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

Perdoceo Education Corporation Reports Second Quarter and Year to Date 2022 Results


Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended June 30, 2022.

Second Quarter 2022 Results as Compared to Prior Year Quarter

Year to Date 2022 Results as Compared to Prior Year to Date

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

"We are pleased with the year to date operating results, which continue to underscore our commitment to student experiences, retention and academic outcomes. I'm proud of the entire Perdoceo team for their focus on educating, serving and supporting our students," said Andrew Hurst, Chief Executive Officer. "We continue to leverage and integrate technology across various academic and student support processes, which improves the efficiency and effectiveness of our student related processes and overall operations."

REVENUE

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Revenue ($ in thousands)

 

2022

 

 

2021

 

 

%
Change

 

 

2022

 

 

2021

 

 

%
Change

 

CTU

 

$

100,461

 

 

$

102,035

 

 

 

-1.5

%

 

$

213,609

 

 

$

207,857

 

 

 

2.8

%

AIUS

 

 

66,920

 

 

 

73,223

 

 

 

-8.6

%

 

 

136,452

 

 

 

150,700

 

 

 

-9.5

%

Corporate and Other

 

 

303

 

 

 

281

 

 

NM

 

 

 

582

 

 

 

620

 

 

NM

 

Total

 

$

167,684

 

 

$

175,539

 

 

 

-4.5

%

 

$

350,643

 

 

$

359,177

 

 

 

-2.4

%

TOTAL STUDENT ENROLLMENTS

 

 

At June 30,

 

Total Student Enrollments

 

2022

 

 

2021

 

 

% Change

 

CTU

 

 

26,000

 

 

 

26,600

 

 

 

-2.3

%

AIUS

 

 

14,100

 

 

 

16,500

 

 

 

-14.5

%

Total

 

 

40,100

 

 

 

43,100

 

 

 

-7.0

%

OPERATING INCOME

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Operating Income ($ in thousands)

 

2022

 

 

2021

 

 

%
Change

 

 

2022

 

 

2021

 

 

%
Change

 

CTU

 

$

33,008

 

 

$

35,398

 

 

 

-6.8

%

 

$

76,034

 

 

$

71,541

 

 

 

6.3

%

AIUS

 

 

10,733

 

 

 

9,218

 

 

 

16.4

%

 

 

20,256

 

 

 

20,541

 

 

 

-1.4

%

Corporate and Other

 

 

(9,795

)

 

 

(8,654

)

 

NM

 

 

 

(18,651

)

 

 

(15,503

)

 

NM

 

Total

 

$

33,946

 

 

$

35,962

 

 

 

-5.6

%

 

$

77,639

 

 

$

76,579

 

 

 

1.4

%

ADJUSTED OPERATING INCOME

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

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Adjusted Operating Income ($ in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating income

 

$

33,946

 

 

$

35,962

 

 

$

77,639

 

 

$

76,579

 

Depreciation and amortization (1)

 

 

4,909

 

 

 

3,913

 

 

 

9,791

 

 

 

7,915

 

Legal fee expense related to certain matters (2)

 

 

3,087

 

 

 

2,416

 

 

 

5,434

 

 

 

2,658

 

Adjusted Operating Income

 

$

41,942

 

 

$

42,291

 

 

$

92,864

 

 

$

87,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

-0.8

%

 

 

 

 

 

 

6.6

%

 

 

 

 

(1)

 

Amortization relates to definite-lived intangible assets associated with acquisitions.

(2)

 

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

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended June 30, 2022, the Company recorded:

For the year to date ended June 30, 2022, the Company recorded:

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.37

 

 

$

0.37

 

 

$

0.83

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (1)

 

 

0.02

 

 

 

0.01

 

 

 

0.05

 

 

 

0.02

 

Legal fee expense related to certain matters (2)

 

 

0.05

 

 

 

0.04

 

 

 

0.08

 

 

 

0.04

 

Tax effect of adjustments (3)

 

 

(0.02

)

 

 

(0.01

)

 

 

(0.03

)

 

 

(0.01

)

Adjusted Earnings Per Diluted Share

 

$

0.42

 

 

$

0.41

 

 

$

0.93

 

 

$

0.85

 

(1)

 

Amortization relates to definite-lived intangible assets associated with acquisitions.

