Loyalist Announces Record Revenues, Earnings and Cash Flow
TORONTO, ONTARIO--(Marketwired - May 28, 2014) - Loyalist Group
Limited ("Loyalist") (TSX-VENTURE:LOY) today announced record
financial results for the three months ended March 31, 2014.
First quarter revenue for the three months ended March 31,
2014 was $15.7 million, an increase of 219% over the same period in
2013. Income from operations was $1.7 million, a 68% increase over
the same period in 2013, while net income was $1.6 million, an
increase of 87% over the same period in 2013. Cash flow from
operations was $2.2 million compared to negative $895,883 a year
ago.
Revenues continue to rise as a result of the acquisitions closed
through March 31, 2014, as well as organic growth of $400,000,
arising from higher enrolment and increased tuition fees. Net
income and cash flow were adversely impacted by $500,000 of
one-time acquisition, integration and restructuring costs ($200,000
in the year-ago period). Excluding these, operating income would
have been $2.2 million and cash from operations $2.7 million.
"Of particular importance, the first quarter demonstrated that
Loyalist can not only grow its top and bottom line, but also
generate strong cash flows from its school operations," said CEO
Andrew Ryu. "Ultimately, our long-term goal is to create cash with
which to self fund acquisitions and, as the business matures, start
to return cash to shareholders."
Speaking to the first quarter, Mr. Ryu added that "our top line
benefited from acquiring schools and from better execution in
schools we owned or acquired. Our first quarter, 2014 results are
in line with our expectations of the seasonal nature of the first
quarter with net income at 9% of gross revenues. The integration of
our recent six acquisitions continues, and we expect that the next
three quarters will show the results in the form of better profit
margins."
"Our assets support our current run-rate expectation of $63.0
million for 2014. We continue to focus on integrating schools and
improving the company's overall profitability. While our corporate
costs more than doubled over the same period last year, we expect
them to stay fixed, and perhaps fall, moving forward, while our
revenue continues to grow, which will create the leverage needed to
see meaningful profit and cash-flow growth."
"We will also aggressively pursue our student housing and
franchise businesses. These are low-risk, high-margin pursuits that
allow Loyalist to create greater shareholder value from its asset
base. Our students collectively spend millions of dollars a year on
rent, and we plan to capture a significant share of that spend over
time."
Loyalist generated $120,000 of revenue from its student housing
pilot program and modest initial franchise fees in the first
quarter of 2014. The company expects both lines of business to
accelerate.
The following table summarizes and compares three month results
for the periods ended March 31, year over year:
Three months ended March 31, |
2014 |
2013 |
% Change |
Revenue |
$ 15,714,747 |
$ 4,932,219 |
+219 |
Gross profit |
6,555,981 |
$ 2,131,524 |
+208 |
Income from operations |
$ 1,732,107 |
$ 1,030,155 |
+68 |
Net Income |
$ 1,562,658 |
$ 833,799 |
+87 |
Adjusted EBITDA* |
$ 1,758,028 |
$ 1,079,480 |
+65 |
|
* Adjusted EBITDA, a non-IFRS measure is used by management to
act as an indicator of its core operating business, is defined as
earnings before interest, taxes, depreciation and amortization,
adjusted for integration, restructuring and acquisition costs, loss
of foreign exchange and stock based compensation expense. |
Loyalist has a number of fiscal goals in 2014:
- To close on accretive acquisitions: Study English in Canada
("SEC") and Upper Career College of Business and Technology
("UCCBT") closed with an effective date of February 1, 2014;
- Close on finance offerings to support the acquisition pipeline
- closed $10.01 million bought deal private placement in January
2014; and
- Centralize all accounting functions in the corporate office and
roll out the Company's custom-built ERP system to provide
standardization of the various student databases and
billing/collection and human resource functions across all
schools.
With cash balance of $3.1 million as at May 26, 2014 and
anticipated profitability, the company has the funds to meet all of
its operating obligations and to continue growing by acquisition
without raising additional capital.
About Loyalist
Loyalist Group Limited owns and operates private English as a
Second Language (ESL) Schools, Career Colleges and Community
Colleges in Toronto, Vancouver, Victoria and Halifax.
Forward-Looking Statements
This news release includes certain forward-looking statements
within the meaning of Canadian securities laws. Such
forward-looking information and statements are not representative
of historical facts or information or current condition, but
instead represent only the company's beliefs regarding future
events, plans or objectives, many of which, by their nature, are
inherently uncertain and outside of the company's control.
Generally, such forward-looking information or statements can be
identified by the use of forward-looking terminology such as
"plans", "hopes", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or may contain statements that
certain actions, events or results "may", "could", "would", "might"
or "will be taken, "will continue", "will occur" or "will be
achieved". The forward-looking information contained herein
includes, but is not limited to, information with respect to
prospective financial performance, anticipated capital funding and
sources, proposed or potential acquisitions, estimated operating
and sales costs, estimated market drivers and demand, business
prospects and strategy, new markets for growth and financial
position. By identifying such information and statements in this
manner, the company is alerting the reader that such information
and statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the company to be
materially different from those expressed or implied by such
information and statements. Any number of important factors could
cause actual results to differ materially from these
forward-looking statements as well as future results, including but
not limited to: risks related to any of the company's announced or
proposed acquisitions failing to close or becoming delayed before
closing; the company's reliance on its South Korean contract;
carrying on business and activities in international jurisdiction
where Canadian laws do not apply; any loss of certain key
personnel; levels of student enrolment; delays in rolling out the
online education programs; competition in the educational services
market; and currency fluctuations. Although the company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking information and statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended.
Although the company believes that the assumptions and factors
used in preparing, and the expectations contained in, the
forward-looking information and statements are reasonable, undue
reliance should not be placed on such information and statements,
and no assurance or guarantee can be given that such
forward-looking information and statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information and
statements. Accordingly, readers should not place undue reliance on
any forward-looking information or statements contained in this
press release. The forward-looking information contained in this
press release is made as of the date hereof, and the company does
not undertake to update any forward-looking information that is
contained or referenced herein, whether as a result of new
information, future events or otherwise, except in accordance with
applicable securities laws. All subsequent written and oral forward
looking information and statements attributable to the company or
persons acting on its behalf is expressly qualified in its entirety
by this notice.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
David McAdamLoyalist Group LimitedVP Corporate DevelopmentT:
(604) 961-3513E: dmcadam@loyalistgroup.comAndrew RyuLoyalist Group
LimitedCEOT: (416) 969-9800 x222E: aryu@loyalistgroup.com
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