EX-99.1 2 prdo-ex99_1.htm EX-99.1 EX-99.1

PRDO ANNOUNCES 4Q23 RESULTS …PG 1

 

 

Exhibit 99.1

img8661304_0.jpg 

 

PERDOCEO EDUCATION CORPORATION REPORTS FOURTH QUARTER AND

FULL YEAR 2023 RESULTS

 

Schaumburg, Ill. (February 21, 2024) – Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2023.

 

 

Full Year 2023 Results as Compared to Prior Year

 

•
Revenue increased 2.1% to $710.0 million, supported by an 11.8% increase at CTU.
•
Operating income increased 16.1% to $150.4 million, while adjusted operating income increased 6.7% to $174.9 million.*
•
Earnings per diluted share were $2.18 as compared to $1.39, while adjusted earnings per diluted share were $2.10 as compared to $1.63.*
•
Total student enrollments at December 31, 2023 increased 3.2% at CTU while AIUS decreased 39.3%.
•
Ended the year with $604.2 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.

 

 

Fourth Quarter 2023 Results as Compared to Prior Year Quarter

 

•
Revenue decreased 16.0% to $147.9 million, primarily driven by the enrollment reduction at AIUS.
•
Operating income decreased 29.7% to $15.9 million, while adjusted operating income decreased 40.2% to $19.4 million.*
•
Earnings per diluted share were $0.26 as compared to $0.23, while adjusted earnings per diluted share were $0.27 as compared to $0.31.*
•
On February 5, 2024 the Board of Directors declared a dividend for the fourth quarter of $0.11 per share payable on March 15, 2024.

 

 

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

 

"We delivered strong results for the full year 2023, supported by ongoing improvements in student retention and engagement across both our academic institutions,” said Todd Nelson, President and Chief Executive Officer. “We remain committed to making investments in our student support teams and technology that we believe will further enhance student retention and academic outcomes across both our academic institutions.”

 

 

 

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 2

 

 

 

REVENUE

•
For the quarter ended December 31, 2023, revenue of $147.9 million decreased 16.0% compared to revenue of $176.1 million for the prior year quarter.
•
For the year ended December 31, 2023, revenue of $710.0 million increased 2.1% compared to revenue of $695.2 million for the prior year.

 

 

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Revenue ($ in thousands)

 

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

CTU

 

$

104,590

 

 

$

108,446

 

 

 

-3.6

%

 

$

468,926

 

 

$

419,617

 

 

 

11.8

%

AIUS

 

 

43,172

 

 

 

67,445

 

 

 

-36.0

%

 

 

240,300

 

 

 

274,479

 

 

 

-12.5

%

Corporate and Other

 

 

157

 

 

 

254

 

 

NM

 

 

 

778

 

 

 

1,112

 

 

NM

 

Total

 

$

147,919

 

 

$

176,145

 

 

 

-16.0

%

 

$

710,004

 

 

$

695,208

 

 

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL STUDENT ENROLLMENTS

 

•
As of December 31, 2023, CTU’s total student enrollments increased 3.2%, while AIUS’ total student enrollments decreased 39.3% as compared to the prior year end.
•
After some necessary short-term operational changes at AIUS that impacted year-end total student enrollments, marketing and student enrollment operations have mostly reverted to normalized levels of operations during the fourth quarter of 2023.

 

 

 

At December 31,

 

Total Student Enrollments(1)

 

2023

 

 

2022

 

 

% Change

 

CTU

 

 

26,000

 

 

 

25,200

 

 

 

3.2

%

AIUS

 

 

8,500

 

 

 

14,000

 

 

 

-39.3

%

Total

 

 

34,500

 

 

 

39,200

 

 

 

-12.0

%

 

 

 

 

 

 

 

 

 

 

 

(1)
Total student enrollments do not include learners pursuing: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities.

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 3

 

 

OPERATING INCOME

 

•
For the quarter ended December 31, 2023, operating income decreased by 29.7% to $15.9 million as compared to the prior year quarter.

 

•
For the year ended December 31, 2023, operating income increased by 16.1% to $150.4 million as compared to the prior year.

