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LEAI: 3Q17 Results Mirror Benefits of Company’s Growth Initiatives

By M. Marin


Legacy Education Alliance (OTC:LEAI) reported third quarter 2017 results this week and hosted a conference call yesterday. The company recognized a 12% year-over-year improvement in revenue to $25.2 million. The company s financial results reflect the benefits of its growth strategy, with international growth a major factor of the strategy. Revenue from offshore markets advanced 26.4% year-over-year and comprised 43.7% of total revenue, up from 38.7% in 3Q16. Despite the company’s ongoing 2017 spending to implement a new ERP system, EPS was $0.06 compared to $0.05 generated in the third quarter of 2016. 

Legacy ended the quarter with $5.2 million of cash, up from $1.7 million at December 31, 2016. The company generated $4.7 million of cash from operations in the first nine months of 2017, largely reflecting increased cash sales in the first nine months of 2017. Separately, on October 31, 2017, Legacy entered into an agreement with several financial institutions to settle litigation that had been pending in New York. Among other things, Legacy sought to recover $8.3 million in reserve funds. Legacy agreed to settle this case. The funds will be included in the company’s 4Q17 financial statements, further strengthening the cash position. 

Legacy has implemented several growth initiatives, including international expansion and increased focus on enhancing the online delivery of its courses in order to provide greater flexibility in a digital world. With Legacy’s domestic operations accounting for over 50% of total revenue, international presents a significant opportunity for growth. The funds from the settlement will bolster the cash reserves that the company can tap to further its growth initiatives. 


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