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Bright Scholar Announces Unaudited Financial Results for the Third Fiscal Quarter of FY2021

·32 min read

FOSHAN, China, July 21, 2021 /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 third fiscal quarter ended May 31, 2021.

Third Fiscal Quarter Ended May 31, 2021 Financial Highlights

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

RMB in million

Except EPS and %

Third Fiscal Quarter

Ended May 31, 2021

Third Fiscal Quarter

Ended May 31, 2020

YoY

% Change

Revenue

1,053.8

739.4

42.5%

Gross Profit

418.2

292.0

43.2%

Gross Margin

39.7%

39.5%

0.2%

Operating Income

212.7

136.2

56.2%

Operating Margin

20.2%

18.4%

1.8%

Net Income

163.9

68.0

141.0%

Net Margin

15.6%

9.2%

6.4%





Adjusted Gross Profit (1)

426.0

302.9

40.7%

Adjusted Gross Margin (1)

40.4%

41.0%

(0.6%)

Adjusted Operating Income (2)

221.2

114.7

92.8%

Adjusted Operating Margin (2)

21.0%

15.5%

5.5%

Adjusted Net Income (3)

170.6

44.3

285.5%

Adjusted Net Margin (3)

16.2%

6.0%

10.2%

Adjusted EBITDA (4)

319.3

164.5

94.1%

Adjusted EBITDA Margin (4)

30.3%

22.2%

8.1%





Basic and Diluted Earnings per Share

1.43

0.64

123.4%

Adjusted Basic and Diluted Earnings per Share (5)

1.49

0.44

238.6%

Nine Months Ended May 31, 2021 Financial Highlights

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

RMB in million

Except EPS and %

Nine Months

Ended May 31, 2021

Nine Months

Ended May 31, 2020

YoY

% Change

Revenue

2,914.4

2,714.4

7.4%

Gross Profit

1,025.1

1,072.3

(4.4%)

Gross Margin

35.2%

39.5%

(4.3%)

Operating Income

400.8

479.6

(16.4%)

Operating Margin

13.8%

17.7%

(3.9%)

Net Income

312.4

312.8

(0.1%)

Net Margin

10.7%

11.5%

(0.8%)





Adjusted Gross Profit (1)

1,047.5

1,105.2

(5.2%)

Adjusted Gross Margin (1)

35.9%

40.7%

(4.8%)

Adjusted Operating Income (2)

425.3

500.5

(15.0%)

Adjusted Operating Margin (2)

14.6%

18.4%

(3.8%)

Adjusted Net Income (3)

331.8

326.7

1.6%

Adjusted Net Margin (3)

11.4%

12.0%

(0.6%)

Adjusted EBITDA (4)

688.2

669.4

2.8%

Adjusted EBITDA Margin (4)

23.6%

24.7%

(1.1%)





Basic and Diluted Earnings per Share

2.61

2.62

(0.4%)

Adjusted Basic and Diluted Earnings per Share (5)

2.78

2.73

1.8%

______________________________________________________________________________________________

1. Adjusted gross profit/(loss) is defined as gross profit/(loss) excluding amortization of intangible assets. Adjusted gross margin is defined as adjusted gross profit/(loss) divided by revenue.

2. Adjusted operating income/(loss) is defined as operating income/(loss) excluding share-based compensation expense and amortization of intangible assets. Adjusted operating margin is defined as adjusted operating income/(loss) divided by revenue.

3. Adjusted net income/(loss) is defined as net income/(loss) excluding share-based compensation expense, amortization of intangible assets and tax effect of amortization of intangible assets. Adjusted net margin is defined as adjusted net income/(loss) divided by revenue.

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. Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.

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 and tax effect of amortization of intangible assets) divided by the weighted average number of basic and diluted ordinary shares or American depositary shares (each an "ADS"), each representing one Class A ordinary share of the Company, on an as-converted basis.


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.

BUSINESS PERFORMANCE HIGHLIGHTS

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

Domestic K-12 Schools

The domestic K-12 school business comprises our international schools, bilingual schools and kindergartens in China.

  • The average number of students increased by 16.9% to 57,188 for the third fiscal quarter and 13.7% to 55,376 for the nine-month period.

  • For the third fiscal quarter, revenue increased by 72.5% to RMB750.0 million and accounted for 71.2% of the total revenue. For the nine-month period, revenue increased by 28.4% to RMB1,993.5 million and accounted for 68.4% of the total revenue.

  • For the third fiscal quarter, gross margin increased to 47.8% from 43.1%, and operating margin increased to 37.0% from 27.0%. For the nine-month period, gross margin was 41.8% compared to 42.3%, and operating margin increased to 28.9% from 28.8%.

Complementary Education Services

The complementary education services business comprises language training, overseas study counselling, camps and study tours and others.

  • Revenue amounted to RMB130.2 million and accounted for 12.4% of the total revenue. For the nine-month period, revenue amounted to RMB387.7 million and accounted for 13.3% of the total revenue.

  • For the third fiscal quarter, gross margin was 27.2% and operating margin was 6.6%. For the nine-month period, gross margin was 27.0% and operating margin was 9.6%.

