Education Management Corporation Reports Fiscal 2013 Third Quarter Results

  Education Management Corporation Reports Fiscal 2013 Third Quarter Results

PR Newswire

PITTSBURGH, May 1, 2013

PITTSBURGH, May1, 2013 /PRNewswire/ --Education Management Corporation (the
"Company") (NASDAQ:EDMC), one of the largest providers of post-secondary
education in North America, today reported its financial results for the three
months ended March 31, 2013. Net revenues during the quarter were $638.9
million and, as a result of certain charges further described below, including
non-cash asset impairment charges of $323.7 million, the Company reported a
net loss of $284.0 million, or $2.28 per diluted share. Excluding these
charges, net income would have been $30.5 million or $0.24 per diluted share.

"We are pleased with this quarter's results as we made progress across
multiple objectives," said Edward H. West, Education Management's President
and Chief Executive Officer. "In addition to the sequential improvement in
new student enrollmenttrends during the quarter, we also experienced
improvements in retention as a result of thecommitment andefforts made by
faculty and staff across our colleges and universities. Our students are at
the core of what we do, and we are passionate about helping them achieve their
career goals through education that is aligned with real opportunities in the
American workforce."

Mr. West added, "During the quarter, we made good progress on other fronts,
including the debt exchange that reduces our outstanding debt and extends our
maturity schedule. We also strengthened our executive management team with
the additions of Carol DiBattiste and Joan Walker to lead our legal and
compliance and corporate communications functions, respectively, and Mick
Beekhuizen as our new Chief Financial Officer. It is a testament to our
mission and position as an industry leader that we were able to attract these
accomplished individuals to EDMC."

Due primarily to the Company's equity market capitalization being below book
value at March 31, 2013, the Company performed impairment reviews of the
carrying value of goodwill and indefinite-lived intangible assets at each of
its four reporting units at March 31, 2013. The reviews resulted in a
non-cash goodwill impairment of $294.5 million and a non-cash indefinite-lived
intangible asset impairment of $28.0 million at The Art Institutes reporting
unit. Goodwill and indefinite-lived intangible asset impairments were not
indicated at the Company's other three reporting units, which are Argosy
University, Brown Mackie Colleges and South University. In addition, the
Company recorded a $1.2 million non-cash impairment charge related to fixed
assets at one of its schools.

Financial Highlights

  oFinancial highlights for the third quarter of fiscal 2013 included the
    following:

       oNet revenues were $638.9 million, a decrease of 9.1% from $702.5
         million recorded in the third quarter of fiscal 2012, primarily due
         to an 11.4% decline in average enrolled student body for the three
         months ended March31, 2013 compared to the prior year quarter.
       oThe Company recorded a net loss of $284.0 million, or $2.28 per
         diluted share, compared to a net loss of $417.1 million, or $3.31 per
         diluted share, for the prior year quarter. The prior year quarter
         included a goodwill impairment charge of $495.4 million.
       oAs noted in the table below, the Company incurred long-lived asset
         impairments, a loss on debt refinancing, and a reversal of an
         uncertain tax position liability in both the current quarter and the
         prior year quarter, as well as a restructuring charge in the prior
         year quarter. After adjusting for these expenses, net income would
         have been $30.5 million, or $0.24 per diluted share, in the current
         quarter compared to net income of $41.6 million, or $0.33 per diluted
         share, in the prior year quarter.
       oEarnings before interest, taxes and depreciation and amortization
         ("EBITDA") was a loss of $206.9 million compared to a loss of $376.3
         million in the prior year quarter. After adjusting for impairment
         charges, a debt refinancing charge and restructuring charges
         described below, EBITDA would have been $122.0 million in the current
         quarter compared to $134.5 million in the prior year quarter.



