Loyalist Group Limited
TSX VENTURE : LOY

Loyalist Group Limited

November 26, 2014 07:00 ET

Loyalist Announces Record Third Quarter 2014 Results

TORONTO, ONTARIO--(Marketwired - Nov. 26, 2014) - Loyalist Group Limited ("Loyalist" or the "Company") (TSX VENTURE:LOY) today announced financial results for the three and nine months ended September 30, 2014.

Third quarter revenue for the three months ended September 30, 2014, was a record $19.6 million, an increase of 93% over the same period in 2013. Income from operations was $3.2 million, a 43% increase over the same period in 2013, while net income was $1.9 million, an increase of 14% over the same period in 2013. Adjusted EBITDA was $3.6 million, an increase of 50% over the same period in 2013, and Adjusted EBITDA margin was 18.6%.

Revenues continue to rise as a result of acquisitions closed through September 30, 2014, as well as organic growth of $1,000,000 or 10.0 % on the base business, as enrollments continued to trend higher. Student count on a "same store" basis was up 4% year over year.

"Our third quarter continued to demonstrate the potential of our acquisition and integration strategy with double digit organic growth and record revenues," said CEO Andrew Ryu. "While the third quarter is traditionally our strongest quarter due to industry seasonality, our exceptional results exceeded our expectations. We are very pleased with the performance of our most recent acquisitions in the third quarter."

On the integration front, Mr. Ryu commented that "we continue to devote significant resources to the integration and consolidation of our acquisitions so that we can realize the synergies inherent in our consolidation strategy. At the end of the third quarter we implemented another wave of restructuring measures that should yield significant savings going forward."

The following table summarizes and compares three month results for the periods ended September 30, year over year:

Three months ended September 30, 2014 2013 % Change
Revenue $ 19,626,107 $ 10,180,761 +93 %
Gross Profit $ 8,374,269 $ 4,785,282 +75 %
Income From Operations $ 3,233,689 $ 2,268,592 +43 %
Net Income $ 1,885,246 $ 1,657,480 +14 %
Adjusted EBITDA* $ 3,643,056 $ 2,430,511 +50 %
*Adjusted EBITDA, a non-IFRS measure used by management to act as an indicator of its core operating business; is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for integration, restructuring and acquisition costs, and loss on foreign exchange.

The following table summarizes and compares nine month results for the periods ended September 30, year over year:

Six months ended September 30, 2014 2013 % Change
Revenue $ 52,525,932 $ 19,864,139 +164 %
Gross Profit $ 22,245,945 $ 8,687,571 +156 %
Income From Operations $ 7,166,929 $ 4,152,170 +73 %
Net Income $ 4,786,776 $ 2,965,299 +61 %
Adjusted EBITDA* $ 8,279,522 $ 4,442,927 +86 %
*Adjusted EBITDA, a non-IFRS measure is used by management to act as an indicator of its core operating business; is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for integration, restructuring and acquisition costs, and loss on foreign exchange .

To date, Loyalist has achieved a number of its corporate goals for 2014:

  • Closed on accretive acquisitions:
    • Study English in Canada and Upper Career College of Business and Technology completed in February 2014.
  • Announced an accretive acquisition:
    • Uhak.com, a South Korean based student recruiting agency. The expected close date is on or around December 5, 2014.
  • Closed on finance offerings to support the Company's acquisition pipeline:
    • Closed $10.0 million bought deal private placement in January 2014.
    • Closed $18.5 million credit facility with Bank of Montreal, including a $15.0 million term loan acquisition facility in November 2014.
  • Continued to centralize all accounting functions in the Company's corporate office and roll out the Company's custom-built ERP system to provide standardization of the Company's student database, billing/collection and human resource functions across all schools.

About Loyalist

Loyalist Group Limited owns and operates private English as a Second Language (ESL) Schools, Career Colleges and Community Colleges in Toronto, Vancouver, Victoria and Halifax.

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 Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company'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 information relating to the Company's operating results. By identifying such information and statements in this manner, the Company 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 Company 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 Company's announced or proposed acquisitions failing to close or becoming delayed before closing; the Company 's reliance on its South Korean contract; carrying on business and activities in international jurisdiction where Canadian laws do not apply; the Company's ability to service its outstanding indebtedness and the impact of that indebtedness on the Company's ability to raise additional capital, fund operations or meet business objectives; 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 Company 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 Company 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 Company 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 Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

Caution Regarding Non-IFRS Financial Measures - The Company references adjusted EBITDA in this press release, which does not have a standardized meaning as prescribed by International Financial Reporting Standards ("IFRS"). This non-IFRS measure is unlikely to be comparable to similar measures presented by other issuers, and has been presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company. This non-IFRS measure should not be considered in isolation or as a substitute for, or more meaningful than, measures prepared in accordance with IFRS, such as net income (loss) or cash flow from operating activities. Please refer to the Company's Management's Discussion and Analysis as at and for the three months ended September 30, 2014 for a reconciliation of this non-IFRS measure to measures prescribed by IFRS.

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.

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