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SMARTPROS® REPORTS FIRST QUARTER 2007 FINANCIAL RESULTS
Company Achieves Record First Quarter Profits
Earnings Conference Call Scheduled for Wednesday, May 9, at 4:15 PM ET
FOR IMMEDIATE RELEASE -- HAWTHORNE, N.Y. -- May 9, 2007 -- SmartPros Ltd. (AMEX:PED), a leader in the field of accredited professional education and corporate training, today reported its first quarter financial results for the three months ended March 31, 2007.
Financial highlights for the three months ended March 31, 2007, compared to the three months ended March 31, 2006:
- Revenues were $3.72 million, representing a 47% increase over revenues of $2.53 million.
- Net income was $586,780, representing a 291% increase over net income of $150,015. This marked our twelfth consecutive quarter of profitability for SmartPros, and our tenth quarter since going public in 2004.
- Gross profit margin remained fairly stable at 60.6%, down slightly from 61.1%.
- Operating income increased to $363,086, up from $31,142.
- Earnings per share for the quarter were $.12 per share, basic and diluted, compared to $.03.
- Sales of our core subscription-based products grew approximately 16% to $2.03 million, up from $1.75 million.
- Online sales rose 29% to $883,000 from $687,000.
As of March 31, 2007, we had approximately $7.8 million in cash and cash equivalents, working capital of $5.1 million and stockholders' equity of approximately $8.9 million.
During the first quarter of 2007, SmartPros worked on several improvements that we hope will further our progress:
- Completed the acquisition of The Selbst Group Inc., a specialized consulting firm providing sales, sales management training, product training and marketing support programs for the financial services industry. Selbst Group programs are now available through SmartPros new Financial Services Training division, which also features our recently integrated banking training course catalogs.
- Successfully launched the new SmartPros Legal division through the integration of 160+ continuing legal education courses from the Cognistar online CLE library into the Professional Education Center, SmartPros' proprietary Learning Management System.
- Began the formal development process on the next generation SmartPros® Professional Education Center™, which will include a variety of upgrades and enhancements offering SmartPros' clients and partners even more flexibility and control of their learning environment.
- Launched a new homepage to highlight and cross-market product lines from recent acquisitions.
Allen Greene, Chairman and Chief Executive Officer of SmartPros, stated, "We are pleased that we were able to carry momentum built in the fourth quarter of last year into the first quarter of this year. While we hope to continue this trend, we are always cautious when looking at growth in any one particular quarter. It is important to remember that certain aspects of our business are consultative in nature, and the revenue recognition principles for those projects will cause variations in our earnings from quarter to quarter. As I've stated before, our company is best viewed on an annual basis. That said, we are very proud of this past quarter and believe it shows that our growth strategies appear to be working—something we hope we can continue."
SmartPros will host a teleconference on Wednesday, May 9, 2007, beginning at 4:15 p.m. Eastern, and invites all interested parties to join management in a discussion regarding the Company's financial results, corporate progression and other meaningful developments. The conference call can be accessed via telephone by dialing toll free 1-800-218-9073. A replay of the call will be available on the Company's Web site approximately one hour after the live broadcast at http://ir.smartpros.com.
About SmartPros Ltd.
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 training, banking, engineering, legal, and ethics and compliance. 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 and video. Our subscription libraries feature hundreds of course titles and 2,000+ 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 sites averages more than 450,000 monthly visits, serving a user base of 350,000+ 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. Specially, results reported within this press release should not be considered an indication of future performance. In addition, there can be no assurance regarding the timing of any stock repurchases by the Company or that any such repurchases will, in fact, occur.
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