Whitney Information Network, Inc. Announces Its Q4 and 2006 Full Year Results



    CAPE CORAL, FLA., April 2 /CNW/ - Whitney Information Network, Inc.
(OTCBB:RUSS), an international leader in the postsecondary education industry
focused on educating individual investors in real estate and financial
markets, announced today its fourth quarter and full year 2006 results.

    Summary Financial Highlights

    
                                            Q4              Full year
                                     ----------------- -------------------
                                      2006     2005      2006      2005
                                     -------- -------- --------- ---------
    (In thousands)

    Revenue                          $79,900  $39,724  $224,654  $163,107

    Earnings (loss) from operations  $18,738  $(4,690) $  7,690  $ (9,161)

    Net earnings (loss)              $11,409  $   (94) $  1,755  $  3,850

    Diluted earnings (loss) per
     share                           $  0.94  $ (0.03) $   0.15  $   0.41

    Cash (used in) provided by
     operations                      $(2,054) $ 2,142  $ 20,019  $ 17,022

    Non-GAAP Operating Metrics:
    --------------------------------

    Cash received from course and
    product sales                    $47,798  $44,286  $223,061  $196,395

    Adjusted EBITDA                  $(4,248) $   129  $ 15,620  $ 23,380
    

    Q4 Highlights

    --  Cash received from course and product sales totaled $47.8 million, a
7.9% increase vs. Q4 2005

    --  Revenue increased 101.1% to $79.9 million vs. Q4 2005, aided by $21.8
million in the initial recognition of course breakage in our financial markets
education segment and our United Kingdom business

    --  Net earnings of $11.4 million improved $11.5 million vs. Q4 2005

    --  Fully diluted earnings per share of $0.94 was $0.97 above Q4 2005's
$(0.03) net loss per share

    --  Cash (used in) provided by operations amounted to $(2.1) million vs.
$2.1 million in Q4 2005, a $4.2 million decline

    During the fourth quarter of 2006, we realized the continued slowdown in
our real estate education segment and the accelerated deterioration of the
STAR Trader(R) brand within the financial markets education segment. We also
exited the Options Success(TM) brand, which will be rebranded and relaunched
in the second half of 2007. These factors were the primary contributors to an
Adjusted EBITDA loss of $(4.2) million vs. an Adjusted EBITDA of $0.1 million
in Q4 2005.

    We were encouraged by the successful introduction of Rich Dad
Education(TM) in Q4, which is now increasing its penetration levels throughout
the United States, with plans to expand outside the United States in 2007.

    Our operating results in Q4 2006 included the initial revenue recognition
from course breakage totaling $21.8 million for our financial markets
education segment ($14.5 million) and United Kingdom business ($7.3 million),
which was previously disclosed.

    Reflected in Q4 2006 results was an impairment of assets charge totaling
$3.7 million relating to exiting the STAR Trader(R) brand, repositioning the
Cash Flow Generator(R) brand and adjustments to reflect the net realizable
value of certain assets we are in the process of divesting. Also reflected in
Q4's earnings from operations were charges with respect to special items
totaling $2.3 million related to the withdrawal of the EduTrades, Inc.
registration statement, liquidated damages associated with registration rights
agreement from the December 2005 PIPE offering, and professional fees and
other related costs associated with the United States Securities and Exchange
Commission and the Department of Justice investigations. Moreover, we
established a $7.3 million valuation allowance against our net deferred tax
asset that is reflected in our income tax provision for Q4 2006.

    On a segment basis, our financial markets education segment's cash
received from course and product sales decreased $(0.4) million to $20.8
million, or (1.9)%, from the $21.2 million received during Q4 2005. The
domestic real estate education segment's cash received from course and product
sales increased $3.3 million over the comparable period, or 16.2%, to $23.9
million, driven by the launch of Rich Dad Education(TM). Our International
segment saw a $0.5 million increase, or 18.3%, to $3.0 million versus Q4 2005.

