PRDO Perdoceo Education Corporation

Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended September 30, 2024.

Third Quarter 2024 Results as Compared to Prior Year Quarter

• Total student enrollments increased by 11.0% supported by a 13.6% increase at CTU and a 4.0% increase at AIUS.
• Operating income increased 4.0% to $44.8 million, while adjusted operating income increased 2.8% to $48.6 million.*
• As expected, revenue for the quarter was lower by 5.6% due to the lag impact from the 2023 operational changes at AIUS and simplification of our professional development offerings at CTU.
• Earnings per diluted share were $0.57 as compared to $0.62, while adjusted earnings per diluted share were $0.59 as compared to $0.64.* The prior year quarter earnings per diluted share included a non-recurring tax benefit.
• Ended the quarter with $722.6 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.

Year to Date 2024 Results as Compared to Prior Year to Date

• Operating income increased 1.9% to $137.1 million, while adjusted operating income decreased 4.2% to $149.0 million.*
• As expected, revenue decreased 10.2% to $504.8 million, driven by the lag impact from the 2023 operational changes at AIUS and simplification of our professional development offerings at CTU.
• Earnings per diluted share were $1.73 as compared to $1.92, while adjusted earnings per diluted share were $1.80 as compared to $1.83.* The prior year quarter earnings per diluted share included a non-recurring tax benefit.

*See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release

"Operating performance for the quarter was ahead of our expectations as both academic institutions continued to experience strong student retention and engagement through the quarter,” said Todd Nelson, President and Chief Executive Officer. “We remain committed to making investments in our student support teams and technology that will further enhance academic outcomes. We are on track to close the acquisition of University of St. Augustine in December and are excited about the opportunity to significantly increase the number of students we serve in the health science field.”

REVENUE

• For the quarter ended September 30, 2024, revenue of $169.8 million decreased 5.6% compared to revenue of $179.9 million for the prior year quarter.
• For the year to date ended September 30, 2024, revenue of $504.8 million decreased 10.2% compared to revenue of $562.1 million for the prior year to date.

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

Revenue ($ in thousands)

 

2024

 

 

2023

 

 

% Change

 

 

2024

 

 

2023

 

 

% Change

 

CTU

 

$

115,742

 

 

$

120,552

 

 

 

-4.0

%

 

$

342,139

 

 

$

364,336

 

 

 

-6.1

%

AIUS

 

 

53,887

 

 

 

59,226

 

 

 

-9.0

%

 

 

162,114

 

 

 

197,128

 

 

 

-17.8

%

Corporate and Other

 

 

199

 

 

 

145

 

 

NM

 

 

 

579

 

 

 

621

 

 

NM

 

Total

 

$

169,828

 

 

$

179,923

 

 

 

-5.6

%

 

$

504,832

 

 

$

562,085

 

 

 

-10.2

%

TOTAL STUDENT ENROLLMENTS

• As of September 30, 2024, CTU’s total student enrollments increased 13.6%, while AIUS’ total student enrollments increased 4.0% as compared to September 30, 2023.

 

 

At September 30,

 

Total Student Enrollments(1)

 

2024

 

 

2023

 

 

% Change

 

CTU

 

 

30,000

 

 

 

26,400

 

 

 

13.6

%

AIUS

 

 

10,400

 

 

 

10,000

 

 

 

4.0

%

Total

 

 

40,400

 

 

 

36,400

 

 

 

11.0

%

(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 September 30, 2024, operating income increased by 4.0% to $44.8 million as compared to the prior year quarter.

• For the year to date ended September 30, 2024, operating income increased by 1.9% to $137.1 million as compared to the prior year to date.

