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 Second Quarter and Year to Date 2023 Results By: Perdoceo Education Corporation via Business Wire August 03, 2023 at 16:15 PM EDT Company Declares Inaugural Quarterly Cash Dividend on Common Stock Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended June 30, 2023. Second Quarter 2023 Results as Compared to Prior Year Quarter Revenue increased 11.3% to $186.6 million, primarily driven by an 18.7% increase at CTU. Operating income increased 41.7% to $48.1 million, while adjusted operating income increased 31.5% to $55.2 million.* Earnings per diluted share were $0.80 as compared to $0.37, while adjusted earnings per diluted share were $0.61 as compared to $0.42.* Total student enrollments at June 30, 2023 decreased by 5.2%. AIUS experienced a 14.2% decrease in total student enrollments while CTU remained relatively flat. Ended the quarter with $578.1 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments. Board of Directors declared inaugural dividend for the second quarter of $0.11 per share payable on September 15, 2023. Year to Date 2023 Results as Compared to Prior Year to Date Revenue increased 9.0% to $382.2 million, primarily driven by a 14.1% increase at CTU. Operating income increased 17.8% to $91.4 million, while adjusted operating income increased 16.6% to $108.3 million.* Earnings per diluted share were $1.30 as compared to $0.83, while adjusted earnings per diluted share were $1.19 as compared to $0.93.* *See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release "Second quarter results came in ahead of our expectations, as we experienced further improvements in student retention and engagement, supported by various operating changes and technology upgrades within our onboarding, academic and student support processes,” said Andrew Hurst, Chief Executive Officer. REVENUE For the quarter ended June 30, 2023, revenue of $186.6 million increased 11.3% compared to revenue of $167.7 million for the prior year quarter. For the year to date ended June 30, 2023, revenue of $382.2 million increased 9.0% compared to revenue of $350.6 million for the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Revenue ($ in thousands) 2023 2022 % Change 2023 2022 % Change CTU $ 119,292 $ 100,461 18.7 % $ 243,784 $ 213,609 14.1 % AIUS 67,062 66,920 0.2 % 137,902 136,452 1.1 % Corporate and Other 210 303 NM 476 582 NM Total $ 186,564 $ 167,684 11.3 % $ 382,162 $ 350,643 9.0 % TOTAL STUDENT ENROLLMENTS As of June 30, 2023, CTU’s total student enrollments decreased 0.4%, while AIUS’ total student enrollments decreased 14.2% as compared to June 30, 2022. At June 30, Total Student Enrollments(1) 2023 2022 % Change CTU 25,900 26,000 -0.4 % AIUS 12,100 14,100 -14.2 % Total 38,000 40,100 -5.2 % (1) Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities. OPERATING INCOME For the quarter ended June 30, 2023, operating income increased by 41.7% to $48.1 million as compared to the prior year quarter. For the year to date ended June 30, 2023, operating income increased by 17.8% to $91.4 million as compared to the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Operating Income ($ in thousands) 2023 2022 % Change 2023 2022 % Change CTU $ 40,451 $ 33,008 22.5 % $ 84,141 $ 76,034 10.7 % AIUS 17,078 10,733 59.1 % 29,081 20,256 43.6 % Corporate and Other (9,435 ) (9,795 ) NM (21,792 ) (18,651 ) NM Total $ 48,094 $ 33,946 41.7 % $ 91,430 $ 77,639 17.8 % 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 June 30, 2023, adjusted operating income of $55.2 million increased 31.5% compared to adjusted operating income of $41.9 million for the prior year quarter. For the year to date ended June 30, 2023, adjusted operating income of $108.3 million increased 16.6% compared to adjusted operating income of $92.9 million for the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Adjusted Operating Income ($ in thousands) 2023 2022 2023 2022 Operating income $ 48,094 $ 33,946 $ 91,430 $ 77,639 Depreciation and amortization (1) 4,369 4,909 9,524 9,791 Legal fee expense related to certain matters (2) 2,709 3,087 7,328 5,434 Adjusted Operating Income $ 55,172 $ 41,942 $ 108,282 $ 92,864 Increase (Decrease) 31.5 % 16.6 % (1) Amortization relates to definite-lived intangible assets associated with acquisitions. (2) 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. NET INCOME AND EARNINGS PER DILUTED SHARE For the quarter ended June 30, 2023, the Company recorded: Net income of $54.7 million compared to $25.8 million for the prior year quarter. Earnings per diluted share of $0.80 compared to $0.37 for the prior year quarter. Adjusted earnings per diluted share of $0.61 compared to $0.42 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 to date ended June 30, 2023, the Company recorded: Net income of $89.2 million compared to $57.8 million for the prior year to date. Earnings per diluted share of $1.30 compared to $0.83 for the prior year to date. Adjusted earnings per diluted share of $1.19 compared to $0.93 for the prior year to date. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the Quarter Ended June 30, For the Year to Date Ended June 30, 2023 2022 2023 2022 Reported Earnings Per Diluted Share $ 0.80 $ 0.37 $ 1.30 $ 0.83 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.03 0.02 0.07 0.05 Legal fee expense related to certain matters (2) 0.04 0.05 0.11 0.08 Gain on sale of intangible asset (3) (0.32 ) - (0.32 ) - Tax effect of adjustments (4) 0.06 (0.02 ) 0.03 (0.03 ) Adjusted Earnings Per Diluted Share $ 0.61 $ 0.42 $ 1.19 $ 0.93 (1) Amortization relates to definite-lived intangible assets associated with 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) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (4) 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. INAUGURAL QUARTERLY DIVIDEND PAYMENT The Company today announced that its board of directors has adopted a dividend policy. Pursuant to this policy, the board of directors intends to pay quarterly dividends, commencing with the Company’s quarter ended June 30, 2023. The board of directors declared the first quarterly dividend as part of the dividend policy of $0.11 per share, which will be paid on September 15, 2023 for holders of record of common stock as of September 1, 2023. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company’s available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral part of its balanced capital allocation strategy while also prioritizing investments in organic projects, in particularly technology-related initiatives designed to benefit students and maintaining a strong balance sheet. BALANCE SHEET AND CASH FLOW For the quarter ended June 30, 2023 net cash provided by operating activities was $61.6 million, compared to net cash provided by operating activities of $32.6 million for the prior year quarter. For the year to date ended June 30, 2023, net cash provided by operating activities was $66.2 million, compared to net cash provided by operating activities of $54.8 million in the prior year to date. As of June 30, 2023 and December 31, 2022, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $578.1 million and $518.2 million, respectively. The Company’s stock repurchase program, which was set to expire on September 30, 2023, has been extended to September 30, 2024. As of June 30, 2023, approximately $24.1 million was available under the stock repurchase program to repurchase outstanding shares of common stock. For the Quarter Ended June 30, For the Year to Date Ended June 30, Selected Cash Flow Items ($ in thousands) 2023 2022 % Change 2023 2022 % Change Net cash provided by operating activities $ 61,648 $ 32,625 89.0 % $ 66,220 $ 54,779 20.9 % Capital expenditures $ 1,687 $ 2,023 -16.6 % $ 3,612 $ 6,765 -46.6 % OUTLOOK The Company is providing the following third quarter outlook along with a full year 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 September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Operating Income $38.6M - $40.6M $29,324 $137.0M - $144.0M $129,637 Depreciation and amortization $4.1M $5,065 $17.6M 19,734 Legal fee expense related to certain matters (1) $0.3M $4,294 $10.4M 14,597 Adjusted Operating Income $43.0M - $45.0M $38,683 $165.0M - $172.0M $163,968 Earnings Per Diluted Share $0.46 - $0.48 $0.32 $1.89 - $1.96 $1.39 Amortization of acquired intangible assets $0.03 $0.03 $0.12 $0.11 Legal fee expense related to certain matters (1) - $0.06 $0.15 $0.21 Gain on sale of intangible asset - - ($0.32) - Tax effect of adjustments ($0.01) ($0.02) $0.01 ($0.08) Adjusted Earnings Per Diluted Share $0.48 - $0.50 $0.39 $1.85 - $1.92 $1.63 (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, which is the most directly comparable GAAP measure to adjusted 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 2023 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and trends in student retention and engagement remain consistent with management’s estimates, (ii) no significant impact of new or proposed regulations, including recent Department negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, which may require further operational changes in the way the Company’s academic institutions enroll, support and educate current and prospective students, among other impacts, (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) the impact from student aid initiatives implemented by the current administration remains consistent with management's estimates, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 28% for the third quarter and 27% for the full year, and (vi) excludes any future impact from the Company’s stock repurchase program. 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, August 3, 2023 at 5:30 p.m. Eastern time to discuss second quarter and year to date 2023 results and outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-888-210-4659 (domestic) or 1-646-960-0383 (international). Both dial-in numbers will use the access code 3224322. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/519983953. 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 at www.perdoceoed.com in the Investor Relations section of the website. ABOUT PERDOCEO EDUCATION CORPORATION Perdoceo’s accredited 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 academic 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 seeking and professional development programs. Perdoceo’s academic institutions 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 serve and educate students while enhancing overall learning and academic experiences. 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; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; 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; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. 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, 2022 and its subsequent filings with the Securities and Exchange Commission. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2023 2022 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents, unrestricted $ 140,533 $ 109,408 Restricted cash 9,476 9,476 Short-term investments 428,104 399,315 Total cash and cash equivalents, restricted cash and short-term investments 578,113 518,199 Student receivables, net 42,322 42,551 Receivables, other 6,896 3,457 Prepaid expenses 12,524 8,411 Inventories 2,875 1,904 Other current assets 664 597 Total current assets 643,394 575,119 NON-CURRENT ASSETS: Property and equipment, net 24,257 26,038 Right of use asset, net 23,105 26,156 Goodwill 244,114 243,540 Intangible assets, net 49,089 53,564 Student receivables, net 1,184 1,850 Deferred income tax assets, net 21,638 24,613 Other assets 6,889 6,488 TOTAL ASSETS $ 1,013,670 $ 957,368 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Lease liability - operating $ 5,695 $ 6,555 Accounts payable 15,361 13,518 Accrued expenses: Payroll and related benefits 27,291 40,306 Advertising and marketing costs 6,385 8,977 Income taxes 16,041 7,814 Other 23,008 14,621 Deferred revenue 66,914 71,590 Total current liabilities 160,695 163,381 NON-CURRENT LIABILITIES: Lease liability - operating 24,357 27,286 Other liabilities 36,186 40,856 Total non-current liabilities 60,543 68,142 STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 900 894 Additional paid-in capital 688,805 684,183 Accumulated other comprehensive loss (5,621 ) (5,447 ) Retained earnings 436,996 347,839 Treasury stock (328,648 ) (301,624 ) Total stockholders' equity 792,432 725,845 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,013,670 $ 957,368 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Quarter Ended June 30, 2023 % of Total Revenue 2022 % of Total Revenue REVENUE: Tuition and fees, net $ 184,520 98.9 % $ 165,896 98.9 % Other 2,044 1.1 % 1,788 1.1 % Total revenue 186,564 167,684 OPERATING EXPENSES: Educational services and facilities 32,748 17.6 % 27,269 16.3 % General and administrative 100,588 53.9 % 101,332 60.4 % Depreciation and amortization 4,369 2.3 % 4,909 2.9 % Asset impairment 765 0.4 % 228 0.1 % Total operating expenses 138,470 74.2 % 133,738 79.8 % Operating income 48,094 25.8 % 33,946 20.2 % OTHER INCOME: Interest income 4,531 2.4 % 1,094 0.7 % Interest expense (96 ) -0.1 % (99 ) -0.1 % Miscellaneous income (expense) 22,074 11.8 % (226 ) -0.1 % Total other income 26,509 14.2 % 769 0.5 % PRETAX INCOME 74,603 40.0 % 34,715 20.7 % Provision for income taxes 19,930 10.7 % 8,948 5.3 % NET INCOME 54,673 29.3 % 25,767 15.4 % NET INCOME PER SHARE - BASIC: $ 0.81 $ 0.38 NET INCOME PER SHARE -DILUTED: $ 0.80 $ 0.37 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 67,421 68,341 Diluted 68,533 69,182 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Quarter Ended June 30, (In Thousands) 2023 2022 NET INCOME $ 54,673 $ 25,767 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments (3 ) (164 ) Unrealized loss on investments (1,497 ) (1,469 ) Total other comprehensive loss (1,500 ) (1,633 ) COMPREHENSIVE INCOME $ 53,173 $ 24,134 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Year to Date Ended June 30, 2023 % of Total Revenue 2022 % of Total Revenue REVENUE: Tuition and fees, net $ 377,839 98.9 % $ 347,223 99.0 % Other 4,323 1.1 % 3,420 1.0 % Total revenue 382,162 350,643 OPERATING EXPENSES: Educational services and facilities 66,599 17.4 % 55,357 15.8 % General and administrative 213,274 55.8 % 207,628 59.2 % Depreciation and amortization 9,524 2.5 % 9,791 2.8 % Asset impairment 1,335 0.3 % 228 0.1 % Total operating expenses 290,732 76.1 % 273,004 77.9 % Operating income 91,430 23.9 % 77,639 22.1 % OTHER INCOME: Interest income 8,349 2.2 % 1,427 0.4 % Interest expense (191 ) 0.0 % (202 ) -0.1 % Miscellaneous income (expense) 22,068 5.8 % (315 ) -0.1 % Total other income 30,226 7.9 % 910 0.3 % PRETAX INCOME 121,656 31.8 % 78,549 22.4 % Provision for income taxes 32,499 8.5 % 20,704 5.9 % NET INCOME 89,157 23.3 % 57,845 16.5 % NET INCOME PER SHARE - BASIC: $ 1.32 $ 0.84 NET INCOME PER SHARE -DILUTED: $ 1.30 $ 0.83 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 67,328 68,542 Diluted 68,512 69,376 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year to Date Ended June 30, (In Thousands) 2023 2022 NET INCOME $ 89,157 $ 57,845 