    2006 Highlights

    --  Cash received from course and product sales totaled a record $223.1
million, a 13.6% increase vs. 2005

    --  Revenue increased 37.7% to $224.7 million vs. 2005's $163.1 million

    --  Net earnings of $1.8 million declined $2.1 million vs. 2005

    --  Cash provided by operations amounted to $20.0 million, a 17.6%
increase vs. 2005's $17.0 million

    --  Cash, cash equivalents and restricted cash totaled $40.7 million at
December 31, 2006 vs. $38.7 million at December 31, 2005, a $2.0 million
increase

    --  Cash dividends of $11.7 million were returned to shareholders in
October 2006

    --  Approximately 87,000 students attended our basic and advanced
courses, an increase of 15.2% over the same period 2005

    We reported record revenue of $224.7 million for 2006, an increase of
37.7% over the prior year's $163.1 million, while net earnings of $1.8 million
declined 54.4% to $3.9 million in the comparable 2005 period. The initial
application of course breakage for the financial markets education segment and
the United Kingdom business of $21.8 million contributed to course breakage
revenue of $55.4 million for the full year 2006, an increase of $39.2 million
over the $16.2 million recorded in 2005.

    In 2006, we recorded Adjusted EBITDA of $15.6 million, a 33.2% decline
from prior year's $23.4 million.

    Our financial markets education segment's cash received from course and
product sales grew to $112.6 million, a $36.1 million increase, or 47.2%, over
the $76.5 million received during 2005. The domestic real estate education
segment decreased $(8.6) million, or (7.9)%, to $100.1 million versus 2005.
Our International segment saw a $0.9 million decline, or (8.4)%, to $10.3
million versus 2005.

    Form 10-K Filing

    Our Form 10-K for the year ended December 31, 2006 was filed today with
the United States Securities and Exchange Commission.

    Reconciliation of Non-GAAP Measurements to GAAP Results

    In addition to the results provided in accordance with generally accepted
accounting principles in the United States of America (U.S. GAAP) throughout
this document, we employ non-GAAP operating metrics that we believe provide
additional information in analyzing our business and facilitate comparison to
past and present operations. Non-GAAP measurements are not intended to replace
the presentation of our financial results in accordance with U.S. GAAP.

    Adjusted EBITDA

    As used in the following operating data and our reconciliation, EBITDA
means net earnings (loss) before income taxes plus interest expense,
depreciation and amortization expense, as well as impairment of assets,
special items (including the costs associated with the United States
Securities and Exchange Commission and the Department of Justice
investigations and writeoff of stock registration costs as a result of the
withdrawal of the EduTrades, Inc. registration statement), the stock portion
of the gift to the wife of the former President, interest and nonoperating
income, stock and warrant compensation, minority interest and equity earnings
in related parties and (gain) from the sale of assets. We refer to "Adjusted
EBITDA" to mean 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 under generally accepted accounting principles.

    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
incentivize management on Adjusted EBITDA. In addition, we provide Adjusted
EBITDA because we believe investors and security analysts find Adjusted EBITDA
to be a useful measure for evaluating our performance.

    The vast majority of our costs to acquire the student have been expended
up to the point of registration, such as media, travel, facilities and
instructor fees for the introductory workshops; these costs are expensed when
incurred. However, the tuition paid at registration is deferred until the
course is attended by the student, the student has received the course content
in an electronic format, or the contract expires, at which time the revenue is
deemed earned. Thus, reporting under generally accepted accounting principles
in the United States of America (U.S. GAAP) creates significant timing
differences with respect to revenue and expenses, both in our Consolidated
Statement of Cash Flows and Consolidated Statement 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 U.S. GAAP financial measure.

    Adjusted EBITDA should not be considered as an alternative to net
earnings (loss), cash flows provided by operations, investing or financing
activities or other financial statement data presented in the 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
measurement determined in accordance with U.S. GAAP and is susceptible to
varying calculations, Adjusted EBITDA as presented may not be comparable to
other similar titled measures of performance from other companies.

    
                                              Q4             Full year
                                      ------------------ -----------------
                                        2006     2005     2006     2005
                                      --------- -------- -------- --------
    (In thousands)

    Net earnings (loss)               $ 11,409  $   (94) $ 1,755  $ 3,850
    Impairment of assets                 3,668        -    3,668        -
    Special items                        2,330        -    2,330        -
    Other income                           246   (1,300)     162   (1,801)
    Interest expense (income), net        (355)     131   (1,876)      28
    Income tax provision (benefit)       7,639     (119)   7,678   (6,798)
    Stock gift                               -        -      937        -
    Stock option and warrant
     compensation expense                  217        -      881        -
    Depreciation and amortization          435      449    1,774    1,856
    Minority interest and equity
     earnings                               36    2,493       45    2,138
    Gain on sale of assets                (237)  (5,802)     (74)  (6,579)

