Q4 2024 Bright Scholar Education Holdings Ltd Earnings Call
Staff seinbeiden-workshop www.seinbaden-workshop.de Gina
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Hui, Ruby Yim, Ruolei Niu, Unknown Executive
Speaker Change: Hello, ladies and gentlemen. Thank you for standing by for Bright Scholars' fourth quarter and fiscal year 2024 earnings conference call.
At this time, all participants are in listen-only mode.
Speaker Change: After management's remarks, there will be a question and answer session.
Today's conference call is being recorded.
Speaker Change: I will now turn the call over to your host from Piacente Financial Communications, Andrea Guo, IR counsel for the company. Please go ahead, Andrea.
Andrea Guo: Thank you very much. Hello everyone and welcome to Brett Scholar's Earnings Conference call for the fourth quarter and fiscal year 2024. The company's financial and operational results were released earlier today and are available online by visiting the IR section of our website at ir.brettscholar.com
Andrea Guo: Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Covered Securities Legislation Reform Act of 1995, forward-looking statements involving inherent risks and uncertainties.
Andrea Guo: As such, the company's results may materially differ from today's views.
Andrea Guo: Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC.
Andrea Guo: The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.
Andrea Guo: Additionally, Brett Scholar's earnings press release and this conference call include discussions of our undebated GAAP and non-GAAP financial measures.
Andrea Guo: Scholar's Earnings Press Release contains a reconciliation of the unaudited non-GAAP measures.
Please also note that all numbers are in RNB.
Andrea Guo: Participants on today's call will include our Chief Executive Officer, Mr. Robert Niu, who will provide a company overview and update on our strategic initiatives with highlights from the quarter and the fiscal year.
Andrea Guo: Our Chief Financial Officer Ms. Cindy Zhang will then provide details on the company's financial results for the period.
We will then open the call for questions.
Speaker Change: I will now turn the call over to Brad Scholar's Chief Executive Officer, Mr. Robert Niu. Please go ahead, sir.
Robert Niu: Thank you. Hello, everyone, and thank you for joining us on today's call.
Robert Niu: We posted with our global business and operations throughout this year.
Showing up our foundation for future growth.
Robert Niu: Despite ongoing macro challenges, we drove rapid expansion in our overseas business, delivering continued double-digit year-over-year revenue growth in our overseas school's business for the full fiscal year.
Robert Niu: Our primary objectives remain laser-focused on strengthening our high-growth, high-return core business. With this focus, I would be pleased to announce that
Robert Niu: We have completed divestiture of all non-core businesses from our complementary education service segment and will be concentrating our efforts on our global recruitment initiatives, providing services for students with ambitions to study overseas.
Meanwhile, the integration of our Headquarters and Overseas Management Team.
Robert Niu: has also helped us with reducing management costs and increased our organization of productivity significantly.
Robert Niu: Allowing the group's strategies to be executed more efficiently at the local level.
Robert Niu: FY24, our streamlined global operations led to a 16% reduction in the over-year in high comps.
Robert Niu: at our overseas headquarters and a 28% decrease in related costs for the upcoming financial year.
Robert Niu: Moving into fiscal year 2025, we plan to reinforce fuel engine growth.
Robert Niu: strategy by focusing on continued expansion of our overseas school business while propelling our global recruitment initiatives for prospective international students.
Robert Niu: This will enable us to drive further expansion and capture more of the sizable market opportunities that will support our sustainable growth over the long term.
Speaker Change: Now I'd like to share some details on the fourth quarter and fiscal year for each of our business segments.
First, as I said,
Speaker Change: Overseas schools attend is solid growth momentum and remain our strongest segment.
Speaker Change: for the fiscal year. Revenue was up 17.5% year over year, accounting for 51.7% and 54.2% of our total revenue for the fourth quarter and the fiscal year, respectively.
Speaker Change: The ability to achieve exceptional academic outcome is one of the ways we are accelerating enrollment.
Our schools continue to foster
Speaker Change: This year, we are proud to share that our Cass Global Schools students achieved outstanding A-level results.
Speaker Change: with 53% of grades being A star to A, while a remarkable 86.8% of St. Michael's School students.
Speaker Change: Grace were 8 stars to 8, propelling this school to a new high ranking of 3rd place in the UK for 11 results in 2024.
Moreover, many CGS students.
