-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MC74Cz2Zc5hF6mkclSS5/97NHuwh7unV9KfGHDjAXUr9KoZYUct5WP+aW310Epbp Nobg455gyOeEjXk83zn7RA== 0000944209-97-000563.txt : 19970512 0000944209-97-000563.hdr.sgml : 19970512 ACCESSION NUMBER: 0000944209-97-000563 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970509 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEARNING TREE INTERNATIONAL INC CENTRAL INDEX KEY: 0001002037 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 953133814 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27248 FILM NUMBER: 97599618 BUSINESS ADDRESS: STREET 1: 6053 WEST CENTURY BLVD CITY: LOS ANGELES STATE: CA ZIP: 90045 BUSINESS PHONE: 3104179700 MAIL ADDRESS: STREET 1: 6053 W CENTURY BLVD CITY: LOS ANGELES STATE: CA ZIP: 90045 10-Q 1 FORM 10-Q FOR PERIOD ENDED 03/31/1997 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 and 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 -------------- or [ ] Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from ___________to___________ Commission file number 0-27248 Learning Tree International, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 95-3133814 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 6053 West Century Boulevard, Los Angeles, CA 90045 -------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 417-9700 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares of common stock, $.0001 par value, outstanding as of May 3, 1997, is 21,994,507 shares. Total number of pages 11 ---- 1 LEARNING TREE INTERNATIONAL, INC. FORM 10-Q March 31, 1997 TABLE OF CONTENTS PART I--FINANCIAL STATEMENTS PAGE ---- Item 1. Financial Statements: Consolidated Balance Sheets ........................ 3 Consolidated Statements of Operations .............. 4 Consolidated Statements of Cash Flows .............. 5 Notes to Consolidated Financial Statements ......... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................ 7 PART II--OTHER INFORMATION Item 1. Legal Proceedings..................................... 10 Item 2. Changes in Securities................................. 10 Item 3. Defaults Upon Senior Securities....................... 10 Item 4. Submission of Matters to a Vote of Security Holders... 10 Item 5. Other Information..................................... 10 Item 6. Exhibits and Reports on Form 8-K...................... 10 SIGNATURES........................................................ 11 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
March 31, September 30, 1997 1996 ------------- ------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents............................................................... 39,496,000 $ 24,541,000 Short-term interest-bearing investments ................................................ 27,356,000 37,000,000 Trade accounts receivable, net ......................................................... 14,157,000 12,652,000 Prepaid marketing expenses ............................................................. 1,239,000 1,084,000 Prepaid expenses and other ............................................................. 2,821,000 2,333,000 ------------- ------------ Total current assets .............................................................. 85,069,000 77,610,000 ------------- ------------ Equipment and leasehold improvement, net ................................................... 18,964,000 11,646,000 Deferred income taxes ...................................................................... 282,000 279,000 Other assets ............................................................................... 2,615,000 1,994,000 ------------ ------------- Total assets....................................................................... $106,930,000 $ 91,529,000 ============ ============= LIABILITIES Current liabilities: Current portion of debt and capital leases.............................................. 97,000 $ 125,000 Trade accounts payable ................................................................. 12,307,000 10,599,000 Deferred revenue ....................................................................... 21,928,000 15,611,000 Accrued liabilities .................................................................... 5,647,000 5,712,000 Income taxes payable ................................................................... 3,776,000 2,200,000 ------------ ------------ Total current liabilities ......................................................... 43,755,000 34,247,000 Long-term debt and capital leases, net of current portion .................................. 92,000 134,000 Deferred facilities rent ................................................................... 1,444,000 1,642,000 ------------ ------------ Total liabilities ................................................................. 45,291,000 36,023,000 ------------ ------------ Commitments STOCKHOLDERS' EQUITY Common Stock, $.0001 par value; 75,000,000 and 25,000,000 shares authorized, respectively; 21,995,000 shares issued and outstanding ...................................................................... 2,000 2,000 Additional paid-in capital ............................................................. 42,992,000 42,992,000 Notes receivable from stockholders .................................................... (101,000) (144,000) Deferred compensation--stockholders .................................................... (167,000) (207,000) Cumulative foreign currency translation ................................................ (921,000) (753,000) Retained earnings ...................................................................... 19,834,000 13,616,000 ------------- ------------ Total stockholders' equity ........................................................ 61,639,000 55,506,000 ------------- ------------ Total liabilities and stockholders' equity ........................................ $ 106,930,000 $ 91,529,000 ============= ============
