-- First Quarter Diluted EPS $1.59 --
Company Website:
http://www.strayereducation.com
HERNDON, Va. -- (Business Wire)
Strayer Education, Inc. (NASDAQ: STRA) today announced financial results
for the three months ended March 31, 2013. Financial highlights are as
follows:
Three Months Ended March 31
-
Revenues for the three months ended March 31, 2013 decreased 8% to
$137.5 million, compared to $149.5 million for the same period in
2012, principally due to lower enrollment and lower revenue per
student.
-
Income from operations was $29.9 million compared to $40.9 million for
the same period in 2012, a decrease of 27%. Operating income margin
was 21.8% compared to 27.3% for the same period in 2012.
-
Net income was $17.2 million compared to $24.0 million for the same
period in 2012, a decrease of 28%. Diluted earnings per share was
$1.59 compared to $2.09 for the same period in 2012, a decrease of
24%. Diluted weighted average shares outstanding decreased 5% to
10,850,000 from 11,477,000 for the same period in 2012.
Balance Sheet and Cash Flow
At March 31, 2013, the Company had cash and cash equivalents of $50.8
million. The Company generated $31.4 million from operating activities
in the first quarter of 2013, compared to $36.5 million during the same
period in 2012. Capital expenditures were $2.4 million for the three
months ended March 31, 2013, compared to $4.1 million for the same
period in 2012.
As previously announced, the Company entered into an amended and
restated revolving credit and term loan agreement on November 8, 2012.
This credit facility, which is secured by the assets of the Company,
provides a $100.0 million revolving credit facility and a $125.0 million
term loan facility with a maturity date of December 31, 2016. At March
31, 2013, the Company had $124.2 million outstanding under its term loan
and no outstanding balance under its revolving credit facility.
During the first quarter of 2013, the Company invested $25.0 million to
repurchase approximately 495,000 shares of stock at an average price of
$50.49 per share as part of a previously announced share repurchase
authorization. The Company had $70.0 million of share repurchase
authorization remaining at March 31, 2013.
For the first quarter 2013, bad debt expense as a percentage of revenues
was 4.0% compared to 3.8% for the same period in 2012. Days sales
outstanding was 15 days at the end of the first quarter of 2013 compared
to 14 days at the end of the first quarter of 2012.
Student Enrollment
Total enrollments at Strayer University for the 2013 spring term
decreased 9% to 46,130 students compared to 50,896 students for the same
term in 2012. Across the Strayer University campus and online system,
continuing student enrollments decreased 8%, while new student
enrollments decreased 14%.
Stock-based Compensation Activity
In February 2013, the Company’s Board of Directors approved grants of
restricted stock and stock options to certain individuals under the
Company’s 2011 Equity Compensation Plan. The Company granted
approximately 166,000 shares of restricted stock, which vest over a
three- to five-year period. The Company’s stock price closed at $62.28
on the date of these restricted stock grants. In addition, the Company
granted 100,000 stock options at an exercise price of $51.95. These
stock options vest two years from the date of grant and expire eight
years from the date of grant.
Common Stock and Common Stock Equivalents
At March 31, 2013, the Company had 10,810,872 common shares issued and
outstanding, 200,000 restricted stock units outstanding, and 100,000
unvested stock options outstanding.
Business Outlook
Based on enrollments announced for the 2013 spring term, the Company
estimates second quarter 2013 diluted EPS will be in the range of $1.37
to $1.39.
Investor Day
As previously announced, the Company is hosting an Investor Day in
Herndon, Virginia later today immediately following the company’s Annual
Meeting of Shareholders. During Investor Day the Company will host
presentations by members of the senior management team. The Investor Day
will also be available for viewing via live webcast. For additional
information, please visit the company’s website at www.strayereducation.com.
About Strayer Education, Inc.
Strayer Education, Inc. (Nasdaq: STRA) is an education services holding
company that owns Strayer University. Strayer’s mission is to make
higher education achievable for working adults in today’s economy.
Strayer University is a proprietary institution of higher learning that
offers undergraduate and graduate degree programs in business
administration, accounting, information technology, education, health
services administration, public administration, and criminal justice to
working adult students at 100 campuses in 24 states and Washington, D.C.
and worldwide via the Internet. Strayer University also offers an
executive MBA online through its Jack Welch Management Institute.
Strayer University is committed to providing an education that prepares
working adult students for advancement in their careers and professional
lives. Founded in 1892, Strayer University is accredited by the Middle
States Commission on Higher Education.
