OREANDA-NEWS. Greenwood Hall, Inc. (QTCQB:ELRN), a Los Angeles-based education technology company that helps colleges and universities improve student engagement and outcomes, announced its financial results for the third quarter of Fiscal Year 2016. The Company experienced a $484,437, or 49%, increase in revenue from its EdTech-related offerings during the third quarter compared to the same period in 2015. Overall revenue for the quarter ending May 31, 2016 was relatively flat at $2,155,082, compared to $2,170,894 for the same quarter in 2015, primarily due to lower revenue from the Company’s legacy, non-EdTech business, compared to the same period in 2015.

Third Quarter 2016 Highlights

  • Addition of 18 client contracts this fiscal year to date – 10 of which were signed during the third quarter, including contracts with the University of Oklahoma, Nevada State, University of Arizona, Troy University, and Oklahoma City Community College.
  • Renewal of strategic subscription agreement with University of the Southwest.
  • Strategic EdTech revenue of $1.47 million, compared to $0.99 million during the same period last year, representing a 49% increase year-over-year in a critical vertical.
  • 75% improvement in Adjusted EBITDA from the same period last year.

“We believe our third quarter results demonstrate our ability to achieve double-digit revenue growth in our education business while improving Adjusted EBITDA. While our third quarter reflects nearly 50% revenue growth in our EdTech segment, 10 of the 18 new contracts with education partners were signed in the third quarter, which means that many of the new contracts are not expected to have an impact on revenue until our fourth quarter of FY-2016 and continuing into FY-2017, which begins September 1, 2016,” said Dr. John Hall, Chief Executive Officer of Greenwood Hall.

Financial Outlook

The Company today provided select financial guidance for FY-2017.  

Guidance for FY-2017 is for the period September 1, 2016 – August 31, 2017 and compares against projected results for the twelve-month period from September 1, 2015 through August 31, 2016.  Based on our existing and new service contracts for the Company’s strategic EdTech offerings, Management anticipates FY-2017 revenues related to the Company’s EdTech business to increase by up to 90-100% and could be in the range of up to $ 11.5 - 12.2 million, compared to projected EdTech revenues of approximately $ 6.0 – 6.3 million for FY-2016. Revenue pertaining to the Company’s legacy and non-strategic offerings are anticipated to be in the range of up to $ 250K – 500K, compared to projected legacy business revenues of approximately $ 1.3 – 1.4  million for FY-2016. The Company anticipates having positive Adjusted EBITDA for the full FY-2017.

Hall added, “We have seen good momentum this fiscal year in terms of both revenue growth and putting ourselves on a path to profitability as we establish ourselves as an EdTech leader in helping colleges and universities maximize student success. Our progress and results for the third quarter support our present financial outlook for up to 90-100% revenue growth in our core EdTech business in Fiscal Year 2016.”

The Company believes its financial outlook for FY-2017 is further bolstered by the recent announcement that it has resolved litigation that was related to legacy, non-education operations  of Greenwood Hall’s subsidiary, PCS Link, Inc. We believe the resolution of this matter reduces the uncertainty and risk that was associated with this particular litigation and eliminates the material expenditures associated with defending against the litigation.

Reconciliation of Adjusted EBITDA to Net Income

  Three Months Ended Nine Months Ended
  May 31, 2016 May 31, 2015 May 31, 2016 May 31, 2015
                         
NET LOSS $  (1,526,201 ) $  (1,977,200 ) $  (7,007,214 ) $  (4,771,058 )
Adjustments:                        
Equity Expense    222,566      1,031,226      748,992      1,031,326  
Interest Expense    550,801      198,477      3,240,317      510,275  
Other Expense    -      -      -      -  
Transaction Related Expenses    150,000      -      410,000      -  
Change in Value of Derivatives    412,115      57,956      189,380      194,826  
Miscellaneous Income (expense), net    16,482      (10,518 )    49,752      21,343  
Total Adjustments    1,351,964      1,277,141      4,638,441      1,757,770  
ADJUSTED EBITDA (LOSS) $  (174,237 ) $  (700,059 ) $  (2,368,773 ) $  (3,013,288 )
                         

About Greenwood Hall, Inc.

Greenwood Hall is an education technology company that helps colleges and universities manage the student journey. Every Greenwood Hall solution is designed to increase revenue and improve student engagement as well as learning outcomes. Since 2006, Greenwood Hall has developed customized turnkey solutions that combine strategy, people, proven processes and robust technology to help schools effectively and efficiently improve student outcomes, as well as increase revenues and expand into new marketing channels, such as online learning. Greenwood Hall has served more than 60 education clients and over 75 degree programs.