Bright Scholar Announces Unaudited Financial Results for the Fourth Fiscal Quarter and Fiscal Year 2023

Rhea-AI Summary

Bright Scholar Education Holdings Limited (BEDU) announced unaudited financial results for Q4 and fiscal year ended August 31, 2023. Revenue for Q4 increased by 38.9% to RMB 559.8 million, and for the fiscal year by 23.9% to RMB 2,123.8 million. Overseas Schools and Complementary Education Services segments showed significant growth, but Domestic Kindergartens & K-12 Operation Services faced challenges. The company reported a net loss for both Q4 and the fiscal year, with improvements in losses compared to the previous year.

Positive

• Revenue for Q4 and the fiscal year increased by 38.9% and 23.9%, respectively
• Overseas Schools and Complementary Education Services segments showed significant revenue growth
• Net loss for Q4 and the fiscal year decreased compared to the previous year

Negative

• Operating and net losses decreased significantly by 52.5% and 47.1% respectively
• Domestic Kindergartens & K-12 Operation Services segment faced challenges with flat revenue in Q4 and only 10.3% growth for the fiscal year

FOSHAN, China, Nov. 27, 2023 /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 fourth fiscal quarter and fiscal year ended August 31, 2023.

FINANCIAL PERFORMANCE HIGHLIGHTS

Fourth Fiscal Quarter Ended August 31, 2023 Financial Highlights  

(in comparison to the same period of the last fiscal year):

RMB in millions Except EPS and %	Fourth Fiscal Quarter Ended August 31, 2023	Fourth Fiscal Quarter Ended August 31, 2022	YoY % Change
Revenue	559.8	402.9	38.9 %
Gross Profit	109.1	82.3	32.5 %
Gross Margin	19.5 %	20.4 %	(0.9 %)
Operating Loss	(286.2)	(602.9)	52.5 %
Operating Margin	(51.1 %)	(149.6 %)	98.5 %
Net Loss for the quarter	(340.3)	(643.5)	47.1 %
Adjusted Gross Profit (1)	112.8	86.3	30.7 %
Adjusted Operating Loss (2)	(57.2)	(50.3)	(13.6 %)
Adjusted Net Loss (3) for the quarter	(111.9)	(91.8)	(21.9 %)
Adjusted EBITDA (4) for the quarter	(43.7)	(49.7)	12.0 %
Basic and Diluted Loss per Share	(2.90)	(5.49)	47.2 %
Adjusted Basic and Diluted Loss per Share (5) for the quarter	(0.98)	(0.84)	(16.7 %)
Basic and Diluted Loss per ADS	(11.60)	(21.96)	47.2 %
Adjusted Basic and Diluted Loss per ADS (6) for the quarter	(3.92)	(3.36)	(16.7 %)

 

Fiscal Year 2023 Ended August 31, 2023 Financial Highlights  

(in comparison to the last fiscal year):

RMB in millions Except EPS and %	Fiscal Year 2023 Ended August 31, 2023	Fiscal Year 2022 Ended August 31, 2022	YoY % Change
Revenue	2,123.8	1,714.0	23.9 %
Gross Profit	597.3	476.7	25.3 %
Gross Margin	28.1 %	27.8 %	0.3 %
Operating Loss	(186.6)	(606.5)	69.2 %
Operating Margin	(8.8 %)	(35.4 %)	26.6 %
Net Loss for the year	(386.8)	(703.5)	45.0 %
Adjusted Gross Profit (1)	612.2	494.5	23.8 %
Adjusted Operating Income/(Loss) (2)	53.7	(40.9)	231.4 %
Adjusted Net Loss (3) for the year	(149.4)	(141.7)	(5.5 %)
Adjusted EBITDA (4) for the year	115.8	147.0	(21.2 %)
Basic and Diluted Loss per Share	(3.33)	(5.98)	44.3 %
Adjusted Basic and Diluted Loss per Share (5) for the year	(1.33)	(1.24)	(7.3 %)
Basic and Diluted Loss per ADS	(13.32)	(23.92)	44.3 %
Adjusted Basic and Diluted Loss per ADS (6) for the year	(5.32)	(4.96)	(7.3 %)

 

1.   Adjusted gross profit/(loss) is defined as gross profit/(loss) excluding amortization of intangible assets.

2.   Adjusted operating income/(loss) is defined as operating income/(loss) excluding share-based compensation expense, amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment.