                                                       For the Three Months
(dollars in millions except per share data)
                                                       Ended March 31,
                                                       2013        2012
EBITDA                                                 $ (206.9)   $ (376.3)
Long-lived asset impairments                           323.7       495.4
Loss on debt refinancing                               5.2         9.5
Restructuring                                          —           5.9
EBITDA excluding certain expenses                      122.0       134.5
Net loss                                               (284.0)     (417.1)
Long-lived asset impairments, loss on debt
                                                       315.2       459.4
refinancing and restructuring, net of tax
Reversal of uncertain tax position liability           (0.7)       (0.7)
Net income excluding certain expenses                  $ 30.5      $ 41.6
Diluted loss per share                                 $ (2.28)    $ (3.31)
Diluted earnings per share, excluding certain expenses $ 0.24      $ 0.33

  oOn March 5, 2013, the Company completed an offer to exchange the 8.75%
    Senior Notes due June 1, 2014 ("Old Notes") for new Senior Cash Pay/PIK
    Notes due July 1, 2018 ("New Notes") and cash. In connection with this
    exchange offer and a simultaneous private exchange on the same terms, the
    Company issued $203.0 million of New Notes and paid down $162.3 million of
    Old Notes with cash on hand. The remaining $9.7 million of Old Notesnot
    tendered were extinguished in April 2013 at par. A loss on debt
    refinancing of $5.2 million was reported in the fiscal third quarter,
    which represents fees paid to third parties in connection with this
    exchange offer.
  oDespite lower operating performance in the current period, cash flows
    provided by operating activities for the nine months ended March31, 2013
    were $286.2 million compared to $152.7 million in the nine months ended
    March31, 2012. Current year operating cash flows were comparatively
    higher primarily due to a transfer of $210.0 million to restricted cash in
    the prior year quarter in connection with the issuance of letters of
    credit under the Company's cash secured letter of credit facilities, which
    reduced the prior year period's cash flow from operating activities. The
    cash secured letter of credit facilities are being used to help satisfy
    the Company's previously disclosed letter of credit requirement with the
    U.S. Department of Education.
  oAt March31, 2013, cash and cash equivalents were $183.6 million, compared
    to $287.5 million at March31, 2012.
  oOn a cash basis, capital expenditures were $64.6 million, or 3.4% of net
    revenues, for the nine months ended March31, 2013 compared to $64.7
    million, or 3.0% of net revenues, in the same period in the prior year.

New Student Enrollment

                       For the Three Months Ended March 31,
                       2013        2012        % Change
The Art Institutes     11,200      12,100      (7.3)%
Argosy University      5,100       4,300       18.1%
Brown Mackie Colleges  4,100       4,000       3.7%
South University ^ (1) 4,100       6,700       (39.0)%
Total EDMC ^(1)        24,500      27,100      (9.5)%

The new student enrollment data shown above includes the number of new
students who enrolled in fully-online programs at The Art Institute of
Pittsburgh, Argosy University and South University. Total new students who
enrolled in fully-online programs for the three months ended March31, 2013
were approximately 7,700 as compared to 10,300 in three months ended March31,
2012.

     The reduction in new student enrollment reflects the impact of the
 (1) actions taken last summer related to South University's fully-online
     programs. When excluding South University's fully-online programs,
     "total EDMC" new student enrollment increased 2.0%.



Average Enrolled Student Body

                      For the Three Months Ended March 31,
                      2013        2012       % Change
The Art Institutes    67,000      75,300     (11.1)%
Argosy University     25,300      28,400     (10.9)%
Brown Mackie Colleges 17,000      18,600     (8.3)%
South University      19,000      22,500     (15.6)%
Total EDMC            128,300     144,800    (11.4)%

Average enrolled student body is the three month average of the unique
students who met attendance requirements within a month of the quarter. The
data above includes the number of students enrolled in fully-online programs
at The Art Institute of Pittsburgh, Argosy University and South University.
The average enrolled student body in fully-online programs was approximately
31,800 for the three months ended March31, 2013 as compared to 39,300 in the
three months ended March31, 2012.