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

Operating Income ($ in thousands)

 

2024

 

 

2023

 

 

% Change

 

 

2024

 

 

2023

 

 

% Change

 

CTU

 

$

44,199

 

 

$

34,491

 

 

 

28.1

%

 

$

129,245

 

 

$

118,632

 

 

 

8.9

%

AIUS

 

 

9,063

 

 

 

15,602

 

 

 

-41.9

%

 

 

31,275

 

 

 

44,683

 

 

 

-30.0

%

Corporate and Other

 

 

(8,468

)

 

 

(7,020

)

 

 

-20.6

%

 

 

(23,442

)

 

 

(28,812

)

 

 

18.6

%

Total

 

$

44,794

 

 

$

43,073

 

 

 

4.0

%

 

$

137,078

 

 

$

134,503

 

 

 

1.9

%

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 September 30, 2024, adjusted operating income of $48.6 million increased 2.8% compared to adjusted operating income of $47.2 million for the prior year quarter.
• For the year to date ended September 30, 2024, adjusted operating income of $149.0 million decreased 4.2% compared to adjusted operating income of $155.5 million for the prior year to date.

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

Adjusted Operating Income ($ in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

Operating income

 

$

44,794

 

 

$

43,073

 

 

$

137,078

 

 

$

134,503

Depreciation and amortization

 

 

3,053

 

 

 

3,914

 

 

 

9,138

 

 

 

13,438

Legal fee expense related to certain matters (1)

 

 

719

 

 

 

246

 

 

 

2,764

 

 

 

7,574

Adjusted Operating Income

 

$

48,566

 

 

$

47,233

 

 

$

148,980

 

 

$

155,515

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

2.8

%

 

 

 

 

 

-4.2

%

 

 

(1)

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 September 30, 2024, the Company recorded:

• Net income of $38.3 million compared to $41.3 million for the prior year quarter.
• Earnings per diluted share of $0.57 compared to $0.62 for the prior year quarter.
• Adjusted earnings per diluted share of $0.59 compared to $0.64 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 September 30, 2024, the Company recorded:

• Net income of $116.1 million compared to $130.5 million for the prior year to date.
• Earnings per diluted share of $1.73 compared to $1.92 for the prior year to date.
• Adjusted earnings per diluted share of $1.80 compared to $1.83 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 September 30,

 

 

For the Year to Date Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.57

 

 

$

0.62

 

 

$

1.73

 

 

$

1.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets

 

 

0.02

 

 

 

0.03

 

 

 

0.06

 

 

 

0.09

 

Legal fee expense related to certain matters (1)

 

 

0.01

 

 

 

-

 

 

 

0.04

 

 

 

0.11

 

Gain on sale of intangible asset

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.32

)

Tax effect of adjustments (2)

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.03

)

 

 

0.03

 

Adjusted Earnings Per Diluted Share

 

$

0.59

 

 

$

0.64

 

 

$

1.80

 

 

$

1.83

 

(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.

 

(2)

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.

QUARTERLY DIVIDEND PAYMENT

On November 12, 2024, the board of directors declared a quarterly dividend of $0.13 per share, which will be paid on December 13, 2024 for holders of record of common stock as of December 2, 2024. 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 and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating acquisitions and share repurchases.

BALANCE SHEET AND CASH FLOW

• For the quarter ended September 30, 2024 net cash provided by operating activities was $51.0 million, compared to net cash provided by operating activities of $32.6 million for the prior year quarter.
• For the year to date ended September 30, 2024, net cash provided by operating activities was $144.0 million, compared to net cash provided by operating activities of $98.8 million in the prior year to date.
• As of September 30, 2024 and December 31, 2023, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $722.6 million and $604.2 million, respectively.

 

 

For the Quarter Ended September 30,

 

For the Year to Date Ended September 30,

Selected Cash Flow Items ($ in thousands)

 

2024

 

 

2023

 

 

% Change

 

2024

 

 

2023

 

 

% Change

Net cash provided by operating activities

 

$

50,978

 

 

$

32,613

 

 

 

56.3%

 

$

143,995

 

 

$

98,833

 

 

 

45.7%

Capital expenditures

 

$

975

 

 

$

1,189

 

 

 

-18.0%

 

$

2,997

 

 

$

4,801

 

 

 

-37.6%

OUTLOOK

The Company is increasing its full year outlook while also providing the following fourth quarter 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 December 31,

 

For the Year Ending December 31,

 

OUTLOOK

ACTUAL

 

OUTLOOK

ACTUAL

 

2024

2023

 

