Nobel Learning Communities, Inc. Reports Improved
Third Quarter and Nine-Month Results
WEST CHESTER, Pa., May 7 /PRNewswire-FirstCall/ -- Nobel Learning
Communities, Inc. (Nasdaq: NLCI), a leading operator of private preschools,
elementary schools, and middle schools, today reported results for the third
quarter and first nine months of fiscal 2008, which ended March 29, 2008.
Third quarter 2008 revenues were $53,328,000, up 8.4% from $49,218,000 for
the third quarter of fiscal 2007. Third quarter operating income was $4,330,000,
up 23.9% compared to third quarter 2007 operating income of $3,496,000. Net
income for the third quarter was $2,507,000, or $0.24 per diluted share,
compared to 2007 third quarter net income of $2,495,000, or $0.23 per diluted
share. Net income in the current quarter was up 13.6% and diluted earnings per
share were up 14.3% from the third quarter of 2007 after excluding a net benefit
in the period last year of $289,000, or $0.02 per diluted share that resulted
from a gain on an asset held for sale offset by accelerated depreciation.
Results in the current quarter were driven by higher revenue from newly
opened or acquired schools and tuition increases at comparable schools. These
results were partially offset by slight reductions in average enrollments and
ancillary revenue as well as expenses incurred primarily at newly opened schools
during their initial ramp-up periods.
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George Bernstein, President and Chief Executive Officer of Nobel Learning
Communities, Inc., stated, "Third quarter earnings rose better than 14% on
revenues that increased over 8% from a year ago as we continue to gain leverage
from our increasing scale and improving efficiencies. Since embarking on the
growth phase of our strategy this fiscal year, we have increased the number of
schools we operate by 14%. These schools contributed 11% of our total
year-to-date revenue, although twelve of the net twenty-one newly acquired
schools have only been onboard since March. We expect that these recent
acquisitions will have a more significant impact on our future results. This
strategic combination of new school development and opportunistic acquisitions
enables us to open new growth markets as well as leverage our brand and
investment in existing markets. We remain committed to accelerating growth both
organically and through acquisition to build stockholder value."
For the third quarter, comparable school revenue increased 2.6%, as a 3.8%
tuition increase more than compensated for lower average school enrollments.
Average school enrollments in the third quarter are up sequentially from the
second quarter as we continue to add students at our schools. However, this
year's third quarter increase was marginally lower than last year's third
quarter increase, primarily due to softer enrollments in our most economically
sensitive markets. Enrollment in our before- and after-school programs was also
marginally lower than a year ago.
School gross profit for the third quarter of fiscal 2008 was $8,987,000,
up from $8,436,000 in the third quarter of fiscal 2007. Comparable school gross
margin was 17.4%, up from 17.2% in the third quarter of fiscal 2007. The
consolidated gross margin was 16.9% in the current quarter, down from 17.1% in
the year earlier period, primarily due to an increase in normal start-up costs
from the opening of four new schools during fiscal 2008. Third quarter 2008
general and administrative expenses were down $283,000 from the third quarter of
2007 and dropped to 8.7% of revenue compared to 10.0% a year ago, mainly due to
lower corporate compensation costs and depreciation expense.
Nine Month Results
Nine month revenues were $149,167,000 in 2008, up 11.4% from $133,881,000
in 2007. Net income for the first nine months of 2008 was $4,343,000. Fully
diluted earnings per share for the first nine months of 2008 were $0.41, up 7.9%
compared to nine month 2007 diluted earnings per share of $0.38. Earnings per
share for the first three quarters of 2008 were up 41.4% compared to nine month
2007 earnings per share net of all non-recurring items discussed above and shown
in the table below.
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About Nobel Learning Communities
Nobel Learning Communities, Inc. is a national network of 172 nonsectarian
private schools, including preschools, elementary schools, and middle schools in
14 states across the nation. 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.
SOURCE Nobel Learning Communities, Inc.
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Nobel Learning Communities, Inc.
Consolidated Statements of Operations
For the Thirteen and Thirty-nine Weeks Ended March 29, 2008 and March 31, 2007
(Amounts in thousands except per share data; net income per share totals
may not sum due to rounding)
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
------------------------- -------------------------
March 29, March 31, March 29, March 31,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Revenues $ 53,328 $ 49,218 $ 149,167 $ 133,881
----------- ----------- ----------- -----------
Gross profit 8,987 8,436 20,966 18,850
General and administrative expenses 4,657 4,940 13,580 12,856
----------- ----------- ----------- -----------
Operating income 4,330 3,496 7,386 5,994
Interest expense 117 185 270 1,315
Other income (2) (21) (318) (3,850)
----------- ----------- ----------- -----------
Income from continuing operations before income taxes 4,215 3,332 7,434 8,529
Income tax expense 1,650 1,300 2,905 3,326
----------- ----------- ----------- -----------
Income from continuing operations 2,565 2,032 4,529 5,203
Income (Loss) from discontinued operations, net of income tax effect (58) 463 (186) (1,189)
----------- ----------- ----------- -----------
Net income 2,507 2,495 4,343 4,014
Preferred stock dividends -- 62 -- 325
----------- ----------- ----------- -----------
Net income applicable to common stockholders $ 2,507 $ 2,433 $ 4,343 $ 3,689
=========== =========== =========== ===========
Weighted average diluted common shares outstanding: 10,633 10,636 10,629 10,573
Income from continuing operations $ 0.24 $ 0.19 $ 0.43 $ 0.49
Income (Loss) from discontinued operations (0.01) 0.04 (0.02) (0.11)
----------- ----------- ----------- -----------
Net income per diluted share $ 0.24 $ 0.23 $ 0.41 $ 0.38
=========== =========== =========== ===========
Reconciliation of GAAP to non-GAAP Net Income
Thirteen Weeks Thirty-nine Weeks
Ended Ended
March 31, 2007 March 31, 2007
-------------- -----------------
Net income $ 2,495 $ 4,014
Recovery of note receivable, net of tax -- (2,013)
Sale of assets, net of tax -- (189)
Lease reserve, net of tax -- 1,242
Loan origination fees, net of tax -- 343
Accelerated depreciation, net of tax 208 208
Sale of assets, net of tax (497) (497)
----------- -----------
Total adjustments, net of tax (289) (906)
Adjusted net income $ 2,206 $ 3,108
=========== ===========
Weighted average diluted shares outstanding 10,636 10,573
----------- -----------
Adjusted net income per share $ 0.21 $ 0.29
=========== ===========
As of As of
Selected Balance Sheet data: March 29, 2008 June 30, 2007
-------------- -------------
Cash and cash equivalents $ 1,163 $ 3,814
Property and equipment, net 26,785 24,412
Goodwill and intangible assets, net 72,939 51,681
Deferred revenue 15,287 12,835
Total debt 17,325 --
Stockholder's equity $ 59,351 $ 54,218
Number of schools 172 151
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.
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