Bright Scholar Announces Unaudited Financial Results for the Six Months of Fiscal 2023
- Revenue increased by 11.9% compared to the same period last year.
- Gross profit increased by 14.0%.
- Operating income increased by 211.8%.
- Adjusted net loss improved by 94.1%.
- The Overseas Schools segment experienced the strongest business recovery, contributing to 41.2% of total revenue.
- The Complementary Education Services segment saw a strong rebound in major businesses.
- The Domestic Kindergartens & K-12 Operation Services segment had a slower rebound and continued downward trend in core service revenue.
- The company paid off all outstanding bank loans in July 2023 to bolster financial sustainability.
- The company expects revenue for fiscal year 2023 to be in the range of RMB1.9 billion and RMB2.0 billion, representing a YoY growth of 10% to 15%.
- None.
FOSHAN,
FISCAL SIX MONTHS 2023 FINANCIAL PERFORMANCE HIGHLIGHTS
Six Months Ended February 28, 2023 (in comparison to the same period of the last fiscal year):
RMB in million Except EPS and % | Six Months Ended February 28, 2023 | Six Months Ended February 28, 2022 | YoY % Change |
Revenue | 977.5 | 873.5 | 11.9 % |
Gross Profit | 295.2 | 258.9 | 14.0 % |
Gross Margin | 30.2 % | 29.6 % | 0.6 % |
Operating Income/(Loss) | 25.7 | (22.9) | 211.8 % |
Operating Margin | 2.6 % | (2.6 %) | 5.2 % |
Net Loss for the period | (8.8) | (52.9) | 83.4 % |
Adjusted Gross Profit (1) | 302.8 | 268.3 | 12.9 % |
Adjusted Operating Income/(Loss) (2) | 33.3 | (14.4) | 331.2 % |
Adjusted Net Loss (3) for the period | (2.7) | (46.4) | 94.1 % |
Adjusted EBITDA (4) for the period | 63.5 | 127.7 | (50.3 %) |
Basic and Diluted Loss per Share | (0.10) | (0.42) | 76.2 % |
Adjusted Basic and Diluted Loss per Share (5) for the period | (0.05) | (0.36) | 86.1 % |
Basic and Diluted Loss per ADS | (0.40) | (1.68) | 76.2 % |
Adjusted Basic and Diluted Loss per ADS (6) for the period | (0.20) | (1.44) | 86.1 % |
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 and amortization of intangible assets. |
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. |
4. Adjusted EBITDA is defined as net income/(loss) excluding interest income/(expense), net, income tax expense/benefit; depreciation and amortization and share-based compensation expense. |
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.) 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.) 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 4 Stafford House locations in
- For the six-month period, revenue increased by
17.4% and amounted toRMB402.9 million , compared toRMB343.3 million in the same period of last fiscal year, and accounted for41.2% 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 six-month period, revenue increased
14.5% and amounted toRMB365.3 million , compared toRMB318.9 million for the same period of last fiscal year, and accounted for37.4% 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 domestic K-12 schools including catering and procurement services.
- For the six-month period, revenue amounted to
RMB209.3 million , as compared toRMB211.3 million for the same period of last fiscal year, and accounted for21.4% of the total revenue.
MANAGEMENT COMMENTARY
"We delivered a solid performance in the first half of fiscal 2023 against an uncertain macroeconomic backdrop, underpinned by the strength of our diversified global business portfolio and our focus on disciplined and rigorous execution," said Mr. Tim Hongru Zhou, Chair & Chief Executive Officer of Bright Scholar. "In the period, we recorded a
"The top line growth was primarily driven by the strong business recovery in our overseas schools and complementary education services businesses in the first half of fiscal 2023. During the period, the Overseas Schools segment, which contributed to
"Since the lifting of COVID restrictions in early 2023, the Complementary Education Services segment, which accounted for
"On the other hand, the Domestic Kindergartens & K-12 Operation Services segment, which represented
"Members of the new management team appreciate the opportunity to fully immerse ourselves into the Company. Following a strategic and holistic analysis of our businesses, we identified opportunities and gaps, prioritised our strategic imperatives, and re-engineered our cost base. Furthermore, in July 2023, we proactively paid off all our outstanding bank loans, an initiative aimed at bolstering our financial sustainability and reducing interest expenses. With these ongoing substantive changes, we believe we are operating from a position of strength. This is crucial to our ongoing efforts to enhance the performance of our portfolio of businesses and achieve growth that is both scalable and sustainable."
