Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast, Stock Sale/Buyback

Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2021 Results


Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2021.

Full Year 2021 Results as Compared to Prior Year

Fourth Quarter 2021 Results as Compared to Prior Year Quarter

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

"We are pleased with our operating performance in 2021. Our business performed well despite recent student engagement issues which we believe relate to the COVID-19 pandemic," said Todd Nelson, Perdoceo's Executive Chairman. "We are also pleased with the two acquisitions completed during 2021 which further broaden the academic offerings at our educational institutions."

Andrew Hurst, recently named as Perdoceo's President and Chief Executive Officer, added, "Our strong management team remains focused on student experiences, retention and academic outcomes while continuing to leverage data analytics and technology to benefit our institutions."

REVENUE

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Revenue ($ in thousands)

 

2021

 

 

2020

 

 

%
Change

 

 

2021

 

 

2020

 

 

%
Change

 

CTU (1)

 

$

95,904

 

 

$

102,741

 

 

 

-6.7

%

 

$

408,549

 

 

$

405,507

 

 

 

0.8

%

AIUS (2)

 

 

63,712

 

 

 

68,082

 

 

 

-6.4

%

 

 

283,360

 

 

 

281,361

 

 

 

0.7

%

Corporate and Other

 

 

243

 

 

 

336

 

 

NM

 

 

 

1,125

 

 

 

446

 

 

NM

 

Total

 

$

159,859

 

 

$

171,159

 

 

 

-6.6

%

 

$

693,034

 

 

$

687,314

 

 

 

0.8

%

(1)

CTU's results of operations include the acquisition of Hippo Education LLC (the "Hippo acquisition") commencing on the September 10, 2021 date of acquisition.

 

 

(2)

AIUS' results of operations include the acquisition of substantially all of the assets of DigitalCrafts (the "DigitalCrafts acquisition") commencing on the August 2, 2021 date of acquisition and the acquisition of substantially all of the assets of Trident University International (the "Trident acquisition") commencing on the March 2, 2020 date of acquisition.

TOTAL STUDENT ENROLLMENTS

 

 

At December 31,

 

Total Student Enrollments (1)

 

2021

 

 

2020

 

 

% Change

 

CTU

 

 

24,700

 

 

 

24,600

 

 

 

0.4

%

AIUS

 

 

15,700

 

 

 

18,100

 

 

 

-13.3

%

Total

 

 

40,400

 

 

 

42,700

 

 

 

-5.4

%

(1)

Total student enrollments do not include learners participating in non-degree professional development and continuing education offerings.

OPERATING INCOME

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Operating Income ($ in thousands)

 

2021

 

 

2020

 

 

%
Change

 

 

2021

 

 

2020

 

 

%
Change

 

CTU (1)

 

$

35,723

 

 

$

37,802

 

 

 

-5.5

%

 

$

148,481

 

 

$

138,490

 

 

 

7.2

%

AIUS (2)

 

 

10,255

 

 

 

5,457

 

 

 

87.9

%

 

 

39,130

 

 

 

30,822

 

 

 

27.0

%

Corporate and Other (3)

 

 

(11,402

)

 

 

(7,070

)

 

 

-61.3

%

 

 

(38,595

)

 

 

(26,378

)

 

 

-46.3

%

Total

 

$

34,576

 

 

$

36,189

 

 

 

-4.5

%

 

$

149,016

 

 

$

142,934

 

 

 

4.3

%

(1)

CTU's results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition.

 

 

(2)

AIUS' results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition.

 

 

(3)

Corporate and Other includes legal fee expense associated with (i) responses to the Department of Education ("the Department") relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts

ADJUSTED OPERATING INCOME

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Adjusted Operating Income ($ in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating income

 

$

34,576

 

 

$

36,189

 

 

$

149,016

 

 

$

142,934

 

Depreciation and amortization (1)

 

 

4,964

 

 

 

4,001

 

 

 

16,766

 

 

 

14,786

 

Legal fee expense related to certain matters (2)

 

 

2,494

 

 

 

1,129

 

 

 

9,735

 

 

 

1,296

 

Adjusted Operating Income

 

$

42,034

 

 

$

41,319

 

 

$

175,517

 

 

$

159,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

1.7

%

 

 

 

 

 

 

10.4

%

 

 

 

 

(1)

Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions.

