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 July 2, 2004

¨	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		(I.R.S. Employer
incorporation or organization)		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 August 5, 2004, is 16,988,885 shares.

Total number of pages 23

LEARNING TREE INTERNATIONAL, INC.

FORM 10-Q

July 2, 2004

TABLE OF CONTENTS


			Page
Part I— Financial Information

	Item 1.	Financial Statements:

		Condensed Consolidated Balance Sheets July 2, 2004 and September 30, 2003	3

		Condensed Consolidated Statements of Operations Three and Nine Months Ended July 2, 2004 and June 30, 2003	4

		Condensed Consolidated Statements of Stockholders’ Equity Nine Months Ended July 2, 2004 and June 30, 2003	5

		Condensed Consolidated Statements of Cash Flows Nine months Ended July 2, 2004 and June 30, 2003	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19

	Item 4.	Controls and Procedures	20

Part II— Other Information

	Item 1.	Legal Proceedings	21

	Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	21

	Item 3.	Defaults Upon Senior Securities	21

	Item 4.	Submission of Matters to a Vote of Security Holders	21

	Item 5.	Other Information	21

	Item 6.	Exhibits and Reports on Form 8-K	22

Signatures			23

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	July 2, 2004		September 30, 2003
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	81,303,000	$	86,711,000
Trade accounts receivable, net		14,113,000		11,779,000
Prepaid marketing expenses		469,000		915,000
Prepaid income taxes		4,303,000		3,974,000
Prepaid expenses and other		4,380,000		5,943,000

Total current assets		104,568,000		109,322,000

Equipment, property and leasehold improvements, net		21,226,000		20,767,000
Long-term interest-bearing investments		9,091,000		8,333,000
Deferred income taxes		638,000		585,000
Other assets		1,023,000		1,902,000

Total assets	$	136,546,000	$	140,909,000

LIABILITIES
Current liabilities:
Trade accounts payable	$	11,791,000	$	12,275,000
Deferred revenue		47,546,000		50,082,000
Accrued liabilities		6,284,000		6,218,000
Income taxes payable		121,000		511,000

Total current liabilities		65,742,000		69,086,000

Deferred income taxes		575,000		575,000
Deferred facilities rent		1,871,000		2,268,000

Total liabilities		68,188,000		71,929,000

Commitments and contingencies

STOCKHOLDERS’ EQUITY
Common Stock, $.0001 par value, 75,000,000 shares authorized, 16,989,000 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		7,000		9,000
Cumulative foreign currency translation		656,000		(473,000	)
Retained earnings		67,693,000		69,442,000

Total stockholders’ equity		68,358,000		68,980,000

Total liabilities and stockholders’ equity	$	136,546,000	$	140,909,000

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended						Nine Months Ended
	July 2, 2004			June 30, 2003			July 2, 2004			June 30, 2003
Revenues	$	39,139,000		$	39,099,000		$	114,735,000		$	115,920,000
Cost of revenues		18,518,000			18,955,000			55,400,000			55,295,000

Gross profit		20,621,000			20,144,000			59,335,000			60,625,000

Operating expenses:
Course development		2,066,000			1,856,000			6,141,000			6,048,000
Sales and marketing		12,791,000			11,543,000			36,672,000			32,618,000
General and administrative		5,921,000			5,667,000			17,732,000			17,894,000

		20,778,000			19,066,000			60,545,000			56,560,000

Income (loss) from operations		(157,000	)		1,078,000			(1,210,000	)		4,065,000

Other income (expense):
Interest expense		—			(4,000	)		—			(8,000	)
Interest income		322,000			471,000			1,020,000			1,544,000
Foreign exchange		(58,000	)		(21,000	)		524,000			194,000
Other		(4,000	)		29,000			218,000			58,000

		260,000			475,000			1,762,000			1,788,000

Income before provision for income taxes		103,000			1,553,000			552,000			5,853,000
Provision for income taxes		37,000			551,000			196,000			2,078,000

Net income	$	66,000		$	1,002,000		$	356,000		$	3,775,000

Earnings per common share	$	0.00		$	0.06		$	0.02		$	0.22

Earnings per common share assuming dilution	$	0.00		$	0.06		$	0.02		$	0.22

Weighted average number of shares outstanding		17,022,000			17,293,000			17,056,000			17,471,000

Diluted shares outstanding		17,031,000			17,348,000			17,088,000			17,527,000

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	COMMON STOCK				ADDITIONAL PAID-IN CAPITAL			FOREIGN CURRENCY TRANSLATION ADJUSTMENT			RETAINED EARNINGS			TOTAL STOCKHOLDERS’ EQUITY
	SHARES		AMOUNT		ADDITIONAL PAID-IN CAPITAL			FOREIGN CURRENCY TRANSLATION ADJUSTMENT			RETAINED EARNINGS			TOTAL STOCKHOLDERS’ EQUITY
Balance, September 30, 2002	18,127,000		$	2,000	$	—		$	(2,887,000	)	$	79,615,000		$	76,730,000

Comprehensive income:
Net income	—			—		—			—			3,775,000			3,775,000
Foreign currency translation	—			—		—			2,461,000			—			2,461,000

Comprehensive income															6,236,000
Stock options issued for services	—			—		20,000			—			—			20,000
Stock repurchases	(994,000	)		—		(631,000	)		—			(13,508,000	)		(14,139,000	)
Stock option exercises	55,000			—		550,000			—			—			550,000
Tax benefit related to stock option exercises	—			—		61,000			—			—			61,000

Balance, June 30, 2003	17,188,000		$	2,000	$	—		$	(426,000	)	$	69,882,000		$	69,458,000

Balance, September 30, 2003	17,108,000		$	2,000	$</

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