Revenue Increased by 69.0% and Net Income Increased by
29.0%
Adjusted EBITDA Increased 62.1% Year over Year
FOSHAN, China, Jan. 16, 2020 /PRNewswire/ -- Bright Scholar
Education Holdings Limited ("Bright Scholar," the "Company," "we"
or "our") (NYSE: BEDU), a global premier education service company,
today announced its unaudited financial results for the first
fiscal quarter ended November 30,
2019.
First Fiscal Quarter Ended November
30, 2019 Financial Highlights
(in comparison to the same period of the last fiscal year):
RMB in
million Except
EPS
|
First Fiscal
Quarter Ended November 30,
2019
|
First Fiscal
Quarter Ended November 30,
2018
|
YoY %
Change
|
Revenue
|
1,098.0
|
649.9
|
69.0%
|
Gross
Profit
|
473.8
|
296.6
|
59.7%
|
Gross
Margin
|
43.1%
|
45.6%
|
(2.5%)
|
Operating
Income
|
267.2
|
182.2
|
46.7%
|
Operating
Margin
|
24.3%
|
28.0%
|
(3.7%)
|
Net Income
|
204.3
|
158.3
|
29.0%
|
Net Margin
|
18.6%
|
24.4%
|
(5.8%)
|
|
|
|
|
Adjusted Gross Profit
(1)
|
484.8
|
299.3
|
62.0%
|
Adjusted Gross Margin
(1)
|
44.2%
|
46.1%
|
(1.9%)
|
Adjusted Operating
Income (2)
|
288.3
|
191.4
|
50.6%
|
Adjusted Operating
Margin (2)
|
26.3%
|
29.5%
|
(3.2%)
|
Adjusted Net Income
(3)
|
225.4
|
167.5
|
34.5%
|
Adjusted Net Margin
(3)
|
20.5%
|
25.8%
|
(5.3%)
|
Adjusted EBITDA
(4)
|
352.5
|
217.4
|
62.1%
|
Adjusted EBITDA Margin
(4)
|
32.1%
|
33.5%
|
(1.4%)
|
|
|
|
|
Basic and Diluted
Earnings per Share
|
1.59
|
1.22
|
30.3%
|
Adjusted Basic and
Diluted Earnings per Share (5)
|
1.76
|
1.30
|
35.4%
|
____________________
- Adjusted gross
profit is defined as gross profit excluding amortization of
intangible assets. Adjusted gross margin is defined as adjusted
gross profit/(loss) divided by revenue.
- Adjusted operating
income/(loss) is defined as operating income/(loss) excluding
share-based compensation expense and amortization of intangible
assets. Adjusted operating margin is defined as adjusted operating
income/(loss) divided by revenue.
- Adjusted net
income/(loss) is defined as net income/(loss) excluding share-based
compensation expense and amortization of intangible assets.
Adjusted net margin is defined as adjusted net income/(loss)
divided by revenue.
- Adjusted EBITDA is
defined as net income/(loss) excluding interest income, net; income
tax expense/benefit; depreciation and amortization, and share-based
compensation expense. Adjusted EBITDA margin is defined as adjusted
EBITDA divided by revenue.
- Adjusted basic and
diluted EPS is defined as adjusted net income/(loss) attributable
to ordinary shareholders (net income/(loss) to ordinary
shareholders excluding share-based compensation expense and
amortization of intangible assets) divided by the weighted average
number of basic and diluted ordinary shares or American depositary
shares (each an "ADS"), each representing one Class A ordinary
share of the Company, on an as-converted basis.
For more information
on these adjusted financial measures, please see the section
captioned under "Non-GAAP Financial Measures" and the tables
captioned "Reconciliations of GAAP and Non-GAAP Results" set forth
at the end of this release.
|
|
Domestic K-12 Schools Highlights
(in comparison to the same period of the last fiscal year):
- The domestic K-12 schools comprises of international schools,
bilingual schools and kindergartens in China
- Average number of students increased by 17.4% to 48,645 with
average tuition and fees increased by 3.2% to RMB13,711
- Revenue increased by 21.7% to RMB669.7
million and accounted for 60.9% of total revenue
- Gross margin increased from 47.8% to 48.5%, and operating
margin increased from 34.3% to 37.4%
- Plan to open 7 kindergartens in FY2020, with 4 to be operated
in collaboration with Country Garden
Overseas Schools Highlights
- The overseas schools comprises all overseas schools such as
Bournemouth, St. Michael's, Bosworth and CATS
- The average number of students of our overseas schools amounted
to 3,220
- Revenue from all acquired business(6) fully
reflected in the first fiscal quarter amounted to RMB259.2 million and accounted for 23.6% of total
revenue
- Gross margin was 32.2% for the quarter and operating margin was
3.4% including impact from transition related expenses
____________________
6. Acquired business
is business acquired after FY19 Q1.
|
|
Complementary Education Services Highlights
(in comparison to the same period of the last fiscal year):
- The complementary education services comprises language
training, overseas study counselling, career counselling, study
tours and camps and others
- Revenue increased by 69.7% to RMB169.1
million and accounted for 15.5% of total revenue
- Gross margin increased from 33.7% to 38.6%, and operating
margin increased from 18.1% to 22.3%
"We are very pleased with the tremendous progress we continue to
make as we transform and scale Bright Scholar to better serve the
evolving needs of our students in a fast-changing education
industry," said Jerry He, Executive
Vice Chairman of Bright Scholar. "The strategic investments we made
across our business segments in the past years have given us a
strong start in the 2020 fiscal year. We scaled our business
significantly with acquired business contributed to over
RMB315 million in revenue and
RMB46 million in adjusted EBITDA in
the first fiscal quarter of 2020. Revenue from domestic K-12
schools only accounted for less than 61% of our total revenue in
the first fiscal quarter of 2020. The impact is transformational as
these acquisitions also served as catalysts to expand our
geographic footprint, portfolio, and organization, as well as
business opportunities."