                                      --------- -------- -------- --------
    EBITDA                              25,388   (4,242)  17,280   (7,306)
                                      --------- -------- -------- --------

    Net change in deferred revenue     (32,102)   4,562   (1,593)  33,288
    Net change in deferred course
     costs                               2,466     (191)     (67)  (2,602)
                                      --------- -------- -------- --------
    Adjusted EBITDA                   $ (4,248) $   129  $15,620  $23,380
                                      --------- -------- -------- --------

    Adjusted EBITDA as a percentage of
     cash received from course and
     product sales                        -8.9%     0.3%     7.0%    11.9%
                                      --------- -------- -------- --------
    

    Cash received from course and product sales

    We believe cash received from course and product sales before changes in
deferred revenue is an important measure of cash receipts and overall business
volume. Cash received from course and product sales as presented may not be
comparable to other similarly titled measures of performance from other
companies. The following reconciles cash received from course and product
sales to revenue for financial reporting purposes for the respective periods:

    
                                            Q4              Full year
                                     ----------------- -------------------
                                      2006     2005      2006      2005
                                     -------- -------- --------- ---------
    (In thousands)

    Cash received from course and
     product sales                   $47,798  $44,286  $223,061  $196,395
    Less: Net changes in deferred
     revenue                          32,102   (4,562)    1,593   (33,288)
                                     -------- -------- --------- ---------
    Revenue for financial reporting
     purposes                        $79,900  $39,724  $224,654  $163,107
                                     -------- -------- --------- ---------
    

    The following illustrates the number of educational events, the number of
students and the average number of students per paid course for the
comparative periods:

    

                                       Q4                 Full year
                             ---------------------- ----------------------
                              2006    2005   Change  2006    2005   Change
                             ------- ------- ------ ------- ------- ------
    Number of courses
     Free introductory
      workshops               1,302   1,114   16.9%  5,205   4,744    9.7%
     Basic training sessions    306     212   44.3%  1,070     939   14.0%
     Advanced live courses      173     209  -17.2%    611     651   -6.1%
     Advanced electronic
      courses                    28      45  -37.8%    166     162    2.5%
                             ------- ------- ------ ------- ------- ------
                              1,809   1,580   14.5%  7,052   6,496    8.6%
                             ------- ------- ------ ------- ------- ------
    Number of attending
     students
     Basic training sessions 14,408  12,145   18.6% 59,244  53,742   10.2%
     Advanced live courses    4,753   3,962   20.0% 16,216  13,837   17.2%
     Advanced electronic
      courses                 1,499   2,210  -32.2%  8,224   5,133   60.2%
     Mentorships completed      720     610   18.0%  3,000   2,510   19.5%
                             ------- ------- ------ ------- ------- ------
                             21,380  18,927   13.0% 86,684  75,222   15.2%
                             ------- ------- ------ ------- ------- ------
    Average students per paid
     course
     Basic training sessions   47.1    57.3  -17.8%   55.4    57.2   -3.1%
     Advanced live courses     27.5    19.0   44.7%   26.5    21.3   24.4%
                             ------- ------- ------ ------- ------- ------
                               40.0    38.3    4.4%   44.9    42.5    5.6%
                             ------- ------- ------ ------- ------- ------
    

    
              WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
    Consolidated Statement of Operations and Comprehensive Earnings (Loss)
                    (in thousands, except per share data)

                                               Years ended December 31,
                                             -----------------------------
                                               2006      2005      2004
                                             --------- --------- ---------

    Revenue                                  $224,654  $163,107  $136,259
                                             --------- --------- ---------
    Operating expenses:
     Direct course expenses                   111,962    94,765    91,763
     Advertising and sales expense             64,168    49,839    49,664
     General and administrative expenses       34,836    27,664    27,676
     Impairment of assets                       3,668         -         -
     Special items                              2,330         -         -
                                             --------- --------- ---------
                                              216,964   172,268   169,103
                                             --------- --------- ---------
    Earnings (loss) from operations             7,690    (9,161)  (32,844)
                                             --------- --------- ---------

