Greenwood Hall Third Quarter 2016 Financial Results and Financial Outlook for FY-2017
Best Adjusted EBITDA Performance in Over 10 Quarters
10 Contracts Signed In Q3 Bolster 90% Ed Tech Sales Growth Outlook for FY-2017
Improvement in Adjusted EBITDA Performance Expected to Continue
SANTA MONICA, Calif., July 20, 2016 (GLOBE NEWSWIRE) -- Greenwood Hall, Inc. (QTCQB:ELRN), a Los Angeles-based education technology company that helps colleges and universities improve student engagement and outcomes, announced its financial results for the third quarter of Fiscal Year 2016. The Company experienced a $484,437, or 49%, increase in revenue from its Ed Tech-related offerings during the third quarter compared to the same period in 2015. Overall revenue for the quarter ending May 31, 2016 was relatively flat at $2,155,082, compared to $2,170,894 for the same quarter in 2015, primarily due to lower revenue from the Company’s legacy, non-Ed Tech business, compared to the same period in 2015.
Third Quarter 2016 Highlights
Addition of 18 client contracts this fiscal year to date – 10 of which were signed during the third quarter, including contracts with the University of Oklahoma, Nevada State, University of Arizona, Troy University, and Oklahoma City Community College.
Renewal of strategic subscription agreement with University of the Southwest.
Strategic Ed Tech revenue of $1.47 million, compared to $0.99 million during the same period last year, representing a 49% increase year-over-year in a critical vertical.
75% improvement in Adjusted EBITDA from the same period last year.
“We believe our third quarter results demonstrate our ability to achieve double-digit revenue growth in our education business while improving Adjusted EBITDA. While our third quarter reflects nearly 50% revenue growth in our Ed Tech segment, 10 of the 18 new contracts with education partners were signed in the third quarter, which means that many of the new contracts are not expected to have an impact on revenue until our fourth quarter of FY-2016 and continuing into FY-2017, which begins September 1, 2016,” said Dr. John Hall, Chief Executive Officer of Greenwood Hall.
The Company today provided select financial guidance for FY-2017.
Guidance for FY-2017 is for the period September 1, 2016 – August 31, 2017 and compares against projected results for the twelve-month period from September 1, 2015 through August 31, 2016. Based on our existing and new service contracts for the Company’s strategic Ed Tech offerings, Management anticipates FY-2017 revenues related to the Company’s Ed Tech business to increase by up to 90-100% and could be in the range of up to $ 11.5 - 12.2 million, compared to projected Ed Tech revenues of approximately $ 6.0 – 6.3 million for FY-2016. Revenue pertaining to the Company’s legacy and non-strategic offerings are anticipated to be in the range of up to $ 250K – 500K, compared to projected legacy business revenues of approximately $ 1.3 – 1.4 million for FY-2016. The Company anticipates having positive Adjusted EBITDA for the full FY-2017.
Hall added, “We have seen good momentum this fiscal year in terms of both revenue growth and putting ourselves on a path to profitability as we establish ourselves as an Ed Tech leader in helping colleges and universities maximize student success. Our progress and results for the third quarter support our present financial outlook for up to 90-100% revenue growth in our core Ed Tech business in Fiscal Year 2016.”
The Company believes its financial outlook for FY-2017 is further bolstered by the recent announcement that it has resolved litigation that was related to legacy, non-education operations of Greenwood Hall’s subsidiary, PCS Link, Inc. We believe the resolution of this matter reduces the uncertainty and risk that was associated with this particular litigation and eliminates the material expenditures associated with defending against the litigation.