Company Declares Inaugural Quarterly Cash
Dividend on Common Stock
Perdoceo Education Corporation (NASDAQ: PRDO) today reported
operating and financial results for the quarter and year to date
ended June 30, 2023.
Second Quarter 2023
Results as Compared to Prior Year Quarter
- Revenue increased 11.3% to $186.6 million, primarily driven by
an 18.7% increase at CTU.
- Operating income increased 41.7% to $48.1 million, while
adjusted operating income increased 31.5% to $55.2 million.*
- Earnings per diluted share were $0.80 as compared to $0.37,
while adjusted earnings per diluted share were $0.61 as compared to
$0.42.*
- Total student enrollments at June 30, 2023 decreased by 5.2%.
AIUS experienced a 14.2% decrease in total student enrollments
while CTU remained relatively flat.
- Ended the quarter with $578.1 million in cash, cash
equivalents, restricted cash and available-for-sale-short-term
investments.
- Board of Directors declared inaugural dividend for the second
quarter of $0.11 per share payable on September 15, 2023.
Year to Date 2023
Results as Compared to Prior Year to Date
- Revenue increased 9.0% to $382.2 million, primarily driven by a
14.1% increase at CTU.
- Operating income increased 17.8% to $91.4 million, while
adjusted operating income increased 16.6% to $108.3 million.*
- Earnings per diluted share were $1.30 as compared to $0.83,
while adjusted earnings per diluted share were $1.19 as compared to
$0.93.*
*See GAAP (U.S. generally accepted accounting principles)
to non-GAAP reconciliation attached to this press release
"Second quarter results came in ahead of our expectations, as we
experienced further improvements in student retention and
engagement, supported by various operating changes and technology
upgrades within our onboarding, academic and student support
processes,” said Andrew Hurst, Chief Executive Officer.
REVENUE
- For the quarter ended June 30, 2023, revenue of $186.6 million
increased 11.3% compared to revenue of $167.7 million for the prior
year quarter.
- For the year to date ended June 30, 2023, revenue of $382.2
million increased 9.0% compared to revenue of $350.6 million for
the prior year to date.
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
Revenue ($ in
thousands)
2023
2022
% Change
2023
2022
% Change
CTU
$
119,292
$
100,461
18.7
%
$
243,784
$
213,609
14.1
%
AIUS
67,062
66,920
0.2
%
137,902
136,452
1.1
%
Corporate and Other
210
303
NM
476
582
NM
Total
$
186,564
$
167,684
11.3
%
$
382,162
$
350,643
9.0
%
TOTAL STUDENT ENROLLMENTS
- As of June 30, 2023, CTU’s total student enrollments decreased
0.4%, while AIUS’ total student enrollments decreased 14.2% as
compared to June 30, 2022.
At June 30,
Total Student
Enrollments(1)
2023
2022
% Change
CTU
25,900
26,000
-0.4
%
AIUS
12,100
14,100
-14.2
%
Total
38,000
40,100
-5.2
%
(1)
Total student enrollments do not include
learners participating in: a) non-degree seeking and professional
development programs, and b) degree seeking, non-Title IV,
self-paced programs at the Company's universities.
OPERATING INCOME
- For the quarter ended June 30, 2023, operating income increased
by 41.7% to $48.1 million as compared to the prior year
quarter.
- For the year to date ended June 30, 2023, operating income
increased by 17.8% to $91.4 million as compared to the prior year
to date.
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
Operating Income
($ in thousands)
2023
2022
% Change
2023
2022
% Change
CTU
$
40,451
$
33,008
22.5
%
$
84,141
$
76,034
10.7
%
AIUS
17,078
10,733
59.1
%
29,081
20,256
43.6
%
Corporate and Other
(9,435
)
(9,795
)
NM
(21,792
)
(18,651
)
NM
Total
$
48,094
$
33,946
41.7
%
$
91,430
$
77,639
17.8
%
ADJUSTED OPERATING INCOME
The Company believes it is useful to present non-GAAP financial
measures, which exclude certain significant and non-cash items, as
a means to understand the performance of its operations. (See table
below and the GAAP to non-GAAP reconciliation attached to this
press release for further details.)
- For the quarter ended June 30, 2023, adjusted operating income
of $55.2 million increased 31.5% compared to adjusted operating
income of $41.9 million for the prior year quarter.
