Learning Tree International, Inc. (LTRE: OTCQX U.S.) | Learning Tree International Announces Fourth Quarter and Fiscal Year 2016 Results

OTC

Learning Tree International Announces Fourth Quarter and Fiscal Year 2016 Results

Jan 13, 2017

OTC Disclosure News Service

Learning
Tree International, Inc.
(OTCQX: LTRE) announced today its revenues
and results of operations for its fourth quarter and full fiscal year
2016, which ended September 30, 2016.

In its fourth quarter of fiscal year 2016, Learning Tree reported
revenues of $21.7 million, loss from continuing operations before income
taxes of $2.0 million, and a net loss of $2.2 million, or $(0.17) per
share. The Company recorded a restructuring charge of $1.9 million in
the fourth quarter of fiscal year 2016 related to one of its leased
facilities. Excluding the restructuring charge, the loss from continuing
operations before income taxes would have been $0.1 million. These
results compare with revenues of $25.6 million, income from continuing
operations before income taxes of $0.8 million, and net income of $0.7
million, or $0.06 per share, in Learning Tree’s fourth quarter of fiscal
year 2015.

For the full fiscal year 2016, Learning Tree reported revenues of $81.6
million, loss from continuing operations before income taxes of $12.3
million, and a net loss of $12.7 million, or $(0.96) per share. These
results compare with revenues of $94.9 million, loss from continuing
operations before income taxes of $9.3 million, and a net loss of $12.6
million, or $(0.95) per share, for the full fiscal year 2015. The
results for the full fiscal year 2016 include the $1.9 million
restructuring charge described above, while the results for the full
fiscal year 2015 include a $2.8 million loss from discontinued operation
from the sale of our subsidiary in France.

To address the decline in our revenue, we have been executing upon new
strategies to increase the number of attendees in our public courses and
expand our overall customer base. We have also been working to reduce
our operating expenses and have accelerated our previously announced
comprehensive cost reduction program with the goal of
significantly reducing our fiscal year 2017 overall expenses. Our
liquidity and working capital needs have historically been funded
through our cash and cash equivalents. At September 30, 2016, our
capital resources consisted of cash and cash equivalents of $8.5
million. To provide additional resources to improve the Company’s
liquidity, on January 12, 2017, the Company entered into a financing and
security agreement with Action Capital Corporation that provides the
Company with access to borrow through advances of funds up to a maximum
aggregate principal amount of $3.0 million. While we have and continue
to take steps to stabilize revenues and decrease our operating costs and
entered into the financing transaction with Action Capital, unless we
are able to further improve our liquidity in the future, there is
substantial doubt about the Company’s ability to continue as a going
concern. Our registered independent public accounting firm’s report on
our audited financial statements for the year ended September 30, 2016
that are included as part of our annual report on Form 10-K that was
filed with the Securities and Exchange Commission contains an
explanatory paragraph related to the Company’s ability to continue as a
going concern. The Company is continuing to work to further improve its
liquidity position and is evaluating additional sources of capital and
financing. However, there is no assurance that additional capital and/or
financing will be available to the Company, and even if available,
whether it will be on terms acceptable to us or in amounts required.

Conference Call and Webcast

Learning Tree will host an investor conference call to discuss its
results for the fourth quarter and full fiscal year 2016 and future
outlook at 4:30 p.m. ET, January 18, 2017. To participate, call
(888) 419-5570 or +1 (617) 896-9871 (International Callers) and enter
pass code: 187 951 57 at least five minutes before 4:30pm (ET) / 1:30pm
(PT) on Wednesday, January 18, 2017; or, go to Learning Tree’s Investor
website at www.learningtree.com/investor
to gain access and listen to the live webcast. A webcast replay of the
investor conference call will be available for 90 days via the Internet
through the Investor Relations section of Learning Tree’s website at www.learningtree.com/investor.
We have also filed our Annual Report on Form 10-K for our fiscal year
2016 with the Securities and Exchange Commission (“SEC”) which is
available at the SEC’s Internet site (http://www.sec.gov).

About Learning Tree International, Inc.

Established in 1974, Learning
Tree International
 is a leading provider of IT training and
management training to business and government organizations worldwide.
In addition, Learning Tree provides IT Workforce
Optimization Solutions
 – a modern approach that
improves the adoption of skills and accelerates the implementation of
technical and business processes required to improve IT service delivery.

To support both business and government organizations in their workforce
optimization efforts, Learning Tree develops structured learning paths
prior to training, and provides implementation services that extend the
value of training long after a training event has concluded. These
custom services include: needs assessments, skill gaps analyses, blended
learning solutions, and project acceleration/process implementation
workshops.

Over 2.4 million IT professionals have enhanced their knowledge, skills
and abilities from Learning Tree’s hands-on instructor-led training by
accessing a broad, proprietary library of courses on topics including: web
development, cyber security, project management, Agile and best practice
adoption, operating systems, database administration and programming,
networking, cloud computing, big data, software design and development,
business intelligence, activity-based intelligence, leadership,
management and business skills, and more.
 Courses are offered at
Learning Tree Education Centers around the world, on-site at client
facilities, and live, online using AnyWare™ — Learning Tree’s superior,
web-based attendance platform.

