Tigrent Inc. Reports Third Quarter 2009 Results
Revenue for the quarter ended
Deferred revenue decreased by
For the nine month period ended
Deferred revenue decreased by
"In these challenging economic times, we are pleased that course registration remains robust as evidenced by an increase of 4.5% in total number of registrants quarter over quarter," said
"We continue to stay the course on our cost cutting efforts with reductions in staff, facilities consolidation, insurance premium reductions, compensation plan revisions and vendor renegotiations," Peck commented.
Peck continued, "We are confident that our transformation to
About
Non-GAAP Financial Measures - Adjusted EBITDA
As used in our operating data, EBITDA is defined as net income (loss) excluding the impact of asset impairments; special items (including the costs associated with the
We use Adjusted EBITDA as a key measure in evaluating our operations and decisionmaking. We feel it is a useful measure in determining our performance since it takes into account the change in deferred revenue and deferred course expenses in combination with our operating expenses. We reference Adjusted EBITDA frequently, since it provides supplemental information that facilitates internal comparisons to historical operating performance of prior periods and external comparisons to competitors' historical operating performance in our industry. We plan and forecast our business using Adjusted EBITDA, with comparisons of actual to planned and forecasted Adjusted EBITDA and we provide incentives to management based on Adjusted EBITDA goals. In addition, we provide Adjusted EBITDA because we believe investors and security analysts find it to be a useful measure for evaluating our performance.
Many costs to acquire customers have been expended before a customer attends any basic or advanced training. Those costs include media, travel, facilities and instructor fees for the preview workshops and are expensed when incurred. Licensing fees paid to
Adjusted EBITDA has material limitations and should not be considered as an alternative to net income (loss), cash flows provided by operations, investing or financing activities or other financial statement data presented in the Condensed Consolidated Financial Statements as indicators of financial performance or liquidity. Items excluded from Adjusted EBITDA are significant components in understanding our financial performance. Because Adjusted EBITDA is not a financial measurement calculated in accordance with GAAP and is subject to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of performance used by other companies.
The table below is a reconciliation of the Company's net income (loss) to EBITDA and Adjusted EBITDA for the periods set forth below (in millions):
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Net income (loss) $3.9 $(7.1) $(6.7) $(12.9)
Impairment of assets - 2.7 0.4 2.7
Special items - 0.2 0.3 0.4
Litigation settlement 3.9 - 3.9 -
Other income, net (0.1) (0.3) (0.4) (1.2)
Provision for income
taxes 0.1 0.2 0.4 0.7
Gain on sale of assets - - - (1.1)
Stock-based compensation - 0.2 - 0.5
Depreciation and
amortization 0.2 0.3 0.8 1.1
Equity loss from related
parties - 0.2 0.1 0.6
--- --- --- ---
EBITDA 8.0 (3.6) (1.2) (9.2)
Net change in deferred
revenue (16.8) 2.7 (4.7) 17.9
Net change in deferred
course costs 3.6 (1.2) 0.7 (6.5)
--- ---- --- ----
Adjusted EBITDA $(5.2) $(2.1) $(5.2) $2.2
===== ===== ===== ====
Adjusted EBITDA as a
percentage of cash
received from course
and product sales (16.8)% (5.6)% (5.0)% 1.6%
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Special Note Regarding Forward Looking Statements
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include all statements other than those made solely with respect to historical facts. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include those factors which can be found in our Form 10-K for the year ended
TIGRENT INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2009 2008
---- ----
(unaudited)
Assets
Current assets:
Cash and cash equivalents $14,089 $23,594
Restricted cash 12,865 13,492
Deferred course expenses, current portion 21,327 22,070
Income taxes receivable and prepayments 494 -
Other current assets 2,823 2,452
Inventory 506 953
Assets held for sale - 3,748
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Total current assets 52,104 66,309
------ ------
Notes receivable, net of current portion 6,806 9,677
Property, equipment and intangible assets, net 3,534 4,241
Other assets 4,320 1,381
----- -----
Total assets $66,764 $81,608
======= =======
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $3,215 $4,516
Income taxes payable - 799
Deferred revenue, current portion 111,678 116,642
Accrued course expenses 1,167 1,440
Accrued salaries, wages and benefits 755 851