- For the year to date ended June 30, 2023, adjusted operating
income of $108.3 million increased 16.6% compared to adjusted
operating income of $92.9 million for the prior year to date.
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
Adjusted
Operating Income ($ in thousands)
2023
2022
2023
2022
Operating income
$
48,094
$
33,946
$
91,430
$
77,639
Depreciation and amortization (1)
4,369
4,909
9,524
9,791
Legal fee expense related to certain
matters (2)
2,709
3,087
7,328
5,434
Adjusted Operating Income
$
55,172
$
41,942
$
108,282
$
92,864
Increase (Decrease)
31.5
%
16.6
%
(1)
Amortization relates to definite-lived
intangible assets associated with acquisitions.
(2)
Legal fee expense associated with (i)
responses to the Department of Education (the “Department”)
relating to borrower defense to repayment applications from former
students, and (ii) acquisition efforts.
NET INCOME AND EARNINGS PER DILUTED SHARE
For the quarter ended June 30, 2023, the Company recorded:
- Net income of $54.7 million compared to $25.8 million for the
prior year quarter.
- Earnings per diluted share of $0.80 compared to $0.37 for the
prior year quarter.
- Adjusted earnings per diluted share of $0.61 compared to $0.42
for the prior year quarter. (See table below and the GAAP to
non-GAAP reconciliation attached to this press release for further
details.)
For the year to date ended June 30, 2023, the Company
recorded:
- Net income of $89.2 million compared to $57.8 million for the
prior year to date.
- Earnings per diluted share of $1.30 compared to $0.83 for the
prior year to date.
- Adjusted earnings per diluted share of $1.19 compared to $0.93
for the prior year to date. (See table below and the GAAP to
non-GAAP reconciliation attached to this press release for further
details.)
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
2023
2022
2023
2022
Reported Earnings Per Diluted
Share
$
0.80
$
0.37
$
1.30
$
0.83
Pre-tax adjustments included in
operating expenses:
Amortization for acquired intangible
assets (1)
0.03
0.02
0.07
0.05
Legal fee expense related to certain
matters (2)
0.04
0.05
0.11
0.08
Gain on sale of intangible asset (3)
(0.32
)
-
(0.32
)
-
Tax effect of adjustments (4)
0.06
(0.02
)
0.03
(0.03
)
Adjusted Earnings Per Diluted
Share
$
0.61
$
0.42
$
1.19
$
0.93
(1)
Amortization relates to definite-lived
intangible assets associated with acquisitions.
(2)
Legal fee expense associated with (i)
responses to the Department relating to borrower defense to
repayment applications from former students, and (ii) acquisition
efforts.
(3)
Non-cash gain associated with the sale of
the LCB tradename in exchange for outstanding shares of Perdoceo's
stock.
(4)
The tax effect of adjustments was
calculated by multiplying the pre-tax adjustments with a tax rate
of 25.0%. This tax rate is intended to reflect federal and state
taxable jurisdictions as well as the nature of the adjustments.
INAUGURAL QUARTERLY DIVIDEND PAYMENT
The Company today announced that its board of directors has
adopted a dividend policy. Pursuant to this policy, the board of
directors intends to pay quarterly dividends, commencing with the
Company’s quarter ended June 30, 2023. The board of directors
declared the first quarterly dividend as part of the dividend
policy of $0.11 per share, which will be paid on September 15, 2023
for holders of record of common stock as of September 1, 2023. Any
decision to pay future cash dividends, however, will be made by the
board of directors and depend on the Company’s available retained
earnings, financial condition and other relevant factors.
The Company expects quarterly dividend payments to be an
integral part of its balanced capital allocation strategy while
also prioritizing investments in organic projects, in particularly
technology-related initiatives designed to benefit students and
maintaining a strong balance sheet.
BALANCE SHEET AND CASH FLOW
- For the quarter ended June 30, 2023 net cash provided by
operating activities was $61.6 million, compared to net cash
provided by operating activities of $32.6 million for the prior
year quarter.
- For the year to date ended June 30, 2023, net cash provided by
operating activities was $66.2 million, compared to net cash
provided by operating activities of $54.8 million in the prior year
to date.