 

 

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Operating Income ($ in thousands)

 

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

CTU

 

$

25,376

 

 

$

34,082

 

 

 

-25.5

%

 

$

144,008

 

 

$

141,622

 

 

 

1.7

%

AIUS

 

 

600

 

 

 

3,469

 

 

 

-82.7

%

 

 

45,283

 

 

 

33,315

 

 

 

35.9

%

Corporate and Other

 

 

(10,033

)

 

 

(14,877

)

 

NM

 

 

 

(38,845

)

 

 

(45,300

)

 

NM

 

Total

 

$

15,943

 

 

$

22,674

 

 

 

-29.7

%

 

$

150,446

 

 

$

129,637

 

 

 

16.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2023, adjusted operating income of $19.4 million decreased 40.2% compared to adjusted operating income of $32.4 million for the prior year quarter.

 

•
For the year ended December 31, 2023, adjusted operating income of $174.9 million increased 6.7% compared to adjusted operating income of $164.0 million for the prior year.

 

 

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Adjusted Operating Income ($ in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating income

 

$

15,943

 

 

$

22,674

 

 

$

150,446

 

 

$

129,637

 

Depreciation and amortization (1)

 

 

3,449

 

 

 

4,878

 

 

 

16,887

 

 

 

19,734

 

Legal fee expense related to certain matters (2)

 

 

5

 

 

 

4,869

 

 

 

7,579

 

 

 

14,597

 

Adjusted Operating Income

 

$

19,397

 

 

$

32,421

 

 

$

174,912

 

 

$

163,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

-40.2

%

 

 

 

 

 

6.7

%

 

 

 

 

(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.

 

 

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 4

 

 

 

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended December 31, 2023, the Company recorded:

•
Net income of $17.2 million compared to $16.0 million for the prior year quarter.
•
Earnings per diluted share of $0.26 increased 13.0% as compared to $0.23 for the prior year quarter.
•
Adjusted earnings per diluted share of $0.27 decreased 12.9% as compared to $0.31 for the prior year quarter. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

For the year ended December 31, 2023, the Company recorded:

•
Net income of $147.7 million compared to $95.9 million for the prior year.
•
Earnings per diluted share of $2.18 increased 56.8% as compared to $1.39 for the prior year.
•
Adjusted earnings per diluted share of $2.10 increased 28.8% as compared to $1.63 for the prior year. (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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.26

 

 

$

0.23

 

 

$

2.18

 

 

$

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (1)

 

 

0.02

 

 

 

0.03

 

 

 

0.11

 

 

 

0.11

 

Legal fee expense related to certain matters (2)

 

 

-

 

 

 

0.07

 

 

 

0.11

 

 

 

0.21

 

Gain on sale of intangible asset (3)

 

 

-

 

 

 

-

 

 

 

(0.32

)

 

 

-

 

Tax effect of adjustments (4)

 

 

(0.01

)

 

 

(0.02

)

 

 

0.02

 

 

 

(0.08

)

Adjusted Earnings Per Diluted Share

 

$

0.27

 

 

$

0.31

 

 

$

2.10

 

 

$

1.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)
Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.

 

(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.

 

 

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 5

 

 

DIVIDEND PAYMENT

 

The board of directors declared a quarterly dividend as part of the Company’s dividend policy of $0.11 per share, which will be paid on March 15, 2024 for holders of record of common stock as of March 1, 2024. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company’s available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating acquisitions and share repurchases.

 

STOCK REPURCHASE PROGRAM

 

The board of directors approved a new stock repurchase program commencing March 1, 2024 which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. The program expires September 30, 2025 and replaces the existing stock repurchase program that expires on September 30, 2024.

 

 

BALANCE SHEET AND CASH FLOW

•
For the quarter ended December 31, 2023, net cash provided by operating activities was $13.2 million, compared to net cash provided by operating activities of $40.5 million for the prior year quarter.
•
For the year ended December 31, 2023, net cash provided by operating activities was $112.0 million, compared to net cash provided by operating activities of $148.2 million for the prior year.
•
As of December 31, 2023 and December 31, 2022, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $604.2 million and $518.2 million, respectively.