3.   Adjusted net income/(loss) is defined as net income/(loss) excluding share-based compensation expense, amortization of intangible assets, tax effect of amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment and impairment loss on property and equipment.

4.   Adjusted EBITDA is defined as net income/(loss) excluding interest income/(expense), net, income tax expense/benefit; depreciation and amortization, share-based compensation expense, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment.

5.   Adjusted basic and diluted earnings/(loss) per share is defined as adjusted net income/(loss) attributable to ordinary shareholders (net income/(loss) attributable to ordinary shareholders excluding share-based compensation expense, amortization of intangible assets, tax effect of amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment,  and impairment loss on property and equipment) divided by the weighted average number of basic and diluted ordinary shares.

6.   Adjusted basic and diluted earnings/(loss) per American depositary share ("ADS") is defined as adjusted net income/(loss) attributable to ADS shareholders (net income/(loss) attributable to ADS shareholders excluding share-based compensation expense, amortization of intangible assets, tax effect of amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment)) divided by the weighted average number of basic and diluted ADSs. The number of shares used in calculating basic and diluted earnings/(loss) per ADS have been retrospectively adjusted to reflect the ADS ratio change from one ADS representing one Class A ordinary share to one ADS representing four Class A ordinary shares, which became effective on August 19, 2022.

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.

 

Overseas Schools (CATS Global Schools)

CATS Global Schools included 3 Stafford House locations in UK, 4 CATS Colleges in US and UK, Cambridge School of Visual & Performing Arts and 3 independent boarding schools in UK as of August 31, 2023.

• For the fourth fiscal quarter, revenue amounted to RMB184.8 million, representing a 51.9% increase compared to RMB121.6 million in the same fiscal quarter last year, and accounted for 33.0% of the total revenue.
• For the fiscal year, revenue amounted to RMB809.5 million, representing a 24.0% increase compared to RMB652.8 million for the last fiscal year, and accounted for 38.1% of the total revenue.

Complementary Education Services 

The complementary education services business comprised language training, overseas study counselling, career counselling, study tour and camps as well as international contest training and others.

• For the fourth fiscal quarter, revenue amounted to RMB273.2 million, representing a 52.0% increase compared to RMB179.7 million in the same fiscal quarter last year, and accounted for 48.8% of the total revenue.
• For the fiscal year, revenue amounted to RMB846.0 million, representing a 32.9% increase compared to RMB636.6 million for the last fiscal year, and accounted for 39.8% of the total revenue.

Domestic Kindergartens & K-12 Operation Services 

The domestic kindergartens & K-12 operation services business comprises of for-profit kindergartens and operation services for students of the domestic K-12 schools including catering and procurement services. 

• For the fourth fiscal quarter, revenue amounted to RMB101.8 million, representing a 0.2% increase compared to RMB101.6 million in the same fiscal quarter last year, and accounted for 18.2% of the total revenue.
• For the fiscal year, revenue amounted to RMB468.3 million, representing a 10.3% increase compared to RMB424.6 million for the last fiscal year, and accounted for 22.1% of the total revenue.

MANAGEMENT COMMENTARY

"We concluded the fiscal year 2023 on a strong note, with total revenue greatly exceeding the top end of our guidance and bottom-line results surpassing internal expectations," said Mr. Tim Hongru Zhou, Chair and Chief Executive Office of Bright Scholar. "This marked a pivotal year for our company as we undertook steps to turnaround our core businesses and reposition ourselves for long-term success. These steps included strengthening our management team, refreshing our Board of Directors, establishing a cost-competitive base, and enhancing our financial sustainability. These actions have enabled us to refocus our vision on high-return businesses and consistently execute our financial and strategic objectives. To pursue greater efficiency and realign our portfolio of businesses and strategic priorities, we implemented a multi-year strategic plan for financial and operational improvement."

"These efforts yielded tremendous results in fiscal year 2023 and laid foundation for strengthening our balance sheet and financial profile in the coming quarters and fiscal years," Mr. Zhou continued. "During the fiscal fourth quarter of 2023, our revenue grew by an impressive 38.9%, with a 32.5% increase in gross profit. Furthermore, our operating and net losses decreased significantly by 52.5% and 47.1% respectively. Looking at the full fiscal year, we achieved a year-over-year revenue growth of 23.9%, surpassing our top-end guidance. Additionally, our gross profit grew by 25.3%, and our operating and net losses improved substantially by 69.2% and 45.0% respectively."

