SmartPros Releases Year-End 2014 Financial Results
March 05 2015 - 4:01PM
Company Declares 21st Consecutive
Dividend
Annual Meeting to be Held June 25,
2015
SmartPros Ltd. (Nasdaq:SPRO), a leader in the field of accredited
professional education and corporate training, today reported
results for the fiscal year ended December 31, 2014.
For the year ended December 31, 2014, compared to
2013:
- Net revenue of $13.49 million, compared to $15.26 million from
continuing operations
- Operating loss of $478,266, compared to an operating income of
$33,972 from continuing operations
- Net loss of $1.64 million, or $.35 per share, compared to a net
income of $143,000, or $.03 per share
- Adjusted Earnings Before Interest, Taxes, Depreciation,
Amortization (EBITDA), from continuing operations, of $623,432
compared to $1.15 million
|
YEAR
ENDED |
RECONCILIATION OF NET (LOSS) INCOME
TO ADJUSTED EBITDA: |
DECEMBER |
|
2014 |
2013 |
|
|
|
Net (loss) income |
$ (1,635,264) |
$142,923 |
|
|
|
Income tax(1) |
403,543 |
24,268 |
Depreciation and amortization |
1,101,698 |
1,115,403 |
Interest and dividend income, (net) |
(16,810) |
(27,453) |
|
|
|
EBITDA before adjustment for discontinued
operations |
(146,833) |
1,255,141 |
|
|
|
Adjustment to EBITDA for discontinued
operations |
770,265 |
(105,766) |
|
|
|
Adjusted EBITDA from continuing
operations |
$623,432 |
$1,149,375 |
|
|
|
(1) Includes $400,000
non-cash charge for an increase in valuation allowance on deferred
taxes. |
As of December 31, 2014, the Company had approximately $4.81
million in cash and cash equivalents, $4.75 million in deferred
revenue, stockholders' equity of $7.67 million, and no debt.
"In June 2014 we announced that we were performing an in-depth
review of our operational activities, in what we described as our
'Back-to-Basics' program," said Allen Greene, Chairman and CEO of
SmartPros. "Our focus is to make certain our business activities
leverage our core competencies, without pursuing projects or
initiatives where our development costs and risks are high, and our
gross profit margins are low. We have reduced or eliminated some
business activities that were not contributing to our profitability
and have refocused our resources on opportunities with more
potential. We noted that this may result in a decline in our
revenues in the short-term, but should also improve our operating
profits and margins. We started to see results over the last three
months of the year as both our cash position and our deferred
revenue increased."
Greene Continued: "As such, 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
also discontinued our custom ethics consulting business as of
December 31, 2014; We reduced the number of live events
managed by our Executive Enterprise Institute (EEI) division,
concentrating on those conferences that generate the larger
audiences; We completed several major software development projects
eliminating expenses related to that development, most of which
were capitalized and thus will not have an effect on profit and
loss but will have a significant positive effect on cash flow; and
We reduced overhead relating to products, services and customer
accounts that did not meet our criteria for profitability."
Greene added: "Although these changes have decreased revenues,
we have also decreased expenses related to those revenues. As such,
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."
Further, Greene said: "Our board of directors has declared
a dividend of $.015 per share payable on April 7, 2015, to
shareholders of record March 20, 2015. In addition, the board has
scheduled the next Annual Meeting of Stockholders on June 25, 2015,
at 10 a.m. Eastern Daylight Time at its headquarters at 12 Skyline
Drive, Hawthorne, NY, 10532. Shareholders of record as of April 27,
2015 will be entitled to vote."
SmartPros does not host regular earnings conference calls, but
does encourage shareholders and other interested parties to contact
the Company with any specific questions relating to its public
filings. Investor related questions can be addressed by
calling 914-829-4974, or by visiting SmartPros' Investor Relations
site at http://ir.smartpros.com
Consolidated
Balance Sheets |
December 31, |
2014 |
2013 |
Assets |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 4,810,982 |
$ 5,303,657 |
Accounts receivable, net of
allowance for doubtful accounts of approximately $20,000 at
December 31, 2014 and 2013, respectively |
1,668,942 |
2,430,495 |
Prepaid expenses and other
current assets |
406,173 |
340,463 |
Current assets of discontinued
operations |
414,296 |
— |
Total Current Assets |
7,300,393 |
8,074,615 |
|
|
|
Property and Equipment, net |
427,241 |
566,475 |
Goodwill |
2,456,474 |
2,807,257 |
Other Intangibles, net |
3,295,958 |
3,516,411 |
Other Assets, including restricted cash of
$75,000 at December 31, 2014 and 2013, respectively |
94,479 |
104,515 |
Deferred Tax Asset |
200,000 |
600,000 |
Investment in Joint Venture |
— |
2,268 |
Non-current assets of discontinued
operations |
4,673 |
— |
Total Assets |
$ 13,779,218 |
$ 15,671,541 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 875,019 |
$ 1,203,222 |
Accrued expenses |
227,021 |
234,863 |
Deferred revenue |
4,752,356 |
