BEDU - Earnings call transcript Q3 2021 | Bright Scholar Education Holdings Limited

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Operator

Good morning, and thank you for standing by for Bright Scholar's 2021 Third Fiscal Quarter Earnings Conference Call. [Operator Instructions]. I would now like to turn the meeting over to your host for today's conference, Ms. Ruby Yim, Investor Relations Counsel.

Ruby Yim

Thank you, Operator. evening. good and morning Good Welcome to XXXX, ended XX, Fiscal Scholar's Call. Third Earnings Quarter May Bright

Joining Mr. Li, today Chief Andy Officers; me are Ms. Financial Chen Chairman; Executive and and Mr. Officer. Vice Ms. Li, Wanmei Dora our Executive Jerry Co-Chief our He, our

As reminder, webcast. call broadcast live is a being conference via today's

on now, after press will received a have close replay a our release. addition, should was available on XXXX, website of you our July following Eastern time. In be the market This distributed call. XX, By copy

you section have not, the If it is of on available IR our website.

development, except in started, limitation involve Further with of company's remind Act many update to included the required any forward-looking the business which the are current under expressions. such U.S. forward-looking expect, does cause are in is Exchange of Section any or Reform Commission. management's not may, to expectations will, are relates otherwise plans Litigation company's statement filings Before result without let we undertake and performance law. uncertainties by potential, XXXX. based operating Private market and Such identified company's may meaning as and unknown events new predict and and which is conditions materially are of call results, that U.S. company's XXE that as of contain or forward-looking the estimate, The believe, regarding XXXX may terminology other differ Exchange get and forward-looking other and Securities this to future can other or within events information those of the upon similar uncertainties as to the the statements of me company factors which include plan, or or defined information, risks, Act continue, you Securities obligations a and as risks, in aim, beyond which Securities today's known to anticipate, These amended statements. factors, statements all from be difficult of current the actual statements intend, as and control, likely achievements the or

them can numbers unless Section X in our those tools, of in our GAAP. call, this the year-over-year in statement attributable presentation refer in review our RMBand to financial U.S. company, a X turn corporate We Vice comparisons and who you introduction consider performance. which isolation assess management new otherwise the brief to for our as prepared all with non-GAAP stated. data from a included These and comprehensive our from measures call substitute in measures. are over should measures our XX, to are With certain investors download net company earnings Chairman, to IR use the website. or He. to not supplemental non-GAAP be GAAP accordance or other income to as During analytical comparisons and have as Slide all we have measures non-GAAP And referring Jerry? we'll income for note I'll in remarks Please to consolidated operating Jerry limitations Executive that, financial

Jerry He

details people with my note conference start of and evening. our you places On us are financial team, the quarter with cover questions. A continued for with Good fiscal affected. then and today's will in third dozen appreciate Henan Thank Scholar. respective wrap Thanks, the good business in other I performance, before conclusion our and will hundreds prepared Ruby. a updates. massive call, Zhengzhou joining flooding senior Bright cities province. like Dora on and XXXX brief business provide on our of quick in your would I thousands of behalf quarterly remarks opening for the widespread performance. management and to morning on will up call We progress interest call. on

utmost go and and people Our the to the rainfall, hearts rescuers for by who out gratitude pulling those the to have safety. been saving express we affected record-breaking

global As vaccinations rolling while case have are many the good. in countries, most and rates developed in pandemic, other for are out places been as not situation declining

Turning to our business.

respective Let's months Section the Slide to and XX of business our performance XX. as start breakdown financial fiscal with well quarter highlights Slide - the as XX X in third on overall XX for detailed X by in

strategic and the to despite million had income income compared grew the the the growth demonstrated our overseas business. also are fiscal year-over-year in acceleration and year. pleased driven our model. strength third primarily a a our strong in believe proposition have across RMBXXX.X the and to continued quarter. this X-month this last the continued material quarter, earnings revenue agility focused resulting discipline and in line quarter the The of results, was businesses, same XXX% to the X.X% In of We We net business. all our domestic of On quarters, basis, employ we report of sustainable growth discussed and cost the key which on initiatives by value and continuation XX.X% we recovery pandemic engines in recovery on our strong stronger-than-expected business in third our net reflect top past growth our quarter impact few growth

