Whitney Information Network, Inc. Reports Second Quarter 2009 Results
CAPE CORAL, Fla.,
Revenue for the quarter ended
Deferred revenue grew by
For the six-month period ended
Deferred revenue grew by
"Decreased sales in second quarter 2009 were significantly affected by the
suspension of proprietary brands," said
"Our geographic expansion into the
Peck commented, "We continue to cut costs in relation to current business conditions through select staff rightsizing moves and a restructuring of the commission structure for our independent contractors and telemarketing staff. Like many companies in today's tough economic climate, we are holding the line on staffing and facilities expenses. Additionally, we are working hard to reduce administrative costs and fees."
About
Non-GAAP Financial Measures - Adjusted EBITDA
As used in our operating data, EBITDA is defined as net income (loss)
excluding the impact of special items (including the costs associated with the
SEC and the DOJ investigations and the related class action and derivative
lawsuits); interest income; interest expense; other income (expense), net;
income tax (provision) benefit; stock option compensation expense;
depreciation and amortization expense; and equity income (loss) from related
parties. We define "Adjusted EBITDA" as EBITDA adjusted for the net change in
deferred revenue less the net change in deferred course expenses. Adjusted
EBITDA is not a financial performance measurement according to accounting
principles generally accepted in the
We use Adjusted EBITDA as a key measure in evaluating our operations and decision-making. 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 loss to EBITDA and Adjusted EBITDA for the periods set forth below (in millions):
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----
Net loss $(7.4) $(1.9) $(10.6) $(5.8)
Impairment of assets 0.4 - 0.4 -
Special items 0.2 - 0.3 0.2
Other income, net - (0.6) (0.3) (0.9)
Provision for income taxes 0.3 0.2 0.4 0.4
Gain on sale of assets - - - (1.1)
Stock-based compensation - 0.2 - 0.3
Depreciation and
amortization expense 0.3 0.4 0.5 0.8
Equity loss from
related parties - 0.2 - 0.4
- --- - ---
EBITDA (6.2) (1.5) (9.3) (5.7)
Net change in deferred
revenue 6.2 0.9 12.1 15.2
Net change in deferred
course costs (1.4) (1.0) (2.9) (5.3)
---- ---- ---- ----
Adjusted EBITDA $(1.4) $(1.6) $(0.1) $4.2
===== ===== ===== ====
Adjusted EBITDA as a
percentage of cash
received from course
and product sales (4.0)% (3.7)% (0.1)% 4.2%
==== ==== ==== ===
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
WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2009 2008
---- ----
(unaudited)
Assets
Current assets:
Cash and cash equivalents $23,700 $23,594
Restricted cash 12,752 13,492
Deferred course expenses, current portion 24,953 22,070
Other current assets 1,357 2,452
Inventories 763 953
Assets held for sale - 3,748
- -----
Total current assets 63,525 66,309
------ ------
Notes receivable, net of current portion 9,368 9,677
Property, equipment and intangible assets, net 3,686 4,241
Other assets 1,572 1,381
----- -----
Total assets $78,151 $81,608
======= =======
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $3,014 $4,516
Income taxes payable 615 799
Deferred revenue, current portion 128,710 116,642
Accrued course expenses 1,285 1,440
Accrued salaries, wages and benefits 1,036 851
Other accrued expenses 4,967 6,611
Other current liabilities 290 288
--- ---
Total current liabilities 139,917 131,147
------- -------
Long-term debt, net of current portion 2,867 2,913
Other long-term liabilities 154 222
--- ---
Total liabilities 142,938 134,282
------- -------
Commitments and contingencies
Whitney Information Network, Inc.'s stockholders'
deficit:
Preferred stock - -
Common stock 2,591 2,591
Paid-in capital 2,527 2,507
Cumulative foreign currency translation
adjustment 328 1,236
Accumulated deficit (61,393) (59,008)
------- -------
Total Whitney Information Network, Inc.'s
stockholders' deficit (55,947) (52,674)
Noncontrolling interest (8,840) -
------ -
Total stockholders' deficit (64,787) (52,674)
------- -------
Total liabilities and stockholders' deficit $78,151 $81,608
======= =======
WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited, in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $29,139 $42,605 $61,601 $85,209
Direct course
expenses 15,792 23,497 32,937 45,626
Advertising and
sales expenses 12,040 12,300 23,416 28,453
General and
administrative
expenses 8,506 8,856 15,714 18,131
----- ----- ------ ------
Loss from
operations (7,199) (2,048) (10,466) (7,001)
Other income, net 97 380 194 1,624
-- --- --- -----
Loss before income taxes (7,102) (1,668) (10,272) (5,377)
Provision for
income taxes (280) (223) (373) (448)
---- ---- ---- ----
Net loss (7,382) (1,891) (10,645) (5,825)
Net loss attributable
to the noncontrolling
interest (4,122) - (8,260) -
------ - ------ -
Net loss
attributable to Whitney
Information Network, Inc. $(3,260) $(1,891) $(2,385) $(5,825)
======= ======= ======= =======
Basic and diluted net loss
per share attributable to
Whitney Information
Network, Inc. common
stockholders $(0.28) $(0.16) $(0.20) $(0.50)
====== ====== ====== ======
Basic and diluted weighted
average shares outstanding 11,739 11,739 11,739 11,739
====== ====== ====== ======
Comprehensive loss:
Net loss $(7,382) $(1,891) $(10,645) $(5,825)
Foreign currency
translation
adjustments (1,493) (76) (1,232) 3
------ --- ------ -
Comprehensive loss (8,875) (1,967) (11,877) (5,822)
Comprehensive loss
attributable to
noncontrolling interest (4,522) - (8,584) -
------ - ------ -
Comprehensive loss
attributable to Whitney
Information Network, Inc. $(4,353) $(1,967) $(3,293) $(5,822)
======= ======= ======= =======
WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six months ended
June 30,
----------------
2009 2008
---- ----
Cash flows from operating activities:
Net loss $(10,645) $(5,825)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 530 811
Impairment of assets 350 -
Stock-based compensation expense 20 332
Gain on sale of assets - (1,080)
Equity loss from related parties 32 400
Changes in operating assets and liabilities:
Restricted cash 740 (1,713)
Deferred course expenses (2,887) (5,302)
Other current assets 1,052 1,006
Inventories 190 (490)
Other assets (73) (56)
Accounts payable (1,502) (1,920)
Income taxes payable (184) 117
Deferred revenue 12,097 15,236
Accrued course expenses (155) 403
Accrued salaries, wages and benefits 185 (1,138)
Other accrued expenses (1,646) 9
Other liabilities (96) (1,194)
--- ------
Net cash used in operations (1,992) (404)
------ ----
Cash flows from investing activities:
Purchase of property and equipment (76) (62)
Proceeds from notes receivable 105 43
Investments and advances to related parties (146) -
Proceeds from the sale of assets 3,748 3,040
----- -----
Net cash provided by investing activities 3,631 3,021
----- -----
Cash flows from financing activities:
Distribution to noncontrolling interest (256) (1,576)
Proceeds from issuance of long-term debt - 7
Principal payments on long-term debt (45) (99)
--- ---
Net cash used in financing activities (301) (1,668)
---- ------
Effect of foreign currency translation (1,232) 3
------ -
Net increase in cash and cash equivalents 106 952
Cash and cash equivalents, at beginning of
period 23,594 33,012
------ ------
Cash and cash equivalents, at end of period $23,700 $33,964
======= =======
Supplemental non-cash disclosures:
Accounts receivable converted to a note
receivable $- $335
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SOURCE
CONTACT:
Booke and Company, Inc.
+1-212-490-9095