    Other income:
     Other (expense) income                      (162)    1,800       893
     Interest income (expense), net             1,876       (28)     (499)
     Equity (loss) earnings from related
      parties                                     (45)     (176)      159
     Gain on sale of assets                        74     6,579       305
                                             --------- --------- ---------
                                                1,743     8,175       858
                                             --------- --------- ---------

    Earnings (loss) before income taxes         9,433      (986)  (31,986)
     Minority interest                              -    (1,962)       23
     Income tax (provision) benefit            (7,678)    6,798         -
                                             --------- --------- ---------
    Net earnings (loss)                         1,755     3,850   (31,963)
     Effect of foreign exchange rates            (510)     (100)       55
                                             --------- --------- ---------
    Comprehensive earnings (loss)            $  1,245  $  3,750  $(31,908)
                                             --------- --------- ---------
    Earnings (loss) per share:
     Diluted                                 $   0.15  $   0.41  $  (3.72)
                                             --------- --------- ---------
     Basic                                   $   0.16  $   0.43  $  (3.72)
                                             --------- --------- ---------
    Weighted average common shares
     outstanding:
     Diluted                                   11,620     9,360     8,589
                                             --------- --------- ---------
     Basic                                     11,162     8,859     8,589
                                             --------- --------- ---------
    

    
              WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                                (in thousands)
                                                Years ended December 31,
                                              ----------------------------
                                                2006     2005      2004
                                              --------- -------- ---------

    Operating activities:
    Net earnings (loss)                       $  1,755  $ 3,850  $(31,963)
    Adjustments to reconcile net earnings
     (loss) to net cash provided by operating
     activities:
     Depreciation and amortization               1,774    1,856     1,610
     Impairment of assets                        3,668        -         -
     Stock option and warrant compensation         881        -         -
     Stock gift                                    937        -         -
     Loss (gain) on asset disposition              (48)  (6,579)     (305)
     Minority interest                              45    1,962       (23)
    Changes in operating assets and
     liabilities:
     Restricted cash                            (1,104)  (3,225)     (389)
     Accounts receivable, net                      737   (3,341)      867
     Prepaid advertising and other                 322     (864)      353
     Inventory                                     (51)     303      (677)
     Deferred tax asset, net of deferred tax
      liability                                  7,287   (7,287)        -
     Deferred course expenses                      (67)  (2,602)   (3,546)
     Other assets                                   70      (19)      (96)
     Accounts payable                            1,102   (3,722)    4,195
     Accrued course expenses                      (591)    (333)      528
     Deferred revenue                           (1,593)  33,288    27,828
     Other accrued expenses                      5,125    3,379     2,218
     Income taxes payable                         (230)     356         -
                                              --------- -------- ---------
     Net change in operating working capital    11,007   15,933    31,281
                                              --------- -------- ---------
    Cash provided by operations                 20,019   17,022       600
                                              --------- -------- ---------
    Investing activities:
     Purchase of property and equipment         (7,574)    (701)   (9,682)
     Purchase of goodwill and intangible
      assets                                         -     (333)     (250)
     Purchase of equity interest in investment
      properties                                     -        -    (2,701)
     Proceeds from notes receivable              3,772        -         -
     Proceeds from sale of investment
      properties                                    28    9,777       827
     Investments in and advances to related
      parties, net                                (608)    (103)    1,202
     Distribution of minority interest             (44)       -         -
                                              --------- -------- ---------
    Cash (used in) provided by investing
     activities                                 (4,426)   8,640   (10,604)
                                              --------- -------- ---------
    Financing activities:
     Proceeds from sale of common stock              -    7,155         -
     Proceeds from (paid to) stockholders from
      sale of common stock                      (5,110)   5,110         -
     Proceeds from issuance of long term debt        -      103     6,363
     Principal payments on long term debt       (1,075)  (9,041)     (291)
     Principal payments on note payable to
      officer                                        -        -    (4,713)
     Proceeds from exercise of stock options
      and warrants                               4,186        3        28
     Dividends paid to shareholders            (11,711)       -         -
     Costs associated with registering common
      stock                                       (392)    (315)        -
                                              --------- -------- ---------
    Cash (used in) provided by financing
     activities                                (14,102)   3,015     1,387
                                              --------- -------- ---------
    Effect of foreign currency translation        (554)    (100)       55
                                              --------- -------- ---------
    Increase (decrease) in cash and cash
     equivalents                                   937   28,577    (8,562)
     Cash and cash equivalents, beginning of
      year                                      33,244    4,667    13,229
                                              --------- -------- ---------
    Cash and cash equivalents, end of year    $ 34,181  $33,244  $  4,667
                                              --------- -------- ---------
    

