UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

{X} Quarterly report pursuant to Section 13 and 15 (d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 2002
--------------

{ } Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the transition period from __________ to __________

Commission file number 0-27248
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Learning Tree International, Inc.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 95-3133814
--------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)

6053 West Century Boulevard, Los Angeles, CA 90045
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (310) 417-9700
------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No _____
-----

The number of shares of common stock, $.0001 par value, outstanding as of May 3,
2002, is 18,721,089 shares.

Total number of pages 20
-----

LEARNING TREE INTERNATIONAL, INC.

FORM 10-Q

March 31, 2002

TABLE OF CONTENTS

Part I--Financial Statements Page
----

Item 1. Financial Statements:
Condensed Consolidated Balance Sheets .............................................. 3
Condensed Consolidated Statements of Operations .................................... 4
Condensed Consolidated Statements of Stockholders' Equity .......................... 5
Condensed Consolidated Statements of Cash Flows .................................... 6
Notes to Condensed Consolidated Financial Statements ............................... 7

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations ...................................................................... 8

Part II--Other Information

Item 1. Legal Proceedings .................................................................... 18
Item 2. Changes in Securities ................................................................ 18
Item 3. Defaults Upon Senior Securities ...................................................... 18
Item 4. Submission of Matters to a Vote of Security Holders .................................. 18
Item 5. Other Information .................................................................... 18
Item 6. Exhibits and Reports on Form 8-K ..................................................... 18

Signatures ...................................................................................... 20

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, September 30,
2002 2001
------------- -------------
(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents ..................................................... $ 103,413,000 $ 108,544,000
Trade accounts receivable, net ................................................ 12,896,000 15,990,000
Prepaid marketing expenses .................................................... 1,970,000 2,212,000
Prepaid income taxes .......................................................... 6,837,000 5,155,000
Prepaid expenses and other .................................................... 7,051,000 5,815,000
------------- -------------

Total current assets ........................................................ 132,167,000 137,716,000
------------- -------------

Equipment, property and leasehold improvements, net ............................. 25,532,000 27,856,000
Long-term interest-bearing investments .......................................... 7,147,000 7,353,000
Other assets .................................................................... 1,984,000 2,050,000
------------- -------------
Total assets ................................................................ $ 166,830,000 $ 174,975,000
============= =============

LIABILITIES
Current liabilities:
Trade accounts payable ........................................................ $ 11,349,000 $ 17,041,000
Deferred revenue .............................................................. 58,444,000 61,662,000
Accrued liabilities ........................................................... 7,816,000 7,316,000
Income taxes payable .......................................................... 1,551,000 2,725,000
------------- -------------
Total current liabilities ................................................... 79,160,000 88,744,000
------------- -------------

Deferred income taxes ........................................................... 177,000 178,000
Deferred facilities rent ........................................................ 2,361,000 1,993,000
------------- -------------
Total liabilities ........................................................... 81,698,000 90,915,000
------------- -------------

Commitments and Contingencies

STOCKHOLDERS' EQUITY
Common Stock, $.0001 par value, 75,000,000 shares
authorized, 18,872,000 and 18,929,000 shares issued
and outstanding, respectively ................................................ 2,000 2,000
Preferred Stock, $.0001 par value, 10,000,000 shares
authorized, 0 shares issued and outstanding .................................. -- --
Additional paid-in capital .................................................... -- --
Cumulative foreign currency translation ....................................... (5,151,000) (4,584,000)
Retained earnings ............................................................. 90,281,000 88,642,000
------------- -------------
Total stockholders' equity .................................................. 85,132,000 84,060,000
------------- -------------
Total liabilities and stockholders' equity .................................. $ 166,830,000 $ 174,975,000
============= =============

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended Six Months Ended
March 31, March 31,
--------------------------------- ---------------------------------
2002 2001 2002 2001
------------- ------------- ------------- -------------

Revenues ........................................... $ 40,635,000 $ 57,990,000 $ 87,806,000 $ 120,094,000
Cost of revenues ................................... 18,468,000 24,155,000 39,460,000 47,768,000

------------- ------------- ------------- -------------
Gross profit ................................. 22,167,000 33,835,000 48,346,000 72,326,000
------------- ------------- ------------- -------------

Operating expenses:
Course development ........................... 2,287,000 3,116,000 4,777,000 5,936,000
Sales and marketing .......................... 13,064,000 17,064,000 26,089,000 31,581,000
General and administrative ................... 6,122,000 6,878,000 12,897,000 13,415,000
------------- ------------- ------------- -------------
21,473,000 27,058,000 43,763,000 50,932,000
------------- ------------- ------------- -------------

Income from operations ............................. 694,000 6,777,000 4,583,000 21,394,000
------------- ------------- ------------- -------------

Other income (expense):
Interest expense ............................. (2,000) (3,000) (6,000) (4,000)
Interest income .............................. 681,000 2,027,000 1,508,000 4,513,000
Foreign exchange ............................. (101,000) (359,000) (352,000) (534,000)
Other ........................................ (113,000) (50,000) (133,000) (136,000)
------------- ------------- ------------- -------------
465,000 1,615,000 1,017,000 3,839,000
------------- ------------- ------------- -------------

Income before provision for income taxes ........... 1,159,000 8,392,000 5,600,000 25,233,000
Provision for income taxes ......................... 412,000 2,979,000 1,988,000 8,958,000
------------- ------------- ------------- -------------

Net income ......................................... $ 747,000 $ 5,413,000 $ 3,612,000 $ 16,275,000
============= ============= ============= =============

Earnings per common share .......................... $ 0.04 $ 0.25 $ 0.19 $ 0.74
============= ============= ============= =============