Overseas Schools (CATS Global Schools)

CATS Global Schools include 6 Stafford House locations in UK and Canada, 4 CATS Colleges in US and UK, Cambridge School of Visual & Performing Arts and 3 independent boarding schools in UK.

  • Revenue amounted to RMB142.3 million, compared to RMB210.4 million in the same fiscal quarter last year, and accounted for 13.4% of the total revenue for the third fiscal quarter. For the nine-month period, revenue amounted to RMB427.1 million, compared to RMB766.8 million in the same period of last fiscal year, and accounted for 14.7% of the total revenue.

  • For the third fiscal quarter, gross margin was 6.3% and operating margin was (33.4%). For the nine-month period, gross margin was 7.6% and operating margin was (30.3%).

Education Technology ("EdTech")

The education technology business comprises online career counselling, online Academic Olympiad training and online international school.

  • Revenue amounted to RMB31.3 million, increased by 47.1% and accounted for 3.0% of the total revenue. For the nine-month period, revenue amounted to RMB106.1 million, increased by 47.9% and accounted for 3.6% of the total revenue.

  • For the third fiscal quarter, gross margin was 49.6% and operating margin was 15.4%. For the nine-month period, gross margin was 50.8% and operating margin was 15.7%.

"We're very pleased to report strong third fiscal quarter results, driven primarily by a stronger than expected recovery in our domestic businesses. It also reflects the continuation and acceleration of our key strategic initiatives we've discussed in the past few quarters," said Jerry He, Executive Vice Chairman of Bright Scholar. "In the third quarter, we focused on engines of growth and continued to employ cost discipline across all of our businesses, resulting in 42.5% revenue growth and 141.0% net income growth compared to same quarter last year. On the nine-month basis, top line grew 7.4% year-over-year and net income was RMB312 million despite the material impact the pandemic had on our overseas business."

"For domestic K-12 business, recovery was the strongest in the third fiscal quarter with enrolment of international schools, bilingual schools and kindergartens grew by 11.6%, 8.4% and 29.4%, respectively," said Ms. Wanmei Li, Chief Executive Officer of Domestic K-12. "In the quarter, revenues and average fees per student were also back to pre-COVID level."

"Our students continued to achieve remarkable academic results," Ms. Li continued. "As of May 31, 2021, 94% of students in the 2021 graduating class of our international schools in China have received offers from the global top 50 institutions, including 12 offers from Oxbridge, 3 offers from University of Chicago, 2 offers from Cornell University, 2 offers from Vanderbilt University, 2 offers from UC Berkeley, and 7 offers from New York University."

"Complementary business remains a significant growth driver for Bright Scholar and we have been very pleased with the strong recovery and the progress our teams have made in increasing the Company's reach and brand awareness, enriching our service offerings and diversifying revenue sources," commented by Mr. Zi Chen, Chief Executive Officer of Complementary Education Services. "In the quarter, revenue grew by 78.5% year-over-year to RMB130.2 million. The growth was primarily driven by the moderate recovery of camps and domestic tour business and after school all-round education services as compared to last year, which was relatively low due to the COVID-19 impact."

"Overseas related complementary business continued to be impacted by the ongoing pandemic and travel restrictions. However, with the speedy COVID-19 vaccine rollout in the UK and the US, campus re-open and lifting of travel restriction is in sight, we continue to see expanding opportunities spurred by the needs of parents to accelerate the growth of reading and all-round education for their children. These trends support our confidence in a very strong recovery to be continued for complementary businesses in our coming quarters and fiscal years. The synergy with our overseas network offers tremendous opportunities. We expect growth will resume and accelerate once the vaccination programs begin to take effect and subsequent travel restrictions are lifted," Mr. Chen continued.

Mr. He commented on the performance of overseas school business, "As anticipated, recovery of our overseas business was slower than domestic business due to significant impacts of COVID. In response to the ongoing COVID-19 impact, the company continues to implement cost control measures in certain areas of the business to effectively manage the changing business environment. Moreover, we have also taken this opportunity to integrate and rebrand our overseas business as CATS Global Schools. The integrated group caters to 3,500 full-time students and 14,500 students from our English language training institutions. Our students represent over 100 nationalities from 16 locations in the UK, US, Canada and China, and our portfolio includes independent and international boarding schools, an Arts University, English language training institutions and a variety of summer programs. We offer students the opportunity to study at different campuses to benefit from learning with different cultures to prepare for today's increasingly globalized society and economy. We are setting our businesses up to capture market opportunities when operating environments return to normal."

"Looking ahead – We are very mindful of the continued risks related to economic, political, regulatory and global health issues that affect our businesses. However, with the multiple engines of growth, the Company is confident that it is well-positioned to drive a continued recovery as pandemic recedes and market dynamics support it. We will continue to focus on our strategic initiatives through improving utilization and enhancing efficiency of our domestic K-12 business; rebuild our revenue growth for overseas business post-COVID and expand the breadth and depth of our complementary service offerings. We expect these initiatives will also bolster our brand awareness, build an effective global organization, expand our emblematic offerings, and enrich learning experience of our students and to generate new business growth over mid to long term. Our solid balance sheet and market leading position have enabled us to navigate through this challenging period, while strengthening our capacities for greater success long term in China and internationally."