 

 

(2)

Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended December 31, 2021, the Company recorded:

For the year ended December 31, 2021, the Company recorded:

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.35

 

 

$

0.38

 

 

$

1.55

 

 

$

1.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (1)

 

 

0.03

 

 

 

0.01

 

 

 

0.06

 

 

 

0.04

 

Legal fee expense related to certain matters (2)

 

 

0.04

 

 

 

0.01

 

 

 

0.14

 

 

 

0.02

 

Tax effect of adjustments (3)

 

 

(0.02

)

 

 

-

 

 

 

(0.05

)

 

 

(0.02

)

Release of valuation allowance (4)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.22

)

Adjusted Earnings Per Diluted Share

 

$

0.40

 

 

$

0.40

 

 

$

1.70

 

 

$

1.56

 

(1)

Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions.

 

 

(2)

Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

 

 

(3)

The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

 

 

(4)

The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance.

BALANCE SHEET AND CASH FLOW

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Selected Cash Flow Items ($ in thousands)

 

2021

 

 

2020

 

 

%
Change

 

 

2021

 

 

2020

 

 

%
Change

 

Net cash provided by operating activities

 

$

46,910

 

 

$

42,203

 

 

 

11.2

%

 

$

191,116

 

 

$

179,956

 

 

 

6.2

%

Business acquisitions, net of cash acquired

 

$

196

 

 

$

-

 

 

NM

 

 

$

57,143

 

 

$

39,819

 

 

 

43.5

%

Capital expenditures

 

$

4,177

 

 

$

2,289

 

 

 

82.5

%

 

$

10,453

 

 

$

9,768

 

 

 

7.0

%

STOCK REPURCHASE PROGRAM

The Board of Directors of the Company approved a stock repurchase program commencing March 1, 2022 which authorizes the Company to repurchase up to $50.0 million of the Company's outstanding common stock. The program expires September 30, 2023 and replaces the existing stock repurchase program that expires on February 28, 2022.

OUTLOOK

The Company is providing the following 2022 outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details.

 

Total Company Outlook

 

For Quarter Ending March 31,

 

For the Year Ending December 31,

 

OUTLOOK

ACTUAL

 

OUTLOOK

ACTUAL

 

2022

2021

 

2022

2021

Operating Income

$40.8M - $42.8M

$40.6M

 

$106.7M - $119.7M

$149.0M

Depreciation and amortization

$5.0M

$4.0M

 

$20.7M

$16.8M

Legal fee expense related to certain matters (1)

$2.2M

$0.3M

 

$7.6M

$9.7M

Adjusted Operating Income

$48.0M - $50.0M

$44.9M

 

$135.0M - $148.0M

$175.5M

 

 

 

 

 

 

Earnings Per Diluted Share

$0.43 - $0.45

$0.43

 

$1.13 - $1.27

$1.55

Amortization of acquired intangible assets

$0.02

$0.01

 

$0.10

$0.06

Legal fee expense related to certain matters (1)

$0.03

-

 

$0.11

$0.14

Tax effect of adjustments

($0.01)

-

 

($0.06)

($0.05)

Adjusted Earnings Per Diluted Share

$0.47 - $0.49

$0.44

 

$1.28 - $1.42

$1.70

(1)

Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2022 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company's programs remains consistent with recent experience, (ii) no significant impact of new or proposed regulations, including recent Department of Education negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, (iii) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (iv) no significant future operating or financial impacts relating to the COVID-19 pandemic, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 27.0% for the first quarter and 26.0% for the full year, and (vi) any future impact from the Company's stock repurchase program is excluded. Although these estimates and assumptions are based upon management's good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above.

CONFERENCE CALL INFORMATION

Perdoceo Education Corporation will host a conference call on Thursday, February 24, 2022 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2021 results and 2022 outlook. Interested parties can access the live webcast of the conference at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 553619. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/364159545. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days following the call at www.perdoceoed.com in the Investor Relations section of the website.

