UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: April 2, 2005
| ¨ | 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 1-10031
NOBEL LEARNING COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 22-2465204 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
| 1615 West Chester Pike, Suite 200, West Chester, PA | 19382-6223 | |
| (Address of principal executive offices) | (Zip Code) |
(484) 947-2000
(Registrants telephone number, including area code)
Indicate by check whether the registrant (1) has filed all report(s) 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 ¨
Indicated by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2b of the Exchange Act) Yes ¨ No x
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of the issuers common stock outstanding at May 9, 2005 was 7,486,807.
Nobel Learning Communities, Inc.
i
CAUTIONARY STATEMENTS ABOUT FORWARD-LOOKING INFORMATION
Statements included or incorporated herein which are not historical facts are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When the Company uses words such as believes, expects, anticipates, plans, estimates, projects, may, intends, seeks or similar expressions, the Company is making forward-looking statements, but these terms are not the exclusive means of identifying forward-looking statements.
Forward-looking statements reflect managements current views with respect to future events and financial performance, and are based on currently available competitive, financial and economic data and managements assumptions regarding future events. While management believes that its assumptions are reasonable, forward-looking statements are subject to various known and unknown risks and uncertainties, and actual results may differ materially from those expressed or implied herein. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that certain factors, among others, which could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein are discussed in greater detail under Managements Discussion and Analysis. In addition, the Companys results may be affected by general factors, such as economic conditions, political developments, interest and inflation rates, accounting standards, taxes, and laws and regulations affecting it in markets where it competes.
Readers are cautioned that the forward-looking statements reflect managements analysis only as of the date hereof, and the Company assumes no obligation to update or revise these statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, whether as a result of new information, future developments or otherwise.
1
Nobel Learning Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
| (Unaudited) April 2, 2005 |
July 3, 2004 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ | 5,594 | $ | 2,716 | ||||
| Accounts receivable, less allowance for doubtful accounts of $849 at April 2, 2005 and $803 at July 3, 2004 |
3,099 | 3,249 | ||||||
| Deferred tax asset |
3,056 | 3,552 | ||||||
| Prepaid assets |
4,741 | 4,843 | ||||||
| Property and equipment held for sale |
| 4,238 | ||||||
| Total Current Assets |
16,490 | 18,598 | ||||||
| Property and equipment, net |
25,874 | 24,924 | ||||||
| Goodwill and intangible assets, net |
36,993 | 37,167 | ||||||
| Deferred tax asset |
1,975 | 1,863 | ||||||
| Note receivable and other assets |
1,291 | 3,313 | ||||||
| Total Assets |
$ | 82,623 | $ | 85,865 | ||||
| LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
| Current portion of long-term debt |
$ | 2,277 | $ | 2,405 | ||||
| Cash overdraft liability |
| 319 | ||||||
| Accounts payable and other current liabilities |
12,659 | 15,092 | ||||||
| Deferred revenue |
12,265 | 9,470 | ||||||
| Total Current Liabilities |
27,201 | 27,286 | ||||||
| Long-term debt |
9,046 | 12,931 | ||||||
| Subordinated debt |
10,000 | 10,000 | ||||||
| Other long term liabilities |
822 | 1,373 | ||||||
| Total Liabilities |
47,069 | 51,590 | ||||||
| Commitments and Contingencies |
||||||||
| Stockholders Equity: |
||||||||
| Preferred stock, $0.001 par value; 10,000,000 shares authorized, issued 8,160,187 at April 2, 2005 and 7,969,749 at July 3, 2004, outstanding 3,175,777 at April 2, 2005 and 6,015,807 at July 3, 2004. $11,897 and $14,030 aggregate liquidation preference at April 2, 2005 and July 3, 2004, respectively. |
3 | 6 | ||||||
| Common stock, $0.001 par value; 20,000,000 shares authorized, issued 7,486,807 at April 2, 2005 and 6,842,707 at July 3, 2004, outstanding 7,450,097 at April 2, 2005 and 6,612,197 at July 3, 2004 |
7 | 7 | ||||||
| Treasury stock, cost; shares held 36,710 at April 2, 2005 and 230,510 at July 3, 2004 |
(375 | ) | (1,375 | ) | ||||
| Additional paid-in capital |
51,302 | 51,216 | ||||||
| Accumulated deficit |
(15,315 | ) | (15,375 | ) | ||||
| Accumulated other comprehensive loss |
(68 | ) | (204 | ) | ||||
| Total Stockholders Equity |
35,554 | 34,275 | ||||||
| Total Liabilities and Stockholders Equity |
$ | 82,623 | $ | 85,865 | ||||
The accompanying notes and the notes in the financial statements included in the Registrants Annual Report on Form 10-K
are an integral part of these financial statements.