"We are excited by the magnitude of opportunities in front of us. Underpinning our confidence in the Company's financial future, the Board of Directors has recently declared a cash dividend of US$0.12 per ADS to our shareholders. We remain committed to executing our growth strategy, evolving our business, strengthening our market position and delivering for our students as we invest for future to deliver value for all of our stakeholders," Mr. He concluded.

UNAUDITED FINANCIAL RESULTS for the THIRD FISCAL QUARTER ENDED MAY 31, 2021

Revenue

Revenue

Third Fiscal Quarter

Ended May 31, 2021

Third Fiscal Quarter

Ended May 31, 2020

YoY

% Change


(RMB in million)

(% of Total Revenue)

(RMB in million)

(% of Total Revenue)


Domestic K-12 Schools

750.0

71.2%

434.8

58.9%

72.5%

International Schools

300.2

28.5%

242.9

32.9%

23.6%

Bilingual Schools

260.2

24.7%

185.5

25.1%

40.3%

Kindergartens

189.6

18.0%

6.4

0.9%

2,875.4%

Overseas Schools

142.3

13.4%

210.4

28.5%

(32.4%)

Education Technology

31.3

3.0%

21.3

2.9%

47.1%

Complementary Education

130.2

12.4%

72.9

9.7%

78.5%

Total

1,053.8

100.0%

739.4

100.0%

42.5%

Revenue for the quarter was RMB1,053.8 million, representing a 42.5% increase from RMB739.4 million for the same period of the last fiscal year. The changes in revenue was primarily due to a stronger than expected recovery in our domestic businesses.

Cost of Revenue

Cost of revenue for the quarter was RMB635.6 million, representing a 42.1% increase from RMB447.4 million for the same period of the last fiscal year.

Gross Profit, Gross Margin and Adjusted Gross Profit

Gross Profit

Third Fiscal Quarter

Ended May 31, 2021

Third Fiscal Quarter

Ended May 31, 2020

YoY

% Change


(RMB in million)

(Margin %)

(RMB in million)

(Margin %)


Domestic K-12 Schools

358.3

47.8%

187.4

43.1%

91.3%

International Schools

149.3

49.7%

127.3

52.4%

17.3%

Bilingual Schools

123.5

47.5%

94.9

51.1%

30.2%

Kindergartens

85.5

45.1%

(34.8)

(547.2%)

(345.1%)

Overseas Schools

8.9

6.3%

62.8

29.9%

(85.8%)

Education Technology

15.5

49.6%

13.8

65.0%

12.3%

Complementary Education

35.5

27.2%

28.0

38.4%

26.5%

Total

418.2

39.7%

292.0

39.5%

43.2%

Gross profit for the quarter was RMB418.2 million, representing a 43.2% increase from RMB292.0 million for the same period of the last fiscal year. Gross margin for the quarter increased to 39.7% from 39.5% for the same period of the last fiscal year.

Adjusted gross profit for the quarter was RMB426.0 million, representing a 40.7% increase from RMB302.9 million for the same period of the last fiscal year. Adjusted gross margin was 40.4% for the quarter, as compared to 41.0% for the same period of the last fiscal year.

Selling, General and Administrative Expenses and Adjusted SG&A Expenses (6)

SG&A Expenses

Third Fiscal Quarter

Ended May 31, 2021

Third Fiscal Quarter

Ended May 31, 2020

YoY

% Change


(RMB in

million)

(% of Total
Revenue)

(RMB in

million)

(% of Total
Revenue)


Domestic K-12 Schools

82.9

7.9%

70.3

9.6%

17.9%

International Schools

36.4

3.5%

36.0

4.9%

1.0%

Bilingual Schools

28.9

2.7%

21.1

2.9%

36.9%

Kindergartens

17.6

1.7%

13.2

1.8%

33.6%

Overseas Schools

60.9

5.8%

60.7

8.2%

0.3%

Education Technology

10.9

1.0%

5.8

0.8%

87.4%

Complementary Education

28.2

2.7%

22.7

3.0%

24.7%

Unallocated Corporate Expenses (7)

31.2

3.0%

6.8

0.9%

355.0%

Total

214.1

20.4%

166.3

22.5%

28.8%

Adj. SG&A Expenses (6)

Third Fiscal Quarter

Ended May 31, 2021

Third Fiscal Quarter

Ended May 31, 2020

YoY

% Change


(RMB in

million)

(% of Total
Revenue)

(RMB in

million)

(% of Total
Revenue)


Domestic K-12 Schools

82.4

7.7%

69.2

9.4%

18.8%

International Schools

36.4

3.4%

36.2

4.9%

0.2%

Bilingual Schools

28.6

2.7%

20.4

2.8%

40.1%

Kindergartens

17.4

1.6%

12.6

1.7%

37.2%

Overseas Schools

60.9

5.8%

60.7

8.2%

0.3%

Education Technology

10.9

1.0%

5.8

0.8%

87.4%

Complementary Education

28.2

2.7%

22.5

3.0%

25.8%

Unallocated Corporate Expenses (8)

31.1

3.0%

40.4

5.5%

(22.9%)

Total

213.5

20.2%

198.6

26.9%

7.5%

______________________________________________________________________________________________

6. Adjusted SG&A expenses is defined as selling, general and administrative expenses excluding share-based compensation expense.

