Loyalist Group Limited
TSX VENTURE : LOY

Loyalist Group Limited

November 28, 2013 11:40 ET

Loyalist Announces Record Third Quarter Earnings

TORONTO, ONTARIO--(Marketwired - Nov. 28, 2013) - Loyalist Group Limited ("Loyalist") (TSX VENTURE:LOY) is pleased to announce record financial results for the nine months ending September 30, 2013.

Revenue for the third quarter was $10.2 million with net income of $1.65 million. Adjusted for the legal costs of acquisitions and other one-time acquisition related expenses, income from operations was $2.3 million.

For the nine months ending September 30, 2013, revenue was $19.9 million, with income from operation of $4.15 million.

Operating income margin for the quarter was 22.3% compared to 20.7 % in the same quarter in 2012. For the nine-month period, it was 20.9% compared to 18.0% in the same nine months period in 2012. "This reflects management's continued focus on rationalizing operating expenses along with integrating additional acquisitions" said CEO Andrew Ryu.

The following tables provide highlights of the quarter and nine-month period, year over year:

Q3 2013 Q3 2012 % Change
Revenue $ 10,180,761 $3,786,339 +169
Gross profit $ 4,785,282 $ 1,494,700 +220
Net income $ 1,657,480 $ 693,369 +139
Costs relating to acquisitions $ 640,266 $ 105,132 +509
Income from operations $ 2,268,592 $ 785,863 +189
9 months 2013 9 months 2012 % Change
Revenue $ 19,864,139 $ 10,146,044 +96
Gross profit $ 8,687,571 $ 3,925,118 +121
Net income $ 2,965,299 $ 1,616,985 +83
Costs relating to acquisitions $ 1,260,438 $ 220,268 +472
Income from operations $ 4,152,170 $ 1,833,941 +126

During the third quarter, Loyalist closed its two largest acquisitions to date, MTi and KGIC. Each contributed only partial-quarter revenues and earnings as they were acquired mid-quarter.

"This quarter highlights two things," said CEO Andrew Ryu. "Firstly, we are becoming increasingly well known in our target overseas markets as the top provider of English as a second language, and are therefore seeing very strong demand for our programs. This is evident in our expanding gross margins, which reflect our pricing power. Secondly, we are building a platform with significant economies of scale, as demonstrated in our Income from Operations in aggregate and as a percentage of Revenue while covering our acquisition and integration costs which include addition of personnel and a comprehensive ERP systems gear up for growth. Our administrative systems are now adequate to add significantly more revenue with minimal increase in operating costs."

"I'm very excited about the near-term future" Mr. Ryu continued. "We've worked hard to build what we have and I believe we are about to reap the rewards of this effort."

"The company has the funds and profitability to meet all of its obligations, while having access to sufficient funds to make an accretive acquisition without raising additional capital, and this should reflect positively on earnings per share going forward."

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.

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