Earnings per common share assuming
dilution ..................................... $ 0.04 $ 0.24 $ 0.19 $ 0.72
============= ============= ============= =============

Weighted average number of shares
outstanding .................................. 18,956,000 21,761,000 18,936,000 21,873,000
============= ============= ============= =============

Diluted shares outstanding ......................... 19,274,000 22,520,000 19,253,000 22,663,000
============= ============= ============= =============

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)

FOREIGN
ADDITIONAL CURRENCY TOTAL
COMMON PAID-IN TRANSLATION RETAINED STOCKHOLDERS'
STOCK CAPITAL ADJUSTMENT EARNINGS EQUITY

Balance,
September 30, 2000 ........... $ 2,000 $ 52,649,000 $ (4,007,000) $ 84,151,000 $132,795,000

Comprehensive income:
Net income ................... -- -- -- 16,275,000 16,275,000
Foreign currency
translation ................. -- -- (1,095,000) -- (1,095,000)
------------
Comprehensive income ...... 15,180,000
Stock repurchases ............. -- (36,326,000) -- -- (36,326,000)
Stock option exercises ........ -- 4,343,000 -- -- 4,343,000
Tax benefit related to
stock option exercises ....... -- 1,583,000 -- -- 1,583,000
------- ------------ ------------ ------------ ------------

Balance,
March 31, 2001 ............... $ 2,000 $ 22,249,000 $ (5,102,000) $100,426,000 $117,575,000
======= ============ ============ ============ ============

Balance,
September 30, 2001 ........... $ 2,000 $ -- $ (4,584,000) $ 88,642,000 $ 84,060,000

Comprehensive income:
Net income ................... -- -- -- 3,612,000 3,612,000
Foreign currency
translation ................. -- -- (567,000) -- (567,000)
------------
Comprehensive income ...... 3,045,000
Stock repurchases ............. -- (2,180,000) -- (1,973,000) (4,153,000)
Stock option exercises ........ -- 1,765,000 -- -- 1,765,000
Tax benefit related to
stock option exercises ....... -- 415,000 -- -- 415,000
------- ------------ ------------ ------------ ------------

Balance,
March 31, 2002 ............... $ 2,000 $ -- $ (5,151,000) $ 90,281,000 $ 85,132,000
======= ============ ============ ============ ============

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Six Months Ended
March 31,
------------------------------------
2002 2001
--------------- --------------

Cash flows--operating activities:
Net income ........................................................ $ 3,612,000 $ 16,275,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ................................... 4,209,000 3,973,000
Unrealized foreign exchange losses .............................. 279,000 422,000
Losses on disposals of equipment and leasehold
improvements .................................................. 11,000 93,000
Deferred facilities rent charges ................................ (41,000) 108,000
Change in net assets and liabilities:
Trade accounts receivable ...................................... 2,891,000 2,665,000
Prepaid marketing expenses ..................................... 224,000 (769,000)
Prepaid expenses and other ..................................... (1,336,000) (2,110,000)
Income taxes ................................................... (2,421,000) (6,051,000)
Trade accounts payable ......................................... (5,465,000) (1,962,000)
Deferred revenue ............................................... (2,691,000) 7,549,000
Other accrued liabilities ...................................... 445,000 6,158,000
--------------- --------------
Net cash provided by (used in) operating activities ................ (283,000) 26,351,000
--------------- --------------

Cash flows--investing activities:
Purchases of equipment, property and leasehold
improvements .................................................... (2,159,000) (9,630,000)
Retirements of equipment and leasehold improvements ............... 108,000 86,000
Proceeds from short-term interest-bearing investments
held to maturity ................................................ -- 68,615,000
Purchases of short-term interest-bearing investments
held to maturity ................................................ -- (30,733,000)
Other, net ........................................................ 470,000 (175,000)
--------------- --------------
Net cash provided by (used in) investing activities ............... (1,581,000) 28,163,000
--------------- --------------

Cash flows--financing activities:
Proceeds from exercise of stock options ........................... 1,765,000 4,343,000
Repurchases of Common Stock ....................................... (4,153,000) (36,326,000)
--------------- --------------
Net cash used in financing activities ............................. (2,388,000) (31,983,000)
--------------- --------------
Effects of exchange rates on cash ................................... (879,000) (2,187,000)
--------------- --------------
Net increase (decrease) in cash and cash equivalents ................ (5,131,000) 20,344,000
Cash and cash equivalents at the beginning of the period ............ 108,544,000 116,231,000
--------------- --------------
Cash and cash equivalents at the end of the period .................. $103,413,000 $136,575,000
=============== ==============

Supplemental disclosures:
Income taxes paid ................................................. $ 4,328,000 $ 9,307,000
=============== ==============
Interest paid ..................................................... $ 1,000 $ --
=============== ==============

See accompanying notes to condensed consolidated financial statements.

LEARNING TREE INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 Operations and Significant Accounting Policies:
----------------------------------------------

The accompanying condensed consolidated financial statements have been
prepared by Learning Tree International, Inc. ("Learning Tree") pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such regulations. The condensed consolidated
financial statements reflect all adjustments and disclosures which are, in the
opinion of management, necessary for a fair presentation. All such adjustments
are of a normal recurring nature. The condensed consolidated financial
statements in this Quarterly Report on Form 10-Q should be read in conjunction
with the consolidated financial statements and notes thereto for the fiscal year
ended September 30, 2001 that are contained in Learning Tree's 2001 Annual
Report on Form 10-K. Learning Tree's business is subject to substantial risk and
fluctuations in earnings. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

Note 2 Computation of Earnings per Common Share and Earnings per Common Share
----------------------------------------------------------------------
Assuming Dilution:
- -----------------

Earnings per common share and earnings per common share assuming dilution
are computed using the weighted average number of shares of Common Stock
outstanding during the period. Earnings per common share assuming dilution are
computed by including the dilutive effect, if any, of all outstanding options to
purchase Common Stock using the treasury stock method. To calculate the number
of diluted shares outstanding, 318,000 shares and 317,000 shares were added to
the weighted average number of shares outstanding for the three and six month
periods ended March 31, 2002, respectively. Approximately 759,000 shares and
790,000 shares were added to the weighted average number of shares outstanding
for the three and six month periods ended March 31, 2001, respectively.
Approximately 134,000 and 792,000 stock options were excluded from the
calculation of earnings per common share assuming dilution for the second
quarters of fiscal 2001 and 2002, respectively, because they were antidilutive.

