New Horizons Reports Fourth Quarter and Twelve Months Ended December 31, 2008 Results

Business Wire, March 25, 2009

CONSHOHOCKEN, Pa. -- New Horizons Worldwide, Inc. (OTCBB: NEWH) today reported financial results for the fourth quarter and the twelve months ended December 31, 2008.

Quarter Ended December 31, 2008 Highlights

• Operating income was $1.4 million for the fourth quarter of 2008, representing our eighth consecutive quarter of positive results.
• Net income was $3.0 million for the quarter ended December 31, 2008.
• System-wide revenue decreased 4.4% for the three months ended December 31, 2008 over the comparable fourth quarter in the prior year.
• On a constant currency basis, System-wide revenue was flat for the three months ended December 31, 2008 over the comparable fourth quarter in the prior year.

Quarter Ended December 31, 2008 Results

Revenue for the quarter ended December 31, 2008 totaled $8.7 million, compared to $11.6 million in the comparable 2007 period. Franchising revenue decreased to $6.0 million in the fourth quarter of 2008 as compared to $6.5 million in the fourth quarter of 2007. Royalty revenue decreased slightly to $4.9 million in the quarter ended December 31, 2008 compared to the same period last year at $5.1 million. Revenue from Company-owned training centers declined to $2.8 million in the quarter ended December 31, 2008 from $5.1 million in the comparable period of 2007, as a result of the disposal and re-franchising of one Company-owned training center in November 2007.

Operating income increased to $1.4 million in the quarter ended December 31, 2008 compared to $272,000 in the same period last year. The Company defines operating income as income before gains (losses) from the sale of assets, interest and income taxes. The Company’s net income was $3.0 million for the three months ended December 31, 2008 compared to a net income of $2.0 million in the comparable 2007 period. The improvement is due to the $1.1 million improvement in operating efficiency, and a benefit for income taxes of $1.8 million recorded in December 2008.

For the three months ended December 31, 2008, total system-wide revenue from all franchised and Company-owned training centers was $91.5 million compared to total system-wide revenue for the comparable 2007 period of $95.7 million, a decrease of 4.4%. On a constant currency basis, System-wide revenue was flat for the three months ended December 31, 2008 over the comparable fourth quarter in the prior year.

Twelve Months Ended December 31, 2008 Highlights

• Operating income was $6.0 million for the twelve months ended December 31, 2008.
• Net income was $6.8 million for the twelve months ended December 31, 2008.
• System-wide revenue increased 3.0% for the twelve months ended December 31, 2008 over the comparable twelve months in the prior year.
• On a constant currency basis, System-wide revenue increased 5.7% for the twelve months ended December 31, 2008 over the prior year.

Twelve Months Ended December 31, 2008 Results

Revenue for the twelve months ended December 31, 2008 totaled $37.2 million, compared to $51.6 million in the comparable 2007 period. Total Franchising revenue increased to $24.7 million for the twelve months ended December 31, 2008 as compared to $24.0 million for the prior year. Within the Franchising segment, royalty revenue increased by $1.7 million in the twelve months ended December 31, 2008 to $20.9 million from $19.2 million in the comparable 2007 period, partially due to the re-franchising of Company-owned training centers. Revenue from Company-owned training centers declined to $12.5 million in the twelve months ended December 31, 2008 from $27.6 million in the comparable period of 2007 as a result of the disposal and re-franchising of four Company-owned training centers during 2007.

The Company had operating income of $6.0 million for the twelve months ended December 31, 2008, compared to operating income of $4.2 million for the twelve months ended December 31, 2007. The Company defines operating income as income before gains (losses) from the sale of assets, interest and income taxes. The improvement reflects increased margins primarily in the Company-owned training centers segment. The Company’s net income was $6.8 million for the twelve months ended December 31, 2008 compared to a net income of $5.3 million in the comparable 2007 period. The twelve months ended December 31, 2007 benefitted from $2.7 million of non-recurring gain on the sale of Company-owned training centers. The December 31, 2008 period also reflects $1.3 million of income tax benefit from the utilization of Net Operating Loss carryforwards.