SOURCE: Nobel Learning Communities, Inc.

Nobel Learning Communities, Inc.

May 12, 2011 16:02 ET

Nobel Learning Communities, Inc. Reports Improved Third Quarter Results

Earnings in the Quarter Up 100% From Year Ago Quarter on Positive Enrollment Growth

WEST CHESTER, PA--(Marketwire - May 12, 2011) - Nobel Learning Communities, Inc. (NASDAQ: NLCI), a leading operator of private preschools, elementary schools, and middle schools and K-12 online distance learning, today reported financial results for the third quarter (thirteen weeks) of fiscal 2011, which ended April 2, 2011.

Net income and earnings per share for the third quarter increased 100% to $2.3 million, or $0.22 per diluted share compared to $1.2 million, or $0.11 per diluted share, for the third quarter of fiscal 2010. Third quarter revenues rose 5% to $63.2 million compared to $60.2 million in the third quarter of fiscal 2010. Adjusted EBITDA in the third quarter of fiscal 2011 was $6.7 million an increase of 22% compared to $5.5 million in the comparable year ago quarter. On a trailing 12 month basis, adjusted EBITDA increased to $18.0 million.

George Bernstein, President and Chief Executive Officer of Nobel Learning Communities, Inc., said, "Our best enrollment growth in over 3 years led to our second consecutive quarter of comparable school revenue growth, with comparable school revenue increasing by over 4%. In a period where employment growth is beginning to gain traction, we believe we are being rewarded with increased enrollment for the investments we made in our schools, curriculum, teachers and administrators at a time when the industry was in recession. In addition to improving the quality of our educational product, we continue to raise the efficiency and productivity of our educational delivery system, which has enabled us to expand margins, increase operating leverage and strengthen our balance sheet. In just the last three months, we generated over $13 million in cash from operations, and in the last year, $18 million in adjusted EBITDA, which is providing us with the resources to further grow the value of our brand."

For the quarter, comparable school revenue was up 4.1%, representing a 100 basis point sequential improvement from a 3.1% increase in the second fiscal quarter of the current year. School gross profit for the third quarter of fiscal 2011 was $10.3 million, up 23% from $8.4 million in the third quarter of fiscal 2010. School gross margins in the quarter were 16.3%, a 240 basis point improvement from 13.9% in the same quarter a year ago, primarily due to a 260 basis point improvement in comparable school gross margins. General and administrative expenses in the third quarter of the current year were $6.1 million, up just 3% compared to $5.9 million a year ago, primarily due to an increase in incentive compensation accruals.

During the quarter the company acquired five preschools located in the Washington, D.C. metropolitan area and surrounding counties, with expected annualized revenue of approximately $7.0 million. The acquisition was completed through the use of existing cash resources and at the end of the third quarter, the Company had over $54 million available on its credit facility, up from $50 million as of the end of the second quarter. The existing facility is for $75 million and is committed through June 2013.

Nine Month Results

For the first nine months of fiscal 2011, revenues increased 3.9% to $176 million on a 1.9% increase in comparable school revenue. Net income for the first nine months of 2011 was $1.7 million, or $0.16 per fully diluted share, both up 130%, compared to net income of $746,000, or $0.07 per fully diluted share a year ago.

Mr. Bernstein concluded, "Our schools are performing more efficiently as a result of both our productivity enhancements and an increase in comparable school enrollment. While we have worked hard to achieve improved enrollments, we are now facing our steepest enrollment improvement period from last year at the same time that meaningful increases in employment levels appear to have stalled. Given this trend, it is our expectation that the rate of comparable school revenue growth will moderate in the fourth quarter, rather than continue its trend of sequential improvement."

About Nobel Learning Communities

Nobel Learning Communities operates a national network of 190 nonsectarian private Pre-K and K+ schools and a global K-12 online distance learning community. All Nobel Learning schools are dedicated to providing a high-quality private education, through small class sizes, caring and skilled teachers, and attention to individual learning styles. Nobel Learning also offers an array of supplemental educational services, including before- and after-school programs, the Camp Zone® summer program, learning support programs, and specialty schools. For more information, please visit

Safe Harbor Statement
Except for historical information contained in this press release, the information in this press release consists of forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward- looking statements. Potential risks and uncertainties include among others, the implementation and results of the Company's ongoing strategic initiatives; the Company's ability to compete with new or existing competitors; dependence on senior management and other key personnel; changes in general economic conditions; and the impact on our business and the price of our common stock caused by the concentration of ownership of our common stock. Other risks and uncertainties are discussed in the Company's filings with the SEC. These statements are based only on management's knowledge and expectations on the date of this press release. The Company will not necessarily update these statements or other information in this press release based on future events or circumstances.