    
              WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
                         Consolidated Balance Sheets
                      (in thousands, except share data)

                                                December 31,  December 31,
                                                    2006          2005
                                                ------------- ------------

                      Assets
    Current assets:
     Cash and cash equivalents                      $ 34,181     $ 33,244
     Restricted cash                                   6,510        5,406
     Accounts receivable, net                          3,373        3,789
     Notes receivable, current portion                    84        1,785
     Deferred course expenses, current portion        14,396       14,401
     Prepaid advertising and other prepaid
      expenses                                         2,519        2,841
     Inventory                                         1,061        1,087
     Deferred registration costs                           -          315
     Assets held for sale                              4,726            -
                                                ------------- ------------
    Total current assets                              66,850       62,868
                                                ------------- ------------
     Notes receivable, net of current portion          7,087        9,158
     Property and equipment, net                      11,757       10,082
     Investment and development costs in real
      estate                                           5,060        4,819
     Intangible assets, net                            4,129        5,754
     Goodwill                                              -        2,000
     Deferred income tax asset                             -        7,287
     Deferred course expenses, net of current
      portion                                            171           99
     Other assets                                         66          136
                                                ------------- ------------
                                                    $ 95,120     $102,203
                                                ------------- ------------
       Liabilities and Stockholders' Deficit
    Current liabilities:
     Accounts payable                               $  4,744     $  3,691
     Notes payable                                       149            -
     Income taxes payable                                126          356
     Accrued course expenses                           1,250        1,841
     Other accrued expenses                           11,957        7,377
     Due to stockholders from sale of common
      stock                                                -        5,110
     Long term debt, current portion                   3,139          462
     Deferred revenue                                114,922      116,777
                                                ------------- ------------
    Total current liabilities                        136,287      135,614
    Long term debt, net of current portion             3,015        2,912
    Deferred rental incentives                           394            -
    Deferred revenue, net of current portion             486          224
                                                ------------- ------------
    Total liabilities                                140,182      138,750
                                                ------------- ------------
    Minority interest                                      -        3,939
    Commitments and contingencies
    Stockholders' deficit:
     Preferred stock, no par value, 10,000,000
      shares authorized, no shares issued and
      outstanding                                          -            -
     Common stock, no par value, 25,000,000
      shares authorized, 11,738,587 and
      10,455,910 shares issued and outstanding,
      as of December 31, 2006 and 2005,
      respectively                                     4,132       10,593
     Paid-in capital                                   1,089          449
     Foreign currency translation adjustment          (1,160)        (650)
     Accumulated deficit                             (49,123)     (50,878)
                                                ------------- ------------
    Total stockholders' deficit                      (45,062)     (40,486)
                                                ------------- ------------
                                                    $ 95,120     $102,203
                                                ------------- ------------
    

    Information in this press release contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
deal with our current plans, intentions, beliefs, expectations, and statements
of future economic performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"could," "expects," "plans," "intends," "anticipates," "believes,"
"estimates," or "predicts" or the negative of such terms. These
forward-looking statements include, without limitation, statements about our
market opportunity, our strategies, competition, expected activities and
expenditures as we pursue our business plan, and the adequacy of our available
cash resources. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Forward-looking statements
involve known and unknown risks and uncertainties which may cause our actual
results in future periods to differ materially from what is currently
anticipated. No forward-looking statement is a guarantee of future
performance, and you should not place undue reliance on any forward-looking
statement. We undertake no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur in the future. Industry data and other statistical information
used are based on independent publications, government publications, reports
by market research firms or other published independent sources. Some data are
based on our good faith estimates, derived from our review of internal surveys
and the independent sources just listed. Although we believe these sources to
be reliable, we have not independently verified the information.




For further information:

For further information: Whitney Information Network, Inc., Cape Coral
Alfred R. Novas, Co-President and Chief Financial Officer 239-540-6522

Organization Profile

WHITNEY INFORMATION NETWORK, INC.

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