ABOUT PERDOCEO EDUCATION CORPORATION

Perdoceo's academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company's accredited institutions ? Colorado Technical University ("CTU") and the American InterContinental University System ("AIUS" or "AIU System") ? provide degree programs from the associate through doctoral level as well as non-degree professional development and continuing education offerings. Perdoceo's universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today's busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as "believe," "will," "expect," "continue," "outlook," "remain," "focused on," "should" and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of "borrower defense to repayment" regulations; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued eligibility to participate in educational assistance programs for veterans or other military personnel; increased competition; the impact of management changes; and changes in the overall U.S. economy which may continue to be impacted by the COVID-19 pandemic. Further information about these and other relevant risks and uncertainties may be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and its subsequent filings with the Securities and Exchange Commission.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

319,982

 

 

$

105,684

 

Restricted cash

 

 

5,196

 

 

 

4,000

 

Short-term investments

 

 

174,213

 

 

 

300,676

 

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

 

 

499,391

 

 

 

410,360

 

 

 

 

 

 

 

 

 

 

Student receivables, net

 

 

43,033

 

 

 

44,682

 

Receivables, other

 

 

1,692

 

 

 

2,873

 

Prepaid expenses

 

 

6,919

 

 

 

8,209

 

Inventories

 

 

904

 

 

 

596

 

Other current assets

 

 

2,514

 

 

 

341

 

Total current assets

 

 

554,453

 

 

 

467,061

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

28,355

 

 

 

27,761

 

Right of use asset, net

 

 

36,664

 

 

 

44,773

 

Goodwill

 

 

162,579

 

 

 

118,312

 

Intangible assets, net

 

 

32,208

 

 

 

15,522

 

Student receivables, net

 

 

1,372

 

 

 

1,303

 

Deferred income tax assets, net

 

 

25,114

 

 

 

40,351

 

Other assets

 

 

6,688

 

 

 

6,434

 

TOTAL ASSETS

 

$

847,433

 

 

$

721,517

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

$

9,400

 

 

$

9,789

 

Accounts payable

 

 

10,838

 

 

 

13,259

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related benefits

 

 

25,312

 

 

 

22,661

 

Advertising and marketing costs

 

 

8,690

 

 

 

10,249

 

Income taxes

 

 

211

 

 

 

1,402

 

Other

 

 

15,180

 

 

 

11,921

 

Deferred revenue

 

 

70,613

 

 

 

34,534

 

Total current liabilities

 

 

140,244

 

 

 

103,815

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

 

35,549

 

 

 

43,405

 

Other liabilities

 

 

21,530

 

 

 

18,390

 

Total non-current liabilities

 

 

57,079

 

 

 

61,795

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

887

 

 

 

873

 

Additional paid-in capital

 

 

674,242

 

 

 

658,423

 

Accumulated other comprehensive (loss) income

 

 

(96

)

 

 

364

 

Retained earnings

 

 

251,972

 

 

 

142,335

 

Treasury stock

 

 

(276,895

)

 

 

(246,088

)

Total stockholders' equity

 

 

650,110

 

 

 

555,907

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

847,433

 

 

$

721,517

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Quarter Ended December 31,

 

 

 

2021

 

 

% of
Total
Revenue

 

 

2020

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

158,185

 

 

 

99.0

%

 

$

170,215

 

 

 

99.4

%

Other

 

 

1,674

 

 

 

1.0

%

 

 

944

 

 

 

0.6

%

Total revenue

 

 

159,859

 

 

 

 

 

 

 

171,159

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

25,276

 

 

 

15.8

%

 

 

28,619

 

 

 

16.7

%

General and administrative

 

 

95,043

 

 

 

59.5

%

 

 

102,350

 

 

 

59.8

%

Depreciation and amortization

 

 

4,964

 

 

 

3.1

%

 

 

4,001

 

 

 

2.3

%

Total operating expenses

 

 

125,283

 

 

 

78.4

%

 

 

134,970

 

 

 

78.9

%

Operating income

 

 

34,576

 

 

 

21.6

%

 

 

36,189

 

 

 

21.1

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

136

 

 

 

0.1

%

 

 

576

 

 

 

0.3

%

Miscellaneous income

 

 

67

 

 

 

0.0

%

 

 

113

 

 

 

0.1

%

Total other income

 

 

203

 

 

 

