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 April 2, 2004
or
| ¨ | 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares of common stock, $.0001 par value, outstanding as of May 3, 2004, is 17,023,761 shares.
Total number of pages 23
1
LEARNING TREE INTERNATIONAL, INC.
FORM 10-Q
April 2, 2004
| Page | ||||
| Part I—Financial Information |
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| Item 1. |
Financial Statements: |
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|
Condensed Consolidated Balance Sheets |
3 | |||
| 4 | ||||
| 5 | ||||
|
Condensed Consolidated Statements of Cash Flows |
6 | |||
| 7 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | ||
| Item 3. |
19 | |||
| Item 4. |
20 | |||
| Part II—Other Information |
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| Item 1. |
21 | |||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
21 | ||
| Item 3. |
21 | |||
| Item 4. |
22 | |||
| Item 5. |
22 | |||
| Item 6. |
22 | |||
| 23 | ||||
2
PART I - FINANCIAL INFORMATION
| Item 1. | FINANCIAL STATEMENTS |
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| April 2, 2004 |
September 30, 2003 |
||||||
| (Unaudited) | |||||||
| ASSETS |
|||||||
| Current assets: |
|||||||
| Cash and cash equivalents |
$ | 81,893,000 | $ | 86,711,000 | |||
| Trade accounts receivable, net |
12,240,000 | 11,779,000 | |||||
| Prepaid marketing expenses |
950,000 | 915,000 | |||||
| Prepaid income taxes |
4,235,000 | 3,974,000 | |||||
| Prepaid expenses and other |
4,673,000 | 5,943,000 | |||||
| Total current assets |
103,991,000 | 109,322,000 | |||||
| Equipment, property and leasehold improvements, net |
22,070,000 | 20,767,000 | |||||
| Long-term interest-bearing investments |
9,091,000 | 8,333,000 | |||||
| Deferred income taxes |
638,000 | 585,000 | |||||
| Other assets |
998,000 | 1,902,000 | |||||
| Total assets |
$ | 136,788,000 | $ | 140,909,000 | |||
| LIABILITIES |
|||||||
| Current liabilities: |
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| Trade accounts payable |
$ | 10,376,000 | $ | 12,275,000 | |||
| Deferred revenue |
48,801,000 | 50,082,000 | |||||
| Accrued liabilities |
5,979,000 | 6,218,000 | |||||
| Income taxes payable |
306,000 | 511,000 | |||||
| Total current liabilities |
65,462,000 | 69,086,000 | |||||
| Deferred income taxes |
575,000 | 575,000 | |||||
| Deferred facilities rent |
2,085,000 | 2,268,000 | |||||
| Total liabilities |
68,122,000 | 71,929,000 | |||||
| Commitments and contingencies |
|||||||
| STOCKHOLDERS’ EQUITY |
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| Common Stock, $.0001 par value, 75,000,000 shares authorized, 17,024,000 and 17,108,000 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 |
32,000 | 9,000 | |||||
| Cumulative foreign currency translation |
535,000 | (473,000 | ) | ||||
| Retained earnings |
68,097,000 | 69,442,000 | |||||
| Total stockholders’ equity |
68,666,000 | 68,980,000 | |||||
| Total liabilities and stockholders’ equity |
$ | 136,788,000 | $ | 140,909,000 | |||
See accompanying notes to condensed consolidated financial statements.
3
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended |
Six Months Ended |
|||||||||||||||
| April 2, 2004 |
March 31, 2003 |
April 2, 2004 |
March 31, 2003 |
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| Revenues |
$ | 35,729,000 | $ | 35,062,000 | $ | 75,596,000 | $ | 76,821,000 | ||||||||
| Cost of revenues |
18,475,000 | 17,452,000 | 36,882,000 | 36,340,000 | ||||||||||||
| Gross profit |
17,254,000 | 17,610,000 | 38,714,000 | 40,481,000 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Course development |
2,078,000 | 2,117,000 | 4,075,000 | 4,192,000 | ||||||||||||
| Sales and marketing |
13,403,000 | 11,069,000 | 23,881,000 | 21,075,000 | ||||||||||||
| General and administrative |
6,046,000 | 6,031,000 | 11,811,000 | 12,227,000 | ||||||||||||
| 21,527,000 | 19,217,000 | 39,767,000 | 37,494,000 | |||||||||||||
| Income (loss) from operations |
(4,273,000 | ) | (1,607,000 | ) | (1,053,000 | ) | 2,987,000 | |||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
— | (1,000 | ) | — | (4,000 | ) | ||||||||||
| Interest income |
337,000 | 509,000 | 698,000 | 1,073,000 | ||||||||||||
| Foreign exchange |
459,000 | 151,000 | 582,000 | 215,000 | ||||||||||||
| Other |
218,000 | 24,000 | 222,000 | 29,000 | ||||||||||||
| 1,014,000 | 683,000 | 1,502,000 | 1,313,000 | |||||||||||||
| Income (loss) before provision for income taxes |
(3,259,000 | ) | (924,000 | ) | 449,000 | 4,300,000 | ||||||||||
| Provision (benefit) for income taxes |
(1,158,000 | ) | (328,000 | ) | 159,000 | 1,527,000 | ||||||||||
| Net income (loss) |
$ | (2,101,000 | ) | $ | (596,000 | ) | $ | 290,000 | $ | 2,773,000 | ||||||
| Earnings (loss) per common share |
$ | (0.12 | ) | $ | (0.03 | ) | $ | 0.02 | $ | 0.16 | ||||||
| Earnings (loss) per common share assuming dilution |
$ | (0.12 | ) | $ | (0.03 | ) | $ | 0.02 | $ | 0.16 | ||||||
| Weighted average number of shares outstanding |
17,064,000 | 17,371,000 | 17,073,000 | 17,560,000 | ||||||||||||
| Diluted shares outstanding |
17,064,000 | 17,371,000 | 17,117,000 | 17,616,000 | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| COMMON STOCK |
ADDITIONAL CAPITAL |
FOREIGN CURRENCY ADJUSTMENT |
RETAINED EARNINGS |
TOTAL EQUITY |
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| SHARES |
AMOUNT |
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| Balance, September 30, 2002 |
18,127,000 | $ | 2,000 | $ | — | $ | (2,887,000 | ) | $ | 79,615,000 | $ | 76,730,000 | ||||||||||
| Comprehensive income: |
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| Net income |
— | — | — | — | 2,773,000 | 2,773,000 | ||||||||||||||||
| Foreign currency translation |
— | — | — | 1,101,000 | — | 1,101,000 | ||||||||||||||||
| Comprehensive income |
3,874,000 | |||||||||||||||||||||
| Stock options issued for services |
— | — | 10,000 | — | — | 10,000 | ||||||||||||||||
| Stock repurchases |
(800,000 | ) | — | (110,000 | ) | — | (11,214,000 | ) | (11,324,000 | ) | ||||||||||||
| Stock option exercises |
23,000 | — | 204,000 | — | — | 204,000 | ||||||||||||||||
| Tax benefit related to stock option exercises |
— | — | 37,000 | — | — | 37,000 | ||||||||||||||||
| Balance, March 31, 2003 |
17,350,000 | $ | 2,000 | $ | 141,000 | $ | (1,786,000 | ) | $ | 71,174,000 | $ | 69,531,000 | ||||||||||
| Balance, September 30, 2003 |
17,108,000 | $ | 2,000 | |||||||||||||||||||