Revenue of $93.4 million for the year ended December 31, 2018, a
decrease of $4.3 million or 4.4%
UK and Other Foreign Market Segments Combine for Revenue of $40.4
million
Cash Sales of $96.8 million for the year ended December 31, 2018, a
decrease of $2.4 million or 2.4%
Net loss of $10.0 million or $0.43 per basic and diluted common share
for the year ended December 31, 2018, a decrease in net income of $14.3
million or $0.62 per basic common share and $0.61 per diluted common
share
Operating Cash Flows of $(1.7) million for the year ended December
31, 2018, representing a period-over-period decrease of $6.8 million.
Company to hold Conference Call Today at 4:30 p.m. ET
Legacy Education Alliance, Inc. (OTCQB:LEAI) (www.legacyeducationalliance.com),
a leading international provider of practical, high-quality, and
value-based educational training on the topics of personal finance,
entrepreneurship, real estate, and financial markets investing
strategies and techniques, today announced financial results for the
fiscal year ended December 31, 2018.
Fiscal Year 2018 Overview
-
Net loss was $10.0 million or $0.43 per basic and diluted common share
for the year ended December 31, 2018, compared to net income of $4.3
million or $0.19 per basic common share and $0.18 per diluted common
share for the year ended December 31, 2017. This was a decrease in net
income of $14.3 million or $0.62 per basic common share and $0.61 per
diluted common share.
-
Revenue was $93.4 million for the year ended December 31, 2018
compared to $97.7 million for the year ended December 31, 2017, a
decrease of $4.3 million or 4.4%.
-
Combined UK and Other Foreign Market Segments revenue was $40.4
million for the year ended December 31, 2018 compared to $40.5 million
for the year ended December 31, 2017, a decrease of $100 thousand.
-
Cash sales were $96.8 million for the year ended December 31, 2018
compared to $99.2 million for the year ended December 31, 2017, a
decrease of $2.4 million or 2.4%.
-
Total operating costs and expenses were $102.5 million for the year
ended December 31, 2018 compared to $95.9 million for the year ended
December 31, 2017, an increase of $6.5 million or 6.8%.
-
Net cash used in operating activities was $1.7 million in the year
ended December 31, 2018 compared to net cash provided by operating
activities of $5.1 million in the year ended December 31, 2017,
representing a period-over-period decrease of $6.8 million.
“Our 2018 financial results were negatively impacted by a variety of
factors, many of which we believe occurred outside the course of normal
business operation,” said James May, Interim CEO. “We feel that the bulk
of these expense increases are behind us and that the investment in our
business was necessary to sustain future growth.”
FY 2018 VERSUS FY 2017 RESULTS
Revenue was $93.4 million for the year ended December 31, 2018 compared
to $97.7 million for the year ended December 31, 2017, a decrease of
$4.3 million or 4.4%. The decrease was due to decreased fulfillment of
$7.8 million or 9.5%, partially offset by the increase in recognition of
revenue from expired contracts of $3.4 million or 21.0%. Cash sales were
$96.8 million for the year ended December 31, 2018 compared to $99.2
million for the year ended December 31, 2017, a decrease of $2.4 million
or 2.4%. The decrease was driven primarily by a $4.0 million decrease in
our Other Foreign Markets segment and a $1.2 million decrease in our
U.K. segment partially offset by a $2.8 million increase in our North
America segment.
Total operating costs and expenses were $102.5 million for the year
ended December 31, 2018 compared to $95.9 million for the year ended
December 31, 2017, an increase of $6.5 million or 6.8%. The increase was
due to a $1.8 million increase in direct course expenses, a $1.8 million
increase in general and administrative expenses, and a $2.9 million
increase in advertising and sales expenses.
Net loss was $10.0 million or $0.43 per basic and diluted common share
for the year ended December 31, 2018, compared to net income of $4.3
million or $0.19 per basic common share and $0.18 per diluted common
share for the year ended December 31, 2017, a decrease in net income of
$14.3 million or $0.62 per basic common share and $0.61 per diluted
common share. Note that the net loss for the year ended December 31,
2018 was negatively impacted by the decrease in revenue of $4.3 million,
the increase in operating costs of $6.5 million, and the decrease in
other income of $4.5 million.