Starting Student Enrollment

                      April    April
                      2013     2012     % Change
The Art Institutes    63,700   70,500   (9.8)%
Argosy University     24,500   26,100   (6.2)%
Brown Mackie Colleges 16,700   18,200   (8.1)%
South University      17,600   20,100   (12.3)%
Total EDMC            122,500  134,900  (9.2)%

The starting student enrollment data shown above includes the number of
students enrolled in fully-online programs at The Art Institute of Pittsburgh,
Argosy University and South University. Starting students enrolled in
fully-online programs were approximately 29,500 as of April 2013 as compared
to 34,200 as of April 2012. Fully-online enrollment is measured based on the
number of students meeting attendance requirements over a two-week period near
the start of the fiscal quarter.

Fiscal 2013 Guidance
The following discussion of the Company's fiscal 2013 guidance includes
information that could constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. As more
fully described below under the heading "Cautionary Statement," these and
other forward-looking statements are based on information currently available
to management and involve estimates, assumptions, risks, uncertainties and
other factors that may cause actual results, performance or achievements to
differ materially and unpredictably from any future results, performance or
achievements expressed or implied by such forward-looking statements. 

For the fiscal year ending June 30, 2013, capital expenditures are projected
to be approximately 3.5% of net revenues, compared to 3.4% of net revenues in
the fiscal year ended June 30, 2012. The following fourth quarter and annual
guidance for fiscal 2013 excludes the impact of asset impairments,
restructuring and other special charges.



Reconciliation of Fiscal Year 2013 Fourth Quarter and Annual Guidance of Net
Income to EBITDA
(Dollars in millions, except earnings per share) (Unaudited)
Fiscal 2013 Guidance – 4th          For the Three Months Ending June 30, 2013
Quarter:
                                    Low                High
Loss per diluted share              $    (0.05)        $    (0.02)
Net loss                            $    (6)           $    (3)
Net interest expense                32                 32
Income tax benefit                  (4)                (2)
Depreciation and amortization       40                 40
EBITDA                              $    62            $    67
Fiscal Year 2013 Guidance –         For the Twelve Months Ending
Annual:
                                    June 30, 2013
                                    Low                High
Loss per diluted share              $    (2.18)        $    (2.16)
Earnings per diluted share
excluding expenses related to
long-lived asset impairments, loss  $    0.41          $    0.43
on debt refinancing, restructuring
and other charges
Net loss                            $    (272)         $    (269)
Expenses related to long-lived
asset impairments, loss on debt     323                323
refinancing, restructuring and
other charges, net of tax
Net income excluding expenses       $    51            $    54
 Net interest expense              $    125           $    125
Income tax expense                  35                 37
Depreciation and amortization       159                159
EBITDA excluding expenses           $    370           $    375

Our quarterly revenues and income fluctuate primarily as a result of the
pattern of student enrollments, and our first fiscal quarter is typically the
lowest revenue quarter of the fiscal year due to student vacations. However,
the seasonality of our business has decreased over the last several years,
primarily due to the percentage of students enrolling in online programs,
which generally experience less seasonal fluctuation than campus-based
programs.

The presentation of EBITDA, as well as the presentations excluding certain
expenses, do not comply with U.S. generally accepted accounting principles
("GAAP"). For an explanation of EBITDA and EBITDA and net income excluding
certain expenses, together with a reconciliation to net income, which is the
most directly comparable GAAP financial measure, see the Non-GAAP Financial
Measures disclosure in the financial tables section below.

Conference Call and Webcast
Education Management Corporation will host a conference call to discuss its
fiscal 2013 third quarter results on Thursday, May2, 2013 at 9:00 a.m.
(Eastern Time). Those wishing to participate in this call should dial
412-317-6789 approximately 10 minutes prior to the start of the call. A
listen-only audio of the conference call will also be broadcast live over the
Internet at www.edmc.edu. A replay of the conference call will be available
at www.edmc.edufor up to one year.



EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
               For the Three Months Ended            For the Nine Months Ended

               March 31,                             March 31,
               2013          2012         %        2013         2012         %
                                          Change                             Change
Net revenues   $ 638,903     $ 702,499    (9.1)%   $ 1,903,363  $ 2,121,782  (10.3)%
Costs and
expenses:
Educational
services ^(1)  350,134       382,204      (8.4)%   1,091,808    1,132,421    (3.6)%
(2)
General and
administrative 166,814       191,747      (13.0)%  512,496      581,608      (11.9)%
^(1)
Depreciation
and            40,266        40,610       (0.8)%   123,667      118,694      4.2%
amortization
Long-lived
asset          323,690       495,380      (34.7)%  323,690      495,380      (34.7)%
impairments
^(3)
Total costs    880,904       1,109,941    (20.6)%  2,051,661    2,328,103    (11.9)%
and expenses
Loss before
interest and   (242,001)     (407,442)    (40.6)%  (148,298)    (206,321)    (28.1)%
income taxes
Interest       30,464        25,424       19.8%    92,924       79,139       17.4%
expense, net
Loss on debt   5,232         9,474        (44.8)%  5,232        9,474        (44.8)%
refinancing
Loss before    (277,697)     (442,340)    (37.2)%  (246,454)    (294,934)    (16.4)%
income taxes
Income tax
expense        6,297         (25,224)     N/M      19,489       32,101       (39.3)%
(benefit)
Net loss       $ (283,994)   $ (417,116)  (31.9)%  $ (265,943)  $ (327,035)  (18.7)%
Loss per
share:
Basic          $ (2.28)      $ (3.31)              $ (2.14)     $ (2.57)
Diluted        $ (2.28)      $ (3.31)              $ (2.14)     $ (2.57)
Weighted
average number
of shares
outstanding:
Basic          124,602       126,005               124,546      127,224
Diluted        124,602       126,005               124,546      127,224

     Certain reclassifications of fiscal 2012 data have been made to conform
 (1) to the fiscal 2013 presentation. These reclassifications did not
     materially change any of the previously reported amounts.
     Includes bad debt expense of $39.9 million and $41.2 million in the three
 (2) months ended March31, 2013 and 2012, respectively and $129.7 million and
     $117.7 million in the nine months ended March31, 2013 and 2012,
     respectively.
     The current quarter includes a $294.5 million goodwill impairment and a
     $28.0 million indefinite-lived intangible asset impairment each recorded
 (3) at The Art Institutes and $1.2 million of an impairment charge related to
     fixed assets at one of the Company's schools. The prior year quarter
     includes goodwill impairment charges at Argosy University, Brown Mackie
     Colleges and South University.





EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (In thousands)
                                    March31, 2013  June  30,      March  31,
                                                    2012           2012
Assets                              (Unaudited)                    (Unaudited)
Current assets:
Cash and cash equivalents           $   183,614     $ 191,008    $ 287,503
Restricted cash                     272,029         267,880      284,053
Total cash, cash equivalents and    455,643         458,888      571,556
restricted cash
Student receivables, net of
allowances of $177,802,             153,069         203,341      144,495

$225,657 and $214,140
Notes, advances and other           27,509          22,174       20,768
receivables
Inventories                         7,000           8,382        10,035
Deferred income taxes               102,793         102,668      76,674
Prepaid income taxes                —               6,796        7,406
Other current assets                33,547          40,399       40,009
Total current assets                779,561         842,648      870,943
Property and equipment, net         543,731         651,797      653,888
Other long-term assets              55,878          51,071       47,176
Intangible assets, net              301,039         330,029      458,844
Goodwill                            669,090         963,550      2,086,619
Total assets                        $   2,349,299   $ 2,839,095  $ 4,117,470
Liabilities and shareholders'
equity
Current liabilities:
Current portion of long-term debt   $   12,076      $ 12,076     $ 12,076
Revolving credit facility           —               111,300      —
Accounts payable                    20,955          54,834       31,735
Accrued liabilities                 148,782         137,348      169,838
Accrued income taxes                3,174           —            —
Unearned tuition                    78,473          116,277      80,046
Advance payments                    222,942         102,170      261,260
Total current liabilities           486,402         534,005      554,955
Long-term debt, less current        1,283,344       1,453,468    1,456,352
portion
Deferred income taxes               88,216          111,767      171,498
Deferred rent                       206,847         197,758      195,494
Other long-term liabilities         39,250          45,533       45,766
Shareholders' equity:
Common stock, at par                1,435           1,434        1,434
Additional paid-in capital          1,789,672       1,777,732    1,774,634
Treasury stock, at cost             (328,605)       (328,605)    (317,888)
(Accumulated deficit) Retained      (1,201,903)     (935,960)    252,746
earnings
Accumulated other comprehensive     (15,359)        (18,037)     (17,521)
loss
Total shareholders' equity          245,240         496,564      1,693,405
Total liabilities and shareholders' $   2,349,299   $ 2,839,095  $ 4,117,470
equity





EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
                                           For the Nine Months Ended March 31,
Cash flows from operating activities:      2013               2012
Net loss                                   $   (265,943)      $   (327,035)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Depreciation and amortization of property  118,814            112,936
and equipment
Amortization of intangible assets          4,853              5,758
Bad debt expense                           129,659            117,695
Long-lived asset impairments               323,690            495,380
Loss on debt refinancing                   5,232              9,474
Share-based compensation                   11,937             10,171
Non cash adjustments related to deferred   (12,610)           (9,300)
rent
Amortization of deferred gains on          (1,012)            —
sale-leaseback transactions
Restricted cash                            (4,149)            (236,540)
Receivables                                (91,473)           (105,089)
Reimbursements for tenant improvements     7,102              14,248
Inventory                                  1,383              (447)
Other assets                               8,667              (9,444)
Accounts payable                           (29,792)           (20,922)
Accrued liabilities                        (3,095)            6,632
Unearned tuition                           (37,804)           (60,104)
Advance payments                           120,743            149,263
Total adjustments                          552,145            479,711
Net cash flows provided by operating       286,202            152,676
activities
Cash flows from investing activities:
Expenditures for long-lived assets         (64,586)           (64,679)
Proceeds from sales of fixed assets        65,065             —
Reimbursements for tenant improvements     (7,102)            (14,248)
Net cash flows used in investing           (6,623)            (78,927)
activities
Cash flows from financing activities:
Payments under revolving credit facility   (111,300)          (79,000)
Principal payment on senior notes          (162,246)          —
Issuance of common stock                   3                  2,618
Common stock repurchased for treasury      —                  (92,756)
Principal payments on long-term debt       (9,117)            (8,141)
Debt issuance costs and other              (4,436)            (11,928)
Net cash flows used in financing           (287,096)          (189,207)
activities
Effect of exchange rate changes on cash    123                (263)
and cash equivalents
Net change in cash and cash equivalents    (7,394)            (115,721)
Cash and cash equivalents, beginning of    191,008            403,224
period
Cash and cash equivalents, end of period   $   183,614        $   287,503
Cash paid during the period for:
Interest (including swap settlement)       $   89,705         $   77,736
Income taxes, net of refunds               34,960             74,328
                                           As of March 31,
Noncash investing activities:              2013                   2012
Capital expenditures in current            $   7,756              $    7,580
liabilities



EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

The Company reports results in four segments - The Art Institutes, Argosy
University, Brown Mackie Colleges and South University. The Company evaluates
segment performance based on EBITDA excluding certain expenses. Adjustments
to reconcile segment results to consolidated results are included under the
caption "Corporate and Other," which primarily includes unallocated corporate
activity.

