Plato Learning, Inc. (TUTR), a provider of e-learning instruction for kindergarten, reported Tuesday a profit for the third quarter, stating that continued improvements in gross margins and operating efficiencies resulted in a third consecutive quarter of profitability.
For the third quarter, net income was $184 thousand or $0.01 per share, compared with a net loss of $2.06 million or $0.09 per share in the previous year. Excluding restructuring charges of $0.8 million, net loss for the year-ago quarter was $1.26 million or $0.05 per share.
Total revenues for the third quarter dipped to $16.74 million from $18.64 million. Subscription revenues grew 17% to $10.77 million from $9.25 million, while license fees dipped to $1.33 million from $3.35 million and services revenue decreased to $4.64 million from $6.04 million in the same quarter last year.
Total orders for the quarter grew 13% to $31.23 million from $27.67 million, as subscription orders improved 33% year-over-year to $23.52 million from $17.71 million.
Total cost of revenues reduced to $7.12 million from $9.30 million, as subscription costs declined to $4.09 million from $4.59 million, cost of license fees slid to $611 thousand from $1.54 million and service costs came down to $2.42 million from $3.17 million in the year-ago period. Subscription gross margins improved to 62% from 50% last year.
Total operating expenses decreased to $9.37 million from $11.23 million, with sales and marketing costs declining to $5.96 million from $6.66 million and software maintenance and development costs reducing to $976 thousand from $1.13 million.
Vin Riera, the president and chief executive officer said, "Our fiscal third quarter occurs during the primary buying season in the education market, and we are pleased to report strong financial results for this important period in our business. Compared to our third quarter 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."
For the nine-month period, net income was $566 thousand or $0.02 per share, compared to loss of $12.44 million or $0.52 per share in fiscal 2008. Revenues came down to $48.28 million from $51.02 million a year ago.
For fiscal year 2009, the company expects subscription revenue to remain unchanged at low double-digit growth. Plato now sees subscription order growth to range from 25% to 30%, compared to a mid-teens growth projected earlier.
TUTR closed Monday's regular trading hours at $4.41 on the NASDAQ.
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