- As of June 30, 2023 and December 31, 2022, cash, cash
equivalents, restricted cash and available-for-sale short-term
investments totaled $578.1 million and $518.2 million,
respectively.
- The Company’s stock repurchase program, which was set to expire
on September 30, 2023, has been extended to September 30, 2024. As
of June 30, 2023, approximately $24.1 million was available under
the stock repurchase program to repurchase outstanding shares of
common stock.
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
Selected Cash
Flow Items ($ in thousands)
2023
2022
% Change
2023
2022
% Change
Net cash provided by operating
activities
$
61,648
$
32,625
89.0
%
$
66,220
$
54,779
20.9
%
Capital expenditures
$
1,687
$
2,023
-16.6
%
$
3,612
$
6,765
-46.6
%
OUTLOOK
The Company is providing the following third quarter outlook
along with a full year outlook, subject to the key assumptions
identified below. Please see the GAAP to non-GAAP reconciliation
for adjusted operating income and adjusted earnings per diluted
share attached to this press release for further details.
Total Company Outlook
For Quarter Ending September
30,
For the Year Ending December
31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2023
2022
2023
2022
Operating Income
$38.6M - $40.6M
$29,324
$137.0M - $144.0M
$129,637
Depreciation and amortization
$4.1M
$5,065
$17.6M
19,734
Legal fee expense related to certain
matters (1)
$0.3M
$4,294
$10.4M
14,597
Adjusted Operating Income
$43.0M - $45.0M
$38,683
$165.0M - $172.0M
$163,968
Earnings Per Diluted Share
$0.46 - $0.48
$0.32
$1.89 - $1.96
$1.39
Amortization of acquired intangible
assets
$0.03
$0.03
$0.12
$0.11
Legal fee expense related to certain
matters (1)
-
$0.06
$0.15
$0.21
Gain on sale of intangible asset
-
-
($0.32)
-
Tax effect of adjustments
($0.01)
($0.02)
$0.01
($0.08)
Adjusted Earnings Per Diluted
Share
$0.48 - $0.50
$0.39
$1.85 - $1.92
$1.63
(1)
Legal fee expense associated with (i)
responses to the Department relating to borrower defense to
repayment applications from former students, and (ii) acquisition
efforts.
Operating income, which is the most directly comparable GAAP
measure to adjusted operating income, and earnings per diluted
share, which is the most directly comparable GAAP measure to
adjusted earnings per diluted share, may not follow the same trends
stated in the outlook above because of adjustments made for certain
significant and non-cash items. The operating income, adjusted
operating income, earnings per share and adjusted earnings per
share outlook provided above for 2023 are based on the following
key assumptions and factors, among others: (i) prospective student
interest in the Company’s programs and trends in student retention
and engagement remain consistent with management’s estimates, (ii)
no significant impact of new or proposed regulations, including
recent Department negotiated rulemaking initiatives, or other
adverse changes in the legal or regulatory environment, which may
require further operational changes in the way the Company’s
academic institutions enroll, support and educate current and
prospective students, among other impacts, (iii) no significant
operating impacts from the settlements with the U.S. Federal Trade
Commission and state attorneys general or other legal or regulatory
matters, (iv) the impact from student aid initiatives implemented
by the current administration remains consistent with management's
estimates, (v) earnings per diluted share outlook assumes an
effective income tax rate of approximately 28% for the third
quarter and 27% for the full year, and (vi) excludes any future
impact from the Company’s stock repurchase program. Although these
estimates and assumptions are based upon management’s good faith
beliefs regarding current and future circumstances and actions that
may be undertaken, actual results could differ materially from
these estimates. In addition, decisions the Company makes in the
future as it continues to evaluate diverse strategies to enhance
stockholder value may impact the outlook provided above.
CONFERENCE CALL INFORMATION
Perdoceo Education Corporation will host a conference call on
Thursday, August 3, 2023 at 5:30 p.m. Eastern time to discuss
second quarter and year to date 2023 results and outlook.
Interested parties can access the live webcast of the conference
call at www.perdoceoed.com in the Investor Relations section of the
website. Participants can also listen to the conference call by
dialing 1-888-210-4659 (domestic) or 1-646-960-0383
(international). Both dial-in numbers will use the access code
3224322. Viewers can also access the conference call by following
this link https://events.q4inc.com/attendee/519983953. Please
log-in or dial-in at least 10 minutes prior to the start time to
ensure a connection. An archived version of the webcast will be
accessible for 90 days at www.perdoceoed.com in the Investor
Relations section of the website.
