Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2021 Results By: Perdoceo Education Corporation via Business Wire February 24, 2022 at 16:15 PM EST Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2021. Full Year 2021 Results as Compared to Prior Year Revenue increased 0.8 percent to $693.0 million, with both CTU and the AIU System contributing to the growth. Operating income increased 4.3 percent to $149.0 million while adjusted operating income increased 10.4 percent to $175.5 million.* Earnings per diluted share was $1.55 as compared to $1.74 while adjusted earnings per diluted share was $1.70 as compared to $1.56.* Total student enrollments at December 31, 2021 decreased by 5.4 percent, with CTU experiencing a 0.4 percent increase that was offset by a 13.3 percent decrease within the AIU System. Total student enrollments at CTU were positively impacted by the academic calendar redesign. Ended the year with $499.4 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments. Fourth Quarter 2021 Results as Compared to Prior Year Quarter Revenue decreased 6.6 percent to $159.9 million, primarily driven by a decrease in total student enrollments. Operating income decreased 4.5 percent to $34.6 million while adjusted operating income increased 1.7 percent to $42.0 million.* Earnings per diluted share was $0.35 as compared to $0.38 while adjusted earnings per diluted share was $0.40 for both periods.* *See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release “We are pleased with our operating performance in 2021. Our business performed well despite recent student engagement issues which we believe relate to the COVID-19 pandemic,” said Todd Nelson, Perdoceo’s Executive Chairman. “We are also pleased with the two acquisitions completed during 2021 which further broaden the academic offerings at our educational institutions.” Andrew Hurst, recently named as Perdoceo’s President and Chief Executive Officer, added, “Our strong management team remains focused on student experiences, retention and academic outcomes while continuing to leverage data analytics and technology to benefit our institutions.” REVENUE For the quarter ended December 31, 2021, revenue of $159.9 million decreased 6.6 percent compared to revenue of $171.2 million for the prior year quarter. For the year ended December 31, 2021, revenue of $693.0 million increased 0.8 percent compared to revenue of $687.3 million for the prior year, with both CTU and AIUS contributing to growth. For the Quarter Ended December 31, For the Year Ended December 31, Revenue ($ in thousands) 2021 2020 % Change 2021 2020 % Change CTU (1) $ 95,904 $ 102,741 -6.7 % $ 408,549 $ 405,507 0.8 % AIUS (2) 63,712 68,082 -6.4 % 283,360 281,361 0.7 % Corporate and Other 243 336 NM 1,125 446 NM Total $ 159,859 $ 171,159 -6.6 % $ 693,034 $ 687,314 0.8 % (1) CTU’s results of operations include the acquisition of Hippo Education LLC (the “Hippo acquisition”) commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the acquisition of substantially all of the assets of DigitalCrafts (the “DigitalCrafts acquisition”) commencing on the August 2, 2021 date of acquisition and the acquisition of substantially all of the assets of Trident University International (the “Trident acquisition”) commencing on the March 2, 2020 date of acquisition. TOTAL STUDENT ENROLLMENTS CTU’s total student enrollments increased 0.4 percent as of December 31, 2021, while AIUS’ total student enrollments decreased 13.3 percent. CTU’s total student enrollments were positively impacted by the academic calendar redesign. At December 31, Total Student Enrollments (1) 2021 2020 % Change CTU 24,700 24,600 0.4 % AIUS 15,700 18,100 -13.3 % Total 40,400 42,700 -5.4 % (1) Total student enrollments do not include learners participating in non-degree professional development and continuing education offerings. OPERATING INCOME For the quarter ended December 31, 2021, operating income decreased by 4.5 percent to $34.6 million as compared to the prior year quarter. For the year ended December 31, 2021, operating income increased by 4.3 percent to $149.0 million as compared to the prior year. For the Quarter Ended December 31, For the Year Ended December 31, Operating Income ($ in thousands) 2021 2020 % Change 2021 2020 % Change CTU (1) $ 35,723 $ 37,802 -5.5 % $ 148,481 $ 138,490 7.2 % AIUS (2) 10,255 5,457 87.9 % 39,130 30,822 27.0 % Corporate and Other (3) (11,402 ) (7,070 ) -61.3 % (38,595 ) (26,378 ) -46.3 % Total $ 34,576 $ 36,189 -4.5 % $ 149,016 $ 142,934 4.3 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. (3) Corporate and Other includes legal fee expense associated with (i) responses to the Department of Education (“the Department”) relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts ADJUSTED OPERATING INCOME The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the quarter ended December 31, 2021, adjusted operating income of $42.0 million increased 1.7 percent compared to adjusted operating income of $41.3 million for the prior year quarter. For the year ended December 31, 2021, adjusted operating income of $175.5 million increased 10.4 percent compared to adjusted operating income of $159.0 million for the prior year. For the Quarter Ended December 31, For the Year Ended December 31, Adjusted Operating Income ($ in thousands) 2021 2020 2021 2020 Operating income $ 34,576 $ 36,189 $ 149,016 $ 142,934 Depreciation and amortization (1) 4,964 4,001 16,766 14,786 Legal fee expense related to certain matters (2) 2,494 1,129 9,735 1,296 Adjusted Operating Income $ 42,034 $ 41,319 $ 175,517 $ 159,016 Increase (Decrease) 1.7 % 10.4 % (1) Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (2) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. NET INCOME AND EARNINGS PER DILUTED SHARE For the quarter ended December 31, 2021, the Company recorded: Net income of $24.5 million compared to $27.1 million for the prior year quarter. Earnings per diluted share of $0.35 compared to $0.38 for the prior year quarter. Adjusted earnings per diluted share of $0.40 compared to $0.40 for the prior year quarter. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the year ended December 31, 2021, the Company recorded: Net income of $109.6 million compared to $124.3 million for the prior year. Earnings per diluted share of $1.55 compared to $1.74 for the prior year. Adjusted earnings per diluted share of $1.70 compared to $1.56 for the prior year. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the Quarter Ended December 31, For the Year Ended December 31, 2021 2020 2021 2020 Reported Earnings Per Diluted Share $ 0.35 $ 0.38 $ 1.55 $ 1.74 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.03 0.01 0.06 0.04 Legal fee expense related to certain matters (2) 0.04 0.01 0.14 0.02 Tax effect of adjustments (3) (0.02 ) - (0.05 ) (0.02 ) Release of valuation allowance (4) - - - (0.22 ) Adjusted Earnings Per Diluted Share $ 0.40 $ 0.40 $ 1.70 $ 1.56 (1) Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (2) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. (3) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. (4) The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance. BALANCE SHEET AND CASH FLOW For the quarter ended December 31, 2021, net cash provided by operating activities was $46.9 million, compared to net cash provided by operating activities of $42.2 million during the prior year quarter. For the year ended December 31, 2021, net cash provided by operating activities was $191.1 million, compared to net cash provided by operating activities of $180.0 million during the prior year. At December 31, 2021 and December 31, 2020, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $499.4 million and $410.4 million, respectively. For the Quarter Ended December 31, For the Year Ended December 31, Selected Cash Flow Items ($ in thousands) 2021 2020 % Change 2021 2020 % Change Net cash provided by operating activities $ 46,910 $ 42,203 11.2 % $ 191,116 $ 179,956 6.2 % Business acquisitions, net of cash acquired $ 196 $ - NM $ 57,143 $ 39,819 43.5 % Capital expenditures $ 4,177 $ 2,289 82.5 % $ 10,453 $ 9,768 7.0 % STOCK REPURCHASE PROGRAM The Board of Directors of the Company approved a stock