"The Overseas School segment played a significant role in our strong business performance, demonstrating continued recovery and growth traction. In the fourth fiscal quarter, revenue increased by 51.9%, and for the full fiscal year, it grew by 24.0%. This segment continues to be a major contributor to our improved bottom line as our operating leverage significantly increased. The Complementary Education Services segment also experienced strong revenue growth in the fiscal quarter of 52.0% and for the fiscal year of 32.9%. This growth was driven by performances across our core businesses. However, our Domestic Kindergartens & K-12 Operation Services segment faced challenges, with flat revenue in the fiscal quarter and only 10.3% growth for the fiscal year. We anticipate this segment will continue to encounter headwinds, resulting in a downward revenue trend heading into fiscal year 2024."

"Our relentless focus on executing our turnaround strategy in fiscal year 2023 enabled us to conclude the fiscal year strongly and positioned ourselves for a transformational fiscal year 2024. As we move forward, we will advance our transformation by intensifying the restructuring of our business portfolio, to be driven by three strategic imperatives. Firstly, we will prioritize our most promising businesses and capitalize on large market opportunities, particularly within the Overseas Schools segment. Secondly, we will further enhance the performance of our portfolio by divesting non-core education businesses in the Complementary Education Service and Domestic Kindergartens & K-12 Operation Services segments. And thirdly, we will continuously streamline our global operations and right-size our cost structure to align with these portfolio actions."

"These strategic priorities of focusing on high-growth and high-return businesses and strengthening our balance sheet are crucial in improving the efficiency and returns of our portfolio of businesses. They will position us favorably to pursue scalable expansion with higher financial predictability in fiscal years 2025 and 2026. Our goal remains maximizing value creation for our shareholders and delivering impact for all stakeholders. The actions we are taking will materially improve our margins and balance sheets in fiscal years 2024, paving the way for sustained, profitable growth in the years to come." Mr. Zhou concluded.

GUIDANCE AND QUARTERLY REPORTING FOR FISCAL YEAR 2024

Given the uncertainties around the scope, timing and impact of portfolio actions, the management is currently not in a position to provide a meaningful estimate of the Company's future financial performance. For that reason, the Company has decided not to provide a revenue guidance for fiscal year 2024.

The Company is committed to keeping our shareholders and stakeholders well-informed of any developments. Therefore, we will resume quarterly earnings reporting in fiscal year 2024, ensuring transparency and providing regular updates.

UNAUDITED FINANCIAL RESULTS FOR THE FOURTH FISCAL QUARTER ENDED AUGUST 31, 2023

Revenue

Revenue for the fourth fiscal quarter was RMB559.8 million, representing a 38.9% increase from RMB402.9 million for the same quarter of the last fiscal year.

Overseas Schools: Revenue contribution for the fourth fiscal quarter was RMB184.8 million, representing a 51.9% increase from RMB121.6 million for the same quarter of the last fiscal year. The increase was mainly attributable to the continuous recovery of overseas schools' operation from the pandemic.

Complementary Education Services: Revenue contribution for the fourth fiscal quarter was RMB273.2 million, representing a 52.0% increase from RMB179.7 million for the same quarter of the last fiscal year. The increase was mainly attributable to the continuous recovery of study tour and camps, international contest training and other complementary business.

Domestic Kindergartens & K-12 Operation Services: Revenue contribution for the fourth fiscal quarter was RMB101.8 million, representing a 0.2% increase from RMB101.6 million for the same quarter of the last fiscal year. The increase was primarily driven by the short term rebound of various service revenues.

Cost of Revenue

Cost of revenue for the fourth fiscal quarter was RMB450.7 million, as compared to RMB320.6 million for the same quarter of the last fiscal year.

Gross Profit, Gross Margin and Adjusted Gross Profit

Gross profit for the fourth fiscal quarter was RMB109.1 million, representing a 32.5% increase from RMB82.3 million for the same quarter of the last fiscal year. Gross margin for the fourth quarter was 19.5%, as compared to 20.4% for the same quarter of the last fiscal year.

Adjusted gross profit for the fourth fiscal quarter was RMB112.8 million, representing a 30.7% increase from RMB86.3 million for the same quarter of the last fiscal year.

