Bright Scholar Education Holdings Limited American Depositary Shares, each representing four Class A Ordinary Share

Hello, ladies and gentlemen. Thank you for standing by for Bright Scholar's fourth quarter and fiscal year 2024 earnings conference call. At this time, all participants are in listen-only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host from Piacente Financial Communications, Andrea Guo, IR Counsel for the company. Please go ahead, Andrea. Andrea.

Thank you very much. Hello, everyone, and welcome to Brett Scholar's earnings conference call for the fourth quarter and fiscal year 2024. The company's financial and operational results were released earlier today and are available online by visiting the IR section of our website at ir.brettscholar.com. Please note that today's discussion will contend for looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 for looking statements involving inherent risks and uncertainties. As such, the company's results may materially differ from today's views. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the USSEC. The company does not assume any obligation to update any forelooking statements, except as required under applicable law. Additionally, Brett Scholar's earnings press release and this conference call include discussions of our antedate gap and non-gap financial measures. Brett Scholar's earnings press release contains a reconciliation of the un-antedate non-gap measures. Please also note that all numbers are in RMB. Participants on today's call will include our Chief Executive Officer, Ms. Robert Niu, who will provide a company overview and update on our strategic initiatives with highlights from the quarter and the fiscal year. Our Chief Financial Officer, Ms. Cindy Zhang, will then provide details on the company's financial results for the period. We'll then open the call for questions. I will now turn the call over to Express Scholars Chief Executive Officer, Mr. Robert Niu. Please go ahead, sir.

Thank you. Hello, everyone, and thank you for joining us on today's call. We both sit with our global business and operations throughout this year, showing up our foundation for future growth. Despite ongoing macro challenges, we drove rapid expansion in our overseas business, delivering continued double-digit year-over-year revenue growth in our overseas schools business for the full fiscal year. Our primary objectives remain laser focused on strengthening our high growth, high return core business. With this focus, I would please to announce that we have completed diverse teacher all non-core business on our complementary education service segment and will be concentrating our efforts on our global recruitment initiatives providing service for students with ambitions to study overseas meanwhile the integration of our headquarters and overseas management team has also helped us with reducing management costs and increase our organizational productivity significantly, allowing the group's strategies to be executed more efficiently at the local level. In FY24, our streamlined global operations led to a 16% reduction year-over-year in HICOMs at our overseas headquarters and a 28% decrease in related costs the upcoming financial year moving into fiscal year 2025 we plan to reinforce two engine growth strategy by focusing on continued expansion of our overseas school business while propelling our global recruitment initiatives for prospective international students this will enable us to drive further expansion and capture more of the sizable market opportunities that will support our sustainable growth over the long term. Now I'd like to share some details from the fourth quarter and fiscal year for each of our business segments. First, as I said, overseas schools sustained solid growth momentum and remain our strongest segment for the fiscal year. Revenue was up 17.5% year over year, accounting for 51% and 54.2% of our total revenue for the fourth quarter and the fiscal year respectively. The ability to achieve exceptional academic outcome is one of the ways we are accelerating enrollment. Our schools continue to foster students' stellar academic performance this year. Proud to share that our CAST Global Schools students achieved outstanding A-level results, with 53% of grades being A star to A, while a remarkable 86.8% of St. Michael's School students' grades were A star to A, propelling the school to a new high ranking of third place in the UK for A-level results in 2024. Moreover, many CGS students successfully gain admissions to their top choice universities, including the University of Cambridge, the University of Oxford, other G5 institutions, and the University of the Arts London. Additionally, CGS students also receive offers from Ivy League schools in the United States. Those noteworthy achievements are a testament to the dedication and diligence experienced by our students and our teachers. Moving forward, we aim to enhance our curriculum further by bringing superior quality teaching resources and sponsoring a collaborative learning environment. Beyond their remarkable academic accomplishments, our students have also excelled in athletics and arts. In the fourth fiscal quarter, three Bournemouth Collegiate Schools graduates secured gold medals at the 2024 Paris Paralympics, matching three golds, one silver and two bronzes. Notably, two of these athletes honed their skills at the sports academy within BCS. In other sports, our Cass Academy Boston is excelling in hockey and basketball, with students representing a broad range of national teams. And in fashion, four of our Cambridge School of Visual Performing Arts students were nominated seven awards at Graduate Fashion Week, the world's largest special arts fashion showcase, sending out about 2,000 entrants and showcasing their impressive talent, and creativity. This exceptional blend of talent highlights our students' diverse strengths and reinforces the importance of holistic education programs that nurture both intelligence and creative pursuits. Looking ahead, we are dedicated to cultivating an environment that forces continued success, inspiring the next generation of leaders across diverse fields. Overall, we are pleased with progress of our overseas school business during the fourth fiscal quarter. Our commitment to provide a premium education that prepares students for success in the global marketplace propels our business growth, accelerating year-over-year increase in enrollment. Moving on to our complementary education services, we saw a 19.7% year-over-year decline in revenue during the fiscal fourth quarter as we continue to wind up low-return and underutilized programs. We have successfully divested our non-core business by the end of this quarter. Looking forward, we aim to drive innovation and enhance service delivery of our global recruitment initiatives to serve more students planning to study abroad. We are expanding our products and services offering on our existing China platform and make these available in more international markets, all while aligning our efforts with our long-term vision and adapting to our dynamic environments. In the fourth fiscal quarter, We also enhanced our senior leadership team to help advance our near-term expansion goals in overseas markets and strengthen our global enrollments. A new principal has joined us to cast Cambridge, plus another highly experienced educator will take over the principal role both within independent schools. In April next year, focusing on curriculum reform and team enhancement to advance the school's development. Additionally, a new general manager will lead our sales and marketing efforts in China. These strategic appointments demonstrate our commitment to building a high-caliber team with international expertise and leadership, promoting student enrollment, engagement, and academic success. as well as the group's long-term growth and development. In summary, our relentless focus on strengthening our high-growth core business in fiscal year 2024 has played us in a strong position to grow this fiscal year. Moving forward, we will continue to advance our dual-engine growth strategy to expand our steady overseas school business and boost our global recruitment initiative. Meanwhile, we will proceed in streamlining our global operations and enhancing efficiencies to align our goals. We are confident that we can capture the extensive growth opportunities in overseas markets that will strengthen our market share and status as a leading global education service provider. With that, I will turn the call over to our CFO, Ms. Cindy Zhang, who will discuss our key financial results. Please go ahead, Cindy.

