Nexient Learning Inc. Announces Second Quarter Results



    SYDNEY, NS, Aug. 13 /CNW/ - Nexient Learning Inc. (TSX: NXN), announced
today its unaudited financial results from the second quarter ended June 30,
2007.
    "We are pleased to report our financial results for the second quarter
that clearly demonstrates the positive impact of our efforts to align costs
with revenues and improve efficiencies throughout the entire organization. For
the comparative quarters of 2007 and 2006, our efforts have resulted in an
increase of revenues of more than $500,000, improved gross margin, EBITDA(*)
that has more than doubled and net income of $300,000. As well we have
achieved positive cash flow for both quarters in 2007." said Colleen
Moorehead, President & Chief Executive Officer. "We will build upon these
successes by continuing to implement revenue growth strategies that are
customer focused and leverage our national footprint. In line with this
objective the Company has realigned its sales force to maximize the efficiency
of our sales efforts and better meet our clients training needs. Our client
base continues to grow to include global companies that are choosing Nexient
as their national training partner for Canada."

    
    Second Quarter Highlights
    -------------------------
    For the three-month period ended June 30, 2007:

    - Revenues increased to $16,976,048 from $16,406,867 for the same period
      in 2006
    - Gross Margin increased to 55.0% from 52.3% for the same period in 2006
    - EBITDA(*) more than doubled in the second quarter of FY 2007 compared
      to the second quarter of 2006
    - Net Income was achieved for the second quarter of FY 2007 for the first
      time in eight quarters
    - Nexient was named the exclusive Canadian distributor of Tata
      Interactive Systems' TOPSIM(R) business simulation product line. This
      will allow Nexient to help companies improve their business results
      through multi-player simulations that provide employees with the
      realistic experience of business operations in a risk-free environment.


    Financial Data
    --------------

                                   Three months                  Six months
                                ended June 30th             ended June 30th
    In millions, except               Unaudited                   Unaudited
     per share data          2007          2006          2007          2006

    Revenues               $16.98        $16.41        $33.03        $33.03
    EBITDA(*)                1.87          0.90          3.01          1.79
    Net Income (Loss),
     Cont. Operations        0.29         (0.95)        (0.60)        (1.62)
    Net Income (Loss),
     Disc. Operations           -         (0.04)            -         (0.14)
    Net Income (Loss)        0.29         (0.99)        (0.60)        (1.76)
    Earnings (Loss)
     Per Share              $0.01        ($0.04)       ($0.02)       ($0.07)


    (*) EBITDA - Earnings before interest, taxes, depreciation and
        amortization does not have a standardized meaning under GAAP.
        However, management believes that this is a useful performance
        measure as it approximates cash generated from operations.


    The Company's financial advisors, NewPoint Capital Partners, have worked
with management under the direction of Nexient's Board of Directors, and have
undertaken an extensive review of the Company's opportunities within the
capital markets and strategic alternatives. Nexient and its financial advisors
are currently engaged in discussions with various parties. Should a
transaction or refinancing be successfully concluded with one or more of these
parties, Nexient will be able to meet its financial obligations and continue
to pursue its business strategy. There can be no assurance that any agreement
will result from these discussions or that any transaction will be completed.

    About Nexient Learning Inc.
    ---------------------------

    Nexient Learning Inc. is the largest corporate training and consulting
company in Canada. Nexient delivers the broadest choice of top calibre,
industry-recognized curricula in information technology, business process
improvement and leadership and business skills. Nexient's learning services
include learning management systems, curriculum development and strategic
consulting. With 18 locations across Canada, Nexient offers innovative
learning solutions in both classroom and online formats. Nexient is traded on
the Toronto Stock Exchange as "NXN". More information is available on the
company's website at www.nexientlearning.com.

    Forward Looking Statements

    This press release contains forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
including economic conditions which may cause the actual results, performance
or achievements of the Corporation to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. As discussed in this press release and in the
second quarter Management's Discussion and Analysis, the Company has initiated
a cost restructuring plan for the purpose of streamlining business processes
and restoring profitability. There is always risk inherent in restructuring
plans that the end result will not have the desired outcome and further action
will need to be taken by the Company. As indicated in this press release and
in the second quarter Management's Discussion and Analysis, and as previously
announced, the Company is assessing all available financing opportunities that
will allow the Company to meet its debt obligations that mature in November
2007. The Company will use its best efforts to complete such a financing
transaction but can make no assurances that such a transaction will be
completed. The Company has focused its efforts on realizing the synergies of
its acquired intellectual property for the purpose of revenue growth however
revenue growth may not be achieved because of customer demand, plan execution
or competitive forces. There can be no assurance that the financing will be
completed or that other forward-looking statements will prove to be accurate
and readers should not place undue reliance on forward-looking statements. The
Corporation specifically disclaims any obligation to update these
forward-looking statements.


