Learning Tree Reports Softening Revenue Growth
LOS ANGELES — March 20, 2001–Learning Tree International, Inc (NASDAQ: LTRE – news) announced today that during the 5-week period from February 2 through March 9, 2001, net enrollments for future courses at its education centers averaged 11% more than enrollments during the comparable 5-week period last year. During the same period, orders for its courses at customer sites grew by 7%. These recent growth rates are lower than was expected at January 31, 2001 at which time the Company’s January revenues plus revenue backlog for February and March was 22% greater than the comparable figure at the end of January 2000.
Additionally, the effect of foreign exchange rates has reduced revenue per attendee for the second quarter of fiscal 2001 by approximately 4% compared to the same period of the prior year. Furthermore, the second quarter of the prior fiscal year included revenues from the Company’s CBT courses, which it no longer sells.
As a result of this combination of factors, the Company now expects that its revenues for its second quarter ending March 31, 2001 will grow by approximately 7-11% over the same quarter of the prioryear to the range of $57 – $59 million. This compares to $53.2 million in revenues in the same quarter of the prior year, and to the average analyst projection of approximately $62 million for the current quarter.
This expected reduction in the rate of revenue growth will reduce the Company’s margins and operating income in the current quarter, as the Company had planned its expenditures based on a higher rate of growth. As a result, the Company expects that its net earnings for the quarter will be between $0.23 and $0.27 per share, compared to $0.37 per share in the prior year’s second fiscal quarter.
Although predicting the Company’s revenue growth in future quarters remains difficult in the current economic environment, the Company believes that it is prudent to assume that its growth rate is more likely to be consistent with its current 7-11% growth rate than with the Company’s historical growth rate of approximately 22%. Accordingly, the Company has begun a process of reducing the planned growth of its expenditures in future quarters. Any savings from such efforts are likely to have an effect on the Company’s operating income beginning in the fourth quarter of the Company’s fiscal year.
Learning Tree will broadcast a conference call live over the Internet beginning at 2:30 pm PST (5:30 pm EST) on Tuesday, March 20, 2001. To listen to the call over the Internet, please go to Learning Tree’s web site at http://www.learningtree.com and click on the Investor Relations Tab.
On March 21, 2001 at 8:00am MST (10:00am EST), Eric Garen, Learning Tree’s President, will be making a presentation on the Company at the Credit Suisse First Boston Global Services Growth Conference in Phoenix, Arizona. Interested investors may listen to a live webcast of the presentation by clicking on http://www.csfb.com/conferences/global_services/schedule_wednesday.html at the start time, and selecting the Mesa Room and either RealPlayer or Media Player.
Learning Tree International is a leading worldwide provider of education and training to information technology (“IT”) professionals in business and government organizations. The Company develops, markets and delivers a broad, proprietary library of instructor-led courses focused on client/server systems, intranet/Internet technologies, computer networks, operating systems, programming languages, databases, object-oriented technology and IT management. The Company also tests and certifies IT professionals, and the American Council on Education recommends its courses for college credit. For more information about Learning Tree products and services, call 1-800-THE-TREE, or visit us on the World Wide Web at: < a href="http://www.learningtree.com" target="blank">http://www.learningtree.com.
The actual results for the Company’s current quarter ended March 31, 2001 will be available in early May. The estimates contained in this release were prepared without the benefit of the operating results for March or the normal quarterly review of financial and operating results that could materially affect the estimates provided above. Accordingly, the actual results for the quarter could vary from the estimates in this release.
Except for historical information contained herein, the matters addressed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, the Company’s dependence on the timely development, introduction and customer acceptance of courses and products; risks in technology development and introduction; risks associated with the introduction of distance learning both by the Company and its competitors; the impact of competition and pricing pressures; the Company’s ability to attract and retain key management and other personnel; risks associated with international operations, including currency fluctuations; the effect of changing economic conditions; the Company’s ability to maintain its current operating margins; the effect of adverse weather conditions, strikes and other external events; and the other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s 2000 Annual Report on Form 10-K and in Exhibit 99 “Risk Factors” thereto.
Lippert/Heilshorn & Associates
Lillian Armstrong, 415/433-3777
Learning Tree International, Inc
Mary C. Adams, 310/342-2229 (Investor Relations)