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments 23 (245 ) Unrealized loss on investments (197 ) (2,833 ) Total other comprehensive loss (174 ) (3,078 ) COMPREHENSIVE INCOME $ 88,983 $ 54,767 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year to Date Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 89,157 $ 57,845 Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment 1,335 228 Gain on sale of asset (22,086 ) - Depreciation and amortization expense 9,524 9,791 Bad debt expense 18,927 24,379 Compensation expense related to share-based awards 4,315 4,316 Deferred income taxes 2,975 (557 ) Changes in operating assets and liabilities (37,927 ) (41,223 ) Net cash provided by operating activities 66,220 54,779 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (159,183 ) (330,797 ) Sales of available-for-sale investments 132,325 134,964 Purchases of property and equipment (3,612 ) (6,765 ) Business acquisition - (7,000 ) Net cash used in investing activities (30,470 ) (209,598 ) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 313 849 Purchase of treasury stock (2,729 ) (15,670 ) Payments of employee tax associated with stock compensation (2,209 ) (1,612 ) Release of cash held in escrow - (3,986 ) Net cash used in financing activities (4,625 ) (20,419 ) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 31,125 (175,238 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 118,884 325,178 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 150,009 $ 149,940 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Quarter Ended June 30, 2023 (1) 2022 REVENUE: CTU $ 119,292 $ 100,461 AIUS 67,062 66,920 Corporate and Other 210 303 Total $ 186,564 $ 167,684 OPERATING INCOME (LOSS): CTU $ 40,451 $ 33,008 AIUS 17,078 10,733 Corporate and Other (9,435 ) (9,795 ) Total $ 48,094 $ 33,946 OPERATING MARGIN (LOSS): CTU 33.9 % 32.9 % AIUS 25.5 % 16.0 % Corporate and Other NM NM Total 25.8 % 20.2 % (1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Year to Date Ended June 30, 2023 (1) 2022 REVENUE: CTU $ 243,784 $ 213,609 AIUS 137,902 136,452 Corporate and Other 476 582 Total $ 382,162 $ 350,643 OPERATING INCOME (LOSS): CTU $ 84,141 $ 76,034 AIUS 29,081 20,256 Corporate and Other (21,792 ) (18,651 ) Total $ 91,430 $ 77,639 OPERATING MARGIN (LOSS): CTU 34.5 % 35.6 % AIUS 21.1 % 14.8 % Corporate and Other NM NM Total 23.9 % 22.1 % (1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands, unless otherwise noted) For the Quarter Ended June 30, For the Year to Date Ended June 30, ACTUAL ACTUAL Adjusted Operating Income 2023 2022 2023 2022 Operating income $ 48,094 $ 33,946 $ 91,430 $ 77,639 Depreciation and amortization (2) 4,369 4,909 9,524 9,791 Legal fee expense related to certain matters (3) 2,709 3,087 7,328 5,434 Adjusted Operating Income $ 55,172 $ 41,942 $ 108,282 $ 92,864 For the Quarter Ending September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Operating income $38.6M - $40.6M $ 29,324 $137.0M - $144.0M $ 129,637 Depreciation and amortization (2) $4.1M 5,065 $17.6M 19,734 Legal fee expense related to certain matters (3) $0.3M 4,294 $10.4M 14,597 Adjusted Operating Income $43.0M - $45.0M $ 38,683 $165.0M - $172.0M $ 163,968 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) For the Quarter Ended June 30, For the Year to Date Ended June 30, ACTUAL ACTUAL 2023 2022 2023 2022 Reported Earnings Per Diluted Share $ 0.80 $ 0.37 $ 1.30 $ 0.83 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.02 0.07 0.05 Legal fee expense related to certain matters (3) 0.04 0.05 0.11 0.08 Gain on sale of intangible asset (4) (0.32 ) - (0.32 ) - Total pre-tax adjustments $ (0.25 ) $ 0.07 $ (0.14 ) $ 0.13 Tax effect of adjustments (5) 0.06 (0.02 ) 0.03 (0.03 ) Total adjustments after tax (0.19 ) 0.05 (0.11 ) 0.10 Adjusted Earnings Per Diluted Share $ 0.61 $ 0.42 $ 1.19 $ 0.93 For the Quarter Ending September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Reported Earnings Per Diluted Share $0.46 - $0.48 $ 0.32 $1.89 -$1.96 $ 1.39 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.03 0.12 0.11 Legal fee expense related to certain matters (3) - 0.06 0.15 0.21 Gain on sale of intangible asset (4) - - (0.32) - Total pre-tax adjustments $0.03 $ 0.09 (0.05) $ 0.32 Tax effect of adjustments (5) (0.01) (0.02 ) 0.01 (0.08 ) Total adjustments after tax 0.02 0.07 (0.04) 0.24 Adjusted Earnings Per Diluted Share $0.48 - $0.50 $ 0.39 $1.85 - $1.92 $ 1.63 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. The Company believes the items it is adjusting for are not normal operating expenses necessary to run its business. 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 Coding Dojo acquisition as of December 1, 2022 and the CalSouthern acquisition as of July 1, 2022. (2) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with 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) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (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. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803894679/en/Contacts Investors: Alpha IR Group Davis Snyder or Nick Nelson (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 Second Quarter and Year to Date 2023 Results By: Perdoceo Education Corporation via Business Wire August 03, 2023 at 16:15 PM EDT Company Declares Inaugural Quarterly Cash Dividend on Common Stock Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended June 30, 2023. Second Quarter 2023 Results as Compared to Prior Year Quarter Revenue increased 11.3% to $186.6 million, primarily driven by an 18.7% increase at CTU. Operating income increased 41.7% to $48.1 million, while adjusted operating income increased 31.5% to $55.2 million.* Earnings per diluted share were $0.80 as compared to $0.37, while adjusted earnings per diluted share were $0.61 as compared to $0.42.* Total student enrollments at June 30, 2023 decreased by 5.2%. AIUS experienced a 14.2% decrease in total student enrollments while CTU remained relatively flat. Ended the quarter with $578.1 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments. Board of Directors declared inaugural dividend for the second quarter of $0.11 per share payable on September 15, 2023. Year to Date 2023 Results as Compared to Prior Year to Date Revenue increased 9.0% to $382.2 million, primarily driven by a 14.1% increase at CTU. Operating income increased 17.8% to $91.4 million, while adjusted operating income increased 16.6% to $108.3 million.* Earnings per diluted share were $1.30 as compared to $0.83, while adjusted earnings per diluted share were $1.19 as compared to $0.93.