Greenwood Hall, Inc. (QTCQB:ELRN), a Los Angeles-based education
technology company that helps colleges and universities improve
student engagement and outcomes, announced its financial results
for the third quarter of Fiscal Year 2016. The Company experienced
a $484,437, or 49%, increase in revenue from its EdTech-related
offerings during the third quarter compared to the same period in
2015. Overall revenue for the quarter ending May 31, 2016 was
relatively flat at $2,155,082, compared to $2,170,894 for the same
quarter in 2015, primarily due to lower revenue from the Company’s
legacy, non-EdTech business, compared to the same period in 2015.
Third Quarter 2016 Highlights
- Addition of 18 client contracts this fiscal year to date – 10
of which were signed during the third quarter, including contracts
with the University of Oklahoma, Nevada State, University of
Arizona, Troy University, and Oklahoma City Community College.
- Renewal of strategic subscription agreement with University of
the Southwest.
- Strategic EdTech revenue of $1.47 million, compared to $0.99
million during the same period last year, representing a 49%
increase year-over-year in a critical vertical.
- 75% improvement in Adjusted EBITDA from the same period last
year.
“We believe our third quarter results demonstrate our ability to
achieve double-digit revenue growth in our education business while
improving Adjusted EBITDA. While our third quarter reflects nearly
50% revenue growth in our EdTech segment, 10 of the 18 new
contracts with education partners were signed in the third quarter,
which means that many of the new contracts are not expected to have
an impact on revenue until our fourth quarter of FY-2016 and
continuing into FY-2017, which begins September 1, 2016,” said Dr.
John Hall, Chief Executive Officer of Greenwood Hall.
Financial Outlook
The Company today provided select financial guidance for
FY-2017.
Guidance for FY-2017 is for the period September 1, 2016 –
August 31, 2017 and compares against projected results for the
twelve-month period from September 1, 2015 through August 31,
2016. Based on our existing and new service contracts for the
Company’s strategic EdTech offerings, Management anticipates
FY-2017 revenues related to the Company’s EdTech business to
increase by up to 90-100% and could be in the range of up to $ 11.5
- 12.2 million, compared to projected EdTech revenues of
approximately $ 6.0 – 6.3 million for FY-2016. Revenue pertaining
to the Company’s legacy and non-strategic offerings are anticipated
to be in the range of up to $ 250K – 500K, compared to projected
legacy business revenues of approximately $ 1.3 – 1.4 million
for FY-2016. The Company anticipates having positive Adjusted
EBITDA for the full FY-2017.
Hall added, “We have seen good momentum this fiscal year in
terms of both revenue growth and putting ourselves on a path to
profitability as we establish ourselves as an EdTech leader in
helping colleges and universities maximize student success. Our
progress and results for the third quarter support our present
financial outlook for up to 90-100% revenue growth in our core
EdTech business in Fiscal Year 2016.”
The Company believes its financial outlook for FY-2017 is
further bolstered by the recent announcement that it has resolved
litigation that was related to legacy, non-education
operations of Greenwood Hall’s subsidiary, PCS Link, Inc. We
believe the resolution of this matter reduces the uncertainty and
risk that was associated with this particular litigation and
eliminates the material expenditures associated with defending
against the litigation.
Reconciliation of Adjusted EBITDA to Net
Income
|
Three Months
Ended |
Nine Months
Ended |
|
May 31,
2016 |
May 31,
2015 |
May 31,
2016 |
May 31,
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
$ |
(1,526,201 |
) |
$ |
(1,977,200 |
) |
$ |
(7,007,214 |
) |
$ |
(4,771,058 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Expense |
|
222,566 |
|
|
1,031,226 |
|
|
748,992 |
|
|
1,031,326 |
|
Interest
Expense |
|
550,801 |
|
|
198,477 |
|
|
3,240,317 |
|
|
510,275 |
|
Other
Expense |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Transaction
Related Expenses |
|
150,000 |
|
|
- |
|
|
410,000 |
|
|
- |
|
Change in
Value of Derivatives |
|
412,115 |
|
|
57,956 |
|
|
189,380 |
|
|
194,826 |
|
Miscellaneous Income (expense), net |
|
16,482 |
|
|
(10,518 |
) |
|
49,752 |
|
|
21,343 |
|
Total
Adjustments |
|
1,351,964 |
|
|
1,277,141 |
|
|
4,638,441 |
|
|
1,757,770 |
|
ADJUSTED
EBITDA (LOSS) |
$ |
(174,237 |
) |
$ |
(700,059 |
) |
$ |
(2,368,773 |
) |
$ |
(3,013,288 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
About Greenwood Hall, Inc.
Greenwood Hall is an education technology company that helps
colleges and universities manage the student journey. Every
Greenwood Hall solution is designed to increase revenue and improve
student engagement as well as learning outcomes. Since 2006,
Greenwood Hall has developed customized turnkey solutions that
combine strategy, people, proven processes and robust technology to
help schools effectively and efficiently improve student outcomes,
as well as increase revenues and expand into new marketing
channels, such as online learning. Greenwood Hall has served more
than 60 education clients and over 75 degree programs.
For more information, visit http://www.greenwoodhall.com, follow
us on Twitter @GreenwoodHall and Facebook at
http://www.facebook.com/GreenwoodandHall.
Statement Concerning Forward-Looking Information
Any statements made in this press release about Greenwood Hall's
future financial condition, results of operations, expectations,
plans, or prospects, including the information under the heading
"Financial Outlook" constitute forward-looking
statements. Forward-looking statements also include those
preceded or followed by the words "anticipates," "believes,"
"could," "estimates," "expects," "intends," "may," "plans,"
"projects," "should," "targets" and/or similar
expressions. These forward-looking statements are based on
Greenwood Hall's current estimates and assumptions and, as such,
involve uncertainty and risk. Forward-looking statements are not
guarantees of future performance, and actual results may differ
materially from those contemplated by the forward-looking
statements because of a number of factors, including the risk
factors described in Greenwood Hall’s Annual Report on Form 10-K
for the period ended August 31, 2015, that are incorporated herein
by reference. Any forward-looking statement in this release
speaks only as of the date in which it is made. Except to the
extent required under the federal securities laws, Greenwood Hall
does not intend to update or revise the forward-looking
statements.
*Non-GAAP Financial Measures
This press release includes references to Adjusted EBITDA, a
non-GAAP financial measure. Adjusted EBITDA represents our earnings
before interest expense, other income (expense), income
taxes, depreciation and amortization, transactional-related
expenses, stock-based compensation, and changes in the fair value
of our derivative financial instruments. Adjusted EBITDA is a key
measure used by Management and the Board of Directors to understand
and evaluate our core operating performance and trends, to prepare
and approve our annual budget and to develop short and long-term
operational plans. In particular, the exclusion of certain expenses
in calculating Adjusted EBITDA can provide a useful measure for
period-to-period comparisons of our core business. Accordingly, we
believe that Adjusted EBITDA provides useful information to
investors and others in understanding and evaluating our operating
results in the same manner as our Management and Board of
Directors. Adjusted EBITDA should not be considered as an
alternative to any measure of financial performance calculated and
presented in accordance with U.S. GAAP. In addition, Adjusted
EBITDA may not be comparable to similarly titled measures of other
companies because other companies may not calculate Adjusted EBITDA
in the same manner as we do.
Media Contact
John Hall
Chief Executive Officer
Greenwood Hall, Inc.
jhall@greenwoodhall.com
310-907-8200