April 30, 2008
Strayer Education, Inc. Reports Record First Quarter 2008 Revenues and Earnings; and Record Spring Term 2008 Enrollments
-- Strayer First Quarter Revenues Up 21% --
-- Strayer First Quarter Diluted EPS $1.64, Up 26% --
-- Strayer Spring 2008 Total Enrollments Up 19% / New Students Up 28% --
-- Two New Campuses Opened for 2008 Summer Term --
ARLINGTON, Va., April 30, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Strayer Education, Inc. (Nasdaq: STRA) today announced financial results for the three months ended March 31, 2008. Financial highlights are as follows:
Three Months Ended March 31
-- Revenues for the three months ended March 31, 2008 increased 21% to
$97.1 million, compared to $80.2 million for the same period in 2007,
due to increased enrollment and a 5% tuition increase which commenced
in January 2008.
-- Income from operations was $35.6 million compared to $28.9 million for
the same period in 2007, an increase of 23%. Operating income margin
was 36.6% compared to 36.1% for the same period in 2007.
-- Net income was $23.5 million compared to $18.8 million for the same
period in 2007, an increase of 25%. Diluted earnings per share was
$1.64 compared to $1.30 for the same period in 2007, an increase of
26%. Diluted weighted average shares outstanding decreased to
14,340,000 from 14,490,000 for the same period in 2007.
"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 continue to expand our geographic footprint with the successful opening of campuses in two new Florida markets: Jacksonville and Palm Beach."
Balance Sheet and Cash Flow
At March 31, 2008, the Company had cash and cash equivalents of $118.9 million and no debt. During the three months ended March 31, 2008, the Company sold its $76.8 million investment in a short-term, tax exempt bond fund and invested the proceeds in money market funds. This sale resulted in a gain before tax of $0.8 million. The Company generated $34.2 million from operating activities in the first quarter of 2008, compared to $19.4 million during the same period in 2007. Net cash provided by operating activities on the March 31, 2007 and 2008 condensed consolidated statements of cash flows was reduced, in accordance with FAS 123®, by $9.1 million and $5.0 million, respectively, related to a reclassification of tax benefits from stock option exercises during the respective quarters. However, the favorable cash flow effect of this tax benefit is not realized until the second quarter of each year when estimated tax payments for the respective year are made. Capital expenditures were $5.1 million for the three months ended March 31, 2008, compared to $3.9 million for the same period in 2007.
During the three months ended March 31, 2008, the Company invested $56.3 million to repurchase 353,083 shares of its common stock at an average price of $159.36 per share as part of a previously announced common stock repurchase authorization. The Company's remaining authorization for common stock repurchases was approximately $26 million at March 31, 2008. During the three months ended March 31, 2008, the Company paid a regular, quarterly common stock dividend of $5.3 million ($0.38 per share) and a special common stock dividend of $28.9 million ($2.00 per share). The Company also received $3.4 million upon the exercise of 100,000 stock options.
For the first quarter 2008, bad debt expense as a percentage of revenues was 2.5% compared to 2.6% for the same period in 2007. Days sales outstanding, adjusted to exclude tuition receivable related to future quarters, was 12 days at the end of the first quarter of 2007 and 2008.
Student Enrollment
Enrollment at Strayer University for the 2008 spring term increased 19% to 37,733 students compared to 31,656 for the same term in 2007. Across the Strayer University campus and online system, new student enrollments increased 28%, while continuing student enrollments increased 17%. Global online students increased 45%. Students taking 100% of their classes online (including campus based students) increased 23%. The total number of students taking at least one class online increased 21%.
Student Enrollment
Spring Spring %
2007 2008 Change
Campus Based Students:
New Campuses (23 in operation 3 years or
less)
Classroom Students 1,379 2,781 102%
Online Students 2,180 3,858 77%
Total New Campus Based Students 3,559 6,639 87%
Mature Campuses (32 in operation more than
3 years)
Classroom Students 11,825 12,226 3%
Online Students 13,491 14,849 10%
Total Mature Campus Based Students 25,316 27,075 7%
Total Campus Based Students 28,875 33,714 17%
Global Online Students 2,781 4,019 45%
Total University Enrollment 31,656 37,733 19%
Total Students Taking 100% of Courses Online 18,452 22,726 23%
Total Students Taking at Least 1 Course
Online 22,392 27,064 21%
New Campus Openings
The Company announced today that Strayer University had successfully opened two new campuses for the summer academic term. Both campuses are in new Florida markets - one in Jacksonville and the other in Palm Beach. With these two new campuses, the Company has opened six of the nine new campuses planned for 2008.
Stock-based Compensation Activity
On April 29, 2008, the Company awarded 2,617 shares of restricted stock to various non-employee members of the Company's Board of Directors as part of its annual director compensation program. The Company's stock price closed at $179.89 on the date of this restricted stock grant.
Shares and Options Outstanding
At March 31, 2008, the Company had 14,216,087 common shares issued and outstanding, and 290,084 stock options outstanding with a weighted average exercise price of $84.33 and a remaining weighted average contractual life of 3.1 years.
Common Stock Cash Dividend
The Company announced today that its Board of Directors had declared its regular, quarterly common stock cash dividend of $0.375 per share. This dividend will be paid on June 10, 2008 to shareholders of record as of May 27, 2008.
Business Outlook
Based on the strong enrollment growth announced for the 2008 spring term, the Company estimates second quarter 2008 diluted EPS will be in the range of $1.45 to $1.47.
Conference Call with Management
Strayer Education, Inc. will host a conference call to discuss its first quarter 2008 earnings at 10:00 a.m. (ET) today. To participate on the live call, investors should dial (800) 289-0468 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 ww.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 4368500) starting at 1:00 p.m. (ET) today and will be available through Sunday, May 4, 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, and public administration to approximately 38,000 working adult students at 57 campuses in 12 states and Washington, D.C., in the eastern United States 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.
For more information on Strayer Education, Inc. visit www.strayereducation.com and for Strayer University visit www.strayer.edu.
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 and regional 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, 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.
SOURCE Strayer Education, Inc.
http://www.strayer.edu
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