NOBEL LEARNING COMMUNITIES, INC. 
By WEST CHESTER, Pa., Sept. 16 /PRNewswire-FirstCall/ -- Nobel Learning Communities, Inc. (Nasdaq: NLCI), a leading operator of private preschools, elementary schools, middle schools and a global online K-12 college prep distance learning school, today reported results for the fourth quarter (fourteen weeks) and fiscal year 2010 (fifty-three weeks) ended July 3, 2010.
Revenues for the fiscal 2010 fourth quarter were $62.6 million, up 11% from fiscal 2009 fourth quarter revenues of $56.4 million and up 6.1% on a thirteen week basis compared to the fourth quarter of fiscal 2009. The improved trend in sequential comparable school revenues was sustained for the third consecutive quarter, with comparable school revenue declining just 1.8% in the fourth quarter, after declining 3.9% in the third quarter, 4.8% in the second quarter, and 5.8% in the first quarter of fiscal 2010. As a key metric, comparable school revenues are always reported on a thirteen or fifty-two week basis. In the fourth quarter, adjusted EBITDA* increased 8% to $5.8 million as gross margins improved 280 basis points to 14.3% in the quarter compared to adjusted EBITDA of $5.3 million and gross margin of 11.5% in the fourth quarter of 2009. Net income for the fourth quarter of 2010 was $1.1 million, or $0.11 per fully diluted share, up compared to $466,000, or $0.04 per fully diluted share, in the fourth quarter of fiscal 2009.
As of the date of this release, the recent trend in comparable school revenue for September, the first full month in our back to school season, continues to improve. While there can be no assurance that this trend will continue, and while fiscal 2011 back-to-school season will not be complete until the end of October, current trends suggest that we will begin the new school year with positive comparable school revenues.
George Bernstein, President and Chief Executive Officer of Nobel Learning Communities, Inc., stated, "Fourth quarter results are a strong finish to a year in which our hard work was rewarded with steadily improving enrollment trends. Acquisitions and new schools drove fourth quarter revenues to a quarterly record, lifting full year revenues to record levels for the fourth consecutive year, before considering the further revenue benefit from an extra week in each respective period. Despite the challenges of a weak economy and rising unemployment, we generated adjusted EBITDA* of $5.8 million in the quarter and $18.2 million for the year, which we invested in strengthening our curriculum, enhancing our assessment programs and educational delivery technologies and expanding into the rapidly growing online and international markets. Nobel Learning's strategy is to provide a differentiated school model that offers students personalized learning opportunities in a 21st century educational environment. The improvement in enrollment trends experienced over the course of the year clearly demonstrates that students and parents alike increasingly recognize that our unique educational model provides superior value."
FULL YEAR 2010 RESULTS
Fiscal 2010 revenues, which included fifty-three weeks compared to fifty-two weeks for fiscal 2009, were $232.0 million, up 5.4% from $220.1 million for fiscal 2009. On a fifty-two week basis fiscal 2010 revenue growth was 4.2% compared to fiscal 2009. Adjusted EBITDA* for fiscal 2010 was $18.2 million, compared to $21.3 million in fiscal 2009. Net income was $1.9 million, or $0.18 per diluted share, for fiscal 2010, compared to $4.6 million or $0.43 per diluted share for fiscal 2009.
Comparable school revenues were down 4.3% for fiscal 2010 due to an approximately 7.0% decline in average enrollments. This compares to comparable school revenues that were down 1.2% for fiscal 2009 as compared to fiscal 2008, due to a 4.7% decline in average enrollments.
General and administrative expenses increased 22.5% in fiscal 2010 compared to 2009. The increase was primarily attributable to the addition of $4.2 million of Laurel Springs School overhead.
Looking ahead to Fiscal 2011
Mr. Bernstein concluded, "Entering the new school year, recent enrollment trends are an encouraging sign that we are succeeding in restoring organic growth. In addition, the growth initiatives implemented over the past year have created opportunities in large, adjacent markets and in new geographies where we can effectively leverage our strong educational platform. From the recent opening of a pre-school in Saudi Arabia, which is the first to license our curriculum, to new partnerships in Korea and China, we have established a nascent path to international growth. With Laurel Springs School, our distance learning and online college prep school, we now have a scalable model to accelerate our growth in a rapidly expanding market where capital expenditure requirements remain modest. We also enter this school year from a position of financial strength to support our growth aspirations. We believe that the continued investment in our educational programs during a difficult fiscal 2010 has accelerated our educational progress and further differentiated and distinguished our high value educational programs. From this strong foundation we believe we are winning in the marketplace and building value for our stockholders."