"As we look ahead, we will further refine our strategy and enhance our business models to capitalise on market opportunities for scaling up our global businesses and, at the same time to build resilience to enable us to achieve strong profitable growth in revenue, adjusted EBITDA and cashflow, even in challenging economic circumstances. This in turn will allow us to generate long-term value for our shareholders," Mr. Zhou concluded.
UNAUDITED FINANCIAL RESULTS for FISCAL SIX Months ENDED February 28, 2023
Revenue
Revenue for the period was
Overseas Schools: Revenue contribution for the period was
Complementary Education Services: Revenue contribution for the period was
Domestic Kindergartens & K-12 Operation Services: Revenue contribution for the period was
Cost of Revenue
Cost of revenue for the period was
Gross Profit, Gross Margin and Adjusted Gross Profit
Gross profit for the period was
Adjusted gross profit for the period was
Selling, General and Administrative Expenses
Total SG&A expenses for the period were
Operating Income/Loss, Operating Margin and Adjusted Operating Income/Loss
Operating income for the period was
Adjusted operating income for the period was
Net Loss and Adjusted Net Loss
Net loss for the period was
Adjusted net loss for the period was
Loss per ordinary share/ADS and Adjusted Loss per ordinary share/ADS
Basic and diluted net loss per ordinary share attributable to ordinary shareholders for the period were
Adjusted basic and diluted net loss per ordinary share attributable to ordinary shareholders for the period were
Basic and diluted net loss per ADS attributable to ADS holders for the period were
Adjusted basic and diluted net loss per ADS attributable to ADS holders for the period were
Adjusted EBITDA
Adjusted EBITDA for the period was
Cash and Working Capital
As of February 28, 2023, the Company's cash and cash equivalents and restricted cash were
GUIDANCE FOR FISCAL YEAR ENDING AUGUST 31, 2023
For the fiscal year 2023, the Company currently expects its revenue to be in a range of
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.
RECENT DEVELOPMENTS
Going Private Proposal
On December 30, 2022, the Company received a letter dated December 29, 2022 from Ms. Huiyan Yang and Ms. Meirong Yang (collectively, the "Buyer Group"), informing the Company the decision of the Buyer Group to withdraw the non-binding going private proposal (the "Proposal") dated April 29, 2022 and forego the Proposal to privatize the Company.
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
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
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
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
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, | February 28, | ||||||
2022 | 2023 | ||||||
RMB | RMB | USD | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | 664,769 | 630,294 | 90,919 | ||||
Restricted cash | 191,365 | 196,020 | 28,275 | ||||
Accounts receivable, net | 18,084 | 32,581 | 4,700 | ||||
Amounts due from related parties, net | 196,626 | 190,100 | 27,422 | ||||
Other receivables, deposits and other assets, net | 112,762 | 109,710 | 15,825 | ||||
Inventories | 6,869 | 5,732 | 827 | ||||
Held for sale assets | 11,258 | - | - | ||||
Total current assets | 1,201,733 | 1,164,437 | 167,968 | ||||
Restricted cash - non current | 1,650 | 1,650 | 238 | ||||
Property and equipment, net | 393,277 | 399,497 | 57,627 | ||||
Intangible assets, net | 322,896 | 331,508 | 47,819 | ||||