* *See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release "Second quarter results came in ahead of our expectations, as we experienced further improvements in student retention and engagement, supported by various operating changes and technology upgrades within our onboarding, academic and student support processes,” said Andrew Hurst, Chief Executive Officer. REVENUE For the quarter ended June 30, 2023, revenue of $186.6 million increased 11.3% compared to revenue of $167.7 million for the prior year quarter. For the year to date ended June 30, 2023, revenue of $382.2 million increased 9.0% compared to revenue of $350.6 million for the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Revenue ($ in thousands) 2023 2022 % Change 2023 2022 % Change CTU $ 119,292 $ 100,461 18.7 % $ 243,784 $ 213,609 14.1 % AIUS 67,062 66,920 0.2 % 137,902 136,452 1.1 % Corporate and Other 210 303 NM 476 582 NM Total $ 186,564 $ 167,684 11.3 % $ 382,162 $ 350,643 9.0 % TOTAL STUDENT ENROLLMENTS As of June 30, 2023, CTU’s total student enrollments decreased 0.4%, while AIUS’ total student enrollments decreased 14.2% as compared to June 30, 2022. At June 30, Total Student Enrollments(1) 2023 2022 % Change CTU 25,900 26,000 -0.4 % AIUS 12,100 14,100 -14.2 % Total 38,000 40,100 -5.2 % (1) Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities. OPERATING INCOME For the quarter ended June 30, 2023, operating income increased by 41.7% to $48.1 million as compared to the prior year quarter. For the year to date ended June 30, 2023, operating income increased by 17.8% to $91.4 million as compared to the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Operating Income ($ in thousands) 2023 2022 % Change 2023 2022 % Change CTU $ 40,451 $ 33,008 22.5 % $ 84,141 $ 76,034 10.7 % AIUS 17,078 10,733 59.1 % 29,081 20,256 43.6 % Corporate and Other (9,435 ) (9,795 ) NM (21,792 ) (18,651 ) NM Total $ 48,094 $ 33,946 41.7 % $ 91,430 $ 77,639 17.8 % 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 June 30, 2023, adjusted operating income of $55.2 million increased 31.5% compared to adjusted operating income of $41.9 million for the prior year quarter. For the year to date ended June 30, 2023, adjusted operating income of $108.3 million increased 16.6% compared to adjusted operating income of $92.9 million for the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Adjusted Operating Income ($ in thousands) 2023 2022 2023 2022 Operating income $ 48,094 $ 33,946 $ 91,430 $ 77,639 Depreciation and amortization (1) 4,369 4,909 9,524 9,791 Legal fee expense related to certain matters (2) 2,709 3,087 7,328 5,434 Adjusted Operating Income $ 55,172 $ 41,942 $ 108,282 $ 92,864 Increase (Decrease) 31.5 % 16.6 % (1) Amortization relates to definite-lived intangible assets associated with acquisitions. (2) 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. NET INCOME AND EARNINGS PER DILUTED SHARE For the quarter ended June 30, 2023, the Company recorded: Net income of $54.7 million compared to $25.8 million for the prior year quarter. Earnings per diluted share of $0.80 compared to $0.37 for the prior year quarter. Adjusted earnings per diluted share of $0.61 compared to $0.42 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 to date ended June 30, 2023, the Company recorded: Net income of $89.2 million compared to $57.8 million for the prior year to date. Earnings per diluted share of $1.30 compared to $0.83 for the prior year to date. Adjusted earnings per diluted share of $1.19 compared to $0.93 for the prior year to date. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the Quarter Ended June 30, For the Year to Date Ended June 30, 2023 2022 2023 2022 Reported Earnings Per Diluted Share $ 0.80 $ 0.37 $ 1.30 $ 0.83 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.03 0.02 0.07 0.05 Legal fee expense related to certain matters (2) 0.04 0.05 0.11 0.08 Gain on sale of intangible asset (3) (0.32 ) - (0.32 ) - Tax effect of adjustments (4) 0.06 (0.02 ) 0.03 (0.03 ) Adjusted Earnings Per Diluted Share $ 0.61 $ 0.42 $ 1.19 $ 0.93 (1) Amortization relates to definite-lived intangible assets associated with 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) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (4) 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. INAUGURAL QUARTERLY DIVIDEND PAYMENT The Company today announced that its board of directors has adopted a dividend policy. Pursuant to this policy, the board of directors intends to pay quarterly dividends, commencing with the Company’s quarter ended June 30, 2023. The board of directors declared the first quarterly dividend as part of the dividend policy of $0.11 per share, which will be paid on September 15, 2023 for holders of record of common stock as of September 1, 2023. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company’s available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral part of its balanced capital allocation strategy while also prioritizing investments in organic projects, in particularly technology-related initiatives designed to benefit students and maintaining a strong balance sheet. BALANCE SHEET AND CASH FLOW For the quarter ended June 30, 2023 net cash provided by operating activities was $61.6 million, compared to net cash provided by operating activities of $32.6 million for the prior year quarter. For the year to date ended June 30, 2023, net cash provided by operating activities was $66.2 million, compared to net cash provided by operating activities of $54.8 million in the prior year to date. As of June 30, 2023 and December 31, 2022, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $578.1 million and $518.2 million, respectively. The Company’s stock repurchase program, which was set to expire on September 30, 2023, has been extended to September 30, 2024. As of June 30, 2023, approximately $24.1 million was available under the stock repurchase program to repurchase outstanding shares of common stock. For the Quarter Ended June 30, For the Year to Date Ended June 30, Selected Cash Flow Items ($ in thousands) 2023 2022 % Change 2023 2022 % Change Net cash provided by operating activities $ 61,648 $ 32,625 89.0 % $ 66,220 $ 54,779 20.9 % Capital expenditures $ 1,687 $ 2,023 -16.6 % $ 3,612 $ 6,765 -46.6 % OUTLOOK The Company is providing the following third quarter outlook along with a full year 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 September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Operating Income $38.6M - $40.6M $29,324 $137.0M - $144.0M $129,637 Depreciation and amortization $4.1M $5,065 $17.6M 19,734 Legal fee expense related to certain matters (1) $0.3M $4,294 $10.4M 14,597 Adjusted Operating Income $43.0M - $45.0M $38,683 $165.0M - $172.0M $163,968 Earnings Per Diluted Share $0.46 - $0.48 $0.32 $1.89 - $1.96 $1.39 Amortization of acquired intangible assets $0.03 $0.03 $0.12 $0.11 Legal fee expense related to certain matters (1) - $0.06 $0.15 $0.21 Gain on sale of intangible asset - - ($0.32) - Tax effect of adjustments ($0.01) ($0.02) $0.01 ($0.08) Adjusted Earnings Per Diluted Share $0.48 - $0.50 $0.39 $1.85 - $1.92 $1.63 (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, which is the most directly comparable GAAP measure to adjusted 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 2023 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and trends in student retention and engagement remain consistent with management’s estimates, (ii) no significant impact of new or proposed regulations, including recent Department negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, which may require further operational changes in the way the Company’s academic institutions enroll, support and educate current and prospective students, among other impacts, (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) the impact from student aid initiatives implemented by the current administration remains consistent with management's estimates, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 28% for the third quarter and 27% for the full year, and (vi) excludes any future impact from the Company’s stock repurchase program. 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, August 3, 2023 at 5:30 p.m. Eastern time to discuss second quarter and year to date 2023 results and outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-888-210-4659 (domestic) or 1-646-960-0383 (international). Both dial-in numbers will use the access code 3224322. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/519983953. 