Selling, General and Administrative (SG&A) Expenses

Total SG&A expenses for the fourth fiscal quarter were RMB176.8 million, as compared to RMB137.8 million for the same quarter of the last fiscal year.

Operating Loss, Operating Margin and Adjusted Operating Loss

Operating loss for the fourth fiscal quarter was RMB286.2 million, representing a 52.5% decrease in loss from operating loss of RMB602.9 million for the same quarter of the last fiscal year. Operating loss margin was 51.1% for the fourth fiscal quarter, as compared to operating loss margin of 149.6% for the same quarter of the last fiscal year. 

Adjusted operating loss for the fourth fiscal quarter was RMB57.2 million, as compared to adjusted operating loss of RMB50.3 million for the same quarter of the last fiscal year.

Net Loss and Adjusted Net Loss

Net loss for the fourth fiscal quarter was RMB340.3 million, representing a 47.1% decrease in loss from net loss of RMB643.5 million for the same quarter of the last fiscal year. This was attributed partly to the recovery of our overall businesses, but mainly to the notable improvement and commendable progress achieved in both top-line and bottom-line performance of Overseas Schools segment.

Adjusted net loss for the fourth fiscal quarter was RMB111.9 million, as compared to adjusted net loss of RMB91.8 million for the same quarter of the last fiscal year. 

Net Loss per ordinary share/ADS and Adjusted Net Loss per ordinary share/ADS

Basic and diluted net loss per ordinary share attributable to ordinary shareholders for the fourth fiscal quarter were RMB2.90 and RMB2.90, respectively, as compared to loss of RMB5.49 and RMB5.49, respectively, for the same quarter of the last fiscal year.

Adjusted basic and diluted net loss per ordinary share attributable to ordinary shareholders for the fourth fiscal quarter were RMB0.98 and RMB0.98, respectively, as compared to loss of RMB0.84 and RMB0.84, respectively, for the same quarter of the last fiscal year.

Basic and diluted net loss per ADS attributable to ADS holders for the fourth fiscal quarter were RMB11.60 and RMB11.60, respectively, as compared to loss of RMB21.96 and RMB21.96, respectively, for the same quarter of the last fiscal year.

Adjusted basic and diluted net loss per ADS attributable to ADS holders for the fourth fiscal quarter were RMB3.92 and RMB3.92, respectively, as compared to loss of RMB3.36 and RMB3.36, respectively, for the same quarter of the last fiscal year.

Adjusted EBITDA Loss

Adjusted EBITDA loss for the fourth fiscal quarter was RMB43.7 million, representing a 12.0% decrease in loss from adjusted EBITDA loss of RMB49.7 million for the same quarter of the last fiscal year. This is due to the strong recovery of our complementary education services' operation.

UNAUDITED FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED AUGUST 31, 2023

Revenue

Revenue for the fiscal year was RMB2,123.8 million, representing a 23.9% increase from RMB1,714.0 million for the last fiscal year.

Overseas Schools: Revenue contribution for the fiscal year was RMB809.5 million, representing a 24.0% increase from RMB652.8 million for the last fiscal year. The increase was mainly attributable to the continuous recovery of overseas schools' operation from the pandemic.

Complementary Education Services: Revenue contribution for the fiscal year was RMB846.0 million, representing a 32.9% increase from RMB636.6 million for the last fiscal year. The increase was mainly attributable to the continuous recovery of study tour and camps, international contest training and other complementary business. 

Domestic Kindergartens & K-12 Operation Services: Revenue contribution for the fiscal year was RMB468.3 million, representing a 10.3% increase from RMB424.6 million for the last fiscal year. The increase was primarily driven by the short term rebound of various service revenues.

Cost of Revenue

Cost of revenue for the fiscal year was RMB1,526.4 million, as compared to RMB1,237.3 million for the last fiscal year.

Gross Profit, Gross Margin and Adjusted Gross Profit

Gross profit for the fiscal year was RMB597.3 million, representing a 25.3% increase from RMB476.7 million for the last fiscal year. Gross margin increased to 28.1% from 27.8% for the last fiscal year.

Adjusted gross profit for the fiscal year was RMB612.2 million, representing a 23.8% increase from RMB494.5 million for the last fiscal year.

Selling, General and Administrative (SG&A) Expenses

Total SG&A expenses for the fiscal year were RMB614.6 million, as compared to RMB539.9 million for the last fiscal year.

