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Strayer Education, Inc. Reports Fourth Quarter and Full Year 2012 Revenues and Earnings; and Winter Term 2013 Enrollments; and

  Strayer Education, Inc. Reports Fourth Quarter and Full Year 2012 Revenues
  and Earnings; and Winter Term 2013 Enrollments; and CEO Succession Plans

                    -- Fourth Quarter Diluted EPS $1.47 --

                      -- Full Year Diluted EPS $5.76 --

               -- McDonnell named CEO, effective May 3, 2013 --

            -- Silberman to remain as full-time Executive Chair --

Business Wire

HERNDON, Va. -- February 14, 2013

Strayer Education, Inc. (Nasdaq: STRA) today announced financial results for
the three months and year ended December 31, 2012. Financial highlights are as
follows:

Three Months Ended December 31

  *Revenues for the three months ended December 31, 2012 decreased 9% to
    $141.9 million, compared to $155.8 million for the same period in 2011,
    principally due to lower enrollment, and lower revenue per student.
  *Income from operations was $28.7 million compared to $45.4 million for the
    same period in 2011, a decrease of 37%. Operating income margin was 20.2%
    compared to 29.1% in 2011.
  *Net income was $16.6 million compared to $26.7 million for the same period
    in 2011, a decrease of 38%. Diluted earnings per share was $1.47 compared
    to $2.30 for the same period in 2011, a decrease of 36%. Diluted weighted
    average shares outstanding decreased 2% to 11,314,000 from 11,592,000 for
    the same period in 2011.

Year Ended December 31

  *Revenues for the year ended December 31, 2012 decreased 10% to $562.0
    million, compared to $627.4 million for the same period in 2011,
    principally due to lower enrollment.
  *Income from operations was $113.6 million compared to $179.1 million for
    the same period in 2011, a decrease of 37%. Operating income margin was
    20.2% compared to 28.6% in 2011.
  *Net income was $65.9 million compared to $106.0 million in 2011, a
    decrease of 38%. Diluted earnings per share was $5.76 compared to $8.88 in
    2011, a decrease of 35%. Diluted weighted average shares outstanding
    decreased 4% to 11,440,000 from 11,943,000 in 2011.

Balance Sheet and Cash Flow

At December 31, 2012, the Company had cash and cash equivalents of $47.5
million. The Company generated $82.1 million in cash from operating activities
in 2012 compared to $154.4 million during the same period in 2011. Capital
expenditures in 2012 were $24.7 million compared to $30.0 million for the same
period in 2011.

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 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. At December 31, 2012, the Company had $125.0 million
outstanding under its term loan and no outstanding balance under its revolving
credit facility.

During the fourth quarter of 2012, the Company invested $25.0 million to
repurchase approximately 485,000 shares of stock at an average price of $51.56
per share as part of a previously announced stock repurchase authorization. At
December 31, 2012, the Company’s remaining share repurchase authorization was
$95.0 million. During the year ended December 31, 2012, the Company declared
and paid regular, quarterly dividends totaling $47.3 million ($1.00 per share
for each quarterly dividend).

For the fourth quarter of 2012, bad debt expense as a percentage of revenues
was 4.5% compared to 4.4% for the same period in 2011. Days sales outstanding
was 15 days at the end of the fourth quarter of 2012 as well as at the end of
the fourth quarter of 2011.

Student Enrollment

Total enrollment at Strayer University for the 2013 winter term decreased 5%
to 47,926 students compared to 50,432 students for the same term in 2012. New
student enrollments decreased 5%, and continuing student enrollments also
decreased 5%. Global online students increased 9%, while students taking 100%
of their classes online (including campus based students) decreased 3%.


Student Enrollment
                                                                   
                                                    Winter   Winter   %

                                                    2012     2013     Change
Campus Based Students:
New Campuses (26 in operation 3 years or less)
Classroom Students                                  1,176    1,686    43%
Online Students                                     1,527    2,173    42%
Total New Campus Based Students                     2,703    3,859    43%
                                                                      
Mature Campuses (74 in operation more than 3 years)
Classroom Students                                  19,073   16,969   -11%
Online Students                                     23,942   21,974   -8%
Total Mature Campus Based Students                  43,015   38,943   -9%
Total Campus Based Students                         45,718   42,802   -6%
Global Online Students                              4,714    5,124    9%
Total University Enrollment                         50,432   47,926   -5%
                                                                      
Total Students Taking 100% of Courses Online        30,183   29,271   -3%
                                                                      

New Campus Openings

The Company announced today that Strayer University successfully opened three
new campuses for the winter academic term. These three new campuses are
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.
With the addition of these three new campuses, the University opened a total
of eight new campuses in 2012.

Business Outlook

Based on the enrollments announced for the 2013 winter term, the Company
estimates first quarter 2013 diluted earnings per share will be in the range
of $1.45 to $1.47.

2013 Annual Meeting of Stockholders

The Company announced today that its 2013 Annual Meeting of Stockholders will
take place on Thursday, May 2, 2013 at the Company’s office located at 2303
Dulles Station Blvd., Herndon, Virginia 20171. The record date for this annual
meeting will be March 15, 2013.

CEO Succession

The Company announced today that at its next annual meeting on May 2, 2013,
Robert S. Silberman will assume the role of full-time Executive Chairman of
the Board, and the Company’s current President and Chief Operating Officer,
Karl McDonnell, will assume the role of Chief Executive Officer. “In his seven
years as our Chief Operating Officer, as well as the last two years as a
member of our Company’s Board of Directors, Karl has proven his leadership
abilities,” stated Mr. Silberman, “the Board and I have complete confidence in
Karl, and look forward to his stewardship of our institution.”

