Lightspan Exceeds Analyst Expectations for Fourth Quarter; Cash Position Remains Strong
SAN DIEGO--(BUSINESS WIRE)--March 7, 2001--Lightspan Inc. (Nasdaq:LSPN), a leader in providing quality curriculum-based software and Internet products and services used in schools and homes, announced today its fourth quarter 2001 revenues and net results exceeded analysts estimates.
Total revenues of $12.4 million for the fourth quarter of 2001 exceeded estimates by approximately $1.0 million or 9 percent. The company recorded a net loss per share of $.40 (pro forma) compared to the analysts' consensus of $.42 per share as reported by First Call.
Chairman and Chief Executive Officer John T. Kernan stated, "Our management team is very pleased to have outperformed the expectations of the analyst community, especially in a challenging stock market. This achievement was the result of several factors including the continued positive shift in the mix toward subscription-based Internet services and ongoing cost control initiatives."
Revenues generated from Internet subscriptions during the fourth quarter of 2001 were $2.5 million, up from $0.5 million during the same period in 2000. Additionally, deferred revenues increased to $9.4 million as of Jan. 31, 2001. President and Chief Operating Officer Carl Zeiger stated, "The robust growth in our Internet business adds a solid future annuity revenue stream, which compliments our licensed software products."
The operating net loss for the fourth quarter of 2001 (excluding non-cash expenses) increased to $14.1 million from $10.0 million during the same period in 2000 primarily as a result of the company's continued investment in the development of the next generation of Internet subscription products and services. The company continues to maintain a solid cash position in excess of $80 million with no debt.
Revenues increased during the year ended Jan. 31, 2001 to $51.0 million from $44.3 million in 2000 (pro forma), reflecting a higher percentage of annuity-based Internet subscriptions. The company's gross profit margin also increased during fiscal 2001 to 68 percent vs. 66 percent in 2000 (pro forma). On a reported basis, revenues were $99.1 million in fiscal 2001, which included $48.1 million of deferred license revenue from prior years, compared to $16.9 million in 2000.
During fiscal 2001, The Lightspan Network (the company's Internet subscription service) added 1,623 schools, bringing the total number of schools under contract to 2,854, an increase of 132 percent. Additionally, the client base for Achieve Now (the company's flagship software product), increased to 3,285 schools from 2,375 or 38 percent. The company's higher education division, Academic Systems, also experienced strong growth, increasing the number of campuses to 294 from 255 or 15 percent.
The company will be restating its stock-based compensation expense for the quarters ended Oct. 31, 2000, July 31, 2000 and April 30, 2000, which will increase the net loss per share by $.01 in the October and July quarterly periods with no change in the per share results in the April quarterly period. This change has no impact on the company's revenues, gross margin, operating expenses, working capital or cash flow.
Lightspan recently achieved great success with several large Internet contracts, including a $1.4 million agreement with Allen, Texas to build a K-3 reading curriculum, and the implementation of one of the largest e-learning contracts in the country, with 621 schools in the New York City Public School System.
The Lightspan Board of Directors has elected Elizabeth Coppinger, senior vice president of new business development, Sony Corp., to its Board effective immediately. Coppinger replaces Lee Masters, president and chief executive officer of Liberty Digital Inc.
Lightspan also named Michael A. Sicuro as its Chief Financial Officer. Sicuro was previously the CFO for Blue Cross of California, ITLA Capital and U.S. Bancorp Mortgage. James Dredge was appointed CEO of the company's Academic Systems higher education division. Dredge formerly served as Senior Vice President and General Manager of the Learning Company's very successful School Division.
Kernan concluded, "Lightspan is uniquely positioned for the future:"
-- "Our management team is now complete with very experienced
executives at all levels.
-- "Our country is clearly focused on improving its education
system, and Lightspan should benefit from the increased
attention to -- and funding for -- education at the state and
federal level.
-- "Our sales team has been selling our products and services for
over five years; over one-third of our total employees are in
the field full-time.
-- "We have multiple products and services with complimentary
revenue streams that directly support state and federal
mandates for improved student achievement, assessment and
accountability.
-- "We have a solid financial position, with over $80 million in
cash and no debt.
-- "We expect Lightspan to continue to make progress toward
achieving positive operating cash flow and ultimate
profitability."
Results presented on a pro forma basis exclude the effects of recognition in the current year of previously deferred Lightspan Achieve Now license revenues and cost of revenues. This pro forma information is presented for information purposes only and should not be considered as a substitute for the historical information presented in accordance with generally accepted accounting principles. |
