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2006-08-18
Web Host and e-Learning Firm, VCampus, Reports Revenue Increase of 29 percent
Reston, Virginia - August 18, 2006 - Web host and end-to-end e-learning service firm, VCampus Corporation, has released its financial results for the second quarter ending June 30, 2006. Highlights include closing on the $2.1 million acquisition of Prosoft Learning Corporation in the second quarter, allowing VCampus to add the market certifications to its product offerings.
Nat Kannan, Chairman and CEO of VCampus Corporation explained, ''The acquisition of Prosoft brings VCampus the valuable CIW and CTP certifications, making us a certification owner, as well as a provider of certification preparation education. We are proceeding with our plan to convert Prosoft's primarily print-based materials into online versions to take advantage of the reach and margins inherent in electronic delivery.''
Other financial highlights include:
-- The company released a major update of Select Partner Courses for (ISC)2's CISSP Program and a new certification course for the CFA Institute in May 2006 and experienced record sales of approximately $80,000 from the two CFA courses in the quarter. These courses are expected to contribute significantly to online tuition revenues going forward.
-- The Online tuition revenues in Q2 declined in 2006 from the same quarter a year ago from decline in legacy hosting for a single client, a business model the company is rapidly moving away from toward certification related revenues. The company expects to replace legacy online tuition revenues from commodity hosting with Select Partner Certification related revenues significantly going forward with the integration of Prosoft in Q3 2006 and beyond.
-- The company increased the deferred revenues by 164% from $469,280 in Q2 2005 to $1,239,214 in Q2 2006 largely from prepaid tuition fees from the Department of Veteran's Administration and from enrollment in courses from CFA Institute and a few partners.
-- The company signed a new Select Partner in the second quarter of 2006, the Institute of Management Accountants with over 65,000 members, which adds to the existing Select Partners such as CFA Institute, (ISC)2, PCI Global, Inc., the New York Institute of Finance, the Association for Financial Professionals, Sourcefire, Inc., the National Contract Management Association, the American College of Forensic Examiners, the Emergency Nurses Association and the Regulatory Affairs Professionals Society.
The company reported total revenues of $1,407,668 in the second quarter of 2006 compared to total revenues of $1,277,202 in the first quarter of 2006 and $1,093,089 in the second quarter of 2005. The operating loss for the three months ended June 30, 2006 was $1,332,259 compared to $1,712,088 and $1,230,238 for the three months ended March 31, 2006 and June 30, 2005, respectively. With the adoption of the new equity-based compensation standards under SFAS 123R effective January 1, 2006, the non-cash charge for stock-based compensation increased to $219,472 in the second quarter of 2006 from $25,499 in the second quarter of 2005. Stock based compensation for the first quarter of 2006 was $229,637.
During the second quarter of 2006, the company recorded a deemed dividend of $1,031,703 representing the beneficial conversion feature associated with its Series A-1 Preferred Stock as a result of the automatic adjustment in the conversion price for such shares and the exercise price of the related warrants to $0.50 per share, as well as the adjustment in the number of shares issuable upon exercise of the warrants, following stockholder ratification of the financing in May 2006. Also during the second quarter, the company recorded a non-cash charge of approximately $109,000, which represents amortization of debt discount and deferred debt offering costs related to the issuance of approximately $3.6 million (June 30, 2006 principal amount of approximately $1.2 million) of convertible promissory notes in March 2004. Corresponding charges in the first quarter of 2006 and second quarter of 2005 were approximately $117,000 and $203,000, respectively. Including these non-cash charges, VCampus reported a net loss to common stockholders in the second quarter of $2,624,342, or $0.27 per share, compared to a net loss to common stockholders of $1,907,393, or $0.20 per share, for the first quarter of 2005 and $1,456,104, or $0.15 per share, in the second quarter of 2005.
For the six months ended June 30, 2006, the company reported revenue of $2,684,870, compared to $2,221,671 for the same period in 2005. The operating losses for the six months ended June 30, 2006 and 2005 were $3,044,747 and $2,652,456, respectively. Including a deemed dividend of $1,031,703 in the 2006 period, stock based compensation of $449,109 and $74,494 for the 2006 and 2005 periods, respectively and approximately $225,000 and $650,000 of non-cash debt discount and deferred debt offering costs amortization for the 2006 and 2005 periods, respectively, VCampus reported a net loss to common stockholders of $4,531,735 ($0.47 per share) for the first six months of 2006, compared to $3,358,777 ($0.37 per share) for the same period in 2005.
The company ended the quarter with approximately $2.1 million in cash compared to approximately $3.2 million in cash on March 31, 2006.
Christopher Nelson, Chief Financial Officer added, ''I am pleased to report that, not only were we able to close on the Prosoft acquisition on schedule, but also that the integration work is proceeding in line with our projections. We have already implemented most of the cost saving measures we planned and should start to see the financial benefits of those efforts in the third quarter.''
Mr. Kannan and Mr. Nelson will hold a conference call to discuss the second quarter financial results, business outlook and the Prosoft acquisition integration. The call is scheduled for 4:30 PM Eastern Time on August 22, 2006. Interested parties may participate by dialing (800) 901-5259. International callers may dial (617) 786-4514. Please enter the passcode 37179650.
The call is also being webcast by Thomson/CCBN and can be accessed at the VCampus web site at www.vcampus.com. The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com. A replay of the call will be available via telephone from approximately 6:30 PM Eastern Time on August 22, 2006 until 6:30 PM Eastern Time on August 29, 2006. To listen to the replay, participants in the U.S. and Canada should dial (888) 286-8010, and international participants should dial (617) 801-6888. The conference ID for the replay is 70897730.
VCampus Corporation, a provider of end-to-end e-learning services, helps organizations that offer professional certifications and credentials unlock the value of their traditional branded course content. Through its innovative Select Partner Program, VCampus publishes training content for online delivery to enhance and support professional certification programs. The Select Partner Program provides custom course development, publishing, hosting, e-commerce, reporting, account support and marketing services. With more than a decade of e-learning experience, VCampus has delivered more than 3 million courses to more than 1 million desktops/users in professional credentialing and certification organizations, associations, non-profits, corporations, government agencies and higher education institutions. VCampus distributes a courseware library of more than 3,800 Web-based courses. VCampus Corporation is headquartered in Reston, Virginia. For more information, call 800-915-9298.
To learn more, please visit: www.vcampus.com
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