*Adjusted EBITDA is a non-GAAP measure that excludes certain items detailed later in this press release under the heading "Reconciliation of Non-GAAP Financial Measures."
About Nobel Learning Communities
Nobel Learning Communities operates a national network of over 180 nonsectarian private Preschool and K+ schools and a global K-12 distance learning and online school. Nobel Learning is dedicated to providing a high-quality private education, through small class sizes, caring and skilled teachers, and attention to individual learning styles. Nobel Learning 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 schools. For more information, please visit 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 the impact on our business and the price of our common stock caused by the concentration of ownership of our common stock. 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 EBITDA in this release is a non-GAAP financial measure. Adjusted 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 Adjusted EBITDA. 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.
Condensed Consolidated Statements of Operations
For the Fourteen and Fifty Three Weeks Ended July 3, 2010
For the Thirteen and Fifty Two Weeks Ended June 27, 2009
(Amounts in thousands except per share data; net income per share
totals may not sum due to rounding)
(Unaudited)
Fourteen Thirteen
Weeks Weeks
July 3, June 27,
2010 2009
-------- ---------
Revenues $62,631 $56,410
------- -------
Gross profit 8,969 6,501
General and administrative expenses 6,334 4,728
----- -----
Operating income 2,635 1,773
Interest expense 494 222
Other income (7) (13)
--- ---
Income from continuing operations before
income taxes 2,148 1,564
Income tax expense 836 605
--- ---
Income from continuing operations 1,312 959
Income (loss) from discontinued
operations, net of income tax effect (184) (493)
---- ----
Net income $1,128 $466
====== ====
Weighted average diluted common shares
outstanding: 10,645 10,699
Income from continuing operations $0.12 $0.09
Income (Loss) from discontinued
operations (0.02) (0.05)
Net income per diluted share (may not sum
due to rounding) $0.11 $0.04
===== =====
Fifty
Three Fifty Two
Weeks Weeks
July 3, June 27,
2010 2009
-------- ---------
Revenues $232,035 $220,103
-------- --------
Gross profit 28,896 28,984
General and administrative expenses 22,938 18,726
------ ------
Operating income 5,958 10,258
Interest expense 1,571 981
Other income (30) (78)
--- ---
Income from continuing operations before
income taxes 4,417 9,355
Income tax expense 1,711 3,622
----- -----
Income from continuing operations 2,706 5,733
Income (loss) from discontinued
operations, net of income tax effect (834) (1,169)
---- ------
Net income $1,872 $4,564
====== ======
Weighted average diluted common shares
outstanding: 10,619 10,701
Income from continuing operations $0.25 $0.54
Income (Loss) from discontinued
operations (0.08) (0.11)
Net income per diluted share (may not sum
due to rounding) $0.18 $0.43
===== =====
Reconciliation of Non-GAAP Financial Measures
Fourteen Thirteen
Weeks Weeks
July 3, June 27,
2010 2009
-------- ---------
Net Income $1,128 $466
Interest expense 494 222
Tax expense 836 605
Depreciation and amortization
expense 2,469 3,087
----- -----
EBITDA $4,927 $4,380
Net loss from discontinued
operations 184 493
Stock compensation expense 273 241
DOJ litigation costs 391 224
Non-capitalizable transaction
costs from acquisitions 3 -
--- ---
Adjusted EBITDA $5,778 $5,338
====== ======
Fifty
Three Fifty Two
Weeks Weeks
July 3, June 27,
2010 2009
-------- ---------
Net Income $1,872 $4,564
Interest expense 1,571 981
Tax expense 1,711 3,622
Depreciation and amortization
expense 9,969 9,667
----- -----
EBITDA $15,123 $18,834
Net loss from discontinued
operations 834 1,169
Stock compensation expense 1,107 1,012
DOJ litigation costs 967 277
Non-capitalizable transaction
costs from acquisitions 207 -
--- ---
Adjusted EBITDA $18,238 $21,292
======= =======
As of
-----
June 27,
Selected Balance Sheet data: July 3, 2010 2009
------------ ---------
Cash and cash equivalents $1,606 $786
Property and equipment, net 29,044 28,750
Goodwill and intangible assets, net 91,337 78,214
Deferred revenue 15,756 14,526
Total debt 21,500 13,525
Stockholder's equity $71,980 $68,886
Number of schools 184 180
NLCI-G
NLCI-F
SOURCE Nobel Learning Communities, Inc.
