Loyalist Announces Record Revenues and Record Income from Operations
V.LOY | April 30, 2014
TORONTO, ONTARIO--(Marketwired - April 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 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
