Loyalist Announces Record Revenues and Record Income from
Operations
TORONTO, ONTARIO--(Marketwired - Apr 30, 2014) - 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:
|
2013 |
2012 |
% Change |
Revenue |
$ 30,682,269 |
$ 13,657,914 |
+126 |
Gross profit |
$ 11,028,527 |
$ 5,803,672 |
+92 |
Income from operations |
$ 3,120,034 |
$ 2,782,493 |
+17 |
Net Income |
$ 1,845,444 |
$ 2,232,156 |
-17% |
Adjusted EBITDA* |
$ 3,702,947 |
$ 2,925,305 |
+29 |
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.
Loyalist Group LimitedDavid McAdamVP Corporate Development(604)
961-3513dmcadam@loyalistgroup.comLoyalist Group LimitedAndrew
RyuCEO(416) 969-9800 x222aryu@loyalistgroup.com
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