For:
Nobel Learning Communities, Inc.
Tom Frank
Chief Financial Officer
484-947-2000
FOR IMMEDIATE RELEASE
Nobel Learning Communities, Inc. Reports Record First Quarter Revenues
Operating Margin and EBITDA Improve as Revenues Rise 15.1%
WEST CHESTER, Pa., Nov. 5 -- Nobel Learning Communities, Inc. (Nasdaq:
NLCI), a leading operator of private preschools, elementary schools, and middle
schools, today reported financial results for the first quarter of fiscal 2009,
which ended September 27, 2008.
First quarter revenues rose to $51.4 million, an increase of 15.1%
compared to $44.6 million of first quarter fiscal 2008 revenues. First quarter
net loss was $358,000, or ($0.03) per diluted share, compared to $290,000, or
$(0.03) per diluted share, for the first quarter of fiscal 2008. EBITDA in the
first quarter of fiscal 2009 was $2.2 million compared to $1.4 million in the
comparable year ago quarter.
For the quarter, comparable school revenue increased 1.4%, which consisted
of an approximately 3.1% tuition increase and a decrease in average enrollments.
New and acquired schools contributed first quarter revenue of $7.2 million this
year compared to $4.1 million in the first quarter of 2008. The Company
continues to aggressively pursue acquisition and new school opening
opportunities as important components of its strategy to achieve leverage and
economies of scale. To support growth, the Company has a $75 million bank
facility in place, of which approximately $55 million is unused as of the date
of this release.
School gross profit for the first quarter of fiscal 2009 was $4.6 million,
up 12.8% from $4.1 million in the first quarter of fiscal 2008, while school
gross margins were 9.0% of total revenues this quarter compared to 9.2% in the
first quarter of fiscal 2008. Comparable school gross profit for the first
quarter was $4.9 million, up 8.8% from $4.5 million in the first quarter fiscal
2008 as positive operating efficiencies drove an 80 basis point improvement in
comparable school gross margin. Comparable school gross margin was 11.2% in the
first quarter up from 10.4% in the comparable year earlier quarter. Newly
developed schools reduced overall gross margin by an incremental 20 basis points
in the first quarter of 2009 compared to the impact in the first quarter of
2008.
First quarter 2009 general and administrative expenses were up 10.8%
compared to a year ago. General and administrative expenses this quarter
primarily reflect increases in depreciation, acquisition related amortization,
growth related field management expense, Sarbanes-Oxley compliance, stock-based
compensation and the cost associated with the implementation of a stockholders'
rights plan, offset by an almost $300,000 decrease in performance-based
management incentive compensation.
For the first quarter of fiscal 2009, the operating loss was reduced by
$45,000 to ($301,000) from ($346,000) in the first quarter of last year.
George Bernstein, President and Chief Executive Officer of Nobel Learning
Communities, Inc., stated, "We are encouraged that we are able to increase our
comparable school margins and improve operating income in spite of the weakening
economy and the effect this has on family budgets and our back to school
enrollments. Our strong brand, curriculum and differentiated educational product
have enabled us to sustain enrollment levels that we believe outpace industry
averages. With our strong operating cash flow and extensive capacity on our line
of credit, we are in an ideal position to continue to capitalize on the broader
array of growth opportunities we believe we will see due to the current economic
environment. At the same time, we are taking prudent actions to strengthen our
organization, reinforce our parent and student relationships, and sustain our
track record of improving financial performance in order to continue to build
value for stockholders."
About Nobel Learning Communities
Nobel Learning Communities, Inc. is a national network of over 178
nonsectarian private schools, including preschools, elementary schools, and
middle schools in 15 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 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 risks and uncertainties arising in connection with Knowledge
Learning Corporation's unsolicited proposal to acquire the Company. 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
and EBITDA in this release are non-GAAP financial measures. Adjusted Net Income
and EBITDA exclude the special items described elsewhere in this release. 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 EBITDA
as derived from the operating income line as we believe this provides the user
the most useful and comparable information on an operating basis. 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 Weeks Ended September 27, 2008 and September 29, 2007
(Amounts in thousands except per share data; net income per share totals
may not sum due to rounding)
(Unaudited)
Thirteen Weeks Ended
--------------------
September 27, September 29,
2008 2007
-------- --------
Revenues $ 51,376 $ 44,633
-------- --------
Gross profit 4,641 4,114
General and administrative expenses 4,942 4,460
-------- --------
Operating income (301) (346)
Interest expense 267 47
Other income (29) (16)
-------- --------
Income from continuing operations
before income taxes (539) (377)
Income tax expense (208) (147)
-------- --------
Income from continuing operations (331) (230)
Loss from discontinued operations,
net of income tax effect (27) (60)
-------- --------
Net loss $ (358) $ (290)
======== ========
Weighted average diluted common
shares outstanding: 10,418 10,367
Loss from continuing operations $ (0.03) $ (0.02)
Loss from discontinued operations (0.00) (0.01)
-------- --------
Net loss per share $ (0.03) $ (0.03)
======== ========
Reconciliation of non-GAAP item
-------------------------------
Thirteen Weeks Ended
--------------------
September 27, September 29,
2008 2007
Operating Loss $ (301) $ (346)
Items excluded from operating income to
reconcile non-GAAP operating income:
Stock based compensation 248 170
Depreciation and amortization 2,261 1,624
------- -------
Total adjustments 2,509 1,794
EBITDA $ 2,208 $ 1,448
======= =======
Selected Balance Sheet Data September 27, 2008 June 28, 2008
------------------ -------------
Cash and cash equivalents $ 952 $ 1,064
Property and equipment, net 29,329 28,098
Goodwill and intangible assets, net 73,820 72,303
Deferred revenue 18,740 15,003
Total debt 16,700 12,500
Stockholder's equity $63,112 $62,914
Number of schools 178 173
Certain reclassifications have been made to the prior year condensed
financial statements to conform to current period presentation. Certain
financial information is presented on a rounded basis, which may cause minor
differences.
NLCI - F
NLCI - G