See accompanying notes to consolidated financial statements. 3 LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended March 31, March 31, ---------------------------- ---------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Revenues ...................................................... $ 35,759,000 $ 22,712,000 $ 71,769,000 $ 45,890,000 Costs of revenues ............................................. 15,448,000 8,969,000 29,790,000 18,201,000 ------------ ------------ ------------ ------------ Gross profit .............................................. 20,311,000 13,743,000 41,979,000 27,689,000 ------------ ------------ ------------ ------------ Operating expenses: Course development ........................................ 2,372,000 1,432,000 4,754,000 2,674,000 Sales and marketing ....................................... 11,409,000 7,936,000 21,300,000 14,144,000 General and administrative ................................ 4,151,000 2,810,000 7,900,000 6,153,000 ------------ ------------ ------------ ------------ 17,932,000 12,178,000 33,954,000 22,971,000 ------------ ------------ ------------ ------------ Income from operations ........................................ 2,379,000 1,565,000 8,025,000 4,718,000 ------------ ------------ ------------ ------------ Other income (expense): Interest expense .......................................... (9,000) (10,000) (17,000) (19,000) Interest income ........................................... 850,000 556,000 1,720,000 794,000 Foreign exchange .......................................... 4,000 (77,000) 17,000 (133,000) Other ..................................................... (35,000) 1,000 (323,000) (15,000) ------------ ------------ ------------ ------------ 810,000 470,000 1,397,000 627,000 ------------ ------------ ------------ ------------ Income before provision for income taxes ...................... 3,189,000 2,035,000 9,422,000 5,345,000 Provision for income taxes .................................... 1,085,000 634,000 3,204,000 1,577,000 ------------ ------------ ------------ ------------ Net income.................................................... $ 2,104,000 $ 1,401,000 $ 6,218,000 $ 3,768,000 ============ ============ ============ ============ Net income per common share and common equivalent share...................................................... $ 0.10 $ 0.07 $ 0.28 $ 0.19 ============ ============ ============ ============ Weighted average number of common and common equivalent shares outstanding ............................. 22,089,000 21,418,000 22,061,000 19,768,000 ============ ============ ============ ============
See accompanying notes to consolidated financial statements. 4 LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended March 31, --------------------------- 1997 1996 ----------- ------------ Cash flows--operating activities: Net income.................................................................. $ 6,218,000 $ 3,768,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .......................................... 2,326,000 1,459,000 (Gains) losses on disposals of equipment, property and leasehold improvements ...................................................... 332,000 1,000 Deferred facilities rent charges ....................................... (209,000) (166,000) Amortization of deferred compensation .................................. 40,000 40,000 Unrealized foreign exchange (gains) losses ............................. (55,000) 117,000 Change in net assets and liabilities: Trade accounts receivable .......................................... (1,670,000) (21,000) Prepaid marketing expenses ......................................... (161,000) 110,000 Prepaid expenses and other ......................................... (385,000) (501,000) Income taxes ....................................................... 1,538,000 (388,000) Trade accounts payable ............................................. 1,671,000 (336,000) Deferred revenue ................................................... 6,408,000 2,263,000 Accrued liabilities ................................................ (43,000) 556,000 ----------- ------------ Net cash provided by operating activities .............................. 16,010,000 6,902,000 ----------- ------------ Cash flows--investing activities: Purchases of equipment, property and leasehold improvements ................. (10,001,000) (3,156,000) Retirements of equipment, property and leasehold improvements ............... 5,000 7,000 Proceeds from short-term interest-bearing investments held to maturity ...... 14,544,000 -- Purchases of short-term interest-bearing investments: Investments held to maturity ............................................ (4,500,000) -- Investments held for sale ............................................... (400,000) -- Other, net .................................................................. (660,000) (51,000) ----------- ------------ Net cash used in investing activities .................................. (1,012,000) (3,200,000) ----------- ------------ Cash flows--financing activities: Principal payments of debt and capital leases ............................... (69,000) (111,000) Sales of Common Stock ....................................................... -- 30,875,000 Collections of stockholder notes ............................................ 43,000 43,000 ----------- ------------ Net cash provided by (used in) financing activities .................... (26,000) 30,807,000 ----------- ------------ Effects of exchange rates on cash ............................................... (17,000) (300,000) ----------- ------------ Net increase (decrease) in cash and cash equivalents ............................ 14,955,000 34,209,000 Cash and cash equivalents at the beginning of the period ........................ 24,541,000 10,029,000 ----------- ------------ Cash and cash equivalents at the end of the period.............................. $ 39,496,000 $ 44,238,000 =========== ============ Supplemental disclosures: Income taxes paid...................................................... $ 2,281,000 $ 2,057,000 =========== ============ Interest paid.......................................................... $ 16,000 $ 18,000 =========== ============
See accompanying notes to consolidated financial statements. 5 LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Operations and Significant Accounting Policies ---------------------------------------------- The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such regulations. Certain prior period balances have been reclassified to conform with the current period presentation. The condensed consolidated financial statements reflect all adjustments and disclosures which are, in the opinion of management, necessary for a fair presentation. All such adjustments are of a normal recurring nature. The condensed consolidated financial statements in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended September 30, 1996 that are contained in the Company's 1996 Annual Report on Form 10-K. Note 2. Common Stock ------------ On December 16, 1996, the Company paid a 50% stock dividend to all holders of its Common Stock, $.0001 Par Value ("Common Stock"). All share and per share amounts in the accompanying financial statements and footnotes have been retroactively restated to reflect the stock dividend. On March 7, 1997, the Company's shareholders approved an increase in the number of authorized shares of Common Stock from 25,000,000 shares to 75,000,000 shares. Note 3. Computation of Net Income per Common share and Common Equivalent Share ---------------------------------------------------------------------- Net income per common share and common equivalent share is computed using the weighted average number of shares of Common Stock outstanding during the period. For fiscal 1996, the weighted average number of common and common equivalent shares outstanding was computed pursuant to the rules of the Securities and Exchange Commission. Such rules require that common stock and common stock equivalents issued by the Company during the twelve months preceding the Company's initial public offering, at prices below the public offering price (654,000 shares), be included in the calculation of the shares outstanding for all periods presented using the treasury stock method. Note 4: Stock Option Plan ----------------- In October 1995, the Company and its stockholders adopted the 1995 Stock Option Plan (the "Stock Option Plan"), which provides for the issuance of both incentive stock options and non-qualified stock options for the purchase of an aggregate of 2,250,000 shares of the Common Stock of the Company. The Stock Option Plan permits the grant of options to officers, employees, directors and consultants of the Company. The exercise price of incentive stock options granted must be greater than or equal to the fair market value of the Common Stock on the date of grant and the exercise price of non-qualified stock options must be greater than or equal to 75% of the fair market value of the Common Stock on the date of the grant. The maximum term of all options may not exceed ten years. The vesting schedule and the period required for full exercisability of the stock options are at the discretion of the Board of Directors but in no event can they be less than six months. On October 1, 1996 and January 1, 1997, non-qualified options for approximately 654,000 shares and 86,000 shares, respectively, were granted under the Stock Option Plan to substantially all employees with at least one year of service with the Company. The exercise prices of options granted were equal to the fair market values of the Common Stock at the dates of grant and the terms of the options are five years. The options are subject to a four year vesting schedule at 25 percent per year on each anniversary date. As of March 31, 1997, options for approximately 722,000 shares were outstanding under the Stock Option Plan. