SmartPros Reports Third Quarter 2012 Financial Results

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HAWTHORNE, N.Y., Nov. 6, 2012 (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 nine months ended September 30, 2012. SmartPros will not hold a conference call to discuss this earnings period due to current widespread power and phone outages in and around its corporate campus area.

For the three months ended September 30, 2012, and 2011:

  • Net revenues decreased to $3.58 million from $3.61 million
  • Operating loss of $309,000, compared to an operating loss of $194,000
  • EBITDA (earnings before interest, taxes, depreciation and amortization) was ($31,000), compared to $112,000
  • Net loss of $362,000, or $.08 per share, compared to a net loss of $175,000, or $0.04 per share

For the nine months ended September 30, 2012, and 2011:

  • Net revenues decreased to $10.8 million from $11.8 million
  • Operating loss of $1.1 million, compared to an operating loss of $367,000
  • EBITDA was ($254,000), compared to $505,000
  • Net loss of $861,000, or $.18 per share, compared to net loss of $288,000, or $0.06 per share
THREE MONTHS ENDED
SEPTEMBER 30,
NINE MONTHS ENDED
SEPTEMBER 30,
RECONCILIATION OF NET INCOME TO EBITDA 2012 2011 2012 2011
Net (loss) income $ (361,728) $ (174,711) $ (861,123) $ (287,536)
Income tax (benefit) provision 59,592 (19,088) (193,761) (84,088)
Depreciation and amortization 277,498 307,110 821,844 882,620
Interest and dividend income, (net) (6,750) (1,627) (20,792) (6,353)
EBITDA $ (31,388) $ 111,684 $ (253,832) $ 504,643

As of September 30, 2012, the Company had approximately $5.8 million in cash and cash equivalents, $1.5 million in accounts receivable, $5.1 million in deferred revenue, stockholders' equity of $10.9 million, and no debt. The Company's cash position reflects the purchase of treasury shares, as well as the payment of dividends, which together totaled approximately $354,000 over the first nine months of this year.

"We continue to manage expenses across the Company as revenues remain flat in this economy," said Allen Greene, Chairman and CEO of SmartPros. "While our overall selling and G&A expenses remained flat, our cost of revenues was a bit higher than last year due to timing issues with consultative types of projects. Revenue from our core accounting and legal divisions remains steady, and our deferred revenue has grown since last quarter. In addition, over the past quarter we had seen a slight uptick in our live seminar business, which is a positive sign."

"We are gearing up for our fourth quarter, which due to the seasonality of our business, is typically our strongest quarter," said Greene. "Due to the recent storm in the northeast, a number of our live events have been canceled. This will have an effect on fourth quarter revenue. We may be covered by insurance for some of the losses, but it is too early to fully understand the full impact of the storm on our results of operations for the fourth quarter of 2012. However, we will continue to focus our efforts on driving revenues, and to be diligent with expenses to insure we remain on solid footing as the economy evolves."

Greene continued: "The board has declared a $.0125 dividend per common share payable on January 7, 2013, to shareholders of record on December 19, 2012. This marks our 12th consecutive quarterly dividend. Our balance sheet and cash position remain strong. While we hope to continue to make quarterly dividends, we must caution that any future dividend will be affected by our results and by our ongoing requirement for cash to make acquisitions, which continues to be our primary goal. In addition, the board has also renewed our $750,000 stock buyback plan for another year."

In lieu of a conference call, investors and analysts are encouraged to call or email our investor relations team with any questions at (914) 829-4974, ir@smartpros.com.

SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30,
2012
December 31,
2011
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 5,791,670 $ 6,281,725
Accounts receivable, net of allowance for doubtful accounts of approximately $13,000 and $39,000 at September 30, 2012 and December 31, 2011, respectively 1,528,443 1,868,063
Prepaid expenses and other current assets 516,445 334,826
Current income tax benefit 200,000
Total Current Assets 8,036,558 8,484,614
Property and equipment, net 605,482 645,325
Goodwill 3,375,257 3,375,257
Other intangibles, net 3,616,855 3,933,738
Other assets, including restricted cash of $75,000 104,515 92,965
Deferred tax asset 1,290,000 1,290,000
Investment in joint venture, at cost 6,492 2,742
8,998,601 9,340,027
Total Assets $ 17,035,159 $ 17,824,641
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 578,328 $ 712,978
Accrued expenses 320,286 338,713
Dividend payable 58,946 60,749
Deferred revenue 5,099,640 4,606,255
Total Current Liabilities 6,057,200 5,718,695
Other liabilities 65,092 66,504
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, 5,622,433 shares issued as of September 30, 2012 and December 31, 2011 respectively; and 4,715,661 shares and 4,797,231 shares outstanding as of September 30, 2012 and December 31, 2011, respectively 563 562
Additional paid-in capital 17,423,609 17,514,275
Accumulated (deficit) (3,942,801 (3,081,678
Common stock in treasury, at cost – 906,772 and 818,202 shares at September 30, 2012 and December 31, 2011, respectively (2,568,504 (2,393,717
Total Stockholders' Equity 10,912,867 12,039,442
Total Liabilities and Stockholders' Equity $ 17,035,159 $ 17,824,641
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of
Operations (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2012 2011 2012 2011
Net revenues $ 3,578,399 $ 3,616,116 $ 10,829,467 $ 11,790,735
Cost of revenues 1,595,813 1,474,094 4,889,031 4,931,799
Gross profit 1,982,586 2,142,022 5,940,436 6,858,936
Operating Expenses:
Selling, general and administrative 2,013,599 2,028,763 6,188,018 6,343,543
Depreciation and amortization 277,498 307,110 821,844 882,620
2,291,097 2,335,873 7,009,862 7,226,163
Operating loss (308,511) (193,851) (1,069,426) (367,227)
Other Income (Expense):
Interest income (net) 6,750 1,627 20,792 6,353
Equity loss from joint venture (375) (1,575) (6,250) (10,750)
6,375 52 14,542 (4,397)
Loss income before income tax (302,136) (193,799) (1,054,884) (371,624)
(Provision) benefit from income taxes (59,592) 19,088 193,761 84,088
Net loss $ (361,728) $ (174,711) $ (861,123) $ (287,536)
Net loss per common share:
Basic net loss per common share $ (0.08) $ (0.04) $ (0.18) $ (0.06)
Diluted net loss per common share $ (0.08) $ (0.04) $ (0.18) $ (0.06)
Weighted Average Number of Shares Outstanding:
Basic 4,715,585 4,904,044 4,759,877 4,900,360
Diluted 4,715,585 4,904,044 4,759,877 4,900,360

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 online, on-demand, Webinar, CD-ROM, and live seminars and events. Our subscription libraries feature over a 1,000+ course titles and thousands-of- hours of accredited education. SmartPros' proprietary eCampus™ 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 900,000 monthly visits, serving a user base of more than one million profiled members. Visit: www.smartpros.com

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

Source:SmartPros Ltd.