 

 

 

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Selected Cash Flow Items ($ in thousands)

 

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

Net cash provided by operating activities

 

$

13,192

 

 

$

40,546

 

 

 

-67.5

%

 

$

112,025

 

 

$

148,186

 

 

 

-24.4

%

Capital expenditures

 

$

1,610

 

 

$

3,515

 

 

 

-54.2

%

 

$

6,411

 

 

$

12,620

 

 

 

-49.2

%

 

 

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 6

 

 

2024 FINANCIAL OUTLOOK

The Company is providing the following 2024 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

 

2024

2023

 

2024

2023

Operating Income

$40.1M - $42.1M

$43.3M

 

$154.6M - $174.6M

$150.4M

Depreciation and amortization

$2.9M

$5.2M

 

$12.4M

$16.9M

Legal fee expense related to certain matters (1)

-

$4.6M

 

$3.0M

$7.6M

Adjusted Operating Income

$43.0M - $45.0M

$53.1M

 

$170.0M - $190.0M

$174.9M

 

 

 

 

 

 

Earnings Per Diluted Share

$0.52 - $0.54

$0.50

 

$1.96 - $2.18

$2.18

Amortization of acquired intangible assets

$0.02

$0.04

 

$0.07

$0.11

Legal fee expense related to certain matters (1)

-

$0.07

 

$0.04

$0.11

Gain on sale of intangible asset

-

-

 

-

($0.32)

Tax effect of adjustments

($0.01)

($0.03)

 

($0.03)

$0.02

Adjusted Earnings Per Diluted Share

$0.53 - $0.55

$0.58

 

$2.04 - $2.26

$2.10

 

 

 

 

 

 

 

(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, which is the most directly comparable GAAP measure to adjusted 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 2024 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and trends in student retention and engagement remain consistent with management’s recent experiences, (ii) no significant impact of new or proposed regulations, or new interpretations of existing regulations, including recent Department negotiated rulemaking initiatives, FTC enforcement activity, FCC rulemaking or other adverse changes in the legal or regulatory environment or our institutions participation in Title IV programs, which may require further operational changes in the way the Company’s academic institutions market to, contact, enroll, support and educate current and prospective students, among other impacts, (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) the impact from federal student aid initiatives implemented by the current administration remains consistent with management's estimates, (v) no significant impact from the further delays by the Department to its implementation of a simplified FAFSA required by the FAFSA Simplification Act and the related delay of providing institutions with students' relevant aid eligibility and award information, (vi) earnings per diluted share outlook assumes an effective income tax rate of approximately 25.5% for the first quarter and approximately 26% for the full year, and (vii) excludes any future impact from the Company’s stock repurchase program. 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.

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 7

 

 

 

CONFERENCE CALL INFORMATION

 

Perdoceo Education Corporation will host a conference call on Wednesday, February 21, 2024 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2023 results and 2024 outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-888-596-4144 (domestic) or 1-646-968-2525 (international). Both dial-in numbers will use the access code 6410615. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/980571149. 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 accredited 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 academic 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 seeking and professional development programs. Perdoceo’s academic institutions 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 serve and educate students while enhancing overall learning and academic experiences. Perdoceo's institutions are 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 or our ability to market to and contact prospective students; 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 terms of any potential changes to or conditions imposed on our continued participation in the Title IV programs under new program participation agreements, the new 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; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; rulemaking or changing interpretations of existing regulations, guidance or historical practices 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 ability to participate in educational assistance programs for key employers, veterans or other military personnel; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. 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, 2023 and its subsequent filings with the Securities and Exchange Commission.

###

 

 

 

 

PRDO ANNOUNCES 4Q23 RESULTS …PG 8

 

 

CONTACT

 

Investors:

Alpha IR Group

Davis Snyder or Nick Nelson

(312) 445-2870

PRDO@alpha-ir.com

 

Or

 

Media:

Perdoceo Education Corporation

(847) 585-2600

media@perdoceoed.com

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

118,009

 

 

$

109,408

 

Restricted cash

 

 

1,012

 

 

 

9,476

 

Short-term investments

 

 

485,135

 

 

 

399,315

 

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

 

 

604,156

 

 

 

518,199

 

 

 

 

 

 

 

 

Student receivables, net

 

