------- -----------
Total Long-Term Liabilities 130,151 186,185
----------- -----------
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, 5,170,005 issued and
4,859,274 outstanding at September 30, 2006
and 5,145,447 issued and 5,035,716 outstanding
at December 31, 2005 517 514
Additional paid-in capital 16,489,652 16,418,034
Accumulated (deficit) (8,117,400) (8,785,935)
----------- -----------
8,372,769 7,632,613
Common stock in treasury, at cost -
310,731 shares at September 30, 2006;
109,731 shares at December 31, 2005 (922,625) (384,600)
Deferred compensation (43,500) (75,000)
Note receivable from stockholder -- (200,000)
----------- -----------
Total Stockholders' Equity 7,406,644 6,973,013
----------- -----------
Total Liabilities and Stockholders'
Equity $12,128,868 $11,392,620
=========== ===========
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------- -----------------------
2006 2005 2006 2005
---------------------------------------------------------------------
Net Revenues $8,630,243 $7,972,330 $3,174,771 $2,416,338
Cost of Revenues 3,584,891 3,174,468 1,379,795 933,524
---------- ---------- ---------- ----------
Gross Profit 5,045,352 4,797,862 1,794,976 1,482,814
---------- ---------- ---------- ----------
Operating Expenses:
Selling, general
and administrative 4,263,962 3,952,854 1,429,570 1,242,024
Depreciation and
amortization 480,792 434,898 164,212 148,999
---------- ---------- ---------- ----------
4,744,754 4,387,752 1,593,782 1,391,023
---------- ---------- ---------- ----------
Operating Income 300,598 410,110 201,194 91,791
---------- ---------- ---------- ----------
Other Income (Expense):
Interest income 239,290 134,142 84,623 57,120
Interest expense (3,604) (6,514) (612) (1,384)
---------- ---------- ---------- ----------
235,686 127,628 84,011 55,736
---------- ---------- ---------- ----------
Income before benefit
for income taxes 536,284 537,738 285,205 147,527
Income tax benefit (132,250) -- (45,165) --
---------- ---------- ---------- ----------
Net Income $ 668,534 $ 537,738 $ 330,370 $ 147,527
========== ========== ========== ==========
Net Income Per
Common Share:
Basic net income
per common share $ .13 $ .11 $ .07 $ .03
========== ========== ========== ==========
Diluted net income
per common share $ .13 $ .11 $ .07 $ .03
========== ========== ========== ==========
Weighted Average
Number of Shares
Outstanding
Basic 5,039,462 5,084,240 5,017,470 5,085,546
========== ========== ========== ==========
Diluted 5,054,587 5,117,117 5,028,578 5,115,180
========== ========== ========== ==========