To learn more, call 1-888-THE-TREE (843-8733) or visit LearningTree.com.
Connect
with us on FacebookLinkedInTwitterGoogle+ or YouTube

Cautionary Statement Regarding Forward Looking Statements

The statements contained herein that are not historical facts are
forward-looking statements based on management’s current expectations
and beliefs concerning future developments and their potential effects
on Learning Tree. Such statements involve inherent risks and
uncertainties, many of which are difficult to predict and are generally
beyond the control of Learning Tree. There can be no assurance that
future developments affecting Learning Tree will be the same as those
anticipated. Learning Tree cautions readers that a number of important
factors could cause actual results to differ materially from those
expressed in, or implied or projected by, such forward-looking
statements. Investors should not put undue reliance on these
forward-looking statements, since they are based on key assumptions
about future risks and uncertainties. Some of these risks and
uncertainties that could affect Learning Tree and its business include,
but are not limited to the following: our ability to continue as a going
concern; our ability to obtain additional liquidity in amounts and on
terms acceptable to the Company; our ability to reverse our trend of
declining year over year revenues, and maintain liquidity; our ability
to successfully implement our new strategies to increase revenue and to
achieve our cost reduction goals; competition; international operations,
including currency fluctuations; attracting and retaining qualified
personnel; intellectual property, including having to defend potential
infringement claims; implementation of partnerships with third party
providers of courses and or course material; efficient delivery and
scheduling of Learning Tree’s courses; technology development and new
technology introduction; the timely development, introduction, and
customer acceptance of our courses and other products; a majority of our
outstanding common stock is beneficially owned by our chairman and his
spouse; ; risks associated with cyber security; changing economic and
market conditions; and adverse weather conditions, strikes, acts of war
or terrorism and other external events. Learning Tree is not undertaking
any obligation to update forward-looking statements contained herein to
reflect future events, developments or changed circumstances.

In order to help the reader assess the factors and risks in Learning
Tree’s business that could cause actual results to differ materially
from those expressed in the forward looking statements, Learning Tree
discusses in its 2016 Annual Report on Form 10-K (“Form 10-K”) , those
risks in Item 1A, “Risk Factors”. Please read the Form 10-K, including
the Risk Factors included therein, which is filed with the SEC and
available at the SEC’s Internet site (http://www.sec.gov).

 

 

 

 

 

Table 1

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(all amounts in thousands, except per share data)

 

 

Three Months Ended

Fiscal Year Ended

September 30,

October 2,

September 30,

October 2,

2016

2015

2016

2015

(unaudited)

(unaudited)

 

Revenues

$

21,695

$

25,629

$

81,587

$

94,884

Cost of revenues

 

12,418

 

 

13,760

 

50,163

 

 

55,809

 

Gross profit

 

9,277

 

 

11,869

 

31,424

 

 

39,075

 

 

Operating expenses:

Course development

1,138

1,751

5,128

8,146

Sales and marketing

3,747

4,592

17,966

21,591

General and administrative

4,494

4,754

18,902

19,029

Restructuring charge

 

1,940

 

 

 

1,940

 

 

 

Total operating expenses

 

11,319

 

 

11,097

 

43,936

 

 

48,766

 

 

(Loss) income from operations

(2,042

)

772

(12,512

)

(9,691

)

Other income (expense), net

 

53

 

 

4

 

238

 

 

350

 

(Loss) income from continuing operations before income taxes

(1,989

)

776

(12,274

)

(9,341

)

Provision for income tax

 

227

 

 

35

 

422

 

 

467

 

 

(Loss) income from continuing operations

 

(2,216

)

 

741

 

(12,696

)

 

(9,808

)

 

Loss from discontinued operations, net of tax

(264

)

Loss on disposal of discontinued segment

 

 

 

 

 

 

(2,501

)

 

Loss from discontinued operations, net of tax

 

 

 

 

 

 

(2,765

)

 

Net (loss) income

$

(2,216

)

$

741

$

(12,696

)

$

(12,573

)

 

(Loss) income per share basic and diluted:

Continuing operations

$

(0.17

)

$

0.06

$

(0.96

)

$

(0.74

)

Discontinued operations

 

 

 

 

 

 

(0.21

)

Basic and diluted (loss) income per share

$

(0.17

)

$

0.06

$

(0.96

)

$

(0.95

)

 

 

 

Table 2

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(all amounts in thousands)

 

September 30,

October 2,

2016

2015

 

 

Cash and cash equivalents

$

8,540

$

17,936

Trade accounts receivable, net

9,538

10,475

Prepaid expenses and other

 

3,548

 

 

5,018

Total current assets

21,626

33,429

Depreciable assets, net and other

 

9,981

 

 

10,492

Total assets

$

31,607

 

$

43,921

 

Accounts payable and accrued liabilities

$

11,149

$

12,409

Deferred revenues

 

21,017

 

 

22,909

Total current liabilities

32,166

35,318

Other long term liabilities

 

9,230

 

 

5,556

Total liabilities

 

41,396

 

 

40,874

 

Stockholders’ (deficit) equity

 

(9,789

)

 

3,047

Total liabilities and stockholders’ (deficit)equity

$

31,607

 

$

43,921

 

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