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LEAI: Revenue Decline Masks Continued International Growth

By M. Marin



Legacy Education Alliance (OTC:LEAI) reported second quarter 2018 results last week. While overall comparisons were negative for the quarter compared to the same period of 2017, some of the variances reflect ongoing investment to drive future growth. The company incurred upfront expenses to develop and promote new brands and products during the second quarter 2018.

For example, the company launched a new initiative with Kathy Ireland. Legacy also invested in the development of its new UK property subsidiary. During the quarter, the company acquired several UK residential properties to grow its real estate investment and development portfolio. At the same time, the company incurred integration costs associated with the continued rollout of its new ERP/CRM system. Going forward, Legacy expects to manage its investments and upfront costs to better align them with projected cash sales.

Lower overall attendance contributed to a 3.8% year-over-year decline in total revenue to $25.2 million for the quarter. However, the decline masks revenue growth in the company’s international operations. Revenue in the company’s UK segment advanced 2.7% year-over-year, while revenue in Other Foreign Markets was up 17.1%.

First Half 2018 Results Boosted by Strong First Quarter

Despite the softness in the second quarter, total revenue for the first half 2018 was up compared to the same period of 2017. Revenue for the first six months of 2018 came in at $51.0 million versus $48.1 million for the comparable period of 2017. That represents a 6.0% year-over-year improvement, primarily reflecting increased revenue from expired contracts, partially offset by a 1.0% decline in attendance.

The company’s goals for 2018 and going forward include continued focus on its core business, driving ongoing international expansion and further expansion in the delivery of courses and content via digital channels. The company continues to launch new initiatives to drive growth. Legacy’s joint marketing alliance with Kathy Ireland® Worldwide to promote their brands is an example. In addition, Legacy formed an agreement with Get Motivated Events, LLC. This creates a new marketing channel for the company, as Legacy seeks to promote its courses at Get Motivated! large stage business seminars.

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