 

29,398

 

 

 

42,551

 

Receivables, other

 

 

4,539

 

 

 

3,457

 

Prepaid expenses

 

 

11,712

 

 

 

8,411

 

Inventories

 

 

5,004

 

 

 

1,904

 

Other current assets

 

 

155

 

 

597

 

Total current assets

 

 

654,964

 

 

 

575,119

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

Property and equipment, net

 

 

21,371

 

 

 

26,038

 

Right of use asset, net

 

 

19,096

 

 

 

26,156

 

Goodwill

 

 

241,162

 

 

 

243,540

 

Intangible assets, net

 

 

36,219

 

 

 

53,564

 

Student receivables, net

 

 

3,859

 

 

 

1,850

 

Deferred income tax assets, net

 

 

23,804

 

 

 

24,613

 

Other assets

 

 

6,841

 

 

 

6,488

 

TOTAL ASSETS

 

$

1,007,316

 

 

$

957,368

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Lease liability - operating

 

$

5,701

 

 

$

6,555

 

Accounts payable

 

 

10,766

 

 

 

13,518

 

Accrued expenses:

 

 

 

 

 

 

Payroll and related benefits

 

 

32,684

 

 

 

40,306

 

Advertising and marketing costs

 

 

7,196

 

 

 

8,977

 

Income taxes

 

 

3,974

 

 

 

7,814

 

Other

 

 

13,503

 

 

 

14,621

 

Deferred revenue

 

 

37,215

 

 

 

71,590

 

Total current liabilities

 

 

111,039

 

 

 

163,381

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

Lease liability - operating

 

 

21,346

 

 

27,286

 

Other liabilities

 

 

33,510

 

 

40,856

 

Total non-current liabilities

 

 

54,856

 

 

 

68,142

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

903

 

 

894

 

Additional paid-in capital

 

 

694,798

 

 

684,183

 

Accumulated other comprehensive loss

 

 

(666

)

 

(5,447

)

Retained earnings

 

 

480,606

 

 

 

347,839

 

Treasury stock

 

 

(334,220

)

 

 

(301,624

)

Total stockholders' equity

 

 

841,421

 

 

 

725,845

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,007,316

 

 

$

957,368

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Quarter Ended December 31,

 

 

 

2023

 

 

% of
Total
Revenue

 

 

2022

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

146,822

 

 

 

99.3

%

 

$

174,012

 

 

 

98.8

%

Other

 

 

1,097

 

 

 

0.7

%

 

 

2,133

 

 

 

1.2

%

Total revenue

 

 

147,919

 

 

 

 

 

 

176,145

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

30,223

 

 

 

20.4

%

 

 

31,217

 

 

 

17.7

%

General and administrative

 

 

92,756

 

 

 

62.7

%

 

 

114,610

 

 

 

65.1

%

Depreciation and amortization

 

 

3,449

 

 

 

2.3

%

 

 

4,878

 

 

 

2.8

%

Asset impairment

 

 

5,548

 

 

 

3.8

%

 

 

2,766

 

 

 

1.6

%

Total operating expenses

 

 

131,976

 

 

 

89.2

%

 

 

153,471

 

 

 

87.1

%

Operating income

 

 

15,943

 

 

 

10.8

%

 

 

22,674

 

 

 

12.9

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

6,421

 

 

 

4.3

%

 

 

3,169

 

 

1.8

%

Interest expense

 

 

(116

)

 

 

-0.1

%

 

 

(102

)

 

 

-0.1

%

Miscellaneous income (expense)

 

 

129

 

 

 

0.1

%

 

 

(1,313

)

 

-0.7

%

Total other income

 

 

6,434

 

 

 

4.3

%

 

 

1,754

 

 

 

1.0

%

PRETAX INCOME

 

 

22,377

 

 

 

15.1

%

 

 

24,428

 

 

 

13.9

%

Provision for income taxes

 

 

5,189

 

 

 

3.5

%

 

 

8,473

 

 

 

4.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

17,188

 

 

 

11.6

%

 

 

15,955

 

 

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.26

 

 

 

 

 

$

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

0.26

 

 

 

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

65,610

 

 

 

 

 

 

67,165

 

