Scientific Learning Corp. reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2013. For the quarter, the company reported total revenue of $5.3 million, compared to $7.1 million in the second quarter of 2012 due to a decline in perpetual license revenue. Total booked sales were $4.3 million, compared to $7.1 million in the same period of 2012, reflecting continued difficulties in the K-12 funding environment and reductions in sales capacity made in 2012. The net loss was $0.05 million or $0.00 per basic and diluted share compared to a net loss of $3.1 million or $0.14 per basic and diluted share in the second quarter of 2012. Adjusted EBITDA was a gain of $0.2 million compared to a loss of $2.4 million in the same period of 2012. The company reported operating loss of $0.33 million and loss before provision for income tax of $21,000 compared to operating loss of $3.22 million and loss before provision for income tax of $3.10 million reported a year ago. The company reported operating loss of $0.33 million and loss before provision for income tax of $21,000 compared to operating loss of $3.22 million and loss before provision for income tax of $3.10 million reported a year ago. Net cash used in operating activities was $1.26 million compared to $4.84 million reported a year ago. Purchases of property and equipment and additions to capitalized software, net, were $34,000 compared to $0.216 million reported a year ago. The decline in revenue was due to a reduction in perpetual license sales. The primary reason for the decline in service and support revenue is the reduction in on-site training days as the company move to a more training and online model.

For the six months, the company reported operating loss of $1.08 million, loss before provision for income tax of $1.01 million and net loss of $1.06 million or $0.04 per basic and diluted share on total revenues of $10.81 million compared to operating loss of $8.16 million, loss before provision for income tax of $8.09 million and net loss of $8.18 million or $0.39 per basic and diluted share on total revenues of $14.23 million reported a year ago. Net cash used in operating activities was $3.36 million compared to $8.84 million reported a year ago. Purchases of property and equipment and additions to capitalized software, net, were $0.157 million compared to $0.465 million reported a year ago. Adjusted EBITDA was $0.059 million compared to a loss of $6.45 million reported a year ago.

For the second half, the company expects to turn cash flow positive but do not now expect to be cash flow positive for the year as a whole.