Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA)
today announced financial results for the period ended September
30, 2020 and closure of the acquisition of the Australia and New
Zealand academic operations from Laureate Education, Inc.
(Laureate) (NASDAQ: LAUR).
“We are excited to announce that Strategic Education’s
acquisition of Laureate’s Australia/New Zealand institutions closed
on November 3, 2020. The addition of these highly-regarded academic
institutions to our portfolio enhances our position as a global
leader in post-secondary education and provides an additional
growth platform as we pursue our mission of enabling economic
mobility with education,” said Karl McDonnell, Chief Executive
Officer of Strategic Education. “As our organization continues to
adapt to the challenges presented by the COVID-19 pandemic, we are
encouraged by consistent performance at Capella University and in
Australia/New Zealand, and are restructuring our organization to
focus on areas of existing strength in our core business and new
opportunities including employer initiatives, Sophia Learning, and
digital enablement partnerships.”
UPDATE ON IMPACT OF
PANDEMIC
The Company continues to take action to ensure the health and
well-being of its students and employees during the ongoing
pandemic. Since our last earnings release in July, the Company has
taken a number of steps to safely return certain parts of the
organization to more normal operations, including:
- Reopening corporate offices in Minneapolis, Minnesota and
Herndon, Virginia for a small number of volunteer employees
- Reopening three campuses in Lithonia and Augusta, Georgia and
Arlington, Virginia to assist international students and eventually
all students
The Company is continuing to provide financial relief to
students impacted negatively by the pandemic. These measures, which
include payment flexibility, scholarship opportunities, and other
pricing relief, will continue to pressure revenue-per-student for
the year.
In the third quarter of 2020, the Company began implementing a
restructuring plan that includes both voluntary and involuntary
employee terminations in an effort to reduce ongoing operating
costs to align with changes in enrollment.
STRATEGIC EDUCATION CONSOLIDATED
RESULTS
Three Months Ended September 30
- Revenue decreased 1.1% to $239.0 million compared to $241.7
million for the same period in 2019.
- Income from operations was $15.4 million or 6.5% of revenue,
compared to $20.0 million or 8.3% of revenue for the same period in
2019. Income from operations in 2020 includes $15.4 million of
amortization expense related to assets acquired in the merger with
Capella Education Company, $2.9 million in costs associated with
the merger with Capella Education Company and transaction expenses
associated with the acquisition of the Australia and New Zealand
operations of Laureate, and $4.0 million of severance costs
associated with the Company’s restructuring. Income from operations
in 2019 included $15.4 million of amortization expense related to
assets acquired in the merger with Capella Education Company and
$1.5 million in costs associated with the merger with Capella
Education Company. Adjusted income from operations, which is a
non-GAAP financial measure and excludes the aforementioned
expenses, was $37.8 million in 2020 compared to $36.9 million for
the same period in 2019. The adjusted operating income margin was
15.8% compared to 15.3% for the same period in 2019. For more
details on non-GAAP financial measures, refer to the information in
the Non-GAAP Financial Measures section of this press release.
- Net income, which includes the items described above, and also
includes income from partnership interests and other investments,
and certain discrete tax adjustments, was $11.0 million in 2020
compared to $16.7 million for the same period in 2019. Adjusted net
income was $27.4 million compared to $28.4 million for the same
period in 2019.
- Earnings before interest, taxes, depreciation, and amortization
(EBITDA) was $41.6 million in 2020 compared to $46.4 million in
2019. Adjusted EBITDA, which excludes merger costs, transaction
expenses associated with the acquisition of the Australia and New
Zealand operations of Laureate, severance costs associated with the
Company’s restructuring, and stock-based compensation expense, was
$52.4 million compared to $50.9 million for the same period in
2019.
- Diluted earnings per share was $0.47 compared to $0.75 for the
same period in 2019. Adjusted diluted earnings per share decreased
to $1.18 from $1.28 for the same period in 2019. Diluted weighted
average shares outstanding increased to 23,214,000 from 22,129,000
for the same period in 2019, due primarily to new shares issued to
facilitate the acquisition of Laureate’s Australia and New Zealand
academic operations.