Operating Loss, Operating Margin and Adjusted Operating Income/Loss

Operating loss for the fiscal year was RMB186.6 million, representing a 69.2% decrease in loss from operating loss of RMB606.5 million for the last fiscal year. Operating loss margin was 8.8% for the fiscal year, as compared to operating loss margin of 35.4% for the last fiscal year. 

Adjusted operating income for the fiscal year was RMB53.7 million, as compared to adjusted operating loss of RMB40.9 million for the last fiscal year.

Net Loss and Adjusted Net Loss

Net loss for the fiscal year was RMB386.8 million, representing a 45.0% decrease in loss from net loss of RMB703.5 million for the last fiscal year. This was attributed partly to the recovery of our overall businesses, but mainly to the notable improvement and commendable progress achieved in both top-line and bottom-line performance of Overseas Schools segment.

Adjusted net loss for the fiscal year was RMB149.4 million, as compared to adjusted net loss of RMB141.7 million for the last fiscal year. 

Net Loss per ordinary share/ADS and Adjusted Net Loss per ordinary share/ADS

Basic and diluted net loss per ordinary share attributable to ordinary shareholders for the fiscal year were RMB3.33 and RMB3.33, respectively, as compared to loss of RMB5.98 and RMB5.98, respectively, for the last fiscal year.

Adjusted basic and diluted net loss per ordinary share attributable to ordinary shareholders for the fiscal year were RMB1.33 and RMB1.33, respectively, as compared to loss of RMB1.24 and RMB1.24, respectively, for the last fiscal year.

Basic and diluted net loss per ADS attributable to ADS holders for the fiscal year were RMB13.32 and RMB13.32, respectively, as compared to loss of RMB23.92 and RMB23.92, respectively, for the last fiscal year.

Adjusted basic and diluted net loss per ADS attributable to ADS holders for the fiscal year were RMB5.32 and RMB5.32, respectively, as compared to loss of RMB4.96 and RMB4.96, respectively, for the last fiscal year.

Adjusted EBITDA

Adjusted EBITDA for the fiscal year was RMB115.8 million, as compared to RMB147.0 million for the last fiscal year.

Cash and Working Capital

As of August 31, 2023, the Company's cash and cash equivalents and restricted cash were RMB567.2 million (US$78.2 million), as compared to RMB765.4 million as of May 31, 2023. 

CONVENIENCE TRANSLATION

The Company's reporting currency is 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 and fiscal year ended August 31, 2023 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB7.2582, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on August 31, 2023. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on August 31, 2023 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 operating income/(loss), adjusted net earnings/(loss) per share attributable to ordinary shareholders/ADS holders 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. We define adjusted EBITDA as net income/(loss) excluding interest income/(expense), net, income tax expense/benefit, depreciation and amortization, share-based compensation expense, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment. We define adjusted net income/(loss) as net income/(loss) excluding share-based compensation expense, amortization of intangible assets, tax effect of amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment. We define adjusted operating income/(loss) as operating income/(loss) excluding share-based compensation expense, amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment. Additionally, we define adjusted net earnings/(loss) per share attributable to ordinary shareholders/ADS holders, basic and diluted, as adjusted net income/(loss) attributable to ordinary shareholders/ADS holders (net income/(loss) to ordinary shareholders/ADS holders excluding share-based compensation expense, amortization of intangible assets, tax effect of amortization of intangible assets, impairment loss on operating lease right-of-use assets, impairment loss on goodwill, impairment loss on intangible assets, impairment loss on the long-term investment, and impairment loss on property and equipment) divided by the weighted average number of basic and diluted ordinary shares or ADSs. 

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 do not have significant connection to the growth of the business. Therefore, we provide exclusion of amortization of intangible assets to define adjusted gross profit, adjusted operating income/(loss), adjusted net income/(loss), and adjusted net earnings/(loss) per share attributable to ordinary shareholders/ADS holders, 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 operating income/(loss), adjusted net earnings/(loss) per share attributable to ordinary shareholders/ADS holders 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/(expense), net; income tax expense/benefit; share-based compensation expense; amortization of intangible assets, and tax effect of 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/(expense), net; income tax expense/benefit; depreciation and amortization; share-based compensation expense; and tax effect of amortization of intangible assets, 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, which primarily provides quality international education to global students and equip them with the critical academic foundation and skillsets necessary to succeed in the pursuit of higher education.

