Strayer Education, Inc. Reports Third Quarter 2012 Revenues and Earnings; and Fall Term 2012 Enrollments

  Strayer Education, Inc. Reports Third Quarter 2012 Revenues and Earnings;
  and Fall Term 2012 Enrollments

                    -- Third Quarter Diluted EPS $0.36 --

     -- Fall 2012 Total Enrollments Down 5% / New Students Increase 4% --

        -- Share Repurchase Authorization Increased to $120 Million --

Business Wire

HERNDON, Va. -- November 09, 2012

Strayer Education, Inc. (Nasdaq: STRA) today announced financial results for
the three months ended September 30, 2012. Financial highlights are as
follows:

Three Months Ended September 30

  *Revenues for the three months ended September 30, 2012 decreased 9% to
    $124.3 million, compared to $135.9 million for the same period in 2011,
    principally due to lower enrollment.
  *Income from operations was $7.8 million compared to $24.4 million for the
    same period in 2011, a decrease of 68%. Operating income margin was 6.3%
    compared to 18.0% for the same period in 2011.
  *Net income was $4.1 million compared to $13.9 million for the same period
    in 2011, a decrease of 71%. Diluted earnings per share was $0.36 compared
    to $1.20 for the same period in 2011, a decrease of 70%. Diluted weighted
    average shares outstanding decreased 1% to 11,487,000 from 11,647,000 for
    the same period in 2011.

Nine Months Ended September 30

  *Revenues for the nine months ended September 30, 2012 decreased 11% to
    $420.0 million, compared to $471.6 million for the same period in 2011,
    principally due to lower average enrollments.
  *Income from operations was $84.9 million compared to $133.8 million for
    the same period in 2011, a decrease of 37%. Operating income margin was
    20.2% compared to 28.4% for the same period in 2011.
  *Net income was $49.3 million compared to $79.4 million for the same period
    in 2011, a decrease of 38%. Diluted earnings per share was $4.29 compared
    to $6.58 for the same period in 2011, a decrease of 35%. Diluted weighted
    average shares outstanding decreased 5% to 11,482,000 from 12,055,000 for
    the same period in 2011.

Balance Sheet and Cash Flow

At September 30, 2012, the Company had cash and cash equivalents of $45.6
million. The Company generated $57.2 million from operating activities in the
first nine months of 2012 compared to $122.7 million during the same period in
2011. Capital expenditures were $18.2 million for the nine months ended
September 30, 2012 compared to $24.9 million for the same period in 2011. At
September 30, 2012, the Company had $77.5 million outstanding under its term
loan and $25 million outstanding under its revolving credit facility.

During the nine months ended September 30, 2012, the Company paid regular,
quarterly dividends of $35.6 million ($1.00 per share for each quarterly
dividend). The Company had $80 million of share repurchase authorization
remaining at September 30, 2012. No shares were repurchased in the third
quarter of 2012.

For the third quarter 2012, bad debt expense as a percentage of revenues was
4.2% compared to 3.8% for the same period in 2011. Days sales outstanding was
18 days at the end of the third quarter of 2012, compared to 14 days at the
end of the third quarter of 2011.

Student Enrollment

Enrollment at Strayer University for the 2012 fall term decreased 5% to 51,727
students compared to 54,233 students for the same term in 2011. Across the
Strayer University campus and online system, new student enrollments increased
4%, while continuing student enrollments decreased 7%. Global online students
increased 13%. Students taking 100% of their classes online (including campus
based students) decreased 4%.


Student Enrollment
                                                     Fall    Fall    %
                                                      2011     2012     Change
Campus Based Students:
New Campuses (26 in operation 3 years or less)
Classroom Students                                    1,400    2,021    44%
Online Students                                       1,778    2,429    37%
Total New Campus Based Students                       3,178    4,450    40%
Mature Campuses (71 in operation more than 3 years)
Classroom Students                                    20,416   18,433   -10%
Online Students                                       25,535   23,094   -10%
Total Mature Campus Based Students                    45,951   41,527   -10%
Total Campus Based Students                           49,129   45,977   -6%
Global Online Students                                5,104    5,750    13%
Total University Enrollment                           54,233   51,727   -5%
                                                                        
Total Students Taking 100% of Courses Online          32,417   31,273   -4%
                                                                        

New Campus Openings

The Company announced today that Strayer University successfully opened one
new campus for the fall academic term, which is located in San Antonio, Texas,
a new market for Strayer University. Subject to regulatory approval, the
Company plans to open three new campuses during the remainder of the year for
a total of eight new campuses in 2012. These three planned new campuses will
be located in Houston, Texas, the University’s third campus in that market,
and in St. Louis and Kansas City, Missouri, both new markets for the
University.