                        Nexient Learning Incorporated
                         CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)


                                                         June   December 31,
    As at                                                2007          2006
    -------------------------------------------------------------------------

    Assets

    Current assets:
      Cash and cash equivalents                  $    756,029  $    969,688
      Accounts receivable                          11,474,775    12,921,866
      Inventories                                     462,978       480,106
      Prepaid expenses                                627,696       655,851
    -------------------------------------------------------------------------
                                                   13,321,478    15,027,511

    Capital assets                                  4,285,789     3,356,933
    Other assets                                      691,371     3,322,954
    Intangible assets                               7,899,744     8,484,878
    Future income tax                               2,518,411     2,504,642
    Goodwill                                       11,199,780    11,199,780
    -------------------------------------------------------------------------
                                                   26,595,095    28,869,187

    -------------------------------------------------------------------------
                                                 $ 39,916,573  $ 43,896,698
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Deficiency

    Current liabilities:
      Operating loan                             $  3,950,000  $  2,983,424
      Accounts payable and accrued liabilities     12,164,921    14,218,406
      Deferred revenue                              2,182,285     3,011,147
      Convertible debentures                          830,363             -
      Current portion of long-term debt            27,708,618    28,158,808
      Current portion of obligations under
       capital lease                                  165,678       192,688
      Current portion of deferred lease
       inducements                                    157,496        90,906
    -------------------------------------------------------------------------
                                                   47,159,361    48,655,379

    Long-term debt                                    458,214       750,000
    Obligations under capital lease                   176,719        91,383
    Deferred lease inducements                      1,133,878       609,455

    Shareholders' deficiency:
      Share capital                                19,211,408    19,115,275
      Contributed surplus                           4,469,947     4,386,405
      Deficit                                     (32,692,954)  (29,711,199)
    -------------------------------------------------------------------------
                                                   (9,011,599)   (6,209,519)

    -------------------------------------------------------------------------
                                                 $ 39,916,573  $ 43,896,698
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Nexient Learning Incorporated
    Consolidated Statements of Earnings, Comprehensive Loss and Deficit
    Periods ended June 30, 2007 and 2006

    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                Three Months                 Six Months
                             2007          2006          2007          2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Revenues         $ 16,976,048  $ 16,406,867  $ 33,026,608  $ 33,030,652
    Cost of revenues    7,643,065     7,818,753    15,251,730    15,521,573
    -------------------------------------------------------------------------
    Gross margin        9,332,983     8,588,114    17,774,878    17,509,079

    Operating expenses:
      General and
       administrative   4,130,209     4,896,627     8,368,893     9,956,965
      Sales and
       marketing        3,093,920     2,787,034     6,148,767     5,730,151
      Restructuring       242,558             -       242,558        30,449
    -------------------------------------------------------------------------
                        7,466,687     7,683,661    14,760,218    15,717,565

    -------------------------------------------------------------------------
    Income before
     the following      1,866,296       904,453     3,014,660     1,791,514

    Depreciation and
     amortization         621,977       659,950     1,257,765     1,510,649
    Gain on sale of
     business analyst
     agreement                  -             -             -      (450,722)
    Interest on long-
     term debt            796,080       841,839     1,803,582     1,728,491
    Other interest
     expense              157,180       335,844       544,462       604,376
    -------------------------------------------------------------------------
                        1,575,237     1,837,633     3,605,809     3,392,794
    -------------------------------------------------------------------------

    Income (loss)
     before taxes         291,059      (933,180)     (591,149)   (1,601,280)

    Income tax expense      4,961        15,040         5,854        17,251

    -------------------------------------------------------------------------
    Income (loss) from
     continuing
     operations           286,098      (948,220)     (597,003)   (1,618,531)

    Loss from
     discontinued
     operations                 -       (39,000)            -      (137,984)

    -------------------------------------------------------------------------
    Net income (loss)
     and comprehensive
     income (loss)        286,098      (987,220)     (597,003)   (1,756,515)
    -------------------------------------------------------------------------