0.1

%

 

 

689

 

 

 

0.4

%

PRETAX INCOME

 

 

34,779

 

 

 

21.8

%

 

 

36,878

 

 

 

21.5

%

Provision for income taxes

 

 

10,309

 

 

 

6.4

%

 

 

9,806

 

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

24,470

 

 

 

15.3

%

 

 

27,072

 

 

 

15.8

%

Loss from discontinued operations, net of tax

 

 

(4

)

 

 

0.0

%

 

 

(21

)

 

 

0.0

%

NET INCOME

 

 

24,466

 

 

 

15.3

%

 

 

27,051

 

 

 

15.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.35

 

 

 

 

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

0.35

 

 

 

 

 

 

$

0.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

69,565

 

 

 

 

 

 

 

69,555

 

 

 

 

 

Diluted

 

 

70,335

 

 

 

 

 

 

 

70,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Quarter Ended December 31,

 

 

 

 

 

(In Thousands)

 

2021

 

 

 

 

 

 

2020

 

 

 

 

 

NET INCOME

 

$

24,466

 

 

 

 

 

 

$

27,051

 

 

 

 

 

OTHER COMPREHENSIVE LOSS, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(2

)

 

 

 

 

 

 

71

 

 

 

 

 

Unrealized loss investments

 

 

(91

)

 

 

 

 

 

 

(310

)

 

 

 

 

Total other comprehensive loss

 

 

(93

)

 

 

 

 

 

 

(239

)

 

 

 

 

COMPREHENSIVE INCOME

 

$

24,373

 

 

 

 

 

 

$

26,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Year Ended December 31,

 

 

 

2021

 

 

% of
Total
Revenue

 

 

2020

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

688,415

 

 

 

99.3

%

 

$

684,579

 

 

 

99.6

%

Other

 

 

4,619

 

 

 

0.7

%

 

 

2,735

 

 

 

0.4

%

Total revenue

 

 

693,034

 

 

 

 

 

 

 

687,314

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

108,743

 

 

 

15.7

%

 

 

111,768

 

 

 

16.3

%

General and administrative

 

 

418,509

 

 

 

60.4

%

 

 

417,214

 

 

 

60.7

%

Depreciation and amortization

 

 

16,766

 

 

 

2.4

%

 

 

14,786

 

 

 

2.2

%

Asset impairment

 

 

-

 

 

 

0.0

%

 

 

612

 

 

 

0.1

%

Total operating expenses

 

 

544,018

 

 

 

78.5

%

 

 

544,380

 

 

 

79.2

%

Operating income

 

 

149,016

 

 

 

21.5

%

 

 

142,934

 

 

 

20.8

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

930

 

 

 

0.1

%

 

 

3,852

 

 

 

0.6

%

Interest expense

 

 

(920

)

 

 

-0.1

%

 

 

(167

)

 

 

0.0

%

Miscellaneous income

 

 

58

 

 

 

0.0

%

 

 

211

 

 

 

0.0

%

Total other income

 

 

68

 

 

 

0.0

%

 

 

3,896

 

 

 

0.6

%

PRETAX INCOME

 

 

149,084

 

 

 

21.5

%

 

 

146,830

 

 

 

21.4

%

Provision for income taxes

 

 

39,430

 

 

 

5.7

%

 

 

22,476

 

 

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

109,654

 

 

 

15.8

%

 

 

124,354

 

 

 

18.1

%

Loss from discontinued operations, net of tax

 

 

(17

)

 

 

0.0

%

 

 

(90

)

 

 

0.0

%

NET INCOME

 

 

109,637

 

 

 

15.8

%

 

 

124,264

 

 

 

18.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

1.57

 

 

 

 

 

 

$

1.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

1.55

 

 

 

 

 

 

$

1.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

70,024

 

 

 

 

 

 

 

69,414

 

 

 

 

 

Diluted

 

 

70,881

 

 

 

 

 

 

 

71,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Year Ended December 31,

 

 

 

 

 

(In Thousands)

 

2021

 

 

 

 

 

 

2020

 

 

 

 

 

NET INCOME

 

$

109,637

 

 

 

 

 

 

$

124,264

 

 

 

 

 

OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(177

)

 

 

 

 