"In the 2020 fiscal year, we remain firmly focused on 3 fronts.
First, capitalize on synergistic opportunities from our domestic
and overseas acquired business. Second, continue our organic growth
initiatives in optimizing operational efficiency, accelerating ramp
up to improve utilization and broadening our service offerings.
Third, continue to pursue strategic investments domestically and
overseas. We are fully committed to delivering sustainable
long-term value for our students, employees, shareholders and
stakeholders."
"We are off to a very strong start in the first fiscal quarter.
Our overall revenue grew by 69.0% and operating income grew by
46.7% year over year," said Derek
Feng, Chief Executive Officer of Bright Scholar. "More
importantly, the revenue and operating income of our China based operations, including domestic
K-12 schools and complementary education services grew 29.1% and
39.3% year over year respectively. The adjusted SG&A of
headquarter(7) as % of total revenue declined by
2.6% year over year. These are the early results from the
operational improvement initiatives that we started last year.
Meanwhile, as we expand our business to reduce risk exposure to
domestic K-12 related regulations as well as enhance competitive
advantages, our overall margin profile is also changing in the near
term driven by the different cost structure of the acquired
overseas business. However, we have a number of operating
initiatives underway including setting up shared-service centre in
the UK to achieve both revenue and cost synergies among all our
business segments that will enhance the overall margin over
time."
____________________
7. The SG&A of
headquarter represents unallocated corporate expenses from
headquarter, including staff cost, share-based compensation expense
and other office expenses. Adjusted SG&A of headquarter are
adjusted by excluding share-based compensation expense.
|
|
"Our performance reflects our commitment to delivering quality
education. As of December 19, 2019,
approximately 57.1% of students in the 2020 graduating class of our
international schools(8) have received over 310 offers
from global top 50 institutions. As of the release date, our
flagship school Guangdong Country Garden School received 3
conditional offers from the University
of Oxford, 3 conditional offers from the University of Cambridge and 1 unconditional offer
from the University of Chicago. We
expect more students will receive offers from these elite
institutions, and the grades of our students will continue to
improve across all age groups."
Mr. Feng concluded, "In the first quarter, we made great strides
in improving school utilization, enhancing cost management,
integrating acquired business and expanding education service
offerings. We are on track to deliver results within our guided
range for the 2020 fiscal year, i.e., annual revenue growth of 56%
to 60%, average student enrollment growth of 14% to 15%, and 7
kindergartens scheduled to open in the 2020 fiscal year."
____________________
UNAUDITED FINANCIAL RESULTS FOR THE FIRST FISCAL QUARTER
ENDED NOVEMBER 30, 2019
Revenue
Revenue
|
First Fiscal
Quarter Ended November 30,
2019
|
First Fiscal
Quarter Ended November 30,
2018
|
YoY %
Change
|
|
(RMB in
million)
|
(RMB in
million)
|
|
Domestic K-12
Schools
|
669.7
|
550.3
|
21.7%
|
International
Schools
|
273.9
|
218.6
|
25.3%
|
Bilingual
Schools
|
229.8
|
194.0
|
18.5%
|
Kindergartens
|
166.0
|
137.7
|
20.5%
|
Overseas
Schools
|
259.2
|
-
|
-
|
Complementary
Education
|
169.1
|
99.6
|
69.7%
|
Total
|
1,098.0
|
649.9
|
69.0%
|
Revenue for the first fiscal quarter was RMB1,098.0 million. It represented a 69.0%
increase from RMB649.9 million for
the same period of the last fiscal year.
Domestic K-12 Schools: Revenue contribution for the
quarter was RMB669.7 million and
accounted for 60.9% of the total revenue. It represented a 21.7%
increase from RMB550.3 million for
the same period of the last fiscal year, which accounted for 84.7%
of the total revenue in that period.
International Schools: Revenue contribution for the
quarter was RMB273.9 million and
accounted for 24.9% of the total revenue. It represented a 25.3%
increase from RMB218.6 million for
the same period of the last fiscal year, which accounted for 33.6%
of the total revenue in that period.
Bilingual Schools: Revenue contribution for the quarter
was RMB229.8 million and accounted
for 20.9% of the total revenue. It represented an 18.5% increase
from RMB194.0 million for the same
period of the last fiscal year, which accounted for 29.9% of the
total revenue in that period.
Kindergartens: Revenue contribution for the quarter was
RMB166.0 million and accounted for
15.1% of the total revenue. It represented a 20.5% increase from
RMB137.7 million for the same period
of the last fiscal year, which accounted for 21.2% of the total
revenue in that period.
Overseas Schools: Revenue for the quarter was
RMB259.2 million, which accounted for
23.6% of total revenue.
Complementary Education: Revenue for the quarter was
RMB169.1 million and accounted for
15.5% of total revenue. It represented a 69.7% increase from
RMB99.6 million for the same period
of the last fiscal year, which accounted for 15.3% of the total
revenue in that period.
