SkillSoft, the e-learning firm that last year merged with the Irish firm SmartForce, will pay $44 million (€39 million) to its US rival, National Education Training Group, to settle a lawsuit alleging the theft of trade secrets.
The settlement has also forced SkillSoft, which employs about 200 staff in Dublin, to cut its earnings forecast for the second time in two months. The firm now expects to post a loss of 66 cents per share for the fiscal year 2004.
The company has also agreed not to modify some of its information technology educational courseware for a limited period of time, it said in a statement.
SkillSoft said that it would pay National Education Training, a unit of Thomson Learning, $22 million this month and $22 million in July 2004 to settle a five-year long lawsuit, which alleged the theft of trade secrets.
The firm said the agreement also settles a patent-infringement claim brought by National Education Training against SkillSoft in 2001.
SkillSoft said it now expected a loss for fiscal year 2004 in a range of 66-67 cents per share compared with an earlier forecast of a 22-23 cents loss per share, due to the settlement and related matters as well as its recent acquisition of the e-learning company, GoTrain.
Chief executive Mr Chuck Moran said SkillSoft and the employees named in the litigation continue to deny any wrongdoing.
SkillSoft said it anticipated that its cash position at the end of fiscal 2004 (January 31st, 2004), would be $50-$55 million.
This estimate also assumes no borrowings are outstanding under the company's $25 million line of credit.
Shares in SkillSoft surged 10 per cent to $6.40 in early trading yesterday, its highest level in more than a year, following the settlement announcement.
SkillSoft, and several of its executive team who worked as executives for SmartForce, also face a raft of class action lawsuits relating to the alleged misstatement of financial information.
The firm, which is currently the subject of an investigation by the Securities and Exchange Commission (SEC), pays legal fees worth €5 million every quarter. - (Additional reporting Reuters)