Speaker Change: successfully gained admissions to their top-choice universities, including the University of Cambridge, the University of Oxford, other G5 institutions, and the University of the Arts London.
Speaker Change: Additionally, CGS students also receive offers from Ivy League schools in the United States.
Speaker Change: Those noteworthy achievements are a testament to the dedication and diligence exhibited by our students and our teachers.
Speaker Change: Moving forward, we aim to enhance our curriculum further by bringing superior quality teaching resources and sponsoring a collaborative
Learning Environment.
Beyond their remarkable academic accomplishments,
Our students have also excelled in athletics and arts.
Speaker Change: In the fourth fiscal quarter, three Bournemouth Collegiate School graduates secured gold medals at the 2024 Paris Paralympics.
I'm asking three goals.
Speaker Change: One silver and two bronze. Notably, two of these athletes hone their skills at the Sports Academy within BCS.
Speaker Change: In other sports, our CAF Academy Boston is excelling in hockey and basketball, with students representing a broad range of national teams.
Speaker Change: And in fashion, four of our Cambridge School of Visual and Performing Arts students were nominated for seven awards at Graduate Fashion Week.
Speaker Change: The world's largest special of arts fashion showcase, sending out about 2,000 entrants and showcasing their impressive talent and creativity.
Speaker Change: This exceptional blend of talents highlights our students' diverse strengths and reinforces the importance of holistic education programs that nurture both intelligence and creative pursuits.
Speaker Change: Looking ahead, we are dedicated to cultivating an environment that boasts continued success, inspiring the next generation of leaders across diverse fields.
Speaker Change: Overall, we are pleased with the progress of our overseas school business during the fourth fiscal quarter.
Speaker Change: Our commitment to provide a premium education that prepares students for success in the global marketplace propels our business growth, accelerating year-over-year increase in enrollment.
Speaker Change: Moving on to our complementary education services, we saw a 19.7% year-over-year decline in revenue during the fiscal fourth quarter as we continue to wind down low-return and underutilized programs.
Speaker Change: We have successfully divested our non-core business by the end of this quarter.
Speaker Change: Looking forward, we aim to drive innovation and enhance service delivery of our global recruitment initiatives to serve more students planning to study abroad.
Speaker Change: We are expanding our products and services offering on our existing China platform and make these available in more international markets.
Speaker Change: All while aligning our efforts with our long-term vision and adapting to a dynamic environment.
Hui, Ruolei Niu, Unknown Executive
Speaker Change: In the fourth fiscal quarter, we also enhanced our senior leadership team.
Speaker Change: to help advance our near-term expansion goals in overseas markets and strengthen our global enrolments.
A new principal has joined us.
Speaker Change: to Cambridge, plus another highly experienced educator will take over the principal role.
Both were in independent schools.
Speaker Change: In April next year, focusing on curriculum reform and team enhancement to advance the
The School's Developments
Additionally,
as well as the group's long-term growth and development.
In summary,
Speaker Change: Relentless focus on strengthening our high-growth core business in physical year 2024 has played us in a strong position to grow this physical year.
Moving forward, we will continue to advance our dual engine.
Speaker Change: Growth Strategy to Expand Our Study Overseas School Business and Boost Our Global Recruitment Initiative.
Meanwhile, we will proceed in streamlining our global operations.
Speaker Change: and enhancing efficiencies to align our goals. We are confident that we can capture the extensive growth opportunities in overseas markets that will strengthen our market share and status as a leading global education service provider.
Speaker Change: With that, I will turn the call over to our CFO, Ms. Cindy Zhang, who will discuss our key financial results. Please go ahead, Cindy.
Hui, Ruby Yim, Ruolei Niu, Unknown Executive
Speaker Change: I'd like to discuss our financial results for the fourth quarter and fiscal year 2024. Please note all amounts are in RMB unless otherwise stated.
Speaker Change: Our total revenue for fiscal year 2024 remains stable, with overseas schools' revenue increasing by 17.5% year-over-year.
Speaker Change: Our gross profit increased by 7.7% and gross margin by 2.3 percentage points year-over-year.
Hui, Ruby Yim, Ruolei Niu, Unknown Executive
We recorded and adjusted the income of 1.1 million.
compared to an adjusting net loss of 192.
and Global Sponsor
Speaker Change: Looking at our financial results for the fourth quarter and fiscal year in more details.
