CAPE CORAL, Fla., Aug. 17 /PRNewswire-FirstCall/ -- Whitney
Information Network, Inc. (OTC:RUSS) (BULLETIN BOARD: RUSS) , a
provider of educational training seminars, conferences and services
across multiple delivery channels that help customers become
financially literate through specialized instruction and mentoring
on real estate and financial instruments investing, personal
finance, entrepreneurism and self-development, today reported
financial results for its second quarter of fiscal year 2009, which
ended on June 30, 2009. Revenue for the quarter ended June 30, 2009
was $29.1 million, or a decrease of $13.5 million or 31.7%, from
$42.6 million for the quarter ended June 30, 2008. The decrease in
revenue in the second quarter of 2009 compared with the second
quarter of 2008 is primarily due to the discontinuation of several
Proprietary Brands. Net loss before non-controlling interest for
the second quarter was ($7.4) million; net loss attributable to
Whitney Information Network, Inc. was ($3.3) million, or ($0.28)
per basic and diluted share. For the comparable quarter in 2008,
the net loss was ($1.9) million or ($0.16) per basic and diluted
share. On a non-GAAP basis, Adjusted EBITDA for the quarter was
($1.4) million compared to ($1.6) million for the second quarter
2008. Adjusted EBITDA is calculated as net income (loss) before
non-controlling interest excluding the impact of special items;
interest income; interest expense; other income (expense), net;
income tax (provision) benefit; stock option compensation expense;
depreciation and amortization expense; and equity income (loss)
from related parties; adjusted for the net change in deferred
revenue less the net change in deferred course expenses. A
reconciliation of Adjusted EBITDA to net loss for the three- and
six-month periods ended June 30, 2009 and 2008 is attached to this
press release. Deferred revenue grew by $6.2 million in the second
quarter of 2009 compared with an increase of $0.9 million in the
second quarter of 2008. This faster rate in the growth of the
deferred revenue balance primarily is attributable to the deferral
of revenue related to unattended courses of RDE Brand customers. In
December 2009, we will have two years of expired RDE Brands
contract data and will begin to recognize breakage revenue on these
brands at that time. For the six-month period ended June 30, 2009,
revenue was $61.6 million, or a decrease of $23.6 million or 27.7%,
from $85.2 million for six months ended June 30, 2008. Net loss
before non-controlling interest for the first six months of 2009
was ($10.6) million; net loss attributable to Whitney Information
Network, Inc. was ($2.4) million, or ($.20) per basic and diluted
share. For the comparable six-month period in 2008, our net loss
was ($5.8) million, or ($.50) per share. Adjusted EBITDA for the
six-month period ended June 30, 2009 was ($0.1) million compared to
$4.2 million for the first six months of 2008. Deferred revenue
grew by $12.1 million in the first half of 2009 compared with an
increase of $15.2 million in the first half of 2008. This slower
rate in the growth of the deferred revenue balance is primarily due
to lower sales and the result of expansion of the options for
course delivery in order to reduce the number of expired contracts
and the resulting breakage determination. In December 2009, we will
have two years of expired RDE Brands contract data and will begin
to recognize breakage revenue on these brands at that time. We have
increased the number of courses offered on DVDs and via the
Internet and expanded the number of location options for customers
in the United States. Additionally, we have implemented an outreach
notification program, contacting our customers by email and the
United States mail as courses near expiration. "Decreased sales in
second quarter 2009 were significantly affected by the suspension
of proprietary brands," said Charles M. Peck, Chief Executive
Officer. "However, revenue from our Rich Dad Education brands
remains stable quarter over quarter. We were particularly pleased
that our test of a Rich Dad 'Launch Your Business' brand targeted
at entrepreneurs met with an enthusiastic marketplace response. We
will continue to test in specific markets and roll out in the near
future." "Our geographic expansion into the Asia-Pacific region
also proceeded as planned, with our initial launch in Australia,"
Peck continued. "Following tests of an online model as well as a
seminar model for our strategic alliance with the Dolans, we are
evaluating performance results and fine tuning our future approach.
