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LEAI: Legacy’s 2017 Improvements Show Benefits of Expansion Initiatives

By M. Marin


Legacy Education Alliance (OTC:LEAI) reported full year 2017 results this month and hosted a conference call. The company recognized a 9.5% year-over-year improvement in revenue to $97.7 million. The company’s financial results reflect the benefits of its growth strategy. Legacy has implemented several expansion 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 and on increasing fulfillment. Importantly, total cash sales advanced 14.3% year-over-year to $99.2 million. With strong cash sales, the company also generated robust cash from operations.

Strong International Growth

In the fourth quarter 2017, Legacy began to combine results from operations in the United States and Canada, which previously had been reported as two separate segments, into one North America segment. As a result, the company now reports the results of three operating segments: North America, the United Kingdom (UK), and Other Foreign Markets. The Other Foreign Markets segment continues to generate strong year-over-year revenue growth. To illustrate, total consolidated cash sales came in at $99.2 million for the year ended December 31, 2017, as noted, up from $86.8 million in 2016, and roughly 44% of the $12.4 million advance was attributable to growth in Legacy’s Other Foreign Markets segment. The Other Foreign Markets segment accounted for 25.0% of total cash sales, up from 22.4% in 2016. Management expects cash sales to continue to advance in 2018, as the company’s newer brands gain traction and reflecting ongoing international expansion.

International continues to represent a significant opportunity for growth, as the company opens new markets – often through digital channels. An important component of the company’s growth strategy is to expand its operations outside of core markets. Towards this goal, Legacy has actively developed programming in markets in other countries, particularly in Australia, South Africa and Asia.

In total, reported revenue from the company’s UK and Other Foreign Market segments came in at $40.6 million, up an impressive 31.0% compared to the prior year. As a result, international revenue comprised 41.5% of total revenue, up from 34.8% the prior year.


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