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Learning Tree International, Inc. (the "Company"), is a leading worldwide provider of education and training for corporate information technology ("IT") professionals in business and government organizations. The Company develops, markets and delivers a broad, proprietary library of instructor-led course titles focused on client/server systems, Internet/intranets, local and wide area computer networks, operating systems, programming languages, database systems, graphical user interfaces, object-oriented technology, and IT management. The Company tests and certifies IT professionals in 22 IT job functions. The Company's instructor-led courses are recommended for college credit by the American Council on Education. In addition to its instructor-led courses, the Company develops, produces and markets a line of interactive computer-based training courses incorporating audio and graphical elements ("multimedia CBT") that are designed for both stand-alone CD-ROM and network-based delivery. NEW DEVELOPMENTS During the quarter ended March 31, 1997, the Company expanded the breadth of its instructor-led training activities through the formation of two new divisions. The new Power Seminars Division presents multi-day conferences comprised of a number of 1-day, multimedia lecture-style courses in key information technologies that are undergoing rapid change. The Company delivered its first Power Seminar conference in March 1997, which was attended by over 500 IT professionals. The new Learning Solutions Division provides custom-developed training programs for larger clients who need to train large numbers of their IT professionals and end-users. The initial focus of this new division is on training that supports the roll-out and use of new organization-wide information systems, tools and applications. The division's first contract was initiated with General Motors Corporation in March 1997 for the training of 20,000 GM employees and dealer personnel in courses scheduled in 60 cities across the United States, primarily between June and December of this year. RESULTS OF OPERATIONS In the second fiscal quarter ended March 31, 1997, revenues increased by $13.1 million or 57% to $35.8 million from $22.7 million for the corresponding quarter of the prior year. Income from operations for the quarter ended March 31, 1997 increased $814,000 or 52% to $2.4 million from $1.6 million for the same quarter of fiscal 1996. Net income for the quarter ended March 31, 1997, increased $703,000 or 50% to $2.1 million from $1.4 million for the quarter ended March 31, 1996. For the six month period ended March 31, 1997, revenues increased by $25.9 million or 56% to $71.8 million from $45.9 million for the six months ended March 31, 1996. Income from operations for the six months ended March 31, 1997, increased $3.3 million or 70% to $8.0 million from $4.7 million for the corresponding period of the prior year. Net income for the six months ended March 31, 1997 increased $2.4 million or 65% to $6.2 million from $3.8 million for the corresponding period of the prior year. Revenues increased primarily because the number of course participants increased to 22,998 in the quarter ended March 31, 1997, from 15,971 participants in the corresponding quarter of the prior year. For the six months ended March 31, 1997, the number of course participants was 47,027 compared to 32,330 in the corresponding six month period of the prior year. The additional course participants are primarily attributable to increased marketing and sales expenditures and an increase in the net number of instructor-led course titles to 124 in the second quarter of fiscal 1997 compared to 95 in the same period a year earlier. Revenues for the three and six month periods ended March 31, 1997, also reflect higher average revenues per course participant as well as revenues from the Company's multimedia CBT product line. As of March 31, 1997, the Company had expanded its multimedia CBT course library to 30 titles. The Company's cost of revenues for its instructor-led courses primarily includes the costs associated with course instructors, course materials and equipment, freight, classroom facilities and refreshments. For its multimedia CBT courses, cost of revenues primarily includes the costs of amortized development, manufacturing, distribution and support. The cost of revenues for the second quarter of fiscal 1997 increased $6.4 million or 72% to $15.4 million from $9.0 million for the same quarter in 1996. For the six months ended March 31, 1997, the Compant's cost of revenues increased $11.6 million or 64% to $29.8 million from $18.2 million for the corresponding period in the prior year. The increased cost of revenues compared to the same periods in the prior year, are primarily the result of increases in the number of instructor-led course events, costs per 7 event and costs of sales associated with the increased sales of the multimedia CBT product line. The number of instructor-led course events increased 41% in the quarter ended March 31, 1997 to 1,446 course events from 1,023 course events in the quarter ended March 31, 1996. For the six month period ended March 31, 1997, the number of instructor-led course events increased 40% to 2,931 from 2,089 for the corresponding period in the prior year. Costs per instructor-led course event increased approximately 17% and 14%, respectively, compared to the corresponding periods in the prior year. The change in the average cost per instructor-led course event primarily arises from a) the need to conduct more events in hotels to handle increasing demand which frequently exceeds the Company's education center capacity, b) increased instructor fees, c) the recruitment and training costs to expand the instructor force, and d) costs of acquiring, maintaining and shipping course equipment for hands-on courses