Cost of Revenue
Cost of revenue for the quarter was RMB624.2 million, representing a 76.7% increase
from RMB353.3 million for the same
period of the last fiscal year.
Gross Profit, Gross Margin and Adjusted Gross Profit
Gross
Profit
|
First Fiscal
Quarter Ended November 30,
2019
|
First Fiscal
Quarter Ended November 30,
2018
|
YoY %
Change
|
|
(RMB in
million)
|
(RMB in
million)
|
|
Domestic K-12
Schools
|
325.1
|
263.0
|
23.6%
|
International
Schools
|
140.5
|
107.3
|
30.9%
|
Bilingual
Schools
|
103.9
|
87.4
|
18.9%
|
Kindergartens
|
80.7
|
68.3
|
18.1%
|
Overseas
Schools
|
83.4
|
-
|
-
|
Complementary
Education
|
65.3
|
33.6
|
94.4%
|
Total
|
473.8
|
296.6
|
59.7%
|
Gross profit for the quarter was RMB473.8
million. It represented a 59.7% increase from RMB296.6 million for the same period of the last
fiscal year. Gross margin for the quarter was 43.1%, as compared to
45.6% for the same period of the last fiscal year.
Adjusted gross profit for the quarter was RMB484.8 million, representing a 62.0% increase
from RMB299.3 million for the same
quarter of the last fiscal year. Adjusted gross margin was 44.2%
for the quarter, as compared to 46.1% for the same period of the
last fiscal year.
Domestic K-12 Schools: Gross profit for the quarter was
RMB325.1 million, representing a
23.6% increase from RMB263.0 million
for the same period of the last fiscal year. Gross margin for the
quarter was 48.5%, as compared to 47.8% for the same period of the
last fiscal year.
International Schools: Gross profit for the quarter was
RMB 140.5 million, representing a
30.9% increase from RMB107.3 million
for the same period of the last fiscal year. Gross margin for the
quarter was 51.3%, as compared to 49.1% for the same period of the
last fiscal year.
Bilingual Schools: Gross profit for the quarter
was RMB103.9 million, representing an
18.9% increase from RMB87.4 million
for the same period of the last fiscal year. Gross margin for the
quarter was 45.2%, as compared to 45.0% for the same period of the
last fiscal year.
Kindergartens: Gross profit for the quarter was
RMB80.7 million, representing an
18.1% increase from RMB68.3 million
for the same period of the last fiscal year. Gross margin for the
quarter was 48.6%, as compared to 49.6% for the same period of the
last fiscal year.
Overseas Schools: Gross profit for the quarter was
RMB83.4 million, with a gross margin
of 32.2%.
Complementary Education: Gross profit for the quarter was
RMB65.3 million, representing a 94.4%
increase from RMB33.6 million for the
same period of last fiscal year. Gross margin for the quarter was
38.6%, as compared to 33.7% for the same period of the last fiscal
year.
Selling, General and Administrative Expenses and Adjusted
SG&A Expenses (9)
SG&A
Expenses
|
First Fiscal
Quarter Ended November 30, 2019
|
First Fiscal
Quarter Ended November 30, 2018
|
YoY %
Change
|
|
(RMB in
million)
|
(RMB in
million)
|
|
Domestic K-12
Schools
|
75.4
|
74.6
|
1.1%
|
International
Schools
|
30.3
|
27.9
|
8.8%
|
Bilingual
Schools
|
25.7
|
25.9
|
(0.9%)
|
Kindergartens
|
19.4
|
20.8
|
(6.8%)
|
Overseas
Schools
|
74.5
|
-
|
-
|
Complementary
Education
|
29.4
|
15.6
|
88.1%
|
Unallocated
Corporate Expenses (10)
|
30.6
|
31.4
|
(2.6%)
|
Total
|
209.9
|
121.6
|
72.6%
|
|
Adj. SG&A
Expenses (9)
|
First Fiscal
Quarter Ended November 30, 2019
|
First Fiscal
Quarter Ended November 30, 2018
|
YoY %
Change
|
|
(RMB in
million)
|
(RMB in
million)
|
|
Domestic K-12
Schools
|
74.1
|
72.0
|
3.0%
|
International
Schools
|
30.1
|
27.4
|
9.7%
|
Bilingual
Schools
|
25.0
|
24.8
|
0.9%
|
Kindergartens
|
19.0
|
19.8
|
(3.8%)
|
Overseas
Schools
|
74.5
|
-
|
-
|
Complementary
Education
|
28.9
|
13.3
|
117.7%
|
Unallocated
Corporate Expenses (10)
|
22.4
|
29.8
|
(25.2%)
|
Total
|
199.9
|
115.1
|
73.7%
|
Total selling, general and administrative expenses for the
quarter were RMB209.9 million, of
which RMB90.1 million was incremental
from the acquired business, as compared to RMB121.6 million for the same period of the last
fiscal year. These expenses amounted to 19.1% of the total revenue
as compared to 18.7% for the same period of the last fiscal
year.
Adjusted SG&A expenses (9) for the quarter were
RMB199.9 million, as compared to
RMB115.1 million for the same period
of the last fiscal year. These expenses amounted to 18.2% of the
total revenue as compared to 17.7% for the same period of the last
fiscal year.
____________________
9. Adjusted SG&A
expenses is defined as selling, general and administrative expenses
excluding share-based compensation expense.