2
Nobel Learning Communities, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands except per share data)
(Unaudited)
| Thirteen Weeks Ended April 2, 2005 |
Three Months Ended March 31, 2004 |
Thirty-nine Weeks Ended April 2, 2005 |
Nine Months Ended March 31, 2004 |
|||||||||||||
| Revenue |
$ | 43,156 | $ | 40,804 | $ | 120,721 | $ | 116,595 | ||||||||
| Personnel costs |
20,384 | 19,569 | 57,560 | 56,311 | ||||||||||||
| School operating costs |
5,793 | 5,559 | 17,673 | 16,972 | ||||||||||||
| Rent and other |
10,641 | 9,969 | 31,061 | 29,227 | ||||||||||||
| Cost of services |
36,818 | 35,097 | 106,294 | 102,510 | ||||||||||||
| Gross profit |
6,338 | 5,707 | 14,427 | 14,085 | ||||||||||||
| General and administrative expenses |
4,557 | 2,919 | 11,020 | 10,807 | ||||||||||||
| Operating income |
1,781 | 2,788 | 3,407 | 3,278 | ||||||||||||
| Interest expense |
671 | 966 | 2,079 | 2,886 | ||||||||||||
| Other income |
(39 | ) | (6 | ) | (131 | ) | (60 | ) | ||||||||
| Income from continuing operations before income taxes |
1,149 | 1,828 | 1,459 | 452 | ||||||||||||
| Income tax expense |
436 | 680 | 554 | 131 | ||||||||||||
| Income from continuing operations |
713 | 1,148 | 905 | 321 | ||||||||||||
| Loss from discontinued operations, net of income tax effect |
(117 | ) | (279 | ) | (351 | ) | (1,360 | ) | ||||||||
| Net income (loss) |
596 | 869 | 554 | (1,039 | ) | |||||||||||
| Preferred stock dividends |
146 | 132 | 494 | 382 | ||||||||||||
| Net income (loss) available to common stockholders |
$ | 450 | $ | 737 | $ | 60 | $ | (1,421 | ) | |||||||
| Basic income (loss) per share: |
||||||||||||||||
| Income (loss) from continuing operations |
$ | 0.08 | $ | 0.15 | $ | 0.06 | $ | (0.01 | ) | |||||||
| Discontinued operations |
(0.02 | ) | (0.04 | ) | (0.05 | ) | (0.21 | ) | ||||||||
| Income (loss) per share |
$ | 0.06 | $ | 0.11 | $ | 0.01 | $ | (0.22 | ) | |||||||
| Diluted income (loss) per share: |
||||||||||||||||
| Income (loss) from continuing operations |
$ | 0.07 | $ | 0.12 | $ | 0.09 | $ | (0.01 | ) | |||||||
| Discontinued operations |
(0.01 | ) | (0.03 | ) | (0.03 | ) | (0.21 | ) | ||||||||
| Income (loss) per share |
$ | 0.06 | $ | 0.09 | $ | 0.06 | $ | (0.22 | ) | |||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
7,450 | 6,578 | 6,936 | 6,476 | ||||||||||||
| Diluted |
9,748 | 9,342 | 9,656 | 6,476 | ||||||||||||
The accompanying notes and the notes in the financial statements included in the Registrants Annual Report on Form 10-K
are an integral part of these financial statements.
3
Nobel Learning Communities, Inc. and Subsidiaries
Consolidated Statements of Stockholders Equity and Comprehensive Loss
For the Thirty-nine Weeks Ended April 2, 2005
(Dollars in thousands except share data)
| Preferred Stock |
Common Stock |
Treasury Stock |
Additional Capital |
Accumulated Deficit |
Accumulated Loss |
Total |
|||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||||||
| July 3, 2004 |
6,015,807 | $ | 6 | 6,842,707 | $ | 7 | $ | (1,375 | ) | $ | 51,216 | $ | (15,375 | ) | $ | (204 | ) | $ | 34,275 | ||||||||||||||
| Comprehensive income: |
|||||||||||||||||||||||||||||||||
| Net income |
| | | | | | 554 | | 554 | ||||||||||||||||||||||||
| Swap contract, net of tax |
| | | | | | | 136 | 136 | ||||||||||||||||||||||||