Whitney Information Network, Inc. Reports Second Quarter 2009 Results

CAPE CORAL, Fla., Aug. 17 /PRNewswire-FirstCall/ -- Whitney Information
Network, Inc. (OTC Bulletin Board: RUSS), a provider of educational training
seminars, conferences and services across multiple delivery channels that help
customers become financially literate through specialized instruction and
mentoring on real estate and financial instruments investing, personal
finance, entrepreneurism and self-development, today reported financial
results for its second quarter of fiscal year 2009, which ended on June 30,
2009.

Revenue for the quarter ended June 30, 2009 was $29.1 million, or a decrease
of $13.5 million or 31.7%, from $42.6 million for the quarter ended June 30,
2008. The decrease in revenue in the second quarter of 2009 compared with the
second quarter of 2008 is primarily due to the discontinuation of several
Proprietary Brands. Net loss before non-controlling interest for the second
quarter was ($7.4) million; net loss attributable to Whitney Information
Network, Inc. was ($3.3) million, or ($0.28) per basic and diluted share. For
the comparable quarter in 2008, the net loss was ($1.9) million or ($0.16) per
basic and diluted share. On a non-GAAP basis, Adjusted EBITDA for the quarter
was ($1.4) million compared to ($1.6) million for the second quarter 2008.
Adjusted EBITDA is calculated as net income (loss) before non-controlling
interest excluding the impact of special items; interest income; interest
expense; other income (expense), net; income tax (provision) benefit; stock
option compensation expense; depreciation and amortization expense; and equity
income (loss) from related parties; adjusted for the net change in deferred
revenue less the net change in deferred course expenses. A reconciliation of
Adjusted EBITDA to net loss for the three- and six-month periods ended June
30, 2009 and 2008 is attached to this press release.

Deferred revenue grew by $6.2 million in the second quarter of 2009 compared
with an increase of $0.9 million in the second quarter of 2008. This faster
rate in the growth of the deferred revenue balance primarily is attributable
to the deferral of revenue related to unattended courses of RDE Brand
customers. In December 2009, we will have two years of expired RDE Brands
contract data and will begin to recognize breakage revenue on these brands at
that time.

For the six-month period ended June 30, 2009, revenue was $61.6 million, or a
decrease of $23.6 million or 27.7%, from $85.2 million for six months ended
June 30, 2008. Net loss before non-controlling interest for the first six
months of 2009 was ($10.6) million; net loss attributable to Whitney
Information Network, Inc. was ($2.4) million, or ($.20) per basic and diluted
share. For the comparable six-month period in 2008, our net loss was ($5.8)
million, or ($.50) per share. Adjusted EBITDA for the six-month period ended
June 30, 2009 was ($0.1) million compared to $4.2 million for the first six
months of 2008.

Deferred revenue grew by $12.1 million in the first half of 2009 compared with
an increase of $15.2 million in the first half of 2008. This slower rate in
the growth of the deferred revenue balance is primarily due to lower sales and
the result of expansion of the options for course delivery in order to reduce
the number of expired contracts and the resulting breakage determination. In
December 2009, we will have two years of expired RDE Brands contract data and
will begin to recognize breakage revenue on these brands at that time. We have
increased the number of courses offered on DVDs and via the Internet and
expanded the number of location options for customers in the United States.
Additionally, we have implemented an outreach notification program, contacting
our customers by email and the United States mail as courses near expiration.

"Decreased sales in second quarter 2009 were significantly affected by the
suspension of proprietary brands," said Charles M. Peck, Chief Executive
Officer. "However, revenue from our Rich Dad Education brands remains stable
quarter over quarter. We were particularly pleased that our test of a Rich Dad
'Launch Your Business' brand targeted at entrepreneurs met with an
enthusiastic marketplace response. We will continue to test in specific
markets and roll out in the near future."

"Our geographic expansion into the Asia-Pacific region also proceeded as
planned, with our initial launch in Australia," Peck continued. "Following
tests of an online model as well as a seminar model for our strategic alliance
with the Dolans, we are evaluating performance results and fine tuning our
future approach. Regarding our alliance with Montel Williams, an initial test
revealed that greater emphasis should be placed on health and wellness
products along with financial products to fully maximize the 'Living Well with
Montel' positioning."

Peck commented, "We continue to cut costs in relation to current business
conditions through select staff rightsizing moves and a restructuring of the
commission structure for our independent contractors and telemarketing staff.
Like many companies in today's tough economic climate, we are holding the line
on staffing and facilities expenses. Additionally, we are working hard to
reduce administrative costs and fees."

About Whitney Information Network, Inc.

Whitney Information Network, Inc. (OTC Bulletin Board: RUSS) is a provider of
educational training seminars, conferences and services across multiple
delivery channels that help customers become financially literate through
specialized instruction and mentoring. The company provides customers with
comprehensive instruction and mentoring in real estate investing, financial
instruments investing, personal finance, entrepreneurism and self-development
in the United States, United Kingdom, Canada, Costa Rica and the Asia-Pacific
region. Additional information can be found at www.wincorporate.com.