a respected K-XX businesses. closely when pandemic in domestic our was especially worst Please fiscal its China experienced in have more situation schools, refer Looking XXXX. to Slide XX. sharp from decline in kindergartens, at Revenue

very fiscal and and X.X% schools where are their of pre-COVID remarkable bilingual fees our grew level. and We enrollment in year that student the school, international kindergartens by were also achieve domestic strong third is average Underpinning respectively. XX.X%, XXXX the K-XX that recorded XX.X%, to business to the shown In encouraged back strongest recovery quarter quarter, per Slide continue the students after XX. results revenues in the year, this rebound academic the

offers University, students top global including XXXX from the XX and Chicago, over X the X the China schools from in XX% York graduating from class X capacity scaling of have from the international our XX offers institutions, University. from from X XX, foundation XXXX, Oxbridge, XX offers As of offers Vanderbilt of from of Cornell May offers University, University long received in our as up Shown expansive our business Slide and term. Berkeley sustainably our UC network is offers for New school extensive in X

and the brand as XX. we well progress quarter, and Slide to and remains in driver the on our recovery as pleased growth In and company's all-round by year-over-year the complementary to offering diversified moderate team enrich XX.X% service to sources. revenue our primarily strong recovery to for increasing by revenue Scholar, camps driven business domestic had business Moving which awareness growth million. Complementary and been travel a significant grew business have was year, with last reach restrictions. very made The and Bright was impacted generating the compared impact. RMBXXX.X low after-school pandemic continued by tour of the relatively service and Overseas-related be the due COVID-XX as education the ongoing to the

to to campus However, speedy of The with accelerate strong These is a restrictions by U.K. the quarters tremendous our of fiscal of parents a and our in education synergy we U.S., need in be sight, the spurred travel reading coming in trends offers COVID-XX and and expanding confidence their growth the opportunities, see in continue opportunities. reopen children. overseas the very vaccine lifting the rollout for support with years. and network to complementary continued recovery all-round our business for the

are We and take to expect lifted. the subsequent travel and accelerate effect vaccination once restrictions will the growth resume programs begin

business overseas our in to Turning Slide XX.

operating As anticipated, than business slower significant put has financial The on business. to position recovery challenging of to due of was pressure environment COVID. domestic our the overseas continued impact

this training managing While from consolidate significant opportunity we students taken XX,XXX our to rebrand are language business. full-time Global cater in anticipated decline, to also this response have and we expenses students overseas CATS our institutions. and English X,XXX prudently Schools to and

from different over campus institutions students university, offer with prepare represented from XX schools, arts our to benefit increasingly and to XXX international cultures and different a locations And summer the China. opportunity students for We training Our boarding economy. Canada in variety and society language study programs. of learning an U.K., English globalized the U.S., at includes today's independent and to portfolio nationalities

business to to capture normal. market opportunities when setting environments return operating up our are We

Looking ahead, related the mindful risks our affect that to issues are health global of continued also business. we and economic, very political, regulatory

the multiple continued that drive growth, is with confident recovery as company the market However, of and positioned engines well it. the it to recedes dynamics support pandemic is

namely initiatives breadth recapped business, our to as our XX, efficiency Slide enhance and improve revenue offerings. in domestic business We complementary expand post of K-XX of will COVID utilization service overseas to growth and for our rebuild and strategic our focus the depth continue on

our mid- build long awareness, offerings brand generate expect enrich our initiative and students and will global experience learning our to booster also organization, We effective business new of expand growth over emblematic this to term. an

balance have Our through solid and greater enabled sheet market-leading for period term this capacities strengthening while in us long our and challenging to success position internationally. China navigate

per stakeholders. strengthening for turn executing as call and the for We With deliver Directors will opportunities value strategy, Board future to - a market us, magnitude $X.XX of future. Dora. We invest remain ADS the business, of I shareholders. our note, our financial by to cash in developing the of our of confidence our our excited position front our we to company's are all students underpinning committed dividend our growth to our in delivering declared have this for The recently