EBITDA, a measure used by management to measure operating performance, is
defined as net income before net interest expense, provision for income taxes
and depreciation and amortization. EBITDA is not a recognized term under GAAP
and does not purport to be an alternative to net income as a measure of
operating performance or to cash flows from operating activities as a measure
of liquidity. Additionally, EBITDA is not intended to be a measure of free
cash flow available for management's discretionary use, as it does not
consider certain cash requirements such as interest payments, tax payments and
debt service requirements. Management believes EBITDA is helpful in
highlighting trends because EBITDA excludes the results of decisions that are
outside the control of operating management and can differ significantly from
company to company depending on long-term strategic decisions regarding
capital structure, the tax jurisdictions in which companies operate and
capital investments. We also present diluted earnings per share, weighted
average number of diluted shares outstanding, net income and EBITDA after
adjusting for certain expenses, which also are non-GAAP financial measures.
Management believes this presentation is also helpful in highlighting trends
in our business because it excludes certain expenses management believes are
not indicative of ongoing operations. Management compensates for the
limitations of using non-GAAP financial measures by using them to supplement
GAAP results to provide a more complete understanding of the factors and
trends affecting the business than GAAP results alone. Because not all
companies use identical calculations, this presentation of EBITDA may not be
comparable to similarly titled measures of other companies. A reconciliation
of EBITDA excluding certain expenses by segment to consolidated net loss to
consolidated net income, excluding certain expenses is detailed below:



Segment Information and Reconciliation of EBITDA to Net Loss to
Net Income Excluding Certain Expenses
(In thousands, except per share amounts) (Unaudited)
                                                    
                 For the Three Months Ended
                                                    For the Nine Months Ended
                 March 31,
                                                    March 31,
                 2013         2012         %        2013         2012         %
                                           Change                             Change
Net revenues:
The Art          $ 393,560    $ 442,842    (11.1)%  $ 1,185,232  $ 1,341,344  (11.6)%
Institutes
Argosy           94,430       104,781      (9.9)%   268,663      308,995      (13.1)%
University
Brown Mackie     73,876       77,949       (5.2)%   226,122      240,617      (6.0)%
Colleges
South University 77,037       76,927       0.1%     223,346      230,826      (3.2)%
Total EDMC       638,903      702,499      (9.1)%   1,903,363    2,121,782    (10.3)%
EBITDA excluding certain
expenses:
The Art          100,527      124,611      (19.3)%  280,714      386,688      (27.4)%
Institutes
Argosy           16,373       19,202       (14.7)%  33,363       50,580       (34.0)%
University
Brown Mackie     8,436        14,521       (41.9)%  28,798       50,733       (43.2)%
Colleges
South University 15,410       (1,980)      N/M      30,670       1,320        N/M
Corporate and    (18,791)     (21,898)     14.2%    (65,341)     (68,993)     5.3%
other
Total EDMC       121,955      134,456      (9.3)%   308,204      420,328      (26.7)%
Reconciliation
to EBITDA:
Long-lived asset 323,690      495,380      (34.7%)  323,690      495,380      (34.7%)
impairments
Loss on debt     5,232        9,474        (44.8)%  5,232        9,474        (44.8)%
refinancing
Restructuring    —            5,908        N/M      9,145        12,575       (27.3)%
EBITDA           (206,967)    (376,306)    (45.0%)  (29,863)     (97,101)     (69.2%)
Reconciliation to net loss:
Depreciation and 40,266       40,610       (0.8%)   123,667      118,694      4.2%
amortization
Net interest     30,464       25,424       19.8%    92,924       79,139       17.4%
expense
Income tax
expense          6,297        (25,224)     N/M      19,489       32,101       (39.3)%
(benefit)
Net loss         $ (283,994)  $ (417,116)  (31.9)%  $ (265,943)  $ (327,035)  (18.7)%
Long-lived asset
impairments, net
of               $ 311,998    $ 450,000    (30.7)%  $ 311,998    $ 450,000    (30.7)%

tax
Loss on debt
refinancing, net 3,139        5,779        (45.7)%  3,139        5,779        (45.7)%
of tax
Restructuring,   —            3,674        N/M      5,488        7,674        (28.5)%
net of tax
Software-related
charge, net of   —            —            N/M      2,753        —            N/M
tax
Reversal of
uncertain tax    (691)        (749)        (7.7)%   (691)        (749)        (7.7)%
position
liability
Net income,
excluding        $ 30,452     $ 41,588     (26.8)%  $ 56,744     $ 135,669    (58.2)%
certain expenses
Diluted loss per $ (2.28)     $ (3.31)              $ (2.14)     $ (2.57)
share
Diluted earnings
per share,       $ 0.24       $ 0.33                $ 0.45       $ 1.07
excluding
certain expenses
Weighted average
number of
diluted shares   125,167      126,005               124,802      127,224
outstanding,
excluding
certain expenses