Goodwill, net | 1,433,916 | 1,483,391 | 213,976 | ||||
Long-term investments | 40,486 | 38,674 | 5,579 | ||||
Prepayment for construction contract | 4,894 | 10,202 | 1,472 | ||||
Deferred tax assets, net | 85,103 | 90,390 | 13,039 | ||||
Other non-current assets, net | 15,343 | 14,123 | 2,036 | ||||
Operating lease right-of-use assets | 1,453,833 | 1,487,138 | 214,517 | ||||
Total non-current assets | 3,751,398 | 3,856,573 | 556,303 | ||||
TOTAL ASSETS | 4,953,131 | 5,021,010 | 724,271 | ||||
BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED | |||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-CONTINUED | |||||||
(Amounts in thousands) | |||||||
As of | |||||||
August 31, | February 28, | ||||||
2022 | 2023 | ||||||
RMB | RMB | USD | |||||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | 100,229 | 119,703 | 17,267 | ||||
Amounts due to related parties | 343,032 | 312,784 | 45,119 | ||||
Accrued expenses and other current liabilities | 262,490 | 235,707 | 34,000 | ||||
Short-term loans | 149,239 | 156,933 | 22,637 | ||||
Income tax payable | 85,856 | 83,193 | 12,000 | ||||
Contract liabilities | 516,731 | 538,247 | 77,641 | ||||
Refund liabilities | 20,517 | 18,136 | 2,616 | ||||
Operating lease liabilities | 104,515 | 111,731 | 16,117 | ||||
Total current liabilities | 1,582,609 | 1,576,434 | 227,397 | ||||
Contract liabilities – non current | 2,203 | 1,825 | 263 | ||||
Deferred tax liabilities, net | 21,707 | 20,276 | 2,925 | ||||
Other non-current liabilities due to related parties | 11,197 | 5,363 | 774 | ||||
Long-term loans | 633 | - | - | ||||
Operating lease liabilities – non current | 1,439,239 | 1,473,595 | 212,563 | ||||
Total non-current liabilities | 1,474,979 | 1,501,059 | 216,525 | ||||
TOTAL LIABILITIES | 3,057,588 | 3,077,493 | 443,922 | ||||
EQUITY | |||||||
Share capital | 8 | 8 | 1 | ||||
Additional paid-in capital | 1,693,358 | 1,696,424 | 244,706 | ||||
Statutory reserves | 14,872 | 20,154 | 2,907 | ||||
Accumulated other comprehensive income | 34,401 | 98,093 | 14,150 | ||||
Accumulated deficit | (72,737) | (90,450) | (13,047) | ||||
Shareholders' equity | 1,669,902 | 1,724,229 | 248,717 | ||||
Non-controlling interests | 225,641 | 219,288 | 31,632 | ||||
Total equity | 1,895,543 | 1,943,517 | 280,349 | ||||
TOTAL LIABILITIES AND EQUITY | 4,953,131 | 5,021,010 | 724,271 | ||||
BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED | |||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
(Amounts in thousands, except for shares and per share data) | |||||
Six Months Ended February 28, | |||||
2022 | 2023 | ||||
RMB | RMB | USD | |||
Revenue | 873,505 | 977,531 | 141,007 | ||
Cost of revenue | (614,584) | (682,349) | (98,428) | ||
Gross profit | 258,921 | 295,182 | 42,579 | ||
Selling, general and administrative expenses | (284,946) | (295,714) | (42,656) | ||
Other operating income | 3,085 | 26,182 | 3,777 | ||
Operating (loss)/income | (22,940) | 25,650 | 3,700 | ||
Interest expense, net | (84,383) | (5,728) | (826) | ||
Investment income/(loss) | 78,954 | (1,463) | (211) | ||
Other expenses | (6,155) | (2,753) | (397) | ||
Net (loss)/income/ before income taxes and share of equity in loss of | (34,524) | 15,706 | 2,266 | ||
Income tax expense | (18,303) | (24,166) | (3,486) | ||
Share of equity in loss of unconsolidated affiliates | (111) | (348) | (50) | ||
Net loss | (52,938) | (8,808) | (1,270) | ||
Net (loss)/income/ attributable to non-controlling interests | (3,610) | 3,623 | 523 | ||
Net loss attributable to ordinary shareholders | (49,328) | (12,431) | (1,793) | ||
