- The Washington Times - Monday, January 22, 2001

Learning Tree International Inc. says business at its New York learning center has grown so much that the company has had to expand the facility.

A player in a crowded field, the Reston-based information technology educator knows all about expansion. Founded in 1974, the company began teaching engineering skills. During the Internet revolution of the 1990s it grew into an information technology educator.

Learning Tree develops, markets and delivers instructor-led courses on Web development, computer networks, programming languages, client/server systems, databases and other operating systems.

The expansion of the New York office comes two months after the company opened a facility in Chicago. It also has centers in markets like Washington, Los Angeles, Boston, Atlanta, Toronto, London, Paris, Stockholm and Tokyo.

Shares of Learning Tree have wavered mostly between the mid-$30s and mid-$40 over the past four months. The stock closed Friday at $44.50 on Nasdaq.

"[Information technology] is a huge market," says analyst Scott Wilson with San Francisco's Merrill Lynch Global Securities, illustrating the competitive nature of the field.

But Learning Tree has kept ahead, he says, growing at an annual rate of 18 to 22 percent over the 1990s.

Several factors contributed to Learning Tree's growth, such as the healthy economy and the technology boom and product evolution. The technology worker shortage also helped, as did the end of the year-2000 bug scare last year, says Mark Marostica, analyst with U.S. Bancorp Piper Jaffray in Minneapolis.

"The idea of new people entering the market lends itself to the need for training," he says. "And companies were devoting their IT staff to Y2K work … when Y2K ended, suddenly the staff was freed up and new projects came to fruition."

But the information technology training market is so jammed with competitors that Learning Tree, though considered one of the top 10 players, holds 1 percent of the field.

"It's a very fragmented market," Mr. Marostica says. "There is no one company that can claim ownership to the IT training scope."

During 1999, the top 15 such companies held 20 percent of the market, making $3.9 billion. IMB and Oracle are the largest among trainers, but they train their own people as opposed to outsource their instructors and courses.

Customers of Learning Tree are mostly Fortune 1,000 companies.

"Most of them at one time or another have been Learning Tree customers," Mr. Marostica says. "It's really a global base too. Half of their business is in the States and half of the business is overseas."

Learning Tree reported sales for its fourth-quarter ended Sept. 30 grew 20.8 percent to $58.59 million from $48.52 million during that time in 1999. Profits also rose 59 percent to $9.05 million (40 cents per diluted share) from $5.68 million (26 cents).

Diluted shares reflect the value of options, warrants and other securities convertible into common stock.

Learning Tree, which is expected shortly to release earnings for its first quarter of 2001, also reported financials for fiscal 2000. It said sales increased 18.3 percent to $224.01 million from $189.32 in 1999. Profits rose last year, too, by 66.5 percent, to $37.09 million ($1.65) from $12.41 million (57 cents) the year before.


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