CONSHOHOCKEN, Pa.--(BUSINESS WIRE)--New Horizons Worldwide, Inc. (Pink Sheets: NEWH) today reported financial results for the second quarter and the six months ended June 30, 2009.
Revenue for the quarter ended June 30, 2009 totaled $8.8 million, compared to $9.9 million in the comparable 2008 period. Revenue from Company-owned training centers declined to $3.3 million in the quarter ended June 30, 2009 from $3.5 million in the comparable period of 2008. Franchising revenue decreased to $5.5 million in the second quarter of 2009 as compared to $6.4 million in the second quarter of 2008. The Franchising revenue decline was due to a $1.6 million decrease in royalty revenue, partially offset by a $600,000 increase in courseware sales and other revenue.
The Company had operating income of $378,000 in the second quarter of 2009, compared to an operating income of $1.5 million in the second quarter of 2008. The Company defines operating income as income before gains (losses) from the sale of assets, interest and income taxes. The Company's net income was $167,000 for the three months ended June 30, 2009 compared to net income of $1.1 million in the comparable 2008 period.
For the three months ended June 30, 2009, total system-wide revenue from all franchised and Company-owned training centers was $80.1 million compared to total system-wide revenue for the comparable 2008 period of $105.5 million, a decrease of 24.1%. On a constant currency basis, system-wide revenue declined 22.8% from the prior year.
Revenue for the six months ended June 30, 2009 totaled $16.7 million, compared to $19.3 million in the comparable 2008 period. Revenue from Company-owned training centers declined to $6.6 million in the six months ended June 30, 2009 from $6.8 million in the comparable period of 2008. Franchising revenue decreased to $10.4 million in the first half of 2009 as compared to $12.6 million in the first half of 2008. The Franchising revenue decline was due to a $2.4 million decrease in royalty revenue, partially offset by a $500,000 increase in courseware sales and other revenue.
The Company had operating income of $401,000 in the first half of 2009, compared to operating income of $3.0 million in the first half of 2008. The Company defines operating income as income before gains (losses) from the sale of assets, interest and income taxes. The Company's net income was $21,000 for the six months ended June 30, 2009 compared to a net income of $2.5 million in the comparable 2008 period.
For the six months ended June 30, 2009, total system-wide revenue from all franchised and Company-owned training centers was $159.3 million compared to total system-wide revenue for the comparable 2008 period of $205.8 million, a decrease of 22.6%. On a constant currency basis, system-wide revenue declined 22.0% from the prior year.
Mark A. Miller, President and Chief Executive Officer of New Horizons, stated, "We are encouraged by New Horizon's ability to deliver positive financial results for our shareholders during what continues to be a very difficult economic climate. Despite the ongoing recession, we have been able to partially offset the effects of reduced revenues on our operations by carefully managing our business and restraining costs. We have also continued to aggressively pursue strategic initiatives that we believe will provide for meaningful revenue and operating profit growth as the current recession subsides.
"As always, we appreciate the dedication and efforts of our employees, the commitment and partnership of our franchise owners and their staffs and the support of our industry partners in making our success possible.
"In July, the Company's shareholders approved the Company's proposal for a 1-for-25 reverse stock split, which enables the Company to cease its periodic reporting obligations under the Securities and Exchange Act of 1934, as amended. As a result of this approval, each share of the Company's common stock held of record by a shareholder owning fewer than 25 shares immediately before the 1-for-25 reverse stock split was converted into the right to receive $1.85 in cash, without interest, per pre-split share. The shareholders also approved the Company's proposal for a 25-for-1 forward stock split immediately thereafter, resulting in no change in the number of shares owned by any shareholder who held at least 25 shares immediately prior to the reverse share split.
"In August, the Company began trading on the Pink Sheets and is currently listed as a Pink Sheet 'Current Filer' under the Pink Sheets terms and definitions. The Company's Quarterly Report for the second quarter, and future quarters, will available on the Company's website (www.newhorizons.com) under 'About Us' under the 'Investor Relations' section and on the Pink Sheets website (www.pinksheets.com)."