10. Unallocated corporate expenses are mainly from headquarter,
including staff cost, share-based compensation expense and other
office expenses. Adjusted unallocated corporate expenses are
adjusted by excluding share-based compensation expense.
|
|
Operating Income, Operating Income Margin and Adjusted
Operating Income
Operating
Income
|
First Fiscal
Quarter Ended November 30,
2019
|
First Fiscal
Quarter Ended November 30,
2018
|
YoY %
Change
|
|
(RMB in
million)
|
(RMB in
million)
|
|
Domestic K-12
Schools
|
250.5
|
188.8
|
32.6%
|
International
Schools
|
110.3
|
79.6
|
38.5%
|
Bilingual
Schools
|
78.4
|
61.4
|
27.6%
|
Kindergartens
|
61.8
|
47.8
|
29.3%
|
Overseas
Schools
|
8.8
|
-
|
-
|
Complementary
Education
|
37.7
|
18.1
|
108.5%
|
Unallocated
Corporate Expenses
|
(29.8)
|
(24.7)
|
20.3%
|
Total
|
267.2
|
182.2
|
46.7%
|
Operating income for the quarter was RMB267.2 million. It represents a 46.7% increase
from RMB182.2 million for the same
period of the last fiscal year. Operating margin for the quarter
was 24.3%, as compared to 28.0% for the same period of the last
fiscal year.
Adjusted operating income for the quarter was RMB288.3 million. It represents a 50.6% increase
from RMB191.4 million for the same
quarter of the last fiscal year. Adjusted operating margin was
26.3% for the quarter, as compared to 29.5% for the same period of
the last fiscal year.
Domestic K-12 Schools: Operating income for the quarter
was RMB250.5 million, representing a
32.6% increase from RMB188.8 million
for the same period of the last fiscal year. Operating margin for
the quarter was 37.4%, as compared to 34.3% for the same period of
the last fiscal year.
International Schools: Operating income for the quarter
was RMB110.3 million, representing a
38.5% increase from RMB79.6 million
for the same period of the last fiscal year. Operating margin for
the quarter was 40.3%, as compared to 36.4% for the same period of
the last fiscal year.
Bilingual Schools: Operating income for the quarter was
RMB78.4 million, representing a 27.6%
increase from RMB61.4 million for the
same period of the last fiscal year. Operating margin for the
quarter was 34.1%, as compared to 31.7% for the same period of the
last fiscal year.
Kindergartens: Operating income for the quarter was
RMB61.8 million, representing a 29.3%
increase from RMB47.8 million for the
same period of the last fiscal year. Operating margin for the
quarter was 37.2%, as compared to 34.7% for the same period of the
last fiscal year.
Overseas Schools: Operating income for the quarter
was RMB8.8 million, with an operating
margin of 3.4%.
Complementary Education: Operating income for the quarter
was RMB37.7 million, representing a
108.5% increase from RMB18.1 million
for the same period of the last fiscal year. Operating margin for
the quarter was 22.3%, as compared to 18.1% for the same period of
the last fiscal year.
Unallocated Corporate Expenses: Unallocated corporate
expenses for the quarter was RMB29.8
million, as compared to RMB24.7
million for the same period of the last fiscal year.
Net Income and Adjusted Net Income
Net income for the quarter was RMB204.3
million, representing a 29.0% increase from RMB158.3 million for the same period of the last
fiscal year.
Adjusted net income for the quarter was RMB225.4 million, representing a 34.5% increase
from RMB167.5 million for the same
period of the last fiscal year.
Earnings per ordinary share/ADS and Adjusted Earnings per
ordinary share/ADS
Basic and diluted net income per ordinary share/ADS attributable
to ordinary shareholders/ADS holders for the quarter were
RMB1.59 and RMB1.59, respectively, as compared to earnings
per share of RMB1.22 and RMB1.22, respectively, for the same period of the
last fiscal year.
Adjusted basic and diluted net income per ordinary share/ADS
attributable to ordinary shareholders/ADS holders for the quarter
were RMB1.76 and RMB1.76, respectively, as compared to earnings
per share of RMB1.30 and RMB1.30, respectively, for the same period of the
last fiscal year.
Adjusted EBITDA
Adjusted EBITDA for the quarter was RMB352.5 million, of which RMB46.4 million was attributable to acquired
business, representing a 62.1% increase from RMB217.4 million for the same period of the last
fiscal year.
Cash and Working Capital
As of November 30, 2019, the
Company's cash and cash equivalents and restricted cash were
RMB2,426.6 million (US$345.1 million), as compared to RMB3,265.0 million as of August 31, 2019. For the first quarter ended
November 30, 2019, the Company's
capital expenditure was approximately RMB60.9 million, up 90.8% compared to the same
period of the last fiscal year.
New Accounting Standards
On September 1, 2019, the Company
adopted the new lease accounting standard (ASC 842), using modified
retrospective transition method. The adoption of the new lease
standard results in the recording of operating lease right-of-use
assets of RMB1,756.3 million and
operating lease liabilities of RMB1,753.9
million on the balance sheet as of September 1, 2019. Prior period amounts have not
been adjusted and continue to be reported in accordance with the
previous accounting guidance. The adoption of the new guidance did
not have a material effect on the consolidated statements of
operations and consolidated statements of cash flows.
GUIDANCE FOR FISCAL YEAR ENDING AUGUST
31, 2020
The Company reaffirms its guidance for the 2020 fiscal year and
expects its revenue to be in a range of RMB4.0 billion and RMB4.1
billion for the 2020 fiscal year, representing a
year-over-year growth of 56% to 60%, and its average student
enrollment to be between approximately 53,200 and 53,600,
representing a year-over-year increase of 14% to 15%. The Company
also expects to open seven new kindergartens for the 2020 fiscal
year.