 

 

199

 

 

 

 

 

Unrealized loss on investments

 

 

(283

)

 

 

 

 

 

 

(179

)

 

 

 

 

Total other comprehensive (loss) income

 

 

(460

)

 

 

 

 

 

 

20

 

 

 

 

 

COMPREHENSIVE INCOME

 

$

109,177

 

 

 

 

 

 

$

124,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For the Year Ended December 31,

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

109,637

 

 

$

124,264

 

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

 

 

 

 

 

 

 

 

Asset impairment

 

 

-

 

 

 

612

 

Depreciation and amortization expense

 

 

16,766

 

 

 

14,786

 

Bad debt expense

 

 

44,344

 

 

 

47,556

 

Compensation expense related to share-based awards

 

 

14,972

 

 

 

13,379

 

Deferred income taxes

 

 

15,330

 

 

 

20,353

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Student receivables, gross

 

 

6,631

 

 

 

7,092

 

Allowance for credit losses

 

 

(47,417

)

 

 

(39,546

)

Receivables, other

 

 

5,396

 

 

 

(99

)

Inventories, prepaid expenses, and other current assets

 

 

3,285

 

 

 

3,031

 

Other non-current assets

 

 

72

 

 

 

151

 

Accounts payable

 

 

(2,744

)

 

 

374

 

Accrued expenses and other non-current liabilities

 

 

(3,404

)

 

 

(11,135

)

Deferred revenue

 

 

30,724

 

 

 

5,138

 

Right of use asset and lease liability

 

 

(2,476

)

 

 

(6,000

)

Net cash provided by operating activities

 

 

191,116

 

 

 

179,956

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(269,739

)

 

 

(403,673

)

Sales of available-for-sale investments

 

 

391,659

 

 

 

287,249

 

Purchases of property and equipment

 

 

(10,453

)

 

 

(9,768

)

Business acquisitions, net of acquired cash

 

 

(57,143

)

 

 

(39,819

)

Other

 

 

-

 

 

 

103

 

Net cash provided by (used in) investing activities

 

 

54,324

 

 

 

(165,908

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of treasury stock

 

 

(25,296

)

 

 

(17,862

)

Issuance of common stock

 

 

861

 

 

 

5,723

 

Payments of employee tax associated with stock compensation

 

 

(5,511

)

 

 

(912

)

Net cash used in financing activities

 

 

(29,946

)

 

 

(13,051

)

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

215,494

 

 

 

997

 

 

 

 

 

 

 

 

 

 

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

 

 

109,684

 

 

 

108,687

 

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

 

$

325,178

 

 

$

109,684

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For the Quarter Ended December 31,

 

 

 

2021

 

 

2020

 

REVENUE:

 

 

 

 

 

 

 

 

CTU (1)

 

$

95,904

 

 

$

102,741

 

AIUS (2)

 

 

63,712

 

 

 

68,082

 

Corporate and Other

 

 

243

 

 

 

336

 

Total

 

$

159,859

 

 

$

171,159

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU (1)

 

$

35,723

 

 

$

37,802

 

AIUS (2)

 

 

10,255

 

 

 

5,457

 

Corporate and Other

 

 

(11,402

)

 

 

(7,070

)

Total

 

$

34,576

 

 

$

36,189

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU (1)

 

 

37.2

%

 

 

36.8

%

AIUS (2)

 

 

16.1

%

 

 

8.0

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

21.6

%

 

 

21.1

%

(1)

CTU's results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition.

 

 

(2)

AIUS' results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For the Year Ended December 31,

 

 

 

2021

 

 

2020

 

REVENUE:

 

 

 

 

 

 

 

 

CTU (1)

 

$

408,549

 

 

$

405,507

 

AIUS (2)

 

 

283,360

 

 

 

281,361

 

Corporate and Other

 

 

1,125

 

 

 

446

 

Total

 

$

693,034

 

 

$

687,314

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU (1)

 

$

148,481

 

 

$

138,490

 

AIUS (2)

 

 

39,130

 

 

 

30,822

 

Corporate and Other

 

 

(38,595

)

 

 

(26,378

)

Total

 

$

149,016

 

 

$

142,934

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU (1)

 

 

36.3

%

 

 

34.2

%

AIUS (2)

 

 

13.8

%

 

 

11.0

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

21.5

%

 

 

20.8

%

 

 

 

 

 

 

 

 

 

(1)

CTU's results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition.