7. Unallocated corporate expenses are mainly from headquarter, including staff cost, share-based compensation expense and other office expenses.

8. Adjusted unallocated corporate expenses is defined as unallocated corporate expenses excluding share-based compensation expense.

Total SG&A expenses for the quarter were RMB214.1 million, representing a 28.8% increase from RMB166.3 million for the same period of the last fiscal year. Adjusted SG&A expenses for the quarter were RMB213.5 million, representing a 7.5% increase from RMB198.6 million for the same period of the last fiscal year.

Operating Income/(Loss), Operating Margin and Adjusted Operating Income/(Loss)

Operating Income/(Loss)

Third Fiscal Quarter

Ended May 31, 2021

Third Fiscal Quarter

Ended May 31, 2020

YoY

% Change


(RMB in
million)

(Margin %)

(RMB in
million)

(Margin %)


Domestic K-12 Schools

277.4

37.0%

117.5

27.0%

136.1%

International Schools

113.6

37.8%

91.8

37.8%

23.8%

Bilingual Schools

94.7

36.4%

74.0

39.9%

27.9%

Kindergartens

69.1

36.4%

(48.3)

(757.7%)

243.1%

Overseas Schools

(47.5)

(33.4%)

10.6

5.1%

(546.3%)

Education Technology

4.8

15.4%

8.0

...

37.6%

(39.9%)

Complementary Education

8.6

6.6%

5.8

8.0%

47.6%

Unallocated Corporate Expenses

(30.6)

-

(5.7)

-

431.0%

Total

212.7

20.2%

136.2

18.4%

56.2%

Operating income for the quarter was RMB212.7 million, representing a 56.2% increase from RMB136.2 million for the same period of the last fiscal year. Operating margin for the quarter increased to 20.2% from 18.4% for the same period of the last fiscal year.

Adjusted operating income for the quarter was RM221.2 million, representing a 92.8% increase from RMB114.7 million for the same period of the last fiscal year. Adjusted operating margin for the quarter increased to 21.0% from 15.5% for the same period of the last fiscal year.

Net Income and Adjusted Net Income

Net income for the quarter was RMB163.9 million, representing a 141.0% increase from RMB68.0 million for the same period of the last fiscal year.

Adjusted net income for the quarter was RMB170.6 million, representing a 285.5% increase from RMB44.3 million for the same period of the last fiscal year.

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

Basic and diluted net earnings per ordinary share/ADS attributable to ordinary shareholders/ADS holders for the quarter were RMB1.43 and RMB1.43, respectively, as compared to RMB0.64 and RMB0.64, respectively, for the same period of the last fiscal year.

Adjusted basic and diluted net earnings per ordinary share/ADS attributable to ordinary shareholders/ADS holders for the quarter were RMB1.49 and RMB1.49, respectively, as compared to RMB0.44 and RMB0.44, respectively, for the same period of the last fiscal year.

Adjusted EBITDA

Adjusted EBITDA for the quarter was RMB319.3 million, representing a 94.1% increase from RMB164.5 million for the same period of the last fiscal year.

UNAUDITED FINANCIAL RESULTS for the NINE MONTHS ENDED MAY 31, 2021

Revenue

Revenue

Nine Months

Ended May 31, 2021

Nine Months

Ended May 31, 2020

YoY

% Change


(RMB in million)

(% of Total Revenue)

(RMB in million)

(% of Total Revenue)


Domestic K-12 Schools

1,993.5

68.4%

1,552.1

57.1%

28.4%

International Schools

802.2

27.5%

695.5

25.6%

15.4%

Bilingual Schools

706.0

24.2%

573.2

21.1%

23.2%

Kindergartens

485.3

16.7%

283.4

10.4%

71.3%

Overseas Schools

427.1

14.7%

766.8

28.2%

(44.3%)

Education Technology

106.1

3.6%

71.7

2.6%

47.9%

Complementary Education

387.7

13.3%

323.8

12.1%

19.7%

Total

2,914.4

100.0%

2,714.4

100.0%

7.4%

Revenue for the period was RMB2,914.4 million, representing a 7.4% increase from RMB2,714.4 million for the same period of the last fiscal year.

Cost of Revenue

Cost of revenue for the period was RMB1,889.3 million, representing a 15.1% increase from RMB1,642.1 million for the same period of the last fiscal year.

Gross Profit, Gross Margin and Adjusted Gross Profit

Gross Profit

Nine Months

Ended May 31, 2021

Nine Months

Ended May 31, 2020

YoY

% Change


(RMB in million)

(Margin %)

(RMB in million)

(Margin %)


Domestic K-12 Schools

833.9

41.8%

657.3

42.3%

26.9%

International Schools

346.6

43.2%

321.5

46.2%

7.8%

Bilingual Schools

299.5

42.4%

253.2

44.2%

18.3%

Kindergartens

187.8

38.7%

82.6

29.1%

127.4%

Overseas Schools

32.6

7.6%

281.2

36.7%

(88.4%)

Education Technology

53.9

50.8%

48.9

68.1%

10.3%

Complementary Education

104.7

27.0%

84.9

26.2%

23.3%

Total

1,025.1

35.2%

1,072.3

39.5%

(4.4%)

Gross profit for the period was RMB1,025.1 million, as compared to RMB1,072.3 million for the same period of the last fiscal year. Gross margin was 35.2% for the quarter, as compared to 39.5% for the same period of the last fiscal year.

