CORRECTION FROM SOURCE: Loyalist Announces Record Revenues, Earnings and Cash Flow
May 29 2014 - 9:50PM
Marketwired Canada
A correction from source is being issued for the release disseminated May 28,
2014 at 07:00 ET. With respect to adjusted EBITDA the numbers $1,758,028 and 65%
should have read $2,069,422 and 92%, respectively. The corrected release
follows:
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(i) $ 2,069,422 $ 1,079,480 +92
----------------------------------------------------------------------------
(i) 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Loyalist Group Limited
David McAdam
VP Corporate Development
(604) 961-3513
dmcadam@loyalistgroup.com
Loyalist Group Limited
Andrew Ryu
CEO
(416) 969-9800 x222
aryu@loyalistgroup.com
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