Strayer University Segment Highlights
- For the third quarter, student enrollment at Strayer University
decreased 1% to 48,774 compared to 49,194 for the same period in
2019. New student enrollment for the period, which was previewed
during our Q2 2020 earnings call, decreased 28%, and continuing
student enrollment for the period increased 6%. Starting in the
first quarter of 2020, Strayer University adopted a new enrollment
reporting census date, which occurs approximately two weeks
following the start of the academic term. Previously the Strayer
University enrollment census date coincided with the end of the
University’s “drop-add” period, approximately one week following
the start of the academic term. This new census date is consistent
with the approach employed by Capella University. All historical
enrollment data included in this release and other disclosures has
been revised using the new census date. Year-over-year percentage
change in enrollment for the new census date does not differ
significantly from the prior approach.
- Revenue decreased 1.2% to $128.4 million in the third quarter
of 2020 compared to $130.0 million for the same period in 2019,
driven by lower third quarter enrollment and lower
revenue-per-student.
- Income from operations increased to $22.8 million in the third
quarter of 2020 from $18.0 million for the same period in 2019. The
operating income margin was 17.8%, compared to 13.8% for the same
period in 2019.
Capella University Segment Highlights
- For the third quarter, student enrollment at Capella University
increased 4% to 40,268 compared to 38,885 for the same period in
2019. New student enrollment for the period increased 4% and
continuing student enrollment for the period increased 4%. Starting
in the first quarter of 2020, Capella University consolidated two
different enrollment reporting census dates into a single date,
which occurs approximately two weeks following the start of the
academic term. All historical enrollment data included in this
release and other disclosures has been revised accordingly.
Year-over-year percentage change in enrollment for the new census
date does not differ significantly from the prior approach.
- FlexPath continued to be a significant driver of new and total
enrollment growth in the third quarter of 2020 and is 40% of
Capella University’s bachelor’s and master’s degrees total
enrollment. With the new Doctor of Nursing Practice program offered
in the FlexPath learning format in the third quarter of 2020,
FlexPath is 31% of Capella University’s total enrollment.
- Revenue decreased 1.0% to $110.6 million in the third quarter
of 2020 compared to $111.8 million for the same period in 2019,
driven by lower revenue-per-student.
- Income from operations decreased to $15.0 million in the third
quarter of 2020 from $18.9 million for the same period in 2019. The
operating income margin was 13.5%, compared to 16.9% for the same
period in 2019.
BALANCE SHEET AND CASH
FLOW
At September 30, 2020, Strategic Education had cash, cash
equivalents, and marketable securities of $768.9 million, which
includes approximately $220.2 million of net proceeds from
Strategic Education’s public offering of common stock on August 10,
2020. For the first nine months of 2020, cash provided by
operations was $158.8 million compared to $141.4 million for the
same period in 2019. Capital expenditures for the first nine months
of 2020 were $34.8 million compared to $27.8 million for the same
period in 2019. Capital expenditures for 2020 are expected to be
approximately $45 million.
Strategic Education also closed the refinancing of its revolving
credit facility on November 3, 2020, for a total commitment of $350
million for a period of five years with materially the same terms
as under the prior revolving credit facility. The Company borrowed
$141.8 million on the facility on November 3rd coinciding with the
close of the acquisition of Laureate’s Australia/New Zealand
institutions.
For the third quarter of 2020, consolidated bad debt expense as
a percentage of revenue was 4.7%, compared to 5.0% of revenue for
the same period in 2019. Net tuition receivable as of September 30,
2020 includes additional reserves to account for projected
deterioration in collections performance in 2020 due to the
pandemic.
LAUNCH OF SUR LA TABLE ONLINE CULINARY
INSTITUTE
Strategic Education, together with culinary leaders including
Marquee Brands, the global brand owner of Sur La Table – a leader
in providing a hands-on culinary cooking experience and Chef Scott
Conant, successful restauranteur and television personality,
announced this morning the launch of the Sur La Table Online
Culinary Institute, a new online offering designed to help students
obtain the skills they need to succeed in the kitchen and thrive in
the modern culinary world. The Sur La Table Online Culinary
Institute courses are being reviewed by the American Council on
Education and are recognized by the American Culinary Federation
Education Foundation as an Approved Program. The program will
initially feature six courses with 55 hours of instruction each and
three thematic courses ranging from two to four hours in length.