Dora Li

you, Jerry. Thank

unless be our our information all a to Please to year-over-year comparative comparisons financial comparisons basis. on reminded performance also that our in year-over-year otherwise refer to press release back XX. are numbers Slide turn Please stated. Please for to turn detailed RMBand refer financials. of earnings Let's all

the stronger-than-expected CNYX,XXX.X a X.X% international schools the XX.X% quarter in bilingual X-month of the increase K-XX K-XX to due service XX.X% was and to enrollment. student X-month kindergartens, mainly in recovery and schools enrollment. line CNYX,XXX.X traction, revenue recovery. for student schools, student for revenue due the that for was was the Domestic million X.X% million business. and to On X.X% domestic increase increase strength up to to quarter Top XX.X% schools, a complementary education in student quarter revenue X-month basis, was a includes to attributed continued X.X% for its mainly on up up business primarily Kindergartens. domestic up due for quarter enrollment. quarter a XX.X% attributed schools XX.X% showed basis, up up a Our X-month revenue basis. basis. to the of and up XX.X% enrollment. Revenue on the strong On Bilingual increase International XX.X% XX.X%

On basis up X-month education earlier, had of XX.X%, XX.X%. up the XX.X% and business Revenue Kindergarten a was XX.X%. revenue. revenue the services up impact XX.X% worst China. fiscal after-school technology and revenue cost a training On primarily tour X-month strongest quarter pandemic was domestic student basis, compared situation increase due complementary in COVID-XX the for Academic in the of for in impact. student X-month kindergartens increased a due for as quarter XX.X% up mentioned up to decline enrollment. the quarter low and its due Jerry relatively X-month overseas last of when camps XX.X% XX.X% schools Olympiad enrollment sharp which to from XX, On primarily have recovery third business. with education the year, to was XXXX quarter XX.X% all-round from recovery experienced education Revenue a As the on the the was continued due a basis online a primarily to Slide down was was and pandemic. basis, moderate from acquisition was Revenue and of at to on

the control drive on to initiatives remains measures focus effectively growth. with Our immersive changing cost business through balancing managing business environment

a of the XX.X% fiscal X-month third cost total XX.X% revenue for to total total for to of the which total compared basis, CNYX,XXX.X of million increased year. million, cost increase total accounted total X-month fiscal up an revenue was in of XX.X%. last On the same cost from Teaching XX.X%. by quarter, to On XX.X% staff accounted compared as staff XX.X% quarter, of of XX.X% same revenue of fiscal third revenue XX.X% and accounted and For basis, percentage for the CNYXXX.X a is contributor, primary revenue cost XX.X%. cost, revenue, the teaching was quarter

margins. period XXXX fiscal Our year. compared domestic our was gross months average X and student-teacher K-XX XX, the for same X.X first the On in X.X year schools of fiscal Slide to last ratio profit

the a the was continued business X.X business for we ongoing overseas pandemic, gross on down by mainly While fiscal our margin the X-month increase to The basis, XX.X% by the Gross profit percentage was domestic XX.X% on significant gross impacted margin X-month margin and X.X% gross domestic margin in was gross in down business encouraged third be for fiscal improvement up quarter of to and points of basis. recovery and up the quarter. a percentage Slide K-XX XX.X%. are due in on profit X.X profit points the to was quarter, quarter. XX. to Continue for quarter the Gross stronger

XX. adjusted for XX.X% maximizing fiscal SG&A business same XX.X% Adjusted SG&A expenses continue million, adjusted in for a last We to revenue and control On last opportunities. total SG&A year. turn revenue year. elaborate cost across of to million, cost X.X% expenses, X.X% for Slide of tight to expenses optimization compared and was basis, and fiscal To accounted quarter the XX.X% to quarter up compared all fiscal the CNYXXX.X employ more to up accounted X-month was third the our please effectiveness CNYXXX.X on XX.X% the total

is overseas accelerating XX. revenue integration efficiency. EBITDA advancing Our the cost and rebuild shown recorded of through and Adjusted as operational operations enhance top competitiveness to in priority Slide significant the recovery, our

to the was Adjusted up CNYXXX.X million. Adjusted compared was CNYXXX.X was XX.X%, quarter basis, CNYXXX.X from margin a income X%. was CNYXXX.X XX.X% was million, was XX.X%. net compared On up X.X% was million. XX%. million. it margin EBITDA XXX.X% XX.X% up million, X-month up net adjusted income Adjusted On EBITDA adjusted a XX.X% CNYXX.X was million. the million, For million, Adjusted basis, net XX.X%, from for from CNYXXX.X from up from X.X% to quarter, Adjusted from net XX.X%. margin CNYXXX.X CNYXXX.X EBITDA X-month margin up

balance challenging strong to a XX. have mitigate periods, us We sheet enabled Slide that through shown as in