2024

2023

Operating Income

$33.0M - $36.0M

$15,943

 

$170.1M - $173.1M

$150,446

Depreciation and amortization

$5.5M

3,449

 

$14.6M

16,887

Legal fee expense related to certain matters (1)

$0.5M

5

 

$3.3M

7,579

Adjusted Operating Income

$39.0M - $42.0M

$19,397

 

$188.0M - $191.0M

$174,912

 

 

 

 

 

 

Earnings Per Diluted Share

$0.43 - $0.46

$0.26

 

$2.15 - $2.18

$2.18

Amortization of acquired intangible assets

$0.03

$0.02

 

$0.09

$0.11

Legal fee expense related to certain matters (1)

$0.01

-

 

$0.05

$0.11

Gain on sale of intangible asset

-

-

 

-

($0.32)

Tax effect of adjustments

($0.01)

($0.01)

 

($0.04)

$0.02

Adjusted Earnings Per Diluted Share

$0.46 - $0.49

$0.27

 

$2.25 - $2.28

$2.10

(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 2024 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 additional 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 loan 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 26% for the fourth quarter and approximately 26.5% 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 Tuesday, November 12, 2024 at 5:00 p.m. Eastern time to discuss third quarter and year to date 2024 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 1-800-715-9871 (domestic) or 1-646-307-1963 (international). Both dial-in numbers will use the access code 4671240. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/345979070. 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 or our ability to market to and contact prospective students; 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 terms of any potential changes to or conditions imposed on our continued participation in the Title IV programs under new program participation agreements, the new 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 or changing interpretations of existing regulations, guidance or historical practices 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 ability to participate in educational assistance programs for key employers, 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, 2023 and its subsequent filings with the Securities and Exchange Commission.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

238,049

 

 

$

118,009

 

Restricted cash

 

 

773

 

 

 

1,012

 

Short-term investments

 

 

483,772

 

 

 

485,135

 

Total cash and cash equivalents, restricted cash and short-term investments

 

 

722,594

 

 

 

604,156

 

 

 

 

 

 

 

 

Student receivables, net

 

 

32,018

 

 

 

29,398

 

Receivables, other

 

 

4,114

 

 

 

4,539

 

Prepaid expenses

 

 

10,665

 

 

 

11,712

 

Inventories

 

 

3,870

 

 

 

5,004

 

Other current assets

 

 

263

 

 

 

155

 

Total current assets

 

 

773,524

 

 

 

654,964

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

Property and equipment, net

 

 

18,099

 

 

 

21,371

 

Right of use asset, net

 

 

15,669

 

 

 

19,096

 

Goodwill

 

 

241,162

 

 

 

241,162

 

Intangible assets, net

 

 

32,894

 

 

 

36,219

 

Student receivables, net

 

 

5,904

 

 

 

3,859

 

Deferred income tax assets, net

 

 

23,010

 

 

 

23,804

 

Other assets

 

 

6,494

 

 

 

6,841

 

TOTAL ASSETS

 

$

1,116,756

 

 

$

1,007,316

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Lease liability - operating

 

$

4,969

 

 

$

5,701

 

Accounts payable

 

 

13,647

 

 

 

10,766

 

Accrued expenses:

 

 

 

 

 

 

Payroll and related benefits

 

 

33,517

 

 

 

32,684

 

Advertising and marketing costs

 

 

7,969

 

 

 

7,196

 

Income taxes

 

 

10,396

 

 

 

3,974

 

Other

 

 

21,322

 

 

 

13,503

 

Deferred revenue

 

 

49,347

 

 

 

37,215

 

Total current liabilities

 

 

141,167

 

 

 

111,039

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

Lease liability - operating

 

 

17,317

 

 

 

21,346

 

Other liabilities

 

 

22,841

 

 

 

33,510

 

Total non-current liabilities

 

 

40,158

 

 

 

54,856

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

910

 

 

 

903

 

Additional paid-in capital

 

 

704,346

 

 

 

694,798

 

Accumulated other comprehensive income (loss)

 

 

1,568

 

 

 

(666

)

Retained earnings

 

 

573,031

 

 

