Strayer Education, Inc. Reports First Quarter 2013 Revenues and Earnings;
and Spring Term 2013 Enrollments
-- First Quarter Diluted EPS $1.59 --
HERNDON, Va. -- May 02, 2013
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.
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.
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.
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.
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,
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,
Cash and cash equivalents $ 47,517 $ 50,762
Tuition receivable, net of allowances for
doubtful accounts of $6,596 and $6,476 at 23,262 22,181
December 31, 2012 and March 31, 2013,
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
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
Common stock, par value $.01; 20,000,000 shares
authorized; 11,387,299 and 10,810,872 shares 114 108
issued and outstanding at December 31, 2012 and
March 31, 2013, respectively
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
For the three months ended
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 (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
Purchases of property and equipment included in $ 1,225 $ 706
Strayer Education, Inc.
Mark C. Brown
Executive Vice President and Chief Financial Officer
Senior Vice President, Corporate Communications
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