repurchase program commencing March 1, 2022 which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. The program expires September 30, 2023 and replaces the existing stock repurchase program that expires on February 28, 2022. OUTLOOK The Company is providing the following 2022 outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details. Total Company Outlook For Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Operating Income $40.8M - $42.8M $40.6M $106.7M - $119.7M $149.0M Depreciation and amortization $5.0M $4.0M $20.7M $16.8M Legal fee expense related to certain matters (1) $2.2M $0.3M $7.6M $9.7M Adjusted Operating Income $48.0M - $50.0M $44.9M $135.0M - $148.0M $175.5M Earnings Per Diluted Share $0.43 - $0.45 $0.43 $1.13 - $1.27 $1.55 Amortization of acquired intangible assets $0.02 $0.01 $0.10 $0.06 Legal fee expense related to certain matters (1) $0.03 - $0.11 $0.14 Tax effect of adjustments ($0.01) - ($0.06) ($0.05) Adjusted Earnings Per Diluted Share $0.47 - $0.49 $0.44 $1.28 - $1.42 $1.70 (1) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2022 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs remains consistent with recent experience, (ii) no significant impact of new or proposed regulations, including recent Department of Education negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, (iii) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (iv) no significant future operating or financial impacts relating to the COVID-19 pandemic, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 27.0% for the first quarter and 26.0% for the full year, and (vi) any future impact from the Company’s stock repurchase program is excluded. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above. CONFERENCE CALL INFORMATION Perdoceo Education Corporation will host a conference call on Thursday, February 24, 2022 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2021 results and 2022 outlook. Interested parties can access the live webcast of the conference at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 553619. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/364159545. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days following the call at www.perdoceoed.com in the Investor Relations section of the website. ABOUT PERDOCEO EDUCATION CORPORATION Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company’s accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from the associate through doctoral level as well as non-degree professional development and continuing education offerings. Perdoceo’s universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com. Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “believe,” “will,” “expect,” “continue,” “outlook,” “remain,” “focused on,” “should” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of “borrower defense to repayment” regulations; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued eligibility to participate in educational assistance programs for veterans or other military personnel; increased competition; the impact of management changes; and changes in the overall U.S. economy which may continue to be impacted by the COVID-19 pandemic. 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 year ended December 31, 2021 and its subsequent filings with the Securities and Exchange Commission. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) December 31, December 31, 2021 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents, unrestricted $ 319,982 $ 105,684 Restricted cash 5,196 4,000 Short-term investments 174,213 300,676 Total cash and cash equivalents, restricted cash and short-term investments 499,391 410,360 Student receivables, net 43,033 44,682 Receivables, other 1,692 2,873 Prepaid expenses 6,919 8,209 Inventories 904 596 Other current assets 2,514 341 Total current assets 554,453 467,061 NON-CURRENT ASSETS: Property and equipment, net 28,355 27,761 Right of use asset, net 36,664 44,773 Goodwill 162,579 118,312 Intangible assets, net 32,208 15,522 Student receivables, net 1,372 1,303 Deferred income tax assets, net 25,114 40,351 Other assets 6,688 6,434 TOTAL ASSETS $ 847,433 $ 721,517 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Lease liability - operating $ 9,400 $ 9,789 Accounts payable 10,838 13,259 Accrued expenses: Payroll and related benefits 25,312 22,661 Advertising and marketing costs 8,690 10,249 Income taxes 211 1,402 Other 15,180 11,921 Deferred revenue 70,613 34,534 Total current liabilities 140,244 103,815 NON-CURRENT LIABILITIES: Lease liability - operating 35,549 43,405 Other liabilities 21,530 18,390 Total non-current liabilities 57,079 61,795 STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 887 873 Additional paid-in capital 674,242 658,423 Accumulated other comprehensive (loss) income (96 ) 364 Retained earnings 251,972 142,335 Treasury stock (276,895 ) (246,088 ) Total stockholders' equity 650,110 555,907 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 847,433 $ 721,517 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Quarter Ended December 31, 2021 % of Total Revenue 2020 % of Total Revenue REVENUE: Tuition and fees, net $ 158,185 99.0 % $ 170,215 99.4 % Other 1,674 1.0 % 944 0.6 % Total revenue 159,859 171,159 OPERATING EXPENSES: Educational services and facilities 25,276 15.8 % 28,619 16.7 % General and administrative 95,043 59.5 % 102,350 59.8 % Depreciation and amortization 4,964 3.1 % 4,001 2.3 % Total operating expenses 125,283 78.4 % 134,970 78.9 % Operating income 34,576 21.6 % 36,189 21.1 % OTHER INCOME: Interest income, net 136 0.1 % 576 0.3 % Miscellaneous income 67 0.0 % 113 0.1 % Total other income 203 0.1 % 689 0.4 % PRETAX INCOME 34,779 21.8 % 36,878 21.5 % Provision for income taxes 10,309 6.4 % 9,806 5.7 % INCOME FROM CONTINUING OPERATIONS 24,470 15.3 % 27,072 15.8 % Loss from discontinued operations, net of tax (4 ) 0.0 % (21 ) 0.0 % NET INCOME 24,466 15.3 % 27,051 15.8 % NET INCOME PER SHARE - BASIC: $ 0.35 $ 0.39 NET INCOME PER SHARE -DILUTED: $ 0.35 $ 0.38 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 69,565 69,555 Diluted 70,335 70,968 UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Quarter Ended December 31, (In Thousands) 2021 2020 NET INCOME $ 24,466 $ 27,051 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments (2 ) 71 Unrealized loss investments (91 ) (310 ) Total other comprehensive loss (93 ) (239 ) COMPREHENSIVE INCOME $ 24,373 $ 26,812 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Year Ended December 31, 2021 % of Total Revenue 2020 % of Total Revenue REVENUE: Tuition and fees, net $ 688,415 99.3 % $ 684,579 99.6 % Other 4,619 0.7 % 2,735 0.4 % Total revenue 693,034 687,314 OPERATING EXPENSES: Educational services and facilities 108,743 15.7 % 111,768 16.3 % General and administrative 418,509 60.4 % 417,214 60.7 % Depreciation and amortization 16,766 2.4 % 14,786 2.2 % Asset impairment - 0.0 % 612 0.1 % Total operating expenses 544,018 78.5 % 544,380 79.2 % Operating income 149,016 21.5 % 142,934 20.8 % OTHER INCOME: Interest income 930 0.1 % 3,852 0.6 % Interest expense (920 ) -0.1 % (167 ) 0.0 % Miscellaneous income 58 0.0 % 211 0.0 % Total other income 68 0.0 % 3,896 0.6 % PRETAX INCOME 149,084 21.5 % 146,830 21.4 % Provision for income taxes 39,430 5.7 % 22,476 3.3 % INCOME FROM CONTINUING OPERATIONS 109,654 15.8 % 124,354 18.1 % Loss from discontinued operations, net of tax (17 ) 0.0 % (90 ) 0.0 % NET INCOME 109,637 15.8 % 124,264 18.1 % NET INCOME PER SHARE - BASIC: $ 1.57 $ 1.79 NET INCOME PER SHARE -DILUTED: $ 1.55 $ 1.74 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 70,024 69,414 Diluted 70,881 71,265 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year Ended December 31, (In Thousands) 2021 2020 NET INCOME $ 109,637 $ 124,264 OTHER COMPREHENSIVE (LOSS) INCOME, net of tax: Foreign currency translation adjustments (177 ) 199 Unrealized loss on investments (283 ) (179 ) Total other comprehensive (loss) income (460 ) 20 COMPREHENSIVE INCOME $ 109,177 $ 124,284 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended December 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 109,637 $ 124,264 Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment - 612 