Test preparation company Princeton Review (NASDAQ:REVU) announces its fourth-quarter and full-year 2004 earnings tomorrow. In preparation for that final exam, let's consider what to look for and do a bit of quick cramming.

Three months ago, in its report on the first three quarters of 2004, Princeton apprised investors that it had racked up $86 million in sales and nearly $900,000 in losses ($0.03 per diluted share) year-to-date. In explaining its poor performance, Princeton blamed lower-than-anticipated enrollments in its test prep courses for the LSAT and GMAT, poor sales in its admissions services segment, and problems getting contracts finalized in its K-12 division. On the other hand, the company highlighted online coursework and tutoring as areas showing promising levels of growth (trends to which for-profit college operatorApollo Group (NASDAQ:APOL) and tutoring companyEducate (NASDAQ:EEEE) can testify).

Princeton promised that in Q4 2004, it would be "working hard to bring our growth and costs into alignment," but warned that investors should still expect to see sequentially flat-to-negative revenue growth, with an outside chance of slight positive growth and, perhaps, even positive earnings. However, two weeks ago, the company ratcheted those expectations back down, warning that come tomorrow, it will almost certainly be announcing about a 9% decline in revenue and a GAAP loss for the quarter -- and the year.

So, in a nutshell, Princeton investors should expect some disappointment tomorrow. We won't be seeing growth on either the sales or earnings fronts. And while there's at least a ray of hope that the company will show some positive free cash flow, chances are we won't know that for about another week. Princeton does not, as a rule, publish cash flow statements along with its earnings releases. It does, however, file its quarterly reports with the SEC pretty promptly after releasing earnings -- and investors might want to focus on that SEC filing, which should appear within five or six days. Why? Princeton may not be profitable under GAAP, but its Q3 filing with the SEC revealed that the company does produce a bit of free cash flow. Not much, mind you -- it's generated somewhere between $200,000 and $2.9 million, depending upon how you calculate it. But at this point, Princeton investors will probably be grateful for any good news.

More's the pity, then, that Princeton will probably keep them waiting to see it.

Want to invest in an education company that produces both profits and cash? Find a likely prospect in:

Fool contributor Rich Smith holds no position in any of the companies mentioned above.