ABOUT PERDOCEO EDUCATION CORPORATION
Perdoceo’s accredited academic institutions offer a quality
postsecondary education primarily online to a diverse student
population, along with campus-based and blended learning programs.
The Company’s academic institutions – Colorado Technical University
(“CTU”) and the American InterContinental University System (“AIUS”
or “AIU System”) – provide degree programs from the associate
through doctoral level as well as non-degree seeking and
professional development programs. Perdoceo’s academic institutions
offer students industry-relevant and career-focused academic
programs that are designed to meet the educational needs of today’s
busy adults. CTU and AIUS continue to show innovation in higher
education, advancing personalized learning technologies like their
intellipath® learning platform and using data analytics and
technology to serve and educate students while enhancing overall
learning and academic experiences. Perdoceo is committed to
providing quality education that closes the gap between learners
who seek to advance their careers and employers needing a qualified
workforce. For more information, please visit
www.perdoceoed.com.
Except for the historical and present factual information
contained herein, the matters set forth in this release, including
statements identified by words such as “believe,” “will,” “expect,”
“continue,” “outlook,” “remain,” “focused on,” “should” and similar
expressions, are forward-looking statements as defined in Section
21E of the Securities Exchange Act of 1934, as amended. These
statements are based on information currently available to us and
are subject to various assumptions, risks, uncertainties and other
factors that could cause our results of operations, financial
condition, cash flows, performance, business prospects and
opportunities to differ materially from those expressed in, or
implied by, these statements. Except as expressly required by the
federal securities laws, we undertake no obligation to update or
revise such factors or any of the forward-looking statements
contained herein to reflect future events, developments or changed
circumstances, or for any other reason. These risks and
uncertainties, the outcomes of which could materially and adversely
affect our financial condition and operations, include, but are not
limited to, the following: declines in enrollment or interest in
our programs; our continued compliance with and eligibility to
participate in Title IV Programs under the Higher Education Act of
1965, as amended, and the regulations thereunder (including the
90-10, financial responsibility and administrative capability
standards prescribed by the U.S. Department of Education), as well
as applicable accreditation standards and state regulatory
requirements; the impact of various versions of “borrower defense
to repayment” regulations; the final outcome of various legal
challenges to the Department's loan discharge and forgiveness
efforts; rulemaking by the U.S. Department of Education or any
state or accreditor and increased focus by Congress and
governmental agencies on, or increased negative publicity about,
for-profit education institutions; the success of our initiatives
to improve student experiences, retention and academic outcomes;
our continued eligibility to participate in educational assistance
programs for veterans or other military personnel; our ability to
pay dividends on our common stock and execute our stock repurchase
program; increased competition; the impact of management changes;
and changes in the overall U.S. economy. Further information about
these and other relevant risks and uncertainties may be found in
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2022 and its subsequent filings with the Securities
and Exchange Commission.