which have increased as a percentage of all courses. To accommodate the growth in course enrollments, the Company has increased the number and size of its education center facilities and is seeking additional education center facilities in certain locations. In response to the continued strength in market response for its training programs, the Company intends to continue to: a) expand its library of instructor-led course titles, including the further development of titles for its new Power Seminar Division; b) expand its multimedia CBT course library; c) expand the activities of its new Learning Solutions Division d) further expand its sales, advertising and marketing expenditures to capture additional market share; e) recruit and train additional instructors for both new and existing course titles and f) add new education centers and expand the number of classrooms in its existing education centers. Accordingly, the Company's cost of revenues, course development and sales and marketing expenditures are expected to increase. There can be no assurance that the Company will be able to achieve increased market share after making the expenditures required by these activities. Course development expenses include the costs of developing new instructor-led courses, Power Seminars, multimedia CBT course titles and Learning Solutions programs, as well as the cost of updating the Company's existing course libraries. The principal costs are for internal product development staff and independent consultants who serve as subject matter experts. Course development expenses increased by $940,000 or 66% to $2.4 million for the quarter ended March 31, 1997 from $1.4 million in the quarter ended March 31, 1996. For the six months ended March 31, 1997, course development expenses increased $2.1 million or 78% to $4.8 million from $2.7 million for the corresponding period in the prior year. These increases reflect the costs associated with the Company's expansion of its library of instructor-led and multimedia CBT courses as well as the development costs for the new Power Seminar and Learning Solutions courses. Sales and marketing expenses consist of salaries, commissions and travel-related costs for sales and marketing personnel, the costs of designing, producing and distributing direct mail marketing and media advertisements, and the costs of information systems to support these activities. Sales and marketing expenses increased $3.5 million or 44% to $11.4 million for the quarter ended March 31, 1997 from $7.9 million for the quarter ended March 31, 1996. For the six months ended March 31, 1997, sales and marketing expenses increased $7.2 million or 51% to $21.3 million from $14.1 million for the corresponding period in the prior year. The increase in sales and marketing expenses is due to an increase in telemarketing and field sales staff and increased direct mail marketing intended to reach a broader range of potential customers, to expand business with current customers, to expand the Company's presence in certain U.S. cities, to promote the new Power Seminar and the CBT product lines and to communicate the availability of new course titles. General and administrative expenses increased $1.4 million or 48% to $4.2 million for the quarter ended March 31, 1997 compared to $2.8 million in the same quarter of the prior year. For the six months ended March 31, 1997, general and administrative expenses increased $1.7 million or 28% to $7.9 million from $6.2 million for the corresponding period in the prior year. Other income (expense) is primarily comprised of interest expense, interest income and foreign currency gains and losses. Other income increased $340,000 to $810,000 for the quarter ended March 31, 1997 from $470,000 for the corresponding quarter in the prior year. For the six months ended March 31, 1997, other income increased by $770,000 to $1.4 million from $627,000 for the corresponding six month period in the prior year. These increases were primarily attributable to additional interest income arising from higher cash balances which have been generated by operations and from the proceeds of the Company's initial public offering in December 1995 and secondary offering in September 1996. 8 The provision for income taxes increased $451,000 to $1.1 million for the quarter ended March 31, 1997, from $634,000 for the quarter ended March 31, 1996. For the six months ended March 31, 1997, the provision for income taxes increased $1.6 million to $3.2 million from $1.6 million for the corresponding period in the prior year. The increase in the income tax provision reflects an increase in income before taxes as well as an increase in the Company's effective tax rate for fiscal 1997. The effective tax rate for fiscal 1996 reflected the utilization of certain foreign tax loss carryforwards and all of the Company's remaining tax loss carryforwards were used in that year. BACKLOG At March 31, 1997, the Company had a backlog of orders for instructor-led courses in the amount of $24.9 million, which represented a 33% increase over the backlog of $18.8 million at March 31, 1996. Only a portion of the Company's backlog is funded. There can be no assurance that the growth in the backlog will continue or that orders comprising the backlog will be realized as revenue. FLUCTUATIONS IN QUARTERLY RESULTS The Company's operating results may fluctuate based on various factors, including the frequency of course events, the