Learning Tree International, Inc. (NASDAQ:LTREE) announced today
its revenues and results of operations for its fourth quarter and
fiscal year ended September 30, 2005. The results for the fiscal
year include the impact of the previously announced restatement of
Learning Tree's consolidated financial statements for fiscal years
ended September 30, 2001, September 30, 2002, September 30, 2003
and October 1, 2004, and the consolidated quarterly periods within
the fiscal year ended October 1, 2004 and the first three quarters
in the fiscal year ended September 30, 2005. Revenues for the
quarter ended September 30, 2005 were $36.5 million, a 2% decline
from the same quarter of the prior year. The Company reported a
loss from operations for the quarter of $0.5 million compared with
income from operations of $0.5 million (restated) for the same
quarter of the prior year. Net income for the quarter was breakeven
compared to a net loss of $1.0 million (restated) for the same
quarter of the prior year. Earnings per share for the fourth
quarter were breakeven compared with a loss per diluted share of
$0.06 (restated) for the same quarter of the prior year. Revenues
for Learning Tree's fiscal year ended September 30, 2005 were
$151.6 million compared with $152.1 million for the fiscal year
ended October 1, 2004. Loss from operations for the fiscal year
ended September 30, 2005 was $1.1 million compared with a loss from
operations of $1.6 million (restated) for the prior year. Net loss
for fiscal 2005 was $0.7 million compared to a restated net loss
for fiscal 2004 of $0.5 million. Loss per share -- basic for the
fiscal year ended September 30, 2005 was $0.04, compared to a loss
per share -- basic of $0.03 for the prior year. The accompanying
Table 1 presents Learning Tree's results of operations for the
fourth quarter and the fiscal year ended September 30, 2005. As
previously announced, the fiscal year 2005 provision for income
taxes included a $1.1 million tax expense resulting from the
Company's inability to amend its fiscal year 2001 federal income
tax return for an understated income tax deduction after the
statute of limitations for that return expired in June 2005. This
expense caused fiscal year 2005 earnings per share to decrease by
$0.06 per share. The Company also noted that it spent $1.7 million
during fiscal year 2005 on external costs associated with the first
year of its Sarbanes-Oxley compliance program, and expects to spend
substantially less in future years. As noted above, the results for
periods other than the fourth quarter of fiscal year 2005 reflect
the previously announced restatement, which related principally to:
(a) Learning Tree's accounting for leases and leasehold
improvements, primarily the recording of asset retirement
obligations for those leases where Learning Tree has a contractual
commitment to restore a leased facility to a specified condition;
(b) the accounting for income taxes; (c) the quarterly recording
and adjustment of certain expense items within different quarters
than originally reported in fiscal years 2004 and 2005; and (d)
recording certain other smaller adjustments to properly state
previously presented financial statements from fiscal year 2001
through the present. The impact of the restatement on the affected
line items in Learning Tree's consolidated statements of operations
for certain periods is set forth in the accompanying Table 2.
Learning Tree International is a leading worldwide provider of
vendor-independent education and training to IT professionals and
managers in business and government organizations. Learning Tree
develops, markets and delivers a broad, proprietary library of
instructor-led courses focused on Web development, operating
systems, programming languages, databases, computer networks,
computer and network security, object-oriented technology, applied
management, project management and key business skills. Learning
Tree also tests and certifies IT and business professionals, and
Learning Tree courses are recommended for college credit by the
American Council on Education. In addition, Learning Tree is on the
National Association of State Boards of Accountancy National
Registry of CPE sponsors and is a Registered Education Provider of
the Project Management Institute (PMI). For more information about
Learning Tree products and services, call 1-800-THE-TREE
(1-800-843-8733), or visit the Learning Tree Web site at
www.learningtree.com. Except for historical information contained
herein, the matters addressed in this press release are
forward-looking statements. Please do not put undue reliance on
these forward-looking statements, since they are based on key
assumptions about future risks and uncertainties. Although Learning
Tree believes that its assumptions are reasonable, inevitably some
will prove to be incorrect. As a result, Learning Tree's actual
future results can be expected to differ from those in the
discussion that follows, and those differences may be material.