(2)

 

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

(3)

 

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.

BALANCE SHEET AND CASH FLOW

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Selected Cash Flow Items ($ in thousands)

 

2022

 

 

2021

 

 

%
Change

 

 

2022

 

 

2021

 

 

%
Change

 

Net cash provided by operating activities

 

$

32,625

 

 

$

38,037

 

 

 

-14.2

%

 

$

54,779

 

 

$

82,745

 

 

 

-33.8

%

Capital expenditures

 

$

2,023

 

 

$

2,017

 

 

 

0.3

%

 

$

6,765

 

 

$

3,059

 

 

 

121.2

%

OUTLOOK

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

 

Total Company Outlook

 

For Quarter Ending September 30,

 

For the Year Ending December 31,

 

OUTLOOK

ACTUAL

 

OUTLOOK

ACTUAL

 

2022

2021

 

2022

2021

Operating Income

$19.7M - $21.7M

$37.9M

 

$111.8M - $117.8M

$149.0M

Depreciation and amortization

$5.0M

$3.9M

 

$19.9M

$16.8M

Legal fee expense related to certain matters (1)

$3.3M

$4.5M

 

$10.3M

$9.7M

Adjusted Operating Income

$28.0M - $30.0M

$46.3M

 

$142.0M - $148.0M

$175.5M

 

 

 

 

 

 

Earnings Per Diluted Share

$0.22 - $0.24

$0.39

 

$1.23 - $1.30

$1.55

Amortization of acquired intangible assets

$0.02

$0.01

 

$0.10

$0.06

Legal fee expense related to certain matters (1)

$0.05

$0.06

 

$0.15

$0.14

Tax effect of adjustments

($0.01)

($0.01)

 

($0.07)

($0.05)

Adjusted Earnings Per Diluted Share

$0.28 - $0.30

$0.45

 

$1.41 - $1.48

$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 and student retention remain consistent with management's estimates, (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) earnings per diluted share outlook assumes an effective income tax rate of approximately 26.5% for the third quarter and 26.0% for the full year, and (v) 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 Monday, August 8, 2022 at 5:30 p.m. Eastern time to discuss second quarter and year to date 2022 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 076271. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/287915325. 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 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

148,749

 

 

$

319,982

 

Restricted cash

 

 

1,191

 

 

 

5,196

 

Short-term investments

 

 

366,840

 

 

 

174,213

 

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

 

 

516,780

 

 

 

499,391

 

 

 

 

 

 

 

 

 

 

Student receivables, net

 

 

32,186

 

 

 

43,033

 

Receivables, other

 

 

8,617

 

 

 

1,692

 

Prepaid expenses

 

 

10,306

 

 

 

6,919

 

Inventories

 

 

1,168

 

 

 

904

 

Other current assets

 

 

2,737

 

 

 

2,514

 

Total current assets

 

 

571,794

 

 

 

554,453

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

26,952

 

 

 

28,355

 

Right of use asset, net

 

 

32,443

 

 

 

36,664

 

Goodwill

 

 

162,579

 

 

 

162,579

 

Intangible assets, net

 

 

28,877

 

 

 

32,208

 

Student receivables, net

 

 

1,295

 

 

 

1,372

 

Deferred income tax assets, net

 

 

25,671

 

 

 

25,114

 

Other assets

 

 

6,450

 

 

 

6,688

 

TOTAL ASSETS

 

$

856,061

 

 

$

847,433

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

$

7,278

 

 

$

9,400

 

Accounts payable

 

 

12,419

 

 

 

10,838

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related benefits

 

 

22,887

 

 

 

25,312

 

Advertising and marketing costs

 

 

9,548

 

 

 

8,690

 

Income taxes

 

 

7,995

 

 

 

211

 

Other

 

 

14,504

 

 

 

15,180

 

Deferred revenue

 

 

35,567

 

 

 

70,613

 

Total current liabilities

 

 

110,198

 

 

 

140,244

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

 

31,990

 

 

 

35,549

 

Other liabilities

 

 

21,113

 