Depreciation and amortization expense 16,766 14,786 Bad debt expense 44,344 47,556 Compensation expense related to share-based awards 14,972 13,379 Deferred income taxes 15,330 20,353 Changes in operating assets and liabilities: Student receivables, gross 6,631 7,092 Allowance for credit losses (47,417 ) (39,546 ) Receivables, other 5,396 (99 ) Inventories, prepaid expenses, and other current assets 3,285 3,031 Other non-current assets 72 151 Accounts payable (2,744 ) 374 Accrued expenses and other non-current liabilities (3,404 ) (11,135 ) Deferred revenue 30,724 5,138 Right of use asset and lease liability (2,476 ) (6,000 ) Net cash provided by operating activities 191,116 179,956 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (269,739 ) (403,673 ) Sales of available-for-sale investments 391,659 287,249 Purchases of property and equipment (10,453 ) (9,768 ) Business acquisitions, net of acquired cash (57,143 ) (39,819 ) Other - 103 Net cash provided by (used in) investing activities 54,324 (165,908 ) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (25,296 ) (17,862 ) Issuance of common stock 861 5,723 Payments of employee tax associated with stock compensation (5,511 ) (912 ) Net cash used in financing activities (29,946 ) (13,051 ) NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 215,494 997 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 109,684 108,687 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 325,178 $ 109,684 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Quarter Ended December 31, 2021 2020 REVENUE: CTU (1) $ 95,904 $ 102,741 AIUS (2) 63,712 68,082 Corporate and Other 243 336 Total $ 159,859 $ 171,159 OPERATING INCOME (LOSS): CTU (1) $ 35,723 $ 37,802 AIUS (2) 10,255 5,457 Corporate and Other (11,402 ) (7,070 ) Total $ 34,576 $ 36,189 OPERATING MARGIN (LOSS): CTU (1) 37.2 % 36.8 % AIUS (2) 16.1 % 8.0 % Corporate and Other NM NM Total 21.6 % 21.1 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Year Ended December 31, 2021 2020 REVENUE: CTU (1) $ 408,549 $ 405,507 AIUS (2) 283,360 281,361 Corporate and Other 1,125 446 Total $ 693,034 $ 687,314 OPERATING INCOME (LOSS): CTU (1) $ 148,481 $ 138,490 AIUS (2) 39,130 30,822 Corporate and Other (38,595 ) (26,378 ) Total $ 149,016 $ 142,934 OPERATING MARGIN (LOSS): CTU (1) 36.3 % 34.2 % AIUS (2) 13.8 % 11.0 % Corporate and Other NM NM Total 21.5 % 20.8 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands, unless otherwise noted) For the Quarter Ended December 31, For the Year Ended December 31, ACTUAL ACTUAL Adjusted Operating Income 2021 2020 2021 2020 Operating income $ 34,576 $ 36,189 $ 149,016 $ 142,934 Depreciation and amortization (2) 4,964 4,001 16,766 14,786 Legal fee expense related to certain matters (3) 2,494 1,129 9,735 1,296 Adjusted Operating Income (4) $ 42,034 $ 41,319 $ 175,517 $ 159,016 For the Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Operating income $40.8M - $42.8M $ 40,617 $106.7M - $119.7M $ 149,016 Depreciation and amortization (2) $5.0M 4,002 $20.7M 16,766 Legal fee expense related to certain matters (3) $2.2M 242 $7.6M 9,735 Adjusted Operating Income (4) $48.0M - $50.0M $ 44,861 $135.0M - $148.0M $ 175,517 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) For the Quarter Ended December 31, For the Year Ended December 31, ACTUAL ACTUAL 2021 2020 2021 2020 Reported Earnings Per Diluted Share $ 0.35 $ 0.38 $ 1.55 $ 1.74 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.01 0.06 0.04 Legal fee expense related to certain matters (3) 0.04 0.01 0.14 0.02 Total pre-tax adjustments $ 0.07 $ 0.02 $ 0.20 $ 0.06 Tax effect of adjustments (5) (0.02 ) - (0.05 ) (0.02 ) Release of valuation allowance (6) - - - (0.22 ) Total adjustments after tax 0.05 0.02 0.15 (0.18 ) Adjusted Earnings Per Diluted Share (4) $ 0.40 $ 0.40 $ 1.70 $ 1.56 For the Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Reported Earnings Per Diluted Share $0.43 - $0.45 $ 0.43 $1.13 - $1.27 $ 1.55 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.02 0.01 0.10 0.06 Legal fee expense related to certain matters (3) 0.03 - 0.11 0.14 Total pre-tax adjustments $0.05 $ 0.01 $0.21 $ 0.20 Tax effect of adjustments (5) (0.01 ) - (0.06 ) (0.05 ) Total adjustments after tax 0.04 0.01 0.15 0.15 Adjusted Earnings Per Diluted Share (4) $0.47 - $0.49 $ 0.44 $1.28 - $1.42 $ 1.70 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity. Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP. Results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition, the Hippo acquisition commencing on the September 10, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. (2) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (3) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. (4) The Company began adjusting for legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts, during the second quarter of 2021. The Company believes that these expenses are not reflective of underlying operating performance. Also, the Company no longer adjusts operating income for expenses related to the vacated facilities at closed campuses as these expenses are expected to be immaterial. Prior period amounts were recast for these items to maintain comparability. (5) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax. (6) The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance. View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005953/en/Contacts Investors: Alpha IR Group Davis Snyder or Eric Markman (312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2021 Results By: Perdoceo Education Corporation via Business Wire February 24, 2022 at 16:15 PM EST Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2021. Full Year 2021 Results as Compared to Prior Year Revenue increased 0.8 percent to $693.0 million, with both CTU and the AIU System contributing to the growth. Operating income increased 4.3 percent to $149.0 million while adjusted operating income increased 10.4 percent to $175.5 million.* Earnings per diluted share was $1.55 as compared to $1.74 while adjusted earnings per diluted share was $1.70 as compared to $1.56.* Total student enrollments at December 31, 2021 decreased by 5.4 percent, with CTU experiencing a 0.4 percent increase that was offset by a 13.3 percent decrease within the AIU System. Total student enrollments at CTU were positively impacted by the academic calendar redesign. Ended the year with $499.4 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments. Fourth Quarter 2021 Results as Compared to Prior Year Quarter Revenue decreased 6.6 percent to $159.9 million, primarily driven by a decrease in total student enrollments. Operating income decreased 4.5 percent to $34.6 million while adjusted operating income increased 1.7 percent to $42.0 million.* Earnings per diluted share was $0.35 as compared to $0.38 while adjusted earnings per diluted share was $0.40 for both periods.* *See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release “We are pleased with our operating performance in 2021. Our business performed well despite recent student engagement issues which we believe relate to the COVID-19 pandemic,” said Todd Nelson, Perdoceo’s Executive Chairman. “We are also pleased with the two acquisitions completed during 2021 which further broaden the academic offerings at our educational institutions.” Andrew Hurst, recently named as Perdoceo’s President and Chief Executive Officer, added, “Our strong management team remains focused on student experiences, retention and academic outcomes while continuing to leverage data analytics and technology to benefit our institutions.” REVENUE For the quarter ended December 31, 2021, revenue of $159.9 million decreased 6.6 percent compared to revenue of $171.2 million for the prior year quarter. For the year ended December 31, 2021, revenue of $693.0 million increased 0.8 percent compared to revenue of $687.3 million for the prior year, with both CTU and AIUS contributing to growth. For the Quarter Ended December 31, For the Year Ended December 31, Revenue ($ in thousands) 2021 2020 % Change 2021 2020 % Change CTU (1) $ 95,904 $ 102,741 -6.7 % $ 408,549 $ 405,507 0.8 % AIUS (2) 63,712 68,082 -6.4 % 283,360 281,361 0.7 % Corporate and Other 243 336 NM 1,125 446 