For more information on Strayer Education, Inc. visit www.strayereducation.com
and for Strayer University visit www.strayer.edu.
Forward-Looking Statements
This press release contains statements that are forward-looking and
are made pursuant to the “safe-harbor” provisions of the Private
Securities Litigation Reform Act of 1995 (the “Reform Act”).Such
statements may be identified by the use of words such as “expect,”
“estimate,” “assume,” “believe,” “anticipate,” “will,” “forecast,”
“plan,” “project,” or similar words. The statements are based on the
Company’s current expectations and are subject to a number of
assumptions, uncertainties and risks.In connection with the
safe-harbor provisions of the Reform Act, the Company has identified
important factors that could cause the Company’s actual results to
differ materially from those expressed in or implied by such statements.The assumptions, uncertainties and risks include the pace of growth
of student enrollment, our continued compliance with Title IV of the
Higher Education Act, and the regulations thereunder, as well as
regional accreditation standards and state regulatory requirements,
rulemaking by the Department of Education and increased focus by the U.
S. Congress on for-profit education institutions, competitive factors,
risks associated with the opening of new campuses, risks associated with
the offering of new educational programs and adapting to other changes,
risks relating to the timing of regulatory approvals, our ability to
implement our growth strategy, risks associated with the ability of our
students to finance their education in a timely manner, and general
economic and market conditions.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 fiscal year ended December 31, 2012
and in its subsequent filings with the Securities and Exchange
Commission, all of which are incorporated herein by reference and which
are available from the Commission. We undertake no obligation to update
or revise forward-looking statements.
|
|
| STRAYER EDUCATION, INC. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (in thousands, except per share data) |
|
| |
| |
For the three months
|
| |
ended March 31,
|
| |
2012
|
|
2013
|
| | | |
|
|
Revenues
| | $ | 149,532 | | $ | 137,506 |
|
Costs and expenses:
| | | | |
|
Instruction and educational support
| | |
73,764
| | |
73,427
|
|
Marketing
| | |
15,469
| | |
17,721
|
|
Admissions advisory
| | |
6,793
| | |
5,351
|
|
General and administration
| |
| 12,648 | |
| 11,088 |
|
Total costs and expenses
| |
| 108,674 | |
| 107,587 |
|
Income from operations
| | |
40,858
| | |
29,919
|
|
Investment income
| | |
1
| | |
--
|
|
Interest expense
| |
| 1,208 | |
| 1,296 |
|
Income before income taxes
| | |
39,651
| | |
28,623
|
|
Provision for income taxes
| |
| 15,662 | |
| 11,392 |
|
Net income
| | $ | 23,989 | | $ | 17,231 |
|
Earnings per share:
| | | | |
|
Basic
| |
$
|
2.10
| |
$
|
1.59
|
|
Diluted
| |
$
|
2.09
| |
$
|
1.59
|
|
Weighted average shares outstanding:
| | | | |
|
Basic
| | |
11,419
| | |
10,813
|
|
Diluted
| | |
11,477
| | |
10,850
|
| | | | | |
|
|
|
| STRAYER EDUCATION, INC. |
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands, except share and per share data) |
|
| |
| |
| |
December 31,
| |
March 31,
|
| |
2012
| |
2013
|
| ASSETS | | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| |
$
|
47,517
| | |
$
|
50,762
| |
Tuition receivable, net of allowances for doubtful accounts of
$6,596 and $6,476 at December 31, 2012 and March 31, 2013,
respectively
| | |
23,262
| | | |
22,181
| |
|
Income taxes receivable
| | |
4,454
| | | |
--
| |
|
Other current assets
| |
| 14,422 |
| |
| 12,052 |
|
|
Total current assets
| | |
89,655
| | | |
84,995
| |
|
Property and equipment, net
| | |
121,520
| | | |
117,912
| |
|
Deferred income taxes
| | |
3,279
| | | |
--
| |
|
Goodwill
| | |
6,800