Speaker Change: 358.3 million compared to 442.2 million for the same quarter last fiscal year.
By segment, Overseas Goods Revenue contribution was $195.1 million.
Speaker Change: Complementary Education Services and Domestic Kindergartens and K-12 Operations Services revenues were $129.8 million and $43.3 million respectively.
and the other one is the same.
Speaker Change: For fiscal year 2022-2024, we achieved total revenue of $1,755.2 million, compared to $1,000
Speaker Change: $772.1 million for the last fiscal year. By segment, overseas recorded revenue of $951.2 million, contributing 54.2% of total revenues and growing by 17.5% year-over-year.
Gross profit from continuing operations for the fourth quarter was
Sit with
Speaker Change: 35.9 million compared to 79.8 million for the same quarter last fiscal year.
Speaker Change: For the whole physical year, our gross profit was 503.6 million, representing a 7.7% increase year-over-year, driven by a 47.8% increase in overseas groups' gross profit.
Hui, Ruolei Niu, Unknown Executive
Guof Ma Jun
from continuing operations for the fourth quarter was 10%.
compared to 18.1% for the same quarter last year.
Speaker Change: For the whole fiscal year, gross margin increased to 28.7% from 26.4% for the last fiscal year.
Speaker Change: The improvement was mainly attributable to cost-saving measures and efficiency enhancements.
Hui, Ruby Yim, Ruolei Niu, Unknown Executive
Hui, Ruby Yim, Ruolei Niu, Unknown Executive
Speaker Change: SG&A expenses from continuing operations for the fourth quarter were $119.3 million, representing an $18.3% decrease year-over-year.
for the fiscal year, SG&A expenses decreased by
Speaker Change: 8.1% to 469 million. This improvement was mainly due to our continuous efforts to streamline our global operations and improve operational efficiency in our headquarters.
Hui, Ruolei Niu, Unknown Executive
Speaker Change: 44.1% to 80.7 million from 56 million for the last fiscal quarter. Now turning to profitability
Speaker Change: We recorded a net loss of $954.8 million and $869.1 million from continuing operations in the fourth quarter and fiscal year.
Hui, Ruby Yim, Ruolei Niu, Unknown Executive
compared to $285.1 million for the same
Speaker Change: quarter last year and 358.9 million for the last fiscal year, mainly due to an
852 million impairment loss on Google and intangible assets.
Hui, Ruby Yim, Ruolei Niu, Unknown Executive
Speaker Change: Adjusted net loss from continuing operations for the fourth quarter narrowed by 24.3% year-over-year to $92 million. For the fiscal year, adjusted net income was $101 million, compared to an adjusted net loss of $192.6 million for the last fiscal year.
Hui, Ruolei Niu, Unknown Executive
Speaker Change: As for our balance sheet, our cash position was significantly enhanced. As of August 31, 2024, we had cash-on-cash equivalent and restricted cash of $505.8 million, an increase of 20 from $419.9 million as of August 31, 2023.
Speaker Change: In addition, our net cash from operating activities also increased by 14 times year over year to $104 million for the fourth quarter and 5 times to $126 million for the fiscal year.
Speaker Change: Moving into fiscal year 2025, we will further enhance our operational efficiency and profitability while strengthening our service offerings.
Speaker Change: Supported by our healthy balance sheet, we are confident in our ability to execute our dual-engine growth strategy, expanding our overseas goods business and promoting our global recruitment initiatives.
We believe these
Speaker Change: Productivity approach will not only solidify our competitive edge, but also drive long-term growth and profitability.
Speaker Change: Okay, this concludes all our prepared remarks today. We will now open the call to the questions. Operator, please go ahead.
Speaker Change: Thank you. If you would like to ask a question, please press star then one on your telephone keypad.
Speaker Change: If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys.
To withdraw your question, please press star then two.
Speaker Change: For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.
Participate in the Discussion
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[inaudible]
Speaker Change: This concludes the question and answer session. I'd like to turn the conference back over to Andrea Groh for any closing remarks.
Andrea Groh: Thank you once again for joining us today. If you have further questions, please feel
Andrea Groh: Please feel free to contact Black Scholars Investor Relations through the contact information provided on our website.
Hui, Ruolei Niu, Unknown Executive
Speaker Change: Thank you. This concludes today's conference call. You may now disconnect your lines. Thank you and have a wonderful day.