KGIC Inc. Announces Positive First Quarter 2016 Financial Results

TORONTO, ONTARIO--(Marketwired - May 24, 2016) - KGIC Inc. ("KGIC" or the "Company") (TSX VENTURE:LRN) today announced financial results for the three months ended March 31, 2016. The Company's financial statements and management's discussion and analysis for the three months ended March 31, 2016 are available on SEDAR (www.sedar.com). Financial references are in Canadian dollars unless otherwise specified.

"Despite the recent transition to new management and a slow January due to destabilized business operations in the fourth quarter of 2015, we successfully stabilized the business, implemented systematic internal cost control measures and delivered a solid quarter of recovery and a strong path to profitability to our shareholders," stated Dr. Alex MacGregor, President and Chief Executive Officer. "We were particularly pleased with our improved gross profit, SG&A cost reduction, and significant reduction in the adjusted negative EBITDA compared to the same period last year which signals a path to strong recovery."

"The Company has implemented a number of internal cost control measures aimed at eliminating redundant operational expenses and improving gross margins. The reduction in adjusted negative EBITDA from school operations of 46% in the first quarter of 2016 compared to the same period in the prior year, demonstrates that the Company is on a progressive path to profitability." said Alex MacGregor, President and Chief Executive Officer.

Financial Performance

The following table summarizes and compares the first quarter financial results for 2016 with the same period a year ago.

School operations		2016		2015	% Change
Tuition revenue	$	6,272,519	$	7,501,981	-16%
Other income		1,092,031		1,818,802	-40%
Total revenue		7,364,550		9,320,783	-21%
Gross profit		587,178		253,062	132%
Loss from school operations before other items		(3,089,140)		(5,325,704)	42%
Loss from continuing operations		(3,633,315)		(5,942,910)	39%
Adjusted EBITDA from school operations	$	(2,707,549)	$	(4,969,844)	46%

The Company reported a net loss of $3.63 million for the first quarter of 2016 (or a loss of $0.02 per share), compared to a net loss of $5.94 million (or a loss of $0.038 per share) for the same period in 2015. Adjusted negative EBITDA was negative $2.71 million, or - $0.015 per share for the first quarter of 2016 compared to negative $4.97 million, or -$0.031 per share for the same period in 2015. In the first quarter of 2016, adjusted negative EBITDA reduced 46% over the same period last year in 2015.