timing, frequency and size of, and response to, the Company's direct mail marketing and advertising campaigns, the timing of the introduction of new course titles and alternate delivery methods, the mix between customer-site course events and Learning Tree-site course events, competitive forces within the current and anticipated future markets served by the Company, the spending patterns of its customers, currency fluctuations, inclement weather and general economic conditions. Fluctuations in quarter-to-quarter results may also occur depending on differences in the timing of, and the time period between, the Company's expenditures on the development and marketing of its courses and the receipt of revenues. The Company's revenues and income have historically varied significantly from quarter to quarter due to seasonal and other factors. The Company generally has greater revenue and operating income in the second half of its fiscal year (April through September) than in the first half of its fiscal year (October through March). This seasonality is due in part to seasonal spending patterns of the Company's customers arising from budgetary and other business factors as well as weather, holiday and vacation considerations. In addition, the seasonality of the Company's operating results reflects the quarterly differences in the frequency and size of the Company's direct mail marketing campaigns. There can be no assurance that these seasonal effects will remain the same in the future. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents and short-term interest-bearing investments increased to $66.9 million at March 31, 1997 from $61.5 million at September 30, 1996, primarily as a result of cash provided by operations. For the six months ended March 31, 1997, cash provided by operations was approximately $16.0 million compared to $6.9 million during the same period in the prior year. The increase in cash provided by operations reflects the increases in profits and deferred revenues arising from prepaid multi-enrollment programs. As of March 31, 1997, the Company had a net working capital balance of $41.3 million. During the six months ended March 31, 1997, the Company invested $10.0 million in equipment and facilities compared to $3.2 million in the same period of the prior year. This increase is primarily related to the build-out of office and classroom facilities and the purchase of additional course equipment to support the growth of course events and the upgrade of course equipment capabilities. While the Company expects to purchase additional course equipment and to enter into leases for additional facilities during fiscal 1997, as of March 31, 1997, the Company had no material future purchase obligations, capital commitments or debt and believes that its cash and cash equivalents, its short-term interest-bearing investments and the cash provided by its operations will be sufficient to meet its cash requirements for the foreseeable future. FORWARD-LOOKING INFORMATION Except for historical information contained herein, the matters discussed in this Form 10-Q 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 new courses and products, the impact of competition and downward pricing pressures, the effect of changing economic conditions, risks in technology development, the risks involved in currency fluctuations, 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 1996 Annual Report on Form 10-K. 9 PART II - OTHER INFORMATION Item 1: LEGAL PROCEEDINGS None Item 2: CHANGES IN SECURITIES Not Applicable Item 3: DEFAULTS UPON SENIOR SECURITIES Not Applicable Item 4: SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS The Company held its Annual Meeting of Stockholders on March 7, 1997. During the Annual Meeting of Stockholders, the following two matters were voted upon; the election of directors and an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of Common Stock from 25,000,000 shares to 75,000,000 shares. The following are the results of the voting for these matters: 1. Election of directors:
Shares for Shares withheld ---------- --------------- Class I Directors for a term expiring in 1999 W. Mathew Juechter 19,860,280 212,741 Alan B. Salisbury 19,852,681 220,340 Class II Directors for a term expiring in 2000 Michael W. Kane 19,852,780 220,241 Max S. Shevitz 19,852,681 220,340
2. Amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of Common Stock from 25,000,000 shares to 75,000,000 shares: Shares for 18,332,170 Shares against 1,688,632 Shares abstaining 52,219
The current terms of the Class III Directors, David C. Collins and Eric R. Garen, continue until the 1998 Annual Meeting of Stockholders. Item 5: OTHER INFORMATION Not Applicable Item 6: EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 27.1 Financial Data Schedule b) Reports on Form 8-K No reports on Form 8-K were filed during the three months ended March 31, 1997. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LEARNING TREE INTERNATIONAL, INC. Dated: May 8, 1997 By: /s/ Gary R. Wright ------------------------------------ Gary R. Wright Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE - ARTICLE 5
5 6-MOS SEP-30-1997 OCT-01-1996 MAR-31-1997 39,496,000 27,356,000 14,157,000 0 0 85,069,000 18,964,000 0 106,930,000 43,755,000 0 0 0 2,000 0 106,930,000 71,769,000 71,769,000 29,790,000 29,790,000 0 0 17,000 9,422,000 3,204,000 6,218,000 0 0 0 6,192,000 .28 .28
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