 

 

21,530

 

Total non-current liabilities

 

 

53,103

 

 

 

57,079

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

894

 

 

 

887

 

Additional paid-in capital

 

 

679,400

 

 

 

674,242

 

Accumulated other comprehensive loss

 

 

(3,174

)

 

 

(96

)

Retained earnings

 

 

309,817

 

 

 

251,972

 

Treasury stock

 

 

(294,177

)

 

 

(276,895

)

Total stockholders' equity

 

 

692,760

 

 

 

650,110

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

856,061

 

 

$

847,433

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Quarter Ended June 30,

 

 

 

2022

 

 

% of
Total
Revenue

 

 

2021

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

165,896

 

 

 

98.9

%

 

$

174,804

 

 

 

99.6

%

Other

 

 

1,788

 

 

 

1.1

%

 

 

735

 

 

 

0.4

%

Total revenue

 

 

167,684

 

 

 

 

 

 

 

175,539

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

27,269

 

 

 

16.3

%

 

 

28,532

 

 

 

16.3

%

General and administrative

 

 

101,332

 

 

 

60.4

%

 

 

107,132

 

 

 

61.0

%

Depreciation and amortization

 

 

4,909

 

 

 

2.9

%

 

 

3,913

 

 

 

2.2

%

Asset impairment

 

 

228

 

 

 

0.1

%

 

 

-

 

 

 

0.0

%

Total operating expenses

 

 

133,738

 

 

 

79.8

%

 

 

139,577

 

 

 

79.5

%

Operating income

 

 

33,946

 

 

 

20.2

%

 

 

35,962

 

 

 

20.5

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,094

 

 

 

0.7

%

 

 

322

 

 

 

0.2

%

Interest expense

 

 

(99

)

 

 

-0.1

%

 

 

(280

)

 

 

-0.2

%

Miscellaneous expense

 

 

(226

)

 

 

-0.1

%

 

 

(36

)

 

 

0.0

%

Total other income

 

 

769

 

 

 

0.5

%

 

 

6

 

 

 

0.0

%

PRETAX INCOME

 

 

34,715

 

 

 

20.7

%

 

 

35,968

 

 

 

20.5

%

Provision for income taxes

 

 

8,948

 

 

 

5.3

%

 

 

9,319

 

 

 

5.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

25,767

 

 

 

15.4

%

 

 

26,649

 

 

 

15.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.38

 

 

 

 

 

 

$

0.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

0.37

 

 

 

 

 

 

$

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

68,341

 

 

 

 

 

 

 

70,299

 

 

 

 

 

Diluted

 

 

69,182

 

 

 

 

 

 

 

71,679

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Quarter Ended June 30,

 

 

 

 

 

(In Thousands)

 

2022

 

 

 

 

 

 

2021

 

 

 

 

 

NET INCOME

 

$

25,767

 

 

 

 

 

 

$

26,649

 

 

 

 

 

OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(164

)

 

 

 

 

 

 

28

 

 

 

 

 

Unrealized loss on investments

 

 

(1,469

)

 

 

 

 

 

 

(22

)

 

 

 

 

Total other comprehensive (loss) income

 

 

(1,633

)

 

 

 

 

 

 

6

 

 

 

 

 

COMPREHENSIVE INCOME

 

$

24,134

 

 

 

 

 

 

$

26,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Year to Date Ended June 30,

 

 

 

2022

 

 

% of
Total
Revenue

 

 

2021

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

347,223

 

 

 

99.0

%

 

$

357,635

 

 

 

99.6

%

Other

 

 

3,420

 

 

 

1.0

%

 

 

1,542

 

 

 

0.4

%

Total revenue

 

 

350,643

 

 

 

 

 

 

 

359,177

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

55,357

 

 

 

15.8

%

 

 

57,506

 

 

 

16.0

%

General and administrative

 

 

207,628

 

 

 

59.2

%

 

 

217,177

 

 

 

60.5

%

Depreciation and amortization

 

 

9,791

 

 

 

2.8

%

 

 

7,915

 

 

 

2.2

%

Asset impairment

 

 

228

 

 

 

0.1

%

 

 

-

 

 

 

