Nobel Learning Communities, Inc. Reports Improved Second Quarter and
Six-Month Results from Operations
Double-digit growth in revenue and operating income drives improved financial
performance
WEST CHESTER, Pa., Feb. 5 /PRNewswire-FirstCall/ -- Nobel Learning
Communities, Inc. (Nasdaq: NLCI), a leading operator of private preschools,
elementary schools, and middle schools, today reported results for the period
ended December 29, 2007, its second quarter of fiscal 2008.
Second quarter 2008 revenues increased at double-digit rates, rising 12.4%
to $51,207,000 compared to $45,556,000 for the second quarter of fiscal 2007.
GAAP net income was $2,126,000, or $0.20 per diluted share, an increase of 33%
compared to non-GAAP second quarter 2007 net income of $1,601,000, or $0.15 per
diluted share. Non-GAAP second quarter 2007 net income excludes the net benefit
of aggregate after tax non-recurring items of approximately $590,000 or $0.06
per fully diluted share which were a result of gains on the recovery of a note
receivable and sale of assets, partially offset by increases to lease reserves
and a charge to write-off deferred loan origination fees. GAAP net income and
earnings for the second quarter of 2007 were $2,189,000, or $0.21 per diluted
share.
Second quarter operating performance improved as a result of higher
revenues from both organic growth and acquisitions and leverage of corporate
overhead, tempered by the start-up operating costs of four newly opened schools.
For the second quarter, comparable school revenue increased 5.0%, consisting of
a tuition increase of approximately 3.8% and an increase in comparable school
enrollments.
George Bernstein, President and Chief Executive Officer of Nobel Learning
Communities, Inc., stated, "The second quarter continues our trend of driving
significant earnings growth from our school model. During the quarter, we
achieved outstanding top- and bottom- line growth and opened one new school. We
also signed an agreement to acquire Enchanted Care Learning Centers, Inc., which
will grow our portfolio by 9 schools and 6 before- and after- school programs in
an attractive new market, Columbus, Ohio. With our announced and completed
acquisitions and new school openings, we expect that annual company revenues
will exceed $200 million in fiscal year 2008 for the first time in Company
history. We continue to demonstrate our commitment to accelerate growth both
organically and through acquisition to build shareholder value."
School gross profit for the second quarter of fiscal 2008 was $7,865,000,
up from $7,230,000 in the second quarter of fiscal 2007. Gross margin in the
second quarter was 15.4%, down from 15.9% in the second quarter of fiscal 2007,
primarily due to the increase in start-up costs associated with the opening of
four new schools during the first half of fiscal 2008. Second quarter 2008
general and administrative expenses fell to 8.7% of revenue compared to 9.3% a
year ago.
Six-Month Results
For the first six months of fiscal 2008 revenues were up 13.2% to
$95,839,000 from $84,663,000 in the first half of fiscal 2007. GAAP six-month
net income was $1,836,000. Fully diluted earnings per share for the first half
of 2008 were $0.17, up 89% compared to non-GAAP six-month 2007 diluted earnings
per share, net of all non-recurring items discussed above and shown in the table
below, of $0.09. GAAP net income for the first six months in fiscal 2007 was
$1,519,000 or $0.14 per fully diluted share.
About Nobel Learning Communities
Nobel Learning Communities, Inc. is a national network of 160 nonsectarian
private schools, including preschools, elementary schools, and middle schools in
13 states across the nation and the District of Columbia. Nobel Learning
Communities provides high-quality private education, with small class sizes,
caring and skilled teachers, and attention to individual learning styles. Nobel
Learning Communities also offers an array of supplemental educational services,
including before- and after-school programs, the Camp Zone(R) summer program,
learning support programs, and specialty high schools. For more information on
Nobel Learning Communities, please visit http://www.NobelLearning.com.
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 changes in ability to hire
and retain qualified personnel, competitive market demand and conditions,
ability to find affordable real estate, ability to obtain the capital required
to implement plans, government regulations, changes in economic conditions
reducing demand or need for private schools, potential negative publicity and
defense against such, environmental health conditions, the small number of
shareholders with majority control, effective financial reporting controls,
competitive conditions including tuition price sensitivity, execution of growth
strategy, and the acceptance of newly developed and converted schools. 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 Net Income and the related earnings per share figures
in this release are non-GAAP financial measures. Adjusted Net Income excludes
the special items described elsewhere in this release. The Company believes that
the use of certain non-GAAP financial measures enables the Company and its
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 Twenty Six Weeks Ended December 29, 2007
and December 30, 2006
(Amounts in thousands except per share data)
(Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ----------------------
December 29, December 30, December 29, December 30,
2007 2006 2007 2006
-------- -------- -------- --------
Revenues $ 51,207 $ 45,556 $ 95,839 $ 84,663
-------- -------- -------- --------
Gross profit 7,865 7,230 11,979 10,423
General and administrative expenses 4,463 4,230 8,923 7,916
-------- -------- -------- --------
Operating income 3,402 3,000 3,056 2,507
Interest expense 105 808 152 1,130
Other income (298) (3,688) (315) (3,824)
-------- -------- -------- --------
Income from continuing operations before income taxes 3,595 5,880 3,219 5,201
Income tax expense 1,402 2,293 1,255 2,028
-------- -------- -------- --------
Income from continuing operations 2,193 3,587 1,964 3,173
Loss from discontinued operations, net of income tax effect (67) (1,398) (128) (1,654)
-------- -------- -------- --------
Net income 2,126 2,189 1,836 1,519
Preferred stock dividends -- 132 -- 263
-------- -------- -------- --------
Net income applicable to common stockholders $ 2,126 $ 2,057 $ 1,836 $ 1,256
======== ======== ======== ========
Weighted average diluted common shares outstanding: 10,551 10,549 10,546 10,539
Income from continuing operations $ 0.21 $ 0.34 $ 0.19 $ 0.30
Loss from discontinued operations (0.01) (0.13) (0.01) (0.16)
-------- -------- -------- --------
Net income per share $ 0.20 $ 0.21 $ 0.17 $ 0.14
======== ======== ======== ========
As of As of
Selected Balance Sheet data: December 29, 2007 June 30, 2007
----------------- -------------
Cash and cash equivalents $ 1,118 $ 3,814
Property and equipment, net 27,075 24,412
Goodwill and intangible assets, net 55,931 51,681
Deferred revenue 12,894 12,835
Total debt 2,350 --
Stockholder's equity $ 56,673 $ 54,218
Number of schools 160 151
Reconciliation of Fiscal 2007 GAAP to non-GAAP Net Income
Thirteen Weeks Twenty-Six Weeks
Ended Ended
December 30, 2006 December 30, 2006
----------------- -----------------
Net income $ 2,189 $ 1,519
Recovery of note receivable, net of tax (2,013) (2,013)
Sale of assets, net of tax (160) (160)
Lease reserve, net of tax 1,242 1,242
Loan origination fees, net of tax 343 343
-------- --------
Total adjustments, net of tax (588) (588)
Adjusted net income $ 1,601 $ 931
======== ========
Weighted average diluted shares outstanding 10,549 10,539
-------- --------
Adjusted net income per share $ 0.15 $ 0.09
======== ========
Certain reclassifications have been made to the prior year condensed financial
statements to current period presentation. Certain financial information is
presented on a rounded basis, which may cause minor differences.
###
CONTACT: Tom Frank of Nobel Learning Communities, Inc.,
Chief Financial Officer, +1-484-947-2000/
Web site: http://www.nobellearning.com
(NLCI)