Regarding our alliance with Montel Williams, an initial test
revealed that greater emphasis should be placed on health and
wellness products along with financial products to fully maximize
the 'Living Well with Montel' positioning." Peck commented, "We
continue to cut costs in relation to current business conditions
through select staff rightsizing moves and a restructuring of the
commission structure for our independent contractors and
telemarketing staff. Like many companies in today's tough economic
climate, we are holding the line on staffing and facilities
expenses. Additionally, we are working hard to reduce
administrative costs and fees." About Whitney Information Network,
Inc. Whitney Information Network, Inc. (OTC:RUSS) (BULLETIN BOARD:
RUSS) is a provider of educational training seminars, conferences
and services across multiple delivery channels that help customers
become financially literate through specialized instruction and
mentoring. The company provides customers with comprehensive
instruction and mentoring in real estate investing, financial
instruments investing, personal finance, entrepreneurism and
self-development in the United States, United Kingdom, Canada,
Costa Rica and the Asia-Pacific region. Additional information can
be found at http://www.wincorporate.com/. Non-GAAP Financial
Measures - Adjusted EBITDA As used in our operating data, EBITDA is
defined as net income (loss) excluding the impact of special items
(including the costs associated with the SEC and the DOJ
investigations and the related class action and derivative
lawsuits); interest income; interest expense; other income
(expense), net; income tax (provision) benefit; stock option
compensation expense; depreciation and amortization expense; and
equity income (loss) from related parties. We define "Adjusted
EBITDA" as EBITDA adjusted for the net change in deferred revenue
less the net change in deferred course expenses. Adjusted EBITDA is
not a financial performance measurement according to accounting
principles generally accepted in the United States ("GAAP"). We use
Adjusted EBITDA as a key measure in evaluating our operations and
decision-making. We feel it is a useful measure in determining our
performance since it takes into account the change in deferred
revenue and deferred course expenses in combination with our
operating expenses. We reference Adjusted EBITDA frequently, since
it provides supplemental information that facilitates internal
comparisons to historical operating performance of prior periods
and external comparisons to competitors' historical operating
performance in our industry. We plan and forecast our business
using Adjusted EBITDA, with comparisons of actual to planned and
forecasted Adjusted EBITDA and we provide incentives to management
based on Adjusted EBITDA goals. In addition, we provide Adjusted
EBITDA because we believe investors and security analysts find it
to be a useful measure for evaluating our performance. Many costs
to acquire customers have been expended before a customer attends
any basic or advanced training. Those costs include media, travel,
facilities and instructor fees for the preview workshops and are
expensed when incurred. Licensing fees paid to Rich Global and
telemarketing and speaker commissions are deferred and recognized
when the related revenue is recognized. Revenue recognition of
tuition paid by customers to enroll in any basic or advanced
training courses at registration is deferred until (i) the course
is attended by the customer, (ii) the customer has received the
course content in an electronic format, (iii) the contract expires,
or (iv) revenue is recognized through course breakage. It is only
after one of those four occurrences that revenue is considered
earned. Thus, reporting in accordance with GAAP creates significant
timing differences between the receipt and disbursement of cash
with the recognition of the related revenue and expenses, both in
our Condensed Consolidated Statements of Cash Flows and Condensed
Consolidated Statements of Operations. As a result of these
factors, our operating cash flows can vary significantly from our
results of operations for the same period. For this reason, we
believe Adjusted EBITDA is an important non-GAAP financial measure.
Adjusted EBITDA has material limitations and should not be
considered as an alternative to net income (loss), cash flows
provided by operations, investing or financing activities or other
financial statement data presented in the Condensed Consolidated
Financial Statements as indicators of financial performance or
liquidity. Items excluded from Adjusted EBITDA are significant
components in understanding our financial performance. Because
Adjusted EBITDA is not a financial measurement calculated in
accordance with GAAP and is subject to varying calculations,
Adjusted EBITDA as presented may not be comparable to other
similarly titled measures of performance used by other companies.