In this release, financial measures are presented both in accordance with United States generally accepted accounting principles ("GAAP") and also on a non-GAAP basis. Adjusted EBITDA in this release is a non-GAAP financial measure. EBITDA is commonly presented as a reconciliation starting with net income. Due to the number of non-operating related items included in net income, we present Adjusted EBITDA. The Company believes that the use of certain non-GAAP financial measures enables the Company and its investors and potential investors to evaluate and compare the Company's results from operations generated from its business in a more meaningful and consistent manner and provides an analysis of operating results using the same measures used by the Company's chief operating decision makers to measure the performance of the Company. Please see the financial summary below for information reconciling non-GAAP financial measures to comparable GAAP financial measures.


Nobel Learning Communities, Inc.
Consolidated Statements of Operations
For the Thirteen and Thirty-Nine Weeks Ended April 2, 2011 and March 27, 2010
(Amounts in thousands except per share data; net income per share totals may not sum due to rounding)
Thirteen Weeks EndedThirty-Nine Weeks Ended
April 2, 2011March 27, 2010April 2, 2011March 27, 2010
Gross profit10,3178,36622,81519,928
General and administrative expenses6,0565,87718,72216,606
Operating income4,2612,4894,0933,322
Interest expense3644951,1321,077
Other income(6)(8)(15)(23)
Income from continuing operations before income taxes3,9032,0022,9762,268
Income tax expense1,5107711,020872
Income from continuing operations2,3931,2311,9561,396
Loss from discontinued operations, net of income tax effect(80)(73)(240)(650)
Net income$2,313$1,158$1,716$746
Weighted average common shares outstanding:
Income from continuing operations$0.23$0.12$0.19$0.13
Loss from discontinued operations(0.01)(0.01)(0.02)(0.06)
Net income per basic common shares outstanding$0.22$0.11$0.16$0.07
Income from continuing operations$0.22$0.12$0.18$0.13
Loss from discontinued operations(0.01)(0.01)(0.02)(0.06)
Net income per diluted common shares outstanding$0.22$0.11$0.16$0.07
Reconciliation of Non-GAAP Financial Measures
Thirteen Weeks EndedThirty-Nine Weeks Ended
April 2, 2011March 27, 2010 April 2, 2011March 27, 2010
Net Income$2,313$1,158$1,716$746
Interest expense3644951,1321,077
Tax expense (benefit)1,5107711,020872
Depreciation and amortization expense2,1352,5586,8737,525
Loss from discontinued operations, net of income tax and depreciation8073240639
Stock compensation expense238258762832
DOJ litigation costs12157693570
Non-capitalizable transaction costs from acquisitions273361175
Adjusted EBITDA$6,679$5,503$12,497$12,436
Trailing Twelve Months
Net Income$2,843
Interest expense1,626
Tax expense1,591
Depreciation and amortization expense9,343
Net loss from discontinued operations, net of depreciation424
Stock compensation expense1,036
DOJ litigation costs1,084
Non-capitalizable transaction costs from acquisitions64
Adjusted EBITDA$18,011
Selected Balance Sheet data:As of
April 2, 2011July 3, 2010
Cash and cash equivalents$3,239$1,606
Property and equipment, net29,08029,044
Goodwill and intangible assets, net94,71991,337
Deferred revenue18,87615,756
Total debt18,00021,500
Stockholder's equity$74,450$71,980
Number of schools190184

Certain reclassifications have been made to the prior year condensed financial statements to conform to the current period presentation. Certain financial information is presented on a rounded basis, which may cause minor differences.

Contact Information

  • Contact:
    Nobel Learning Communities, Inc.
    Tom Frank
    Chief Financial Officer