These courses, offered by Strategic Education, support personal
development in culinary practices through an online, self-paced
experience. To read the full press release and find out more
information about this offering, please go to
www.strategiceducation.com in the News section or visit
surlatableonlineculinaryinstitute.com.
COMMON STOCK CASH
DIVIDEND
Strategic Education announced today that it declared a regular,
quarterly cash dividend of $0.60 per share of common stock. This
dividend will be paid on December 7, 2020 to shareholders of record
as of November 30, 2020.
WEBCAST WITH MANAGEMENT
Strategic Education will host a webcast with a corresponding
slide presentation to discuss its third quarter 2020 results at
10:00 a.m. (ET) today. To access the live webcast with the
presentation, please go to www.strategiceducation.com in the
Investor Relations section 15 minutes prior to the start time to
register. After completion of the webcast, the slide presentation
will be posted to www.strategiceducation.com in the Investor
Relations section. The webcast will also be archived and available
at www.strategiceducation.com in the Investor Relations section. If
unable to join via webcast, investors can participate in the live
call by dialing (877) 303-9047 ten minutes prior to the start
time.
About Strategic Education, Inc.
Strategic Education, Inc. (NASDAQ: STRA)
(www.strategiceducation.com) is dedicated to helping advance
economic mobility through higher education. We serve working adult
students all over the globe through our core focus areas: 1) U.S.
Higher Education, through Strayer University and Capella
University, each institutionally accredited, and collectively offer
flexible and affordable associate, bachelor’s, master’s and
doctoral programs including the Jack Welch Management Institute at
Strayer University; 2) Alternative Learning, encompassing Sophia
Learning, self-paced general education courses that are
ACE-recommended for college credit; Workforce Edge, a full service,
online employee education management portal; Digital Enablement
Partnerships, helping advance capabilities in course development,
online delivery and student support; and non-degree web and mobile
application development courses through Hackbright Academy and
Strayer University’s DevMountain; and 3) Australia/New Zealand,
comprised of Torrens University, Think Education and Media Design
School operations in Australia and New Zealand. This portfolio of
high quality, innovative, relevant, and affordable programs and
institutions helps our students prepare for success in today’s
workforce and find a path to bettering their lives.
Forward-Looking Statements
This communication contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements may be identified by the use of words such
as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “may,”
“will,” “forecast,” “outlook,” “plan,” “project,” “potential” and
other similar words, and include all statements that are not
historical facts, including with respect to, among other things,
the future financial performance and growth opportunities of
Strategic Education; Strategic Education’s plans, strategies and
prospects; the impact of the current COVID-19 pandemic on Strategic
Education’s business and results; and future events and
expectations. The statements are based on Strategic Education’s
current expectations and are subject to a number of assumptions,
uncertainties and risks, including but not limited to:
- Strategic Education’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;
- the pace of student enrollment;
- competitive factors;
- risks associated with the further spread of COVID-19, including
the ultimate impact of COVID-19 on people and economies;
- the impact of regulatory measures or voluntary actions that may
be put in place to limit the spread of COVID-19, including
restrictions on business operations or social distancing
requirements;
- risks associated with the opening of new campuses;
- risks associated with the offering of new educational programs
and adapting to other changes;
- risks associated with the acquisition of existing educational
institutions, including in the case of Strategic Education’s
acquisition of Laureate’s Australia and New Zealand business, the
risk that the benefits of the acquisition may not be fully realized
or may take longer to realize than expected, and the risk that the
acquisition may not advance Strategic Education’s business strategy
and growth strategy;
- risks relating to the timing of regulatory approvals;
- Strategic Education’s ability to implement its growth
strategy;
- the risk that the combined company may experience difficulty
integrating employees or operations;
- risks associated with the ability of Strategic Education’s
students to finance their education in a timely manner;
- general economic and market conditions; and
- additional factors described in Strategic Education’s most
recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K.
Many of these risks, uncertainties and assumptions are beyond
Strategic Education’s ability to control or predict. Because of
these risks, uncertainties and assumptions, you should not place
undue reliance on these forward-looking statements. Furthermore,
these forward-looking statements speak only as of the information
currently available to Strategic Education on the date they are
made, and Strategic Education undertakes no obligation to update or
revise forward-looking statements, except as required by law.
Actual results may differ materially from those projected in the
forward-looking statements.
