Lightspan Exceeds Analyst Expectations for the Third Consecutive Quarter; Record Level of Quarterly Revenues, Cash Position Remains Strong
SAN DIEGO, Aug. 21 /PRNewswire/ -- Lightspan, Inc. (Nasdaq: LSPN) ("the Company"), a leading provider of quality curriculum-based software and Internet products and services used in schools and homes, announced today its second quarter of fiscal 2002 results ended July 31, 2002 exceeded analyst estimates for the third consecutive quarter. Total revenues of $19.5 million for the second quarter of fiscal 2002 exceeded estimates by approximately $0.7 million. The Company recorded a net loss per share of $.30 compared to the analysts' consensus of $.32 per share as reported by First Call.
Chairman and Chief Executive Officer John T. Kernan stated: "Our team delivered the highest level of quarterly revenues in the Company's history. We achieved consistent performance from all of our products coupled with a solid balance between large and small contracts. We also continued to control our operating costs, which were 10 percent lower during the first half of this year compared to the same period in the previous year."
Revenues generated from Internet subscriptions increased 100 percent during the second quarter of 2002 to $1.8 million from $0.9 million in the second quarter 2001 (pro forma). Total revenues during the second quarter of 2002 increased to $19.5 million from $17.1 million during the same period in 2001 (pro forma). For the six months ended July 31, 2001, total revenues increased to $30.1 million from $27.4 million during the same period in the prior year (pro forma). Additionally, deferred revenues increased to $14.2 million as of July 31, 2001. President and Chief Operating Officer Carl Zeiger stated: "We continued to expand our customer base across all lines of business, especially in our on-line assessment and higher education products. This clearly demonstrates confidence by existing and potential customers in the ability of our products and services to deliver on our commitment to provide a complete achievement and accountability system for teachers, parents, students and administrators."
On a reported basis, total revenues during the second quarter of fiscal 2002 were $19.5 million compared to $19.1 million during the same period in fiscal 2001, which included $2.0 million of deferred license revenue from prior years. Total revenues during the six months ended July 31, 2001 were $30.1 compared to $75.5 million during the same period in the prior year, which included $48.1 million of deferred license revenue from prior years.
Management's continued focus on growing revenues while controlling operating costs resulted in a 23 percent reduction in the net operating loss to $9.8 million for the second quarter of fiscal 2002 from $12.7 million during the same period in 2001 (excluding non-cash expenses -- pro forma). For the six months ended July 31, 2001, the Company's net operating loss decreased to $23.8 million from $29.8 million during the same period in the prior year, or 20 percent. The Company continues to maintain a solid cash position of approximately $55 million and no debt.
The Company's client base continued to increase across all product lines during the second quarter of 2002. Total schools using the Company's flagship software product, Achieve Now, increased to 3,683 as of July 31, 2001. The Company's Internet subscription products, The Lightspan Network and eduTest.com, are being used in 3,326 schools. Academic Systems, the Company's higher education division, also experienced solid growth, increasing the number of client campuses to 343 as of July 31, 2001.
Lightspan continues to win large multi-million dollar software and Internet contracts balanced with small to medium size deals from new and existing customers. The Company recently announced a $4.2 million contract with Fort Worth, Texas ISD, and a $2.5 million contract with the Camden, New Jersey School District. Both districts purchased the Company's flagship software product, Achieve Now. Lightspan's higher education division, Academic Systems, was an integral part of the successes in the second quarter of 2002, adding 28 new college campuses to our customer base.
Chief Financial Officer Michael A. Sicuro stated: "Our management team is committed to achieving profitability by increasing revenues and controlling costs as demonstrated by our operating results over the last three quarters. We are excited about Lightspan's future."
Financial Outlook
Remainder of Calendar Year 2001 (Fiscal Year Ending 1/31/02)
The following statements are based on current estimates and expectations. These are forward-looking statements and actual results may be materially different.
Net cash utilized during the second quarter was less than internal targets. The Company expects to operate near cash break even in the current quarter due to the seasonality of revenues and cash collections.
The Company expects to achieve the analyst consensus for revenues and the net loss per share for the current year of $61 million and $1.37, respectively. The Company is expecting a change in revenues between its third and fourth quarters due primarily to changes in the timing of federal funding provided to school districts. As a result, the Company expects to record revenues of $12.0 - $14.0 million and $17.0 - $19.0 million in the third and fourth quarters, respectively, in the current fiscal year. This will result in an estimated loss per share of $.38 - $.42 and $.27 - $.31 for the third and fourth quarters, respectively, in the current fiscal year. The Company expects this seasonality to continue for the following fiscal year.
Calendar Year 2002 (Fiscal Year Ending 1/31/03)
The following statements are based on current estimates and expectations. These are forward-looking statements and actual results may be materially different.
The Company expects to achieve the following financial targets for the fiscal year ending January 31, 2003:
Revenues (increase of 23% - 31% plus
deferred revenue growth) $75-$80 million
Loss from Operations before
Amortization of Intangibles,
Stock-based Compensation and
Net Interest Income $30-$35 million
Net Loss $35-$40 million
Net Loss Per Share $.75-$.85
Cash Utilization $20-$25 million
Cash Profitability
The Company expects to begin generating cash from operations during the quarter ending October 31, 2002. The Company's cash position is not expected to fall below $20 million.
Operating Profitability
The Company expects to generate an operating profit during the quarter ending July 31, 2003, excluding costs related to the amortization of intangibles, stock-based compensation and net interest income.
Kernan concluded: "With the successful completion of our best quarter in the Company's history, we are confident with our cash and operating profitability forecasts. Our strategy is straightforward; continue to be the 'blocking and tackling' company by internally growing our revenue and customer base while controlling our costs, successfully leveraging our current product offerings and infrastructure and ensuring that every dollar of expense is linked to generating profitable revenue."
Results presented on a pro forma basis exclude the effects of recognition in 2001 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 |