About Education Management Corporation
Education Management Corporation (www.edmc.edu), with approximately 132,000
students as of October 2012, is among the largest providers of post-secondary
education in North America, based on student enrollment and revenue, with a
total of 110 locations in 32 U.S. states and Canada. We offer academic
programs to our students through campus-based and online instruction, or
through a combination of both. We are committed to offering quality academic
programs and strive to improve the learning experience for our students. Our
educational institutions offer students the opportunity to earn undergraduate
and graduate degrees and certain specialized non-degree diplomas in a broad
range of disciplines, including media arts, health sciences, design,
psychology and behavioral sciences, culinary, business, fashion, legal,
education and information technology.

Cautionary Statement
This press release includes information that could constitute forward-looking
statements with the meaning of the Private Securities Litigation Reform Act of
1995. These statements, which are based on information currently available to
management, concern the Company's strategy, plans, intentions or expectations
and typically contain words such as "anticipates," "believes," "estimates,"
"expects," "intends," "may," "will," "should," "seeks," "approximately," or
"plans" or similar words, although the absence of such words does not mean
that any particular statement is not forward-looking. All of the statements
included in this press release that relate to estimated and projected
earnings, margins, costs, expenditures, cash flows, growth rates and financial
results, including the fourth quarter and annual guidance for fiscal 2013, and
including statements regarding expected enrollment, revenue, expense levels,
capital expenditures and earnings, are forward-looking statements, as are any
statements concerning the Company's expected future operations and performance
and other future developments. These and other forward-looking statements
involve estimates, assumptions, known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements to
differ materially and unpredictably from any future results, performance or
achievements expressed or implied by such forward-looking statements. The
Company derives many of its forward-looking statements from its operating
budgets and forecasts, which are based upon many detailed assumptions, and the
Company cautions that it is very difficult to predict the impact of unknown
factors, and impossible to anticipate all factors, that could affect its
actual results. Some of the factors that the Company believes could affect
its results and that could cause actual results to differ materially from
expectations include, but are not limited to: the timing and magnitude of
student enrollment and changes in student mix, including the relative
proportions of campus-based and online students enrolled in its programs;
changes in average registered credits taken by students; the Company's ability
to maintain eligibility to participate in Title IV programs; other changes in
its students' ability to access federal and state financial aid, as well as
obtain loans from third-party lenders; difficulties the Company may face in
opening new schools, growing its academic programs and otherwise implementing
its growth strategy; increased or unanticipated legal and regulatory costs;
the results of program reviews and audits; changes in accreditation standards;
the implementation of new operating procedures for the Company's fully online
programs; the implementation of program initiatives in response to the U.S.
Department of Education's new gainful employment regulations; adjustments to
the Company's programmatic offerings to comply with the 90/10 rule; its high
degree of leverage and ability to generate sufficient cash to service all of
its debt obligations and other liquidity needs; market and credit risks
associated with the post-secondary education industry, adverse media coverage
of the industry and the overall condition of the industry; changes in the
overall U.S. or global economies and access to credit and capital markets; the
effects of war, terrorism, natural disasters or other catastrophic events and
other risks affecting the Company, including but not limited to those
described in its periodic reports filed with the Securities Exchange
Commission pursuant to the Securities Exchange Act of 1934. 

Education Management Corporation
COMPANY CONTACT:
John Iannone
Director of Investor Relations
(412) 995-7727

SOURCE Education Management Corporation

Website: http://www.edmc.edu
 
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