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
June 30,
December 31,
2023
2022
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents,
unrestricted
$
140,533
$
109,408
Restricted cash
9,476
9,476
Short-term investments
428,104
399,315
Total cash and cash equivalents,
restricted cash and short-term investments
578,113
518,199
Student receivables, net
42,322
42,551
Receivables, other
6,896
3,457
Prepaid expenses
12,524
8,411
Inventories
2,875
1,904
Other current assets
664
597
Total current assets
643,394
575,119
NON-CURRENT ASSETS:
Property and equipment, net
24,257
26,038
Right of use asset, net
23,105
26,156
Goodwill
244,114
243,540
Intangible assets, net
49,089
53,564
Student receivables, net
1,184
1,850
Deferred income tax assets, net
21,638
24,613
Other assets
6,889
6,488
TOTAL ASSETS
$
1,013,670
$
957,368
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Lease liability - operating
$
5,695
$
6,555
Accounts payable
15,361
13,518
Accrued expenses:
Payroll and related benefits
27,291
40,306
Advertising and marketing costs
6,385
8,977
Income taxes
16,041
7,814
Other
23,008
14,621
Deferred revenue
66,914
71,590
Total current liabilities
160,695
163,381
NON-CURRENT LIABILITIES:
Lease liability - operating
24,357
27,286
Other liabilities
36,186
40,856
Total non-current liabilities
60,543
68,142
STOCKHOLDERS' EQUITY:
Preferred stock
-
-
Common stock
900
894
Additional paid-in capital
688,805
684,183
Accumulated other comprehensive loss
(5,621
)
(5,447
)
Retained earnings
436,996
347,839
Treasury stock
(328,648
)
(301,624
)
Total stockholders' equity
792,432
725,845
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
1,013,670
$
957,368
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share
amounts and percentages)
For the Quarter Ended June
30,
2023
% of Total Revenue
2022
% of Total Revenue
REVENUE:
Tuition and fees, net
$
184,520
98.9
%
$
165,896
98.9
%
Other
2,044
1.1
%
1,788
1.1
%
Total revenue
186,564
167,684
OPERATING EXPENSES:
Educational services and facilities
32,748
17.6
%
27,269
16.3
%
General and administrative
100,588
53.9
%
101,332
60.4
%
Depreciation and amortization
4,369
2.3
%
4,909
2.9
%
Asset impairment
765
0.4
%
228
0.1
%
Total operating expenses
138,470
74.2
%
133,738
79.8
%
Operating income
48,094
25.8
%
33,946
20.2
%
OTHER INCOME:
Interest income
4,531
2.4
%
1,094
0.7
%
Interest expense
(96
)
-0.1
%
(99
)
-0.1
%
Miscellaneous income (expense)
22,074
11.8
%
(226
)
-0.1
%
Total other income
26,509
14.2
%
769
0.5
%
PRETAX INCOME
74,603
40.0
%
34,715
20.7
%
Provision for income taxes
19,930
10.7
%
8,948
5.3
%
NET INCOME
54,673
29.3
%
25,767
15.4
%
NET INCOME PER SHARE - BASIC:
$
0.81
$
0.38
NET INCOME PER SHARE -DILUTED:
$
0.80
$
0.37
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic
67,421
68,341
Diluted
68,533
69,182
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Quarter Ended June
30,
(In Thousands)
2023
2022
NET INCOME
$
54,673
$
25,767
OTHER COMPREHENSIVE LOSS, net of
tax:
Foreign currency translation
adjustments
(3
)
(164
)
Unrealized loss on investments
(1,497
)
(1,469
)
Total other comprehensive loss
(1,500
)
(1,633
)
COMPREHENSIVE INCOME
$
53,173
$
24,134
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share
amounts and percentages)
For the Year to Date Ended
June 30,
2023
% of Total Revenue
2022
% of Total Revenue
REVENUE:
Tuition and fees, net
$
377,839
98.9
%
$
347,223
99.0
%
Other
4,323
1.1
%
3,420
1.0
%
Total revenue
382,162
350,643
OPERATING EXPENSES:
Educational services and facilities
66,599
17.4
%
55,357
15.8
%
General and administrative
213,274
55.8
%
207,628
59.2
%
Depreciation and amortization
9,524
2.5
%
9,791
2.8
%
Asset impairment
1,335
0.3
%
228
0.1
%
Total operating expenses
290,732
76.1
%
273,004
77.9
%
Operating income
91,430
23.9
%
77,639
22.1
%
OTHER INCOME:
Interest income
8,349
2.2
%
1,427
0.4
%
Interest expense
(191
)
0.0
%
(202
)
-0.1
%
Miscellaneous income (expense)
22,068
5.8
%
(315
)
-0.1
%
Total other income
30,226
7.9
%
910
0.3
%
PRETAX INCOME
121,656
31.8
%
78,549
22.4
%
Provision for income taxes
32,499
8.5
%
20,704
5.9
%
NET INCOME
89,157
23.3
%
57,845
16.5
%
NET INCOME PER SHARE - BASIC:
$
1.32
$
0.84
NET INCOME PER SHARE -DILUTED:
$
1.30
$
0.83
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic
67,328
68,542
Diluted
68,512
69,376
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year to Date Ended
June 30,
(In Thousands)
2023
2022
NET INCOME
$
89,157
$
57,845