Note 3 Repurchase of Common Stock:
--------------------------

During the second quarter of fiscal 2002, Learning Tree repurchased
approximately 117,500 shares of its Common Stock on the open market at a total
cost of $2,641,000. Learning Tree repurchased 191,500 shares of Common Stock on
the open market at a total cost of $4,153,000 during the six months ended March
31, 2002. Learning Tree may make additional purchases through open-market
transactions, but has no commitments to do so.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
- -------------------------

Except for historical statements and discussions, this discussion consists
of "forward-looking statements." All plans, projections, and future estimates
are forward-looking statements, which in some, but not all, cases, are
identified by words such as "anticipate," "estimate," "project," "believe,"
"expect" and similar expressions. Please do not put undue reliance on
forward-looking statements. Forward-looking statements are based on certain
factors and assumptions about future risks and uncertainties. Many, but not all,
of these factors and assumptions are identified in Exhibit 99, "Risk Factors" to
Learning Tree International, Inc.'s ("Learning Tree's") 2001 Annual Report on
Form 10-K ("Exhibit 99"). Although Learning Tree believes that the assumptions
are reasonable, it is likely that at least some of the forward-looking
statements will not come true. Accordingly, Learning Tree's actual results will
differ from those suggested by any forward-looking statement, and those
differences could be material. Factors that could cause or contribute to such
differences include, among others, those factors included in Exhibit 99, as well
as, those discussed in other places in Learning Tree's filings with the
Securities and Exchange Commission. For example, actual results could differ
materially from those projected as a result of Learning Tree's dependence on the
timely development, introduction and customer acceptance of courses and
products; risks in technology development and introduction; risks associated
with the introduction of e-learning either by Learning Tree or its competitors;
the impact of competition and pricing pressures; Learning Tree's ability to
attract and retain key management and other personnel; risks associated with
international operations, including currency fluctuations; the effect of
changing economic conditions; Learning Tree's ability to maintain its current
operating margins; the effect of adverse weather conditions, strikes, acts of
war or terrorism, and other external events. Should one or more of these risks,
or any other risk, materialize, or should one or more of the underlying
assumptions prove to be incorrect, Learning Tree's actual results may vary
materially from those anticipated, estimated, expected or projected. In light of
the risks and uncertainties, there can be no assurance that any forward-looking
information will in fact prove to be correct. Learning Tree does not undertake
any obligation to update forward-looking statements.

Overview

Learning Tree is a leading worldwide provider of education and training to
information technology ("IT") professionals in business and government
organizations. Approximately two-thirds of Learning Tree's participants come
from Fortune 1000-level companies, their international equivalents and
government organizations, and approximately one-third come from small and
medium-tier companies.

Learning Tree offers a broad, proprietary library of intensive four- and
five-day instructor-led courses, representing over 4,000 hours of training.
Learning Tree courses focus on client/server technology, operating systems,
programming languages, intranet/Internet/Web applications, computer networks,
databases, object-oriented technology and IT management.

As a vendor-independent provider of IT training, Learning Tree designs its
own courses to provide participants an unbiased perspective of software and
hardware products and the ability to compare and integrate multiple platforms
and technologies from various vendors in a single course. Learning Tree uses a
well-defined, systematic approach in developing and updating its course library
to provide training that is immediately relevant to course participants working
in a broad range of applications and industries. Learning Tree's courses are
recommended for college credit by the American Council on Education, and are
accepted for college credit at the University of Phoenix. Learning Tree's
proprietary course development process also allows it to customize its courses
for on-site delivery to its customers.

Learning Tree has engaged in limited development and testing of the
content, packaging and delivery methodology for Internet-based "e-learning"
courses. In testing, even though the completion rates for Learning Tree's pilot
"stand-alone" three-hour "e-courses" were more than double recently published
industry average completion rates, only a small fraction of the participants
completed enough e-courses to cover material equivalent to just one Learning
Tree multi-day instructor-led classroom course. As a result, Learning Tree
expects to continue to limit its investment in e-learning, and focus its
attention on finding ways to use e-learning technology to support its
instructor-led course business. Recently, Learning Tree tested
"synchronous-format" on-line seminars for use as "previews" or introductions to
some of its instructor-led courses. Learning Tree intends to continue testing
this delivery format for e-learning as it may prove to be a useful support
mechanism for its instructor-led training activities. However, Learning Tree may
or may not be successful with this approach, as noted in the Risk Factors in
Exhibit 99 to its Annual Report on Form 10-K.

Results of Operations

In the second quarter of fiscal 2002, Learning Tree's revenues decreased by
30% to $40.6 million from $58.0 million for the corresponding quarter of fiscal
2001. Income from operations for the second quarter of fiscal 2002 was $694,000
versus $6.8 million for the same quarter of fiscal 2001. Net income for the
second quarter of fiscal 2002 was $747,000 compared to $5.4 million in the
second quarter of fiscal 2001.

