HAWTHORNE, N.Y., Aug. 7, 2014 (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, 2014.

Financial results for the three months ended June 30, 2014, compared to 2013

  • Net revenues of $4.0 million, compared to $4.5 million,
  • Operating loss of $238,000 compared to operating income of $107,000
  • Net loss of $234,000 or $.05 per diluted share, compared to net income of $68,000, or $.01 per diluted share

Financial results for the six months ended June 30, 2014, compared to 2013

  • Net revenues of $7.0 million, compared to $7.8 million
  • Operating loss of $874,000 compared to an operating loss of $471,000
  • Net loss of $618,000, or $.13 per diluted share, compared to a net loss of $288,000, or $.06 per diluted share
     
 SIX MONTHS ENDEDTHREE MONTHS ENDED
RECONCILIATION OF NET (LOSS) INCOME TO EBITDAJune 30,June 30,
 2014201320142013
         
Net (loss) income  $ (617,555)  $ (288,174)  $ (233,954) $68,308
         
Income tax (benefit) provision (245,831) (176,972) 388 41,625
Depreciation and amortization 522,752 544,288 265,992 275,775
Interest and dividend income, (net) (11,909) (11,478) (5.336) (4,983)
         
EBITDA $ (352,543)$67,664 $27,450 $380,725

As of June 30, 2014, the Company had approximately $4.4 million in cash and cash equivalents, $1.9 million in accounts receivable, $4.4 million in deferred revenue, stockholders' equity of $9.0 million, and no debt.

"We are extremely disappointed with the results for the quarter and the year so far, and as previously announced, have instituted a 'Back-to-Basics' plan," said Allen Greene, Chairman and CEO of SmartPros. "Hopefully with the economy turning, and upon the full execution of our plan, SmartPros can start to grow both our revenue and bottom line. As noted in our June 16, 2014 Statement on Operational Changes, our 'Back-to-Basics' program focuses our attention on the areas of our business with the best ROI, and includes reducing, discontinuing or selling certain under-achieving businesses or assets. This will result in a reduction in personnel, both outsourced and internal. We intend to use some of these savings to increase sales and marketing efforts for both our technology products and our core business of providing high quality continuing professional education."

Greene continued: "As outlined in our most recent 10Q filing, we anticipate our annualized cash savings from net personnel reductions will be substantial and have a positive effect on our net income. As a large portion of these personnel costs were for capitalized software development we estimate that exclusive of possible reductions in revenues and related costs our operating costs will be reduced by approximately $750,000 per annum. We anticipate cash savings from personnel and out-sourced labor for the remainder of 2014 to be approximately $500,000 of which approximately $300,000 should have a positive effect on our net income. Although subsequent quarters should begin to reflect the effect of these savings, the full impact will not be realized until the 2015 fiscal year. We must caution that these estimates can be greatly affected by many factors as our 'Back-to-Basics' plan is implemented." 

In addition, SmartPros' Board of Directors declared the Company's 19th consecutive quarterly dividend. The $.015 per share dividend is payable on October 7, 2014, to shareholders of record as of September 19, 2014. 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,December 31,
 20142013
 (Unaudited)(Audited)
ASSETS    
Current Assets:    
Cash and cash equivalents  $ 4,391,241  $ 5,303,657
Accounts receivable, net of allowance for doubtful accounts of approximately $20,000 at June 30, 2014 and December 31, 2013, respectively 1,924,693 2,430,495
Prepaid expenses and other current assets 337,107 340,463
 Deferred income tax - current 250,000 —
Total Current Assets 6,903,041 8,074,615
Property and equipment, net 519,029 566,475
Goodwill 2,807,257 2,807,257
Other intangibles, net 3,676,310 3,516,411
Other assets, including restricted cash of $75,000 104,165 104,515
Deferred tax asset 600,000 600,000
Investment in joint venture 1,447 2,268
  7,708,208 7,596,926
Total Assets  $ 14,611,249  $ 15,671,541
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Accounts payable  $ 911,803  $ 1,203,222
Accrued expenses 200,239 234,863
Dividend payable 70,267 70,289
Deferred revenue 4,393,671 4,395,166
Total Current Liabilities 5,575,980 5,903,540
Other liabilities 68,242 70,378
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, 5,665,433 shares issued as of June 30, 2014 and December 31, 2013, respectively; and 4,684,441 shares outstanding as of June 30, 2014 and December 31, 2013, respectively 567 567
Additional paid-in capital 17,103,967 17,217,008
Accumulated deficit (5,451,775) (4,834,220)
Common stock in treasury, at cost – 980,992 shares at June 30, 2014 and December 31, 2013 respectively (2,685,732) (2,685,732)
Total Stockholders' Equity 8,967,027 9,697,623
Total Liabilities and Stockholders' Equity  $ 14,611,249  $ 15,671,541
 
SMARTPROS LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of
Operations (Unaudited)
 Three Months EndedSix Months Ended
 June 30,June 30,
 2014201320142013
Net revenues  $ 3,988,360  $ 4,531,688  $ 6,976,363  $ 7,750,355
Cost of revenues 1,955,906 2,059,453 3,501,574 3,486,907
Gross profit 2,032,454 2,472,235 3,474,789 4,263,448
Operating Expenses:        
Selling, general and administrative 2,004,558 2,089,528 3,826,511 4,190,555
Depreciation and amortization 265,992 275,775 522,752 544,288
  2,270,550 2,365,303 4,349,263 4,734,843
Operating (loss) income (238,096) 106,932 (874,474) (471,395)
Other Income (Expense):        
Interest income (net) 5,336 4,983 11,909 11,478
Equity loss from joint venture (446) (1,982) (821) (5,229)
  4,890 3,001 11,088 6,249
(Loss) income before income taxes (233,206) 109,933 (863,386) (465,146)
(Provision) benefit for income taxes (388) (41,625) 245,831 176,972
Net (loss) income $ (233,594) $ 68,308 $ (617,555) $ (288,174)
Net (loss) income per common share:        
Basic net (loss) income per common share $ (0.05) $ 0.01 $ (0.13) $ (0.06)
Diluted net (loss) income per common share $ (0.05) $ 0.01 $ (0.13) $ (0.06)
Weighted Average Number of Shares Outstanding:        
Basic 4,684,441 4,680,941 4,684,441 4,701,245
Diluted 4,684,441 4,683,785 4,684,441 4,701,245

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

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