Bright Scholar Announces Unaudited Financial Results for the First Fiscal Quarter of Fiscal 2024

---

FOSHAN, China, Feb. 6, 2024 /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, 2023.

FINANCIAL PERFORMANCE HIGHLIGHTS

First Fiscal Quarter Ended November 30, 2023

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

RMB in million

Except EPS and %

First Fiscal Quarter

Ended November 30, 2023

First Fiscal Quarter

Ended November 30, 2022

YoY

% Change

Revenue

572.7

532.5

7.6 %

Gross Profit

203.4

179.8

13.1 %

Gross Margin

35.5 %

33.8 %

1.7 %

Operating Income

74.5

64.9

14.8 %

Operating Margin

13.0 %

12.2 %

0.8 %

Net Income for the quarter

59.2

42.0

40.9 %





Adjusted Gross Profit (1)

206.8

183.6

12.6 %

Adjusted Operating Income (2)

77.8

68.7

13.3 %

Adjusted Net Income (3) for the quarter

61.9

45.0

37.3 %

Adjusted EBITDA (4) for the quarter

90.8

90.1

0.8 %





Basic and Diluted Earnings per Share

0.46

0.32

43.8 %

Adjusted Basic and Diluted Earnings per Share (5) for the quarter

0.48

0.35

37.1 %

Basic and Diluted Earnings per ADS

1.84

1.28

43.8 %

Adjusted Basic and Diluted Earnings per ADS (6) for the quarter

1.92

1.40

37.1 %

______________________________________________________________________________________________

1.  Adjusted gross profit is defined as gross profit excluding amortization of intangible assets.

2.  Adjusted operating income is defined as operating income excluding amortization of intangible assets.

3.  Adjusted net income is defined as net income excluding amortization of intangible assets, and tax effect of amortization of intangible assets.

4.  Adjusted EBITDA is defined as net income excluding interest income/(expense), net, income tax expense/benefit, and depreciation and amortization.

5.  Adjusted basic and diluted earnings per share is defined as adjusted net income attributable to ordinary shareholders (net income attributable to ordinary shareholders excluding amortization of intangible assets, and 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 per American depositary share ("ADS") is defined as adjusted net income attributable to ADS shareholders (net income attributable to ADS shareholders excluding amortization of intangible assets, and tax effect of amortization of intangible assets) divided by the weighted average number of basic and diluted ADSs.


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 November 30, 2023.

  • For the first fiscal quarter, revenue amounted to RMB252.9 million, representing a 28.4% increase compared to RMB196.9 million in the same fiscal quarter last year, and accounted for 44.2% 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 first fiscal quarter, revenue amounted to RMB210.0 million, representing a 12.8% increase compared to RMB186.2 million for the same fiscal quarter last year, and accounted for 36.7% 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 first fiscal quarter, revenue amounted to RMB109.8 million, representing a 26.4% decrease compared to RMB149.4 million for the same fiscal quarter last year, and accounted for 19.1% of the total revenue.

KEY EVENTS

1.  Senior Management Appointments

On Jan. 18, 2024, the Company announced changes and appointments in its management. Mr. Robert Ruolei Niu succeeded Mr. Tim Hongru Zhou and was appointed as the new Chief Executive Officer having previously served as Chief Financial Officer, while Mr. Tim Hongru Zhou continues to serve as chairman of the Board of directors (the "Board") of the Company. After previously serving as finance director, Ms. Cindy Hui Zhang succeeded Mr. Robert Ruolei Niu and was appointed as the Chief Financial Officer.

2.  2024 Share Incentive Plan

On Jan. 19, 2024, the Board approved the 2024 Share Incentive Plan (the "2024 Plan") which is effective on the same date. Employees, directors and consultants are eligible to receive Share Awards. The purpose of the Plan, through the granting of Share Awards, is to help the Company to secure and retain services of eligible award recipients provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliates and provide means by which the eligible recipients may benefit from increases in value of the ordinary shares.

MANAGEMENT COMMENTARY 

"I consider it an honour to lead Bright Scholar, a premier education service company with abundant market opportunities due to its global presence and network. Additionally, our resilient business model, supported by a diversified portfolio of enterprises adds further strength to our position." Bright Scholar's recently appointed Chief Executive Officer, Mr. Robert Roulie Niu, said. "We kicked off fiscal year 2024 with a solid start, making significant strides in revitalizing our businesses. It is particularly evident in the ongoing recovery of our business and operations in UK, leading to notable bottom-line improvements despite the prolonged macroeconomic challenges across our industry. In the first fiscal quarter, we achieved a 7.6% increase in revenue, coupled with sustained improvements of 13.1% in gross profit, 14.8% in operating income, and 40.9% in net income compared to the same quarter in the previous fiscal year."