Adjusted gross profit for the period was RMB1,047.5 million, as compared to RMB1,105.2 million for the same period of the last fiscal year. Adjusted gross margin was 35.9% for the period, as compared to 40.7% for the same period of the last fiscal year.

Selling, General and Administrative Expenses and Adjusted SG&A Expenses (6)

SG&A Expenses

Nine Months

Ended May 31, 2021

Nine Months

Ended May 31, 2020

YoY

% Change


(RMB in

million)

(% of Total
Revenue)

(RMB in

million)

(% of Total
Revenue)


Domestic K-12 Schools

261.7

8.9%

213.2

7.8%

22.8%

International Schools

113.4

3.9%

85.3

3.1%

33.0%

Bilingual Schools

85.8

2.9%

74.1

2.7%

15.8%

Kindergartens

62.5

2.1%

53.8

2.0%

16.2%

Overseas Schools

169.7

5.8%

216.8

8.0%

(21.7%)

Education Technology

38.0

1.3%

24.7

0.9%

53.9%

Complementary Education

76.2

2.6%

71.7

2.7%

6.3%

Unallocated Corporate Expenses (7)

101.5

3.5%

82.1

3.0%

23.5%

Total

647.1

22.1%

608.5

22.4%

6.3%

Adj. SG&A Expenses (6)

Nine Months

Ended May 31, 2021

Nine Months

Ended May 31, 2020

YoY

% Change


(RMB in

million)

(% of Total
Revenue)

(RMB in

million)

(% of Total
Revenue)


Domestic K-12 Schools

260.0

8.9%

209.4

7.7%

24.1%

International Schools

113.2

3.9%

85.0

3.1%

33.2%

Bilingual Schools

85.0

2.9%

72.2

2.7%

17.8%

Kindergartens

61.8

2.1%

52.2

1.9%

18.1%

Overseas Schools

169.7

5.8%

216.8

8.0%

(21.7%)

Education Technology

38.0

1.3%

24.7

0.9%

53.9%

Complementary Education

76.2

2.6%

70.7

2.6%

7.8%

Unallocated Corporate Expenses (8)

101.2

3.5%

99.0

3.6%

2.3%

Total

645.1

22.1%

620.6

22.8%

3.9%

______________________________________________________________________________________________

6. Adjusted SG&A expenses is defined as selling, general and administrative expenses excluding share-based compensation expense.

7. Unallocated corporate expenses are mainly from headquarter, including staff cost, share-based compensation expense and other office expenses.

8. Adjusted unallocated corporate expenses is defined as unallocated corporate expenses excluding share-based compensation expense.

Total SG&A expenses for the period were RMB647.1 million, representing a 6.3% increase from RMB608.5 million for the same period of the last fiscal year. Adjusted SG&A expenses for the period were RMB645.1 million, representing a 3.9% increase from RMB620.6 million for the same period of the last fiscal year.

Operating Income/(Loss), Operating Income Margin and Adjusted Operating Income

Operating Income

Nine Months

Ended May 31, 2021

Nine Months

Ended May 31, 2020

YoY

% Change


(RMB in million)

(Margin %)

(RMB in million)

(Margin %)


Domestic K-12 Schools

576.4

28.9%

446.5

28.8%

29.1%

International Schools

234.2

29.2%

236.7

34.0%

(1.1%)

Bilingual Schools

214.2

30.3%

179.8

31.4%

19.1%

Kindergartens

128.0

26.4%

30.0

10.6%

327.3%

Overseas Schools

(129.5)

(30.3%)

72.9

9.5%

(277.6%)

Education Technology

16.6

15.7%

24.7

34.5%

(32.9%)

Complementary Education

37.1

9.6%

14.8

4.6%

151.8%

Unallocated Corporate Expenses

(99.8)

-

(79.3)

-

25.7%

Total

400.8

13.8%

479.6

17.7%

(16.4%)

Operating income for the period was RMB400.8 million, as compared to RMB479.6 million for the same period of the last fiscal year. Operating margin was 13.8% for the period, as compared to 17.7% for the same period of the last fiscal year.

Adjusted operating income for the period was RMB425.3 million, as compared to RMB500.5 million for the same period of the last fiscal year. Adjusted operating margin was 14.6% for the period, as compared to 18.4% for the same period of the last fiscal year.

Net Income and Adjusted Net Income

Net income for the period was RMB312.4 million, as compared to RMB312.8 million for the same period of the last fiscal year.

Adjusted net income for the period was RMB331.8 million, representing a 1.6% increase from RMB326.7 million for the same period of the last fiscal year.

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

Basic and diluted net earnings per ordinary share/ADS attributable to ordinary shareholders/ADS holders for the period were RMB2.61 and RMB2.61, respectively, as compared to RMB2.62 and RMB2.62, respectively, for the same period of the last fiscal year.

Adjusted basic and diluted net earnings per ordinary share/ADS attributable to ordinary shareholders/ADS holders for the period were RMB2.78 and RMB2.78, respectively, as compared to RMB2.73 and RMB2.73, respectively, for the same period of the last fiscal year.