OTHER COMPREHENSIVE LOSS, net of
tax:
Foreign currency translation
adjustments
23
(245
)
Unrealized loss on investments
(197
)
(2,833
)
Total other comprehensive loss
(174
)
(3,078
)
COMPREHENSIVE INCOME
$
88,983
$
54,767
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year to Date Ended
June 30,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
89,157
$
57,845
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset impairment
1,335
228
Gain on sale of asset
(22,086
)
-
Depreciation and amortization expense
9,524
9,791
Bad debt expense
18,927
24,379
Compensation expense related to
share-based awards
4,315
4,316
Deferred income taxes
2,975
(557
)
Changes in operating assets and
liabilities
(37,927
)
(41,223
)
Net cash provided by operating
activities
66,220
54,779
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of available-for-sale
investments
(159,183
)
(330,797
)
Sales of available-for-sale
investments
132,325
134,964
Purchases of property and equipment
(3,612
)
(6,765
)
Business acquisition
-
(7,000
)
Net cash used in investing activities
(30,470
)
(209,598
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock
313
849
Purchase of treasury stock
(2,729
)
(15,670
)
Payments of employee tax associated with
stock compensation
(2,209
)
(1,612
)
Release of cash held in escrow
-
(3,986
)
Net cash used in financing activities
(4,625
)
(20,419
)
NET INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
31,125
(175,238
)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, beginning of the period
118,884
325,178
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, end of the period
$
150,009
$
149,940
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT
INFORMATION
(In thousands, except
percentages)
For the Quarter Ended June
30,
2023 (1)
2022
REVENUE:
CTU
$
119,292
$
100,461
AIUS
67,062
66,920
Corporate and Other
210
303
Total
$
186,564
$
167,684
OPERATING INCOME (LOSS):
CTU
$
40,451
$
33,008
AIUS
17,078
10,733
Corporate and Other
(9,435
)
(9,795
)
Total
$
48,094
$
33,946
OPERATING MARGIN (LOSS):
CTU
33.9
%
32.9
%
AIUS
25.5
%
16.0
%
Corporate and Other
NM
NM
Total
25.8
%
20.2
%
(1)
Results of operations include an
acquisition completed on December 1, 2022 within CTU and an
acquisition completed on July 1, 2022 within AIUS.
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT
INFORMATION
(In thousands, except
percentages)
For the Year to Date Ended
June 30,
2023 (1)
2022
REVENUE:
CTU
$
243,784
$
213,609
AIUS
137,902
136,452
Corporate and Other
476
582
Total
$
382,162
$
350,643
OPERATING INCOME (LOSS):
CTU
$
84,141
$
76,034
AIUS
29,081
20,256
Corporate and Other
(21,792
)
(18,651
)
Total
$
91,430
$
77,639
OPERATING MARGIN (LOSS):
CTU
34.5
%
35.6
%
AIUS
21.1
%
14.8
%
Corporate and Other
NM
NM
Total
23.9
%
22.1
%
(1)
Results of operations include an
acquisition completed on December 1, 2022 within CTU and an
acquisition completed on July 1, 2022 within AIUS.
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP ITEMS (1)
(In thousands, unless otherwise
noted)
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
ACTUAL
ACTUAL
Adjusted
Operating Income
2023
2022
2023
2022
Operating income
$
48,094
$
33,946
$
91,430
$
77,639
Depreciation and amortization (2)
4,369
4,909
9,524
9,791
Legal fee expense related to certain
matters (3)
2,709
3,087
7,328
5,434
Adjusted Operating Income
$
55,172
$
41,942
$
108,282
$
92,864
For the Quarter Ending
September 30,
For the Year Ending December
31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2023
2022
2023
2022
Operating income
$38.6M - $40.6M
$
29,324
$137.0M - $144.0M
$
129,637
Depreciation and amortization (2)
$4.1M
5,065
$17.6M
19,734
Legal fee expense related to certain
matters (3)
$0.3M
4,294
$10.4M
14,597
Adjusted Operating Income
$43.0M - $45.0M
$
38,683
$165.0M - $172.0M
$
163,968
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP ITEMS (1) (cont’d)
For the Quarter Ended June
30,
For the Year to Date Ended
June 30,
ACTUAL
ACTUAL
2023
2022
2023
2022
Reported Earnings Per Diluted
Share
$
0.80
$
0.37
$
1.30
$
0.83
Pre-tax adjustments included in
operating expenses:
Amortization for acquired intangible
assets (2)
0.03
0.02
0.07
0.05
Legal fee expense related to certain
matters (3)
0.04
0.05
0.11
0.08
Gain on sale of intangible asset (4)
(0.32
)
-
(0.32
)
-
Total pre-tax adjustments
$
(0.25
)
$
0.07
$
(0.14
)
$
0.13
Tax effect of adjustments (5)
0.06
(0.02
)
0.03
(0.03
)
Total adjustments after tax
(0.19
)
0.05
