Spring Education Group Inc.

However, Spring has demonstrated strong recovery in enrollments in fiscal 2022 (ended June 30), with K-12 enrollments exceeding pre-COVID-19 levels by 4% and continued positive momentum in the early childhood education division. We expect that EBITDA and FOCF will improve in fiscal 2022 due to lower restructuring, rent savings from renegotiated leased facilities, and lower losses related to school closure. Despite significant EBITDA improvement, we estimate that the company will generate negative reported free cash flows in the $30 million to $60 million range for the full-year 2022 because of elevated growth capital expenditure of about $60 million toward new schools. With continued enrollment growth in fiscal 2023 resulting in steady EBITDA growth and normalized capital expenditure of about $25

...Spring's free operating cash flow (FOCF) will remain negative for fiscal 2022. Spring Education Group Inc. experienced substantial revenue declines as enrollments declined across all programs for brick and mortar schools. The company's GAAP EBITDA and free cash flows turned negative because of enrollment declines related to COVID-19, fixed cost base, expenses associated with school closures, new school start-up loses and restructuring related expenses. However, Spring has demonstrated strong recovery in enrollments in fiscal 2022 (ended June 30), with K-12 enrollments exceeding pre-COVID-19 levels by 4% and continued positive momentum in the early childhood education division. We expect that EBITDA and FOCF will improve in fiscal 2022 due to lower restructuring, rent savings from renegotiated leased facilities, and lower losses related to school closure. Despite significant EBITDA improvement, we estimate that the company will generate negative reported free cash flows in the $30 million...

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