Exhibit 99.1
Company Press Release
CBT Group Reports Fourth Quarter and Full Year Financial Results
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Jan. 19, 1999--CBT Group PLC today
announced financial results for the fourth quarter and year ended Dec. 31, 1998.
Revenues for the fourth quarter were $42.3 million, compared to $45.4 million in
revenues for the fourth quarter of 1997. Net income for the quarter was $2.2
million or $0.05 per equivalent American Depositary Share, compared to net
income before after-tax costs of acquisitions of $9.9 million, or $0.22 per
equivalent American Depositary Share in the fourth quarter of 1997.
CBT Group reported revenues of $162.2 million in 1998, an 18 percent increase
from $137.0 million in 1997. Net income before deducting after-tax costs of
acquisitions was $21.3 million or $0.46 per American Depositary Share. This
represents an increase of 10 percent over net income, before deducting after-tax
costs of acquisitions, of $19.3 million or $0.44 per American Depositary Share
in 1997. Reported net income for 1998 was $16.5 million or $0.36 per American
Depositary Share, compared to $18.1 million or $0.41 per American Depositary
Share in 1997.
During 1998, CBT Group grew its backlog, which is firmly contracted business
that has not yet been recognized as revenue, to approximately $144 million,
representing a 31 percent increase over the $110 million in backlog at the end
of 1997.
"The fourth quarter of 1998 was a satisfactory one for the company," said CBT
Group Chairman William G. McCabe. "There is much left to do to return the
company to the path of long-term growth and acceptable profitability, but we
have successfully taken the critical first steps.
"Our re-energized executive management team has been responsible for defining
CBT Group's direction and positive growth for many years, and has a strong track
record for working closely with our customers to understand their needs and
requirements," McCabe added. "We believe this team is uniquely qualified to
chart the company's path as we move forward in 1999 and into the next century.
We're also very excited about the addition of Knowledge Well, which we
anticipate will open up entire new areas of opportunity for CBT Group."
"We are satisfied with our fourth quarter results," said Gregory M. Priest, CBT
Group president and CEO. "We had a challenging third quarter in which we did not
meet management's internal revenue expectations, and after which we made a
number of far-reaching changes in the business and executive management. During
this time of dislocation, we were able in the fourth quarter to meet internal
goals for the quarter by increasing revenues 20 percent sequentially and by
keeping costs under control to enable us to deliver $0.05 in earnings per share.
"We are gratified to see our backlog of firmly contracted future business grow
by 31 percent over the level at the beginning of 1998," Priest continued. "This
growth makes a strong statement about the underlying strength of our business
franchise."
CBT Group made significant progress toward its goals in the fourth quarter.
During the quarter, the company established its core executive management team,
with key executives remaining in place and the addition of new executive
management, including McCabe, 42, as chairman of the board, and Priest, 35, as
president and chief executive officer. At the same time, CBT Group took steps to
build its franchise outside the information technology marketplace through the
announcement of its intention to acquire Knowledge Well, a provider of business,
management and professional education using interactive learning technologies.
From a sales standpoint, CBT Group exceeded its target of five million-dollar-
plus contracts in the quarter.
CBT Group also continued to produce new interactive training titles at an
aggressive rate, delivering 72 new titles in the quarter. The company ended the
year with a total of 837
interactive training titles, a 50 percent increase over the 558 titles at the
beginning of 1998. In addition, CBT Group produced 39 new translated titles in
the fourth quarter, for a total of 262 titles at the end of 1998, more than
doubling the library of translated titles from the beginning of 1998.
CBT Group has also taken significant steps with respect to its deployment and
management software offerings. During the quarter, CBT Group introduced a new
version of CBTCampus(TM), the company's flagship enterprise training management
and deployment system. The new offering increases the robustness of CBTCampus
and adds new features.
CBT Group's intranet-based deployment offering, CBTWeb(TM), is also being used
widely in the customer base. During the first quarter of 1999, CBT Group expects
to release the next version of CBTWeb(TM) Plus, which enables customers to
access CBT Group courseware over the Internet from a CBT Group-hosted website.
