UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal quarter ended January 31, 2003 |
| ¨ | 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 000-21535
ProsoftTraining
(Exact name of Registrant as specified in its charter)
| NEVADA |
87-0448639 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
410 N. 44th Street, Suite 600, Phoenix, AZ 85008
(Address of principal executive offices) (Zip Code)
(602) 794-4199
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.001 Per Share
(Title of class)
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 twelve (12) months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. YES (X) NO ( )
The number of shares of the registrants’ common stock, $.001 par value, outstanding as of March 14, 2003 was 24,221,326 shares.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
PROSOFTTRAINING AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended January 31, |
Six Months Ended January 31, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Content |
$ |
2,182 |
|
$ |
3,260 |
|
$ |
5,212 |
|
$ |
6,842 |
| ||||
| Certification |
|
647 |
|
|
985 |
|
|
1,273 |
|
|
1,844 |
| ||||
| Services |
|
11 |
|
|
168 |
|
|
75 |
|
|
330 |
| ||||
| Total revenues |
|
2,840 |
|
|
4,413 |
|
|
6,560 |
|
|
9,016 |
| ||||
| Costs and expenses: |
||||||||||||||||
| Costs of revenues |
|
1,256 |
|
|
2,172 |
|
|
2,836 |
|
|
4,481 |
| ||||
| Content development |
|
420 |
|
|
568 |
|
|
957 |
|
|
1,065 |
| ||||
| Sales and marketing |
|
877 |
|
|
1,570 |
|
|
2,190 |
|
|
3,138 |
| ||||
| General and administrative |
|
1,376 |
|
|
1,369 |
|
|
2,764 |
|
|
3,113 |
| ||||
| Depreciation and amortization |
|
279 |
|
|
878 |
|
|
502 |
|
|
1,769 |
| ||||
| Restructuring charge |
|
— |
|
|
— |
|
|
— |
|
|
762 |
| ||||
| Total costs and expenses |
|
4,208 |
|
|
6,557 |
|
|
9,249 |
|
|
14,328 |
| ||||
| Loss from operations |
|
(1,368 |
) |
|
(2,144 |
) |
|
(2,689 |
) |
|
(5,312 |
) | ||||
| Interest income |
|
1 |
|
|
21 |
|
|
5 |
|
|
42 |
| ||||
| Interest expense |
|
(73 |
) |
|
(72 |
) |
|
(142 |
) |
|
(89 |
) | ||||
| Net loss |
$ |
(1,440 |
) |
$ |
(2,195 |
) |
$ |
(2,826 |
) |
$ |
(5,359 |
) | ||||
| Net loss per share: basic and diluted |
$ |
(0.06 |
) |
$ |
(0.09 |
) |
$ |
(0.12 |
) |
$ |
(0.22 |
) | ||||
| Weighted average shares outstanding: |
||||||||||||||||
| basic and diluted |
|
24,201 |
|
|
23,991 |
|
|
24,199 |
|
|
23,858 |
| ||||
See accompanying notes.
3
PROSOFTTRAINING AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
| January 31, 2003 |
July 31, 2002 |
|||||||
| ASSETS |
(Unaudited) |
|||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
1,576 |
|
$ |
3,526 |
| ||
| Accounts receivable, less allowances of $557 and $478 |
|
1,289 |
|
|
1,995 |
| ||
| Prepaid expenses and other current assets |
|
297 |
|
|
379 |
| ||
| Total current assets |
|
3,162 |
|
|
5,900 |
| ||
| Deferred income taxes |
|
— |
|
|||||
| Property and equipment, net |
|
657 |
|
|
1,166 |
| ||
| Goodwill, net of accumulated amortization of $5,506 |
|
6,745 |
|
|
6,745 |
| ||
| Courseware and licenses, net of accumulated amortization of $2,371 and $2,243 |
|
926 |
|
|
1,296 |
| ||
| Total assets |
$ |
11,490 |
|
$ |
15,107 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable, trade |
$ |
1,748 |
|
$ |
2,239 |
| ||
| Accrued expenses |
|
1,943 |
|
|
2,266 |
| ||
| Current portion of capital lease obligations |
|
53 |
|
|
59 |
| ||
| Other |
|
23 |
|
|
151 |
| ||
| Total current liabilities |
|
3,767 |
|
|
4,715 |
| ||
| Long-term debt |
|
2,830 |
|
|
2,698 |
| ||
| Obligations under capital leases, net of current portion |
|
98 |
|
|
118 |
| ||
| Total liabilities |
|
6,695 |
|
|
7,531 |
| ||
| Stockholders’ equity: |
||||||||
| Common shares, par value $.001 per share; authorized shares: |
||||||||
| 75,000,000; issued: 24,221,326 shares and 24,209,326 shares |
|
24 |
|
|
24 |
| ||
| Additional paid-in capital |
|
104,422 |
|
|
104,421 |
| ||
| Accumulated deficit |
|
(99,679 |
) |
|
(96,853 |
) | ||
| Accumulated other comprehensive income |
|
103 |
|
|
59 |
| ||
| Less common stock in treasury, at cost: 11,912 shares |
|
(75 |
) |
|
(75 |
) | ||
| Total stockholders’ equity |
|
4,795 |
|
|
7,576 |
| ||
| Total liabilities and stockholders’ equity |
$ |
11,490 |
|
$ |
15,107 |
| ||
See accompanying notes
4
PROSOFTTRAINING AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six Months Ended January 31, |
||||||||
| 2003 |
2002 |
|||||||
| Operating activities: |
||||||||
| Net loss |
$ |
(2,826 |
) |
$ |
(5,359 |
) | ||
| Adjustments to reconcile net loss to cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
717 |
|
|
2,303 |
| ||
| Non-cash interest |
|
132 |
|
|
73 |
| ||
| Loss on the disposal of fixed assets |
|
112 |
|
|
14 |
|||