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 at www.perdoceoed.com in the Investor Relations section of the website. ABOUT PERDOCEO EDUCATION CORPORATION Perdoceo’s accredited 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 academic 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 seeking and professional development programs. Perdoceo’s academic institutions 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 serve and educate students while enhancing overall learning and academic experiences. 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; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; 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; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. 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, 2022 and its subsequent filings with the Securities and Exchange Commission. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2023 2022 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents, unrestricted $ 140,533 $ 109,408 Restricted cash 9,476 9,476 Short-term investments 428,104 399,315 Total cash and cash equivalents, restricted cash and short-term investments 578,113 518,199 Student receivables, net 42,322 42,551 Receivables, other 6,896 3,457 Prepaid expenses 12,524 8,411 Inventories 2,875 1,904 Other current assets 664 597 Total current assets 643,394 575,119 NON-CURRENT ASSETS: Property and equipment, net 24,257 26,038 Right of use asset, net 23,105 26,156 Goodwill 244,114 243,540 Intangible assets, net 49,089 53,564 Student receivables, net 1,184 1,850 Deferred income tax assets, net 21,638 24,613 Other assets 6,889 6,488 TOTAL ASSETS $ 1,013,670 $ 957,368 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Lease liability - operating $ 5,695 $ 6,555 Accounts payable 15,361 13,518 Accrued expenses: Payroll and related benefits 27,291 40,306 Advertising and marketing costs 6,385 8,977 Income taxes 16,041 7,814 Other 23,008 14,621 Deferred revenue 66,914 71,590 Total current liabilities 160,695 163,381 NON-CURRENT LIABILITIES: Lease liability - operating 24,357 27,286 Other liabilities 36,186 40,856 Total non-current liabilities 60,543 68,142 STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 900 894 Additional paid-in capital 688,805 684,183 Accumulated other comprehensive loss (5,621 ) (5,447 ) Retained earnings 436,996 347,839 Treasury stock (328,648 ) (301,624 ) Total stockholders' equity 792,432 725,845 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,013,670 $ 957,368 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Quarter Ended June 30, 2023 % of Total Revenue 2022 % of Total Revenue REVENUE: Tuition and fees, net $ 184,520 98.9 % $ 165,896 98.9 % Other 2,044 1.1 % 1,788 1.1 % Total revenue 186,564 167,684 OPERATING EXPENSES: Educational services and facilities 32,748 17.6 % 27,269 16.3 % General and administrative 100,588 53.9 % 101,332 60.4 % Depreciation and amortization 4,369 2.3 % 4,909 2.9 % Asset impairment 765 0.4 % 228 0.1 % Total operating expenses 138,470 74.2 % 133,738 79.8 % Operating income 48,094 25.8 % 33,946 20.2 % OTHER INCOME: Interest income 4,531 2.4 % 1,094 0.7 % Interest expense (96 ) -0.1 % (99 ) -0.1 % Miscellaneous income (expense) 22,074 11.8 % (226 ) -0.1 % Total other income 26,509 14.2 % 769 0.5 % PRETAX INCOME 74,603 40.0 % 34,715 20.7 % Provision for income taxes 19,930 10.7 % 8,948 5.3 % NET INCOME 54,673 29.3 % 25,767 15.4 % NET INCOME PER SHARE - BASIC: $ 0.81 $ 0.38 NET INCOME PER SHARE -DILUTED: $ 0.80 $ 0.37 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 67,421 68,341 Diluted 68,533 69,182 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Quarter Ended June 30, (In Thousands) 2023 2022 NET INCOME $ 54,673 $ 25,767 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments (3 ) (164 ) Unrealized loss on investments (1,497 ) (1,469 ) Total other comprehensive loss (1,500 ) (1,633 ) COMPREHENSIVE INCOME $ 53,173 $ 24,134 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Year to Date Ended June 30, 2023 % of Total Revenue 2022 % of Total Revenue REVENUE: Tuition and fees, net $ 377,839 98.9 % $ 347,223 99.0 % Other 4,323 1.1 % 3,420 1.0 % Total revenue 382,162 350,643 OPERATING EXPENSES: Educational services and facilities 66,599 17.4 % 55,357 15.8 % General and administrative 213,274 55.8 % 207,628 59.2 % Depreciation and amortization 9,524 2.5 % 9,791 2.8 % Asset impairment 1,335 0.3 % 228 0.1 % Total operating expenses 290,732 76.1 % 273,004 77.9 % Operating income 91,430 23.9 % 77,639 22.1 % OTHER INCOME: Interest income 8,349 2.2 % 1,427 0.4 % Interest expense (191 ) 0.0 % (202 ) -0.1 % Miscellaneous income (expense) 22,068 5.8 % (315 ) -0.1 % Total other income 30,226 7.9 % 910 0.3 % PRETAX INCOME 121,656 31.8 % 78,549 22.4 % Provision for income taxes 32,499 8.5 % 20,704 5.9 % NET INCOME 89,157 23.3 % 57,845 16.5 % NET INCOME PER SHARE - BASIC: $ 1.32 $ 0.84 NET INCOME PER SHARE -DILUTED: $ 1.30 $ 0.83 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 67,328 68,542 Diluted 68,512 69,376 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year to Date Ended June 30, (In Thousands) 2023 2022 NET INCOME $ 89,157 $ 57,845 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments 23 (245 ) Unrealized loss on investments (197 ) (2,833 ) Total other comprehensive loss (174 ) (3,078 ) COMPREHENSIVE INCOME $ 88,983 $ 54,767 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year to Date Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 89,157 $ 57,845 Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment 1,335 228 Gain on sale of asset (22,086 ) - Depreciation and amortization expense 9,524 9,791 Bad debt expense 18,927 24,379 Compensation expense related to share-based awards 4,315 4,316 Deferred income taxes 2,975 (557 ) Changes in operating assets and liabilities (37,927 ) (41,223 ) Net cash provided by operating activities 66,220 54,779 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (159,183 ) (330,797 ) Sales of available-for-sale investments 132,325 134,964 Purchases of property and equipment (3,612 ) (6,765 ) Business acquisition - (7,000 ) Net cash used in investing activities (30,470 ) (209,598 ) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 313 849 Purchase of treasury stock (2,729 ) (15,670 ) Payments of employee tax associated with stock compensation (2,209 ) (1,612 ) Release of cash held in escrow - (3,986 ) Net cash used in financing activities (4,625 ) (20,419 ) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 31,125 (175,238 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 118,884 325,178 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 150,009 $ 149,940 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Quarter Ended June 30, 2023 (1) 2022 REVENUE: CTU $ 119,292 $ 100,461 AIUS 67,062 66,920 Corporate and Other 210 303 Total $ 186,564 $ 167,684 OPERATING INCOME (LOSS): CTU $ 40,451 $ 33,008 AIUS 17,078 10,733 Corporate and Other (9,435 ) (9,795 ) Total $ 48,094 $ 33,946 OPERATING MARGIN (LOSS): CTU 33.9 % 32.9 % AIUS 25.5 % 16.0 % Corporate and Other NM NM Total 25.8 % 20.2 % (1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Year to Date Ended June 30, 2023 (1) 2022 REVENUE: CTU $ 243,784 $ 213,609 AIUS 137,902 136,452 Corporate and Other 476 582 Total $ 382,162 $ 350,643 OPERATING INCOME (LOSS): CTU $ 84,141 $ 76,034 AIUS 29,081 20,256 Corporate and Other (21,792 ) (18,651 ) Total $ 91,430 $ 77,639 OPERATING MARGIN (LOSS): CTU 34.5 % 35.6 % AIUS 21.1 % 14.8 % Corporate and Other NM NM Total 23.9 % 22.1 % (1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands, unless otherwise noted) For the Quarter Ended June 30, For the Year to Date Ended June 30, ACTUAL ACTUAL Adjusted