Conference Call with Management

Strayer Education, Inc. will host a conference call to discuss its fourth
quarter 2012 earnings at 10:00 a.m. (ET) today. To participate in 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. 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. Following the call,
the webcast will be archived and available 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, 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)

                                For the three months   For the year
                                 ended December 31,      ended December 31,
                                  2011      2012       2011      2012
Revenues                         $ 155,824   $ 141,933   $ 627,434   $ 561,979
Costs and expenses:
Instruction and educational        72,483      77,685      292,003     300,098
support
Marketing                          18,659      18,171      74,293      71,864
Admissions advisory                6,357       6,641       26,531      26,374
General and administration        12,956     10,711     55,464     50,056
Income from operations             45,369      28,725      179,143     113,587
Investment income                  1           1           152         4
Interest expense                  1,213      1,244      3,773      4,616
Income before income taxes         44,157      27,482      175,522     108,975
Provision for income taxes        17,486     10,855     69,478     43,045
Net income                       $ 26,671    $ 16,627    $ 106,044   $ 65,930
Earnings per share:
Basic                            $ 2.31      $ 1.47      $ 8.91      $ 5.79
Diluted                          $ 2.30      $ 1.47      $ 8.88      $ 5.76
Weighted average shares
outstanding:
Basic                              11,564      11,276      11,906      11,390
Diluted                            11,592      11,314      11,943      11,440
Shares outstanding at end of       11,792      11,387      11,792      11,387
quarter
Dividends per share (paid)       $ 1.00      $ 1.00      $ 4.00      $ 4.00
                                                                     


STRAYER EDUCATION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)

                                                  December 31,  December 31,
                                                      2011          2012
ASSETS
Current assets:
Cash and cash equivalents                          $   57,137     $   47,517
Tuition receivable, net of allowances for
doubtful accounts of $7,279 and $6,596 at              25,006         23,262
December 31, 2011 and 2012, respectively
Income taxes receivable                                394            4,454
Other current assets                                  12,131        14,422
Total current assets                                   94,668         89,655
Property and equipment, net                            121,149        121,520
Deferred income taxes                                  3,326          3,279
Goodwill                                               6,800          6,800
Other assets                                          5,190         6,538
Total assets                                       $   231,133    $   227,792
                                                                  
                                                                  
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:                               
Accounts payable and accrued expenses              $   34,039     $   39,124
Unearned tuition                                       15,364         494
Other current liabilities                              281            281
Current portion of term loan                          27,500        3,125
Total current liabilities                              77,184         43,024
Revolving credit facility                              20,000         --
Term loan, less current portion                        70,000         121,875
Other long-term liabilities                           21,656        21,905
Total liabilities                                     188,840       186,804
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 20,000,000 shares
authorized; 11,792,456 and 11,387,299 shares           118            114
issued and outstanding at December 31, 2011 and
2012, respectively
Additional paid-in capital                             295            299
Retained earnings                                      42,491         41,311
Accumulated other comprehensive income (loss)         (611)         (736)
Total stockholders’ equity                            42,293        40,988
Total liabilities and stockholders’ equity         $   231,133    $   227,792
                                                                  


STRAYER EDUCATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

                                              For the year ended December 31,
                                                  2011            2012
Cash flows from operating activities:
Net income                                     $   106,044        $  65,930
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of gain on sale of assets             (281)             (281)
Amortization of deferred rent                      1,177             323
Gain on sale of marketable securities              (66)              --
Amortization of deferred financing costs           663               795
Depreciation and amortization                      21,525            23,973
Deferred income taxes                              3,722             (38)
Stock-based compensation                           13,234            5,464
Changes in assets and liabilities:
Tuition receivable, net                            (2,995)           1,744
Other current assets                               (768)             (2,130)
Other assets                                       102               (135)
Accounts payable and accrued expenses              (3,360)           5,673
Income taxes payable and income taxes              (1,279)           (4,306)
receivable
Unearned tuition                                   11,841            (14,870)
Other long-term liabilities                       4,804            (80)
Net cash provided by operating activities         154,363          82,062
Cash flows from investing activities:
Purchases of property and equipment                (29,991)          (24,733)
Purchases of marketable securities                 (2)               --
Proceeds from the sale of marketable               12,388            --
securities
Acquisition of assets                             (7,000)          --
Net cash used in investing activities             (24,605)         (24,733)
Cash flows from financing activities:
Common dividends paid                              (49,105)          (47,328)
Repurchase of common stock                         (202,664)         (25,001)
Proceeds from revolving credit facility            120,000           63,000
Payments on revolving credit facility              (100,000)         (83,000)
Proceeds from term loan                            100,000           47,500
Payments on term loan                              (2,500)           (20,000)
Payment of deferred financing costs               (2,459)          (2,120)
Net cash used in financing activities             (136,728)        (66,949)
Net decrease in cash and cash equivalents          (6,970)           (9,620)
Cash and cash equivalents – beginning of          64,107           57,137
period
Cash and cash equivalents – end of period      $   57,137         $  47,517
Non-cash transactions:
Purchases of property and equipment included   $   1,115          $  529
in accounts payable
                                                                  

Contact:

Strayer Education, Inc.
Mark C. Brown, 703-247-2514
Executive Vice President and Chief Financial Officer
or
Sonya Udler, 703-247-2517
Senior Vice President, Corporate Communications
sonya.udler@strayer.edu
 
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