NM Total $ 159,859 $ 171,159 -6.6 % $ 693,034 $ 687,314 0.8 % (1) CTU’s results of operations include the acquisition of Hippo Education LLC (the “Hippo acquisition”) commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the acquisition of substantially all of the assets of DigitalCrafts (the “DigitalCrafts acquisition”) commencing on the August 2, 2021 date of acquisition and the acquisition of substantially all of the assets of Trident University International (the “Trident acquisition”) commencing on the March 2, 2020 date of acquisition. TOTAL STUDENT ENROLLMENTS CTU’s total student enrollments increased 0.4 percent as of December 31, 2021, while AIUS’ total student enrollments decreased 13.3 percent. CTU’s total student enrollments were positively impacted by the academic calendar redesign. At December 31, Total Student Enrollments (1) 2021 2020 % Change CTU 24,700 24,600 0.4 % AIUS 15,700 18,100 -13.3 % Total 40,400 42,700 -5.4 % (1) Total student enrollments do not include learners participating in non-degree professional development and continuing education offerings. OPERATING INCOME For the quarter ended December 31, 2021, operating income decreased by 4.5 percent to $34.6 million as compared to the prior year quarter. For the year ended December 31, 2021, operating income increased by 4.3 percent to $149.0 million as compared to the prior year. For the Quarter Ended December 31, For the Year Ended December 31, Operating Income ($ in thousands) 2021 2020 % Change 2021 2020 % Change CTU (1) $ 35,723 $ 37,802 -5.5 % $ 148,481 $ 138,490 7.2 % AIUS (2) 10,255 5,457 87.9 % 39,130 30,822 27.0 % Corporate and Other (3) (11,402 ) (7,070 ) -61.3 % (38,595 ) (26,378 ) -46.3 % Total $ 34,576 $ 36,189 -4.5 % $ 149,016 $ 142,934 4.3 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. (3) Corporate and Other includes legal fee expense associated with (i) responses to the Department of Education (“the Department”) relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts ADJUSTED OPERATING INCOME The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the quarter ended December 31, 2021, adjusted operating income of $42.0 million increased 1.7 percent compared to adjusted operating income of $41.3 million for the prior year quarter. For the year ended December 31, 2021, adjusted operating income of $175.5 million increased 10.4 percent compared to adjusted operating income of $159.0 million for the prior year. For the Quarter Ended December 31, For the Year Ended December 31, Adjusted Operating Income ($ in thousands) 2021 2020 2021 2020 Operating income $ 34,576 $ 36,189 $ 149,016 $ 142,934 Depreciation and amortization (1) 4,964 4,001 16,766 14,786 Legal fee expense related to certain matters (2) 2,494 1,129 9,735 1,296 Adjusted Operating Income $ 42,034 $ 41,319 $ 175,517 $ 159,016 Increase (Decrease) 1.7 % 10.4 % (1) Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (2) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. NET INCOME AND EARNINGS PER DILUTED SHARE For the quarter ended December 31, 2021, the Company recorded: Net income of $24.5 million compared to $27.1 million for the prior year quarter. Earnings per diluted share of $0.35 compared to $0.38 for the prior year quarter. Adjusted earnings per diluted share of $0.40 compared to $0.40 for the prior year quarter. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the year ended December 31, 2021, the Company recorded: Net income of $109.6 million compared to $124.3 million for the prior year. Earnings per diluted share of $1.55 compared to $1.74 for the prior year. Adjusted earnings per diluted share of $1.70 compared to $1.56 for the prior year. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the Quarter Ended December 31, For the Year Ended December 31, 2021 2020 2021 2020 Reported Earnings Per Diluted Share $ 0.35 $ 0.38 $ 1.55 $ 1.74 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.03 0.01 0.06 0.04 Legal fee expense related to certain matters (2) 0.04 0.01 0.14 0.02 Tax effect of adjustments (3) (0.02 ) - (0.05 ) (0.02 ) Release of valuation allowance (4) - - - (0.22 ) Adjusted Earnings Per Diluted Share $ 0.40 $ 0.40 $ 1.70 $ 1.56 (1) Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (2) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. (3) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. (4) The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance. BALANCE SHEET AND CASH FLOW For the quarter ended December 31, 2021, net cash provided by operating activities was $46.9 million, compared to net cash provided by operating activities of $42.2 million during the prior year quarter. For the year ended December 31, 2021, net cash provided by operating activities was $191.1 million, compared to net cash provided by operating activities of $180.0 million during the prior year. At December 31, 2021 and December 31, 2020, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $499.4 million and $410.4 million, respectively. For the Quarter Ended December 31, For the Year Ended December 31, Selected Cash Flow Items ($ in thousands) 2021 2020 % Change 2021 2020 % Change Net cash provided by operating activities $ 46,910 $ 42,203 11.2 % $ 191,116 $ 179,956 6.2 % Business acquisitions, net of cash acquired $ 196 $ - NM $ 57,143 $ 39,819 43.5 % Capital expenditures $ 4,177 $ 2,289 82.5 % $ 10,453 $ 9,768 7.0 % STOCK REPURCHASE PROGRAM The Board of Directors of the Company approved a stock repurchase program commencing March 1, 2022 which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. The program expires September 30, 2023 and replaces the existing stock repurchase program that expires on February 28, 2022. OUTLOOK The Company is providing the following 2022 outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details. Total Company Outlook For Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Operating Income $40.8M - $42.8M $40.6M $106.7M - $119.7M $149.0M Depreciation and amortization $5.0M $4.0M $20.7M $16.8M Legal fee expense related to certain matters (1) $2.2M $0.3M $7.6M $9.7M Adjusted Operating Income $48.0M - $50.0M $44.9M $135.0M - $148.0M $175.5M Earnings Per Diluted Share $0.43 - $0.45 $0.43 $1.13 - $1.27 $1.55 Amortization of acquired intangible assets $0.02 $0.01 $0.10 $0.06 Legal fee expense related to certain matters (1) $0.03 - $0.11 $0.14 Tax effect of adjustments ($0.01) - ($0.06) ($0.05) Adjusted Earnings Per Diluted Share $0.47 - $0.49 $0.44 $1.28 - $1.42 $1.70 (1) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2022 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs remains consistent with recent experience, (ii) no significant impact of new or proposed regulations, including recent Department of Education negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, (iii) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (iv) no significant future operating or financial impacts relating to the COVID-19 pandemic, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 27.0% for the first quarter and 26.0% for the full year, and (vi) any future impact from the Company’s stock repurchase program is excluded. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above. CONFERENCE CALL INFORMATION Perdoceo Education Corporation will host a conference call on Thursday, February 24, 2022 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2021 results and 2022 outlook. Interested parties can access the live webcast of the conference at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 553619. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/364159545. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days following the call at www.perdoceoed.com in the Investor Relations section of the website. ABOUT PERDOCEO EDUCATION CORPORATION Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company’s accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from the associate through doctoral level as well as non-degree professional development and continuing education offerings. Perdoceo’s universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com. Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “believe,” “will,” “expect,” “continue,” “outlook,” “remain,” “focused on,” “should” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of “borrower defense to repayment” regulations; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued eligibility to participate in educational assistance programs for veterans or other military personnel; increased competition; the impact of management changes; and changes in the overall U.S. economy which may continue to be impacted by the COVID-19 pandemic. 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 year ended December 31, 2021 and its subsequent filings with the Securities and Exchange Commission. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) December 31, December 31, 2021 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents, unrestricted $ 319,982 $ 105,684 Restricted cash 5,196 4,000 Short-term investments 174,213 300,676 Total cash and cash equivalents, restricted cash and short-term investments 499,391 410,360 Student receivables, net 43,033 44,682 Receivables, other 1,692 2,873 Prepaid expenses 6,919 8,209 Inventories 904 596 Other current assets 2,514 341 Total current assets 554,453 467,061 NON-CURRENT ASSETS: Property and equipment, net 28,355 27,761 Right of use asset, net 36,664 44,773 Goodwill 162,579 118,312 Intangible assets, net 32,208 15,522 Student receivables, net 1,372 1,303 Deferred income tax assets, net 25,114 40,351 Other assets 6,688 6,434 TOTAL ASSETS $ 847,433 $ 721,517 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Lease liability - operating $ 9,400 $ 9,789 Accounts payable 10,838 13,259 Accrued expenses: Payroll and related benefits 25,312 22,661 Advertising and marketing costs 8,690 10,249 Income taxes 211 1,402 Other 15,180 11,921 Deferred revenue 70,613 34,534 Total current liabilities 140,244 103,815 NON-CURRENT LIABILITIES: Lease liability - operating 35,549 43,405 Other liabilities 21,530 18,390 Total non-current liabilities 57,079 61,795 STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 887 873 Additional paid-in capital 674,242 658,423 Accumulated other comprehensive (loss) income (96 ) 364 Retained earnings 251,972 142,335 Treasury stock (276,895 ) (246,088 ) Total stockholders' equity 650,110 555,907 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 847,433 $ 721,517 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Quarter Ended December 31, 2021 % of Total Revenue 2020 % of Total Revenue REVENUE: Tuition and fees, net $ 158,185 99.0 % $ 170,215 99.4 % Other 1,674 1.0 % 944 0.6 % Total revenue 159,859 171,159 OPERATING EXPENSES: Educational services and facilities 25,276 15.8 % 28,619 16.7 % General and administrative 95,043 59.5 % 102,350 59.8 % Depreciation and amortization 4,964 3.1 % 4,001 2.3 % Total operating expenses 125,283 78.4 % 134,970 78.9 % Operating income 34,576 21.6 % 36,189 21.1 % OTHER INCOME: Interest income, net 136 0.1 % 576 0.3 % Miscellaneous income 67 0.0 % 113 0.1 % Total other income 203 0.1 % 689 0.4 % PRETAX INCOME 34,779 21.8 % 36,878 21.5 % Provision for income taxes 10,309 6.4 % 9,806 5.7 % INCOME FROM CONTINUING OPERATIONS 24,470 15.3 % 27,072 15.8 % Loss from discontinued operations, net of tax (4 ) 0.0 % (21 ) 0.0 % NET INCOME 24,466 15.3 % 27,051 15.8 % NET INCOME PER SHARE - BASIC: $ 0.35 $ 0.39 NET INCOME PER SHARE -DILUTED: $ 0.35 $ 0.38 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 69,565 69,555 Diluted 70,335 70,968 UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Quarter Ended December 31, (In Thousands) 2021 2020 NET INCOME $ 24,466 $ 27,051 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments (2 ) 71 Unrealized loss investments (91 ) (310 ) Total other comprehensive loss (93 ) (239 ) COMPREHENSIVE INCOME $ 24,373 $ 26,812 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Year Ended December 31, 2021 % of Total Revenue 2020 % of Total Revenue REVENUE: Tuition and fees, net $ 688,415 99.3 % $ 684,579 99.6 % Other 4,619 0.7 % 2,735 0.4 % Total revenue 693,034 687,314 OPERATING EXPENSES: Educational services and facilities 108,743 15.7 % 111,768 16.3 % General and administrative 418,509 60.4 % 417,214 60.7 % Depreciation and amortization 16,766 2.4 % 14,786 2.2 % Asset impairment - 0.0 % 612 0.1 % Total operating expenses 544,018 78.5 % 544,380 79.2 % Operating income 149,016 21.5 % 142,934 20.8 % OTHER INCOME: Interest income 930 0.1 % 3,852 0.6 % Interest expense (920 ) -0.1 % (167 ) 0.0 % Miscellaneous income 58 0.0 % 211 0.0 % Total other income 68 0.0 % 3,896 0.6 % PRETAX INCOME 149,084 21.5 % 146,830 21.4 % Provision for income taxes 39,430 5.7 % 22,476 3.3 % INCOME FROM CONTINUING OPERATIONS 109,654 15.8 % 124,354 18.1 % Loss from discontinued operations, net of tax (17 ) 0.0 % (90 ) 0.0 % NET INCOME 109,637 15.8 % 124,264 18.1 % NET INCOME PER SHARE - BASIC: $ 1.57 $ 1.79 NET INCOME PER SHARE -DILUTED: $ 1.55 $ 1.74 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 70,024 69,414 Diluted 70,881 71,265 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year Ended December 31, (In Thousands) 2021 2020 NET INCOME $ 109,637 $ 124,264 OTHER COMPREHENSIVE (LOSS) INCOME, net of tax: Foreign currency translation adjustments (177 ) 199 Unrealized loss on investments (283 ) (179 ) Total other comprehensive (loss) income (460 ) 20 COMPREHENSIVE INCOME $ 109,177 $ 124,284 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended December 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 109,637 $ 124,264 Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment - 612 Depreciation and amortization expense 16,766 14,786 Bad debt expense 44,344 47,556 Compensation expense related to share-based awards 14,972 13,379 Deferred income taxes 15,330 20,353 Changes in operating assets and liabilities: Student receivables, gross 6,631 7,092 Allowance for credit losses (47,417 ) (39,546 ) Receivables, other 5,396 (99 ) Inventories, prepaid expenses, and other current assets 3,285 3,031 Other non-current assets 72 151 Accounts payable (2,744 ) 374 Accrued expenses and other non-current liabilities (3,404 ) (11,135 ) Deferred revenue 30,724 5,138 Right of use asset and lease liability (2,476 ) (6,000 ) Net cash provided by operating activities 191,116 179,956 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (269,739 ) (403,673 ) Sales of available-for-sale investments 391,659 287,249 Purchases of property and equipment (10,453 ) (9,768 ) Business acquisitions, net of acquired cash (57,143 ) (39,819 ) Other - 103 Net cash provided by (used in) investing activities 54,324 (165,908 ) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (25,296 ) (17,862 ) Issuance of common stock 861 5,723 Payments of employee tax associated with stock compensation (5,511 ) (912 ) Net cash used in financing activities (29,946 ) (13,051 ) NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 215,494 997 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 109,684 108,687 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 325,178 $ 109,684 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Quarter Ended December 31, 2021 2020 REVENUE: CTU (1) $ 95,904 $ 102,741 AIUS (2) 63,712 68,082 Corporate and Other 243 336 Total $ 159,859 $ 171,159 OPERATING INCOME (LOSS): CTU (1) $ 35,723 $ 37,802 AIUS (2) 10,255 5,457 Corporate and Other (11,402 ) (7,070 ) Total $ 34,576 $ 36,189 OPERATING MARGIN (LOSS): CTU (1) 37.2 % 36.8 % AIUS (2) 16.1 % 8.0 % Corporate and Other NM NM Total 21.6 % 21.1 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Year Ended December 31, 2021 2020 REVENUE: CTU (1) $ 408,549 $ 405,507 AIUS (2) 283,360 281,361 Corporate and Other 1,125 446 Total $ 693,034 $ 687,314 OPERATING INCOME (LOSS): CTU (1) $ 148,481 $ 138,490 AIUS (2) 39,130 30,822 Corporate and Other (38,595 ) (26,378 ) Total $ 149,016 $ 142,934 OPERATING MARGIN (LOSS): CTU (1) 36.3 % 34.2 % AIUS (2) 13.8 % 11.0 % Corporate and Other NM NM Total 21.5 % 20.8 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands, unless otherwise noted) For the Quarter Ended December 31, For the Year Ended December 31, ACTUAL ACTUAL Adjusted Operating Income 2021 2020 2021 2020 Operating income $ 34,576 $ 36,189 $ 149,016 $ 142,934 Depreciation and amortization (2) 4,964 4,001 16,766 14,786 Legal fee expense related to certain matters (3) 2,494 1,129 9,735 1,296 