With over 300 centers in 60 countries, Conshohocken, Pennsylvania based New Horizons Worldwide, Inc. (Pink Sheets: NEWH) is the world's largest independent IT training company. Through an integrated learning approach that ensures that new knowledge can be applied to real life situations, New Horizons delivers a full range of technology and business skills training from basic application and desktop productivity tools to complex and integrated business systems. New Horizons continues to expand its offerings, locations, and solutions to meet the growing demands placed on organizations and their employees. For more information, or to find a local New Horizons Computer Learning Center, visit www.newhorizons.com.
Certain matters discussed in this press release are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and as such involve risks and uncertainties. Any statements about expectations, beliefs, plans, objectives, assumptions, future events or performance are not historical facts and are forward-looking statements. The forward-looking statements in this press release are based upon beliefs, assumptions and expectations of the Company's management as to the Company's future operations and economic performance, taking into account the information currently available and include comments regarding management's future outlook and financial performance of the Company. These statements are not statements of historical fact, and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Readers should not place undue reliance on these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company or the benefits of the proposed transaction to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Many of the factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission.
NEW HORIZONS WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
June 30, December 31,
Cash and cash equivalents $ 901 $ 639
Accounts receivable, net 6,284 5,340
Prepaid expenses 834 1,001
Deferred tax asset 2,429 2,429
Other current assets 174 292
Total current assets 10,622 9,701
Property and equipment, net 5,119 4,873
Goodwill and other intangibles, net 12,852 11,865
Other assets 315 292
Total assets $ 28,908 $ 26,731
Liabilities and shareholders' equity
Accounts payable $ 1,109 $ 853
Deferred revenue 4,097 3,513
Other current liabilities 6,081 7,840
Total current liabilities 11,287 12,206
Revolving credit facility, net 3,664 754
Deferred tax liability 457 457
Deferred rent and other long-term liabilities 744 706
Total liabilities 16,152 14,123
Commitments and contingencies - -
Convertible preferred stock Series C, no par value, 200,000 shares 3,168 3,802
authorized, 143,369 and 172,043 shares issued and outstanding at
June 30, 2009 and December 31, 2008, respectively. Liquidation
preference of $23.25 per share
Convertible preferred stock Series B, no par value, 200,000 shares 5,611 5,611
authorized, 174,693 shares issued and outstanding at June 30, 2009
and December 31, 2008. Liquidation preference of $37.50 per share
Common stock, $.01 par value, 30,000,000 shares authorized 118 116
11,755,269 and 11,635,269 shares issued; 11,570,269 and 11,450,269
shares outstanding at June 30, 2009 and December 31, 2008,
Additional paid-in capital 50,679 49,920
Accumulated deficit (45,522 ) (45,543 )
Treasury stock at cost - 185,000 shares of common stock at June (1,298 ) (1,298 )
30, 2009 and December 31, 2008, respectively
Total shareholders' equity 12,756 12,608
Total liabilities and shareholders' equity $ 28,908 $ 26,731
NEW HORIZONS WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Royalties and franchise fees $ 4,357 $ 5,951 $ 8,662 $ 11,308
Courseware sales and other 1,123 477 1,782 1,260
Total franchising revenues 5,480 6,428 10,444 12,568
Company-owned training center revenues 3,340 3,481 6,242 6,750
Total revenues 8,820 9,909 16,686 19,318
Cost of revenues 3,679 3,690 7,126 7,417
Selling, general and administrative expenses 4,763 4,735 9,159 8,915
Operating income 378 1,484 401 2,986
Loss on disposal of property and equipment (42 ) (4 ) (56 ) (4 )
Interest expense, net (33 ) (97 ) (40 ) (180 )
Income before provision for income taxes 303 1,383 305 2,802
Provision for income taxes (136 ) (261 ) (284 ) (320 )
Net income $ 167 $ 1,122 $ 21 $ 2,482
Net income/(loss) per share:
Basic $ 0.00 $ 0.08 $ (0.03 ) $ 0.19
Diluted $ 0.00 $ 0.05 $ (0.03 ) $ 0.11
SOURCE: New Horizons Worldwide, Inc.