Operating Income 2023 2022 2023 2022 Operating income $ 48,094 $ 33,946 $ 91,430 $ 77,639 Depreciation and amortization (2) 4,369 4,909 9,524 9,791 Legal fee expense related to certain matters (3) 2,709 3,087 7,328 5,434 Adjusted Operating Income $ 55,172 $ 41,942 $ 108,282 $ 92,864 For the Quarter Ending September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Operating income $38.6M - $40.6M $ 29,324 $137.0M - $144.0M $ 129,637 Depreciation and amortization (2) $4.1M 5,065 $17.6M 19,734 Legal fee expense related to certain matters (3) $0.3M 4,294 $10.4M 14,597 Adjusted Operating Income $43.0M - $45.0M $ 38,683 $165.0M - $172.0M $ 163,968 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) For the Quarter Ended June 30, For the Year to Date Ended June 30, ACTUAL ACTUAL 2023 2022 2023 2022 Reported Earnings Per Diluted Share $ 0.80 $ 0.37 $ 1.30 $ 0.83 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.02 0.07 0.05 Legal fee expense related to certain matters (3) 0.04 0.05 0.11 0.08 Gain on sale of intangible asset (4) (0.32 ) - (0.32 ) - Total pre-tax adjustments $ (0.25 ) $ 0.07 $ (0.14 ) $ 0.13 Tax effect of adjustments (5) 0.06 (0.02 ) 0.03 (0.03 ) Total adjustments after tax (0.19 ) 0.05 (0.11 ) 0.10 Adjusted Earnings Per Diluted Share $ 0.61 $ 0.42 $ 1.19 $ 0.93 For the Quarter Ending September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Reported Earnings Per Diluted Share $0.46 - $0.48 $ 0.32 $1.89 -$1.96 $ 1.39 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.03 0.12 0.11 Legal fee expense related to certain matters (3) - 0.06 0.15 0.21 Gain on sale of intangible asset (4) - - (0.32) - Total pre-tax adjustments $0.03 $ 0.09 (0.05) $ 0.32 Tax effect of adjustments (5) (0.01) (0.02 ) 0.01 (0.08 ) Total adjustments after tax 0.02 0.07 (0.04) 0.24 Adjusted Earnings Per Diluted Share $0.48 - $0.50 $ 0.39 $1.85 - $1.92 $ 1.63 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. The Company believes the items it is adjusting for are not normal operating expenses necessary to run its business. 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 Coding Dojo acquisition as of December 1, 2022 and the CalSouthern acquisition as of July 1, 2022. (2) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with 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) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (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. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803894679/en/Contacts Investors: Alpha IR Group Davis Snyder or Nick Nelson (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 to date ended June 30, 2023. Second Quarter 2023 Results as Compared to Prior Year Quarter Revenue increased 11.3% to $186.6 million, primarily driven by an 18.7% increase at CTU. Operating income increased 41.7% to $48.1 million, while adjusted operating income increased 31.5% to $55.2 million.* Earnings per diluted share were $0.80 as compared to $0.37, while adjusted earnings per diluted share were $0.61 as compared to $0.42.* Total student enrollments at June 30, 2023 decreased by 5.2%. AIUS experienced a 14.2% decrease in total student enrollments while CTU remained relatively flat. Ended the quarter with $578.1 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments. Board of Directors declared inaugural dividend for the second quarter of $0.11 per share payable on September 15, 2023. Year to Date 2023 Results as Compared to Prior Year to Date Revenue increased 9.0% to $382.2 million, primarily driven by a 14.1% increase at CTU. Operating income increased 17.8% to $91.4 million, while adjusted operating income increased 16.6% to $108.3 million.* Earnings per diluted share were $1.30 as compared to $0.83, while adjusted earnings per diluted share were $1.19 as compared to $0.93.* *See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release "Second quarter results came in ahead of our expectations, as we experienced further improvements in student retention and engagement, supported by various operating changes and technology upgrades within our onboarding, academic and student support processes,” said Andrew Hurst, Chief Executive Officer. REVENUE For the quarter ended June 30, 2023, revenue of $186.6 million increased 11.3% compared to revenue of $167.7 million for the prior year quarter. For the year to date ended June 30, 2023, revenue of $382.2 million increased 9.0% compared to revenue of $350.6 million for the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Revenue ($ in thousands) 2023 2022 % Change 2023 2022 % Change CTU $ 119,292 $ 100,461 18.7 % $ 243,784 $ 213,609 14.1 % AIUS 67,062 66,920 0.2 % 137,902 136,452 1.1 % Corporate and Other 210 303 NM 476 582 NM Total $ 186,564 $ 167,684 11.3 % $ 382,162 $ 350,643 9.0 % TOTAL STUDENT ENROLLMENTS As of June 30, 2023, CTU’s total student enrollments decreased 0.4%, while AIUS’ total student enrollments decreased 14.2% as compared to June 30, 2022. At June 30, Total Student Enrollments(1) 2023 2022 % Change CTU 25,900 26,000 -0.4 % AIUS 12,100 14,100 -14.2 % Total 38,000 40,100 -5.2 % (1) Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities. OPERATING INCOME For the quarter ended June 30, 2023, operating income increased by 41.7% to $48.1 million as compared to the prior year quarter. For the year to date ended June 30, 2023, operating income increased by 17.8% to $91.4 million as compared to the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Operating Income ($ in thousands) 2023 2022 % Change 2023 2022 % Change CTU $ 40,451 $ 33,008 22.5 % $ 84,141 $ 76,034 10.7 % AIUS 17,078 10,733 59.1 % 29,081 20,256 43.6 % Corporate and Other (9,435 ) (9,795 ) NM (21,792 ) (18,651 ) NM Total $ 48,094 $ 33,946 41.7 % $ 91,430 $ 77,639 17.8 % 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 June 30, 2023, adjusted operating income of $55.2 million increased 31.5% compared to adjusted operating income of $41.9 million for the prior year quarter. For the year to date ended June 30, 2023, adjusted operating income of $108.3 million increased 16.6% compared to adjusted operating income of $92.9 million for the prior year to date. For the Quarter Ended June 30, For the Year to Date Ended June 30, Adjusted Operating Income ($ in thousands) 2023 2022 2023 2022 Operating income $ 48,094 $ 33,946 $ 91,430 $ 77,639 Depreciation and amortization (1) 4,369 4,909 9,524 9,791 Legal fee expense related to certain matters (2) 2,709 3,087 7,328 5,434 Adjusted Operating Income $ 55,172 $ 41,942 $ 108,282 $ 92,864 Increase (Decrease) 31.5 % 16.6 % (1) Amortization relates to definite-lived intangible assets associated with acquisitions. (2) 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. NET INCOME AND EARNINGS PER DILUTED SHARE For the quarter ended June 30, 2023, the Company recorded: Net income of $54.7 million compared to $25.8 million for the prior year quarter. Earnings per diluted share of $0.80 compared to $0.37 for the prior year quarter. Adjusted earnings per diluted share of $0.61 compared to $0.42 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 to date ended June 30, 2023, the Company recorded: Net income of $89.2 million compared to $57.8 million for the prior year to date. Earnings per diluted share of $1.30 compared to $0.83 for the prior year to date. Adjusted earnings per diluted share of $1.19 compared to $0.93 for the prior year to date. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.) For the Quarter Ended June 30, For the Year to Date Ended June 30, 2023 2022 2023 2022 Reported Earnings Per Diluted Share $ 0.80 $ 0.37 $ 1.30 $ 0.83 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.03 0.02 0.07 0.05 Legal fee expense related to certain matters (2) 0.04 0.05 0.11 0.08 Gain on sale of intangible asset (3) (0.32 ) - (0.32 ) - Tax effect of adjustments (4) 0.06 (0.02 ) 0.03 (0.03 ) Adjusted Earnings Per Diluted Share $ 0.61 $ 0.42 $ 1.19 $ 0.93 (1) Amortization relates to definite-lived intangible assets associated with 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) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (4) 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. INAUGURAL QUARTERLY DIVIDEND PAYMENT The Company today announced that its board of directors has adopted a dividend policy. Pursuant to this policy, the board of directors intends to pay quarterly dividends, commencing with the Company’s quarter ended June 30, 2023. The board of directors declared the first quarterly dividend as part of the dividend policy of $0.11 per share, which will be paid on September 15, 2023 for holders of record of common stock as of September 1, 2023. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company’s available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral part of its balanced capital allocation strategy while also prioritizing investments in organic projects, in particularly technology-related initiatives designed to benefit students and maintaining a strong balance sheet. BALANCE SHEET AND CASH FLOW For the quarter ended June 30, 2023 net cash provided by operating activities was $61.6 million, compared to net cash provided by operating activities of $32.6 million for the prior year quarter. For the year to date ended June 30, 2023, net cash provided by operating activities was $66.2 million, compared to net cash provided by operating activities of $54.8 million in the prior year to date. As of June 30, 2023 and December 31, 2022, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $578.1 million and $518.2 million, respectively. The Company’s stock repurchase program, which was set to expire on September 30, 2023, has been extended to September 30, 2024. As of June 30, 2023, approximately $24.1 million was available under the stock repurchase program to repurchase outstanding shares of common stock. For the Quarter Ended June 30, For the Year to Date Ended June 30, Selected Cash Flow Items ($ in thousands) 2023 2022 % Change 2023 2022 % Change Net cash provided by operating activities $ 61,648 $ 32,625 89.0 % $ 66,220 $ 54,779 20.9 % Capital expenditures $ 1,687 $ 2,023 -16.6 % $ 3,612 $ 6,765 -46.6 % OUTLOOK The Company is providing the following third quarter outlook along with a full year 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 September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Operating Income $38.6M - $40.6M $29,324 $137.0M - $144.0M $129,637 Depreciation and amortization $4.1M $5,065 $17.6M 19,734 Legal fee expense related to certain matters (1) $0.3M $4,294 $10.4M 14,597 Adjusted Operating Income $43.0M - $45.0M $38,683 $165.0M - $172.0M $163,968 Earnings Per Diluted Share $0.46 - $0.48 $0.32 $1.89 - $1.96 $1.39 Amortization of acquired intangible assets $0.03 $0.03 $0.12 $0.11 Legal fee expense related to certain matters (1) - $0.06 $0.15 $0.21 Gain on sale of intangible asset - - ($0.32) - Tax effect of adjustments ($0.01) ($0.02) $0.01 ($0.08) Adjusted Earnings Per Diluted Share $0.48 - $0.50 $0.39 $1.85 - $1.92 $1.63 (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, which is the most directly comparable GAAP measure to adjusted 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 2023 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and trends in student retention and engagement remain consistent with management’s estimates, (ii) no significant impact of new or proposed regulations, including recent Department negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, which may require further operational changes in the way the Company’s academic institutions enroll, support and educate current and prospective students, among other impacts, (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) the impact from student aid initiatives implemented by the current administration remains consistent with management's estimates, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 28% for the third quarter and 27% for the full year, and (vi) excludes any future impact from the Company’s stock repurchase program. 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, August 3, 2023 at 5:30 p.m. Eastern time to discuss second quarter and year to date 2023 results and outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-888-210-4659 (domestic) or 1-646-960-0383 (international). Both dial-in numbers will use the access code 3224322. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/519983953. 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 at www.perdoceoed.com in the Investor Relations section of the website. ABOUT PERDOCEO EDUCATION CORPORATION Perdoceo’s accredited 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 academic 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 seeking and professional development programs. Perdoceo’s academic institutions 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 serve and educate students while enhancing overall learning and academic experiences. 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; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; 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; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. 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, 2022 and its subsequent filings with the Securities and Exchange Commission. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2023 2022 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents, unrestricted $ 140,533 $ 109,408 Restricted cash 9,476 9,476 Short-term investments 428,104 399,315 Total cash and cash equivalents, restricted cash and short-term investments 578,113 518,199 Student receivables, net 42,322 42,551 Receivables, other 6,896 3,457 Prepaid expenses 12,524 8,411 Inventories 2,875 1,904 Other current assets 664 597 Total current assets 643,394 575,119 NON-CURRENT ASSETS: Property and equipment, net 24,257 26,038 Right of use asset, net 23,105 26,156 Goodwill 244,114 243,540 Intangible assets, net 49,089 53,564 Student receivables, net 1,184 1,850 Deferred income tax assets, net 21,638 24,613 Other assets 6,889 6,488 TOTAL ASSETS $ 1,013,670 $ 957,368 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Lease liability - operating $ 5,695 $ 6,555 Accounts payable 15,361 13,518 Accrued expenses: Payroll and related benefits 27,291 40,306 Advertising and marketing costs 6,385 8,977 Income taxes 16,041 7,814 Other 23,008 14,621 Deferred revenue 66,914 71,590 Total current liabilities 160,695 163,381 NON-CURRENT LIABILITIES: Lease liability - operating 24,357 27,286 Other liabilities 36,186 40,856 Total non-current liabilities 60,543 68,142 STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 900 894 Additional paid-in capital 688,805 684,183 Accumulated other comprehensive loss (5,621 ) (5,447 ) Retained earnings 436,996 347,839 Treasury stock (328,648 ) (301,624 ) Total stockholders' equity 792,432 725,845 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,013,670 $ 957,368 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Quarter Ended June 30, 2023 % of Total Revenue 2022 % of Total Revenue REVENUE: Tuition and fees, net $ 184,520 98.9 % $ 165,896 98.9 % Other 2,044 1.1 % 1,788 1.1 % Total revenue 186,564 167,684 OPERATING EXPENSES: Educational services and facilities 32,748 17.6 % 27,269 