 

480,606

 

Treasury stock

 

 

(344,424

)

 

 

(334,220

)

Total stockholders' equity

 

 

935,431

 

 

 

841,421

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,116,756

 

 

$

1,007,316

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Quarter Ended September 30,

 

 

 

2024

 

 

% of Total Revenue

 

 

2023

 

 

% of Total Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

168,442

 

 

 

99.2

%

 

$

178,259

 

 

 

99.1

%

Other

 

 

1,386

 

 

 

0.8

%

 

 

1,664

 

 

 

0.9

%

Total revenue

 

 

169,828

 

 

 

 

 

 

179,923

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

28,287

 

 

 

16.7

%

 

 

33,502

 

 

 

18.6

%

General and administrative

 

 

93,694

 

 

 

55.2

%

 

 

92,054

 

 

 

51.2

%

Depreciation and amortization

 

 

3,053

 

 

 

1.8

%

 

 

3,914

 

 

 

2.2

%

Asset impairment

 

 

-

 

 

 

0.0

%

 

 

7,380

 

 

 

4.1

%

Total operating expenses

 

 

125,034

 

 

 

73.6

%

 

 

136,850

 

 

 

76.1

%

Operating income

 

 

44,794

 

 

 

26.4

%

 

 

43,073

 

 

 

23.9

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

7,702

 

 

 

4.5

%

 

 

5,210

 

 

 

2.9

%

Interest expense

 

 

(82

)

 

 

0.0

%

 

 

(97

)

 

 

-0.1

%

Miscellaneous expense

 

 

(52

)

 

 

0.0

%

 

 

(98

)

 

 

-0.1

%

Total other income

 

 

7,568

 

 

 

4.5

%

 

 

5,015

 

 

 

2.8

%

PRETAX INCOME

 

 

52,362

 

 

 

30.8

%

 

 

48,088

 

 

 

26.7

%

Provision for income taxes

 

 

14,107

 

 

 

8.3

%

 

 

6,781

 

 

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

38,255

 

 

 

22.5

%

 

 

41,307

 

 

 

23.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.58

 

 

 

 

 

$

0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

0.57

 

 

 

 

 

$

0.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

65,699

 

 

 

 

 

 

65,634

 

 

 

 

Diluted

 

 

67,312

 

 

 

 

 

 

67,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Quarter Ended September 30,

 

 

 

 

(In Thousands)

 

2024

 

 

 

 

 

2023

 

 

 

 

NET INCOME

 

$

38,255

 

 

 

 

 

$

41,307

 

 

 

 

OTHER COMPREHENSIVE INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

46

 

 

 

 

 

 

(31

)

 

 

 

Unrealized gain on investments

 

 

3,243

 

 

 

 

 

 

653

 

 

 

 

Total other comprehensive income

 

 

3,289

 

 

 

 

 

 

622

 

 

 

 

COMPREHENSIVE INCOME

 

$

41,544

 

 

 

 

 

$

41,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30,

 

 

 

2024

 

 

% of Total Revenue

 

 

2023

 

 

% of Total Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

500,844

 

 

 

99.2

%

 

$

556,098

 

 

 

98.9

%

Other

 

 

3,988

 

 

 

0.8

%

 

 

5,987

 

 

 

1.1

%

Total revenue

 

 

504,832

 

 

 

 

 

 

562,085

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

85,661

 

 

 

17.0

%

 

 

100,101

 

 

 

17.8

%

General and administrative

 

 

270,487

 

 

 

53.6

%

 

 

305,328

 

 

 

54.3

%

Depreciation and amortization

 

 

9,138

 

 

 

1.8

%

 

 

13,438

 

 

 

2.4

%

Asset impairment

 

 

2,468

 

 

 

0.5

%

 

 

8,715

 

 

 

1.6

%

Total operating expenses

 

 

367,754

 

 

 

72.8

%

 

 

427,582

 

 

 

76.1

%

Operating income

 

 

137,078

 

 

 

27.2

%

 

 

134,503

 

 

 

23.9

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

21,685

 

 

 

4.3

%

 

 

13,559

 

 

 