4,395,166 |
Dividend payable |
69,157 |
70,289 |
Current liabilities of
discontinued operations |
120,066 |
— |
Total Current Liabilities |
6,043,619 |
5,903,540 |
Long-Term Liabilities: |
|
|
Other liabilities |
66,106 |
70,378 |
Total Long-Term Liabilities |
66,106 |
70,378 |
Total Liabilities |
6,109,725 |
5,973,918 |
Commitments and Contingencies |
|
|
Stockholders' Equity: |
|
|
Preferred stock, $.001 par
value; 1,000,000 shares authorized, no shares issued and
outstanding |
— |
— |
Common stock, $.0001 par value;
30,000,000 shares authorized, 5,665,433 shares issued as of
December 31, 2014 and 2013, respectively, and 4,598,325 and
4,684,441 shares outstanding as of December 31, 2014 and 2013,
respectively |
567 |
567 |
Additional paid-in capital |
16,985,235 |
17,217,008 |
Accumulated deficit |
(6,469,484) |
(4,834,220) |
Common stock in treasury, at
cost - 1,067,108 and 980,992 shares as of December 31, 2014 and
2013, respectively |
(2,846,825) |
(2,685,732) |
Total Stockholders' Equity |
7,669,493 |
9,697,623 |
Total Liabilities and Stockholders'
Equity |
$ 13,779,218 |
$ 15,671,541 |
|
|
|
|
|
|
Consolidated
Statements of Operations |
Years Ended December
31, |
2014 |
2013 |
Net Revenues |
$ 13,487,917 |
$ 15,263,083 |
Cost of Revenues |
6,105,117 |
6,531,922 |
Gross Profit |
7,382,800 |
8,731,161 |
Operating Expenses: |
|
|
Selling, general and
administrative |
6,759,368 |
7,581,786 |
Depreciation and
amortization |
1,101,698 |
1,115,403 |
Total Operating Expenses |
7,861,066 |
8,697,189 |
Operating (Loss) Income |
(478,266) |
33,972 |
Other Income (Expense): |
|
|
Interest and dividend income,
net |
16,810 |
27,453 |
Total Other Income |
16,810 |
27,453 |
(Loss) Income From Continuing Operations
Before Income Taxes |
(461,456) |
61,425 |
Provision for Income Taxes |
(403,543) |
(24,268) |
(Loss) Income From Continuing Operations |
(864,999) |
37,157 |
(Loss) Income From Discontinued
Operations |
(770,265) |
105,766 |
Net (Loss) Income |
$ (1,635,264) |
$ 142,923 |
|
|
|
Net income (loss) per Common
Share: |
|
|
Basic (loss) income per common
share from continuing operations |
$ (0.19) |
$ 0.01 |
Basic (loss) income per common
share from discontinued operations |
$ (0.16) |
$ 0.02 |
Basic net (loss) income |
$ (0.35) |
$ 0.03 |
|
|
|
Diluted (loss) per common share
from continuing operations |
$ (0.19) |
$ 0.01 |
Diluted (loss) per common share
from discontinued operations |
$ (0.16) |
$ 0.02 |
Diluted net (loss) income |
$ (0.35) |
$ 0.03 |
|
|
|
Weighted Average Number of Common Shares
Outstanding: |
|
|
Basic |
4,672,828 |
4,680,232 |
Diluted |
4,672,828 |
4,686,074 |
|
|
|
About SmartPros
Founded in 1981, SmartPros Ltd. is an industry leader in the
field of accredited professional education and corporate training.
Its products and services are primarily focused in the accredited
professional areas of corporate accounting, financial management,
public accounting, governmental and not-for-profit accounting,
financial services, banking, engineering, legal, ethics and
compliance, and information technology. SmartPros is a leading
provider of professional education products to Fortune 500
companies, as well as the major firms and associations in each of
its professional markets. SmartPros provides education and content
publishing and development services in a variety of media including
Web, CD-ROM, video and live seminars and events. Our subscription
libraries feature hundreds of course titles and 2,800+ hours of
accredited education. SmartPros' proprietary Professional Education
Center (PEC) Learning Management System (LMS) offers enterprise
distribution and administration of education content and
information. In addition, SmartPros produces a popular news and
information portal for accounting and finance professionals serving
more than one million ads and distributing more than 200,000
subscriber email newsletters each month. SmartPros' network of Web
sites averages more than 1 million monthly visits, serving a user
base of more than 1.5 million profiled members. Visit:
www.smartpros.com
Safe Harbor Statement
Statements in this press release that are not statements of
historical or current fact constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements involve risks and uncertainties,
including activities, events or developments, that the Company
expects, believes or anticipates will or may occur in the future.
In addition to statements that explicitly describe these risks and
uncertainties, readers are urged to consider statements that
contain terms such as "believes," "belief," "expects," "expect,"
"intends," "intend," "anticipate," "anticipates," "plans," "plan,"
to be uncertain and forward-looking. The forward-looking statements
contained herein are also subject generally to other risks and
uncertainties that are described from time to time in the Company's
filings with Securities and Exchange Commission. Specifically,
results reported within this press release should not be considered
an indication of future performance.
CONTACT: For More Information, Please Contact:
SmartPros Ltd. -
Shane Gillispie, VP Marketing Services & eCommerce
914-829-4974 - shanegillispie@smartpros.com
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