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:
Email: BEDU.IR@gcm.international

Media Contact:
Email: media@brightscholar.com
Phone: +86-757-2991-6814

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
			As of
			August 31,		August 31,
			2022		2023
			RMB		RMB		USD
ASSETS
	Current assets
		Cash and cash equivalents	664,769		537,325		74,030
		Restricted cash, net	191,365		28,261		3,894
		Accounts receivable, net	18,084		19,209		2,647
		Amounts due from related parties, net	196,626		188,445		25,963
		Other receivables, deposits and other assets, net	112,762		148,679		20,483
		Inventories	6,869		5,480		755
		Held for sale assets	11,258		-		-
	Total current assets		1,201,733		927,399		127,772
		Restricted cash - non-current	1,650		1,650		227
		Property and equipment, net	393,277		414,225		57,070
		Intangible assets, net	322,896		343,077		47,268
		Goodwill, net	1,433,916		1,328,872		183,086
		Long-term investments	40,486		36,070		4,970
		Prepayments for construction contracts	4,894		1,711		236
		Deferred tax assets, net	85,103		1,810		249
		Other non-current assets, net	15,343		15,249		2,101
		Operating lease right-of-use assets	1,453,833		1,549,447		213,475
	Total non-current assets		3,751,398		3,692,111		508,682
TOTAL ASSETS			4,953,131		4,619,510		636,454

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-CONTINUED
(Amounts in thousands)
			As of
			August 31,		August 31,
			2022		2023
			RMB		RMB		USD
LIABILITIES AND EQUITY
	Current liabilities
		Accounts payable	100,229		105,193		14,493
		Amounts due to related parties	343,032		311,451		42,910
		Accrued expenses and other current liabilities	262,490		279,690		38,535
		Short-term loans	149,239		-		-
		Income tax payable	85,856		99,367		13,690
		Contract liabilities	516,731		541,683		74,630
		Refund liabilities	20,517		17,572		2,421
		Operating lease liabilities	104,515		125,447		17,283
	Total current liabilities		1,582,609		1,480,403		203,962
		Contract liabilities – non-current	2,203		2,116		292
		Deferred tax liabilities	21,707		42,093		5,799
		Other non-current liabilities due to related parties	11,197		-		-
		Long-term loan	633		-		-
		Operating lease liabilities – non-current	1,439,239		1,523,242		209,865
	Total non-current liabilities		1,474,979		1,567,451		215,956
TOTAL LIABILITIES			3,057,588		3,047,854		419,918
EQUITY
		Share capital	8		8		1
		Additional paid-in capital	1,693,358		1,697,370		233,856
		Statutory reserves	14,872		20,155		2,777
		Accumulated other comprehensive income	34,401		172,230		23,729
		Accumulated deficit	(72,737)		(473,154)		(65,189)
	Shareholders' equity		1,669,902		1,416,609		195,174
	Non-controlling interests		225,641		155,047		21,362
TOTAL EQUITY			1,895,543		1,571,656		216,536
TOTAL LIABILITIES AND EQUITY			4,953,131		4,619,510		636,454