CASH FLOW AND CAPITAL STRUCTURE
Net cash used in operating activities was $1.7 million in the year ended
December 31, 2018 compared to net cash provided by operating activities
of $5.1 million in the year ended December 31, 2017, representing a
period-over-period decrease of $6.8 million. This decrease was primarily
the result of decreased earnings.
Our consolidated capital structure as of December 31, 2018 and December
31, 2017 was 100.0% equity.
CONFERENCE CALL
Legacy Education Inc. will hold a conference call on Wednesday, April
24, 2019 at 4:30 p.m. EDT to discuss its financial results for the
fiscal year ended December 31, 2018.
To listen to the conference call, interested parties within the U.S.
should dial 1-866-548-4713 or 1-323-794-2093 for international calls,
approximately 10 minutes prior to the scheduled start time. Conference
ID: 6288024. The conference call will also be available through a live
webcast, which can be accessed at http://public.viavid.com/index.php?id=134044
or through the company’s website at http://ir.legacyeducationalliance.com/ir-calendar.
Management will answer pre-submitted questions gathered prior to the
earnings conference call in the Question and Answer period of the call.
Interested parties may submit questions for Management’s consideration
prior to the call by submitting them in writing to Legacy Education
Alliance Investor Relations at scottg@coreir.com.
A replay of the call will be available approximately one hour after the
conclusion of the call through May 8, 2019. The number for the replay is
(844) 512-2921 (US), or (412) 317-6671 for international calls; the
passcode for the replay is 6288024.
About Legacy Education Alliance Inc.
Legacy Education Alliance, Inc. (http://www.legacyeducationalliance.com)
is a leading international provider of practical, high-quality, and
value-based educational training on the topics of personal finance,
entrepreneurship, real estate, and financial markets investing
strategies and techniques. Legacy Education Alliance was founded in
1996, today we are a global company with approximately 165 full-time
employees that has cumulatively served more than two million students
from more than 150 countries and territories over the course of our
operating history.
We offer our training through a variety of brands including Rich Dad®
Education; Rich Dad® Stock Education; Making Money from Property with
Martin Roberts™; Brick Buy Brick™; Building Wealth; Robbie Fowler
Property Academy™; Women in Wealth™; Perform in Property™, and Teach Me
to Trade™. For more information, please visit our website at www.legacyeducationalliance.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (which Sections were adopted as part of the Private
Securities Litigation Reform Act of 1995). Statements preceded by,
followed by or that otherwise include the words “believe,” “anticipate,”
“estimate,” “expect,” “intend,” “plan,” “project,” “prospects,”
“outlook,” and similar words or expressions, or future or conditional
verbs such as “will,” “should,” “would,” “may,” and “could” are
generally forward-looking in nature and not historical facts. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the Company's actual
results, performance or achievements to be materially different from any
anticipated results, performance or achievements. The Company disclaims
any intention to, and undertakes no obligation to, revise any
forward-looking statements, whether as a result of new information, a
future event, or otherwise. For additional risks and uncertainties that
could impact the Company’s forward-looking statements, please see the
Company’s Annual Report on Form 10-K (including but not limited to the
discussion under “Risk Factors” therein) filed with the SEC on April 15,
2019 and which may be viewed at http://www.sec.gov.
LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES
|
Consolidated Balance Sheets
|
(In thousands, except share data)
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,557
|
|
|
$
|
6,005
|
|
Restricted cash
|
|
|
5,080
|
|
|
|
2,899
|
|
Deferred course expenses
|
|
|
8,547
|
|
|
|
9,417
|
|
Prepaid expenses and other current assets
|
|
|
3,132
|
|
|
|
6,408
|
|
Inventory
|
|
|
89
|
|
|
|
330
|
|
Total current assets
|
|
|
18,405
|
|
|
|
25,059
|
|
Property and equipment, net
|
|
|
1,880
|
|
|
|
1,187
|
|
Deferred tax asset, net
|
|
|
97
|
|
|
|
441
|
|
Other assets
|
|
|
178
|
|
|
|
333
|
|
Total assets
|
|
$
|
20,560
|
|
|
$
|
27,020
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,962
|
|
|
$
|
2,860
|
|
Royalties payable
|
|
|
210
|
|
|
|
188
|
|
Accrued course expenses
|
|
|
1,483
|
|
|
|
1,829
|
|
Accrued salaries, wages and benefits
|
|
|
748
|
|
|
|
1,506
|
|
Other accrued expenses
|
|
|
2,614
|
|
|
|
2,430
|
|
Long-term debt, current portion
|
|
|
512
|
|
|
|
11
|
|
Deferred revenue, current portion
|
|
|
57,353
|
|
|
|
57,151
|
|
Total current liabilities
|
|
|
67,882
|
|
|
|
65,975
|
|
Long-term debt, net of current portion
|
|
|
8
|
|
|
|
20
|
|
Deferred revenue, net of current portion
|
|
|
—
|
|
|
|
602
|
|
Other liabilities
|
|
|
1,331
|
|
|
|
1,188
|
|
Total liabilities
|
|
|
69,221
|
|
|
|
67,785
|
|
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
|
|
Stockholders’ deficit:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 20,000,000 shares authorized,
none issued
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.0001 par value, 200,000,000 shares authorized,
23,120,852 and
|
|
|
|
|
|
|
|
|
23,007,519 shares issued and outstanding at December 31, 2018 and
2017,
|
|
|
|
|
|
|
|
|
respectively
|
|
|
2
|
|
|
|
2
|
|
Additional paid-in capital
|
|
|
11,470
|
|
|
|
11,299
|
|
Cumulative foreign currency translation adjustment
|
|
|
1,444
|
|
|
|
(445
|
)
|
Accumulated deficit
|
|
|
(61,577
|
)
|
|
|
(51,621
|
)
|
Total stockholders’ deficit
|
|
|
(48,661
|
)
|
|
|
(40,765
|
)
|
Total liabilities and stockholders’ deficit
|
|
$
|
20,560
|
|
|
$
|
27,020
|
|
|
LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES
|
Consolidated Statements of Operations and Comprehensive Income
(Loss)
|
(In thousands, except per share data)
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
|
2018
|
|
|
2017
|
|
Revenue
|
|
|
|
$
|
93,409
|
|
|
$
|
97,730
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Direct course expenses
|
|
|
|
|
55,800
|
|
|
|
53,972
|
|
Advertising and sales expenses
|
|
|
|
|
22,740
|
|
|
|
19,790
|
|
Royalty expenses
|
|
|
|
|
4,698
|
|
|
|
4,746
|
|
General and administrative expenses
|
|
|
|
|
19,250
|
|
|
|
17,408
|
|
Total operating costs and expenses
|
|
|
|
|
102,488
|
|
|
|
95,916
|
|
Income (loss) from operations
|
|
|
|
|
(9,079
|
)
|
|
|
1,814
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
(40
|
)
|
|
|
(9
|
)
|
Other income (expense), net
|
|
|
|
|
(368
|
)
|
|
|
4,480
|
|
Total other income (expense), net
|
|
|
|
|
(408
|
)
|
|
|
4,471
|
|
Income (loss) before income taxes
|
|
|
|
|
(9,487
|
)
|
|
|
6,285
|
|
Income tax expense
|
|
|
|
|
(469
|
)
|
|
|
(1,989
|
)
|
Net income (loss)
|
|
|
|
$
|
(9,956
|
)
|
|
$
|
4,296
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share
|
|
|
|
$
|
(0.43
|
)
|
|
$
|
0.19
|
|
Diluted earnings (loss) per common share
|
|
|
|
$
|
(0.43
|
)
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding
|
|
|
|
|
23,014
|
|
|
|
21,510
|
|
Diluted weighted average common shares outstanding
|
|
|
|
|
23,014
|
|
|
|
22,857
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
(9,956
|
)
|
|
$
|
4,296
|
|
Foreign currency translation adjustments, net of tax of $0
|
|
|
|
|
1,889
|
|
|
|
(3,113
|
)
|
Total comprehensive income
|
|
|
|
$
|
(8,067
|
)
|
|
$
|
1,183
|
|
|
LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES
|
Consolidated Statements of Changes in Stockholders’ Deficit
|
(In thousands)
|
|
|
|
Common stock
|
|
|