2.4

%

Interest expense

 

 

(529

)

 

 

-0.1

%

 

 

(288

)

 

 

-0.1

%

Miscellaneous (expense) income

 

 

(7

)

 

 

0.0

%

 

 

21,970

 

 

 

3.9

%

Total other income

 

 

21,149

 

 

 

4.2

%

 

 

35,241

 

 

 

6.3

%

PRETAX INCOME

 

 

158,227

 

 

 

31.3

%

 

 

169,744

 

 

 

30.2

%

Provision for income taxes

 

 

42,101

 

 

 

8.3

%

 

 

39,280

 

 

 

7.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

116,126

 

 

 

23.0

%

 

 

130,464

 

 

 

23.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

1.77

 

 

 

 

 

$

1.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

1.73

 

 

 

 

 

$

1.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

65,622

 

 

 

 

 

 

66,758

 

 

 

 

Diluted

 

 

67,110

 

 

 

 

 

 

68,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Year to Date Ended September 30,

 

 

 

 

(In Thousands)

 

2024

 

 

 

 

 

2023

 

 

 

 

NET INCOME

 

$

116,126

 

 

 

 

 

$

130,464

 

 

 

 

OTHER COMPREHENSIVE INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

7

 

 

 

 

 

 

(8

)

 

 

 

Unrealized gain on investments

 

 

2,227

 

 

 

 

 

 

456

 

 

 

 

Total other comprehensive income

 

 

2,234

 

 

 

 

 

 

448

 

 

 

 

COMPREHENSIVE INCOME

 

$

118,360

 

 

 

 

 

$

130,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For the Year to Date Ended September 30,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

116,126

 

 

$

130,464

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Asset impairment

 

 

2,468

 

 

 

8,715

 

Gain on sale of asset

 

 

-

 

 

 

(22,086

)

Depreciation and amortization expense

 

 

9,138

 

 

 

13,438

 

Bad debt expense

 

 

21,364

 

 

 

26,519

 

Compensation expense related to share-based awards

 

 

7,385

 

 

 

6,651

 

Deferred income taxes

 

 

794

 

 

 

4,249

 

Changes in operating assets and liabilities

 

 

(13,280

)

 

 

(69,117

)

Net cash provided by operating activities

 

 

143,995

 

 

 

98,833

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(266,842

)

 

 

(205,529

)

Sales of available-for-sale investments

 

 

277,111

 

 

 

179,139

 

Purchases of property and equipment

 

 

(2,997

)

 

 

(4,801

)

Net cash provided by (used in) investing activities

 

 

7,272

 

 

 

(31,191

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Issuance of common stock

 

 

2,170

 

 

 

749

 

Purchase of treasury stock

 

 

(6,769

)

 

 

(2,729

)

Payments of employee tax associated with stock compensation

 

 

(3,435

)

 

 

(2,209

)

Payments of cash dividends and dividend equivalents

 

 

(23,156

)

 

 

(7,222

)

Release of cash held in escrow

 

 

(276

)

 

 

(1,000

)

Net cash used in financing activities

 

 

(31,466

)

 

 

(12,411

)

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

119,801

 

 

 

55,231

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period

 

 

119,021

 

 

 

118,884

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period

 

$

238,822

 

 

$

174,115

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For the Quarter Ended September 30,

 

 

 

2024

 

 

2023

 

REVENUE:

 

 

 

 

 

 

CTU

 

$

115,742

 

 

$

120,552

 

AIUS

 

 

53,887

 

 

 

59,226

 

Corporate and Other

 

 

199

 

 

 

145

 

Total

 

$

169,828

 

 

$

179,923

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

CTU

 

$

44,199

 

 

$

34,491

 

AIUS

 

 

9,063

 

 

 

15,602

 

Corporate and Other

 

 

(8,468

)

 

 

(7,020

)

Total

 

$

44,794

 

 

$

43,073

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

CTU

 

 

38.2

%

 

 

28.6

%

AIUS

 

 

16.8

%

 

 

26.3

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

26.4

%

 

 

23.9

%

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For the Year to Date Ended September 30,

 

 

 