This guidance is based on the current market and operating
conditions and reflects the Company's current and preliminary
estimates of such market and operating conditions and market
demand, which are all subject to change.
Conference Call
BEDU's management will host a conference call at 8:00 am US Eastern Time (9:00 pm Beijing/Hong Kong Time) on January 17, 2020 to discuss its quarterly results
and recent business activities.
To participate in the conference call, please dial the following
number five to ten minutes prior to the scheduled conference call
time:
Mainland
China:
|
4001-201-203
|
Hong Kong:
|
852-301-84992
|
United
States:
|
1-888-346-8982
|
Canada Toll
Free:
|
1-855-669-9657
|
International:
|
1-412-902-4272
|
*No passcode is required for the call. Please request to join
Bright Scholar Education Holdings Ltd.'s call as you dial in.
The Company will also broadcast a live audio webcast of the
conference call. The webcast will be available at
http://ir.brightscholar.com/.
Following the earnings conference call, an archive of the call
will be available by dialing:
United
States:
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Canada Toll
Free:
|
855-669-9658
|
Replay
Passcode:
|
10137574
|
Replay End
Date:
|
January 24,
2020
|
CONVENIENCE TRANSLATION
The Company's business is primarily conducted in China and the significant majority of revenue
generated are denominated in Renminbi ("RMB"). However, periodic
reports made to shareholders will include current period amounts
translated into U.S. dollars using the prevailing exchange rates at
the balance sheet date, for the convenience of readers.
Translations of balances in the condensed consolidated balance
sheets, and the related condensed consolidated statements of
operations, and cash flows from RMB into U.S. dollars as of and for
the quarter ended November 30, 2019
are solely for the convenience of the readers and were calculated
at the rate of US$1.00=RMB7.0308, representing the noon buying rate set
forth in the H.10 statistical release of the U.S. Federal Reserve
Board on November 29, 2019. No
representation is made that the RMB amounts could have been, or
could be, converted, realized or settled into US$ at that rate on
November 29, 2019 or at any other
rate.
NON-GAAP FINANCIAL MEASURES
In evaluating our business, we consider and use certain non-GAAP
measures, including primarily adjusted EBITDA, adjusted net
income/(loss), adjusted gross profit/(loss), adjusted SG&A,
adjusted operating income/(loss), adjusted net earnings per share
attributable to ordinary shareholders basic and diluted as
supplemental measures to review and assess our operating
performance. The presentation of these non-GAAP financial measures
is not intended to be considered in isolation or as a substitute
for the financial information prepared and presented in accordance
with U.S. GAAP. We define adjusted gross profit/(loss) as gross
profit/(loss) excluding amortization of intangible assets and
adjusted gross margin as adjusted gross profit/(loss) divided by
revenue. We define adjusted EBITDA as net income/(loss) excluding
interest income, net; income tax expense/benefit; depreciation and
amortization; share-based compensation expense, and adjusted net
income/(loss) as net income/(loss) excluding share-based
compensation expense and amortization of intangible assets. We
define adjusted SG&A as selling, general and administration
expense excluding share-based compensation expense and adjusted
operating income/(loss) as net operating income/(loss) excluding
share-based compensation expense and amortization of intangible
assets. Additionally, we define adjusted net earnings per share
attributable to ordinary shareholders, basic and diluted, as
adjusted net income/(loss) attributable to ordinary shareholders
(net income/(loss) to ordinary shareholders excluding share-based
compensation expense and amortization of intangible assets) divided
by the weighted average number of basic and diluted ordinary shares
or American depositary shares (each an "ADS"), each representing
one Class A ordinary share of the Company, on an as-converted
basis.
We incur amortization expense of intangible assets related to
various acquisitions that have been made in recent years. These
intangible assets are valued at the time of acquisition and are
then amortized over a period of several years after the
acquisition. We believe that exclusion of these expenses allows
greater comparability of operating results that are consistent over
time for the Company's newly-acquired and long-held business as the
related intangibles does not have significant connection to the
growth of the business. Therefore, we provide additional exclusion
of amortization of intangible assets to redefine adjusted operating
income/(loss), adjusted net income/(loss), and adjusted net
earnings per share attributable to ordinary shareholders, basic and
diluted.
We present the non-GAAP financial measures because they are used
by our management to evaluate our operating performance and
formulate business plans. Such non-GAAP measures include adjusted
EBITDA, adjusted net income/(loss), adjusted gross profit/(loss),
adjusted SG&A, adjusted operating income/(loss), adjusted net
earnings per share attributable to ordinary shareholders basic and
diluted. Non-GAAP financial measures enable our management to
assess our operating results without considering the impact of
non-cash charges, including depreciation and amortization and
share-based compensation expense, and without considering the
impact of non-operating items such as interest income, net; income
tax expense/benefit and share-based compensation expense and
amortization of intangible assets. We also believe that the use of
these non-GAAP measures facilitates investors' assessment of our
operating performance.
The non-GAAP financial measures are not defined under U.S. GAAP
and are not presented in accordance with U.S. GAAP. The non-GAAP
financial measures have limitations as analytical tools. One of the
key limitations of using these non-GAAP financial measures is that
they do not reflect all items of income and expense that affect our
operations. Interest income, net; income tax expense/benefit;
depreciation and amortization; and share-based compensation
expense, have been and may continue to be incurred in our business
and are not reflected in the presentation of these non-GAAP
measures, including adjusted EBITDA or adjusted net income/(loss).