"The recovery of Overseas School business remained the strongest, marked by a 28.4% increase in top line revenue during the first fiscal quarter. This segment continues to offer significant opportunities for scaling growth and bottom-line enhancement through increased operating leverage. Meanwhile, the Complementary Education Services segment sustained steady revenue growth, predominantly driven by the recovery of overseas study counselling business, which achieved a 12.8% revenue increase in the first fiscal quarter. Conversely, the Domestic Kindergartens & K-12 Operation Services segment continued its contraction, recording a 26.4% decrease in revenue, aligning with our internal expectations."

"Our consistent advancement reflects the strength of our diversified business portfolio, underscored by significant progress in operational optimizations and cost efficiencies. These strategic changes and improvements play a central role in our ongoing transformation efforts, aimed at shaping a portfolio of businesses geared towards sustainable revenue growth, enhanced EBITDA and solid cashflow. In conclusion, we have made substantial headway in driving our strategic agenda forward, unwavering in our commitment to accelerate the restructuring of our business portfolio. Our focus remains on nurturing high-growth, high-return businesses while bolstering our financial standing through margin expansion, strengthening our balance sheet, and enhancing cash flows. Our overarching goal is to establish a position of strength, providing ample room to pursue scalable business expansion with sustainable profitability well into fiscal year 2025 and beyond. We firmly believe that this marks a pivotal step in driving forward-looking value creation for our stakeholders in the long term." Mr. Niu concluded.

UNAUDITED FINANCIAL RESULTS for THE FIRST FISCAL QUARTER ENDED NOVEMBER 30, 2023

Revenue

Revenue for the first fiscal quarter was RMB572.7 million, representing a 7.6% increase from RMB532.5 million for the same fiscal quarter last year.

Overseas Schools: Revenue contribution for the first fiscal quarter was RMB252.9 million, representing a 28.4% increase from RMB196.9 million for the same fiscal quarter last year. The increase was mainly attributable to the recovery of overseas schools' operation from the pandemic.

Complementary Education Services: Revenue contribution for the first fiscal quarter was RMB210.0 million, representing a 12.8% increase from RMB186.2 million for the same fiscal quarter last year. The increase was mainly attributable to the recovery of overseas study counselling business.  

Domestic Kindergartens & K-12 Operation Services: Revenue contribution for the first fiscal quarter was RMB109.8 million, representing a 26.4% decrease from RMB149.4 million for the same fiscal quarter last year.

Cost of Revenue

Cost of revenue for the first fiscal quarter was RMB369.3 million, representing a 4.7% increase from RMB352.6 million for the same fiscal quarter last year.

Gross Profit, Gross Margin and Adjusted Gross Profit

Gross profit for the first fiscal quarter was RMB203.4 million, representing an 13.1% increase from RMB179.8 million for the same fiscal quarter last year. Gross margin for the first fiscal quarter increased to 35.5% from 33.8% for the same fiscal quarter last year.

Adjusted gross profit for the first fiscal quarter was RMB206.8 million, representing a 12.6% increase from RMB183.6 million for the same fiscal quarter last year.

Selling, General and Administrative Expenses

Total SG&A expenses for the first fiscal quarter were RMB138.0 million, representing a 1.3% decrease from RMB139.8 million for the same fiscal quarter last year.

Operating Income, Operating Margin and Adjusted Operating Income

Operating income for the first fiscal quarter was RMB74.5 million, representing a 14.8% increase from RMB64.9 million for the same fiscal quarter last year. Operating margin for the first fiscal quarter increased to 13.0% from 12.2% for the same fiscal quarter last year. 

Adjusted operating income for the first fiscal quarter was RMB77.8 million, representing a 13.3% from RMB68.7 million for the same fiscal quarter last year.

Net Income and Adjusted Net Income 

Net income for the first fiscal quarter was RMB59.2 million, representing a 40.9% increase from RMB42.0 million for the same fiscal quarter last year.

Adjusted net income for the first fiscal quarter was RMB61.9 million, representing a 37.3% increase from RMB45.0 million for the same fiscal quarter last year. 