For the first six months of fiscal 2002, Learning Tree's revenues decreased
by 27% to $87.8 million from $120.1 million for the corresponding period of
fiscal 2001. Income from operations for the first six months of fiscal 2002 was
$4.6 million versus $21.4 million for the same period of fiscal 2001. Net income
for the first six months of fiscal 2002 was $3.6 million compared to $16.3
million in the corresponding period of fiscal 2001.

Revenue. During the second quarter of fiscal 2002, Learning Tree trained a
total of 26,889 multi-day instructor-led course participants compared to 36,639
participants for the second quarter of fiscal 2001. For the first six months of
fiscal 2002, the total trained multi-day instructor-led course participants were
57,732 compared to 75,817 participants for the corresponding period of fiscal
2001. Learning Tree believes that the decrease in the number of multi-day course
participants is primarily the result of the slowdown in the IT industry and the
overall economy. Learning Tree believes that this has resulted in more cautious
spending by its customers on IT training.

Learning Tree's average revenue per multi-day course participant decreased
by 5% for the second quarter of fiscal 2002 and 4% for the first six months of
fiscal 2002 as compared to the same periods of the prior year. Approximately
three percentage points of this decrease resulted from changes in foreign
exchange rates compared to the rates that prevailed in the second quarter of
fiscal 2001. In addition, average revenue per multi-day course participant
decreased in the second quarter of fiscal 2002 primarily because a larger
portion of course participants attended under multiple-course discount programs
as compared to the corresponding period in the prior year. Average revenue per
multi-day course participant decreased during the first six months of fiscal
2002 for the same reasons, with changes in foreign exchange rates causing two
percentage points of the decline.

Cost of Revenues. Learning Tree's cost of revenues primarily includes the
costs associated with course instructors, course materials and equipment,
freight, classroom facilities and refreshments. Learning Tree has structured its
business so that the majority of its instructor-led course costs are variable
and depend primarily upon the number of course events conducted. Learning Tree
schedules its

multi-day course events throughout the year based on its assessment of demand.
Since Learning Tree's instructors typically work full-time in the IT industry
and teach Learning Tree course events as needed, Learning Tree's instructor
related costs are largely variable. In addition, although the expenses
associated with its own Education Centers are fixed, in some cases Learning Tree
can moderate its overall facility expenses by varying its use of rented hotel
and conference facilities.

During the second quarter of fiscal 2002, the cost of revenues increased to
45.4% of revenues compared to 41.7% in the second quarter of fiscal 2001. For
the first six months of fiscal 2002, the cost of revenues increased to 44.9% of
revenues compared to 39.8% for the same period of the prior year. The change in
the gross profitability of Learning Tree's instructor-led courses primarily
reflects an 11% decrease in revenue per multi-day course event for the second
quarter of fiscal 2002 and a 12% decrease for the first six months of fiscal
2002 compared to the same periods of the prior year. Revenues per multi-day
course event reflect decreases in the average number of attendees per event and
the decreases in average revenue per attendee in both the second quarter and the
first six months of fiscal 2002 compared to the corresponding periods in fiscal
2001. Learning Tree believes that the decreases in attendees per event primarily
reflect the impact of current economic conditions, which lowered Learning Tree's
overall attendance rates. In addition, to a lesser extent, the average number of
attendees per event in the first six months of fiscal 2002 was impacted by
Learning Tree's decision after September 11 to run courses with lower numbers of
attendees to maintain its market presence and to serve its customers' training
needs.

Learning Tree's average cost per event decreased by 4% for the second
quarter of fiscal 2002 and by 1% for the first six months of fiscal 2002. These
decreases reflect the favorable impact of changes in foreign exchange rates as
compared to the exchange rates that prevailed during the corresponding periods
in fiscal 2001. Excluding the impact of foreign exchange rate changes, the cost
per multi-day course event would have decreased by 1% for the second quarter of
fiscal 2002 and increased by 1% for the first six months of fiscal 2002. The
decrease in the second quarter primarily reflects reduced spending on instructor
training and recruiting and a reduction in the use of rented hotel and
conference facilities. The second quarter decrease was partially offset, and the
six-month period reflects, the impact of lower utilization of Learning Tree's
education centers arising from the decrease in the number of course events
conducted in 2002.

The cost of revenues for the second quarter of fiscal 2002 was $18.5
million compared to $24.2 million for the same quarter of fiscal 2001. For the
first six months of fiscal 2002, the cost of revenue was $39.5 million compared
to $47.8 million for the corresponding period in fiscal 2001. These decreases
primarily reflect a 21% decrease in the number of course events conducted during
the second quarter of fiscal 2002 and a 17% decrease in the number of course
events conducted for the first six months of fiscal 2002. During the second
quarter of fiscal 2002, Learning Tree presented 1,938 multi-day instructor-led
course events compared to 2,452 events during the same period in fiscal 2001.
For the first six months of fiscal 2002, Learning Tree presented 4,128 multi-day
instructor-led course events compared to 4,983 events during the corresponding
period in fiscal 2001.

Course Development Expenses. Learning Tree maintains a disciplined process
to develop new courses and update its existing courses. The costs incurred in
that process, principally for internal product development staff and for subject
matter experts, are included in course development expenses. Course development
costs also include the costs of Learning Tree's e-learning development
activities.