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per
share data)
For the three months ended
September 30,
For the nine months ended
September 30,
2019
2020
2019
2020
Revenues
$
241,747
$
239,026
$
733,365
$
760,159
Costs and expenses:
Instructional and support costs
132,527
127,174
397,281
385,654
General and administration
72,303
74,069
204,816
210,596
Amortization of intangible assets
15,417
15,417
46,251
46,251
Merger and integration costs
1,500
2,920
11,698
7,858
Restructuring costs
—
4,024
—
4,024
Total costs and expenses
221,747
223,604
660,046
654,383
Income from operations
20,000
15,422
73,319
105,776
Other income
3,243
912
10,695
4,674
Income before income taxes
23,243
16,334
84,014
110,450
Provision for income taxes
6,551
5,374
31,413
30,099
Net income
$
16,692
$
10,960
$
52,601
$
80,351
Earnings per share:
Basic
$
0.77
$
0.48
$
2.42
$
3.62
Diluted
$
0.75
$
0.47
$
2.38
$
3.58
Weighted average shares outstanding:
Basic
21,806
23,004
21,694
22,193
Diluted
22,129
23,214
22,096
22,432
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
and per share data)
December 31, 2019
September 30,
2020
ASSETS
Current assets:
Cash and cash equivalents
$
419,693
$
717,804
Marketable securities
34,874
20,457
Tuition receivable, net
51,523
45,958
Other current assets
18,004
22,156
Total current assets
524,094
806,375
Property and equipment, net
117,029
115,607
Right-of-use lease assets
84,778
80,719
Marketable securities, non-current
36,633
30,663
Intangible assets, net
273,011
231,511
Goodwill
732,075
732,075
Other assets
21,788
50,369
Total assets
$
1,789,408
$
2,047,319
LIABILITIES &
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
90,828
$
115,829
Income taxes payable
1,352
12,093
Contract liabilities
39,284
42,633
Lease liabilities
25,284
24,740
Total current liabilities
156,748
195,295
Deferred income tax liabilities
47,942
34,012
Lease liabilities, non-current
80,557
76,802
Other long-term liabilities
41,451
36,152
Total liabilities
326,698
342,261
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 32,000,000
shares authorized; 21,964,809 and 24,403,364 shares issued and
outstanding at December 31, 2019 and September 30, 2020,
respectively
220
244
Additional paid-in capital
1,309,438
1,515,662
Accumulated other comprehensive income
233
760
Retained earnings
152,819
188,392
Total stockholders’ equity
1,462,710
1,705,058
Total liabilities and stockholders’
equity
$
1,789,408
$
2,047,319
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the nine months ended
September 30,
2019
2020
Cash flows from operating activities:
Net income
$
52,601
$
80,351
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of deferred financing
costs
250
250
Amortization of investment
discount/premium
286
108
Depreciation and amortization
78,862
78,189
Deferred income taxes
971
(12,867
)
Stock-based compensation
9,075
10,759
Impairment of right-of-use lease
assets
—
453
Changes in assets and liabilities:
Tuition receivable, net
2,258
(1,224
)
Other assets
(1,648
)
(8,684
)
Accounts payable and accrued expenses
(2,022
)
681
Income taxes payable
(7,125
)
10,674
Contract liabilities
10,311
4,540
Other long-term liabilities
(2,412
)
(4,444
)
Net cash provided by operating
activities
141,407
158,786
Cash flows from investing activities:
Purchases of property and equipment
(27,769
)
(34,787
)
Purchases of marketable securities
(17,769
)
(1,863
)
Proceeds from marketable securities
32,860
22,868
Other investments
(878
)
(768
)
Net cash used in investing activities
(13,556
)
(14,550
)
Cash flows from financing activities:
Net proceeds from issuance of common
stock
—
220,248
Common dividends paid
(33,297
)
(41,305
)
Net payments for stock awards
(9,195
)
(24,778
)
Repurchase of common stock
—
(247
)
Net cash provided by (used in) financing
activities
(42,492
)
153,918
Net increase in cash, cash equivalents,
and restricted cash
85,359
298,154
Cash, cash equivalents, and restricted
cash — beginning of period
312,237
420,497
Cash, cash equivalents, and restricted
cash — end of period
$
397,596
$
718,651
STRATEGIC EDUCATION,
INC.
