Loyalist Announces Record Revenues and Record Income from Operations
30 Abril 2014 - 10:16PM
Marketwired Canada
Loyalist Group Limited ("Loyalist") (TSX VENTURE:LOY) today announced record
financial results for the year ended December 31, 2013.
Revenue for 2013 was $31 million, an increase of 126% over 2012. Net income was
$1.8 million, while income for operations was $3,120,034, a 17% increase over
2012.
Revenues continue to rise as a result of six acquisitions made during 2012 and
2013, as well as organic growth arising from higher enrolment and increased
tuition fees. Net income was adversely impacted by $2.1 million in one-time
acquisition, integration and restructuring costs.
"2013 was a year of aggressive growth," said CEO Andrew Ryu. "Our top line
benefited from buying new schools and from better execution in schools we owned
or acquired. Our gross profit - revenue less the school-level costs of teacher
salaries, rents and so on - almost doubled, but was lower on a percentage basis
because we acquired a big school, KGIC, late in the year. The fourth quarter is
always the slowest in our industry because of the Christmas holiday, so revenue
falls but salaries and rents must still be paid. This lowers our gross profit.
We expect gross margin percentage to bounce back for 2014, when we'll report
school results for the whole year."
"Our assets support our current run-rate expectation of $63 million for 2014. We
expect to focus on integrating schools this year, improving the company's
overall profitability. While our overhead or corporate costs, more than doubled
last year, we expect them to stay fixed, and perhaps fall, moving forward, which
should create the leverage needed to see meaningful profit growth. We therefore
expect to see margins improve this year."
"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 expect to capture a significant share of that
spend over time."
Our long-term objectives are intact: top-line growth of 20% per year and
normalized profit margins of 15%.
The following table summarizes and compares full year results, year over year:
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2013 2012 % Change
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Revenue $ 30,682,269 $ 13,657,914 +126
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Gross profit $ 11,028,527 $ 5,803,672 +92
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Income from operations $ 3,120,034 $ 2,782,493 +17
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Net Income $ 1,845,444 $ 2,232,156 -17%
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Adjusted EBITDA(i) $ 3,702,947 $ 2,925,305 +29
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The company notes that had it owned all its schools as of January 1, 2013,
revenues would have been over $54 million for the full year.
As previously reported Loyalist attained a number of its fiscal goals in 2013:
-- Closed six acquisitions: Urban International School (Toronto), Pan
Pacific College ("PPC" Vancouver), MTi Community College ("MTi"
Vancouver) and KGIC/KGIBC (Halifax, Toronto, Vancouver and Victoria);
-- Closed on $13,190,237 in gross proceeds through two private placement
finance offerings;
-- Closed on a $5.2 million 5-year convertible debenture;
-- Established the corporate office in downtown Toronto and Vancouver;
-- Centralized all accounting functions in the corporate office and started
the roll out of the Company's custom built ERP to provide
standardization of the various Student Data bases and billing/collection
and human resource functions across all schools.
With cash balance of $6.0 million as at April 29, 2014 and anticipated
profitability, the company has the funds to meet all of its operating and
promissory note obligations and to continue growing by acquisition without
raising capital.
About Loyalist
Loyalist Group Limited (the "Company") owns and operates private English as a
Second Language (ESL) Schools, Career Colleges and Community Colleges in
Toronto, Vancouver, Victoria and Halifax.
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
Andrew Ryu
CEO
(416) 969-9800 x222
aryu@loyalistgroup.com
Loyalist Group Limited (TSXV:LOY)
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