In the second quarter of fiscal 2002, course development expenses were 5.6%
of revenue compared to 5.4% for the same period of fiscal 2001. For the first
six months of fiscal 2002, course development expenses were 5.4% of revenue
compared to 4.9% of revenue for the corresponding period in the prior

year. These increases were a result of lower revenues, partly offset by a
decline in absolute expenditures on course development. Course development
expenses decreased 27% to $2.3 million for the second quarter of fiscal 2002
from $3.1 million in the second quarter of fiscal 2001. For the first six months
of fiscal 2002, course development expense decreased 20% to $4.8 million from
$5.9 million for the corresponding period in the prior year. These decreases
primarily reflect a decrease in the number of new course titles developed during
the first half of 2002. During slower economic periods, IT hardware and software
vendors typically introduce fewer new products, thus requiring the development
of fewer new IT courses. In addition, the reduction in course development
expense reflects a decrease in spending on e-learning development.

Learning Tree has recently released additional multi-day course titles on
topics such as Oracle9i, SQL Server and ASP.NET. At the end of March 31, 2002,
Learning Tree offered 159 multi-day course titles compared to 152 a year ago.
During the second quarter of 2002, Learning Tree introduced two new titles and
retired nine old titles. In general, titles are retired when the profits they
generate are not sufficient to justify the ongoing cost of marketing them and
maintaining their technological content.

Learning Tree expects to have approximately 157 course titles in the third
quarter of fiscal 2002. The actual number of course titles which Learning Tree
will execute, and their delivery dates, are subject to a number of factors such
as the hiring and training of staff, perceived customer demand, and the
availability of subject matter experts who are also responsible for teaching
Learning Tree's instructor-led courses. There can be no assurance that Learning
Tree will develop more titles than it retires in any period. Course development
costs may increase in the future if Learning Tree expands its instructor-led
training course library and as it explores the development of Internet
e-learning approaches and technologies.

Sales and Marketing Expenses. Sales and marketing expenses include
salaries, commissions and travel-related costs for sales and marketing
personnel, the costs of designing, producing and distributing direct mail
marketing and media advertisements, and the costs of information systems to
support these activities.

In the second quarter of fiscal 2002, sales and marketing expenses were
32.1% of revenue compared to 29.4% in the second quarter of fiscal 2001. For the
first six months of fiscal 2002, sales and marketing expenses were 29.7% of
revenue compared to 26.3% of revenue as compared to the same period of fiscal
2001. These increases were a result of lower revenues, partly offset by lower
sales and marketing expenses. During the second quarter of fiscal 2002, sales
and marketing expenses decreased by 23% to $13.1 million from $17.1 million for
the second quarter of fiscal 2001. For the first six months of fiscal 2002,
sales and marketing expenses decreased by 17% to $26.1 million from $31.6
million for the corresponding period of fiscal 2001. These decreases primarily
reflect a decrease in marketing expenditures, a reduction in sales personnel and
lower selling commissions due to the lower level of revenues. During the first
six months of fiscal 2002, Learning Tree leveled out the weekly quantities of
its mailings as compared to fiscal 2001. This measure caused approximately
$500,000 of marketing costs to move from Learning Tree's first quarter of fiscal
2002 into its second quarter, and from its second quarter of fiscal 2002 into
its third quarter as compared to the prior year periods.

General and Administrative Expenses. As a percentage of revenue, general
and administrative costs increased to 15.1% in the second quarter of fiscal 2002
from 11.9% in the corresponding period of fiscal 2001. For the first six months
of fiscal 2002, these costs increased to 14.7% from 11.2% as a percentage of
revenue as compared to the same period of the 2001 fiscal year. These increases
were a result of lower revenues, partly offset by lower general and
administrative expenses. General and administrative expenses decreased in the
second quarter of fiscal 2002 by 11% to $6.1 million compared to $6.9 million

in the same quarter of fiscal 2001. For the first six months of fiscal 2002,
general and administrative expenses decreased by 4% to $12.9 million from $13.4
million for the corresponding period in fiscal 2001. The decrease in general and
administrative expenses primarily reflects a reduction in incentive accruals,
partially offset by an increase in IT staff and related expenses, and staff
salary adjustments.

Other Income (Expense). Other income (expense) is primarily comprised of
interest income and foreign currency transaction gains and losses. In the second
quarter of fiscal 2002, other income (expense) decreased to an income of
$465,000 from $1.6 million for the corresponding quarter in fiscal 2001.
For the first six months of fiscal 2002, other income (expense) decreased to an
income of $1.0 million from $3.8 million for the corresponding period of fiscal
2001.

Lower interest rates in the marketplace together with the decline in
Learning Tree's interest-bearing investments, as a result of repurchases of its
Common Stock, caused interest income to decline by $1.3 million in the second
quarter of fiscal 2002 compared with the second quarter of fiscal 2001. For the
first six months of fiscal 2002, interest income declined by $3.0 million
compared with the corresponding period of fiscal 2001.

Learning Tree recorded foreign exchange losses of $101,000 in the second
quarter of fiscal 2002 compared to foreign exchange losses of $359,000 in the
second quarter of fiscal 2001. For the first six months of fiscal 2002, foreign
exchange losses were $352,000 compared to $534,000 in the corresponding period
of fiscal 2001. These transaction losses arose from receivables and payables
denominated in currencies other than the functional currencies of Learning
Tree's foreign subsidiaries.

Income Taxes. In the second quarter of fiscal 2002, the provision for
income taxes decreased $2.6 million to $412,000 compared to $3.0 million for the
same quarter of fiscal 2001. For the first six months of fiscal 2002, the
provision for income taxes decreased $7.0 million to $2.0 million compared to
$9.0 million for the same period in fiscal 2001. The decrease in the income tax
provision reflects the decrease in taxable income.

