Market Overview

Learning Tree International Announces Third Quarter 2018 Results

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Learning
Tree International, Inc.
(OTCQX:LTRE) announced today its revenues
and results of operations for its third quarter of fiscal year 2018,
which ended June 29, 2018.

In its third quarter of fiscal year 2018, Learning Tree reported
revenues of $16.2 million, loss from operations of $(0.4) million, and a
net loss of $(0.3) million, or $(0.02) per share. These results compare
with revenues of $16.4 million, loss from operations of $(0.5) million,
and net loss of $(0.9) million, or $(0.07) per share, in Learning Tree's
third quarter of fiscal year 2017. The 1.2% decline in revenues and the
0.9% increase in cost of revenues for our third quarter of fiscal year
2018 were offset by a 5.7% reduction in total operating expenses when
compared to the third quarter of fiscal year 2017.

For the first nine months of fiscal year 2018, Learning Tree reported
revenues of $47.0 million, loss from operations of $(2.4) million, and a
net loss of $(2.4) million, or $(0.18) per share. These results compare
with revenues of $51.0 million, loss from operations of $(3.1) million,
and a net loss of $(3.6) million, or $(0.27) per share, for the first
nine months of fiscal year 2017. The results for the first nine months
of fiscal year 2018 include a restructuring charge of $0.3 million
related to excess classroom capacity in our Toronto, Canada and Reston,
Virginia facilities, while the results for the first nine months of
fiscal year 2017 included the non-cash restructuring charge of $0.4
million related to the Reston, Virginia facility.

At June 29, 2018, our capital resources consisted of cash and cash
equivalents of $4.8 million. During our third quarter, we executed a new
$5.0 million unsecured Line of Credit Agreement with our majority
stockholder and drew down $2.0 million at closing. In addition, we still
maintain a financing and security agreement with Action Capital
Corporation, secured by the accounts receivables of our U.S. operating
unit that provides us with access to borrow up to $3.0 million. To date,
we have not borrowed any funds under this financing and security
agreement.

Conference Call and Webcast

Learning Tree will host an investor conference call to discuss its
results for the third quarter and future outlook for the remainder of
fiscal year 2018 at 4:30 p.m. ET, August 7, 2018. To participate, call
(888) 339-2688 or +1 (617) 847-3007 (International Callers) and enter
participant code: 616 771 60 at least five minutes before 4:30 pm (ET) /
1:30 pm (PT) on Tuesday, August 7, 2018; or, go to Learning Tree's
Investor website at www.learningtree.com/investor to gain access and
listen to the live webcast. A webcast replay of the investor conference
call will be available for 90 days via the Internet through the Investor
Relations section of Learning Tree's website at www.learningtree.com/investor.
We have also filed our Quarterly Report on Form 10-Q for our third
quarter of fiscal year 2018 with the Securities and Exchange Commission
("SEC") which is available at the SEC's Internet site (http://www.sec.gov).

About Learning Tree International, Inc.

Learning
Tree International
is a trusted, global partner delivering
mission-critical IT
training and certifications
, as well as the communication and
critical thinking skills necessary to effectively deploy and deliver
major IT initiatives. Over 2.5 million IT & business professionals
around the world have enhanced their skills through Learning Tree's
extensive library of proprietary and partner content.

Today, Learning Tree offers an expanded training portfolio, including
Agile, cyber security, cloud computing, program/project management, web
development, operating systems, networking, leadership, and more.
Attendees enjoy award-winning content that goes beyond the classroom
with customized blended
learning solutions
featuring instructor-led, on-demand, and live,
online training through Learning Tree AnyWare®, a modern technology
platform that delivers an immersive, virtual learning experience.

We go beyond training with Workforce Optimization Solutions — a modern
approach that improves the adoption of skills and accelerates the
implementation of technical and business processes required to improve
IT service delivery. These services include: needs assessments, skill
gaps analyses, blended delivery, and acceleration workshops delivered by
our expert instructors — working professionals with 15+ years of
experience in the fields in which they teach.

