Strayer Education, Inc. (NASDAQ: STRA) today announced financial
results for the period ended September 30, 2016. Financial
highlights are as follows:
Three Months Ended September 30
- Revenues for the three months ended
September 30, 2016 increased 3% to $102.2 million, compared to
$99.1 million for the same period in 2015, principally due to
increased enrollment, partly offset by lower revenue per
student.
- Income from operations was $4.8 million
for the three months ended September 30, 2016 compared to $7.3
million for the same period in 2015, a decrease of 33%. Income from
operations in the third quarter of 2016 and 2015 includes non-cash
adjustments to the Company’s liability for losses on facilities no
longer in use. Excluding these items, income from operations was
$4.6 million and $6.9 million for the third quarter of 2016 and
2015, respectively. Operating margin was 4.7% for the third quarter
compared to 7.3% as reported for the same period in 2015, or 4.5%
for the third quarter of 2016 compared to 6.9% for the same period
in 2015, when excluding the non-cash adjustments.
- Net income was $2.9 million for the
third quarter of 2016 compared to $3.7 million for the same period
in 2015, a decrease of 23%. Excluding non-cash adjustments to the
Company’s liability for losses on facilities no longer in use, net
income was $2.7 million for the third quarter, compared to $3.5
million for the same period in 2015.
- Diluted earnings per share was $0.27,
compared to $0.35 for the same period in 2015, a decrease of 23%.
Excluding non-cash adjustments to the Company’s liability for
losses on facilities no longer in use, diluted earnings per share
was $0.25 for the third quarter compared to $0.32 for the same
period in 2015. Diluted weighted average shares outstanding
increased 1% to 10,828,000 from 10,736,000 for the same period in
2015.
Nine Months Ended September 30
- Revenues for the nine months ended
September 30, 2016 increased to $321.8 million, compared to $320.8
million for the same period in 2015, principally due to increased
enrollment offset by lower revenue per student.
- Income from operations was $37.8
million compared to $48.0 million for the same period in 2015, a
decrease of 21%. Income from operations in the nine months ended
September 30, 2016 and 2015 includes non-cash adjustments to the
Company’s liability for losses on facilities no longer in use.
Excluding these items, income from operations was $35.9 million and
$47.6 million for the nine months ended 2016 and 2015,
respectively. Operating income margin was 11.8% compared to 15.0%
for the same period in 2015, or 11.1% compared to 14.8% for the
same period in 2015, when excluding the non-cash adjustments.
- Net income was $23.1 million compared
to $27.0 million for the same period in 2015, a decrease of 14%.
Excluding non-cash adjustments to the Company’s liability for
losses on facilities no longer in use, net income for the nine
months ended September 30, 2016 was $21.9 million, compared to
$26.7 million for the same period in 2015.
- Diluted earnings per share was $2.14
compared to $2.52 for the same period in 2015, a decrease of 15%.
Excluding non-cash adjustments to the Company’s liability for
losses on facilities no longer in use, diluted earnings per share
was $2.03 compared to $2.49 for the same period in 2015. Diluted
weighted average shares outstanding increased 1% to 10,803,000 from
10,726,000 for the same period in 2015.
Balance Sheet and Cash Flow
At September 30, 2016, the Company had cash and cash equivalents
of $120.5 million. The Company generated $30.1 million in cash from
operating activities in the first nine months of 2016 compared to
$54.5 million during the same period in 2015. Capital expenditures
were $7.5 million for the nine months ended September 30, 2016
compared to $9.6 million for the same period in 2015.
The Company had $70.0 million of share repurchase authorization
remaining at September 30, 2016. No shares were repurchased in the
third quarter of 2016.
For the third quarter of 2016, bad debt expense as a percentage
of revenues was 3.8%, compared to 2.3% for the same period in
2015.
Student Enrollment
Total enrollments at Strayer University for the fall term 2016
increased 6% to 45,509 students compared to 42,975 students for the
fall term 2015. New student enrollments increased by 13%, and
continuing student enrollments increased by 4%.
Jack Welch Management Institute Ranked 22nd by Princeton
Review
On September 20, 2016, the Jack Welch Management Institute
(JWMI) was ranked 22nd in the Princeton Review Top 25 Online MBA
Programs for 2017 for its excellence in five areas of selection
criteria: academics, selectivity, faculty, technical platforms, and
career outcomes. The list is based on both surveys of
administrators and currently enrolled students. The Princeton
Review chose the schools for the list based on its surveys in 2016
of 90 institutions offering online MBAs and of about 3,800 students
enrolled in the online MBAs, plus graduates of the online programs.