Non-GAAP Financial Measures - Adjusted EBITDA

As used in our operating data, EBITDA is defined as net income (loss)
excluding the impact of special items (including the costs associated with the
SEC and the DOJ investigations and the related class action and derivative
lawsuits); interest income; interest expense; other income (expense), net;
income tax (provision) benefit; stock option compensation expense;
depreciation and amortization expense; and equity income (loss) from related
parties. We define "Adjusted EBITDA" as EBITDA adjusted for the net change in
deferred revenue less the net change in deferred course expenses. Adjusted
EBITDA is not a financial performance measurement according to accounting
principles generally accepted in the United States ("GAAP").

We use Adjusted EBITDA as a key measure in evaluating our operations and
decision-making. We feel it is a useful measure in determining our performance
since it takes into account the change in deferred revenue and deferred course
expenses in combination with our operating expenses. We reference Adjusted
EBITDA frequently, since it provides supplemental information that facilitates
internal comparisons to historical operating performance of prior periods and
external comparisons to competitors' historical operating performance in our
industry. We plan and forecast our business using Adjusted EBITDA, with
comparisons of actual to planned and forecasted Adjusted EBITDA and we provide
incentives to management based on Adjusted EBITDA goals. In addition, we
provide Adjusted EBITDA because we believe investors and security analysts
find it to be a useful measure for evaluating our performance.

Many costs to acquire customers have been expended before a customer attends
any basic or advanced training. Those costs include media, travel, facilities
and instructor fees for the preview workshops and are expensed when incurred.
Licensing fees paid to Rich Global and telemarketing and speaker commissions
are deferred and recognized when the related revenue is recognized. Revenue
recognition of tuition paid by customers to enroll in any basic or advanced
training courses at registration is deferred until (i) the course is attended
by the customer, (ii) the customer has received the course content in an
electronic format, (iii) the contract expires, or (iv) revenue is recognized
through course breakage. It is only after one of those four occurrences that
revenue is considered earned. Thus, reporting in accordance with GAAP creates
significant timing differences between the receipt and disbursement of cash
with the recognition of the related revenue and expenses, both in our
Condensed Consolidated Statements of Cash Flows and Condensed Consolidated
Statements of Operations. As a result of these factors, our operating cash
flows can vary significantly from our results of operations for the same
period. For this reason, we believe Adjusted EBITDA is an important non-GAAP
financial measure.

Adjusted EBITDA has material limitations and should not be considered as an
alternative to net income (loss), cash flows provided by operations, investing
or financing activities or other financial statement data presented in the
Condensed Consolidated Financial Statements as indicators of financial
performance or liquidity. Items excluded from Adjusted EBITDA are significant
components in understanding our financial performance. Because Adjusted EBITDA
is not a financial measurement calculated in accordance with GAAP and is
subject to varying calculations, Adjusted EBITDA as presented may not be
comparable to other similarly titled measures of performance used by other
companies.

The table below is a reconciliation of the Company's net loss to EBITDA and
Adjusted EBITDA for the periods set forth below (in millions):

Three months ended Six months ended
June 30, June 30,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----

Net loss $(7.4) $(1.9) $(10.6) $(5.8)
Impairment of assets 0.4 - 0.4 -
Special items 0.2 - 0.3 0.2
Other income, net - (0.6) (0.3) (0.9)
Provision for income taxes 0.3 0.2 0.4 0.4
Gain on sale of assets - - - (1.1)
Stock-based compensation - 0.2 - 0.3
Depreciation and
amortization expense 0.3 0.4 0.5 0.8
Equity loss from
related parties - 0.2 - 0.4
- --- - ---
EBITDA (6.2) (1.5) (9.3) (5.7)

Net change in deferred
revenue 6.2 0.9 12.1 15.2
Net change in deferred
course costs (1.4) (1.0) (2.9) (5.3)
---- ---- ---- ----
Adjusted EBITDA $(1.4) $(1.6) $(0.1) $4.2
===== ===== ===== ====
Adjusted EBITDA as a
percentage of cash
received from course
and product sales (4.0)% (3.7)% (0.1)% 4.2%
==== ==== ==== ===

Special Note Regarding Forward Looking Statements

This press release includes certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements include all statements other than those made solely with respect to
historical facts. These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results or
performance to be materially different from any future results or performance
expressed or implied by these forward-looking statements. These factors
include those factors which can be found in our Form 10-K for the year ended
December 31, 2008 and our other filings with the Securities and Exchange
Commission. Forward-looking statements in this press release should be
evaluated in light of these important factors. Although we believe that these
statements are based upon reasonable assumptions, we cannot provide any
assurances regarding future results. We undertake no obligation to revise or
update any forward-looking statements or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.

WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)

June 30, December 31,
2009 2008
---- ----
(unaudited)
Assets
Current assets:
Cash and cash equivalents $23,700 $23,594
Restricted cash 12,752 13,492
Deferred course expenses, current portion 24,953 22,070
Other current assets 1,357 2,452
Inventories 763 953
Assets held for sale - 3,748
- -----
Total current assets 63,525 66,309
------ ------

Notes receivable, net of current portion 9,368 9,677
Property, equipment and intangible assets, net 3,686 4,241
Other assets 1,572 1,381
----- -----
Total assets $78,151 $81,608
======= =======

Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $3,014 $4,516
Income taxes payable 615 799
Deferred revenue, current portion 128,710 116,642
Accrued course expenses 1,285 1,440
Accrued salaries, wages and benefits 1,036 851
Other accrued expenses 4,967 6,611
Other current liabilities 290 288
--- ---
Total current liabilities 139,917 131,147
------- -------

Long-term debt, net of current portion 2,867 2,913
Other long-term liabilities 154 222
--- ---
Total liabilities 142,938 134,282
------- -------

Commitments and contingencies
Whitney Information Network, Inc.'s stockholders'
deficit:
Preferred stock - -
Common stock 2,591 2,591
Paid-in capital 2,527 2,507
Cumulative foreign currency translation
adjustment 328 1,236
Accumulated deficit (61,393) (59,008)
------- -------
Total Whitney Information Network, Inc.'s
stockholders' deficit (55,947) (52,674)
Noncontrolling interest (8,840) -
------ -
Total stockholders' deficit (64,787) (52,674)
------- -------
Total liabilities and stockholders' deficit $78,151 $81,608
======= =======

WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited, in thousands, except per share data)

Three months ended Six months ended
June 30, June 30,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----

Revenue $29,139 $42,605 $61,601 $85,209

Direct course
expenses 15,792 23,497 32,937 45,626
Advertising and
sales expenses 12,040 12,300 23,416 28,453
General and
administrative
expenses 8,506 8,856 15,714 18,131
----- ----- ------ ------

Loss from
operations (7,199) (2,048) (10,466) (7,001)

Other income, net 97 380 194 1,624
-- --- --- -----

Loss before income taxes (7,102) (1,668) (10,272) (5,377)

Provision for
income taxes (280) (223) (373) (448)
---- ---- ---- ----

Net loss (7,382) (1,891) (10,645) (5,825)

Net loss attributable
to the noncontrolling
interest (4,122) - (8,260) -
------ - ------ -

Net loss
attributable to Whitney
Information Network, Inc. $(3,260) $(1,891) $(2,385) $(5,825)
======= ======= ======= =======

Basic and diluted net loss
per share attributable to
Whitney Information
Network, Inc. common
stockholders $(0.28) $(0.16) $(0.20) $(0.50)
====== ====== ====== ======

Basic and diluted weighted
average shares outstanding 11,739 11,739 11,739 11,739
====== ====== ====== ======

Comprehensive loss:
Net loss $(7,382) $(1,891) $(10,645) $(5,825)
Foreign currency
translation
adjustments (1,493) (76) (1,232) 3
------ --- ------ -
Comprehensive loss (8,875) (1,967) (11,877) (5,822)
Comprehensive loss
attributable to
noncontrolling interest (4,522) - (8,584) -
------ - ------ -
Comprehensive loss
attributable to Whitney
Information Network, Inc. $(4,353) $(1,967) $(3,293) $(5,822)
======= ======= ======= =======

WHITNEY INFORMATION NETWORK, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

Six months ended
June 30,
----------------
2009 2008
---- ----

Cash flows from operating activities:
Net loss $(10,645) $(5,825)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 530 811
Impairment of assets 350 -
Stock-based compensation expense 20 332
Gain on sale of assets - (1,080)
Equity loss from related parties 32 400
Changes in operating assets and liabilities:
Restricted cash 740 (1,713)
Deferred course expenses (2,887) (5,302)
Other current assets 1,052 1,006
Inventories 190 (490)
Other assets (73) (56)
Accounts payable (1,502) (1,920)
Income taxes payable (184) 117
Deferred revenue 12,097 15,236
Accrued course expenses (155) 403
Accrued salaries, wages and benefits 185 (1,138)
Other accrued expenses (1,646) 9
Other liabilities (96) (1,194)
--- ------
Net cash used in operations (1,992) (404)
------ ----

Cash flows from investing activities:
Purchase of property and equipment (76) (62)
Proceeds from notes receivable 105 43
Investments and advances to related parties (146) -
Proceeds from the sale of assets 3,748 3,040
----- -----
Net cash provided by investing activities 3,631 3,021
----- -----

Cash flows from financing activities:
Distribution to noncontrolling interest (256) (1,576)
Proceeds from issuance of long-term debt - 7
Principal payments on long-term debt (45) (99)
--- ---
Net cash used in financing activities (301) (1,668)
---- ------

Effect of foreign currency translation (1,232) 3
------ -

Net increase in cash and cash equivalents 106 952
Cash and cash equivalents, at beginning of
period 23,594 33,012
------ ------
Cash and cash equivalents, at end of period $23,700 $33,964
======= =======

Supplemental non-cash disclosures:
Accounts receivable converted to a note
receivable $- $335
== ====

SOURCE Whitney Information Network, Inc.

Investor Relations, Booke and Company, Inc., +1-212-490-9095