UNAUDITED SEGMENT
REPORTING
(in thousands)
For the three months ended
September 30,
For the nine months
ended September 30,
2019
2020
2019
2020
Revenues:
Strayer University
$
129,993
$
128,411
$
392,466
$
412,145
Capella University
111,754
110,615
340,899
348,014
Consolidated revenues
$
241,747
$
239,026
$
733,365
$
760,159
Income from operations:
Strayer University
$
17,993
$
22,809
$
66,229
$
95,225
Capella University
18,924
14,974
65,039
68,684
Amortization of intangible assets
(15,417
)
(15,417
)
(46,251
)
(46,251
)
Merger and integration costs
(1,500
)
(2,920
)
(11,698
)
(7,858
)
Restructuring costs
—
(4,024
)
—
(4,024
)
Consolidated income from operations
$
20,000
$
15,422
$
73,319
$
105,776
Non-GAAP Financial Measures
In our press release and schedules, we report certain financial
measures that are not required by, or presented in accordance with,
accounting principles generally accepted in the United States of
America ("GAAP"). We discuss management's reasons for reporting
these non-GAAP measures below, and the press release schedules that
follow reconcile the most directly comparable GAAP measure to each
non-GAAP measure that we reference. Although management evaluates
and presents these non-GAAP measures for the reasons described
below, please be aware that these non-GAAP measures have
limitations and should not be considered in isolation or as a
substitute for revenue, total costs and expenses, income from
operations, operating margin, income before income taxes, net
income, earnings per share or any other comparable financial
measure prescribed by GAAP. In addition, we may calculate and/or
present these non-GAAP financial measures differently than measures
with the same or similar names that other companies report, and as
a result, the non-GAAP measures we report may not be comparable to
those reported by others.
Management uses certain non-GAAP measures to evaluate financial
performance because those non-GAAP measures allow for
period-over-period comparisons of the Company’s ongoing operations
before the impact of certain items described below. These measures
are Adjusted Total Costs and Expenses, Adjusted Income from
Operations, Adjusted Operating Margin, Adjusted Income Before
Income Taxes, Adjusted Net Income, Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA), Adjusted EBITDA and
Adjusted Diluted Earnings Per Share (EPS). We define Adjusted Total
Costs and Expenses, Adjusted Income from Operations, Adjusted
Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net
Income, and Adjusted Diluted EPS to exclude (1) amortization and
depreciation expense related to intangible assets and software
assets associated with the Company’s merger with Capella Education
Company, (2) integration expenses associated with the Company's
merger with Capella Education Company, and transaction expenses
associated with the Company's acquisition of the Australia and New
Zealand operations of Laureate, (3) severance costs associated with
the Company’s restructuring, (4) income recognized from the
Company’s investments in partnership interests and other
investments, and (5) discrete tax adjustments utilizing an adjusted
effective tax rate of 28.0% and 28.5% for the three months ended
September 30, 2019 and 2020, respectively. We define EBITDA as net
income before other income, the provision for income taxes,
depreciation and amortization, and from this amount in arriving at
Adjusted EBITDA we also exclude stock-based compensation expense
and the amounts in (2) and (3) above. These non-GAAP measures are
reconciled to the most directly comparable GAAP measures in the
sections that follow. Non-GAAP measures should not be viewed as
substitutes for GAAP measures.