Fluctuations in Quarterly Results

Historically, Learning Tree's quarterly operating results have fluctuated,
and that is expected to continue in the future. The fluctuations may be caused
by many factors such as the frequency and availability of course events; the
number of weeks in a quarter during which courses can be conducted; the timing,
timely delivery, frequency and size of, and response to Learning Tree's direct
mail marketing and advertising campaigns; the timing of the introduction of new
course titles; the mix between course events held at customer-sites and course
events held in Learning Tree's education centers and hotels; competitive forces
within current and anticipated future markets served by Learning Tree; Learning
Tree's ability to attract customers and meet their expectations; currency
fluctuations and other risks of international operations; natural disasters,
external strikes, acts of war or terrorism, and other external factors; and
general economic conditions and industry-specific slowdowns. Fluctuations in
quarter-to-quarter results may also occur as a result of differences in the
timing of Learning Tree's spending on development and marketing of its courses
and receiving revenues from its customers.

Learning Tree's quarterly revenues and income typically reflect seasonal
patterns. Generally, Learning Tree's revenue and operating income are greater in
the second half of its fiscal year (April through September) than in the first
half (October through March). This is due in large part to seasonal spending
patterns of Learning Tree's customers, which are affected by matters such as
their budgetary considerations; factors specific to their business or industry;
and weather, holiday and vacation

considerations. There can be no assurance that these seasonal factors or their
effects will remain the same in the future.

Liquidity and Capital Resources

Cash and cash equivalents decreased to $103.4 million at March 31, 2002
from $108.5 million at September 30, 2001. At September 30, 2001, trade accounts
payable included $2.7 million required to settle Common Stock repurchases made
at the end of fiscal 2001, which were settled during the first few days of
fiscal 2002. As a result, during the first half of fiscal 2002 Learning Tree
paid approximately $6.9 million in cash for stock repurchases which included the
$2.7 million to settle the 2001 year-end stock repurchases and approximately
$4.2 million to repurchase approximately 191,500 shares of its Common Stock in
the first half of fiscal 2002. Learning Tree may make additional purchases
through open-market transactions, but has no commitments to do so.

Cash used by operations for the first half of fiscal 2002 was $283,000.
Excluding the effects on current liabilities of fiscal 2001 stock repurchases
which were paid in fiscal 2002, and fiscal 2001 second quarter stock repurchases
of $7.6 million which were paid in the third quarter of fiscal 2001, cash
provided by operations during the first half of fiscal 2002 was approximately
$2.4 million, compared to $18.8 million in the first half of fiscal 2001. This
primarily reflects the changes in profitability and advance payments by
customers for future courses. At March 31, 2002, Learning Tree had working
capital of $53.0 million.

During the first half of fiscal 2002, Learning Tree invested $2.2 million
in equipment and facilities compared to $9.6 million in the same period of
fiscal 2001. The investments in the current year primarily relate to purchases
of course equipment and the build-out of a second education center in Paris,
France, which is expected to open in the third quarter of fiscal 2002. The
higher level of investment during the prior year was primarily related to the
build-out of education center facilities in New York, Chicago and Atlanta.
Although Learning Tree expects to continue to invest in additional equipment and
facilities in fiscal 2002, as of March 31, 2002, Learning Tree had no other
material future purchase obligations, capital commitments or debt. Accordingly,
Learning Tree believes its cash and cash equivalents and the cash provided by
its operations will be sufficient to meet its cash requirements for the
foreseeable future.

Outlook For Fiscal 2002

Throughout this document, there have been various forward-looking
statements. However, this entire section should be treated as forward-looking
and subject to various risks and uncertainties, including those detailed from
time to time in Learning Tree's filings with the Securities and Exchange
Commission, including Learning Tree's 2001 Annual Report on Form 10-K and in
Exhibit 99, "Risk Factors." As economic and market conditions change during
fiscal 2002, Learning Tree's future revenues, plans and expenditures will vary
from the observations below, and these differences may be material.

Backlog. At March 31, 2002, Learning Tree had a backlog of orders for
instructor-led courses of $33.1 million, which represented an 18% decrease from
the backlog of $40.4 million at March 31, 2001. Only a portion of Learning
Tree's backlog is funded. There can be no assurance that orders comprising the
backlog will be realized as revenue.

Current Trends. During the remainder of fiscal 2002, Learning Tree's
business will continue to be influenced by world events, by the economy, and by
spending trends in the corporate marketplace for information technology.
Although some analysts have stated that they expect the economy and technology
spending to begin to recover at some point in the current year, Learning Tree
has seen no discernable improvement in demand from its customers. Learning Tree
currently believes it is prudent to

operate its business based on an assumption that its revenues (adjusted for
seasonal fluctuations) will not increase significantly until the general economy
and the IT industry begin to improve. At the same time, Learning Tree expects to
maintain its course development and delivery infrastructure while spending
somewhat more as a percentage of revenues on sales and marketing than in the
prior year. Learning Tree believes that this will help it take advantage of the
economic improvement when it comes.

Effect of Exchange Rates. Approximately half of Learning Tree's business is
conducted in currencies other than US dollars, and fluctuations in exchange
rates will impact future revenues and expenses when translated into dollars.
Exchange rates at May 7, 2002 were very similar to the average rates that
prevailed during fiscal 2001. If current exchange rates remain stable through
the remainder of fiscal 2002, revenues and net income for the third and fourth
fiscal quarters would not be materially affected by exchange rates.

Third Quarter 2002 Revenues. With respect to forecasting Learning Tree's
revenues for its third quarter of fiscal 2002, some of the factors considered
included:

. At March 31, 2002, Learning Tree's backlog of $33.1 million was 18% lower
than at March 31, 2001. At April 30, 2002, Learning Tree's backlog of $31.7
million was 18% lower than at April 30, 2001. At April 30, 2002, Learning
Tree's backlog pertaining to just those courses to be held during the third
quarter was 20% lower than it had been a year earlier.