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except for shares and per share data)
	Three Months Ended August 31,						Twelve Months Ended August 31,
	2022		2023				2022		2023
	RMB		RMB		USD		RMB		RMB		USD
Revenue	402,911		559,775		77,123		1,713,965		2,123,751		292,600
Cost of revenue	(320,564)		(450,651)		(62,089)		(1,237,306)		(1,526,419)		(210,303)
Gross profit	82,347		109,124		15,034		476,659		597,332		82,297
Selling, general and administrative expenses	(137,825)		(176,841)		(24,364)		(539,893)		(614,571)		(84,673)
Impairment loss on goodwill	(419,805)		(207,830)		(28,633)		(419,805)		(207,830)		(28,633)
Impairment loss on operating lease right-of use assets	(8,861)		-		-		(8,861)		-		-
Impairment loss on property and equipment	(6,586)		(12,891)		(1,776)		(6,586)		(12,891)		(1,776)
Impairment loss on intangible assets	(113,385)		(2,052)		(283)		(113,385)		(2,052)		(283)
Impairment loss on the long-term investment	-		(2,613)		(360)		-		(2,613)		(360)
Other operating income	1,252		6,923		954		5,339		56,043		7,722
Operating loss	(602,863)		(286,180)		(39,428)		(606,532)		(186,582)		(25,706)
Interest expense, net	(17,093)		1,220		168		(127,840)		(7,367)		(1,015)
Investment income	28,200		909		125		135,309		60		8
Other expenses	(579)		(3,902)		(537)		(5,808)		(6,677)		(920)
Loss before income taxes and share of equity in (loss)/profit of unconsolidated affiliates	(592,335)		(287,953)		(39,672)		(604,871)		(200,566)		(27,633)
Income tax expense	(11,667)		(52,425)		(7,223)		(58,919)		(185,918)		(25,615)
Share of equity in (loss)/profit of unconsolidated affiliates	(39,515)		61		8		(39,747)		(339)		(47)
Net loss	(643,517)		(340,317)		(46,887)		(703,537)		(386,823)		(53,295)
Net loss attributable to non-controlling interests	7,556		4,291		591		5,803		8,311		1,145
Net loss attributable to ordinary shareholders	(651,073)		(344,608)		(47,478)		(709,340)		(395,134)		(54,440)
Net loss per share attributable to
ordinary shareholders
—Basic	(5.49)		(2.90)		(0.40)		(5.98)		(3.33)		(0.46)
—Diluted	(5.49)		(2.90)		(0.40)		(5.98)		(3.33)		(0.46)
Weighted average shares used in
calculating net loss per ordinary share:
—Basic	118,669,795		118,669,795		118,669,795		118,697,495		118,669,795		118,669,795
—Diluted	118,669,795		118,669,795		118,669,795		118,697,495		118,669,795		118,669,795
Net loss per ADS
—Basic	(21.96)		(11.60)		(1.60)		(23.92)		(13.32)		(1.84)
—Diluted	(21.96)		(11.60)		(1.60)		(23.92)		(13.32)		(1.84)

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
	Three Months Ended August 31,						Twelve Months Ended August 31,
	2022		2023				2022		2023
	RMB		RMB		USD		RMB		RMB		USD
Net cash generated from operating activities	167,161		6,923		954		47,173		22,261		3,067
Net cash generated from/(used in) investing activities	310,193		(20,003)		(2,756)		(836,769)		(52,949)		(7,295)
Net cash (used in)/generated from financing activities	(1,001,420)		(208,397)		(28,712)		101,383		(298,794)		(41,166)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	10,260		23,319		3,213		30,834		38,934		5,364
Net change in cash and cash equivalents, and restricted cash	(513,806)		(198,158)		(27,301)		(657,379)		(290,548)		(40,030)
Cash and cash equivalents, and restricted cash at beginning of the period	1,371,590		765,394		105,452		1,515,163		857,784		118,181
Cash and cash equivalents, and restricted cash at end of the period	857,784		567,236		78,151		857,784		567,236		78,151