Additional
paid-in
|
|
|
Cumulative
foreign
currency
translation
|
|
|
Accumulated
|
|
|
Total
stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
capital
|
|
|
adjustment
|
|
|
deficit
|
|
|
deficit
|
|
Balance at December 31, 2016
|
|
|
22,631
|
|
|
|
2
|
|
|
|
11,073
|
|
|
|
2,668
|
|
|
|
(55,917
|
)
|
|
|
(42,174
|
)
|
Issuance of common stock for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
services
|
|
|
400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Share-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
226
|
|
|
|
—
|
|
|
|
—
|
|
|
|
226
|
|
Cancellation of common stock
|
|
|
(23
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
translation adjustment, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of tax of $0
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,113
|
)
|
|
|
—
|
|
|
|
(3,113
|
)
|
Net Income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,296
|
|
|
|
4,296
|
|
Balance at December 31, 2017
|
|
|
23,008
|
|
|
$
|
2
|
|
|
$
|
11,299
|
|
|
$
|
(445
|
)
|
|
$
|
(51,621
|
)
|
|
$
|
(40,765
|
)
|
Share-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
171
|
|
|
|
—
|
|
|
|
—
|
|
|
|
171
|
|
Issuance of common stock
|
|
|
120
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Cancellation of common stock
|
|
|
(7
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
translation adjustment, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of tax of $0
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,889
|
|
|
|
—
|
|
|
|
1,889
|
|
Net Loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9,956
|
)
|
|
|
(9,956
|
)
|
Balance at December 31, 2018
|
|
|
23,121
|
|
|
$
|
2
|
|
|
$
|
11,470
|
|
|
$
|
1,444
|
|
|
$
|
(61,577
|
)
|
|
$
|
(48,661
|
)
|
|
LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES
|
Consolidated Statements of Cash Flows
|
(In thousands)
|
|
|
|
Years Ended December 31,
|
|
|
|
2018
|
|
|
2017
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(9,956
|
)
|
|
$
|
4,296
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating
|
|
|
|
|
|
|
|
|
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
146
|
|
|
|
125
|
|
Gain on change in fair value of derivatives
|
|
|
(24
|
)
|
|
|
(85
|
)
|
Share-based compensation
|
|
|
170
|
|
|
|
226
|
|
Deferred income taxes
|
|
|
487
|
|
|
|
1,667
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Deferred course expenses
|
|
|
703
|
|
|
|
(49
|
)
|
Prepaid expenses and other receivable
|
|
|
3,084
|
|
|
|
(2,813
|
)
|
Inventory
|
|
|
236
|
|
|
|
34
|
|
Other assets
|
|
|
26
|
|
|
|
(42
|
)
|
Accounts payable-trade
|
|
|
2,248
|
|
|
|
(675
|
)
|
Royalties payable
|
|
|
23
|
|
|
|
12
|
|
Accrued course expenses
|
|
|
(290
|
)
|
|
|
699
|
|
Accrued salaries, wages and benefits
|
|
|
(751
|
)
|
|
|
657
|
|
Other accrued expenses
|
|
|
611
|
|
|
|
516
|
|
Deferred revenue
|
|
|
1,581
|
|
|
|
496
|
|
Net cash provided by (used in) operating activities
|
|
|
(1,706
|
)
|
|
|
5,064
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(858
|
)
|
|
|
(181
|
)
|
Net cash used in investing activities
|
|
|
(858
|
)
|
|
|
(181
|
)
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Principal payments on debt
|
|
|
(11
|
)
|
|
|
(11
|
)
|
Proceeds from issuance debt
|
|
|
500
|
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
|
|
489
|
|
|
|
(11
|
)
|
Effect of exchange rate differences on cash
|
|
|
(192
|
)
|
|
|
(908
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(2,267
|
)
|
|
|
4,045
|
|
Cash and cash equivalents and restricted cash, beginning of period
|
|
$
|
8,904
|
|
|
$
|
4,859
|
|
Cash and cash equivalents and restricted cash, end of period
|
|
$
|
6,637
|
|
|
$
|
8,904
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
|
|
Cash paid during the period for interest
|
|
$
|
40
|
|
|
$
|
10
|
|
Cash paid during the period for income taxes, net of refunds received
|
|
$
|
(924
|
)
|
|
$
|
1,240
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190424006009/en/
Copyright Business Wire 2019