Adjusted EBITDA

Adjusted EBITDA for the period was RMB688.2 million, representing a 2.8% increase from RMB669.4 million for the same period of the last fiscal year.

Cash and Working Capital

As of May 31, 2021, the Company's cash and cash equivalents and restricted cash were RMB1,668.1 million (US$262.0 million), as compared to RMB2,098.4 million as of February 28, 2021. As of May 31, 2021, we also had short-term investments of RMB2,507.2 million (US$393.8 million). For the nine months ended May 31, 2021, the Company's capital expenditure was approximately RMB110.4 million, up 2.9% compared to the same period of last fiscal year.

REAFFIRMS GUIDANCE FOR FISCAL YEAR ENDING AUGUST 31, 2021

The Company reaffirms its guidance for the 2021 fiscal year and expects its revenue to be in a range of RMB3.59 billion and RMB3.69 billion, representing a year-over-year growth of 7% to 10%, and its average student enrolment in our domestic and overseas schools to be between approximately 56,000 and 57,000, representing a year-over-year increase of 8% to 10%.

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.

Conference Call

BEDU's management will host a conference call at 8:00 am US Eastern Time (8:00 pm Beijing/Hong Kong Time) on July 22, 2021 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:

4001-201-203

Hong Kong:

852-301-84992

United States:

1-888-346-8982

Canada Toll Free:

1-855-669-9657

International:

1-412-902-4272

*No passcode is required for the call. Please request to join Bright Scholar Education Holdings Ltd.'s 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 dialling:

United States:

1-877-344-7529

International:

1-412-317-0088

Canada Toll Free:

855-669-9658

Replay Passcode:

10157851

Replay End Date:

July 29, 2021

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 nine-month period ended May 31, 2021 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.3674, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on May 28, 2021. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on May 31, 2021 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 SG&A expenses, adjusted operating income/(loss), adjusted net earnings/(loss) per share attributable to ordinary shareholders 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 and adjusted gross margin as adjusted gross profit/(loss) divided by revenue. We define adjusted EBITDA as net income/(loss) excluding interest income/(expense), net; income tax expense/benefit; depreciation and amortization; share-based compensation expense, and adjusted EBITDA margin as adjusted EBITDA divided by revenue. 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, and adjusted net margin as adjusted net income/(loss) divided by revenue. We define adjusted SG&A expenses as selling, general and administration expense excluding share-based compensation expense. We define adjusted operating income/(loss) as net operating income/(loss) excluding share-based compensation expense; amortization of intangible assets and adjusted operating margin as adjusted operating income/(loss) divided by revenue. Additionally, we define adjusted net earnings/(loss) per share attributable to ordinary shareholders, basic and diluted, as adjusted net income/(loss) attributable to ordinary shareholders (net income/(loss) to ordinary shareholders excluding share-based compensation expense; 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 American depositary shares, each representing one Class A ordinary share of the Company, on an as-converted basis.

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, 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 SG&A expenses, adjusted operating income/(loss), adjusted net earnings/(loss) per share attributable to ordinary shareholders 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, dedicated to providing quality international education to global students and equipping them with the critical academic foundation and skillsets necessary to succeed in the pursuit of higher education. Bright Scholar also complements its international offerings with Chinese government-mandated curriculum for students who wish to maintain the option of pursuing higher education in China. As of May 31, 2021, Bright Scholar operated 107 schools across twelve provinces in China and eight schools overseas, covering the breadth of K-12 academic needs of its students.

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:
GCM Strategic Communications
Email: BEDU.IR@gcm.international

Media Contact:
Email: media@brightscholar.com
Phone: +86-757-6683-2507

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)












August 31,


May 31,




2020


2021




RMB


RMB


USD

ASSETS








Current assets








Cash and cash equivalents

3,377,684


661,199


103,841



Restricted cash

1,044,853


1,005,491


157,912



Short-term investments(1)

13,695


2,507,216


393,758



Accounts receivable, net

19,271


34,888


5,479



Amounts due from related parties, net

18,521


21,441


3,367



Other receivables, deposits and other assets, net

198,593


140,119


22,006



Inventories

28,013


24,094


3,784


Total current assets

4,700,630


4,394,448


690,147



Restricted cash - non current

1,400


1,400


220



Property and equipment, net

1,076,590


1,038,742


163,134



Land use rights, net

86,076


84,623


13,290



Intangible assets, net

597,527


579,037


90,938



Goodwill, net

2,284,109


2,287,076


359,185



Long-term investments

55,137


53,438


8,392



Prepayment for construction contract

4,822


5,351


840



Deferred tax assets, net

35,678


79,926


12,552



Deposit for investment

-


10,976


1,724



Other non-current assets, net

16,654


74,143


11,644



Operating lease right-of-use assets

1,964,686


1,975,976


310,327


Total non-current ...assets

6,122,679


6,190,688


972,246

TOTAL ASSETS

10,823,309


10,585,136


1,662,393









1. As of May 31, 2021, majority of short-term investments principal are guaranteed by a related party of the Company.




BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-CONTINUED

(Amounts in thousands)












As of




August 31,


May 31,




2020


2021




RMB


RMB


USD

LIABILITIES AND EQUITY







Current liabilities








Accounts payable (including accounts payable of the consolidated VIEs without

recourse to Bright Scholar of RMB 28,691 and RMB 33,171 as of August 31, 2020

and May 31, 2021, respectively)