. Learning Tree expects to have approximately 156 course titles in the third
quarter of fiscal 2002 compared with 163 course titles in the third quarter
of the prior year. Learning Tree may continue to retire more courses in
coming quarters as it seeks to manage gross profit levels and course
development and marketing expenses.

. Learning Tree's quarterly revenues and income typically reflect seasonal
patterns which generally result in revenue and operating income that is
greater in the second half of its fiscal year (April through September)
than in the first half (October through March). Learning Tree believes that
revenues in the third quarter of fiscal 2001, which declined slightly from
the second quarter, did not reflect this typical seasonal pattern because
its business had begun to reflect the impact of the economy which was
turning downward at that point last year.

Based on these factors and Learning Tree's current assessment of general
economic conditions, Learning Tree believes that revenues in the third quarter
of fiscal 2002 will be approximately $44 million to $46 million, and thus 20% to
24% lower than the revenues of $57.8 million in the third quarter of fiscal
2001.

Third Quarter 2002 Gross Margins. During the third quarter of fiscal 2002,
Learning Tree expects two factors to adversely impact Learning Tree's gross
margins by approximately 2.5% to 3.0% compared with the same quarter last year:

. Learning Tree expects this year's trend of fewer attendees per event
compared with last year to continue, and to cause revenues per event in the
third quarter to be lower than during the same quarter of the prior year.

. Lower utilization rates of Learning Tree's education centers are expected
to continue to result in higher fixed costs per event compared to the same
period last year.

Third Quarter 2002 Overhead Expenses. Learning Tree expects overall
overhead expenses for the third quarter, to be approximately $2.5 million to
$2.7 million lower than in the same quarter of the prior year, even after
including the previously discussed movement of approximately $500,000 of

marketing expense from its second quarter into its third quarter. This decrease
reflects anticipated reductions in marketing activities and costs, lower selling
commissions due to lower levels of sales, reductions in sales and other
personnel and a decrease in the number of new course titles being developed.

Third Quarter 2002 Interest Income. Learning Tree's interest income
reflects changes in interest rates, as well as changes in Learning Tree's cash
balances. Learning Tree expects its third quarter interest income to be similar
to that of the second quarter of fiscal 2002.

2002 Tax Rate. Learning Tree estimates that its tax rate in fiscal 2002
will be approximately 35.5%, which is approximately the same as it was in fiscal
2001.

Fiscal 2002. During the remainder of fiscal 2002, Learning Tree will
continue to monitor business conditions, and may make adjustments to its
operating plans. The uncertainties in the economic and political situation make
it difficult to forecast future revenues. If recent economic conditions and
attendance rates continue, Learning Tree expects fourth quarter 2002 revenues to
be similar to the revenues expected for the third quarter. If this occurs,
fourth quarter revenues would reflect a 7% to 10% decline from the fourth
quarter of fiscal 2001. The fourth quarter of fiscal 2001 already reflected the
general economic slowdown, and in the month of September last year, also
reflected some of the effects of the events of September 11.

Learning Tree intends to continue to monitor and adjust, as necessary, the
balance between investing in market share through ongoing marketing and sales
programs and adjusting its costs to be in line with ongoing revenue
expectations. In addition, Learning Tree intends to focus on improving the
efficiency and effectiveness of its operations. The approach Learning Tree uses
will depend on its continued evaluation of ongoing conditions. Learning Tree
currently expects that its fourth quarter gross profit and overall overhead
expenses as a percentage of revenue will be similar to that expected in its
third quarter of fiscal 2002. In addition, Learning Tree expects that its
interest income will be comparable to fiscal 2002 third quarter estimates.

Quantitative and Qualitative Disclosures About Market Risk

Learning Tree's cash equivalents and short-term investment portfolio is
diversified and consists primarily of investment grade securities of
high-quality financial institutions, government and government agencies, and
corporations. The fair value of Learning Tree's portfolio of marketable
securities would not be significantly impacted by either a 10 percent (20 basis
point) increase or decrease in the rates of interest due primarily to the
short-term nature of the portfolio. Learning Tree does not hold or issue
derivative financial instruments.

Learning Tree's consolidated financial statements are prepared in U.S.
dollars, while the operations of its foreign subsidiaries are conducted in their
respective local currencies. Consequently, changes in exchange rates can result
in exchange losses. The impact of future exchange rates on Learning Tree's
results of operations cannot be accurately predicted. To date, Learning Tree has
not sought to hedge the risks associated with fluctuations in exchange rates and
therefore continues to be subject to such risks. In the future, Learning Tree
may undertake such transactions. However, any hedging techniques implemented by
Learning Tree might not be successful in eliminating or reducing the effects of
currency fluctuations.

Critical Accounting Policies

Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods

used in the preparation of financial statements. Note 1 of the Notes to
Consolidated Financial Statements of Learning Tree's 2001 Annual Report on Form
10-K includes a summary of the significant accounting policies and methods used
in the preparation of Learning Tree's Consolidated Financial Statements. The
following is a brief discussion of the more significant accounting policies and
methods used by Learning Tree.

Use of Estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. For example, the allowance for bad debts is
based upon the level of historical write-offs and specific account reviews to
estimate the required reserve. Actual results could differ from those estimates.

Revenue Recognition. Course events range from two to five days with an
average of approximately four days. For individual course enrollments, it is
Learning Tree's policy to recognize revenues and the related direct costs of
course events as courses are delivered on a straight-line basis. However, for
administrative purposes, the revenues and the related costs of course events are
recorded upon commencement of each course event. The difference between Learning
Tree's revenue recognition policy and recording revenues and related course
costs on a straight-line basis is inconsequential.