The table below is a reconciliation of the Company's net loss to
EBITDA and Adjusted EBITDA for the periods set forth below (in
millions): Three months ended Six months ended June 30, June 30,
------------------ ---------------- 2009 2008 2009 2008 ---- ----
---- ---- Net loss $(7.4) $(1.9) $(10.6) $(5.8) Impairment of
assets 0.4 - 0.4 - Special items 0.2 - 0.3 0.2 Other income, net -
(0.6) (0.3) (0.9) Provision for income taxes 0.3 0.2 0.4 0.4 Gain
on sale of assets - - - (1.1) Stock-based compensation - 0.2 - 0.3
Depreciation and amortization expense 0.3 0.4 0.5 0.8 Equity loss
from related parties - 0.2 - 0.4 - --- - --- EBITDA (6.2) (1.5)
(9.3) (5.7) Net change in deferred revenue 6.2 0.9 12.1 15.2 Net
change in deferred course costs (1.4) (1.0) (2.9) (5.3) ---- ----
---- ---- Adjusted EBITDA $(1.4) $(1.6) $(0.1) $4.2 ===== =====
===== ==== Adjusted EBITDA as a percentage of cash received from
course and product sales (4.0)% (3.7)% (0.1)% 4.2% ==== ==== ====
=== Special Note Regarding Forward Looking Statements This press
release includes certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements include all statements other than those made
solely with respect to historical facts. These statements involve
known and unknown risks, uncertainties and other factors that may
cause our actual results or performance to be materially different
from any future results or performance expressed or implied by
these forward-looking statements. These factors include those
factors which can be found in our Form 10-K for the year ended
December 31, 2008 and our other filings with the Securities and
Exchange Commission. Forward-looking statements in this press
release should be evaluated in light of these important factors.
Although we believe that these statements are based upon reasonable
assumptions, we cannot provide any assurances regarding future
results. We undertake no obligation to revise or update any
forward-looking statements or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise. WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (in thousands) June 30,
December 31, 2009 2008 ---- ---- (unaudited) Assets Current assets:
Cash and cash equivalents $23,700 $23,594 Restricted cash 12,752
13,492 Deferred course expenses, current portion 24,953 22,070
Other current assets 1,357 2,452 Inventories 763 953 Assets held
for sale - 3,748 - ----- Total current assets 63,525 66,309 ------
------ Notes receivable, net of current portion 9,368 9,677
Property, equipment and intangible assets, net 3,686 4,241 Other
assets 1,572 1,381 ----- ----- Total assets $78,151 $81,608 =======
======= Liabilities and Stockholders' Deficit Current liabilities:
Accounts payable $3,014 $4,516 Income taxes payable 615 799
Deferred revenue, current portion 128,710 116,642 Accrued course
expenses 1,285 1,440 Accrued salaries, wages and benefits 1,036 851
Other accrued expenses 4,967 6,611 Other current liabilities 290
288 --- --- Total current liabilities 139,917 131,147 -------
------- Long-term debt, net of current portion 2,867 2,913 Other
long-term liabilities 154 222 --- --- Total liabilities 142,938
134,282 ------- ------- Commitments and contingencies Whitney
Information Network, Inc.'s stockholders' deficit: Preferred stock
- - Common stock 2,591 2,591 Paid-in capital 2,527 2,507 Cumulative
foreign currency translation adjustment 328 1,236 Accumulated
deficit (61,393) (59,008) ------- ------- Total Whitney Information
Network, Inc.'s stockholders' deficit (55,947) (52,674)
Noncontrolling interest (8,840) - ------ - Total stockholders'
deficit (64,787) (52,674) ------- ------- Total liabilities and
stockholders' deficit $78,151 $81,608 ======= ======= WHITNEY
INFORMATION NETWORK, INC. AND SUBSIDIARIES Condensed Consolidated