    Deficit, beginning
     of period        (32,979,052)  (21,598,746)  (29,711,199)  (20,829,451)
    Adoption of
     accounting policy
      Financial
       instruments              -             -    (2,384,752)            -
    -------------------------------------------------------------------------

    Deficit, end of
     period          $(32,692,954) $(22,585,966) $(32,692,954) $(22,585,966)
    -------------------------------------------------------------------------

    Income (loss)
     per share:
      Continuing
       operations       0.8 cents    (4.0)cents    (1.7)cents    (6.8)cents
      Discontinued
       operations               -    (0.2)cents             -    (0.6)cents
    -------------------------------------------------------------------------
                        0.8 cents    (4.2)cents    (1.7)cents    (7.4)cents

    Weighted average
     number of
     common shares
     outstanding       34,631,971    23,450,324    34,607,016    23,835,043



    Nexient Learning Incorporated
    Consolidated Statements of Cash Flows
    Periods ended June 30, 2007 and 2006
    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                Three Months                 Six Months
                             2007          2006          2007          2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash provided by (used in):

    Operating activities:
      Income (loss)
       from
       continuing
       operations    $    286,098  $   (948,220) $   (597,003) $ (1,618,531)
      Add items not
       involving cash:
        Stock-based
         compensation      41,317        43,510        83,542        58,383
        Amortization
         of deferred
         finance
         charges                -       289,239             -       548,540
        Amortization
         of deferred
         lease
         inducements      (39,374)            -       (73,199)            -
        Cash interest
         payments
         deferred and
         converted to
         convertible
         debenture              -             -       864,102             -
        Accretion of
         convertible
         debenture         23,680        14,428        41,032        41,071
        Accretion of
         long-term debt    21,293             -        55,991             -
        Depreciation and
         amortization     621,977       659,950     1,257,765     1,510,649
        Gain on sale of
         business analyst
         agreement              -             -             -      (450,722)
        Future income
         taxes            (10,039)       15,040       (13,769)        5,818
      Cash received for
       lease inducements        -             -       664,212             -
      Changes in non-cash
       working capital
       balances          (199,765)     (295,492)   (1,401,401)   (2,349,824)
      Discontinued
       operations               -       (78,199)            -      (181,115)
    -------------------------------------------------------------------------
      Cash provided by
       (used in)
       operating
       activities         745,187      (299,744)      881,272    (2,435,731)

    Financing
     activities:
      Issue of share
       capital for cash    18,087       500,000        21,362       500,000
      Increase in
       operating loan     450,000             -       966,576             -
      Increase in
       long-term debt           -             -             -       156,647
      Repayments of
       long-term debt    (308,273)     (432,201)     (574,436)     (773,178)
      Repayments of
       obligations under
       capital lease      (94,277)      (68,520)     (212,150)      (95,109)
    -------------------------------------------------------------------------
      Cash provided by
       (used in)
       financing
       activities          65,537          (721)      201,352      (211,640)

    Investing activities:
      (Increase) decrease
        in other assets       (63)     (113,333)       24,961      (165,000)
      Sale of intangible
       assets                   -             -             -     2,854,239
      Purchase of
       intangible assets  (98,428)      (85,000)     (175,974)     (126,188)
      Purchase of capital
       assets            (705,454)      (22,185)   (1,145,270)      (52,536)
      Cash required for
       acquisition              -      (145,096)            -      (145,096)
      Discontinued
       operations               -       (28,003)            -       (28,003)
    -------------------------------------------------------------------------
      Cash provided by
       (used in)
       investing
       activities        (803,945)     (393,617)   (1,296,283)    2,337,416

    Increase (decrease)
     in cash for the
     period                 6,779      (694,082)     (213,659)     (309,955)

    Cash and cash
     equivalents,
     beginning of period  749,250     1,133,977       969,688       749,850

    -------------------------------------------- ----------------------------
    Cash and cash
     equivalents,
     end of period   $    756,029  $    439,895  $    756,029  $    439,895
    -------------------------------------------- ----------------------------
    -------------------------------------------- ----------------------------
    
    %SEDAR: 00002373E




For further information:

For further information: Donna de Winter, CFO, Nexient Learning Inc.,
(416) 964-8688 x2636, ddewinter@nexientlearning.com

Organization Profile

NEXIENT LEARNING INC.

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