0.0

%

Total operating expenses

 

 

273,004

 

 

 

77.9

%

 

 

282,598

 

 

 

78.7

%

Operating income

 

 

77,639

 

 

 

22.1

%

 

 

76,579

 

 

 

21.3

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,427

 

 

 

0.4

%

 

 

681

 

 

 

0.2

%

Interest expense

 

 

(202

)

 

 

-0.1

%

 

 

(389

)

 

 

-0.1

%

Miscellaneous (expense) income

 

 

(315

)

 

 

-0.1

%

 

 

95

 

 

 

0.0

%

Total other income

 

 

910

 

 

 

0.3

%

 

 

387

 

 

 

0.1

%

PRETAX INCOME

 

 

78,549

 

 

 

22.4

%

 

 

76,966

 

 

 

21.4

%

Provision for income taxes

 

 

20,704

 

 

 

5.9

%

 

 

19,564

 

 

 

5.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

57,845

 

 

 

16.5

%

 

 

57,402

 

 

 

16.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.84

 

 

 

 

 

 

$

0.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

0.83

 

 

 

 

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

68,542

 

 

 

 

 

 

 

70,224

 

 

 

 

 

Diluted

 

 

69,376

 

 

 

 

 

 

 

71,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Year to Date Ended June 30,

 

 

 

 

 

(In Thousands)

 

2022

 

 

 

 

 

 

2021

 

 

 

 

 

NET INCOME

 

$

57,845

 

 

 

 

 

 

$

57,402

 

 

 

 

 

OTHER COMPREHENSIVE LOSS, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(245

)

 

 

 

 

 

 

(101

)

 

 

 

 

Unrealized loss on investments

 

 

(2,833

)

 

 

 

 

 

 

(243

)

 

 

 

 

Total other comprehensive loss

 

 

(3,078

)

 

 

 

 

 

 

(344

)

 

 

 

 

COMPREHENSIVE INCOME

 

$

54,767

 

 

 

 

 

 

$

57,058

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

 

 

For the Year to Date Ended June 30,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

57,845

 

 

$

57,402

 

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

 

 

 

 

 

 

 

 

Asset impairment

 

 

228

 

 

 

-

 

Depreciation and amortization expense

 

 

9,791

 

 

 

7,915

 

Bad debt expense

 

 

24,379

 

 

 

26,168

 

Compensation expense related to share-based awards

 

 

4,316

 

 

 

7,430

 

Deferred income taxes

 

 

(557

)

 

 

8,569

 

Changes in operating assets and liabilities

 

 

(41,223

)

 

 

(24,739

)

Net cash provided by operating activities

 

 

54,779

 

 

 

82,745

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(330,797

)

 

 

(218,437

)

Sales of available-for-sale investments

 

 

134,964

 

 

 

127,193

 

Purchases of property and equipment

 

 

(6,765

)

 

 

(3,059

)

Payments for pending business acquisition

 

 

(7,000

)

 

 

-

 

Net cash used in investing activities

 

 

(209,598

)

 

 

(94,303

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

849

 

 

 

623

 

Purchase of treasury stock

 

 

(15,670

)

 

 

(5,372

)

Payments of employee tax associated with stock compensation

 

 

(1,612

)

 

 

(2,034

)

Release of cash held in escrow

 

 

(3,986

)

 

 

-

 

Net cash used in financing activities

 

 

(20,419

)

 

 

(6,783

)

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(175,238

)

 

 

(18,341

)

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

 

 

325,178

 

 

 

109,684

 

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

 

$

149,940

 

 

$

91,343

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

 

 

 

For the Quarter Ended June 30,

 

 

 

2022

 

 

2021

 

REVENUE:

 

 

 

 

 

 

 

 

CTU

 

$

100,461

 

 

$

102,035

 

AIUS

 

 

66,920

 

 

 

73,223

 

Corporate and Other

 

 

303

 

 

 

281

 

Total

 

$

167,684

 

 

$

175,539

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU

 

$

33,008

 

 

$

35,398

 

AIUS

 

 

10,733

 

 

 

9,218

 

Corporate and Other

 

 

(9,795

)

 

 

(8,654

)

