- « Previous Releases | Next Releases »
-- Third Quarter Diluted EPS
Strayer Universityto Open Eight New Campuses in 2012 --
-- Share Repurchase Authorization Increased to
$100 Million-- HERNDON, Va.--(BUSINESS WIRE)-- Strayer Education, Inc.(Nasdaq: STRA) today announced financial results for the three months ended September 30, 2011. Financial highlights are as follows:
Three Months Ended
Revenues for the three months ended
September 30, 2011decreased 8% to $135.9 million, compared to $147.6 millionfor the same period in 2010, due to lower enrollment partly offset by a 5% tuition increase which commenced in January 2011.
Income from operations was
$24.4 millioncompared to $38.2 millionfor the same period in 2010, a decrease of 36%. Operating income margin was 18.0% compared to 25.9% for the same period in 2010.
Net income was
$13.9 millioncompared to $23.3 millionfor the same period in 2010, a decrease of 40%. Diluted earnings per share was $1.20compared to $1.72for the same period in 2010, a decrease of 30%. Diluted weighted average shares outstanding decreased 14% to 11,647,000 from 13,557,000 for the same period in 2010.
Nine Months Ended
Revenues for the nine months ended
September 30, 2011increased 1% to $471.6 million, compared to $464.8 millionfor the same period in 2010, due to a 5% tuition increase which commenced in January 2011offset by lower average enrollments.
Income from operations was
$133.8 millioncompared to $156.9 millionfor the same period in 2010, a decrease of 15%. Operating income margin was 28.4% compared to 33.8% for the same period in 2010.
Net income was
$79.4 millioncompared to $95.4 millionfor the same period in 2010, a decrease of 17%. Diluted earnings per share was $6.58compared to $6.98for the same period in 2010, a decrease of 6%. Diluted weighted average shares outstanding decreased 12% to 12,055,000 from 13,663,000 for the same period in 2010.
Balance Sheet and
September 30, 2011, the Company had cash and cash equivalents of $57.1 million. The Company generated $122.7 millionfrom operating activities in the first nine months of 2011 compared to $141.4 millionduring the same period in 2010. Capital expenditures were $24.9 millionfor the nine months ended September 30, 2011compared to $32.1 millionfor the same period in 2010.
As previously announced, the Company entered into an amended and restated revolving credit and term loan agreement on
April 4, 2011. This credit facility, which is secured by the assets of the Company, provides a $100.0 millionrevolving credit facility and a $100.0 millionterm loan facility with a maturity date of March 31, 2014. Proceeds from the term loan were used to pay off the $80 millionoutstanding at March 31, 2011under the original revolving credit facility. At September 30, 2011, the Company had $100.0 millionoutstanding under its term loan and $5.0 millionoutstanding under its revolving credit facility.
During the nine months ended
September 30, 2011, the Company invested $182.7 millionto repurchase approximately 1,370,000 shares of stock at an average of $133.32per share, as part of a previously announced stock repurchase authorization. During the nine months ended September 30, 2011, the Company paid regular, quarterly dividends of $37.2 million( $1.00per share for each quarterly dividend).
For the third quarter 2011, bad debt expense as a percentage of revenues was 3.8% compared to 4.2% for the same period in 2010. Days sales outstanding was 14 days at the end of the third quarter of 2011, compared to 13 days at the end of the third quarter of 2010.
Strayer Universityfor the 2011 fall term decreased 11% to 54,233 students compared to 60,711 students for the same term in 2010. Across the Strayer Universitycampus and online system, continuing student enrollments decreased 9%, while new student enrollments decreased 15%. Global online students decreased 15%. Students taking 100% of their classes online (including campus based students) decreased 8%.
Campus Based Students: New Campuses (32 in operation 3 years or less) Classroom Students 2,387 2,704 13 % Online Students 2,875 3,651 27 % Total New Campus Based Students 5,262 6,355 21 % Mature Campuses (60 in operation more than 3 years) Classroom Students 22,949 19,112 -17 % Online Students 26,369 23,550 -11 % Total Mature Campus Based Students 49,318 42,662 -13 % Total Campus Based Students 54,580 49,017 -10 % Global Online Students 6,131 5,216 -15 % Total University Enrollment 60,711 54,233 -11 % Total Students Taking 100% of Courses Online 35,375 32,417 -8 %
New Campus Openings
The Company announced today that
Strayer Universitysuccessfully opened three new campuses for the fall academic term. Two campuses are located in Chicago, Illinois, a new market for Strayer University. The third campus is located in Dallas, Texas, its fourth campus in that market.
