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SmartPros Reports Second Quarter 2015 Financial Results

Best Operating Results from Continuing Operations in More Than Five Years

Company Announces 23rd Consecutive Quarterly Dividend

HAWTHORNE, N.Y., Aug. 06, 2015 (GLOBE NEWSWIRE) -- SmartPros Ltd. (Nasdaq:SPRO), a leader in the field of accredited professional education and corporate training, today announced its financial results for the three and six months ended June 30, 2015.


Financial results from continuing operations for the three months ended June 30, 2015, compared to 2014

  • Net revenues of $3.65 million, compared to net revenues of $3.69 million,
  • Operating Income $474,000 compared to an operating loss of $176,000
  • Gross profit margin of 61.6% compared to gross profit margin of 53.6%
  • Net income of $448,000 or $.10 per diluted share, compared to net loss of $234,000, or $.(05) per diluted share

Financial results from continuing operations for the six months ended June 30, 2015, compared to 2014

  • Net revenues of $6.36 million, compared to net revenues of $6.35 million
  • Operating income of $154,000 compared to an operating loss of $715,055
  • Gross profit margin of 59.5% compared to gross profit margin of 53.6%
  • Net income of $121,000, or $.03 per diluted share, compared to a net loss of $618,000, or $(.13) per diluted share

SIX MONTHS ENDEDTHREE MONTHS ENDED
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA:JUNE 30,JUNE 30,
2015 2014 2015 2014
Net income (loss)$ 120,919 (617,555)$ 448,464 $ (233,594)
Income tax 7,987 (132,456) 4,225 77,388
Depreciation and amortization 531,231 515,695 264,082 262,425
Interest and dividend income, (net) (8,224) (9,097) (4,110) (4,124)
EBITDA before adjustment for discontinued operations 651,913 (243,413) 712,661 102,095
Adjustment to EBITDA for discontinued operations 33,483 44,053 25,343 (15,275)
Adjusted EBITDA from continuing operations$ 685,396 (199,360)$ 738,004 $ 86,820


As of June 30, 2015 the Company had approximately $4.1 million in cash and cash equivalents, $1.5 million in accounts receivable, $3.8 million in deferred revenue, stockholders' equity of $7.6 million, and no debt.

“Excluding discontinued operations, our results over our first six-months of this year are the best we’ve posted in more than 5 years,” said Allen Greene, Chairman and CEO of SmartPros. “Because of the seasonal aspects of our business, it has not been uncommon for us to show a loss at six-months. However, our recent six month numbers show a return to profitability, producing a $738,000 turnaround from last year’s results. In addition, our operating income for the six months ended June 30, 2015 was up $869,000 over the previous period. Although our three months revenues were relatively constant we had substantial increases in both operating income and net income as compared to the previous year.”

Greene continued: “We attribute this performance to a number of different factors, including an increase in earned revenues from the sale of our technology products as well as the ongoing effects of the "Back to Basics" program that we implemented in June 2014. Specifically, we are starting to build a good pipeline for our Audit Management System (AMS) and we have created some new products related to the AMS. In addition, we eliminated a few of our poorly performing products and unprofitable customers and sold some of the operating assets of our former Skye Multimedia, Ltd. subsidiary back in December 2014. Overall, for the six month period, our cost of revenues was down 13% and our selling, general and administrative costs were down 14% compared to last year. In addition, our gross profit margin was up 11%, from 53.6% to 59.5%, and close to our target goal of 60%. The net result of all these efforts has taken us back to a profitable bottom line.”

SmartPros’ Board of Directors declared the Company’s 23rd consecutive quarterly dividend. The $.015 per common share dividend is payable on October 7, 2015, to shareholders of record as of September 18, 2015. The Company cautions that any future dividend will be affected by ongoing results.

Shareholders and other interested parties are encouraged to contact the Company with any specific questions relating to the Company’s 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

SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

June 30,
2015
December 31,
2014
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and cash equivalents$4,075,478 $4,810,982
Accounts receivable, net of allowance for doubtful accounts of approximately $20,000 and $20,000 at June 30, 2015 and December 31, 2014, respectively1,538,532 1,668,942
Prepaid expenses and other current assets363,979 406,173
Current assets of discontinued operations38,086 414,296
Total Current Assets6,016,075 7,300,393
Property and equipment, net458,158 427,241
Goodwill2,456,474 2,456,474
Other intangibles, net3,102,994 3,295,958
Other assets, including restricted cash of $75,00094,479 94,479
Deferred tax asset200,000 200,000
Non-current assets of discontinued operations 4,673
6,312,105 6,478,825
Total Assets$12,328,180 $13,779,218
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$574,473 $875,019
Accrued expenses201,732 227,021
Dividend payable68,869 69,157
Deferred revenue3,777,137 4,752,356
Current liabilities of discontinued operations153 120,066
Total Current Liabilities4,622,364 6,043,619
Other liabilities62,975 66,106
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $.001 par value, authorized 1,000,000 shares, 0 shares issued and outstanding
Common stock, $.0001 par value, authorized 30,000,000 shares, 5,675,433 shares issued as of June 30, 2015 and 5,665,433 issued as of December 31, 2014, respectively; and 4,591,241 and 4,598,325 shares outstanding as of June 30, 2015 and December 31, 2014, respectively568 567
Additional paid-in capital16,867,078 16,985,235
Accumulated deficit(6,348,565) (6,469,484)
Common stock in treasury, at cost – 1,084,192 and 1,067,108 shares at June 30, 2015 and December 31, 2014, respectively(2,876,240) (2,846,825)
Total Stockholders’ Equity7,642,841 7,669,493
Total Liabilities and Stockholders’ Equity$12,328,180 $13,779,218


SMARTPROS LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of
Operations (Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Net revenues$3,650,572 $3,685,301 $6,359,198 $6,349,314
Cost of revenues1,402,594 1,708,601 2,573,935 2,947,520
Gross profit2,247,978 1,976,700 3,785,263 3,401,794
Operating Expenses:
Selling, general and administrative1,509,974 1,889,880 3,099,867 3,601,154
Depreciation and amortization264,082 262,425 531,231 515,695
1,774,056 2,152,305 3,631,098 4,116,849
Operating income (loss)473,922 (175,605) 154,165 (715,055)
Other Income:
Interest and dividend income (net)4,110 4,124 8,224 9,097
4,110 4,124 8,224 9,097
Income (loss) from continuing operations478,032 (171,481) 162,389 (705,958)
(Provision for) benefit from income taxes(4,225) (77,388) (7,987) 132,456
Income (loss) from continuing operations473,807 (248,869) 154,402 (573,502)
(Loss) income from discontinued operations, net of taxes(25,343) 15,275 (33,483) (44,053)
Net income (loss)$448,464 $(233,594) $120,919 $(617,555)
Net income (loss) per common share, basic and diluted:
Net income (loss) from continuing operations$0.10 $(0.05) $0.03 $(0.12)
Net income (loss) from discontinued operations, net of taxes$ $ $ $(0.01)
Net income (loss)$0.10 $(0.05) $0.03 $(0.13)
Weighted Average Number of Shares Outstanding:
Basic4,594,042 4,684,441 4,596,056 4,684,441
Diluted4,608,926 4,684,441 4,606,982 4,684,441


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.



For More Information, Please Contact: SmartPros Ltd. - Shane Gillispie, VP Marketing Services & eCommerce 914-829-4974 - shanegillispie@smartpros.com

Source:SmartPros Ltd.