Data points were weighted in more than 60 unique fields to tally
the final list. This was the program’s first year under
consideration.
Election of Director
On October 25, 2016, upon the recommendation of the Nominating
and Corporate Governance Committee, the Board of Directors of the
Company unanimously voted to elect Nathaniel Fick to serve as a
Director of the Company and as a member of the Audit Committee. Mr.
Fick is the Chief Executive Officer of Endgame, a technology firm
focusing on cybersecurity. He previously served as a Captain in the
United States Marine Corps leading infantry and reconnaissance
units in combat in Afghanistan and Iraq. His book about that
experience, “One Bullet Away,” was a New York Times bestseller, a
Washington Post “Best Book of the Year,” and one of the Military
Times’ “Best Military Books of the Decade.” Mr. Fick is a graduate
of Dartmouth College, the Harvard Kennedy School, and the Harvard
Business School, and serves as a Trustee of Dartmouth College.
Common Stock and Common Stock Equivalents
At September 30, 2016, the Company had 11,093,958 common shares
issued and outstanding, including 477,569 shares of restricted
stock. The Company also had 250,000 restricted stock units
outstanding, and 100,000 vested stock options outstanding.
Conference Call with Management
Strayer Education, Inc. will host a conference call to discuss
its third quarter 2016 earnings results at 10:00 a.m. (ET) today.
To participate on the live call, investors should dial (877)
303-9047 10 minutes prior to the start time. In addition, the call
will be available via live webcast. To access the live webcast of
the conference call, please go to www.strayereducation.com 15
minutes prior to the start time of the call to register. Following
the call, the webcast will be archived and available at
www.strayereducation.com.
About Strayer Education, Inc.
Strayer Education, Inc. (NASDAQ: STRA) is an education services
holding company that owns Strayer University and the New York Code
and Design Academy. For more information on Strayer Education, Inc.
visit www.strayereducation.com.
About Strayer University
Founded in 1892, Strayer University is a proprietary institution
of higher learning that offers undergraduate and graduate degree
programs in business administration, accounting, information
technology, education, health services administration, nursing,
public administration, and criminal justice, to working adult
students. The University includes Strayer@Work, which serves
corporate clients by delivering the next generation of performance
improvement and workforce development. Strayer University also
offers an executive MBA online and corporate training program
through its Jack Welch Management Institute. Strayer University is
accredited by the Middle States Commission on Higher Education,
3624 Market Street, Philadelphia, PA 19104. (267-284-5000). The
Middle States Commission on Higher Education is an institutional
accrediting agency recognized by the U.S. Secretary of Education
and the Council for Higher Education Accreditation.
For more information on Strayer University visit
www.strayer.edu.
About New York Code and Design Academy
New York Code and Design Academy (NYCDA) is a New York
City-based provider of non-degree web and mobile app development
courses. NYCDA courses are delivered primarily on-ground to
students seeking to further their career in software application
development. NYCDA does not participate in the Federal Title IV
lending program.
For more information on NYCDA visit www.nycda.com.
Forward-Looking Statements
This press release contains statements that are forward-looking
and are made pursuant to the "safe-harbor" provisions of the
Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). Such statements may be identified by the use of words such
as "expect," "estimate," "assume," "believe," "anticipate," "will,"
"forecast," "plan," "project," or similar words. The statements are
based on the Company's current expectations and are subject to a
number of assumptions, uncertainties and risks. In connection with
the safe-harbor provisions of the Reform Act, the Company has
identified important factors that could cause the Company's actual
results to differ materially from those expressed in or implied by
such statements. The assumptions, uncertainties and risks include
the pace of growth of student enrollment, the Company's continued
compliance with Title IV of the Higher Education Act, and the
regulations thereunder, as well as regional accreditation standards
and state regulatory requirements, rulemaking by the Department of
Education and increased focus by the U.S. Congress on for-profit
education institutions, competitive factors, risks associated with
the opening of new campuses, risks associated with the offering of
new educational programs and adapting to other changes, risks
relating to the timing of regulatory approvals, the Company's
ability to implement its growth strategy, risks associated with the
ability of the University's students to finance their education in
a timely manner, and general economic and market conditions.
Further information about these and other relevant risks and
uncertainties may be found in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2015 and in its
subsequent filings with the Securities and Exchange Commission, all
of which are incorporated herein by reference and which are
available from the Commission. The Company undertakes no obligation
to update or revise forward-looking statements.