 

 

(2)

AIUS' results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

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

(In thousands, unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

 

 

ACTUAL

 

 

ACTUAL

 

Adjusted Operating Income

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating income

 

$

34,576

 

 

$

36,189

 

 

$

149,016

 

 

$

142,934

 

Depreciation and amortization (2)

 

 

4,964

 

 

 

4,001

 

 

 

16,766

 

 

 

14,786

 

Legal fee expense related to certain matters (3)

 

 

2,494

 

 

 

1,129

 

 

 

9,735

 

 

 

1,296

 

Adjusted Operating Income (4)

 

$

42,034

 

 

$

41,319

 

 

$

175,517

 

 

$

159,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending March 31,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating income

 

$40.8M - $42.8M

 

 

$

40,617

 

 

$106.7M - $119.7M

 

 

$

149,016

 

Depreciation and amortization (2)

 

$5.0M

 

 

 

4,002

 

 

$20.7M

 

 

 

16,766

 

Legal fee expense related to certain matters (3)

 

$2.2M

 

 

 

242

 

 

$7.6M

 

 

 

9,735

 

Adjusted Operating Income (4)

 

$48.0M - $50.0M

 

 

$

44,861

 

 

$135.0M - $148.0M

 

 

$

175,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

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

 

 

 

 

 

 

 

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

 

 

ACTUAL

 

 

ACTUAL

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Reported Earnings Per Diluted Share

 

$

0.35

 

 

$

0.38

 

 

$

1.55

 

 

$

1.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

 

0.03

 

 

 

0.01

 

 

 

0.06

 

 

 

0.04

 

Legal fee expense related to certain matters (3)

 

 

0.04

 

 

 

0.01

 

 

 

0.14

 

 

 

0.02

 

Total pre-tax adjustments

 

$

0.07

 

 

$

0.02

 

 

$

0.20

 

 

$

0.06

 

Tax effect of adjustments (5)

 

 

(0.02

)

 

 

-

 

 

 

(0.05

)

 

 

(0.02

)

Release of valuation allowance (6)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.22

)

Total adjustments after tax

 

 

0.05

 

 

 

0.02

 

 

 

0.15

 

 

 

(0.18

)

Adjusted Earnings Per Diluted Share (4)

 

$

0.40

 

 

$

0.40

 

 

$

1.70

 

 

$

1.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending March 31,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reported Earnings Per Diluted Share

 

$0.43 - $0.45

 

 

$

0.43

 

 

$1.13 - $1.27

 

 

$

1.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

0.02

 

 

 

0.01

 

 

0.10

 

 

 

0.06

 

Legal fee expense related to certain matters (3)

 

0.03

 

 

 

-

 

 

0.11

 

 

 

0.14

 

Total pre-tax adjustments

 

$0.05

 

 

$

0.01

 

 

$0.21

 

 

$

0.20

 

Tax effect of adjustments (5)

 

(0.01

 

 

-

 

 

(0.06

 

 

(0.05

)

Total adjustments after tax

 

0.04

 

 

 

0.01

 

 

0.15

 

 

 

0.15

 

Adjusted Earnings Per Diluted Share (4)

 

$0.47 - $0.49

 

 

$

0.44

 

 

$1.28 - $1.42

 

 

$

1.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

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

 

(1)

The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company's historical results and to provide estimates of future performance.

 

 

The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity.

 

 

Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company's results of operations and the factors and trends affecting the Company's business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.

 

 

Results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition, the Hippo acquisition commencing on the September 10, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition.

 

(2)

Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo acquisitions.

 

 

(3)

Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

 

 

(4)

The Company began adjusting for legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts, during the second quarter of 2021. The Company believes that these expenses are not reflective of underlying operating performance. Also, the Company no longer adjusts operating income for expenses related to the vacated facilities at closed campuses as these expenses are expected to be immaterial. Prior period amounts were recast for these items to maintain comparability.

 

 

(5)

The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax.

 

 

(6)

The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance.

 


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