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED
Reconciliations of GAAP and Non-GAAP Results
(Amounts in thousands, except for shares and per share data)
	Three Months Ended August 31,						Twelve Months Ended August 31,
	2022		2023				2022		2023
	RMB		RMB		USD		RMB		RMB		USD
Gross profit	82,347		109,124		15,034		476,659		597,332		82,297
Add: Amortization of intangible assets	3,931		3,642		502		17,814		14,916		2,055
Adjusted gross profit	86,278		112,766		15,536		494,473		612,248		84,352
Operating loss	(602,863)		(286,180)		(39,428)		(606,532)		(186,582)		(25,706)
Add: Share-based compensation expense	-		-		-		(816)		-		-
Add: Amortization of intangible assets	3,931		3,642		502		17,814		14,916		2,055
Add: Impairment loss on operating lease right-of-use assets	8,861		-		-		8,861		-		-
Add: Impairment loss on goodwill	419,805		207,830		28,633		419,805		207,830		28,633
Add: Impairment loss on intangible assets	113,385		2,052		283		113,385		2,052		283
Add: Impairment loss on property and equipment	6,586		12,891		1,776		6,586		12,891		1,776
Add: Impairment loss on the long-term investment	-		2,613		360		-		2,613		360
Adjusted operating (loss)/income	(50,295)		(57,152)		(7,874)		(40,897)		53,720		7,401
Net loss	(643,517)		(340,317)		(46,887)		(703,537)		(386,823)		(53,295)
Add: Share-based compensation expense	-		-		-		(816)		-		-
Add: Amortization of intangible assets	3,931		3,642		502		17,814		14,916		2,055
Add: Tax effect of amortization of intangible assets	(811)		(581)		(80)		(3,764)		(2,883)		(397)
Add: Impairment loss on operating lease right-of-use assets	8,861		-		-		8,861		-		-
Add: Impairment loss on goodwill	419,805		207,830		28,633		419,805		207,830		28,633
Add: Impairment loss on intangible assets	113,385		2,052		283		113,385		2,052		283
Add: Impairment loss on property and equipment	6,586		12,891		1,776		6,586		12,891		1,776
Add: Impairment loss on the long-term investment	-		2,613		360		-		2,613		360
Adjusted net loss	(91,760)		(111,870)		(15,413)		(141,666)		(149,404)		(20,585)
Net loss attributable to ordinary shareholders	(651,073)		(344,608)		(47,478)		(709,340)		(395,134)		(54,440)
Add: Share-based compensation expense	-		-		-		(816)		-		-
Add: Amortization of intangible assets	3,931		3,642		502		17,814		14,916		2,055
Add: Tax effect of amortization of intangible assets	(811)		(581)		(80)		(3,764)		(2,883)		(397)
Add: Impairment loss on operating lease right-of-use assets	8,861		-		-		8,861		-		-
Add: Impairment loss on goodwill	419,805		207,830		28,633		419,805		207,830		28,633
Add: Impairment loss on intangible assets	113,385		2,052		283		113,385		2,052		283
Add: Impairment loss on property and equipment	6,586		12,891		1,776		6,586		12,891		1,776
Add: Impairment loss on the long-term investment	-		2,613		360		-		2,613		360
Adjusted net loss attributable to ordinary shareholders	(99,316)		(116,161)		(16,004)		(147,469)		(157,715)		(21,730)
Net loss	(643,517)		(340,317)		(46,887)		(703,537)		(386,823)		(53,295)
Add: Interest expense, net	17,093		(1,220)		(168)		127,840		7,367		1,015
Add: Income tax expense	11,667		52,425		7,223		58,919		185,918		25,615
Add: Depreciation and amortization	16,442		19,990		2,754		115,934		83,919		11,562
Add: Share-based compensation expense	-		-		-		(816)		-		-
Add: Impairment loss on operating lease right-of-use assets	8,861		-		-		8,861		-		-
Add: Impairment loss on goodwill	419,805		207,830		28,633		419,805		207,830		28,633
Add: Impairment loss on intangible assets	113,385		2,052		283		113,385		2,052		283
Add: Impairment loss on property and equipment	6,586		12,891		1,776		6,586		12,891		1,776
Add: Impairment loss on the long-term investment	-		2,613		360		-		2,613		360
Adjusted EBITDA	(49,678)		(43,736)		(6,026)		146,977		115,767		15,949
Weighted average shares used
in calculating adjusted net loss per ordinary    share:
—Basic and Diluted	118,669,795		118,669,795		118,669,795		118,697,495		118,669,795		118,669,795
Adjusted net loss per share attributable
to ordinary shareholders
—Basic	(0.84)		(0.98)		(0.13)		(1.24)		(1.33)		(0.18)
—Diluted	(0.84)		(0.98)		(0.13)		(1.24)		(1.33)		(0.18)
Adjusted net loss per ADS
—Basic	(3.36)		(3.92)		(0.52)		(4.96)		(5.32)		(0.72)
—Diluted	(3.36)		(3.92)		(0.52)		(4.96)		(5.32)		(0.72)

 

 

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SOURCE Bright Scholar Education Holdings Ltd.

FAQ

What are the unaudited financial results announced by Bright Scholar Education Holdings Limited (BEDU)?

The company announced unaudited financial results for the fourth fiscal quarter and fiscal year ended August 31, 2023.

How did the revenue for Q4 and the fiscal year change compared to the previous year?

The revenue for Q4 increased by 38.9% to RMB 559.8 million, and for the fiscal year by 23.9% to RMB 2,123.8 million.

Which segments showed significant growth in revenue?

Overseas Schools and Complementary Education Services segments showed significant revenue growth.

What challenges did the Domestic Kindergartens & K-12 Operation Services segment face?

The segment faced challenges with flat revenue in Q4 and only 10.3% growth for the fiscal year.

What was the net loss reported by Bright Scholar Education Holdings Limited for Q4 and the fiscal year?

The company reported a net loss for both Q4 and the fiscal year, with improvements in losses compared to the previous year.