93,090


105,619


16,588



Amounts due to related parties (including amounts due to related parties of the

consolidated VIEs without recourse to Bright Scholar of RMB 52,567 and RMB 45,328

as of August 31, 2020 and May 31, 2021, respectively)

86,563


79,638


12,507



Accrued expenses and other current liabilities (including accrued expenses and other

current liabilities of the consolidated VIEs without recourse to Bright Scholar of

RMB 394,880 and RMB 407,382 as of August 31, 2020 and May 31, 2021,

respectively)

633,397


703,002


110,406



Short term loan (including short term loan of the consolidated VIEs without

recourse to Bright Scholar of RMB 7,500 and RMB 14,500 as of August 31, 2020

and May 31, 2021, respectively)

938,300


1,061,484


166,706



Income tax payable (including income tax payable of the consolidated VIEs

without recourse to Bright Scholar of RMB 34,992 and RMB 87,461 as of August 31,

2020 and May 31, 2021, respectively)

118,716


203,455


31,953



Contract liabilities (including contract liabilities of the consolidated VIEs without

recourse to Bright Scholar of RMB 1,291,781 and RMB 734,715 as of August 31,

2020 and May 31, 2021, respectively)

1,544,184


891,871


140,068



Refund liabilities (including refund liabilities of the consolidated VIEs without

recourse to Bright Scholar of RMB 23,804 and RMB 14,929 as of August 31, 2020

and May 31, 2021, respectively)

70,711


23,613


3,708



Operating lease liabilities (including operating lease liabilities of the consolidated

VIEs without recourse to Bright Scholar of RMB 30,601 and RMB 18,938 as of

August 31, 2020 and May 31, 2021, respectively)

210,082


127,648


20,047


Total current liabilities

3,695,043


3,196,330


501,983



Contract liabilities – non current (including contract liabilities – non current of the

consolidated VIEs without recourse to Bright Scholar of RMB 1,772 and RMB 909

as of August 31, 2020 and May 31, 2021, respectively)

1,772


1,086


171



Deferred tax liabilities, net (including deferred tax liabilities of the consolidated

VIEs without recourse to Bright Scholar of RMB 34,641 and RMB 33,323 as of

August 31, 2020 and May 31, 2021, respectively)

57,826


51,476


8,084



Other non-current liabilities due to related parties (including non-current liabilities

due to related parties of the consolidated VIEs without recourse to Bright Scholar of

RMB 26,843 and RMB 12,718 as of August 31, 2020 and May 31, 2021, respectively)

26,843


12,718


1,997



Other non-current liabilities (including non-current liabilities of the consolidated

VIEs without recourse to Bright Scholar of RMB 11,364 and RMB 8,141 as of
August 31, 2020 and May 31, 2021, respectively)

19,612


8,141


1,279



Bond payable

2,017,369


1,885,191


296,069



Long term loan (including long term loan of the consolidated VIEs without

recourse to Bright Scholar of RMB 77,500 and RMB 63,000 as of August 31, 2020

and May 31, 2021, respectively)

77,919


63,633


9,993



Operating lease liabilities – non current (including operating lease liabilities – non

current of the consolidated VIEs without recourse to Bright Scholar of RMB 222,693

and RMB 222,445 as of August 31, 2020 and May 31, 2021, respectively)

1,802,544


1,929,675


303,055


Total non-current liabilities

4,003,885


3,951,920


620,648

TOTAL LIABILITIES

7,698,928


7,148,250


1,122,631









EQUITY









Share capital

8


8


1



Additional paid-in capital

1,854,262


1,826,442


286,843



Statutory reserves

65,567


66,476


10,440



Accumulated other comprehensive income

185,371


230,091


36,136



Accumulated retained earnings

632,722


939,515


147,550


Shareholders' equity

2,737,930


3,062,532


480,970


Non-controlling interests

386,451


374,354


58,792


Total equity

3,124,381


3,436,886


539,762

TOTAL LIABILITIES AND EQUITY

10,823,309


10,585,136


1,662,393

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except for shares and per share data)


























Three Months Ended May 31,


Nine Months Ended May 31,


2020


2021


2020


2021


RMB


RMB


USD


RMB


RMB


USD

Revenue

739,390


1,053,789


165,498


2,714,384


2,914,362


457,700

Cost of revenue

(447,427)


(635,624)


(99,825)


(1,642,122)


(1,889,267)


(296,709)













Gross profit

291,963


418,165


65,673


1,072,262


1,025,095


160,991

Selling, general and administrative expenses

(166,304)


(214,117)


(33,627)


(608,537)


(647,116)


(101,630)

Other operating income

10,497


8,629


1,355


15,883


22,840


3,587













Operating income

136,156


212,677


33,401


479,608


400,819


62,948

Interest expense, net

(43,086)


(52,355)


(8,222)


(106,304)


(122,671)


(19,265)

Investment income

12,978


52,160


8,192


54,570


129,055


20,268

Other expenses

(2,546)


(1,344)


(211)


(2,676)


(8,093)


(1,271)













Income before income taxes and share of equity in income of
unconsolidated affiliates

