LEARNING TREE INTERNATIONAL INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly report pursuant to Section 13 and 15 (d) of the Securities Exchange Act of 1934
	For the quarterly period ended December 31, 2002

	or

o	Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
	For the transition period from ____________ to ___________

Commission file number 0-27248

Learning Tree International, Inc.

(Exact name of registrant as specified in its charter)

Delaware		95-3133814

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer identification No.)


6053 West Century Boulevard, Los Angeles, CA 90045

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (310) 417-9700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x

No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x

No o

The number of shares of common stock, $.0001 par value, outstanding as of February 3, 2003, is 17,388,008 shares.

Total number of pages 21

LEARNING TREE INTERNATIONAL, INC.

FORM 10-Q

December 31, 2002

TABLE OF CONTENTS

			Page


Part I-- Financial Information

	Item 1.	Financial Statements:
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Operations	4
		Condensed Consolidated Statements of Stockholders’ Equity	5
		Condensed Consolidated Statements of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

	Item 4.	Controls and Procedures	17

Part II-- Other Information

	Item 1.	Legal Proceedings	18
	Item 2.	Changes in Securities	18
	Item 3.	Defaults Upon Senior Securities	18
	Item 4.	Submission of Matters to a Vote of Security Holders	18
	Item 5.	Other Information	18
	Item 6.	Exhibits and Reports on Form 8-K	18

Signatures			19
Certifications			20

PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

													December 31, 2002			September 30, 2002

													(Unaudited)
ASSETS
Current assets:
							Cash and cash equivalents						$	89,463,000		$	96,897,000
							Trade accounts receivable, net							11,511,000			11,522,000
							Prepaid marketing expenses							954,000			1,648,000
							Prepaid income taxes							3,754,000			5,460,000
						Prepaid expenses and other								4,238,000			4,884,000

												Total current assets		109,920,000			120,411,000

Equipment, property and leasehold improvements, net														22,667,000			23,946,000
Long-term interest-bearing investments														8,065,000			7,813,000
Other assets														1,896,000			1,848,000

											Total assets		$	142,548,000		$	154,018,000

LIABILITIES
Current liabilities:
						Trade accounts payable							$	8,953,000		$	12,134,000
					Deferred revenue									53,424,000			55,868,000
					Accrued liabilities									6,211,000			5,773,000
				Income taxes payable										672,000			781,000

										Total current liabilities				69,260,000			74,556,000

Deferred income taxes														366,000			367,000
Deferred facilities rent														2,404,000			2,365,000

								Total liabilities						72,030,000			77,288,000

Commitments and contingencies
STOCKHOLDERS’ EQUITY
				Common Stock, $.0001 par value, 75,000,000 shares authorized, 17,388,000 and 18,127,000 shares issued and outstanding, respectively										2,000			2,000
				Preferred Stock, $.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding										—			—
			Additional paid-in capital											—			—
		Cumulative foreign currency translation												(1,898,000	)		(2,887,000	)
	Retained earnings													72,414,000			79,615,000

									Total stockholders’ equity					70,518,000			76,730,000

									Total liabilities and stockholders’ equity				$	142,548,000		$	154,018,000

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

								For the Three Months Ended December 31,

								2002			2001

Revenues								$	41,759,000		$	47,171,000
Cost of revenues									18,888,000			20,992,000

Gross profit									22,871,000			26,179,000

Operating expenses:
							Course development		2,075,000			2,490,000
						Sales and marketing			10,006,000			13,025,000
					General and administrative				6,196,000			6,775,000

									18,277,000			22,290,000

Income from operations									4,594,000			3,889,000

Other income (expense):
				Interest expense					(3,000	)		(4,000	)
			Interest income						564,000			827,000
		Foreign exchange							64,000			(251,000	)
	Other								5,000			(20,000	)

									630,000			552,000

Income before provision for income taxes									5,224,000			4,441,000
Provision for income taxes									1,855,000			1,576,000

Net income								$	3,369,000		$	2,865,000

Earnings per common share								$	0.19		$	0.15

Earnings per common share assuming dilution								$	0.19		$	0.15

Weighted average number of shares outstanding									17,748,000			18,916,000

Diluted shares outstanding									17,825,000			19,245,000

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

								ADDITIONAL PAID-IN CAPITAL			FOREIGN CURRENCY TRANSLATION ADJUSTMENT			RETAINED EARNINGS			TOTAL STOCKHOLDERS’ EQUITY
			COMMON STOCK

			SHARES			AMOUNT

Balance, September 30, 2001				18,929,000		$	2,000	$	—		$	(4,584,000	)	$	88,642,000		$	84,060,000
Comprehensive income:
	Net income			—			—		—			—			2,865,000			2,865,000
	Foreign currency translation			—			—		—			(245,000	)		—			(245,000	)

		Comprehensive income																2,620,000
Stock repurchases				(74,000	)		—		(8,000	)		—			(1,504,000	)		(1,512,000	)
Stock option exercises				116,000			—		1,572,000			—			—			1,572,000
Tax benefit related to stock option exercises				—			—		326,000			—			—			326,000

Balance, December 30, 2001				18,971,000		$	2,000	$	1,890,000		$	(4,829,000	)	$	90,003,000		$	87,066,000

Balance, September 30, 2002

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