Loyalist Group Limited Reports More Than 661% Revenue Growth In 2nd Quarter, 2012
TSX Venture Exchange
TORONTO, Aug. 29, 2012 /CNW/ - Loyalist Group Limited (TSX-V: LOY) ("Loyalist Group" or "the Company"), a consolidator of private English-as-a-second-language schools, is pleased to announce its financial results for the second quarter ended June 30, 2012. Financial statements and MD&A will be available at www.sedar.com.
Loyalist Group reported Q2 revenue of $3,059,783, a 661% increase, with net income of $425,023. Earnings before interest, tax, depreciation, and amortization (EBITDA) were $547,653, compared to losses a year earlier. The increase in revenue was the result of acquisitions, the establishment of overseas recruitment offices in Japan, South Korea, Taiwan, and Brazil and synergies, such as the rebranding of schools which allowed the Company to increase tuition fees by as much as 30%. Centralizing administration, relocating and amalgamating schools and eliminating overlapping positions also resulted in substantial cost savings and higher revenues.
Included in these results are restructuring and acquisition costs of $115,136.
For the first six months of the year, including restructuring and acquisition costs, the Company earned $923,616.
"These results prove that we have the right strategy," said CEO Andrew Ryu. "The ESL market is very big and growing but fragmented. Many school owners want to retire. We are one of the few buyers, and by folding their schools into our scalable business model we can create tremendous shareholder value not only by cutting costs but also by increasing revenues from our existing asset base. For example, when we buy a school, as much as a third of its leased space is used for administration. Because we centralize these duties we can add more classrooms and tuition-paying students without paying more rent. With about $6 million to put to work we intend to continue adding schools aggressively and we expect shareholders to be rewarded. The bigger we get the more efficient we become. "
|As at||June 30, 2012||December 31, 2011|
|For the three and six months ended||Three months ended||Six months ended|
|June 30, 2012||June 30, 2011||June 30, 2012||June 30, 2011|
|Restructuring and acquisition costs||(115,136)||-||(115,136)||-|
|Foreign exchange loss||(245)||(773)||(1,103)||(2,767)|
|Unrealized gain (loss) on investments||-||-||-||(2,025)|
|Income taxes recovered||65,381||-||65,381||-|
|Net earnings (loss)||425,023||(268,712)||923,616||(646,242)|
As a result of several acquisitions completed last year, both revenues and expenses increased when compared to 2011 figures. The Corporation generated net income of $425,023 for the three months ended June 30, 2012, compared to a net loss of $268,712 for the three months ended June 30, 2011. Details are described below:
- The Corporation's revenues for the three months ended June 30, 2012 were $3,059,783, compared to $401,942 for the three months ended June 30, 2011, an increase of 661%, resulting from acquisitions of Western Town College Ltd. ("WTC"), PGIC Vancouver Studies Inc. ("PGIC"), Pacific Gateway Career College Inc. ("PGCC"), and Universal College of Language Inc. ("UCL") in 2011. Together, these schools generated $2,771,078 in revenue for the three months ended June 30, 2012.
- The Corporation's expenses for the three months ended June 30 were $2,584,760, an increase of 286% compared to $669,881 for 2011. The increase in operating expenses is in line with the increase in revenue and year 2011 acquisitions.
Second quarter highlights
- Continued the process of optimizing its operations through reorganization by increasing efficiency, merging campus locations, and amalgamating its administration and accounting departments.
- Completed the non-brokered private placement of common shares, issuing 20,000,000 common shares at a price of $0.10 for gross proceeds of $2,000,000.
- Secured an additional loan for $500,000 with Windsor Private Capital Limited Partnership ("Windsor"), bearing interest at 13% per annum, for a 14-month term.
- Established marketing offices in Taiwan and Brazil.
- Entered into an agreement with MegaNEXT, the largest of over 28,000 private, after-school educational institutions or "cram-schools" in South Korea.
- Appointed Mr. Ron Binns, as an independent director of the Company.
Subsequent Business Highlights
- Established a marketing office in Italy to attract students from Europe.
- Paid the remaining balance of $200,000 in acquisition costs to former shareholders of PGIC and PGCC.
- Signed letters of intent to purchase additional English as Second Language schools in Canada.
- On August 8, 2012, Windsor exercised 900,000 purchase warrants for proceeds of $135,000.
- On August 27, 2012, the Company completed a non-brokered private placement for gross proceeds of $5,000,000.
About Loyalist Group (TSXV: LOY)
Loyalist Group owns and operates private ESL schools both in Toronto and
Vancouver. Run by experienced professionals in the private education
sector, Loyalist Group provides educational services with an emphasis
on teaching: (i) English as a Second Language courses for international
students, (ii) training programs for teachers, commonly known as TESOL,
(iii) professional development courses, and (iv) corporate English for
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.
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 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.
SOURCE: Loyalist Group LimitedFor further information:
Loyalist Group Limited
T: (416) 977-9800 x225
Loyalist Group Limited
T: (416) 221-2009