MARKETS
SkillSoft suffers from legal settlements
04-12-2003
by
SkillSoft has reported a sharp rise in quarterly revenues to USD50 million, but the e-learning company's bottom line is suffering as a result of two lawsuits.
The New Hampshire-based company had revenues of almost USD50 million for the third quarter to the end of October, compared to USD45 million in the previous quarter and over USD29 million in the same quarter last year. The third quarter of 2002 was the first quarter which included combined company revenue from the SmartForce and SkillSoft merger that took place in September 2002.
Despite the increase in revenues the company had net losses of USD22 million and losses per share of USD0.22. This was a significant increase on the USD15.4 million loss it made in the same quarter of the previous year, which equated to a loss per share of USD0.20.
"We continue to execute on our business plan as we put merger and litigation issues behind us," said Chuck Moran, president and chief executive officer of SkillSoft, in a statement. "Despite the continued challenging business environment, we continue to move forward and meet or exceed our operational objectives."
The company's results include a USD16 million charge, which reflects the amount of a settlement it is making to investors who sued the company for issuing incorrect financial results in the past. The company will disburse USD10 million of its settlement in the fourth quarter of 2004 and another USD6 million in the middle of 2005.
The USD16 million follows on the July announcement that the company had reached a USD44 million settlement with NETg to end the five-year long lawsuit in which NETg alleged that SkillSoft and certain SkillSoft executives, who were former employees of NETg, had taken NETg trade secrets. That agreement also settled a patent infringement claim brought by NETg against SkillSoft in 2001. According to the settlement agreement, SkillSoft paid NETg USD22 million in July 2003 and will pay USD22 million in July 2004.
When the cost of the class-action settlement and other exceptional charges are excluded, the company had pro-forma net income of USD10.4 million, with earnings per share of USD0.10.
In its outlook for the fourth quarter, the company said it expects revenues of between USD50 million and USD53 million and earnings per share of USD0.04 to USD0.05.
SkillSoft employs 300 at its Dublin facility, which is responsible for part of the company's EMEA operations.
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