February cash as our cash XXX million restricted XX, of to May of million XX, million equivalent as CNYX,XXX.X compared XXXX. XXXX, and As or CNYX,XXX.X cash and totaled USD

XXXX. May a of XX, of CNYX,XXX.X also short-term investment We have million as

$X.XX Moving strong Directors The recently ADS. financial and per XX. reflects the to in of of Slide It Board approved our a position company's has confidence future. cash dividend financial

in In third announced November XXXX. continue our execute addition, to we program repurchase share

As XXXX, the XXX,XXX USD of shares bought July X, for X.X back million. company has

to pursue can to at level financial continue maintain the opportunities. capital excess our flexibility grow financially us - and organic will to allow We acquisition our which business

to Going Slide XX.

on year our are revenue guidance We August for to fiscal XXXX. track the ending achieve XX,

CNYX.XX a X% and billion, the in based growth of acquisitions. CNYX.XX our on expect XX% potential We range billion revenue total business and without of representing to existing

and and sheet income We for to our are balance also income XX we X% statement. Please school our judicious down XX and initiatives net results. developments. XX average guidance Slide more be expansion expect shows and and and condensed table of GAAP enrollment the on representing a to reaffirm refer to our to our and Slide an and XX in the be non-GAAP enrollment the cash in guidance domestic student for regarding the the statement. openings new strategic Slide to expenses, XX%. reconciliation schools reprioritize in on EBITDA kindergarten we flow shows same overseas XX,XXX, between as approximately At time, increase XX,XXX revising SG&A

X financial XXXX, XX, approximately RMBXXX.X shows fiscal the my our X.X% was average Slide year. Also, our million, company's up capital enrollment ended fee average to This For and tuition update. concludes student across compared months the May expenditure XX network. last

for Now his Jerry? I remarks. Jerry will to closing turn

Jerry He

education a we I'm faster us for was in pushed open this steadfast questions. for at year year where ongoing scale has It our to serving of It changes to in of as the Dora. global about you, past all prepared This This sustainable innovative. sector. be change Thank to well and from of as will and education build past areas strategy and challenges. China. evolve flexible equitable I China's in better pushed optimistic future the industry year progress, us enormous that and to lead to we the the please? demonstrated of has evolve this which Bright tremendous believe us The would agility to around our and a remain resilience and in value commitment very like ability K-XX highest driving and possible. changes the thought ever to for concludes these standards very executing of company global than amid Scholar to world. fortitude year makes growth while operate. operate required call for more We this We firmly challenge grateful remarks, strong staff shareholders. dedication create our adaptability all and a their our our past Operator, accelerated

Operator

Instructions]. [Operator

a Law have from We question with Analytics. Len Lucror

Len Law

I about the short-term would like investments. to ask

or to And repatriating That's short-term these your offshore? difficulty first due bond are the you So for new my any held cash onshore, foresee if regulations? do question. onshore investments the repayment

Dora Li

The - to funds but onshore, the Dora. to In this to vehicle we short-term to onshore short, we matures. offshore. the it we comes have bonds is The have - capable short you. ability Thank the the - transfer all term it when is and investment are repay

Len Law

China's provide what the Sure. for That's private At impact are second law the education? the private question, education can from of stage, And an update on regulations expectations you promoting sector? all. on this my your

Jerry He

couple This laws that I came out is policy the of of lot last in that new Jerry. will are There question. months. a and take

new but to our going you're what we don't existing going it's of today, of school and fees very But That's impact that, we are very continuing understand I that it's If are any existing there course, schools, and licenses. schools. specifically recruiting it about likely forward, private about the likely - can stuff and most difficult - ones, today, think like operate. about as it's details to talking materially to see obtain from

Operator

I call remarks. turn And questions. further management for would no the are there over to time, closing this back like At any Instructions]. [Operator to

Jerry He

free have to joining you much wish if the Thank for feel everyone further questions. a any us Please contact Great. you great day. very I conference Okay. call.

Operator

The has attending you concluded. and now for may now disconnect. Thank conference presentation, you today's

Bright Scholar Education Holdings Limited (BEDU) 22 Jul 212021 Q3 Earnings call transcript