Learning Tree International Inc.

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Learning Tree International Inc.

6053 West Century Boulevard
P.O. Box 45028
Los Angeles, California 90045-0028
U.S.A.
(310) 417-9700
(800) THE-TREE (843-8733)
Fax: (800) 709-6405
Web site:http://www.learningtree.com

Public Company
Incorporated: 1974 as Integrated Computer Systems
Employees: 645
Sales: $164.48 million
Stock Exchanges: NASDAQ
Ticker Symbol: LIRE

SICs: 7372 Prepackaged Software; 8243 Data Processing Schools; 8299 Schools & Educational Services, Not Elsewhere Classified

The brisk advancements in information technology have many corporations worldwide scrambling to catch up with ever-advancing technological capabilities. Learning Tree International Inc. is a key player in the information technology training and education industry, a growing $18 billion field. “The Internet’s growth caught many companies off-guard, and they are still struggling to put infrastructure in place to exploit its capabilities. Since there is no slowdown in sight, corporations will find it difficult to find skilled technicians,” says industry analyst Doug Rutherford in a 1996 InfoWorld article.

Learning Tree has stepped up to the plate to offer corporations personalized training, as well as certification programs to train and test the expertise of the technology professionals, engineers, programmers, and systems specialists they target. The demonstration of practical experience provided by these programs helps guard against a corporation hiring what a 1996 InfoWorld article by Paul Korzeniowski termed “one-Web-page wonders.” In a 1998 study, the Information Technology Association of America in Arlington, Virginia, identified education as crucial to correcting this situation but that, conversely, there are not enough university graduates in this field to fill all the job vacancies.

A purported 10 percent of technical positions in the United States are vacant, and one of the most promising ways corporations are finding to fill the dearth of trained professionals is to retrain workers already employed in the field. According to another 1998 study, by the American Society for Training and Development in Alexandria, Virginia, high-tech companies spend an average of $911 per employee on training, more than any other sector. Learning Tree is prepared to take this growing market head-on; in 1998 the company taught 6,300 courses annually. The company has established U.S. education centers in Los Angeles; Boston; Washington, D.C.; and New York City. Additional U.S. course sites include: Atlanta; Chicago; Dallas; San Diego; Irvine, California; and Santa Clara, California. Reston, Virginia, is the site of the Company’s U.S. headquarters; worldwide headquarters are located in Los Angeles. Other offices are located in Paris, France; London, England; Toronto, Canada; Ottawa, Canada; Stockholm, Sweden; Hong Kong; and Tokyo, Japan.

1974: Building the Learning Technology

Two engineers, David C. Collins, Ph.D., and Eric R. Garen, developed their common interests in computers and teaching to establish what would become one of the world’s largest independent educational resources for information technology professionals. Prior to this collaboration, Dr. Collins earned a Bachelor of Science degree (with distinction) in electrical engineering from Stanford University, and Master’s and Ph.D. degrees in the same field from the University of Southern California. Later, he was a University computer science instructor as well as having performed as an advisor to the development of college-level electrical engineering courses. Additionally, Dr. Collins participated in a think tank relating to the advancement of surveillance, communications, and weapons systems. Garen holds a Bachelor’s degree in electrical engineering from the California Institute of Technology, and earned a Master’s degree in computer science from the University of Southern California, each with honors.

It was while Garen worked as a design engineer and project manager at Technology Service Corporation, the same organization which employed Dr. Collins, that the two devised an idea for a new business. They realized the great desire and need for engineers in business and government organizations to actively remain on top of their professions and keep up with emerging technologies. Thus, the foundation of their company, then known as Integrated Computer Systems, was established.

Garen was the company’s first instructor, as well as author of the first course offering, Microprocessors and Microcomputers. He continued teaching on a part-time basis until 1980, when he moved full-time to company management. Garen was elected president of Learning Tree in 1991. Dr. Collins has served as CEO of Learning Tree International since its inception in 1974.

The Late 1970s: Successfully Expanding

In 1975, the “hands-on” courses offered by Learning Tree were the first of their kind in the information technology field. The structure of the class was based on the concept that in order to teach an individual the practical, real-life knowledge of a specific computer operation, it was necessary to provide handson experience in the classroom. “They need to be able to apply what they’ve learned to be successful on a live project. With us, companies get an immediate return on their investment,” said Garen in a 1997 Investor’s Business Daily article. Learning Tree held these course programs in cities across North America and Europe. In addition to the first course offerings in Japan, a new European headquarters debuted in 1975. Much growth occurred in 1976 as the company opened subsidiaries in the United Kingdom, Sweden, and France.