STRAYER EDUCATION, INC. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands,
except per share data)
For the three months ended
September 30,
For the nine months ended
September 30,
2015 2016 2015 2016
Revenues $ 99,142 $ 102,156 $ 320,777 $ 321,809 Costs and expenses:
Instruction and educational support 55,281 56,295 174,223 176,175
Marketing 21,593 25,388 52,944 61,434 Admissions advisory 4,089
4,691 12,144 13,171 General and administration 10,925
10,952 33,424 33,211 Total costs and expenses
91,888 97,326 272,735 283,991 Income from
operations 7,254 4,830 48,042 37,818 Investment income 44 115 222
327 Interest expense 1,144 161 3,689
481 Income before income taxes 6,154 4,784 44,575 37,664 Provision
for income taxes 2,431 1,906 17,593
14,580 Net income $ 3,723 $ 2,878 $ 26,982 $ 23,084 Earnings
per share: Basic $ 0.35 $ 0.27 $ 2.55 $ 2.18 Diluted $ 0.35 $ 0.27
$ 2.52 $ 2.14 Weighted average shares outstanding: Basic
10,593 10,616 10,586 10,608 Diluted 10,736 10,828 10,726 10,803
STRAYER EDUCATION, INC. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except
share and per share data) December 31,
September 30, 2015 2016 ASSETS Current
assets: Cash and cash equivalents $ 106,889 $ 120,502 Tuition
receivable, net 18,519 18,925 Income taxes receivable — 2,437 Other
current assets 6,944 10,838 Total current assets
132,352 152,702 Property and equipment, net 77,139 71,725 Deferred
income taxes 26,449 27,894 Goodwill 6,800 20,793 Other assets
5,694 13,390 Total assets $ 248,434 $ 286,504
LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable and accrued expenses $ 42,253 $ 44,818 Income
taxes payable 2,684 — Deferred revenue 12,373 16,633 Other current
liabilities 281 203 Total current liabilities 57,591
61,654 Other long-term liabilities 47,987 51,631
Total liabilities 105,578 113,285 Commitments and
contingencies Stockholders’ equity:
Common stock, par value $0.01, 20,000,000
shares authorized; 11,027,177 and 11,093,958 shares issued and
outstanding at December 31, 2015 and September 30, 2016,
respectively
110 111 Additional paid-in capital 24,738 32,016 Retained earnings
118,008 141,092 Total stockholders’ equity
142,856 173,219 Total liabilities and stockholders’ equity $
248,434 $ 286,504
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
For the nine months
endedSeptember 30,
2015 2016 Cash flows from operating
activities: Net income $ 26,982 $ 23,084
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of gain on sale of assets (210 ) (211 ) Amortization
of deferred rent (417 ) (919 ) Amortization of deferred financing
costs 1,163 197 Depreciation and amortization 13,711 13,276
Deferred income taxes (3,358 ) (5,543 ) Stock-based compensation
7,576 7,330 Changes in assets and liabilities: Tuition receivable,
net (435 ) 425 Other current assets 1,402 (3,895 ) Other assets 2
(2,264 ) Accounts payable and accrued expenses 1,023 2,825 Income
taxes payable and income taxes receivable 205 (4,854 ) Deferred
revenue 8,126 5,940 Other long-term liabilities (1,299 )
(5,284 ) Net cash provided by operating activities
54,471 30,107 Cash flows from investing
activities: Purchases of property and equipment (9,587 ) (7,501 )
Cash used in acquisition, net of cash acquired —
(7,635 ) Net cash used in investing activities (9,587
) (15,136 ) Cash flows from financing activities:
Payments on term loan (118,750 ) — Payment of deferred financing
costs (850 ) — Payment of contingent consideration (650 )
(1,358 ) Net cash used in financing activities
(120,250 ) (1,358 ) Net (decrease) increase in cash and cash
equivalents (75,366 ) 13,613 Cash and cash equivalents - beginning
of period 162,283 106,889 Cash and cash
equivalents - end of period $ 86,917 $ 120,502
Non-cash transactions: Purchases of property and equipment included
in accounts payable $ 633 $ 112 Contingent
consideration recorded in connection with an acquisition $ —
$ 8,000
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version on businesswire.com: http://www.businesswire.com/news/home/20161026005389/en/
Strayer Education, Inc.Daniel JacksonExecutive Vice President
andChief Financial
Officer703-713-1862daniel.jackson@strayer.edu
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