Further, these non-GAAP measures may differ from the non-GAAP
information used by other companies, including peer companies, and
therefore their comparability may be limited.
About Bright Scholar Education Holdings
Limited
Bright Scholar is a global premier education service company.
The Company is dedicated to providing quality international
education to global students and equipping them with the critical
academic foundation and skillsets necessary to succeed in the
pursuit of higher education. Bright Scholar also complements its
international offerings with Chinese government-mandated curriculum
for students who wish to maintain the option of pursuing higher
education in China. As of
November 30, 2019, Bright Scholar
operated 80 schools across ten provinces in China and eight schools overseas, covering the
breadth of K-12 academic needs of its students. In the quarter
ended November 30, 2019, Bright
Scholar had an average of 51,865 students enrolled at its schools.
As of November 30, 2019, Bright
Scholar has a global network of 88 schools, and a total student
capacity of 67,194 students.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements include,
without limitation, the Company's business plans and development,
which can be identified by terminology such as "may," "will,"
"expect," "anticipate," "aim," "estimate," "intend," "plan,"
"believe," "potential," "continue," "is/are likely to" or other
similar expressions. Such statements are based upon management's
current expectations and current market and operating conditions
and relate to events that involve known or unknown risks,
uncertainties and other factors, all of which are difficult to
predict and many of which are beyond the Company's control, which
may cause the Company's actual results, performance or achievements
to differ materially from those in the forward-looking statements.
Further information regarding these and other risks, uncertainties
or factors is included in the Company's filings with the U.S.
Securities and Exchange Commission. The Company does not undertake
any obligation to update any forward-looking statement as a result
of new information, future events or otherwise, except as required
under law.
IR Contact:
GCM Strategic Communications
Email:
BEDU.IR@gcm.international
Media Contact:
Email: media@brightscholar.com
Phone: +86-757-6683-2507
BRIGHT SCHOLAR
EDUCATION HOLDINGS LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
August
31,
|
|
November
30,
|
|
|
|
2019
|
|
2019
|
|
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
3,246,995
|
|
2,402,639
|
|
341,731
|
|
|
Restricted
cash
|
18,019
|
|
23,911
|
|
3,401
|
|
|
Short-term
investments
|
241,270
|
|
610,119
|
|
86,778
|
|
|
Accounts
receivable
|
21,528
|
|
54,528
|
|
7,756
|
|
|
Amounts due from
related parties
|
10,652
|
|
10,002
|
|
1,423
|
|
|
Other receivables,
deposits and other assets
|
177,150
|
|
202,763
|
|
28,839
|
|
|
Inventories
|
26,234
|
|
27,468
|
|
3,906
|
|
Total current
assets
|
3,741,848
|
|
3,331,430
|
|
473,834
|
|
|
Property and
equipment, net
|
899,510
|
|
1,097,387
|
|
156,083
|
|
|
Land use rights,
net
|
88,204
|
|
87,672
|
|
12,470
|
|
|
Intangible assets,
net
|
552,011
|
|
608,714
|
|
86,578
|
|
|
Goodwill
|
2,090,078
|
|
2,277,220
|
|
323,892
|
|
|
Long-term
investments
|
28,455
|
|
28,714
|
|
4,084
|
|
|
Prepayment for
construction contract
|
5,251
|
|
13,386
|
|
1,904
|
|
|
Deferred tax assets,
net
|
30,333
|
|
26,978
|
|
3,837
|
|
|
Deposit for
acquisition
|
338,585
|
|
-
|
|
-
|
|
|
Other non-current
assets
|
13,362
|
|
14,210
|
|
2,021
|
|
|
Operating lease
right-of-use assets
|
-
|
|
1,822,102
|
|
259,160
|
|
Total non-current
assets
|
4,045,789
|
|
5,976,383
|
|
850,029
|
TOTAL
ASSETS
|
7,787,637
|
|
9,307,813
|
|
1,323,863
|
BRIGHT SCHOLAR
EDUCATION HOLDINGS LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS-CONTINUED
|
(Amounts in
thousands)
|
|
|
|
|
As
of
|
|
|
|
August
31,
|
|
November
30,
|
|
|
|
2019
|
|
2019
|
|
|
|
RMB
|
|
RMB
|
|
USD
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable
(including accounts payable of the
consolidated VIEs without recourse to Bright
Scholar
Education of RMB 32,842 and RMB 45,717 as of
August
31, 2019 and November 30, 2019,
respectively)
|
94,295
|
|
126,745
|
|
18,027
|
|
|
Amounts due to
related parties (including amounts due to
related parties of the consolidated VIEs without recourse
to
Bright Scholar Education of RMB 76,117 and RMB 81,289
as
of August 31, 2019 and November 30, 2019, respectively)