| | | |
6,800
| |
|
Other assets
| |
| 6,538 |
| |
| 6,320 |
|
|
Total assets
| | $ | 227,792 |
| | $ | 216,027 |
|
| | | |
|
| LIABILITIES & STOCKHOLDERS' EQUITY | | | | |
| | | |
|
|
Current liabilities:
| | | | |
|
Accounts payable and accrued expenses
| |
$
|
39,124
| | |
$
|
31,082
| |
|
Income taxes payable
| | |
--
| | | |
4,700
| |
|
Unearned tuition
| | |
494
| | | |
229
| |
|
Other current liabilities
| | |
281
| | | |
281
| |
|
Current portion of term loan
| |
| 3,125 |
| |
| 3,125 |
|
|
Total current liabilities
| | |
43,024
| | | |
39,417
| |
|
Term loan, less current portion
| | |
121,875
| | | |
121,094
| |
|
Other long-term liabilities
| |
| 21,905 |
| |
| 23,193 |
|
|
Total liabilities
| |
| 186,804 |
| |
| 183,704 |
|
|
Commitments and contingencies
| | | | |
|
Stockholders’ equity:
| | | | |
Common stock, par value $.01; 20,000,000 shares authorized;
11,387,299 and 10,810,872 shares issued and outstanding at
December 31, 2012 and March 31, 2013, respectively
| | |
114
| | | |
108
| |
|
Additional paid-in capital
| | |
299
| | | |
377
| |
|
Retained earnings
| | |
41,311
| | | |
32,435
| |
|
Accumulated other comprehensive income (loss)
| |
| (736 | ) | |
| (597 | ) |
|
Total stockholders' equity
| |
| 40,988 |
| |
| 32,323 |
|
|
Total liabilities and stockholders’ equity
| | $ | 227,792 |
| | $ | 216,027 |
|
| | | | | | | |
|
|
|
| STRAYER EDUCATION, INC. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (in thousands) |
|
| |
| |
For the three months ended
|
| |
March 31,
|
| |
2012
|
|
2013
|
|
Cash flows from operating activities:
| | | | |
|
Net income
| |
$
|
23,989
| | |
$
|
17,231
| |
|
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | |
|
Amortization of gain on sale of assets
| | |
(70
|
)
| | |
(70
|
)
|
|
Amortization of deferred rent
| | |
147
| | | |
27
| |
|
Amortization of deferred financing costs
| | |
200
| | | |
195
| |
|
Depreciation and amortization
| | |
5,817
| | | |
6,190
| |
|
Deferred income taxes
| | |
(317
|
)
| | |
(661
|
)
|
|
Stock-based compensation
| | |
2,390
| | | |
2,250
| |
|
Changes in assets and liabilities:
| | | | |
|
Tuition receivable, net
| | |
1,686
| | | |
1,081
| |
|
Other current assets
| | |
(957
|
)
| | |
1,645
| |
|
Other assets
| | |
(154
|
)
| | |
(4
|
)
|
|
Accounts payable and accrued expenses
| | |
2,369
| | | |
(8,220
|
)
|
|
Income taxes payable and income taxes receivable
| | |
15,443
| | | |
11,847
| |
|
Unearned tuition
| | |
(14,061
|
)
| | |
(265
|
)
|
|
Other long-term liabilities
| |
| -- |
| |
| 147 |
|
|
Net cash provided by operating activities
| |
| 36,482 |
| |
| 31,393 |
|
|
Cash flows from investing activities:
| | | | |
|
Purchases of property and equipment
| |
| (4,050 | ) | |
| (2,368 | ) |
|
Net cash used in investing activities
| |
| (4,050 | ) | |
| (2,368 | ) |
|
Cash flows from financing activities:
| | | | |
|
Repurchase of common stock
| | |
--
| | | |
(24,999
|
)
|
|
Payments on term loan
| | |
(5,000
|
)
| | |
(781
|
)
|
|
Payments on revolving credit facility
| | |
(20,000
|
)
| | |
--
| |
|
Common dividends paid
| |
| (11,865 | ) | |
| -- |
|
|
Net cash used in financing activities
| |
| (36,865 |
)
| |
| (25,780 | ) |
|
Net (decrease) increase in cash and cash equivalents
| | |
(4,433
|
)
| | |
3,245
| |
|
Cash and cash equivalents — beginning of period
| |
| 57,137 |
| |
| 47,517 |
|
|
Cash and cash equivalents — end of period
| | $ | 52,704 |
| | $ | 50,762 |
|
|
Non-cash transactions:
| | | | |
|
Purchases of property and equipment included in accounts payable
| |
$
|
1,225
| | |
$
|
706
| |
Contacts:
Strayer Education, Inc.
Mark C. Brown
Executive Vice President
and Chief Financial Officer
703-247-2514
or
Sonya Udler
Senior
Vice President, Corporate Communications
703-247-2517
sonya.udler@strayer.edu
Source: Strayer Education, Inc.
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