103,502


211,138


33,160


425,198


399,110


62,680

Income tax expense

(35,477)


(46,933)


(7,371)


(112,168)


(85,968)


(13,501)

Share of equity in loss of unconsolidated affiliates

(19)


(301)


(47)


(252)


(753)


(118)













Net income

68,006


163,904


25,742


312,778


312,389


49,061













Net (loss)/income attributable to non-controlling interests

(8,791)


(6,448)


(1,013)


(2,065)


443


70













Net incomeattributable to ordinary shareholders

76,797


170,352


26,755


314,843


311,946


48,991













Net earnings per share attributable to ordinary shareholders












Basic

0.64


1.43


0.22


2.62


2.61


0.41

Diluted

0.64


1.43


0.22


2.62


2.61


0.41













Weighted average shares used in calculating net earnings
per ordinary share:












Basic

119,981,400


119,162,036


119,162,036


120,331,525


119,300,151


119,300,151

Diluted

119,981,400


119,162,036


119,162,036


120,331,525


119,300,151


119,300,151

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)














Three Months Ended May 31,


Nine Months Ended May 31,


2020


2021


2020


2021


RMB


RMB


USD


RMB


RMB


USD

Net cash used in operating activities

(211,310)


(200,367)


(31,468)


(111,576)


(143,962)


(22,609)

Net cash used in investing activities

(214,278)


(307,578)


(48,305)


(1,756,712)


(2,520,180)


(395,794)

Net cash generated from financing activities

51,901


118,089


18,546


705,541


22,168


3,481

Effect of exchange rate changes on cash

32,223


(40,493)


(6,360)


(10,293)


(113,873)


(17,884)

Net change in cash and cash equivalents, and restricted
cash

(341,464)


(430,349)


(67,587)


(1,173,040)


(2,755,847)


(432,806)

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

2,433,438


2,098,439


329,560


3,265,014


4,423,937


694,779

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

2,091,974


1,668,090


261,973


2,091,974


1,668,090


261,973


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 May 31,


Nine Months Ended May 31,



2020


2021


2020


2021



RMB


RMB


USD


RMB


RMB


USD

Gross profit

291,963


418,165


65,673


1,072,262


1,025,095


160,991


Add: Amortization of intangible assets

10,896


7,834


1,230


32,891


22,438


3,524

Adjusted gross profit

302,859


425,999


66,903


1,105,153


1,047,533


164,515














Operating income

136,156


212,677


33,401


479,608


400,819


62,948


Add: Share-based compensation expense

(32,336)


662


104


(12,037)


2,032


319


Add: Amortization of intangible assets

10,896


7,834


1,230


32,891


22,438


3,524

Adjusted operating income

114,716


221,173


34,735


500,462


425,289


66,791














Net income

68,006


163,904


25,742


312,778


312,389


49,061


Add: Share-based compensation expense

(32,336)


662


104


(12,037)


2,032


319


Add: Amortization of intangible assets

10,896


7,834


1,230


32,891


22,438


3,524


Add: Tax effect of amortization of intangible assets

(2,305)


(1,754)


(275)


(6,948)


(5,059)


(795)

Adjusted net income

44,261


170,646


26,801


326,684


331,800


52,109














Net income attributable to ordinary shareholders

76,797


170,352


26,755


314,843


311,946


48,991


Add: Share-based compensation expense

(32,336)


662


104


(12,037)


2,032


319


Add: Amortization of intangible assets

10,896


7,834


1,230


32,891


22,438


3,524


Add: Tax effect of amortization of intangible assets

(2,305)


(1,754)


(275)


(6,948)


(5,059)


(795)

Adjusted net income attributable to ordinary shareholders

53,052


177,094


27,814


328,749


331,357


52,039














Net income

68,006


163,904


25,742


312,778


312,389


49,061


Add: Interest expense, net

43,086


52,355


8,222


106,304


122,671


19,265


Add: Income tax expense

35,477


46,933


7,371


112,168


85,968


13,501


Add: Depreciation and amortization

50,259


55,396


8,700


150,229


165,146


25,936


Add: Share-based compensation expense

(32,336)


662


104


(12,037)


2,032


319

Adjusted EBITDA

164,492


319,250


50,139


669,442


688,206


108,082














Selling, general and administrative expenses

166,304


214,117


33,627


608,537


647,116


101,630


Less: Share-based compensation expense

(32,336)


662


104


(12,037)


2,032


319

Adjusted selling, general and administrative expenses

198,640


213,455


33,523


620,574


645,084


101,311














Weighted averageshares used in calculating earnings per ordinary share:











—Basic

119,981,400


119,162,036


119,162,036


120,331,525


119,300,151


119,300,151

—Diluted

119,981,400


119,162,036


119,162,036


120,331,525


119,300,151


119,300,151














Adjusted net earnings per share attributable to ordinary shareholders











—Basic

0.44


1.49


0.23


2.73


2.78


0.44

—Diluted

0.44


1.49


0.23


2.73


2.78


0.44

Cision
Cision

View original content:https://www.prnewswire.com/news-releases/bright-scholar-announces-unaudited-financial-results-for-the-third-fiscal-quarter-of-fy2021-301338576.html

SOURCE Bright Scholar Education Holdings Ltd.