Exhibit 99.1
NOBEL LEARNING COMMUNITIES, INC. ANNOUNCES IMPROVED GROSS PROFIT FOR THIRD
QUARTER AND YEAR TO DATE AND LOWER THIRD QUARTER NET INCOME ON INVESTMENT
RESERVE
WEST CHESTER, Pa., May 12 /PRNewswire-FirstCall/ -- Nobel Learning
Communities, Inc. (Nasdaq: NLCI), a leading for-profit provider of education
services for the pre-elementary through 12th grade market, reported improved
gross profit for the third quarter and year to date periods ended April 2, 2005,
and lower third quarter earnings due to a reserve for the Company's investment
in Total Education Solutions, Inc.
References to third quarter, and year to date or nine months, for fiscal
2005 refer to the thirteen week and thirty-nine week periods ended April 2,
2005, respectively. For fiscal 2004, the year to date period ended March 31,
2004 and had two extra days versus the year to date period ended April 2, 2005.
The third quarter period for both fiscal 2005 and fiscal 2004 contain the same
number of days.
Third quarter revenues from continuing operations for fiscal 2005 were
$43,156,000, an increase of 5.8% over the $40,804,000 reported for third quarter
fiscal 2004. The Company ended the third quarter of fiscal 2005 with 150
schools, versus 157 schools for the comparable period in the prior year. Gross
profit for the third quarter of fiscal 2005 increased to $6,338,000 or 14.7% of
revenue, from $5,707,000 or 14.0% in the same period in the prior year. Third
quarter net income for fiscal 2005 was $596,000 or $0.06 per diluted share
compared to third quarter fiscal 2004 net income of $869,000 or $0.09 per
diluted share. During the third quarter of fiscal 2005, the Company recorded a
$1,500,000 charge to reserve the remainder of a note receivable from Total
Education Solutions, Inc. relating to a loan made by the Company in 2000. The
after-tax impact of this charge on the third quarter was a decrease in net
income of $930,000 or $0.10 per share; net income for the quarter without the
reserve of this note would have been $1,526,000 or $0.16 diluted earnings per
share.
The improved operating results for third quarter fiscal 2005 resulted
primarily from tuition increases of approximately 3.3%, an increase in
enrollment at comparable pre-elementary schools, improved school labor
management, lower interest expense and a reduction in loss from discontinued
operations. Total comparable school revenue for the third quarter of fiscal 2005
increased 4.7%.
Revenue from continuing operations for the nine months ended April 2, 2005
was $120,721,000, an increase of 3.5% over the $116,595,000 reported for the
fiscal 2004 nine month period. For the nine month period of fiscal 2005, the
Company reported net income of $554,000 or $0.06 per diluted share compared to a
nine month loss of ($1,039,000) or ($0.22) per diluted share in the same period
of fiscal 2004. Net income for the fiscal 2005 year to date period without the
reserve for the note receivable from Total Education Solutions, Inc. would have
been $1,484,000 or $0.15 diluted earnings per share. Included in the nine month
period for fiscal 2004 ended March 31, 2004 were 2 extra days of operations that
provided that period with an additional $1,300,000 of revenue, $390,000 of
operating profit and $242,000 of net income. Total comparable school revenue for
the nine months ended April 2, 2005 increased 3.7%, calculated on the same
number of days.
The improved results for the nine months ended April 2, 2005 resulted
primarily from improved gross profit in the Company's schools, lower interest
expense and a reduction in losses, net of taxes, from the Company's discontinued
operations to ($351,000) from ($1,360,000) in the same nine month period of
fiscal 2004. Results from both nine month periods include charges amounting to
approximately $1,500,000 pre-tax: in fiscal 2005, a third quarter charge
relating to the reserve of the Company's note receivable from Total Education
Solutions, Inc., and in fiscal 2004, a first quarter charge relating to
separation agreements with two former executives.