This press release may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Any forward-looking statements in
this press release are subject to certain risks and uncertainties that could
cause actual results to differ materially from those stated. Factors that could
cause or contribute to such differences include those discussed in CBT Group's
Form 10-K for the year ended Dec. 31, 1997 and Form 10-Q for the quarter ended
Sept. 30, 1998. Any forward-looking statements in this press release reflect
management's opinions only as of the date hereof, and CBT Group assumes no
obligation unless required by law to revise or publicly release the results of
any revision to any such forward-looking statements.
About CBT Group
CBT Group PLC is a leading provider of interactive education software for
information technology professionals in business, education and government
markets worldwide. The company's comprehensive library, which covers a range of
client-server, mainframe and Internet and intranet technologies, is used by the
world's leading organizations to train employees to develop and apply mission-
critical technologies in the workplace.
For information on CBT Group's products, call 800/387-0932, fax 800/387-0933, or
send an email to salesinfo@cbtsys.com. CBT Group is located on the World Wide
Web at www.cbtsys.com.
Note to Editors: CBT Systems, CBTCampus, CBTWeb, CBTWeb Plus, and the CBT
Systems logo are trademarks of CBT Group PLC. All other company and product
names may be trademarks of the respective companies with which they are
associated.
CBT GROUP PLC
Condensed Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
Three Months Twelve Months
Ended December 31, Ended December 31,
1997 1998 1997 1998
-------- -------- -------- --------
(Unaudited) (Unaudited)
Revenues $ 45,429 $ 42,269 $137,047 $162,232
Cost of revenues 6,989 6,498 22,502 25,137
Gross profit 38,440 35,771 114,545 137,095
Operating expenses:
Research and development 6,611 7,076 20,878 25,832
Sales and marketing 18,238 22,221 59,160 75,395
General and administrative 3,012 4,906 11,601 15,893
Acquired research and
development -- -- 4,097 --
Cost of acquisitions 366 -- 1,534 5,505
Total operating expenses 28,227 34,203 97,270 122,625
-------- -------- -------- --------
Income from operations 10,213 1,568 17,275 14,470
Other income, net 892 1,045 4,710 4,734
Income before provision
for income taxes 11,105 2,613 21,985 19, 204
Provision for income taxes 1,539 393 3,916 2,666
Net income 9,566 2,220 18,069 16,538
Net income per equivalent
ADS (1) - Basic $ 0.23 $ 0.05 $ 0.45 $ 0.38
======== ======== ======== ========
ADSs used in computing
net income per
equivalent ADS - Basic 41,683 44,469 40,292 43,630
======== ======== ======== ========
Net income per
equivalent ADS (1) -
Diluted $ 0.21 $ 0.05 $ 0.41 $ 0.36
======== ======== ======== ========
ADSs used in computing
net income per
equivalent 45,074 45,004 44,128 45,870
======== ======== ======== ========
(1) Net income per equivalent ADS gives effect to both two-for-one share splits
of Registrants' ADSs effected in May 1996 and March 1998
CBT GROUP PLC
Condensed Consolidated Balance Sheets
(dollars in thousands)
December 31, December 31,
1997 1998
ASSETS
Current assets
Cash $ 35,505 $ 65,648
Short term investments 36,038 36,386
Accounts receivable, net 40,031 43,508
Inventories 615 247
Deferred tax assets, net 140 253
Prepaid expenses 4,198 5,777
-------- --------
Total Current assets 116,527 151,819
Intangible assets 5,600 4,237
Property and equipment, net 10,207 17,636
Investment 200 550
Deferred tax assets, net 342 --
Other assets 8,453 16,002
------- -------
Total assets 141,329 190,244
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 32,509 34,978
------- -------
Total current liabilities 32,509 34,978
Non current liabilities 1,141 465
Shareholders' equity 107,679 154,801
------- -------
Total liabilities and
shareholders' equity 141,329 190,244
======= =======
Contact:
CBT Group
Cindy McCaffrey, 650/817-5710
cindy_mccaffrey@cbtsys.com