2012 Business Outlook

Based on enrollments announced for the 2012 fall term, the Company estimates
fourth quarter 2012 diluted earnings per share will be in the range of $1.43
to $1.45. Based on its fourth quarter 2012 estimates, the Company expects its
full year 2012 diluted earnings per share will be in the range of $5.73 to
$5.75.

New Term Loan and Revolving Credit Facility

The Company announced today that on November 8, 2012, it entered into an
amended and restated revolving credit and term loan agreement. This credit
facility, which is secured by the assets of the Company, provides for a $125.0
million term loan facility and $100.0 million revolving credit facility with a
maturity date of December 31, 2016. Proceeds from the new term loan were used
to pay off $77.5 million outstanding under the original term loan facility.
The Company had no outstanding balance under the revolving credit facility on
the day of closing.

2013 Business Model

The Company announced today that Strayer University will implement a 3%
tuition increase effective January 2013, but is assuming roughly flat revenue
per student in 2013 due to the University’s continued mix shift towards
graduate and corporate sponsored students, as well as continued targeted use
of scholarships. The Company also announced today that it expects Strayer
University’s expenses to grow 1% to 2% in 2013, reflecting the annualization
of operating costs at the eight new campuses opened during 2012, but that no
additional campuses are currently planned for 2013. Therefore, the Company
expects that at the 2012 revenue level, anticipated 2013 expenses would lead
to a 19-20% operating margin in 2013, and EPS in the $5.40-$5.60 range. Each
1% increase (or decrease) in revenue from 2012 levels in 2013 will have an
approximate 50 basis points positive (or negative) impact on operating margin,
and an approximate $0.20 positive (or negative) impact on earnings per share.
Finally, this model assumes an effective tax rate of 39.5% and 11,500,000
diluted shares outstanding.

Capital Allocation

The Company announced today that its Board of Directors declared a regular,
quarterly cash dividend of $1.00 per share to be paid on December 10, 2012 to
shareholders of record as of November 26, 2012. The Company also announced
that it does not currently intend to pay a regular quarterly dividend in 2013.
In addition, the Company announced that the Company's Board of Directors
amended its share repurchase program to authorize the repurchase of up to $120
million in value of the Company's common stock. The Company had $80 million
left under its authorization at September 30, 2012 and at the time the new
authorization was approved by the Company’s Board of Directors. The Company
intends to conduct such purchases, if any, in compliance with Rule 10b-18
under the Securities Exchange Act of 1934, as amended. This share repurchase
program may be modified, suspended or terminated at any time by the Company
without notice.

Shares and Options Outstanding

At September 30, 2012, the Company had 11,873,156 common shares issued and
outstanding, and 100,000 stock options outstanding with an exercise price of
$107.28 and a remaining contractual life of four months.

Conference Call with Management

Strayer Education, Inc. will host a conference call to discuss its third
quarter 2012 earnings at 9:00 a.m. (ET) today. To participate on the live
call, investors should dial (877) 303-9047 10 minutes prior to the start time.
In addition, the call will be available via live Webcast over the Internet. To
access the live Webcast of the conference call, please go to
www.strayereducation.com 15 minutes prior to the start time of the call to
register. An archived replay of the conference call will be available at (855)
859-2056 (conference id 39822150) starting at 1:00 p.m. (ET) today and will be
available through Friday, November 23, and archived at
www.strayereducation.com for 90 days.

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 97 campuses in 23 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, 2011 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
(Amounts in thousands, except per share data)
                                                         