Other accrued expenses 5,172 6,611
Other current liabilities 806 288
--- ---
Total current liabilities 122,793 131,147
------- -------
Long-term debt, net of current portion 4,921 2,913
Other long-term liabilities 349 222
--- ---
Total liabilities 128,063 134,282
------- -------
Commitments and contingencies
Tigrent Inc.'s stockholders' deficit:
Preferred stock - -
Common stock 2,591 2,591
Paid-in capital 2,540 2,507
Cumulative foreign currency translation
adjustment 125 1,236
Accumulated deficit (58,280) (59,008)
------- -------
Total Tigrent Inc.'s stockholders' deficit (53,024) (52,674)
Noncontrolling interest (8,275) -
------ -------
Total stockholders' deficit (61,299) (52,674)
------- -------
Total liabilities and stockholders' deficit $66,764 $81,608
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TIGRENT INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and
Comprehensive Income (Loss)
(Unaudited, in thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $47,820 $34,713 $109,421 $119,922
Direct course expenses 17,630 18,896 50,567 64,522
Advertising and sales
expenses 14,829 11,558 38,245 40,011
General and administrative
expenses 7,536 11,149 23,250 29,280
Litigation settlement
expenses 3,948 - 3,948 -
----- ------ ----- ------
Income (loss) from
operations 3,877 (6,890) (6,589) (13,891)
Other income, net 116 - 310 1,624
--- ------ --- -----
Income (loss) before income
taxes 3,993 (6,890) (6,279) (12,267)
Provision for income taxes (63) (213) (436) (661)
--- ---- ---- ----
Net income (loss) 3,930 (7,103) (6,715) (12,928)
Net income (loss)
attributable to the
noncontrolling interest 817 - (7,443) -
--- ------ ------ ------
Net income (loss)
attributable to Tigrent Inc. $3,113 $(7,103) $728 $(12,928)
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Basic and diluted net income
(loss) per share attributable
to Tigrent Inc. common
stockholders $0.27 $(0.61) $0.06 $(1.10)
===== ====== ===== ======
Basic and diluted weighted
average shares outstanding 11,739 11,739 11,739 11,739
====== ====== ====== ======
Comprehensive income (loss):
Net income (loss) $3,930 $(7,103) $(6,715) $(12,928)
Foreign currency translation
adjustments (455) 925 (1,687) 928
---- --- ------ ---
Comprehensive income (loss) 3,475 (6,178) (8,402) (12,000)
Comprehensive income (loss)
attributable to
noncontrolling interest 565 - (8,019) -
--- --- ------ ---
Comprehensive income (loss)
attributable to Tigrent
Inc. $2,910 $(6,178) $(383) $(12,000)
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TIGRENT INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine months ended
September 30,
-----------------
2009 2008
---- ----
Cash flows from operating activities:
Net loss $(6,715) $(12,928)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 768 1,061
Impairments of assets 350 2,717
Litigation settlement through issuance of
secured long-term debt 2,600 -
Share-based compensation expense 33 498
Gain on sales of assets - (1,080)
Equity loss from related parties 57 600
Changes in operating assets and liabilities:
Restricted cash 627 (2,268)
Deferred course expenses 696 (6,548)
Income taxes receivable and prepayments (494) -
Inventory 447 (284)
Other current assets (518) 2,025
Other assets (127) (38)
Accounts payable (1,301) (2,521)
Income taxes payable (799) 244
Deferred revenue (4,704) 17,930
Accrued course expenses (273) 253
Accrued salaries, wages and benefits (96) (679)
Accrued executive severance - (1,625)
Other accrued expenses (1,441) 29
Other liabilities (148) (91)
---- ---
Net cash used in operating activities (11,038) (2,705)
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Cash flows from investing activities:
Purchases of property and equipment (163) (308)
Proceeds from repayment of notes receivable 145 58
Investments in and advances to related parties (195) -
Proceeds from sales of assets 3,748 3,019
----- -----
Net cash provided by investing activities 3,535 2,769
----- -----
Cash flows from financing activities:
Distributions to noncontrolling interest (256) (1,576)
Proceeds from issuance of unsecured debt - 7
Payments on secured and unsecured debt (59) (110)
--- ----
Net cash used in financing activities (315) (1,679)
---- ------
Effect of foreign currency exchange rates on
cash and cash equivalents (1,687) 928
------ ---
Net decrease in cash and cash equivalents (9,505) (687)
Cash and cash equivalents at beginning of period 23,594 33,012
------ ------
Cash and cash equivalents at end of period $14,089 $32,325
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Supplemental non-cash disclosures:
Accounts receivable converted to a note
receivable $- $335
== ====
Note receivable converted to investment
in real estate (included in Other assets) $2,627 $-
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SOURCE
Investor Relations: Booke and Company, Inc., +1-212-490-9095