Earnings per ordinary share/ADS and Adjusted Earnings per ordinary share/ADS

Basic and diluted net earnings per ordinary share attributable to ordinary shareholders for the first fiscal quarter were RMB0.46 and RMB0.46, respectively, as compared to RMB0.32 and RMB0.32, respectively, for the same fiscal quarter last year.

Adjusted basic and diluted net earnings per ordinary share attributable to ordinary shareholders for the first fiscal quarter were RMB0.48 and RMB0.48, respectively, as compared RMB0.35 and RMB0.35, respectively, for the same fiscal quarter last year.

Basic and diluted net earnings per ADS attributable to ADS holders for the first fiscal quarter were RMB1.84 and RMB1.84, respectively, as compared to RMB1.28 and RMB1.28, respectively, for the same fiscal quarter last year.

Adjusted basic and diluted net earnings per ADS attributable to ADS holders for the first fiscal quarter were RMB1.92 and RMB1.92, respectively, as compared to RMB1.40 and RMB1.40, respectively, for the same fiscal quarter last year.

Adjusted EBITDA

Adjusted EBITDA for the first fiscal quarter was RMB90.8 million, representing a 0.8% increase from RMB90.1 million for the same fiscal quarter last year.

Cash and Working Capital

As of November 30, 2023, the Company's cash and cash equivalents and restricted cash were RMB521.6 million (US$73.1 million), as compared to RMB567.2 million as of August 31, 2023. 

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 February 6, 2024, 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:           

4001-201203

Hong Kong:

800-905945

United States:

1-888-346-8982

International:

1-412-902-4272

*No passcode is needed for the call. Please request to join Bright Scholar Education Holdings Ltd. 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 Toll Free:

1-877-344-7529

International:

1-412-317-0088

Replay Passcode:

7587259

Replay End Date:

February 13, 2024

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 ended November 30, 2023 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB 7.1360, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on November 30, 2023. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on November 30, 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, and depreciation and amortization. We define adjusted net income/(loss) as net income/(loss) excluding amortization of intangible assets and tax effect of amortization of intangible assets. We define adjusted operating income/(loss) as operating income/(loss) excluding amortization of intangible assets. 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 amortization of intangible assets and tax effect of amortization of intangible assets) 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 without considering the impact of non-operating items such as interest income/(expense), net; income tax expense/benefit; 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,


 November 30,




2023


2023




RMB


RMB


USD

ASSETS








Current assets








Cash and cash equivalents

537,325


492,661


69,039



Restricted cash

28,261


28,639


4,013



Short term investment

-


9,951


1,394



Accounts receivable

19,209


28,685


4,020



Amounts due from related parties, net

188,445


199,809


28,000



Other receivables, deposits and other assets, net

148,679


151,884


21,284



Inventories

5,480


5,160


723










Total current assets

927,399


916,789


128,473











Restricted cash - non-current

1,650


250


35



Property and equipment, net

414,225


393,780


55,182



Intangible assets, net

343,077


334,205


46,834



Goodwill, net

1,328,872


1,313,585


184,079



Long-term investments, net

36,070


36,253


5,080



Prepayments for construction contracts

1,711


712


100



Deferred tax assets, net

1,810


1,645


231



Other non-current assets, net

15,249


15,319


2,147



Operating lease right-of-use assets - non current

1,549,447


1,497,353


209,831










Total non-current assets

3,692,111


3,593,102


503,519









TOTAL ASSETS

4,619,510


4,509,891


631,992

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-CONTINUED

(Amounts in thousands)












As of




August 31,


 November 30,




2023


2023




RMB


RMB


USD

LIABILITIES AND EQUITY







   Current liabilities








Accounts payable

105,193


143,015


20,042



Amounts due to related parties

311,451


300,867


42,162



Accrued expenses and other current liabilities

279,690


261,263


36,612



Income tax payable

99,367


96,213


13,483



Contract liabilities - current

541,683


441,860


61,920



Refund liabilities - current

17,572


16,962


2,377



Operating lease liabilities - current

125,447


124,897


17,502










Total current liabilities

1,480,403


1,385,077


194,098











Non-current contract liabilities

2,116


3,084


432



Deferred tax liabilities, net

42,093


40,957


5,740



Operating lease liabilities - non current

1,523,242


1,472,116


206,294










Total non-current liabilities

1,567,451


1,516,157


212,466









TOTAL LIABILITIES

3,047,854


2,901,234


406,564









EQUITY









Share capital

8


8


1



Additional paid-in capital

1,697,370


1,697,370


237,860



Statutory reserves

20,155


20,155


2,824



Accumulated other comprehensive income

172,230


154,099


21,595



Accumulated deficit

(473,154)