                                 For the three months    For the nine months
                                 ended September 30,     ended September 30,
                                 2011       2012        2011       2012
Revenues                         $ 135,865   $ 124,260   $ 471,610   $ 420,046
Costs and expenses:
Instruction and educational        68,170      72,997      219,519     222,413
support
Marketing                          23,351      23,171      55,634      53,693
Admissions advisory                6,533       6,487       20,174      19,733
General and administration        13,406     13,769     42,508     39,345
Income from operations             24,405      7,836       133,775     84,862
Investment income                  5           1           149         4
Interest expense                  1,209      1,055      2,559      3,373
Income before income taxes         23,201      6,782       131,365     81,493
Provision for income taxes        9,266      2,679      51,992     32,190
Net income                       $ 13,935    $ 4,103     $ 79,373    $ 49,303
Earnings per share:
Basic                            $ 1.20      $ 0.36      $ 6.61      $ 4.31
Diluted                          $ 1.20      $ 0.36      $ 6.58      $ 4.29
Weighted average shares
outstanding:
Basic                              11,623      11,433      12,016      11,428
Diluted                            11,647      11,487      12,055      11,482
Shares outstanding at end of       12,006      11,873      12,006      11,873
quarter
Dividends per share (paid)       $ 1.00      $ 1.00      $ 3.00      $ 3.00
                                                                     

                                                              
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
                                                                 
                                                  December 31,   September 30,
                                                  2011           2012
ASSETS
Current assets:
Cash and cash equivalents                         $  57,137      $  45,609
Tuition receivable, net of allowances for
doubtful accounts of $7,279 and $7,373 at            25,006         24,109
December 31, 2011 and September 30, 2012,
respectively
Income taxes receivable                              394            7,964
Other current assets                                12,131       14,255   
Total current assets                                 94,668         91,937
Property and equipment, net                          121,149        122,620
Deferred income taxes                                3,326          5,615
Goodwill                                             6,800          6,800
Other assets                                        5,190        4,642    
Total assets                                      $  231,133    $  231,614  
                                                                 
LIABILITIES & STOCKHOLDERS' EQUITY
                                                                 
Current liabilities:
Accounts payable and accrued expenses             $  34,039      $  40,362
Unearned tuition                                     15,364         1,163
Other current liabilities                            281            281
Current portion of term loan                        27,500       30,000   
Total current liabilities                            77,184         71,806
Revolving credit facility                            20,000         25,000
Term loan, less current portion                      70,000         47,500
Other long-term liabilities                         21,656       22,315   
Total liabilities                                   188,840      166,621  
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 20,000,000
shares authorized; 11,792,456 and 11,873,156         118            119
shares issued and outstanding at December 31,
2011 and September 30, 2012, respectively
Additional paid-in capital                           295            9,234
Retained earnings                                    42,491         56,185
Accumulated other comprehensive income (loss)       (611    )     (545     )
Total stockholders' equity                          42,293       64,993   
Total liabilities and stockholders’ equity        $  231,133    $  231,614  
                                                                             

                                                  
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
                                                    
                                                    For the nine months ended
                                                    September 30,
                                                    2011          2012
Cash flows from operating activities:
Net income                                          $ 79,373       $ 49,303
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of gain on sale of assets                (211     )     (210    )
Amortization of deferred rent                         885            173
Gain on sale of marketable securities                 (66      )     --
Amortization of deferred financing costs              463            599
Depreciation and amortization                         15,779         17,857
Deferred income taxes                                 941            (2,827  )
Stock-based compensation                              9,798          9,358
Changes in assets and liabilities:
Tuition receivable, net                               811            897
Other current assets                                  (2,580   )     (1,992  )
Other assets                                          80             (134    )
Accounts payable and accrued expenses                 4,505          5,307
Income taxes payable and income taxes receivable      1,585          (7,630  )
Unearned tuition                                      11,089         (14,201 )
Other long-term liabilities                          297          746     
Net cash provided by operating activities            122,749      57,246  
Cash flows from investing activities:
Purchases of property and equipment                   (24,887  )     (18,165 )
Purchases of marketable securities                    (2       )     --
Proceeds from the sale of marketable securities      12,388       --      
Net cash used in investing activities                (12,501  )    (18,165 )
Cash flows from financing activities:
Common dividends paid                                 (37,161  )     (35,609 )
Repurchase of common stock                            (182,664 )     --
Proceeds from revolving credit facility               100,000        53,000
Payments on revolving credit facility                 (95,000  )     (48,000 )
Proceeds from term loan                               100,000        --
Payments on term loan                                 --             (20,000 )
Payment of deferred financing costs                  (2,459   )    --      
Net cash used in financing activities                (117,284 )    (50,609 )
Net decrease in cash and cash equivalents             (7,036   )     (11,528 )
Cash and cash equivalents – beginning of period      64,107       57,137  
Cash and cash equivalents – end of period           $ 57,071      $ 45,609  
Non-cash transactions:
Purchases of property and equipment included in     $ 2,087        $ 2,132
accounts payable
                                                                             

Contact:

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