|
110,038
|
|
115,123
|
|
16,374
|
|
|
Accrued expenses and
other current liabilities (including
accrued expenses and other current liabilities of the
consolidated VIEs without recourse to Bright Scholar
Education of RMB 364,734 and RMB 193,837 as of August
31, 2019 and November 30, 2019, respectively)
|
615,082
|
|
518,371
|
|
73,729
|
|
|
Short term
loan
|
50,000
|
|
50,000
|
|
7,112
|
|
|
Income tax payable
(including income tax payable of the
consolidated VIEs without recourse to Bright Scholar
Education of RMB 50,968 and RMB 85,496 as of August 31,
2019 and November 30, 2019, respectively)
|
93,479
|
|
136,789
|
|
19,456
|
|
|
Contract liabilities
(including contract liabilities of the
consolidated VIEs without recourse to Bright Scholar
Education of RMB 1,157,774 and RMB 600,811 as of
August 31, 2019 and November 30, 2019, respectively)
|
1,529,137
|
|
974,381
|
|
138,588
|
|
|
Refund liabilities
(including refund liabilities of the
consolidated VIEs without recourse to Bright Scholar
Education of RMB 19,132 and RMB 3,905 as of August 31,
2019 and November 30, 2019, respectively)
|
20,259
|
|
4,664
|
|
663
|
|
|
Operating lease
liabilities (including operating lease liabilities
of
the consolidated VIEs without recourse to Bright Scholar
Education of nil and RMB 31,290 as of August 31, 2019
and
November 30, 2019, respectively)
|
-
|
|
158,343
|
|
22,520
|
|
Total current
liabilities
|
2,512,290
|
|
2,084,416
|
|
296,469
|
|
|
Non-current portion
of deferred revenue (including non-current
portion of deferred revenue of the consolidated VIEs
without recourse to Bright Scholar Education of nil and
RMB 2,127 as of August 31, 2019 and November 30, 2019,
respectively)
|
-
|
|
4,997
|
|
711
|
|
|
Deferred tax
liabilities, net (including deferred tax liabilities of
the consolidated VIEs without recourse to Bright Scholar
Education of RMB 35,895 and RMB 40,881 as of August
31, 2019 and November 30, 2019, respectively)
|
53,689
|
|
63,785
|
|
9,072
|
|
|
Other non-current
liability due to related parties (including non-
current liabilities due to related parties of the
consolidated
VIEs without recourse to Bright Scholar Education of RMB
21,736 and RMB 22,153 as of August 31, 2019 and
November 30, 2019, respectively)
|
21,736
|
|
22,153
|
|
3,151
|
|
|
Other non-current
liability due to third parties (including non-
current liabilities due to third parties of the
consolidated
VIEs without recourse to Bright Scholar Education of RMB
7,621 and RMB 9,972 as of August 31, 2019 and November
30, 2019, respectively)
|
10,654
|
|
12,527
|
|
1,782
|
|
|
Bonds
payable
|
2,106,000
|
|
2,072,685
|
|
294,801
|
|
|
Long term loan
(including long term loan of the consolidated
VIEs without recourse to Bright Scholar Education of nil
and RMB 15,000 as of August 31, 2019 and November 30,
2019, respectively)
|
-
|
|
85,000
|
|
12,090
|
|
|
Operating lease
liabilities (including operating lease liabilities
of
the consolidated VIEs without recourse to Bright Scholar
Education of nil and RMB 1,657,429 as of August 31, 2019
and November 30, 2019, respectively)
|
-
|
|
1,677,555
|
|
238,601
|
|
Total non-current
liabilities
|
2,192,079
|
|
3,938,702
|
|
560,208
|
TOTAL
LIABILITIES
|
4,704,369
|
|
6,023,118
|
|
856,677
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
August
31,
|
|
November
30,
|
|
|
|
2019
|
|
2019
|
|
|
|
RMB
|
|
RMB
|
|
USD
|
EQUITY
|
|
|
|
|
|
|
|
|
Share
capital
|
8
|
|
8
|
|
1
|
|
|
Additional paid-in
capital
|
2,105,189
|
|
2,028,913
|
|
288,575
|
|
|
Statutory
reserves
|
64,945
|
|
64,945
|
|
9,237
|
|
|
Accumulated other
comprehensive income
|
78,955
|
|
157,898
|
|
22,458
|
|
|
Accumulated retained
earnings
|
472,339
|
|
663,625
|
|
94,388
|
|
Shareholders'
equity
|
2,721,436
|
|
2,915,389
|
|
414,659
|
|
Non-controlling
interests
|
361,832
|
|
369,306
|
|
52,527
|
|
Total
equity
|
3,083,268
|
|
3,284,695
|
|
467,186
|
TOTAL LIABILITIES
AND EQUITY
|
7,787,637
|
|
9,307,813
|
|
1,323,863
|
BRIGHT SCHOLAR
EDUCATION HOLDINGS LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Amounts in
thousands, except for shares and per share data)
|
|
|
|
|
|
|
|
Three Months Ended
November 30
|
|
2018
|
|
2019
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
Revenue
|
649,852
|
|
1,097,953
|
|
156,163
|
Cost of
revenue
|
(353,264)
|
|
(624,202)
|
|
(88,781)
|
Gross
profit
|
296,588
|
|
473,751
|
|
67,382
|
Selling, general and
administrative expenses
|
(121,634)
|
|
(209,930)
|
|
(29,859)