Learning Tree offers its customers a multiple course sales discount
referred to as a Training Passport. A Training Passport allows an individual
passport holder to attend up to a specified number of courses held by Learning
Tree over a one-year period for a fixed price. For a Training Passport, the
amount of revenue recognized for each attendance in a course is based upon the
selling price of the Training Passport, the list price of the course taken and
the estimated average number of courses passport holders will actually attend.
Upon expiration of a Training Passport, Learning Tree records the difference, if
any, between the revenues previously recognized and the Training Passport
selling price. The estimated attendance rate is based upon the historical
experience of the average actual number of course events Training Passport
holders have been attending. The average actual attendance rate for all expired
Training Passports has closely approximated the estimated rate utilized by
Learning Tree. If the Training Passport attendance rates change, the revenue
recognition rate for all active Training Passports and for all Training
Passports sold thereafter is adjusted. Learning Tree believes it is appropriate
to recognize revenues on this basis in order to more closely match revenue and
related costs, as the substantial majority of its Passport holders do not attend
the maximum number of course events permitted under their Training Passport.
Learning Tree believes that the use of historical data is reasonable and
appropriate because of the relative stability of the average actual number of
course events attended by the tens of thousands of Passport holders since the
inception of the program in fiscal 1993. Although Learning Tree has seen no
material changes in the historical rates as the number of course titles has
increased, it monitors such potential effects. In general, determining the
estimated average number of course events that will be attended by a Training
Passport holder is based on historical trends that may not continue in the
future. These estimates could differ in the near term from amounts used in
arriving at the reported revenue.

Learning Tree also offers a multiple-course sales discount referred to as
Training Vouchers. When purchasing Training Vouchers, the customer buys the
right to send a specified number of attendees to a Learning Tree course or
courses over a one-year period for a fixed price. Revenue is recognized on a pro
rata basis for each attendance. If a Training Voucher expires unused, the
selling price of the expired Training Voucher is recorded as revenue.

Prepaid Marketing Expenses. Prepaid marketing expenses are charged to
income in the month in which advertising materials are mailed since the benefit
period for such costs is short and the amount of such future benefit is not
practically measurable.

Course Development Costs. Course development costs are charged to
operations in the period incurred.

Foreign Currency. Learning Tree translates the financial statements of its
foreign subsidiaries from the local (functional) currencies to United States
dollars in accordance with SFAS No. 52 "Foreign Currency Translation." The rates
of exchange at each fiscal year end are used for translating the balance sheets
and the average monthly rates of exchange for each year are used for the
statements of operations. Gains or losses arising from the translation of the
foreign subsidiaries' financial statements are included in the accompanying
consolidated balance sheets as a separate component of stockholders' equity.
Gains or losses resulting from foreign currency transactions are included in the
consolidated statements of operations.

To date, Learning Tree has not sought to hedge the risk associated with
fluctuations in currency exchange rates, and therefore continues to be subject
to such risk.

Facilities, Intangible and Other Long-Lived Assets. Equipment, property and
leasehold improvements are recorded at cost and depreciated or amortized using
the straight-line method over the assets' estimated useful lives.

Learning Tree periodically reviews the carrying value of its facilities,
intangible and other long-lived assets to identify and assess any impairment of
the carrying value.

Facilities Leases. Learning Tree leases its facilities under various
operating lease agreements. Certain provisions of these leases provide for cash
incentives, graduated rent payments and other inducements. Learning Tree
recognizes rent expense on a straight-line basis, which more closely reflects
the benefits received. The value of any lease incentives or inducements, along
with the excess of the rent expense recognized over the rentals paid is recorded
as deferred facilities rent charges in the accompanying consolidated financial
statements.

PART II - OTHER INFORMATION

Item 1: LEGAL PROCEEDINGS

None

Item 2. CHANGES IN SECURITIES

Not Applicable

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

Learning Tree held its Annual Meeting on March 4, 2002. During the
Annual Meeting of Stockholders the matters that were voted upon were
as follows:

1. Election of Directors
2. Approval of the Amendment of the 1999 Stock Option Plan

The following are the results of the voting:

1. Election of Directors: Shares for Shares withheld
---------- ---------------

Class I Directors for a term expiring in 2005:
W. Mathew Juechter 16,303,799 316,726
Howard A. Bain III 16,304,337 316,188

The current terms of the Class II Directors, Michael W. Kane and Mary
C. Adams will continue until the 2003 Annual Meeting of Stockholders.
The current terms of the Class III Directors, David C. Collins, Eric
R. Garen and Gary R. Wright will continue until the 2004 Annual
Meeting of Stockholders. James E. Furlan, a Class II Director,
resigned as an officer and Director, effective April 19, 2002.

2. The Amendment of the 1999 Stock Option Plan was approved.

Item 5. OTHER INFORMATION

Not Applicable

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

16.1 Letter of Arthur Andersen LLP regarding change in
certifying accountants.

b) Reports on Form 8-K

A Form 8-K was filed on April 5, 2002, regarding Learning Tree's announcement
that its Board of Director's, upon the recommendation of its Audit Committee,
dismissed Arthur Andersen LLP who had previously acted as Learning Tree's
independent auditors. Learning Tree engaged Ernst & Young LLP as its new
independent auditors to audit the financial statements of Learning Tree for the
fiscal year ending September 30, 2002, as well as to perform timely reviews of
its second and third quarter results for fiscal 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

LEARNING TREE INTERNATIONAL, INC.

Dated: May 10, 2002 By: /s/ Gary R. Wright
---------------------------------
Gary R. Wright
Chief Financial Officer
(Principal Financial Officer and
Duly Authorized Officer)