Back in the United States, Learning Tree landed a contract with General Electric, one of the company’s first big clients. In addition to training 7,500 General Electric personnel, which included 300 of GM’s top 400 line managers, the company also developed a custom course program on the application of microcomputers. Soon thereafter, Learning Tree was hired by IBM to train their top information technology team, who would later use this training to aid in the development of the IBM PC.

The 1980s and the Growing Need for High-Level Education

The technological advances achieved during the 1980s made the shortage of competent professionals in this industry evident. In a 1998 article for Barron’s, Eric J. Savitz pointed out that “between 1986 and 1994, the annual number of computer-science graduates dropped 43 percent to 24,200 from 42,195.” It was this growing number of vacant positions and lack of new college graduates to fill them that helped renew corporate America’s interest in educating their current employees.

Paris, France, was the site of the first “education center,” launched in 1983 with classrooms that were fully outfitted for Learning Tree’s hands-on training approach. Because of the tremendous success enjoyed by this site, additional centers were opened in Stockholm, London, Los Angeles, and Washington, D.C. Classes could be delivered at such centers, public facilities, or in-house client sites. Course subjects included: Windows 95, Windows NT, and PC Support; Networks. Data Communications, and Telecommunications; Operating Systems and Programming; Software Development and Technical Management; Oracle and RDBMS; and Client/Server Systems.

The 1990s: Expanding to Fulfill the Need

A sixth Learning Tree office and education center was opened in Ottawa in 1989. This same year also brought about the name change from Integrated Computer Systems to Learning Tree International, so that the company was belter recognized as a worldwide organization.

With customers such as Sony, Hitachi, and Matsushita. Learning Tree International KK began operations in Japan in 1990. Also in 1990, the company opened a seventh office and education center in Boston. Three years later, in May 1993, a Toronto site was introduced, bringing the total number of Learning Tree education centers to eight.

The company introduced a Professional Certification Program to provide validation of the range of knowledge and capabilities acquired by Learning Tree clients. “The main positive,” said Dr. Collins in a 1994 interview with Combiner Reseller News, “is the value to the customer, and the student in accelerating the completion of their degree program.” These classes were recommended for up to ten semester hours of both undergraduate and graduate credit by the American Council on Education. Also granted was credit-transfer approval to more than 1,500 colleges and universities in both the United States and Canada. This credit could also be applied toward the Certified Computing Professional (CCP) and Associate Computing Professional (ACP) from the Institute for Certification of Computing Professionals (ICCP). In a 1994 article in Computer Reseller News. Kevin Merrill said that “surveys of companies have found that reviewing training for college credit validates its quality, augments the organization’s return on investment and assures cost-effectiveness by reducing tuition-assistance costs,” thus bolstering the necessity of this sort of training.

Company Perspectives

Learning Tree International is dedicated to providing continuing education in information technology in order to accelerate the rate at which industry can absorb new technology and improve the productivity of individuals and the organization.

To assist in their efforts to retain and attract clients, Learning Tree introduced the Training Advantage Program in January 1995. With such Fortune 1000 corporations as J.P. Morgan, Honeywell, Lockheed-Martin, and Siemens, a partnership was formed which provided such organizations with a substantial discount for their information technology training. The company was hired in March of this same year as designated trainer for Computer Associates International, a $1.2 billion software company, for its CA-Visual Realia and CA-Realia II Workbench. Of the collaboration, CA’s vice president of product strategy, Marc Sokol, said in a March 1995 interview with Computer Reseller News, “Authorized education is becoming more and more important when delivering training to clients.”

New courses continued to be produced in response to the changing field. In March 1995, Learning Tree added a class on Internet-Intranet and Web Site Development, including Web page production training. The addition of this subject proved to be particularly timely for companies which were attempting to establish their business on the Internet. “In many instances, a company building its first Web server does not have the right skills in-house,” said Paul Korzeniowski in a 1996 article for InfoWorld. Due to the strong response to their Web-related training, Learning Tree added a Hands-On Internet/Intranet for Business Applications, which served to explore Internet connect options, and Internet and Systems Security: Attacks and Countermeasures, which instructed how to safeguard a corporation’s internal networks from the Internet. In addition, new certification programs were started: one awarding the title of Internet/Intranet Certified Professional; the second, relating to Java Programming. Learning Tree marked its own place on the Internet as the debut of the company’s web site occurred in April 1995. By the end of the year Learning Tree had gone public, trading on the NASDAQ following an initial offer of three million shares at $12 apiece.