(0.11
)
0.10
Adjusted Earnings Per Diluted
Share
$
0.61
$
0.42
$
1.19
$
0.93
For the Quarter Ending
September 30,
For the Year Ending December
31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2023
2022
2023
2022
Reported Earnings Per Diluted
Share
$0.46 - $0.48
$
0.32
$1.89 -$1.96
$
1.39
Pre-tax adjustments included in
operating expenses:
Amortization for acquired intangible
assets (2)
0.03
0.03
0.12
0.11
Legal fee expense related to certain
matters (3)
-
0.06
0.15
0.21
Gain on sale of intangible asset (4)
-
-
(0.32)
-
Total pre-tax adjustments
$0.03
$
0.09
(0.05)
$
0.32
Tax effect of adjustments (5)
(0.01)
(0.02
)
0.01
(0.08
)
Total adjustments after tax
0.02
0.07
(0.04)
0.24
Adjusted Earnings Per Diluted
Share
$0.48 - $0.50
$
0.39
$1.85 - $1.92
$
1.63
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP ITEMS (1) (cont’d)
(1)
The Company believes it is useful to
present non-GAAP financial measures which exclude certain
significant and non-cash items as a means to understand the
performance of its operations. As a general matter, the Company
uses non-GAAP financial measures in conjunction with results
presented in accordance with GAAP to help analyze the performance
of its operations, assist with preparing the annual operating plan,
and measure performance for some forms of compensation. In
addition, the Company believes that non-GAAP financial information
is used by analysts and others in the investment community to
analyze the Company’s historical results and to provide estimates
of future performance.
The Company believes adjusted operating
income and adjusted earnings per diluted share allow it to analyze
and assess its operations and compare current operating results
with the operational performance of other companies in its industry
because it does not give effect to potential differences caused by
items it does not consider reflective of underlying operating
performance, such as amortization for acquired intangible assets,
significant legal settlements and legal fee expense related to
certain matters. The Company believes the items it is adjusting for
are not normal operating expenses necessary to run its business. In
evaluating adjusted operating income and adjusted earnings per
diluted share, investors should be aware that in the future the
Company may incur expenses similar to the adjustments presented
above. The presentation of adjusted operating income and adjusted
earnings per diluted share should not be construed as an inference
that the Company's future results will be unaffected by expenses
that are unusual, non-routine or non-recurring. Adjusted operating
income and adjusted earnings per diluted share have limitations as
an analytical tool, and should not be considered in isolation, or
as a substitute for net income, operating income, earnings per
diluted share, or any other performance measure derived in
accordance and reported under GAAP or as an alternative to cash
flow from operating activities or as a measure of liquidity.
Non-GAAP financial measures, when viewed
in a reconciliation to corresponding GAAP financial measures,
provide an additional way of viewing the Company’s results of
operations and the factors and trends affecting the Company’s
business. Non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to, the
corresponding financial results presented in accordance with
GAAP.
Results of operations include the Coding
Dojo acquisition as of December 1, 2022 and the CalSouthern
acquisition as of July 1, 2022.
(2)
Amortization for acquired intangible
assets relate to definite-lived intangible assets associated with
acquisitions.
(3)
Legal fee expense associated with (i)
responses to the Department relating to borrower defense to
repayment applications from former students, and (ii) acquisition
efforts.
(4)
Non-cash gain associated with the sale of
the LCB tradename in exchange for outstanding shares of Perdoceo's
stock.
(5)
The tax effect of adjustments was
calculated by multiplying the pre-tax adjustments with a tax rate
of 25.0%. This tax rate is intended to reflect federal and state
taxable jurisdictions as well as the nature of the adjustments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803894679/en/
Investors: Alpha IR Group Davis Snyder or Nick Nelson
(312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo
Education Corporation (847) 585-2600 media@perdoceoed.com
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