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Part of Its “Back-to-Basics” Plan
SmartPros Ltd. (Nasdaq:SPRO), an accredited professional education and corporate training, today released an update regarding its “Back to Basics” plan.
The plan includes “reducing staffing in certain areas; closing, selling or reducing certain verticals of our business; and re-purposing resources to areas”.
Allen Greene, SmartPros’ Chairman and CEO stated:
“As outlined in our June 16, 2014 press release regarding operational changes, SmartPros has implemented its “Back-to-Basics” plan which includes: reducing staffing in certain areas; closing, selling or reducing certain verticals of our business; and re-purposing resources to areas of our business that we believe will contribute the most towards our profitability and future growth.
Over the past six months we have managed the Company’s operations to improve our profit margins and our overall profitability. In this regard, the following steps have been taken:
– Our wholly-owned subsidiary, Skye Multimedia Ltd., which served as our high-end custom content development channel, sold some of its assets including its 50% interest in iReflect;
– We have discontinued our custom ethics consulting business as of December 31, 2014;
– We have reduced in the latter part of 2014 and plan on reducing in 2015 the number of live events managed by our Executive Enterprise Institute (EEI) division;
– We reduced overhead related to development; and
– We reduced expenses related to certain large customer accounts as of the beginning of this year in relationship to reduced business with those customers.
Although these changes will decrease revenues, we are focusing our attention on products with higher returns including our accounting subscriptions, CPE Administration services and licensing of our software products. We believe these changes will help to generate long term profits for the Company and we expect to see the positive effect of those in 2015.
In addition, we are seeing new opportunities as companies are being forced to move away from common open-source Learning Management Systems (LMS) for compliance and security reasons. Our proprietary LMS is not built on open source code, putting us in a position to meet the needs of companies looking for a compliant solution. As such, we have recently signed several new firms to multi-year contracts for our LMS and are renewing an existing contract for our Audit Management System. These multi-year contracts are typically larger than our average sale in other areas of the company.
In line with what we have previously noted, we have expanded our sales force as well as hired a lead generation firm and are increasing direct marketing activities. As the sales cycle for our products can be long, we expect to see the benefit of these changes take hold as we progress through 2015.
Some of these changes will impact our fourth quarter 2014 numbers due to the write down of goodwill and possibly other charges related to the steps we have taken.”
