Lingo Media seeing English language learning products shine brightly in pandemic world

Toronto-based education technology company has a suite of products designed to teach English to a global population Novel speech recognition technology allows users to analyze pronunciation and simulate real-life conversation scenarios Major strategic partnerships in South America and China, which are its main target markets What Lingo Media does: Lingo Media Corporation (CVE:LM) (OTCMKTS:LMDCF) is an education technology company which develops English language learning products to support learners — from classroom to boardroom. The Toronto-based company publishes English language learning material in multiple media formats for international markets. It develops books, tapes, videos, compact discs, and online content. With over 1.6 billion people globally learning the language, English-as-a-second language (ESL) products and services are an estimated $56 billion industry, according to data from Ambient Insight. What’s more, digital ESL applications are booming in both market value and popularity, democratizing access to the world’s most popular language. Against this backdrop, Lingo has developed a software-as-a-service (SaaS) learning platform with a complete suite of products that seamlessly blends education and technology by way of two distinct business units: ELL Technologies and Lingo Learning. ELL Technologies provides online training and assessment for English language learning, while Lingo Learning is a print-based publisher of English language learning programs in China, where Lingo Media has a particularly strong presence. Lead product ELL Technologies is aimed squarely at academic institutions, governments and corporations offering lessons and teaching material. A major differentiating feature of the product is Lingo’s speech recognition technology that allows users to analyze pronunciation and simulate real-life conversation scenarios. Users can record and compare themselves with native speakers to match their pronunciation. How is it doing: It has been a busy spell for Lingo amid the sweeping shift to remote learning as schools adjust to the new normal in the age of the coronavirus (COVID-19). In August, Lingo boosted its second-quarter revenue and profit as educators adapted to virtual learning. For the quarter ended June 30, 2020, the company posted revenue of C$977,000, compared to $895,000 in the same quarter a year earlier. The group’s net profit was C$624,000, or $0.02 per share, compared to $431,000, or $0.01 a share, in the same period in 2019. Lingo also gave shareholders a glimpse into its six-month results, which saw revenue rise to C$1,074,513 for the six-month period ended June 30, from $1 million for the same period in 2019. Significantly, the firm has secured two sales contracts in Japan – its first in the country – and sales contracts with two Colombian universities. On the print-based learning side, the company has expanded its existing market for its PEP Primary English program into an additional province in China. Lingo subsidiary ELL Technologies is holding webinars to help English teachers adjust to teaching remotely. The company recently conducted a webinar in Latin America which drew 1,500 people. The webinars showcase best practices from the company’s online education programs and help teachers hone the skills to keep students engaged in a remote environment. ELL Technologies has enhanced its language learning platform with new features, including additional resources for teachers and white label capacity for distributors and customers. Chief among the new features is ELL’s Studio App, which lets students practice pronunciation using their mobile devices and provides instant feedback to help them improve. The app builds on the company’s Studio Desktop and Speak2Me features by integrating anytime access, progress tracking and teacher monitoring capabilities. For teachers, ELL has added file assignment and lesson assignment features, which let teachers supplement the regular curriculum by assigning additional content to specific students. For its white label business and other customers, there are new interface customization options available for institutions or course providers to add their own logos, colors and course descriptions. The group has entered a distribution agreement with JPH Consultoria Academica in Guatemala and renewed an agreement with FloridaBlanca in Colombia for an additional year. It also renewed its agreement with Innovalingua de Mexico SAS de CV in Mexico and inked new distribution deals in Ecuador and Mexico. Significantly, Lingo has enhanced its online English language learning capabilities with new reporting functionality and an improved chat feature in its new Learning Management System (LMS) and developed a resource allocation functionality feature for the LMS for teachers. In March, ELL Technologies inked an agreement to sell its interactive language learning solutions to Accent Plus SA. Accent Plus is using ELL Technologies' English for Success (EFS) and Portuguese learning solutions in a blended environment that combines in-class instruction with interactive online tools outside of the classroom. The company’s business model rests on establishing alliances with academic intuitions. In keeping with this tack, ELL Technologies has signed an agreement to license its interactive English for Success solution to Liberty University. Lingo has a multimillion-dollar contract with Colombia’s National Training Service, SENA, where it is developing a digital content library. Similarly, ELL Technologies secured a sales contract with FOCUS Your Mind Colombia to implement its new online English language learning program, one of several agreements in the country. Nearby in Peru, the company has a distribution partnership with Telefonica Group, a dominant telecommunications firm in the region. It also has alliances with education publisher Gale Cengage and language assessment tool provider iTEP. Inflection points: On a long-term basis, Lingo will gain traction as it has implemented functionality and feature upgrades to its platform for teachers and students The work with its channel partners to renew existing contracts and to build new business is promising It has expanded its distribution network which will drive sales contracts The company has also said it is evaluating M&A opportunities to position the company for accelerated growth There’s massive upside potential as it continues to release new product features, and expand its library of content What the boss says: Commenting on the adoption of remote and e-learning trends in the markets that the company services, Lingo Media CEO Gali Bar-Ziv said: "We live in a new world, with a new normal and new learning reality. COVID has introduced us with both challenges, as well as opportunities.” He added: “While our markets initially experienced difficulties adjusting to the new reality of remote learning, we’ve been seeing enhanced acceptance by institutions to adopt e-learning solutions. We expect to see further opportunities in the marketplace. We are very pleased with the addition of key distributors in our core markets and the results for the first six months.” Contact Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive