-- Strayer First Quarter Diluted EPS $2.65, Up 28% --
-- Strayer Spring 2010 Total Enrollments Up 22% / New Students Up 16% --
-- Two New Campuses Opened for 2010 Summer Term --
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ARLINGTON, Va., Apr 29, 2010 (BUSINESS WIRE) -- Strayer Education, Inc. (NASDAQ: STRA) today announced financial results for the three months ended March 31, 2010. Financial highlights are as follows:
Three Months Ended March 31
"We are pleased with our solid financial results for the first quarter and our strong student enrollment for the spring term," said Robert S. Silberman, Chairman and Chief Executive Officer of Strayer Education, Inc. "We look forward to expanding our geographic footprint with the planned opening of two new campuses for the summer academic term, one each in the Dallas, Texas and Jackson, Mississippi markets."
Balance Sheet and Cash Flow
At March 31, 2010, the Company had cash, cash equivalents and marketable securities of $144.0 million and no debt. The Company generated $63.1 million from operating activities in the first quarter of 2010, compared to $47.1 million during the same period in 2009. Capital expenditures were $12.2 million for the three months ended March 31, 2010, compared to $6.6 million for the same period in 2009.
During the three months ended March 31, 2010, the Company invested $15.0 million to repurchase 66,900 shares of its common stock at an average price of $224.23 per share as part of a previously announced common stock repurchase authorization. The Company's remaining authorization for common stock repurchases was $75.0 million at March 31, 2010. During the three months ended March 31, 2010, the Company paid a regular, quarterly common stock dividend of $10.5 million ($0.75 per share).
For the first quarter 2010, bad debt expense as a percentage of revenues was 3.2% which remained unchanged from the same period in 2009. Days sales outstanding, adjusted to exclude tuition receivable related to future quarters, was 13 days at the end of the first quarter of 2010 compared to 15 days at the end of the first quarter of 2009.
Enrollment at Strayer University for the 2010 spring term increased 22% to 55,970 students compared to 46,038 for the same term in 2009. Across the Strayer University campus and online system, new student enrollments increased 16%, while continuing student enrollments increased 23%. Global online students increased 34%. Students taking 100% of their classes online (including campus based students) increased 18%. The total number of students taking at least one class online increased 21%.
2009 2010 % Change Campus Based Students: New Campuses (31 in operation 3 years or less) Classroom Students 1,790 4,045 126 % Online Students 2,391 4,428 85 % Total New Campus Based Students 4,181 8,473 103 % Mature Campuses (47 in operation more than 3 years) Classroom Students 16,084 18,759 17 % Online Students 21,436 22,919 7 % Total Mature Campus Based Students 37,520 41,678 11 % Total Campus Based Students 41,701 50,151 20 % Global Online Students 4,337 5,819 34 % Total University Enrollment 46,038 55,970 22 % Total Students Taking 100% of Courses Online 28,164 33,166 18 % Total Students Taking at Least 1 Course Online 33,208 40,097 21 %
The Company announced today that Strayer University had successfully opened four new campuses for the spring academic term, two in Miami, Florida; one in New Orleans, Louisiana; and one in Austin, Texas. The Company also announced that it planned to open two new campuses for the summer academic term, one in Dallas, Texas, and the other in Jackson, Mississippi, the University's first campus in that state. With these two new campuses for the summer academic term, the Company will have opened nine of 13 new campuses planned for 2010.
Stock-based Compensation Activity
On April 27, 2010, the Company awarded approximately 3,000 shares of restricted stock to various non-employee members of the Company's Board of Directors, as part of the Company's annual director compensation program. The Company's stock price closed at $248.75 on the date of this restricted stock grant.
Shares and Options Outstanding
At March 31, 2010, the Company had 13,914,137 common shares issued and outstanding and 100,000 stock options outstanding with a weighted average exercise price of $107.28 and a remaining weighted average contractual life of 1.8 years.
Common Stock Cash Dividend
The Company announced today that its Board of Directors had declared its regular, quarterly common stock cash dividend of $0.75 per share. This dividend will be paid on June 10, 2010 to shareholders of record as of May 27, 2010.
Based on the strong enrollment growth announced for the 2010 spring term, the Company estimates second quarter 2010 diluted EPS will be in the range of $2.54 to $2.56.
Conference Call with Management
Strayer Education, Inc. will host a conference call to discuss its first quarter 2010 earnings at 10:00 a.m. (ET) today. To participate on the live call, investors should dial (877) 874-1589 10 minutes prior to the start time. In addition, the call will be available via live Webcast over the Internet. To access the live Webcast of the conference call, please go to www.strayereducation.com 15 minutes prior to the start time of the call to register. An archived replay of the conference call will be available at (888) 203-1112 (pass code 3688654) starting at 1:00 p.m. (ET) today and will be available through Wednesday, May 5, and archived at www.strayereducation.com for 90 days.
Strayer Education, Inc. (NASDAQ: STRA) is an education services holding company that owns Strayer University and certain other assets. Strayer's mission is to make higher education achievable and convenient for working adults in today's economy. Strayer University is a proprietary institution of higher learning that offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health care, public administration, and criminal justice to approximately 56,000 working adult students at 80 campuses in 19 states and Washington, D.C. and worldwide via the Internet. Strayer University is committed to providing an education that prepares working adult students for advancement in their careers and professional lives. Founded in 1892, Strayer University is accredited by the Middle States Commission on Higher Education.
This press release contains statements that are forward looking and are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995 ("Reform Act"). The statements are based on the Company's current expectations and are subject to a number of uncertainties and risks. In connection with the safe-harbor provisions of the Reform Act, the Company has identified important factors that could cause the Company's actual results to differ materially. The uncertainties and risks include the pace of growth of student enrollment, our continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as regional accreditation standards and state regulatory requirements, competitive factors, risks associated with the opening of new campuses, risks associated with the offering of new educational programs and adapting to other changes, risks associated with the acquisition of existing educational institutions, risks relating to the timing of regulatory approvals, our ability to implement our growth strategy, risks associated with the ability of our students to finance their education in a timely manner, and general economic and market conditions. Further information about these and other relevant risks and uncertainties may be found in the Company's annual report on Form 10-K and its other filings with the Securities and Exchange Commission, all of which are incorporated herein by reference and which are available from the Commission. We undertake no obligation to update or revise forward looking statements.
STRAYER EDUCATION, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) For the three months ended March 31, 2009 2010 Revenues $ 124,478 $ 157,901 Costs and expenses: Instruction and educational support 39,069 48,977 Marketing and admissions 19,868 24,745 General and administration 17,930 24,253 Income from operations 47,611 59,926 Investment and other income 491 244 Income before income taxes 48,102 60,170 Provision for income taxes 19,049 23,791 Net income $ 29,053 $ 36,379 Earnings per share: Basic $ 2.09 $ 2.68 Diluted $ 2.07 $ 2.65 Weighted average shares outstanding: Basic 13,875 13,596 Diluted 14,002 13,729 STRAYER EDUCATION, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, March 31, 2009 2010 ASSETS Current assets: Cash and cash equivalents $ 63,958 $ 91,266 Marketable securities available for sale, at fair value 52,558 52,716
Tuition receivable, net of allowances for doubtful accounts of $6,175 and $7,053 at December 31, 2009 and March 31, 2010, respectively
165,142 180,886 Other current assets 8,317 9,724 Total current assets 289,975 334,592 Property and equipment, net 84,675 90,996 Deferred income taxes 9,316 9,705 Restricted cash 500 500 Other assets 1,339 1,258 Total assets $ 385,805 $ 437,051 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 21,261 $ 21,837 Accrued expenses 7,794 6,755 Income taxes payable 5,100 23,937 Unearned tuition 149,804 166,268 Other current liabilities 281 281 Total current liabilities 184,240 219,078 Long-term liabilities 11,745 12,173 Total liabilities 195,985 231,251 Commitments and contingencies Stockholders' equity:
Common stock, par value $.01; 20,000,000 shares authorized; 13,957,596 and 13,914,137 shares issued and outstanding at December 31, 2009 and March 31, 2010, respectively
140 139 Additional paid-in capital 1,157 1,626 Retained earnings 188,218 203,750 Accumulated other comprehensive income 305 285 Total stockholders' equity 189,820 205,800 Total liabilities and stockholders' equity $ 385,805 $ 437,051 STRAYER EDUCATION, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the three months ended March 31, 2009 2010
Cash flows from operating activities:
Net income $ 29,053 $ 36,379 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of gain on sale of assets (71 ) (70 ) Amortization of deferred rent (93 ) (105 ) Depreciation and amortization 3,200 4,198 Deferred income taxes (998 ) (740 ) Stock-based compensation 2,368 3,059 Changes in assets and liabilities: Tuition receivable, net (2,827 ) (15,744 ) Other current assets 1,017 (1,043 ) Other assets 25 62 Accounts payable (3,864 ) 2,246 Accrued expenses 377 (1,039 ) Income taxes payable/receivable 19,893 20,418 Excess tax benefits from stock-based payment arrangements (1,471 ) (1,581 ) Unearned tuition 456 16,464 Deferred lease incentives - 603 Net cash provided by operating activities 47,065 63,107 Cash flows from investing activities: Purchases of property and equipment (6,584 ) (12,170 ) Purchases of marketable securities (337 ) (191 ) Net cash used in investing activities (6,921 ) (12,361 ) Cash flows from financing activities: Common dividends paid (7,120 ) (10,470 ) Proceeds from exercise of stock options 1,691 452 Excess tax benefits from stock-based payment arrangements 1,471 1,581 Repurchase of common stock (60,068 ) (15,001 ) Net cash used in financing activities (64,026 ) (23,438 ) Net (decrease) increase in cash and cash equivalents (23,882 ) 27,308 Cash and cash equivalents - beginning of period 56,379 63,958 Cash and cash equivalents - end of period $ 32,497 $ 91,266 Non-cash transactions: Purchases of property and equipment included in accounts payable $ 337 $ 1,247
SOURCE: Strayer Education, Inc.
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