(418,462)


(58,641)










Shareholders' equity

1,416,609


1,453,170


203,639


Non-controlling interests

155,047


155,487


21,789









TOTAL EQUITY

1,571,656


1,608,657


225,428









TOTAL LIABILITIES AND EQUITY

4,619,510


4,509,891


631,992

 

 

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,


2022


2023


RMB


RMB


USD

Revenue

532,460


572,736


80,260

Cost of revenue

(352,630)


(369,298)


(51,751)







Gross profit

179,830


203,438


28,509

Selling, general and administrative expenses

(139,844)


(137,979)


(19,336)

Other operating income

24,931


9,055


1,269







Operating income

64,917


74,514


10,442

Interest (expense)/income, net

(3,759)


386


54

Investment (loss)/income

(1,463)


995


139

Other income/(expenses)

4,182


(1,196)


(168)







Income before income taxes and share of equity in (loss)/profit of unconsolidated
affiliates

63,877


74,699


10,467

Income tax expense

(21,670)


(15,672)


(2,196)

Share of equity in (loss)/profit of unconsolidated affiliates

(183)


183


26







Net income

42,024


59,210


8,297







Net income attributable to non-controlling interests

4,092


4,518


633







Net income attributable to ordinary shareholders

37,932


54,692


7,664







Net income per share attributable to






   ordinary shareholders






—Basic

0.32


0.46


0.06

—Diluted

0.32


0.46


0.06







Weighted average shares used in






   calculating net income per ordinary share:






—Basic

118,669,795


118,669,795


118,669,795

—Diluted

118,669,795


118,669,795


118,669,795







Net income per ADS






—Basic

1.28


1.84


0.24

—Diluted

1.28


1.84


0.24

 

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)








Three Months Ended November 30,


2022


2023


RMB


RMB


USD

Net cash used in operating activities

(26,667)


(23,679)


(3,318)







Net cash generated from/(used in) investing activities

16,337


(17,685)


(2,478)







Net cash used in financing activities

(5,334)


(1,887)


(264)







Effect of exchange rate changes on cash and cash equivalents, and restricted
cash

13,398


(2,435)


(342)







Net change in cash and cash equivalents, and restricted cash

(2,266)


(45,686)


(6,402)







Cash and cash equivalents, and restricted cash at beginning of the period

857,784


567,236


79,489







Cash and cash equivalents, and restricted cash at end of the period

855,518


521,550


73,087

 

 

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 November 30,


2022


2023


RMB


RMB


USD

Gross profit

179,830


203,438


28,509

Add: Amortization of intangible assets

3,798


3,322


466

Adjusted gross profit

183,628


206,760


28,975







Operating income

64,917


74,514


10,442

Add: Amortization of intangible assets

3,798


3,322


466

Adjusted operating income

68,715


77,836


10,908







Net income

42,024


59,210


8,297

Add: Amortization of intangible assets

3,798


3,322


466

Add: Tax effect of amortization of intangible assets

(777)


(670)


(94)

Adjusted net income

45,045


61,862


8,669







Net income attributable to ordinary shareholders

37,932


54,692


7,664

Add: Amortization of intangible assets

3,798


3,322


466

Add: Tax effect of amortization of intangible assets

(777)


(670)


(94)

Adjusted net income attributable to ordinary shareholders

40,953


57,344


8,036







Net income

42,024


59,210


8,297

Add: Interest expense/(income), net

3,759


(386)


(54)

Add: Income tax expense

21,670


15,672


2,196

Add: Depreciation and amortization

22,599


16,293


2,283

Adjusted EBITDA

90,052


90,789


12,722







Weighted average shares used






   in calculating adjusted net income per ordinary share:






Basic and Diluted

118,669,795


118,669,795


118,669,795







Adjusted net income per share attributable






   to ordinary shareholders






—Basic

0.35


0.48


0.07

—Diluted

0.35


0.48


0.07







Adjusted net income per ADS






—Basic

1.40


1.92


0.28

—Diluted

1.40


1.92


0.28

 

 


Source: Bright Scholar Education Holdings Ltd. Related Stocks: NYSE:BEDU

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