Loyalist Announces Record Second Quarter Earnings
30 Agosto 2013 - 1:00PM
Marketwired Canada
Loyalist Group Limited (TSX VENTURE:LOY) ("Loyalist") is pleased to announce
record financial results for the three months ending June 30, 2013.
Revenues and earnings continue to rise as a result of four acquisitions made
during 2012 and 2013, as well as organic growth arising from higher enrolment
and increased tuition fees.
-- In the second quarter,
-- revenues rose 55% year over year to $4.8 million.
-- Income from operations increased 65% to $853,424.
-- Exited the quarter with $13.4 million of cash.
-- For the six months ending June 30, 2013,
-- Revenue rose 53% to $9.7 million while income from operations
increased 80% to $1.9 million.
-- Gross margin rose to 40%, a two-percentage-point improvement
-- Operating income margin improved to 19% of gross revenue, a three-
percentage-point improvement
-- Pretax income increased 47% while net income increased 42%.
-- Adjusting for acquisition-related and other one-time expenses, net
income was approximately $1,881,671, an increase of 93% year over
year.
The following table summarizes and compares second-quarter results year over year:
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Q2 2013 Q2 2012 % Change
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Revenue $4,751,159 $3,059,783 55%
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Gross profit $1,770,766 $1,274,717 39%
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Net income $474,021 $425,023 12%
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Costs relating to acquisitions $388,715 115,136 238%
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Income from operations $853,424 $516,974 65%
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The following table summarizes and compares six-months results year over year:
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Q2 2013 Q2 2012 % Change
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Revenue $9,683,378 $6,359,705 53%
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Gross profit $3,902,289 $2,430,418 61%
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Net income $1,307,819 $923,616 42%
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Costs relating to acquisitions $620,172 115,136 439%
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Income from operations $1,883,578 $1,048,078 80%
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"This quarter highlights two things," said CEO Andrew Ryu. "First, despite the
work action by the Professional Association of Foreign Service Officers, who
issue student visas, we have continued to deliver strong revenue growth, driven
through a combination of acquisitions and organically. We are becoming
increasingly well known as the top provider of English as a second language
education in our target overseas markets and are therefore seeing very strong
demand for our programs. This is evident in our expanding gross margins. Second
is the economies of scale we create with our rollup strategy. This is evident in
our net margin which, adding back costs directly and indirectly related to
acquisitions and financings, was 24% compared to 20% in the year-earlier period.
Rising net income should lead to earnings per share growth as we deploy capital
and integrate new schools. For the time being EPS is held back by a share count
that has risen faster than we can deploy the funds produced by new share issue.
In time this will reverse."
"It's also worth noting that our six month costs include personnel increases in
the Corporate office as we staff up in anticipation of expected growth. We
prefer to have systems and people in place prior to adding new schools to ensure
excellent service to our students," Mr. Ryu continued.
Loyalist is happy to report that it attained a number of its half year goals:
-- Closed on two acquisitions Urban International School (Toronto) and Pan
Pacific College ("PPC" Vancouver);
-- Closed on $13,190,237 in gross proceeds through two private placement
finance offerings;
-- Established a corporate office in downtown Toronto in conjunction with
the establishment of the PPC Toronto campus.
Along with a strong cash balance, the company has the funds to close significant
acquisitions without raising additional capital, and this should reflect
positively on earnings per share going forward.
The Company continues to assess ways to monetize its students lodging
requirements in Canada. The Company anticipates offering select services to
students in the next fiscal year.
The Company also announces that with six firms providing analyst coverage, the
Company plans to provide quarterly analyst calls starting in Q3-2013.
About Loyalist
Loyalist owns and operates private education schools in Toronto, Vancouver, and
Victoria offering (i) English as a Second Language Courses for international
students; (ii) Training programs for teachers, commonly known as TESL; (iii)
Professional Development Courses; and (iv) Corporate English for Professionals.
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.
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 Corporation's beliefs regarding future events, plans
or objectives, many of which, by their nature, are inherently uncertain and
outside of the Corporation's control. Generally, such forward-looking
information or statements can be identified by the use of forward-looking
terminology such as "plans", "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 Corporation
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 Corporation 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 Corporation's announced or proposed
acquisitions failing to close or becoming delayed before closing; the
Corporation'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 Corporation 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 Corporation 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 Corporation 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 Corporation or
persons acting on its behalf is expressly qualified in its entirety by this
notice.
FOR FURTHER INFORMATION PLEASE CONTACT:
Loyalist Group Limited
David McAdam
VP Corporate Development
(604) 961-3513
dmcadam@loyalistgroup.com
Loyalist Group Limited
Anthony Durkacz
Investor Relations
(416) 720-4360
adurkacz@loyalistgroup.com
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