Total

 

$

33,946

 

 

$

35,962

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU

 

 

32.9

%

 

 

34.7

%

AIUS

 

 

16.0

%

 

 

12.6

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

20.2

%

 

 

20.5

%

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

 

 

 

For the Year to Date Ended June 30,

 

 

 

2022

 

 

2021

 

REVENUE:

 

 

 

 

 

 

 

 

CTU

 

$

213,609

 

 

$

207,857

 

AIUS

 

 

136,452

 

 

 

150,700

 

Corporate and Other

 

 

582

 

 

 

620

 

Total

 

$

350,643

 

 

$

359,177

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU

 

$

76,034

 

 

$

71,541

 

AIUS

 

 

20,256

 

 

 

20,541

 

Corporate and Other

 

 

(18,651

)

 

 

(15,503

)

Total

 

$

77,639

 

 

$

76,579

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU

 

 

35.6

%

 

 

34.4

%

AIUS

 

 

14.8

%

 

 

13.6

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

22.1

%

 

 

21.3

%

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

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

(In thousands, unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

 

 

ACTUAL

 

 

ACTUAL

 

Adjusted Operating Income

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating income

 

$

33,946

 

 

$

35,962

 

 

$

77,639

 

 

$

76,579

 

Depreciation and amortization (2)

 

 

4,909

 

 

 

3,913

 

 

 

9,791

 

 

 

7,915

 

Legal fee expense related to certain matters (3)

 

 

3,087

 

 

 

2,416

 

 

 

5,434

 

 

 

2,658

 

Adjusted Operating Income

 

$

41,942

 

 

$

42,291

 

 

$

92,864

 

 

$

87,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending September 30,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating income

 

$19.7M - $21.7M

 

 

$

37,861

 

 

$111.8M - $117.8M

 

 

$

149,016

 

Depreciation and amortization (2)

 

5.0M

 

 

 

3,887

 

 

19.9M

 

 

 

16,766

 

Legal fee expense related to certain matters (3)

 

3.3M

 

 

 

4,583

 

 

10.3M

 

 

 

9,735

 

Adjusted Operating Income

 

$28.0M - $30.0M

 

 

$

46,331

 

 

$142.0M - $148.0M

 

 

$

175,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

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

 

 

 

 

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

 

ACTUAL

 

 

ACTUAL

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reported Earnings Per Diluted Share

 

$

0.37

 

 

$

0.37

 

 

$

0.83

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

 

0.02

 

 

 

0.01

 

 

 

0.05

 

 

 

0.02

 

Legal fee expense related to certain matters (3)

 

 

0.05

 

 

 

0.04

 

 

 

0.08

 

 

 

0.04

 

Total pre-tax adjustments

 

$

0.07

 

 

$

0.05

 

 

$

0.13

 

 

$

0.06

 

Tax effect of adjustments (4)

 

 

(0.02

)

 

 

(0.01

)

 

 

(0.03

)

 

 

(0.01

)

Total adjustments after tax

 

 

0.05

 

 

 

0.04

 

 

 

0.10

 

 

 

0.05

 

Adjusted Earnings Per Diluted Share

 

$

0.42

 

 

$

0.41

 

 

$

0.93

 

 

$

0.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending September 30,

 

 

For the Year Ending December 31,

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reported Earnings Per Diluted Share

 

$0.22 - $0.24

 

 

$

0.39

 

 

$1.23 - $1.30

 

 

$

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)

 

0.05

 

 

 

0.06

 

 

0.15

 

 

 

0.14

 

Total pre-tax adjustments

 

$0.07

 

 

$

0.07

 

 

$0.25

 

 

$

0.20

 

Tax effect of adjustments (4)

 

(0.01)

 

 

 

(0.01

)

 

(0.07)

 

 

 

(0.05

)

Total adjustments after tax

 

0.06

 

 

 

0.06

 

 

0.18

 

 

 

0.15

 

Adjusted Earnings Per Diluted Share

 

$0.28 - $0.30

 

 

$

0.45

 

 

$1.41 - $1.48

 

 

$

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 and the Hippo acquisition commencing on the September 10, 2021 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 tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

 


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