16.3 % General and administrative 100,588 53.9 % 101,332 60.4 % Depreciation and amortization 4,369 2.3 % 4,909 2.9 % Asset impairment 765 0.4 % 228 0.1 % Total operating expenses 138,470 74.2 % 133,738 79.8 % Operating income 48,094 25.8 % 33,946 20.2 % OTHER INCOME: Interest income 4,531 2.4 % 1,094 0.7 % Interest expense (96 ) -0.1 % (99 ) -0.1 % Miscellaneous income (expense) 22,074 11.8 % (226 ) -0.1 % Total other income 26,509 14.2 % 769 0.5 % PRETAX INCOME 74,603 40.0 % 34,715 20.7 % Provision for income taxes 19,930 10.7 % 8,948 5.3 % NET INCOME 54,673 29.3 % 25,767 15.4 % NET INCOME PER SHARE - BASIC: $ 0.81 $ 0.38 NET INCOME PER SHARE -DILUTED: $ 0.80 $ 0.37 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 67,421 68,341 Diluted 68,533 69,182 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Quarter Ended June 30, (In Thousands) 2023 2022 NET INCOME $ 54,673 $ 25,767 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments (3 ) (164 ) Unrealized loss on investments (1,497 ) (1,469 ) Total other comprehensive loss (1,500 ) (1,633 ) COMPREHENSIVE INCOME $ 53,173 $ 24,134 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages) For the Year to Date Ended June 30, 2023 % of Total Revenue 2022 % of Total Revenue REVENUE: Tuition and fees, net $ 377,839 98.9 % $ 347,223 99.0 % Other 4,323 1.1 % 3,420 1.0 % Total revenue 382,162 350,643 OPERATING EXPENSES: Educational services and facilities 66,599 17.4 % 55,357 15.8 % General and administrative 213,274 55.8 % 207,628 59.2 % Depreciation and amortization 9,524 2.5 % 9,791 2.8 % Asset impairment 1,335 0.3 % 228 0.1 % Total operating expenses 290,732 76.1 % 273,004 77.9 % Operating income 91,430 23.9 % 77,639 22.1 % OTHER INCOME: Interest income 8,349 2.2 % 1,427 0.4 % Interest expense (191 ) 0.0 % (202 ) -0.1 % Miscellaneous income (expense) 22,068 5.8 % (315 ) -0.1 % Total other income 30,226 7.9 % 910 0.3 % PRETAX INCOME 121,656 31.8 % 78,549 22.4 % Provision for income taxes 32,499 8.5 % 20,704 5.9 % NET INCOME 89,157 23.3 % 57,845 16.5 % NET INCOME PER SHARE - BASIC: $ 1.32 $ 0.84 NET INCOME PER SHARE -DILUTED: $ 1.30 $ 0.83 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 67,328 68,542 Diluted 68,512 69,376 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year to Date Ended June 30, (In Thousands) 2023 2022 NET INCOME $ 89,157 $ 57,845 OTHER COMPREHENSIVE LOSS, net of tax: Foreign currency translation adjustments 23 (245 ) Unrealized loss on investments (197 ) (2,833 ) Total other comprehensive loss (174 ) (3,078 ) COMPREHENSIVE INCOME $ 88,983 $ 54,767 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year to Date Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 89,157 $ 57,845 Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment 1,335 228 Gain on sale of asset (22,086 ) - Depreciation and amortization expense 9,524 9,791 Bad debt expense 18,927 24,379 Compensation expense related to share-based awards 4,315 4,316 Deferred income taxes 2,975 (557 ) Changes in operating assets and liabilities (37,927 ) (41,223 ) Net cash provided by operating activities 66,220 54,779 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (159,183 ) (330,797 ) Sales of available-for-sale investments 132,325 134,964 Purchases of property and equipment (3,612 ) (6,765 ) Business acquisition - (7,000 ) Net cash used in investing activities (30,470 ) (209,598 ) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 313 849 Purchase of treasury stock (2,729 ) (15,670 ) Payments of employee tax associated with stock compensation (2,209 ) (1,612 ) Release of cash held in escrow - (3,986 ) Net cash used in financing activities (4,625 ) (20,419 ) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 31,125 (175,238 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 118,884 325,178 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 150,009 $ 149,940 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Quarter Ended June 30, 2023 (1) 2022 REVENUE: CTU $ 119,292 $ 100,461 AIUS 67,062 66,920 Corporate and Other 210 303 Total $ 186,564 $ 167,684 OPERATING INCOME (LOSS): CTU $ 40,451 $ 33,008 AIUS 17,078 10,733 Corporate and Other (9,435 ) (9,795 ) Total $ 48,094 $ 33,946 OPERATING MARGIN (LOSS): CTU 33.9 % 32.9 % AIUS 25.5 % 16.0 % Corporate and Other NM NM Total 25.8 % 20.2 % (1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages) For the Year to Date Ended June 30, 2023 (1) 2022 REVENUE: CTU $ 243,784 $ 213,609 AIUS 137,902 136,452 Corporate and Other 476 582 Total $ 382,162 $ 350,643 OPERATING INCOME (LOSS): CTU $ 84,141 $ 76,034 AIUS 29,081 20,256 Corporate and Other (21,792 ) (18,651 ) Total $ 91,430 $ 77,639 OPERATING MARGIN (LOSS): CTU 34.5 % 35.6 % AIUS 21.1 % 14.8 % Corporate and Other NM NM Total 23.9 % 22.1 % (1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS. PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands, unless otherwise noted) For the Quarter Ended June 30, For the Year to Date Ended June 30, ACTUAL ACTUAL Adjusted Operating Income 2023 2022 2023 2022 Operating income $ 48,094 $ 33,946 $ 91,430 $ 77,639 Depreciation and amortization (2) 4,369 4,909 9,524 9,791 Legal fee expense related to certain matters (3) 2,709 3,087 7,328 5,434 Adjusted Operating Income $ 55,172 $ 41,942 $ 108,282 $ 92,864 For the Quarter Ending September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Operating income $38.6M - $40.6M $ 29,324 $137.0M - $144.0M $ 129,637 Depreciation and amortization (2) $4.1M 5,065 $17.6M 19,734 Legal fee expense related to certain matters (3) $0.3M 4,294 $10.4M 14,597 Adjusted Operating Income $43.0M - $45.0M $ 38,683 $165.0M - $172.0M $ 163,968 PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d) For the Quarter Ended June 30, For the Year to Date Ended June 30, ACTUAL ACTUAL 2023 2022 2023 2022 Reported Earnings Per Diluted Share $ 0.80 $ 0.37 $ 1.30 $ 0.83 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.02 0.07 0.05 Legal fee expense related to certain matters (3) 0.04 0.05 0.11 0.08 Gain on sale of intangible asset (4) (0.32 ) - (0.32 ) - Total pre-tax adjustments $ (0.25 ) $ 0.07 $ (0.14 ) $ 0.13 Tax effect of adjustments (5) 0.06 (0.02 ) 0.03 (0.03 ) Total adjustments after tax (0.19 ) 0.05 (0.11 ) 0.10 Adjusted Earnings Per Diluted Share $ 0.61 $ 0.42 $ 1.19 $ 0.93 For the Quarter Ending September 30, For the Year Ending December 31, OUTLOOK ACTUAL OUTLOOK ACTUAL 2023 2022 2023 2022 Reported Earnings Per Diluted Share $0.46 - $0.48 $ 0.32 $1.89 -$1.96 $ 1.39 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (2) 0.03 0.03 0.12 0.11 Legal fee expense related to certain matters (3) - 0.06 0.15 0.21 Gain on sale of intangible asset (4) - - (0.32) - Total pre-tax adjustments $0.03 $ 0.09 (0.05) $ 0.32 Tax effect of adjustments (5) (0.01) (0.02 ) 0.01 (0.08 ) Total adjustments after tax 0.02 0.07 (0.04) 0.24 Adjusted Earnings Per Diluted Share $0.48 - $0.50 $ 0.39 $1.85 - $1.92 $ 1.63 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. The Company believes the items it is adjusting for are not normal operating expenses necessary to run its business. 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 Coding Dojo acquisition as of December 1, 2022 and the CalSouthern acquisition as of July 1, 2022. (2) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with 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) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (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. 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Investors: Alpha IR Group Davis Snyder or Nick Nelson (312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com