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
ADJUSTED INCOME FROM
OPERATIONS, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET
INCOME, AND ADJUSTED EPS
(in thousands, except per
share data)
For the three months ended
September 30, 2019
Non-GAAP Adjustments
As Reported
(GAAP)
Amortization of
intangible assets(1)
Merger and integration
costs(2)
Restructuring costs(3)
Income from other
investments(4)
Tax
adjustments(5)
As Adjusted
(Non-GAAP)
Revenues
$
241,747
$
—
$
—
$
—
$
—
$
—
$
241,747
Total costs and expenses
221,747
(15,417)
(1,500)
—
—
—
204,830
Income from operations
20,000
15,417
1,500
—
—
—
36,917
Operating margin
8.3%
15.3%
Income before income taxes
23,243
15,417
1,500
—
(706)
—
39,454
Net income
$
16,692
$
15,417
$
1,500
$
—
$
(706)
$
(4,496)
$
28,407
Earnings per share:
Diluted
$
0.75
$
1.28
Weighted average shares
outstanding:
Diluted
22,129
22,129
For the three months ended
September 30, 2020
Non-GAAP Adjustments
As Reported (GAAP)
Amortization of
intangible assets(1)
Merger and integration
costs(2)
Restructuring costs(3)
Income from other
investments(4)
Tax
adjustments(5)
As Adjusted
(Non-GAAP)
Revenues
$
239,026
$
—
$
—
$
—
$
—
$
—
$
239,026
Total costs and expenses
223,604
(15,417)
(2,920)
(4,024)
—
—
201,243
Income from operations
15,422
15,417
2,920
4,024
—
—
37,783
Operating margin
6.5%
15.8%
Income before income taxes
16,334
15,417
2,920
4,024
(391)
—
38,304
Net income
$
10,960
$
15,417
$
2,920
$
4,024
$
(391)
$
(5,543)
$
27,387
Earnings per share:
Diluted
$
0.47
$
1.18
Weighted average shares
outstanding:
Diluted
23,214
23,214
(1)
Reflects amortization and depreciation
expense of intangible assets and software assets acquired through
the Company’s merger with Capella Education Company.
(2)
Reflects integration expenses associated
with the Company's merger with Capella Education Company, and
transaction expenses associated with the Company's acquisition of
the Australia and New Zealand operations of Laureate.
(3)
Reflects severance costs associated with
the Company’s restructuring.
(4)
Reflects income recognized from the
Company's investments in partnership interests and other
investments.
(5)
Reflects tax impacts of the adjustments
described above and discrete tax adjustments related to stock-based
compensation and other adjustments, utilizing adjusted effective
tax rates of 28.0% and 28.5% for the three months ended September
30, 2019 and 2020, respectively.
STRATEGIC EDUCATION, INC.
UNAUDITED NON-GAAP SEGMENT
REPORTING
(in thousands)
For the three months ended
September 30,
For the nine months ended
September 30,
2019
2020
2019
2020
Revenues:
Strayer University
$
129,993
$
128,411
$
392,466
$
412,145
Capella University
111,754
110,615
340,899
348,014
Consolidated revenues
$
241,747
$
239,026
$
733,365
$
760,159
Income from operations:
Strayer University
$
17,993
$
22,809
$
66,229
$
95,225
Capella University
18,924
14,974
65,039
68,684
Amortization of intangible assets
(15,417)
(15,417)
(46,251)
(46,251)
Merger and integration costs
(1,500)
(2,920)
(11,698)
(7,858)
Restructuring costs
—
(4,024)
—
(4,024)
Consolidated income from operations
20,000
15,422
73,319
105,776
Adjustments to consolidated income from
operations:
Amortization of intangible assets
15,417
15,417
46,251
46,251
Merger and integration costs
1,500
2,920
11,698
7,858
Restructuring costs
—
4,024
—
4,024
Total adjustments to consolidated income
from operations
16,917
22,361
57,949
58,133
Adjusted income from operations by
segment:
Strayer University
17,993
22,809
66,229
95,225
Capella University
18,924
14,974
65,039
68,684
Total adjusted income from operations
$
36,917
$
37,783
$
131,268
$
163,909
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
(in thousands)
For the three months ended
September 30,
2019
2020
Net income
$
16,692
$
10,960
Provision for income taxes
6,551
5,374
Other income
(3,243)
(912)
Depreciation and amortization
26,365
26,208
EBITDA
46,365
41,630
Stock-based compensation
3,020
3,875
Merger and integration costs (1)
1,500
2,920
Restructuring costs (2)
—
4,024
Adjusted EBITDA
$
50,885
$
52,449
(1)
Reflects integration charges associated with the Company's
merger with Capella Education Company, and transaction expenses
associated with the Company's acquisition of the Australia and New
Zealand operations of Laureate. Includes $0.5 million of
stock-based compensation benefit related to forfeitures of
stock-based awards for the three months ended September 30,
2019.
(2)
Reflects severance costs associated with the Company’s
restructuring.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005346/en/
Terese Wilke Manager, Investor Relations Strategic Education,
Inc. (612) 977-6331 terese.wilke@strategiced.com
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