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PLATO Learning, Inc. (TUTR) announced its financial results on Tuesday for its fiscal 2009 third quarter ended July 31, 2009.
Total revenue for the third quarter was $16.7 million, compared to $18.6 million in the third quarter of 2008. Subscription revenue increased $1.6 million, or 17%, to $10.8 million on the Company's growing base of subscription customers. Net income for the third quarter was $184,000, or $0.01 per share, compared to a net loss of ($2.1) million, or ($0.09) per share, a year ago.
Vin Riera, President and CEO of PLATO Learning, commented in a conference call, "Compared to Q3 of last year, subscription orders and revenues grew at double-digit rates, gross margins improved, operating expenses declined, cash balances grew, and we achieved our third consecutive quarter of profitability."
He continued, "During the quarter, we added 176 school districts and community colleges as first time subscribers to our PLE(TM). Of these, 70 were new customers and 106 were existing customers that switched to our new platform from one of our legacy products."
Mr. Riera noted, "In addition to growing subscription revenue and improving margins, we lowered operating expenses by 10%."
Robert Rueckl, CFO of PLATO Learning, added, "Despite a budget environment that remains challenging for our customers, we continue to see strong new and recurring demand for our PLE(TM) solution. Our PLE(TM) renewal rate in the quarter was approximately 90%."
Mr. Riera said, "We saw some stabilization in school district spending in Q3 as federal stimulus funding became available to our customers. Also, some school districts that would not have normally looked at our solutions, are now evaluating our product. We believe that this will expand our market opportunities and drive adoption of our solutions."
He concluded, "Our ability to deliver consistent profitability in this difficult environment is an indication of the stability and predictability of our business model."
In light of the Company's strong third quarter performance, it now expects fiscal year 2009 subscription order growth to be in the range of 25% to 30%, versus growth in the mid-teens as previously expected. Cash balances are expected to increase from $14.2 million at the end of the third quarter, to between $25 million and $27 million at fiscal year end, up from previous expectations of approximately $20 million. The Company's expectations for fiscal 2009 subscription revenue remain unchanged at low double-digit growth given the nature of subscription revenue recognition, the timing of orders, and the effect of longer subscription contracts on near-term revenue. Profitability for fiscal 2009 remains the Company's goal; however, specific earnings guidance is not being provided.
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