Lightspan's Second Quarter Operating Results Improve 38% vs. Prior Year; On Target for Cash Profitability in October 2002
SAN DIEGO, Aug. 20 /PRNewswire-FirstCall/ -- Lightspan, Inc. (Nasdaq: LSPN - News; the Company), a leading provider of quality curriculum-based software and on-line products and services used in schools and homes, announced today that its operating loss per share, excluding amortization and interest, for the three months ended July 31, 2002 was $.13 as compared to $.21 during the same period a year ago, a 38 percent improvement. The Company recorded a net loss per share, including amortization and interest, of $.17 in the second quarter of fiscal 2003 as compared to $.30 per share in the same period a year ago. The analysts' consensus was a net loss per share of $.18 as reported by First Call. This exceeded analysts' expectations for the seventh consecutive quarter. ADVERTISEMENT
Cash utilized of $11.0 million and the net loss per share of $.17 during the second quarter of fiscal 2003 was consistent with forecasted guidance of $11 - $15 million and $.16 - $.19, respectively. Lightspan continues to remain debt free.
Chairman and Chief Executive Officer John T. Kernan stated: "The catalyst in achieving our bottom line targets this quarter was a lower cost structure. Operating expenses were lower in the second quarter of fiscal 2003 as compared to the same period in the prior year, and as compared to the previous quarter of the current fiscal year."
Total revenues of $14.1 million during the second quarter of fiscal 2003 were consistent with the Company's revised forecast of $13.5 - $14.5 million. Revenues generated from on-line subscriptions increased 27 percent during the second quarter of fiscal 2003 to $2.2 million from $1.7 million in the same period in fiscal 2002. Revenues from software licenses decreased during the three months ended July 31, 2002 to $8.9 million from $13.3 million in the same period a year ago, or 33 percent. Total revenues for the six months ended July 31, 2002 declined to $24.4 million from $30.1 million as compared to the same period a year ago primarily due to lower software license sales.
President and Chief Operating Officer Carl Zeiger stated: "Slower than expected distributions of federal monies to local school districts and uncertainty surrounding budget appropriations at community colleges has temporarily caused a decrease in the sales of our software products. However, with the increased focus on assessment and accountability, our K-12 on-line assessment products are building momentum as evidenced by the 47 percent increase in deferred revenues during the quarter to $14.7 million."
The Company's client base as of July 31, 2002 consisted of 4,188 schools using the Company's flagship software product, Achieve Now. Schools are using approximately 4,000 subscriptions of the Company's on-line products: The Lightspan Network, the Lightspan Reading Center and Lightspan eduTest Assessment. Academic Systems, the Company's higher education division, had 350 client campuses as of July 31, 2002.
Effective February 1, 2002, the Company adopted the provisions of SFAS 142, "Goodwill and Other Intangible Assets," which eliminates the amortization of goodwill and requires an annual assessment for impairment based on a fair value test. The amount of goodwill amortization recorded in the three and six months ended July 31, 2001, and not recorded in the three and six months ended July 31, 2002 in accordance with SFAS 142, was $2.6 million ($.05 per share) and $5.1 million ($.11 per share), respectively.
The following statements are based on current estimates and expectations. These are forward-looking statements and actual results may be materially different.
Chief Financial Officer Michael A. Sicuro stated: "Lower operating costs should enable us to achieve profitability on a cash basis for the three months ending October 31, 2002 as forecasted over a year ago. There is no change to the forecasts provided on August 5, 2002 for the third quarter of fiscal 2003 for revenues ($11 - $13 million) and the net loss per share ($.17 - $.19)."
Kernan concluded: "We have the key ingredients to become a profitable enterprise: a world class sales and professional development team, products that improve student achievement and are a near perfect match with the key elements of the new federal legislation, a lower cost of operations and a solid financial position with cash and no debt. We remain committed to our shareholders to achieve our profitability goals." |