George Bernstein, President and Chief Executive Officer of Nobel Learning
Communities, stated, "We are pleased with the continued improvement in the
operating performance of our schools and our gross profit results. The third
quarter is relatively comparable to last year in terms of number of days and
operating environment. Without the reserve of our investment in Total Education
Solutions, Inc., third quarter net income would have increased by over 75%
versus the same period last year. Revenue growth is slightly ahead of our year
to date trend, coming primarily from our pre-elementary schools where we have
experienced comparable school growth above our tuition increase. We hope that
this trend will create a strong potential pipeline for our elementary schools.
In addition, we have just completed a major marketing program aimed at driving
enrollment for the fall and are introducing a new school readiness product to
support our schools during our traditionally slow summer months."
"We also continue to strengthen our balance sheet. Year to date we have
reduced debt by $4,000,000 and have had no borrowings under our revolving credit
facility. We are currently analyzing opportunities to lower the cost of our
debt. Now that we have a stronger core business and improved operating results,
we will begin to focus more of our attention on potential avenues for growth and
expansion."
Nobel Learning Communities, Inc. operates 150 schools in 13 states,
consisting of private pre-elementary, elementary, middle, specialty high schools
and schools for learning challenged children clustered within established
regional learning communities. The Company receives over 96% of its revenue from
private pay sources.
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 market demand,
market condition, competitive conditions including tuition price sensitivity,
execution of growth strategy, changes in labor force reducing demand or need for
private schools 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.
Nobel Learning Communities, Inc.
Consolidated Statements of Operations
For the Thirteen Weeks and Thirty-Nine Weeks Ended April 2, 2005
and For the Three Months and Nine Months Ended March 31, 2004
(In thousands except per share data)
(Unaudited)
Thirty-
Thirteen Three nine Nine
Weeks Months Weeks Months
Ended Ended Ended Ended
April 2, March 31, April 2, March 31,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues $ 43,156 $ 40,804 $ 120,721 $ 116,595
Gross profit 6,338 5,707 14,427 14,085
General and administrative expenses 4,557 2,919 11,020 10,807
Operating income 1,781 2,788 3,407 3,278
Interest expense 671 966 2,079 2,886
Other income (39) (6) (131) (60)
Income from continuing operations
before income taxes 1,149 1,828 1,459 452
Income taxes expense 436 680 554 131
Income from continuing operations 713 1,148 905 321
Loss from discontinued operations, net of taxes (117) (279) (351) (1,360)
Net income (loss) 596 869 554 (1,039)
Preferred stock dividends 146 132 494 382
Income (loss) available to common stockholders $ 450 $ 737 $ 60 $ (1,421)
Weighted average common shares:
Basic 7,450 6,578 6,936 6,476
Diluted 9,748 9,342 9,656 6,476
Basic income (loss) per share:
Income (loss) from continuing operations $ 0.08 $ 0.15 $ 0.06 $ (0.01)
Discontinued operations (0.02) (0.04) (0.05) (0.21)
Income (loss) per share $ 0.06 $ 0.11 $ 0.01 $ (0.22)
Diluted income (loss) per share:
Income (loss) from continuing operations $ 0.07 $ 0.12 $ 0.09 $ (0.01)
Discontinued operations (0.01) (0.03) (0.03) (0.21)
Income (loss) per share $ 0.06 $ 0.09 $ 0.06 $ (0.22)
Selected Balance sheet data:
As of As of
April 2, July 3,
2005 2004
------------ ------------
Cash and cash equivalents $ 5,594 $ 2,716
Property and equipment, net
(Including assets held for sale) 25,874 29,162
Goodwill and intangible assets, net 36,993 37,167
Total debt 21,323 25,336
Stockholders' equity $ 35,554 $ 34,275
SOURCE Nobel Learning Communities, Inc.
-0- 05/12/2005
/CONTACT: Tom Frank, CFO, Nobel Learning Communities, Inc.,
+1-484-947-2000/
/Web site: http://www.nobellearning.com /