Net loss per share attributable to | |||||
—Basic | (0.42) | (0.10) | (0.02) | ||
—Diluted | (0.42) | (0.10) | (0.02) | ||
Weighted average shares used in | |||||
—Basic | 118,725,655 | 118,669,795 | 118,669,795 | ||
—Diluted | 118,725,655 | 118,669,795 | 118,669,795 | ||
Net loss per ADS | |||||
—Basic | (1.68) | (0.40) | (0.08) | ||
—Diluted | (1.68) | (0.40) | (0.08) | ||
BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED | |||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(Amounts in thousands) | |||||
Six Months Ended February 28, | |||||
2022 | 2023 | ||||
RMB | RMB | USD | |||
Net cash (used in)/generated from operating activities | (385,616) | 23,536 | 3,395 | ||
Net cash used in investing activities | (1,181,644) | (11,956) | (1,725) | ||
Net cash generated from/(used in) financing activities | 1,581,836 | (49,142) | (7,089) | ||
Effect of exchange rate changes on cash and cash equivalents, | (37,119) | 7,742 | 1,117 | ||
Net change in cash and cash equivalents, and restricted cash | (22,543) | (29,820) | (4,302) | ||
Cash and cash equivalents, and restricted cash at beginning of the | 1,515,163 | 857,784 | 123,734 | ||
Cash and cash equivalents, and restricted cash at end of the | 1,492,620 | 827,964 | 119,432 | ||
BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED | ||||||
Reconciliations of GAAP and Non-GAAP Results | ||||||
(Amounts in thousands, except for shares and per share data) | ||||||
Six Months Ended February 28, | ||||||
2022 | 2023 | |||||
RMB | RMB | USD | ||||
Gross profit | 258,921 | 295,182 | 42,579 | |||
Add: Amortization of intangible assets | 9,360 | 7,632 | 1,101 | |||
Adjusted gross profit | 268,281 | 302,814 | 43,680 | |||
Operating (loss)/income | (22,940) | 25,650 | 3,700 | |||
Add: Share-based compensation expense | (816) | - | - | |||
Add: Amortization of intangible assets | 9,360 | 7,632 | 1,101 | |||
Adjusted operating (loss)/income | (14,396) | 33,282 | 4,801 | |||
Net loss | (52,938) | (8,808) | (1,270) | |||
Add: Share-based compensation expense | (816) | - | - | |||
Add: Amortization of intangible assets | 9,360 | 7,632 | 1,101 | |||
Add: Tax effect of amortization of intangible assets | (1,995) | (1,564) | (226) | |||
Adjusted net loss | (46,389) | (2,740) | (395) | |||
Net loss attributable to ordinary shareholders | (49,328) | (12,431) | (1,793) | |||
Add: Share-based compensation expense | (816) | - | - | |||
Add: Amortization of intangible assets | 9,360 | 7,632 | 1,101 | |||
Add: Tax effect of amortization of intangible assets | (1,995) | (1,564) | (226) | |||
Adjusted net loss attributable to ordinary shareholders | (42,779) | (6,363) | (918) | |||
Net loss | (52,938) | (8,808) | (1,270) | |||
Add: Interest expense, net | 84,383 | 5,728 | 826 | |||
Add: Income tax expense | 18,303 | 24,166 | 3,486 | |||
Add: Depreciation and amortization | 78,732 | 42,376 | 6,113 | |||
Add: Share-based compensation expense | (816) | - | - | |||
Adjusted EBITDA | 127,664 | 63,462 | 9,155 | |||
Weighted average shares used | ||||||
—Basic and Diluted | 118,725,655 | 118,669,795 | 118,669,795 | |||
Adjusted net loss per share attributable | ||||||
—Basic | (0.36) | (0.05) | (0.01) | |||
—Diluted | (0.36) | (0.05) | (0.01) | |||
Adjusted net loss per ADS | ||||||
—Basic | (1.44) | (0.20) | (0.04) | |||
—Diluted | (1.44) | (0.20) | (0.04) | |||
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SOURCE Bright Scholar Education Holdings Ltd.
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