Statements of Operations and Comprehensive Loss (Unaudited, in
thousands, except per share data) Three months ended Six months
ended June 30, June 30, ------------------ ---------------- 2009
2008 2009 2008 ---- ---- ---- ---- Revenue $29,139 $42,605 $61,601
$85,209 Direct course expenses 15,792 23,497 32,937 45,626
Advertising and sales expenses 12,040 12,300 23,416 28,453 General
and administrative expenses 8,506 8,856 15,714 18,131 ----- -----
------ ------ Loss from operations (7,199) (2,048) (10,466) (7,001)
Other income, net 97 380 194 1,624 -- --- --- ----- Loss before
income taxes (7,102) (1,668) (10,272) (5,377) Provision for income
taxes (280) (223) (373) (448) ---- ---- ---- ---- Net loss (7,382)
(1,891) (10,645) (5,825) Net loss attributable to the
noncontrolling interest (4,122) - (8,260) - ------ - ------ - Net
loss attributable to Whitney Information Network, Inc. $(3,260)
$(1,891) $(2,385) $(5,825) ======= ======= ======= ======= Basic
and diluted net loss per share attributable to Whitney Information
Network, Inc. common stockholders $(0.28) $(0.16) $(0.20) $(0.50)
====== ====== ====== ====== Basic and diluted weighted average
shares outstanding 11,739 11,739 11,739 11,739 ====== ====== ======
====== Comprehensive loss: Net loss $(7,382) $(1,891) $(10,645)
$(5,825) Foreign currency translation adjustments (1,493) (76)
(1,232) 3 ------ --- ------ - Comprehensive loss (8,875) (1,967)
(11,877) (5,822) Comprehensive loss attributable to noncontrolling
interest (4,522) - (8,584) - ------ - ------ - Comprehensive loss
attributable to Whitney Information Network, Inc. $(4,353) $(1,967)
$(3,293) $(5,822) ======= ======= ======= ======= WHITNEY
INFORMATION NETWORK, INC. AND SUBSIDIARIES Condensed Consolidated
Statements of Cash Flows (Unaudited, in thousands) Six months ended
June 30, ---------------- 2009 2008 ---- ---- Cash flows from
operating activities: Net loss $(10,645) $(5,825) Adjustments to
reconcile net loss to net cash used in operating activities:
Depreciation and amortization 530 811 Impairment of assets 350 -
Stock-based compensation expense 20 332 Gain on sale of assets -
(1,080) Equity loss from related parties 32 400 Changes in
operating assets and liabilities: Restricted cash 740 (1,713)
Deferred course expenses (2,887) (5,302) Other current assets 1,052
1,006 Inventories 190 (490) Other assets (73) (56) Accounts payable
(1,502) (1,920) Income taxes payable (184) 117 Deferred revenue
12,097 15,236 Accrued course expenses (155) 403 Accrued salaries,
wages and benefits 185 (1,138) Other accrued expenses (1,646) 9
Other liabilities (96) (1,194) --- ------ Net cash used in
operations (1,992) (404) ------ ---- Cash flows from investing
activities: Purchase of property and equipment (76) (62) Proceeds
from notes receivable 105 43 Investments and advances to related
parties (146) - Proceeds from the sale of assets 3,748 3,040 -----
----- Net cash provided by investing activities 3,631 3,021 -----
----- Cash flows from financing activities: Distribution to
noncontrolling interest (256) (1,576) Proceeds from issuance of
long-term debt - 7 Principal payments on long-term debt (45) (99)
--- --- Net cash used in financing activities (301) (1,668) ----
------ Effect of foreign currency translation (1,232) 3 ------ -
Net increase in cash and cash equivalents 106 952 Cash and cash
equivalents, at beginning of period 23,594 33,012 ------ ------
Cash and cash equivalents, at end of period $23,700 $33,964 =======
======= Supplemental non-cash disclosures: Accounts receivable
converted to a note receivable $- $335 == ==== DATASOURCE: Whitney
Information Network, Inc. CONTACT: Investor Relations, Booke and
Company, Inc., +1-212-490-9095 Web Site:
http://www.wincorporate.com/
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