Adjusted Operating Income (4) $ 42,034 $ 41,319 $ 175,517 $ 159,016 For the Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Operating income $40.8M - $42.8M $ 40,617 $106.7M - $119.7M $ 149,016 Depreciation and amortization (2) $5.0M 4,002 $20.7M 16,766 Legal fee expense related to certain matters (3) $2.2M 242 $7.6M 9,735 Adjusted Operating Income (4) $48.0M - $50.0M $ 44,861 $135.0M - $148.0M $ 175,517 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) For the Quarter Ended December 31, For the Year Ended December 31, ACTUAL ACTUAL 2021 2020 2021 2020 Reported Earnings Per Diluted Share $ 0.35 $ 0.38 $ 1.55 $ 1.74 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.01 0.06 0.04 Legal fee expense related to certain matters (3) 0.04 0.01 0.14 0.02 Total pre-tax adjustments $ 0.07 $ 0.02 $ 0.20 $ 0.06 Tax effect of adjustments (5) (0.02 ) - (0.05 ) (0.02 ) Release of valuation allowance (6) - - - (0.22 ) Total adjustments after tax 0.05 0.02 0.15 (0.18 ) Adjusted Earnings Per Diluted Share (4) $ 0.40 $ 0.40 $ 1.70 $ 1.56 For the Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Reported Earnings Per Diluted Share $0.43 - $0.45 $ 0.43 $1.13 - $1.27 $ 1.55 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.02 0.01 0.10 0.06 Legal fee expense related to certain matters (3) 0.03 - 0.11 0.14 Total pre-tax adjustments $0.05 $ 0.01 $0.21 $ 0.20 Tax effect of adjustments (5) (0.01 ) - (0.06 ) (0.05 ) Total adjustments after tax 0.04 0.01 0.15 0.15 Adjusted Earnings Per Diluted Share (4) $0.47 - $0.49 $ 0.44 $1.28 - $1.42 $ 1.70 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity. Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP. Results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition, the Hippo acquisition commencing on the September 10, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. (2) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (3) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. (4) The Company began adjusting for legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts, during the second quarter of 2021. The Company believes that these expenses are not reflective of underlying operating performance. Also, the Company no longer adjusts operating income for expenses related to the vacated facilities at closed campuses as these expenses are expected to be immaterial. Prior period amounts were recast for these items to maintain comparability. (5) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax. (6) The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance. View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005953/en/Contacts Investors: Alpha IR Group Davis Snyder or Eric Markman (312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com
Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2021. Full Year 2021 Results as Compared to Prior Year Revenue increased 0.8 percent to $693.0 million, with both CTU and the AIU System contributing to the growth. Operating income increased 4.3 percent to $149.0 million while adjusted operating income increased 10.4 percent to $175.5 million.* Earnings per diluted share was $1.55 as compared to $1.74 while adjusted earnings per diluted share was $1.70 as compared to $1.56.* Total student enrollments at December 31, 2021 decreased by 5.4 percent, with CTU experiencing a 0.4 percent increase that was offset by a 13.3 percent decrease within the AIU System. Total student enrollments at CTU were positively impacted by the academic calendar redesign. Ended the year with $499.4 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments. Fourth Quarter 2021 Results as Compared to Prior Year Quarter Revenue decreased 6.6 percent to $159.9 million, primarily driven by a decrease in total student enrollments. Operating income decreased 4.5 percent to $34.6 million while adjusted operating income increased 1.7 percent to $42.0 million.* Earnings per diluted share was $0.35 as compared to $0.38 while adjusted earnings per diluted share was $0.40 for both periods.* *See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release “We are pleased with our operating performance in 2021. Our business performed well despite recent student engagement issues which we believe relate to the COVID-19 pandemic,” said Todd Nelson, Perdoceo’s Executive Chairman. “We are also pleased with the two acquisitions completed during 2021 which further broaden the academic offerings at our educational institutions.” Andrew Hurst, recently named as Perdoceo’s President and Chief Executive Officer, added, “Our strong management team remains focused on student experiences, retention and academic outcomes while continuing to leverage data analytics and technology to benefit our institutions.” REVENUE For the quarter ended December 31, 2021, revenue of $159.9 million decreased 6.6 percent compared to revenue of $171.2 million for the prior year quarter. For the year ended December 31, 2021, revenue of $693.0 million increased 0.8 percent compared to revenue of $687.3 million for the prior year, with both CTU and AIUS contributing to growth. For the Quarter Ended December 31, For the Year Ended December 31, Revenue ($ in thousands) 2021 2020 % Change 2021 2020 % Change CTU (1) $ 95,904 $ 102,741 -6.7 % $ 408,549 $ 405,507 0.8 % AIUS (2) 63,712 68,082 -6.4 % 283,360 281,361 0.7 % Corporate and Other 243 336 NM 1,125 446 NM Total $ 159,859 $ 171,159 -6.6 % $ 693,034 $ 687,314 0.8 % (1) CTU’s results of operations include the acquisition of Hippo Education LLC (the “Hippo acquisition”) commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the acquisition of substantially all of the assets of DigitalCrafts (the “DigitalCrafts acquisition”) commencing on the August 2, 2021 date of acquisition and the acquisition of substantially all of the assets of Trident University International (the “Trident acquisition”) commencing on the March 2, 2020 date of acquisition. TOTAL STUDENT ENROLLMENTS CTU’s total student enrollments increased 0.4 percent as of December 31, 2021, while AIUS’ total student enrollments decreased 13.3 percent. CTU’s total student enrollments were positively impacted by the academic calendar redesign. At December 31, Total Student Enrollments (1) 2021 2020 % Change CTU 24,700 24,600 0.4 % AIUS 15,700 18,100 -13.3 % Total 40,400 42,700 -5.4 % (1) Total student enrollments do not include learners participating in non-degree professional development and continuing education offerings. OPERATING INCOME For the quarter ended December 31, 2021, operating income decreased by 4.5 percent to $34.6 million as compared to the prior year quarter. For the year ended December 31, 2021, operating income increased by 4.3 percent to $149.0 million as compared to the prior year. For the Quarter Ended December 31, For the Year Ended December 31, Operating Income ($ in thousands) 2021 2020 % Change 2021 2020 % Change CTU (1) $ 35,723 $ 37,802 -5.5 % $ 148,481 $ 138,490 7.2 % AIUS (2) 10,255 5,457 87.9 % 39,130 30,822 27.0 % Corporate and Other (3) (11,402 ) (7,070 ) -61.3 % (38,595 ) (26,378 ) -46.3 % Total $ 34,576 $ 36,189 -4.5 % $ 149,016 $ 142,934 4.3 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. (3) Corporate and Other includes legal fee expense associated with (i) responses to the Department of Education (“the Department”) relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts ADJUSTED OPERATING INCOME The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the quarter ended December 31, 2021, adjusted operating income of $42.0 million increased 1.7 percent compared to adjusted operating income of $41.3 million for the prior year quarter. For the year ended December 31, 2021, adjusted operating income of $175.5 million increased 10.4 percent compared to adjusted operating income of $159.0 million for the prior year. For the Quarter Ended December 31, For the Year Ended December 31, Adjusted Operating Income ($ in thousands) 2021 2020 2021 2020 Operating income $ 34,576 $ 36,189 $ 149,016 $ 142,934 Depreciation and amortization (1) 4,964 4,001 16,766 14,786 Legal fee expense related to certain matters (2) 2,494 1,129 9,735 1,296 Adjusted Operating Income $ 42,034 $ 41,319 $ 175,517 $ 159,016 Increase (Decrease) 1.7 % 10.4 % (1) Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (2) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. NET INCOME AND EARNINGS PER DILUTED SHARE For the quarter ended December 31, 2021, the Company recorded: Net income of $24.5 million compared to $27.1 million for the prior year quarter. Earnings per diluted share of $0.35 compared to $0.38 for the prior year quarter. Adjusted earnings per diluted share of $0.40 compared to $0.40 for the prior year quarter. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the year ended December 31, 2021, the Company recorded: Net income of $109.6 million compared to $124.3 million for the prior year. Earnings per diluted share of $1.55 compared to $1.74 for the prior year. Adjusted earnings per diluted share of $1.70 compared to $1.56 for the prior year. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the Quarter Ended December 31, For the Year Ended December 31, 2021 2020 2021 2020 Reported Earnings Per Diluted Share $ 0.35 $ 0.38 $ 1.55 $ 1.74 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.03 0.01 0.06 0.04 Legal fee expense related to certain matters (2) 0.04 0.01 0.14 0.02 Tax effect of adjustments (3) (0.02 ) - (0.05 ) (0.02 ) Release of valuation allowance (4) - - - (0.22 ) Adjusted Earnings Per Diluted Share $ 0.40 $ 0.40 $ 1.70 $ 1.56 (1) Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (2) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. (3) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. (4) The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance. BALANCE SHEET AND CASH FLOW For the quarter ended December 31, 2021, net cash provided by operating activities was $46.9 million, compared to net cash provided by operating activities of $42.2 million during the prior year quarter. For the year ended December 31, 2021, net cash provided by operating activities was $191.1 million, compared to net cash provided by operating activities of $180.0 million during the prior year. At December 31, 2021 and December 31, 2020, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $499.4 million and $410.4 million, respectively. For the Quarter Ended December 31, For the Year Ended December 31, Selected Cash Flow Items ($ in thousands) 2021 2020 % Change 2021 2020 % Change Net cash provided by operating activities $ 46,910 $ 42,203 11.2 % $ 191,116 $ 179,956 6.2 % Business acquisitions, net of cash acquired $ 196 $ - NM $ 57,143 $ 39,819 43.5 % Capital expenditures $ 4,177 $ 2,289 82.5 % $ 10,453 $ 9,768 7.0 % STOCK REPURCHASE PROGRAM The Board of Directors of the Company approved a stock repurchase program commencing March 1, 2022 which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. The program expires September 30, 2023 and replaces the existing stock repurchase program that expires on February 28, 2022. OUTLOOK The Company is providing the following 2022 outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details. Total Company Outlook For Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Operating Income $40.8M - $42.8M $40.6M $106.7M - $119.7M $149.0M Depreciation and amortization $5.0M $4.0M $20.7M $16.8M Legal fee expense related to certain matters (1) $2.2M $0.3M $7.6M $9.7M Adjusted Operating Income $48.0M - $50.0M $44.9M $135.0M - $148.0M $175.5M Earnings Per Diluted Share $0.43 - $0.45 $0.43 $1.13 - $1.27 $1.55 Amortization of acquired intangible assets $0.02 $0.01 $0.10 $0.06 Legal fee expense related to certain matters (1) $0.03 - $0.11 $0.14 Tax effect of adjustments ($0.01) - ($0.06) ($0.05) Adjusted Earnings Per Diluted Share $0.47 - $0.49 $0.44 $1.28 - $1.42 $1.70 (1) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2022 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs remains consistent with recent experience, (ii) no significant impact of new or proposed regulations, including recent Department of Education negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, (iii) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (iv) no significant future operating or financial impacts relating to the COVID-19 pandemic, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 27.0% for the first quarter and 26.0% for the full year, and (vi) any future impact from the Company’s stock repurchase program is excluded. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above. CONFERENCE CALL INFORMATION Perdoceo Education Corporation will host a conference call on Thursday, February 24, 2022 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2021 results and 2022 outlook. Interested parties can access the live webcast of the conference at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 553619. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/364159545. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days following the call at www.perdoceoed.com in the Investor Relations section of the website. ABOUT PERDOCEO EDUCATION CORPORATION Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company’s accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from the associate through doctoral level as well as non-degree professional development and continuing education offerings. Perdoceo’s universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com. Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “believe,” “will,” “expect,” “continue,” “outlook,” “remain,” “focused on,” “should” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of “borrower defense to repayment” regulations; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued eligibility to participate in educational assistance programs for veterans or other military personnel; increased competition; the impact of management changes; and changes in the overall U.S. economy which may continue to be impacted by the COVID-19 pandemic. 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 year ended December 31, 2021 and its subsequent filings with the Securities and Exchange Commission. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) December 31, December 31, 2021 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents, unrestricted $ 319,982 $ 105,684 Restricted cash 5,196 4,000 Short-term investments 174,213 300,676 Total cash and cash equivalents, restricted cash and short-term investments 499,391 410,360 Student receivables, net 43,033 44,682 Receivables, other 1,692 2,873 Prepaid expenses 6,919 8,209 Inventories 904 596 Other current assets 2,514 341 Total current assets 554,453 467,061 NON-CURRENT ASSETS: Property and equipment, net 28,355 27,761 Right of use asset, net 36,664 44,773 Goodwill 162,579 118,312 Intangible assets, net 32,208 15,522 Student receivables, net 1,372 1,303 Deferred income tax assets, net 25,114 40,351 Other assets 6,688 6,434 TOTAL ASSETS $ 847,433 $ 721,517 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Lease liability - operating $ 9,400 $ 9,789 Accounts payable 10,838 13,259 Accrued expenses: Payroll and related benefits 25,312 22,661 Advertising and marketing costs 8,690 10,249 Income taxes 211 1,402 Other 15,180 11,921 Deferred revenue 70,613 34,534 Total current liabilities 140,244 103,815 NON-CURRENT LIABILITIES: Lease liability - operating 35,549 43,405 Other liabilities 21,530 18,390 Total non-current liabilities 57,079 61,795 STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 887 873 Additional paid-in capital 674,242 658,423 Accumulated other comprehensive (loss) income (96 ) 364 Retained earnings 251,972 142,335 Treasury stock (276,895 ) (246,088 ) Total stockholders' equity 650,110 555,907 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 847,433 $ 721,517 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Quarter Ended December 31, 2021 % of Total Revenue 2020 % of Total Revenue REVENUE: Tuition and fees, net $ 158,185 99.0 % $ 170,215 99.4 % Other 1,674 1.0 % 944 0.6 % Total revenue 159,859 171,159 OPERATING EXPENSES: Educational services and facilities 25,276 15.8 % 28,619 16.7 % General and administrative 95,043 59.5 % 102,350 59.8 % Depreciation and amortization 4,964 3.1 % 4,001 2.3 % Total operating expenses 125,283 78.4 % 134,970 78.9 % Operating income 34,576 21.6 % 36,189 21.1 % OTHER INCOME: Interest income, net 136 0.1 % 576 0.3 % Miscellaneous income 67 0.0 % 113 0.1 % Total other income 203 0.1 % 689 0.4 % PRETAX INCOME 34,779 21.8 % 36,878 21.5 % Provision for income taxes 10,309 6.4 % 9,806 5.7 % INCOME FROM CONTINUING OPERATIONS 24,470 15.3 % 27,072 15.8 % Loss from discontinued operations, net of tax (4 ) 0.0 % (21 ) 0.0 % NET INCOME 24,466 15.3 % 27,051 15.8 % NET INCOME PER SHARE - BASIC: $ 0.35 $ 0.39 NET INCOME PER SHARE -DILUTED: $ 0.35 $ 0.38 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 69,565 69,555 Diluted 70,335 70,968 UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Quarter Ended December 31, (In Thousands) 2021 2020 NET INCOME $ 24,466 $ 27,051 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments (2 ) 71 Unrealized loss investments (91 ) (310 ) Total other comprehensive loss (93 ) (239 ) COMPREHENSIVE INCOME $ 24,373 $ 26,812 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Year Ended December 31, 2021 % of Total Revenue 2020 % of Total Revenue REVENUE: Tuition and fees, net $ 688,415 99.3 % $ 684,579 99.6 % Other 4,619 0.7 % 2,735 0.4 % Total revenue 693,034 687,314 OPERATING EXPENSES: Educational services and facilities 108,743 15.7 % 111,768 16.3 % General and administrative 418,509 60.4 % 417,214 60.7 % Depreciation and amortization 16,766 2.4 % 14,786 2.2 % Asset impairment - 0.0 % 612 0.1 % Total operating expenses 544,018 78.5 % 544,380 79.2 % Operating income 149,016 21.5 % 142,934 20.8 % OTHER INCOME: Interest income 930 0.1 % 3,852 0.6 % Interest expense (920 ) -0.1 % (167 ) 0.0 % Miscellaneous income 58 0.0 % 211 0.0 % Total other income 68 0.0 % 3,896 0.6 % PRETAX INCOME 149,084 21.5 % 146,830 21.4 % Provision for income taxes 39,430 5.7 % 22,476 3.3 % INCOME FROM CONTINUING OPERATIONS 109,654 15.8 % 124,354 18.1 % Loss from discontinued operations, net of tax (17 ) 0.0 % (90 ) 0.0 % NET INCOME 109,637 15.8 % 124,264 18.1 % NET INCOME PER SHARE - BASIC: $ 1.57 $ 1.79 NET INCOME PER SHARE -DILUTED: $ 1.55 $ 1.74 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 70,024 69,414 Diluted 70,881 71,265 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year Ended December 31, (In Thousands) 2021 2020 NET INCOME $ 109,637 $ 124,264 OTHER COMPREHENSIVE (LOSS) INCOME, net of tax: Foreign currency translation adjustments (177 ) 199 Unrealized loss on investments (283 ) (179 ) Total other comprehensive (loss) income (460 ) 20 COMPREHENSIVE INCOME $ 109,177 $ 124,284 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended December 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 109,637 $ 124,264 Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment - 612 Depreciation and amortization expense 16,766 14,786 Bad debt expense 44,344 47,556 Compensation expense related to share-based awards 14,972 13,379 Deferred income taxes 15,330 20,353 Changes in operating assets and liabilities: Student receivables, gross 6,631 7,092 Allowance for credit losses (47,417 ) (39,546 ) Receivables, other 5,396 (99 ) Inventories, prepaid expenses, and other current assets 3,285 3,031 Other non-current assets 72 151 Accounts payable (2,744 ) 374 Accrued expenses and other non-current liabilities (3,404 ) (11,135 ) Deferred revenue 30,724 5,138 Right of use asset and lease liability (2,476 ) (6,000 ) Net cash provided by operating activities 191,116 179,956 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (269,739 ) (403,673 ) Sales of available-for-sale investments 391,659 287,249 Purchases of property and equipment (10,453 ) (9,768 ) Business acquisitions, net of acquired cash (57,143 ) (39,819 ) Other - 103 Net cash provided by (used in) investing activities 54,324 (165,908 ) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (25,296 ) (17,862 ) Issuance of common stock 861 5,723 Payments of employee tax associated with stock compensation (5,511 ) (912 ) Net cash used in financing activities (29,946 ) (13,051 ) NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 215,494 997 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 109,684 108,687 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 325,178 $ 109,684 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Quarter Ended December 31, 2021 2020 REVENUE: CTU (1) $ 95,904 $ 102,741 AIUS (2) 63,712 68,082 Corporate and Other 243 336 Total $ 159,859 $ 171,159 OPERATING INCOME (LOSS): CTU (1) $ 35,723 $ 37,802 AIUS (2) 10,255 5,457 Corporate and Other (11,402 ) (7,070 ) Total $ 34,576 $ 36,189 OPERATING MARGIN (LOSS): CTU (1) 37.2 % 36.8 % AIUS (2) 16.1 % 8.0 % Corporate and Other NM NM Total 21.6 % 21.1 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Year Ended December 31, 2021 2020 REVENUE: CTU (1) $ 408,549 $ 405,507 AIUS (2) 283,360 281,361 Corporate and Other 1,125 446 Total $ 693,034 $ 687,314 OPERATING INCOME (LOSS): CTU (1) $ 148,481 $ 138,490 AIUS (2) 39,130 30,822 Corporate and Other (38,595 ) (26,378 ) Total $ 149,016 $ 142,934 OPERATING MARGIN (LOSS): CTU (1) 36.3 % 34.2 % AIUS (2) 13.8 % 11.0 % Corporate and Other NM NM Total 21.5 % 20.8 % (1) CTU’s results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. (2) AIUS’ results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands, unless otherwise noted) For the Quarter Ended December 31, For the Year Ended December 31, ACTUAL ACTUAL Adjusted Operating Income 2021 2020 2021 2020 Operating income $ 34,576 $ 36,189 $ 149,016 $ 142,934 Depreciation and amortization (2) 4,964 4,001 16,766 14,786 Legal fee expense related to certain matters (3) 2,494 1,129 9,735 1,296 Adjusted Operating Income (4) $ 42,034 $ 41,319 $ 175,517 $ 159,016 For the Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Operating income $40.8M - $42.8M $ 40,617 $106.7M - $119.7M $ 149,016 Depreciation and amortization (2) $5.0M 4,002 $20.7M 16,766 Legal fee expense related to certain matters (3) $2.2M 242 $7.6M 9,735 Adjusted Operating Income (4) $48.0M - $50.0M $ 44,861 $135.0M - $148.0M $ 175,517 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) For the Quarter Ended December 31, For the Year Ended December 31, ACTUAL ACTUAL 2021 2020 2021 2020 Reported Earnings Per Diluted Share $ 0.35 $ 0.38 $ 1.55 $ 1.74 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.01 0.06 0.04 Legal fee expense related to certain matters (3) 0.04 0.01 0.14 0.02 Total pre-tax adjustments $ 0.07 $ 0.02 $ 0.20 $ 0.06 Tax effect of adjustments (5) (0.02 ) - (0.05 ) (0.02 ) Release of valuation allowance (6) - - - (0.22 ) Total adjustments after tax 0.05 0.02 0.15 (0.18 ) Adjusted Earnings Per Diluted Share (4) $ 0.40 $ 0.40 $ 1.70 $ 1.56 For the Quarter Ending March 31, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2022 2021 2022 2021 Reported Earnings Per Diluted Share $0.43 - $0.45 $ 0.43 $1.13 - $1.27 $ 1.55 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.02 0.01 0.10 0.06 Legal fee expense related to certain matters (3) 0.03 - 0.11 0.14 Total pre-tax adjustments $0.05 $ 0.01 $0.21 $ 0.20 Tax effect of adjustments (5) (0.01 ) - (0.06 ) (0.05 ) Total adjustments after tax 0.04 0.01 0.15 0.15 Adjusted Earnings Per Diluted Share (4) $0.47 - $0.49 $ 0.44 $1.28 - $1.42 $ 1.70 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity. Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP. Results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition, the Hippo acquisition commencing on the September 10, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition. (2) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions. (3) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts. (4) The Company began adjusting for legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts, during the second quarter of 2021. The Company believes that these expenses are not reflective of underlying operating performance. Also, the Company no longer adjusts operating income for expenses related to the vacated facilities at closed campuses as these expenses are expected to be immaterial. Prior period amounts were recast for these items to maintain comparability. (5) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax. (6) The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance. 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Investors: Alpha IR Group Davis Snyder or Eric Markman (312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com