|
Other operating
income
|
7,256
|
|
3,419
|
|
487
|
Operating
income
|
182,210
|
|
267,240
|
|
38,010
|
Interest
income/(expense), net
|
12,245
|
|
(29,588)
|
|
(4,208)
|
Investment
income
|
5,440
|
|
21,032
|
|
2,991
|
Other
(expenses)/income
|
(1,024)
|
|
3,642
|
|
518
|
Income before income
taxes and share of equity in income of unconsolidated
affiliates
|
198,871
|
|
262,326
|
|
37,311
|
Income tax
expense
|
(40,597)
|
|
(58,015)
|
|
(8,252)
|
Share of equity in
income/(loss) of unconsolidated affiliates
|
25
|
|
(27)
|
|
(3)
|
Net
income
|
158,299
|
|
204,284
|
|
29,056
|
Net income
attributable to non-controlling interests
|
5,711
|
|
12,998
|
|
1,849
|
Net income
attributable to ordinary shareholders
|
152,588
|
|
191,286
|
|
27,207
|
|
|
|
|
|
|
Net earnings per
share attributable to ordinary shareholders
|
|
|
|
|
|
—Basic
|
1.22
|
|
1.59
|
|
0.23
|
—Diluted
|
1.22
|
|
1.59
|
|
0.23
|
|
|
|
|
|
|
Weighted average
shares used in calculating net earnings per ordinary
share:
|
|
|
|
|
|
—Basic
|
124,884,908
|
|
120,584,500
|
|
120,584,500
|
—Diluted
|
124,945,468
|
|
120,631,807
|
|
120,631,807
|
BRIGHT SCHOLAR
EDUCATION HOLDINGS LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
Three Months Ended
November 30
|
|
2018
|
|
2019
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
Net cash used in
operating activities
|
(293,633)
|
|
(399,757)
|
|
(56,857)
|
Net cash used in
investing activities
|
(322,804)
|
|
(406,412)
|
|
(57,805)
|
Net cash used in from
financing activities
|
(148,219)
|
|
(1,183)
|
|
(168)
|
Effect of exchange
rate changes on cash
|
28,893
|
|
(31,112)
|
|
(4,425)
|
Net change in cash
and cash equivalents, and restricted cash
|
(735,763)
|
|
(838,464)
|
|
(119,255)
|
Cash and cash
equivalents, and restricted cash at beginning of the
period
|
3,164,081
|
|
3,265,014
|
|
464,387
|
Cash and cash
equivalents, and restricted cash at end of the period
|
2,428,318
|
|
2,426,550
|
|
345,132
|
Reconciliations of
GAAP and Non-GAAP Results
|
(Amounts in
thousands, except for shares and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
November 30
|
|
|
2018
|
|
2019
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
|
Gross
profit
|
296,588
|
|
473,751
|
|
67,382
|
|
Add: Amortization of
intangible assets
|
2,680
|
|
11,040
|
|
1,570
|
Adjusted gross
profit
|
299,268
|
|
484,791
|
|
68,952
|
|
|
|
|
|
|
|
Operating
income
|
182,210
|
|
267,240
|
|
38,010
|
|
Add: Share-based
compensation expense
|
6,549
|
|
10,032
|
|
1,427
|
|
Add: Amortization of
intangible assets
|
2,680
|
|
11,040
|
|
1,570
|
Adjusted operating
income
|
191,439
|
|
288,312
|
|
41,007
|
|
|
|
|
|
|
|
Net
income
|
158,299
|
|
204,284
|
|
29,056
|
|
Add: Share-based
compensation expense
|
6,549
|
|
10,032
|
|
1,427
|
|
Add: Amortization of
intangible assets
|
2,680
|
|
11,040
|
|
1,570
|
Adjusted net
income
|
167,528
|
|
225,356
|
|
32,053
|
|
|
|
|
|
|
|
Net income
attributable to ordinary shareholders
|
152,588
|
|
191,286
|
|
27,207
|
|
Add: Share-based
compensation expense
|
6,549
|
|
10,032
|
|
1,427
|
|
Add: Amortization of
intangible assets
|
2,680
|
|
11,040
|
|
1,570
|
Adjusted net
income attributable to ordinary shareholders
|
161,817
|
|
212,358
|
|
30,204
|
|
|
|
|
|
|
|
Net
income
|
158,299
|
|
204,284
|
|
29,056
|
|
Less: Interest
income/(expense), net
|
12,245
|
|
(29,588)
|
|
(4,208)
|
|
Add: Income tax
expense
|
40,597
|
|
58,015
|
|
8,252
|
|
Add: Depreciation and
amortization
|
24,211
|
|
50,580
|
|
7,194
|
|
Add: Share-based
compensation expense
|
6,549
|
|
10,032
|
|
1,427
|
Adjusted
EBITDA
|
217,411
|
|
352,499
|
|
50,137
|
|
|
|
|
|
|
|
Selling, general
and administrative expenses
|
121,634
|
|
209,930
|
|
29,859
|
|
Less: Share-based
compensation expense
|
6,549
|
|
10,032
|
|
1,427
|
Adjusted selling,
general and administrative expenses
|
115,085
|
|
199,898
|
|
28,432
|
|
|
|
|
|
|
|
Weighted average
shares used in calculating earnings per ordinary share:
|
|
|
|
|
|
—Basic
|
124,884,908
|
|
120,584,500
|
|
120,584,500
|
—Diluted
|
124,945,468
|
|
120,631,807
|
|
120,631,807
|
|
|
|
|
|
|
|
Adjusted net earnings
per share attributable to ordinary shareholders
|
|
|
|
|
|
—Basic
|
1.30
|
|
1.76
|
|
0.25
|
—Diluted
|
1.30
|
|
1.76
|
|
0.25
|
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content:http://www.prnewswire.com/news-releases/bright-scholar-announces-unaudited-financial-results-for-fy2020-first-fiscal-quarter-300988524.html
SOURCE Bright Scholar Education Holdings Ltd.