Thank you, Robert. Now, I'd like to discuss our financial results for the fourth quarter and fiscal year 2024. Please note all amounts are in RMB unless otherwise stated. We are pleased to report healthy financial results for the physical year, driven by ongoing development across our core businesses. Our total revenue for physical year 2024 remains stable, with overseas schools revenue increasing by 17.5% year-over-year. Our gross profit increased by 7.7% and gross margin by 2.3 percentage points year-over-year. we recorded an adjusted net income of $1.1 million compared to an adjusted net loss of $192.6 million for the prior fiscal year. We continue to streamline our operations and to improve operational efficiency reducing our SG&A expenses by 18% and 8% year-over-year for the fourth quarter and fiscal year respectively, benefiting from the integration of our headquarters and overseas management teams. Notably, we significantly enhance our cash provision, increasing our cash and cash equivalent and restricted cash by 20% for the fiscal year. looking at our financial results for the fourth quarter and fiscal year in more details. Our revenue from continuing operations for the fourth quarter was $358.3 million, compared to $442.2 million for the same quarter last fiscal year. By segment, overseas schools' revenue contribution was $195.1 million. Complementary education services and domestic kindergarten and K-12 operation services revenues were $129.8 million and $43.3 million respectively. For fiscal year 2024, we achieved total revenue of $1,755.2 million compared to $772.1 million for the last fiscal year. By segment, overseas schools recorded revenue of $951.2 million, contributing 54.2% of total revenues and growing by 17.5% year-over-year. Complementary education services and Domestic kindergarten and K-12 operation services revenues were $495.1 million and $308.9 million, respectively. Gross profit from continuing operations for the fourth quarter was $35.9 million compared to $79.8 million for the same quarter last fiscal year. For the whole fiscal year, our gross profit was $503.6 million, representing a 7.7% increase year-over-year, driven by a 47.8% increase in overseas gross profit. Growth margin from continuing operations for the fourth quarter was 10%, compared to 18.1% for the same quarter last year. For the whole fiscal year, growth margin increased to 28.7% from 26.4% for the last fiscal year. The improvement was mainly attributable to cost saving measures and efficiency enhancements. Notably, our overseas business growth margin grew 4.1% point and 4.9% point for the fourth quarter and fiscal year respectively. Adjusted gross profit from continuing operations was 36.9 million and 507.8 million for the fourth quarter and fiscal year, compared to $80.9 million for the same quarter last fiscal year and $471.8 million for the last fiscal year respectively. SG&A expenses from continuing operations for the fourth quarter were $119.3 million, representing an 18.3% decrease year over year. For the fiscal year, SG&A expenses decreased by 8.1% to $469 million. This improvement was mainly due to our continuous efforts to streamline our global operations and improve operational efficiency in our headquarters. Adjusted EBITDA loss from continuing operations was $81.8 million for the fourth quarter, compared to $55 million for the same quarter last fiscal year. For the whole fiscal year 2024, adjusted EBITDA increased by 44.1% to $80.7 million from $56 million for the last fiscal quarter. Now, turning to profitability, we recorded a net loss of $954.8 million and $869.1 million from continuing operations in the fourth quarter and fiscal year compared to $285.1 million for the same quarter last year and $358.9 million for the last fiscal year, mainly due to an $852 million impairment loss on goodwill and intangible assets. Adjusting net loss from continued operations for the fourth quarter narrowed by 24.3% year-over-year to $92 million. For the fiscal year, adjusting net income was $101 million compared to an adjusting net loss of $192.6 million for the last fiscal year. As for our balance sheet, our cash position was significantly enhanced. As of August 31, 2024, we had cash and cash equivalent and restricted cash of 505.8 million, an increase of 20 from 419.9 million as of August 31, 2023. In addition, our net cash from operating activities also increased by 14 times year-over-year to 104 million for the fourth quarter, and five times to 126 million for the physical year. Moving into physical year 2025, we will further enhance our operational efficiency and profitability by strengthening our service offerings. Supported by our healthy balance sheet, we are confident in our ability to execute our dual-engine growth strategy, expanding our overseas schools, business, promoting our global recruitment initiatives. We believe this productivity approach will not only solidify our competitive edge, but also drive long-term growth and profitability. Okay, this concludes all our prepared remarks today. We will now open the call to the questions. Operators, please go ahead.

Thank you. If you would like to ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Once again, that's star then 1 if you have a question. And as a reminder, if you'd like to ask a question, please press star then one at this time. This concludes the question and answer session. I'd like to turn the conference back over to Andrea Groh for any closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact BRAC Scholars Investor Relations through the contact information provided on our website.

Thank you. This concludes today's conference call. You may now disconnect your lines. Thank you and have a wonderful day.