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SmartPros Releases Year-End 2012 Financial Results



SmartPros Releases Year-End 2012 Financial Results

                      Company Increases Dividend by 20%

                  Annual Meeting to be Held on June 20, 2013

HAWTHORNE, N.Y., March 7, 2013 (GLOBE NEWSWIRE) -- SmartPros Ltd.
(Nasdaq:SPRO), a leader in the field of accredited professional education and
corporate training, today reported results for the fiscal year ended December
31, 2012.

For the year ended December 31, 2012, compared to 2011:

  * Net revenue of $15.89 million, compared to $16.99 million
  * Operating loss of $1.18 million, compared to operating income of $198,000
  * Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
    (EBITDA) of $500,000, compared to $1.37 million
  * Net loss of $1.90 million, or $0.40 per share, compared to a net income of
    $154,000, or $0.03 per share

RECONCILIATION OF NET (LOSS) INCOME DECEMBER 31,
TO ADJUSTED EBITDA                  2012           2011
                                                    
Net (loss) income                    $ (1,895,465)  $ 154,127
Provision for income taxes           735,379        44,614
Depreciation and amortization        1,118,157      1,178,538
Interest and dividend income         (27,023)       (12,022)
Impairment of goodwill               568,000        -- 
                                                    
ADJUSTED EBITDA                     $499,048       $1,365,257

As of December 31, 2012, the Company had approximately $5.4 million in cash,
cash equivalents and certificates of deposit, $5.0 million in deferred
revenue, stockholders' equity of $9.8 million, and no debt.

"Our operating results for the year were adversely affected by a charge of
$568,000 due to the impairment of goodwill related to our Skye Multimedia
subsidiary," said Allen Greene, Chairman and CEO of SmartPros. "Despite our
decline in revenues over last year, SmartPros was able to maintain a positive
EBITDA of $500,000 after adjusting for the impairment loss. In addition, our
net earnings were negatively affected by a non-cash charge that reduced our
deferred tax asset by $690,000. Exclusive of the non-cash impairment loss and
the deferred tax charge the adjusted loss would have been $0.13 per share."

Greene continued: "We had a positive fourth quarter and remain focused on both
building revenues and keeping costs in line through this continuing stagnant
economy. For the upcoming year we see upside potential in a new application we
are launching in the financial services area that adds breadth and depth to
our compliance and securities offerings. We have also begun to see positive
results through newly developed reseller programs. We will continue to pursue
accretive acquisitions, drive top-line revenue opportunities and balance
expenses with a focused eye on profitability and growth."

"In addition, I am pleased to announce that, based on our cash position and
EBITDA results for 2012, the Board of Directors has increased the quarterly
dividend 20 percent to $.015 per share payable on April 5, 2013, to
shareholders of record on March 22, 2013. 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 remains our primary goal."

Further, the Board has set April 24, 2013, as the record date for its next
Annual Meeting of Stockholders, which will be held at Company headquarters at
12 Skyline Drive, Hawthorne, NY, 10532, on June 20, 2013, at 10:00 a.m,
Eastern Daylight Time.

SmartPros also announces that it will no longer host regular earnings
conference calls but does encourage shareholders and other interested parties
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

Consolidated Balance Sheets
December 31,                                         2012         2011
Assets                                               Unaudited     
Current Assets:                                                    
Cash and cash equivalents                            $ 4,918,543  $ 6,281,725
Certificates of deposit                              500,000      —
Accounts receivable, net of allowance for doubtful
accounts of approximately $20,000 and $39,000 at     2,612,709    1,868,063
December 31, 2012 and 2011, respectively
Prepaid expenses and other current assets            331,493      334,826
Total Current Assets                                 8,362,745    8,484,614
                                                                   
Property and Equipment, net                          547,448      645,325
Goodwill                                             2,807,257    3,375,257
Other Intangibles, net                               3,530,744    3,933,738
Other Assets, including restricted cash of $75,000   104,515      92,965
at December 31, 2012 and 2011, respectively
Deferred Tax Asset                                   600,000      1,290,000
Investment in Joint Venture                          3,245        2,742
Total Assets                                         $ 15,955,954 $ 17,824,641
                                                                   
Liabilities and Stockholders' Equity                               
Current Liabilities:                                               
Accounts payable                                     $ 706,948    $ 712,978
Accrued expenses                                     272,921      338,713
Deferred revenue                                     5,006,496    4,606,255
Dividend payable                                     58,936       60,749
Total Current Liabilities                            6,045,301    5,718,695
Long-Term Liabilities:                                             
Other liabilities                                    63,598       66,504
Total Long-Term Liabilities                          63,598       66,504
Total Liabilities                                    6,108,899    5,785,199
Commitments and Contingencies                                      
Stockholders' Equity:                                              
Preferred stock, $.001 par value; 1,000,000 shares   —            —
authorized, no shares issued and outstanding
                                                                   
Common stock, $.0001 par value; 30,000,000 shares
authorized, 5,622,433 and 5,615,433 shares issued as
of December 31, 2012 and 2011, respectively, and     563          562
4,714,914 and 4,797,231 shares outstanding as of
December 31, 2012 and 2011, respectively
Common stock in treasury, at cost - 907,519 and
818,202 shares as of December 31, 2012 and 2011,     (2,569,625)  (2,393,717)
respectively
Additional paid-in capital                           17,393,260   17,514,275
Accumulated deficit                                  (4,977,143)  (3,081,678)
Total Stockholders' Equity                           9,847,055    12,039,442
Total Liabilities and Stockholders' Equity           $ 15,955,954 $ 17,824,641

 
 
Consolidated Statements of Operations
Years Ended December 31,                          2012           2011
                                                  Unaudited       
Net Revenues                                       $ 15,883,212   $ 16,988,691
Cost of Revenues                                  7,028,032      7,048,316
Gross Profit                                      8,855,180      9,940,375
Operating Expenses:                                               
Selling, general and administrative               8,346,635      8,563,993
Depreciation and amortization                     1,118,157      1,178,538
Impairment of goodwill                            568,000        —
Total Operating Expenses                          10,032,792     9,742,531
Operating (Loss) Income                           (1,177,612)    197,844
Other Income (Expense):                                           
Interest and dividend income, net                 27,023         12,022
Loss from joint venture                           (9,497)        (11,125)
Total Other Income                                17,526         897
(Loss) Income before Provision for Income Taxes   (1,160,086)    198,741
Provision for Income Taxes                        (735,379)      (44,614)
Net (Loss) Income                                 $ (1,895,465)   $ 154,127
Net (loss) income per Common Share:                               
Basic net (loss) income per common share          $ (0.40)        $ 0.03
Diluted net (loss) income per common share        $ (0.40)        $ 0.03
Weighted Average Number of Common Shares                          
Outstanding:
Basic                                             4,748,764      4,888,977
Diluted                                           4,748,764      4,888,977

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
2,300+ 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

The SmartPros logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=2586

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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