To learn more, call 1-888-THE-TREE (843-8733) or visit LearningTree.com

Cautionary Statement Regarding Forward Looking Statements

The statements contained herein that are not historical facts are
forward-looking statements based on management's current expectations
and beliefs concerning future developments and their potential effects
on Learning Tree. Such statements involve inherent risks and
uncertainties, many of which are difficult to predict and are generally
beyond the control of Learning Tree. There can be no assurance that
future developments affecting Learning Tree will be the same as those
anticipated. Learning Tree cautions readers that a number of important
factors could cause actual results to differ materially from those
expressed in, or implied or projected by, such forward-looking
statements. Investors should not put undue reliance on these
forward-looking statements, since they are based on key assumptions
about future risks and uncertainties. Some of these risks and
uncertainties that could affect Learning Tree and its business include,
but are not limited to the following: our ability to continue as a going
concern; our ability to obtain additional liquidity in amounts and on
terms acceptable to the Company; our ability to reverse our trend of
declining year over year revenues and negative cash flows from
operations, and to maintain sufficient liquidity; our ability to
successfully implement our new strategies including achieving our cost
reduction goals; our ability to identify and execute upon strategic
options for the Company; competition; international operations,
including currency fluctuations; attracting and retaining qualified
personnel; intellectual property, including having to defend potential
infringement claims; implementation of partnerships with third party
providers of courses and or course material; efficient delivery and
scheduling of Learning Tree's courses; technology development and new
technology introduction; risks associated with the timely development,
introduction, and customer acceptance of our courses and other products;
risks associated with a majority of our outstanding common stock being
beneficially owned by a new majority stockholder that is a trust; our
majority stockholder having significant influence over the composition
of our Board of Directors; our majority stockholders being the largest
unsecured creditor of the Company; the conversion of the amounts
borrowed by the Company under the Credit Agreement potentially resulting
in substantial dilution; risks associated with the Credit Agreement;
risks associated with maintaining cyber security; changing economic and
market conditions; and adverse weather conditions, strikes, acts of war
or terrorism and other external events. Learning Tree is not undertaking
any obligation to update forward-looking statements contained herein to
reflect future events, developments or changed circumstances.

In order to help the reader assess the factors and risks in Learning
Tree's business that could cause actual results to differ materially
from those expressed in the forward looking statements, Learning Tree
discusses in its 2017 Annual Report on Form 10-K ("Form 10-K"), those
risks in Item 1A, "Risk Factors", as well as in its other filings with
the SEC including our current Form 10-Q. Please read the Form 10-K,
including the Risk Factors included therein, which is filed with the SEC
and available at the SEC's Internet site (http://www.sec.gov).

 
Table 1
 
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(all amounts in thousands, except per share data)
 
  Three Months Ended   Nine Months Ended
June 29,   June 30, June 29,   June 30,
2018 2017 2018 2017
(unaudited) (unaudited) (unaudited) (unaudited)
 
Revenues $ 16,203 $ 16,404 $ 46,994 $ 51,027
Cost of revenues   9,657     9,572     27,062     29,790  
Gross profit   6,546     6,832     19,932     21,237  
 
Operating expenses:
Course development 727 663 2,063 2,184
Sales and marketing 3,231 3,199 9,762 10,261
General and administrative 2,996 3,509 10,263 11,511
Restructuring charges   0     0     264     386  

Total operating expenses

  6,954     7,371     22,352     24,342  
 
Loss from operations (408 ) (539 ) (2,420 ) (3,105 )
Other income (expense), net   205     (259 )   126     (169 )

Loss from operations before income taxes

(203 ) (798 ) (2,294 ) (3,274 )
Provision for income tax   91     79     65     331  
 
Net loss $ (294 ) $ (877 ) $ (2,359 ) $ (3,605 )
 
Loss per share basic and diluted:

Basic and diluted loss per share

$ (0.02 ) $ (0.07 ) $ (0.18 ) $ (0.27 )
 
 

Table 2

 
LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(all amounts in thousands)
 
  June 29,   September 29,
2018 2017
(unaudited)
 
Cash and cash equivalents $ 4,772 $ 5,080
Trade accounts receivable, net 9,790 9,725
Prepaid expenses and other   3,747     4,035  
Total current assets 18,309 18,840
Depreciable assets, net and other   6,611     7,423  
Total assets $ 24,920   $ 26,263  
 
Accounts payable and accrued liabilities $ 12,029 $ 10,809
Deferred revenues   17,478     18,383  
Total current liabilities 29,507 29,192
Other long term liabilities   9,566     8,893  
Total liabilities   39,073     38,085  
 

Stockholders' deficit

  (14,153 )   (11,822 )
Total liabilities and stockholders' deficit $ 24,920   $ 26,263  
 

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