Learning Tree is not undertaking any obligation to update
forward-looking statements. In order to help the reader assess the
major risks in Learning Tree's business, Learning Tree has
identified many, but not all, of these risks in Exhibit 99.1, "Risk
Factors" to Learning Tree's Annual Report on Form 10-K ("Exhibit
99.1"). Please read that exhibit carefully. Some of the factors
discussed in Exhibit 99.1 that could affect Learning Tree include:
risks associated with the timely development, introduction, and
customer acceptance of Learning Tree's courses; competition;
international operations, including currency fluctuations; changing
economic and market conditions; technology development and new
technology introduction; efficient delivery and scheduling of
Learning Tree's courses; adverse weather conditions, strikes, acts
of war or terrorism and other external events; and attracting and
retaining qualified personnel. - tables follow - (Table 1--Normal
quarterly/annual table) (Table 2--Restatement adjustments) Webcast
An investor conference call to discuss fourth quarter and year end
results is scheduled at 8:00 am EST January 13, 2006. Interested
parties are invited to listen to the conference call by accessing
the webcast live on Learning Tree's website www.learningtree.com.
The webcast will also be available at www.learningtree.com for
replay. -0- *T Table 1 LEARNING TREE INTERNATIONAL, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts) For the Three Months For the Fiscal Year
Ended Ended ------------------------- ------------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1, 2005 2004 2005 2004
------------ ----------- ---------- ------------ (Restated)
(Restated) Revenues $ 36,457 $ 37,323 $ 151,558 $ 152,058 Cost of
revenues 18,401 18,228 76,167 73,755 ------------ -----------
---------- ------------ Gross profit 18,056 19,095 75,391 78,303
------------ ----------- ---------- ------------ Operating
expenses: Course development 2,109 1,819 7,952 7,960 Sales and
marketing 9,730 10,534 42,387 47,206 General and administrative
6,712 6,255 26,111 24,757 ------------ ----------- ----------
------------ Total operating expenses 18,551 18,608 76,450 79,923
------------ ----------- ---------- ------------ (Loss) income from
operations (495) 487 (1,059) (1,620) Other income, net 591 287
2,263 2,049 ------------ ----------- ---------- ------------ Income
before provision for income taxes 96 774 1,204 429 Provision for
income taxes 70 1,748 1,912 969 ------------ ----------- ----------
------------ Net income (loss) $ 26 $ (974) $ (708) $ (540)
============ =========== ========== ============ Earnings (loss)
per common share $ 0.00 $ (0.06) $ (0.04) $ (0.03) ============
=========== ========== ============ Earnings (loss) per common
share assuming dilution $ 0.00 $ (0.06) $ (0.04) $ (0.03)
============ =========== ========== ============ LEARNING TREE
INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) September 30, October 1, 2005 2004
---------------- --------------- (Restated) Cash and cash
equivalents $ 56,736 $ 70,913 Available for sale securities 18,555
13,000 Accounts receivable, net 15,568 12,902 Prepaid expenses and
other 8,078 7,588 -------------- -------------- Total current
assets 98,937 104,403 Equipment (net), long-term investments and
other 33,041 33,641 -------------- -------------- Total assets $
131,978 $ 138,044 ============== ============== Accounts payable
and accrued liabilities $ 11,913 $ 12,570 Deferred revenue 44,956
46,847 Other current liabilities 7,151 5,729 --------------
-------------- Total current liabilities 64,020 65,146 Other
liabilities 6,949 6,723 -------------- -------------- Total
liabilities 70,969 71,869 -------------- --------------
Stockholders' equity 61,009 66,175 -------------- --------------
Total liabilities and stockholders' equity $ 131,978 $ 138,044
============== ============== Table 2 Learning Tree International,
Inc. and Subsidiaries Effects of Restatement on Certain Key Line
Items in Consolidated Statements of Operations (dollars in
millions) As As Adjustment originally restated reported -----------
----------- ------------ Year ended September 30, 2001: Revenues
227.2 227.2 0.0 Income before provision for income taxes 38.7 38.8
0.0 Provision for income taxes 13.8 13.1 (0.7) Net income (loss)
25.0 25.7 (0.7) Year ended September 30, 2002: Revenues 174.2 173.5
(0.7) Income before provision for income taxes 12.2 11.9 (0.3)
Provision for income taxes 4.3 3.5 (0.9) Net income (loss) 7.9 8.4
0.6 Year ended September 30, 2003: Revenues 151.9 152.6 0.7 Income
before provision for income taxes 7.1 6.8 (0.4) Provision for
income taxes 2.0 2.5 0.6 Net income (loss) 5.2 4.2 (0.9) Year ended
October 1, 2004: Revenues 152.1 152.1 0.0 Income before provision
for income taxes 0.9 0.4 (0.4) Provision for income taxes 0.3 1.0
0.7 Net income (loss) 0.6 (0.5) (1.1) Nine months ended July 1,
2005: Revenues 115.1 115.1 0.0 Income before provision for income
taxes 1.7 1.1 (0.6) Provision for income taxes 0.6 1.9 1.3 Net
income (loss) 1.2 (0.7) (1.9) *T
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