Board of Directors
The Company announced today that
Karl McDonnell, President and Chief Operating Officer, has been elected to its Board of Directors. Robert S. Silberman, Chairman and Chief Executive Officer, commented, "Karl has been a key contributor in building Strayer University. His operational experience, strong leadership and sound judgment will be a great addition to Board deliberations."
The Company announced today that Dr.
Sondra Stallardis retiring as Strayer UniversityPresident and taking Emeritus status. As President Emerita, in addition to remaining as a member of the Strayer Universityfaculty, Dr. Stallard will also serve as the University's Director of Accreditation and Regulatory Affairs. Additionally, the Company announced today that Dr. Michael Plater, Strayer University's current Provost and Chief Academic Officer, will assume the role of Strayer UniversityPresident. Prior to joining Strayer University, Dr. Plater served as Dean of the College of Arts and Sciencesat North Carolina A&T University, and as an Associate Dean for the graduate school at Brown University. Dr. Plater holds a bachelor's degree from Harvard University, a master's degree in business administration from the University of Pennsylvania, and a Ph.D. from the College of William and Mary.
2011 Business Outlook
Based on enrollments announced for the 2011 fall term, the Company estimates fourth quarter 2011 diluted earnings per share will be in the range of
$2.24 to $2.26. Based on its fourth quarter 2011 estimates, the Company expects its full year 2011 diluted earnings per share will be in the range of $8.82 to $8.84.
2012 Business Model
The Company announced today that
Strayer Universityis implementing a 3% tuition increase effective January 2012, and that the University intends to open eight new campuses in 2012. Based on this investment plan and assuming 11,700,000 diluted weighted average shares outstanding and an effective tax rate of 39.5%, the Company today provided the following information to illustrate its 2012 business model: Assumed new student enrollment (vs. 2011) -10% 0% 10% Total student enrollment (vs. 2011) -9% -6% -3% Revenue (millions) $570 $590 $610 Operating income margin 21% to 22% 23% to 24% 25% to 26% Diluted earnings per share $6.00 to $6.20 $6.90 to $7.10 $7.80 to $8.00
Quarterly Cash Dividends
The Company announced today its intent to maintain its annual dividend of
$4.00per share in 2012 and that the Board of Directors declared a regular, quarterly cash dividend of $1.00per share to be paid on December 12, 2011to shareholders of record as of November 28, 2011.
Share Repurchase Plan
The Company announced today that the Company's Board of Directors amended the share repurchase program to authorize the repurchase of up to
$100 millionin value of the Company's common stock over the next 14 months. The Company had $25.0 millionleft under its authorization at September 30, 2011and at the time the new authorization was approved by the Company's Board of Directors. The Company intends to conduct such purchases, if any, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. This share repurchase program may be modified, suspended or terminated at any time by the Company without notice.
Shares and Options Outstanding
September 30, 2011, the Company had 12,006,075 common shares issued and outstanding, and 100,000 stock options outstanding with an exercise price of $107.28and a remaining contractual life of 1.4 years.
Conference Call with Management
Strayer Education, Inc.will host a conference call to discuss its third quarter 2011 earnings at 10:00 a.m. (ET)today. To participate on the live call, investors should dial (877) 303-9047 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 (855) 859-2056 (conference id 94195606) starting at 1:00 p.m. (ET)today and will be available through Thursday, November 10, and archived at www.strayereducation.com for 90 days.
Strayer Education, Inc. Strayer Education, Inc.(Nasdaq: STRA) is an education services holding company that owns Strayer Universityand certain other assets. Strayer's mission is to make higher education achievable for working adults in today's economy. Strayer Universityis a proprietary institution of higher learning that offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, public administration, and criminal justice to working adult students at 92 campuses in 22 states and Washington, D.C.and worldwide via the Internet. Strayer Universityis committed to providing an education that prepares working adult students for advancement in their careers and professional lives. Founded in 1892, Strayer Universityis 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 (the "Reform Act"). Such statements may be identified by the use of words such as "expect," "estimate," "assume," "believe," "anticipate," "will," "forecast," "plan," "project," or similar words. The statements are based on the Company's current expectations and are subject to a number of assumptions, 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 from those expressed in or implied by such statements. The assumptions, 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, rulemaking by the
Department of Educationand increased focus by the U. S. Congresson for-profit education institutions, 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 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 for the fiscal year ended December 31, 2010and in its subsequent 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 (Amounts in thousands, except per share data) For the three months For the nine months ended September 30, ended September 30, 2010 2011 2010 2011 Revenues $ 147,597 $ 135,865 $ 464,781 $ 471,610 Costs and expenses: Instruction and educational support 65,759 68,170 195,404 219,519 Marketing 23,621 23,351 51,933 55,634 Admissions advisory 6,583 6,533 18,693 20,174 General and administration 13,385 13,406 41,885 42,508 Income from operations 38,249 24,405 156,866 133,775 Investment income 331 5 822 149 Interest expense -- 1,209 -- 2,559 Income before income taxes 38,580 23,201 157,688 131,365 Provision for income taxes 15,239 9,266 62,311 51,992 Net income $ 23,341 $ 13,935 $ 95,377 $ 79,373 Earnings per share: Basic $ 1.73 $ 1.20 $ 7.04 $ 6.61 Diluted $ 1.72 $ 1.20 $ 6.98 $ 6.58 Weighted average shares outstanding: Basic 13,467 11,623 13,542 12,016 Diluted 13,557 11,647 13,663 12,055 Shares outstanding at end of quarter 13,589 12,006 13,589 12,006 Dividends per share (paid) $ 0.75 $ 1.00 $ 2.25 $ 3.00 STRAYER EDUCATION, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) December 31, September 30, 2010 2011 ASSETS Current assets: Cash and cash equivalents $ 64,107 $ 57,071 Marketable securities available for sale, at fair value 12,386 --
Tuition receivable, net of allowances for doubtful accounts of
$7,935and $7,025at December 31, 2010and September 30, 2011, respectively 22,011 21,200 Other current assets 10,231 12,785 Total current assets 108,735 91,056 Property and equipment, net 116,063 121,898 Deferred income taxes 8,374 7,412 Restricted cash 500 500 Other assets 1,506 3,339 Total assets $ 235,178 $ 224,205 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 31,280 $ 38,014 Accrued expenses 10,512 4,862 Income taxes payable 934 2,620 Unearned tuition 3,523 14,612 Other current liabilities 281 281 Current portion of term loan -- 22,500 Total current liabilities 46,530 82,889 Revolving credit facility -- 5,000 Term loan, less current portion -- 77,500 Other long-term liabilities 12,644 15,066 Total liabilities 59,174 180,455 Commitments and contingencies Stockholders' equity:
Common stock, par value
$0.01; 20,000,000 shares authorized; 13,316,822 and 12,006,075 shares issued and outstanding at December 31, 2010and September 30, 2011, respectively 133 120 Additional paid-in capital 1,206 6,059 Retained earnings 174,625 38,411 Accumulated other comprehensive income (loss) 40 (840 ) Total stockholders' equity 176,004 43,750 Total liabilities and stockholders' equity $ 235,178 $ 224,205 STRAYER EDUCATION, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)
For the nine months ended
2010 2011 Cash flows from operating activities: Net income $ 95,377 $ 79,373 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of marketable securities (118 ) (66 ) Amortization of gain on sale of assets (211 ) (211 ) Amortization of deferred rent 54 885 Depreciation and amortization 12,813 15,779 Amortization of deferred financing costs -- 463 Deferred income taxes (3,474 ) 941 Stock-based compensation 8,984 9,798 Changes in assets and liabilities: Tuition receivable, net (3,479 ) 811 Other current assets (2,869 ) (2,580 ) Other assets (257 ) 80 Accounts payable 20,574 10,155 Accrued expenses 3,638 (5,650 ) Income taxes payable (9,056 ) 1,585 Excess tax benefits from stock-based payment arrangements (2,808 ) -- Unearned tuition 21,553 11,089 Deferred lease incentives 725 297 Net cash provided by operating activities 141,446 122,749 Cash flows from investing activities: Purchases of property and equipment (32,067 ) (24,887 ) Purchases of marketable securities (523 ) (2 ) Proceeds from the sale of marketable securities 12,500 12,388 Net cash used in investing activities (20,090 ) (12,501 ) Cash flows from financing activities: Common dividends paid (31,224 ) (37,161 ) Proceeds from exercise of stock options 452 -- Excess tax benefits from stock-based payment arrangements 2,808 -- Repurchase of common stock (73,228 ) (182,664 ) Proceeds from revolving credit facility -- 100,000 Payments on revolving credit facility -- (95,000 ) Proceeds from term loan -- 100,000 Payment of deferred financing costs -- (2,459 ) Net cash used in financing activities (101,192 ) (117,284 ) Net increase (decrease) in cash and cash equivalents 20,164 (7,036 ) Cash and cash equivalents — beginning of period 63,958 64,107 Cash and cash equivalents — end of period $ 84,122 $ 57,071 Non-cash transactions: Purchases of property and equipment included in accounts payable $ 2,667 $ 2,087 Strayer Education, Inc. Mark C. Brown, Executive Vice President and
Chief Financial Officer
Sonya Udler, Senior Vice President,
Strayer Education, Inc.
News Provided by Acquire Media
- Revenues for the three months ended