WHITEFISH, MT / May 27, 2014 / A recent Gallup® poll found that 70% of U.S. citizens believed college was "very important" in 2013, compared to just 60% in 1983 and 36% in 1978, but found that the majority (53%) were dissatisfied with the K-12 education system. Math and science were also ranked as two of the top three subjects studied in school that were most useful in adult life - areas where public schools have historically struggled.
Creative Learning Corporation (CLCN) has taken a unique approach to solving these problems by creating after-school programs that can help students improve their math and science skills using fun and engaging activities. Investors in education companies, like Leapfrog Enterprises, Inc. (LF) or American Public Education, Inc. (APEI), might want to keep an eye on this emerging company. In this article, we’ll take a look at the company’s recent second quarter financial results and where the stock may be headed over the coming quarters and years.
Also See: Creative Learning: An Undervalued Education Franchise
Franchise Growth
Creative Learning franchises after-school programs designed to improve science, technology, engineering and math ("STEM") scores in a fun and engaging way. Its flagship BRICKS 4 KIDZ(R) franchise teaches the principles of engineering, architecture and physics using LEGO(R) bricks, while its newer Challenge Island(R) is designed to develop creative thinking, problem solving, and core STEM skills.
In 2013, the company expanded its franchise footprint from 210 to 395, which resulted in significant revenue growth for shareholders. These trends continued during the first six months of 2014 with the addition of 117 domestic and international franchises, while the company also realized higher royalty revenue from existing franchisees that have been successfully expanding their businesses.
The success of its franchises is also apparent in the recognition it has received from Entrepreneur Magazine, where it was listed as the #1 Children’s Enrichment Franchise in the country and #2 Best New Franchise in the country. In addition to its growing presence in the United States, the company’s franchises can be found in 28 different countries around the world and growing.
Looking ahead, management "expects all of these trends to continue through this fiscal year" according to statements in its 10-Q filing with the SEC. As of early 2013, the company also began developing a third franchise called Sew Fun Studios that is in the process of registering with state franchise regulators. While no state registrations have been completed yet, shareholders should not discount its long-term potential.