In February 1996, Learning Tree introduced a new product line of multimedia interactive computer-based training (CBT). Based on their successful classroom training, the first of the CBTs featured Visual Basic and Local Area Networks. These courses, delivered on CD-ROM, were each six hours in length with four to six lesson modules. A virtual instructor was part of the presentation, and guided the user through the program, complete with quizzes and performance-based testing. LearnTrack management software, included free with each course, assisted in installation and management of the programs, allowing supervisors to check each user’s proficiency. These courses were applicable for either stand-alone or server-based systems. At this time Learning Tree projected that an additional 18 courses were to be available by September 1996. Instructor-led training continued to develop as well; by April 1996 the company offered in excess of 100 courses of this type.

Another public offering was made in the fall of 1996, and the amount of shares offered was raised from the proposed 2 million shares to 2.26 million at $30 per share. November 1996 featured another big contract for Learning Tree, when it signed the General Services Administration Schedule contract from the GSA, the government procurement agency. As part of this contract, government-employed information technology professionals received substantial discounts on their tuition.

It was February 1997 when Learning Tree unveiled its newest education center in New York. That year also saw the launch of the Learning Solutions Division of the company, which custom-designed training programs for clients who needed to train large groups of their information technology professionals and/or end-users. General Motors awarded this division’s first multimillion-dollar contract in 1997, for the custom training of more than 30,000 employees in 60 cities. Training went to GM operations across the nation on the new GM Access client server information system.

The Downside of the 1990s

The company hit a sour note with what turned out to be a short-lived new product: the Power Seminar. These one-day high intensity courses failed financially, and were discontinued within the year in November 1997, when stock prices fell 26 percent. From this point the company chose to focus its attention on its more profitable two-, three-, and five-day instructorled courses. Despite the fact that Power Seminars lost lots of money, sales still grew 59 percent in 1997, according to a 1998 SmartMoney article. The company then faced a lawsuit in the spring of 1998 regarding its axed Power Seminar program. Shareholders alleged that Learning Tree officers concealed certain information regarding the performance of this product, enabling them to sell the stock at an inflated price. The suit sought damages for those who bought Learning Tree stock between May 8, 1997, and November 3, 1997.

Learning Tree announced six new Professional Certification programs in October 1997. They included: NT Web Administration; NT Web Development; Lotus Notes/Domino; Oracle 8 Application Development; Cisco Router; and Telecommunications. In 1998, 20,000 information technology professionals participated in the 27 Professional Certification Programs offered by Learning Tree. Furthermore, SkillsTree, a management and assessment program for information technology professionals, was added to the Learning Tree roster in March 1998. It was also at this time that the company had developed more than 100 CBT courses.

Evaluating the Progress

Since its founding in 1974, Learning Tree International has trained over 700,000 information technology professionals (as of March 1998), including employees of Xerox, Intel, IBM, DuPont, GE, Reuters, Sun, Bell Atlantic, and Hewlett-Packard. Courses offered more than just excellent teaching by skilled professionals; according to Robin M. Grugal in a 1997 Investor’s Business Daily article, “students are even clued in on how to avoid the pitfalls of a technology, something manufacturers (which also offer classes) don’t talk about.” In addition to the 92 CBT courses marketed in 1998 (with a goal of reaching 200 course titles), Learning Tree has provided services to about 101,000 information technology professionals annually, via some 145 instructor-led courses and 27 Professional Certification Programs. Through the variety and sheer plentitude of course offerings, Learning Tree planned to be a “one-stop” center for information technology training. “Last year alone,” stated Eric J. Savitz in a 1998 article in Barron’s, “companies spent about $18 billion worldwide training their workers in various information technologies.... By 2001 that annual bill should hit $27.9 billion.” The company is prepared to continue its role as a major educational resource for this quickly growing field.

Principal Subsidiaries

Learning Tree International USA, Inc.; Learning Tree International, KK (Japan); Learning Tree International Ltd. (U.K.); Learning Tree International SA (France); Learning Tree International AB (Sweden); Learning Tree Publishing AB (Sweden); Learning Tree International Inc. (Canada); Advanced Technology Marketing, Inc.; Systems for Business and Industry, Inc.; Technology for Business and Industry, Inc.