2024

 

 

2023

 

REVENUE:

 

 

 

 

 

 

CTU

 

$

342,139

 

 

$

364,336

 

AIUS

 

 

162,114

 

 

 

197,128

 

Corporate and Other

 

 

579

 

 

 

621

 

Total

 

$

504,832

 

 

$

562,085

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

CTU

 

$

129,245

 

 

$

118,632

 

AIUS

 

 

31,275

 

 

 

44,683

 

Corporate and Other

 

 

(23,442

)

 

 

(28,812

)

Total

 

$

137,078

 

 

$

134,503

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

CTU

 

 

37.8

%

 

 

32.6

%

AIUS

 

 

19.3

%

 

 

22.7

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

27.2

%

 

 

23.9

%

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)

(In thousands, unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

 

ACTUAL

 

 

ACTUAL

Adjusted Operating Income

 

2024

 

 

2023

 

 

2024

 

 

2023

Operating income

 

$

44,794

 

 

$

43,073

 

 

$

137,078

 

 

$

134,503

Depreciation and amortization

 

 

3,053

 

 

 

3,914

 

 

 

9,138

 

 

 

13,438

Legal fee expense related to certain matters (2)

 

 

719

 

 

 

246

 

 

 

2,764

 

 

 

7,574

Adjusted Operating Income

 

$

48,566

 

 

$

47,233

 

 

$

148,980

 

 

$

155,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending December 31,

 

 

For the Year Ending December 31,

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Operating income

 

$33.0M - $36.0M

 

 

$

15,943

 

 

$170.1M - $173.1M

 

 

$

150,446

Depreciation and amortization

 

5.5M

 

 

 

3,449

 

 

14.6M

 

 

 

16,887

Legal fee expense related to certain matters (2)

 

0.5M

 

 

 

5

 

 

3.3M

 

 

 

7,579

Adjusted Operating Income

 

$39.0M - $42.0M

 

 

$

19,397

 

 

$188.0M - $191.0M

 

 

$

174,912

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)

 

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

 

 

ACTUAL

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported Earnings Per Diluted Share

 

$

0.57

 

 

$

0.62

 

 

$

1.73

 

 

$

1.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets

 

 

0.02

 

 

 

0.03

 

 

 

0.06

 

 

 

0.09

 

Legal fee expense related to certain matters (2)

 

 

0.01

 

 

 

-

 

 

 

0.04

 

 

 

0.11

 

Gain on sale of intangible asset (3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.32

)

Total pre-tax adjustments

 

$

0.03

 

 

$

0.03

 

 

$

0.10

 

 

$

(0.12

)

Tax effect of adjustments (4)

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.03

)

 

 

0.03

 

Total adjustments after tax

 

 

0.02

 

 

 

0.02

 

 

 

0.07

 

 

 

(0.09

)

Adjusted Earnings Per Diluted Share

 

$

0.59

 

 

$

0.64

 

 

$

1.80

 

 

$

1.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending December 31,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported Earnings Per Diluted Share

 

$0.43 - $0.46

 

 

$

0.26

 

 

$2.15 - $2.18

 

 

$

2.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets

 

0.03

 

 

 

0.02

 

 

0.09

 

 

 

0.11

 

Legal fee expense related to certain matters (2)

 

0.01

 

 

 

-

 

 

0.05

 

 

 

0.11

 

Gain on sale of intangible asset (3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.32

)

Total pre-tax adjustments

 

0.04

 

 

$

0.02

 

 

0.14

 

 

$

(0.10

)

Tax effect of adjustments (4)

 

(0.01)

 

 

 

(0.01

)

 

(0.04)

 

 

 

0.02

 

Total adjustments after tax

 

0.03

 

 

 

0.01

 

 

0.10

 

 

 

(0.08

)

Adjusted Earnings Per Diluted Share

 

$0.46 - $0.49

 

 

$

0.27

 

 

$2.25 - $2.28

 

 

$

2.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112617316/en/

Investors: Alpha IR Group Stephen Poe or Nick Nelson (312) 445-2870 PRDO@alpha-ir.com

Or

Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com