 

 

 

Diluted

 

 

67,185

 

 

 

 

 

 

68,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Quarter Ended December 31,

 

 

 

 

(In Thousands)

 

2023

 

 

 

 

 

2022

 

 

 

 

NET INCOME

 

$

17,188

 

 

 

 

 

$

15,955

 

 

 

 

OTHER COMPREHENSIVE INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

53

 

 

 

 

 

 

217

 

 

 

 

Unrealized gain on investments

 

 

4,280

 

 

 

 

 

 

653

 

 

 

 

Total other comprehensive income

 

 

4,333

 

 

 

 

 

 

870

 

 

 

 

COMPREHENSIVE INCOME

 

$

21,521

 

 

 

 

 

$

16,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

 

 

For the Year Ended December 31,

 

 

 

2023

 

 

% of
Total
Revenue

 

 

2022

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

702,920

 

 

 

99.0

%

 

$

687,672

 

 

 

98.9

%

Other

 

 

7,084

 

 

 

1.0

%

 

 

7,536

 

 

 

1.1

%

Total revenue

 

 

710,004

 

 

 

 

 

 

695,208

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

130,324

 

 

 

18.4

%

 

 

116,723

 

 

 

16.8

%

General and administrative

 

 

398,084

 

 

 

56.1

%

 

 

426,120

 

 

 

61.3

%

Depreciation and amortization

 

 

16,887

 

 

 

2.4

%

 

 

19,734

 

 

 

2.8

%

Asset impairment

 

 

14,263

 

 

 

2.0

%

 

 

2,994

 

 

 

0.4

%

Total operating expenses

 

 

559,558

 

 

 

78.8

%

 

 

565,571

 

 

 

81.4

%

Operating income

 

 

150,446

 

 

 

21.2

%

 

 

129,637

 

 

 

18.6

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

19,980

 

 

 

2.8

%

 

 

6,866

 

 

 

1.0

%

Interest expense

 

 

(404

)

 

 

-0.1

%

 

 

(400

)

 

 

-0.1

%

Miscellaneous income (expense)

 

 

22,099

 

 

 

3.1

%

 

 

(1,834

)

 

 

-0.3

%

Total other income

 

 

41,675

 

 

 

5.9

%

 

 

4,632

 

 

 

0.7

%

PRETAX INCOME

 

 

192,121

 

 

 

27.1

%

 

 

134,269

 

 

 

19.3

%

Provision for income taxes

 

 

44,469

 

 

 

6.3

%

 

 

38,402

 

 

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

147,652

 

 

 

20.8

%

 

 

95,867

 

 

 

13.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

2.22

 

 

 

 

 

$

1.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

2.18

 

 

 

 

 

$

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

66,468

 

 

 

 

 

 

67,934

 

 

 

 

Diluted

 

 

67,826

 

 

 

 

 

 

69,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Year Ended December 31,

 

 

 

 

(In Thousands)

 

2023

 

 

 

 

 

2022

 

 

 

 

NET INCOME

 

$

147,652

 

 

 

 

 

$

95,867

 

 

 

 

OTHER COMPREHENSIVE INCOME (LOSS), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

45

 

 

 

 

 

 

(166

)

 

 

 

Unrealized gain (loss) on investments

 

 

4,736

 

 

 

 

 

 

(5,185

)

 

 

 

Total other comprehensive income (loss)

 

 

4,781

 

 

 

 

 

 

(5,351

)

 

 

 

COMPREHENSIVE INCOME

 

$

152,433

 

 

 

 

 

$

90,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

For the Year Ended December 31,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

147,652

 

 

$

95,867

 

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

 

 

 

 

 

 

Asset impairment

 

 

14,263

 

 

 

2,994

 

Gain on sale of asset

 

 

(22,086

)

 

 

-

 

Depreciation and amortization expense

 

 

16,887

 

 

 

19,734

 

Bad debt expense

 

 

33,215

 

 

 

41,574

 

Compensation expense related to share-based awards

 

 

8,078

 

 

 

8,751

 

Deferred income taxes

 

 

3,761

 

 

 

(720

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

  Student receivables, gross

 

 

15,929

 

 

 

6,380

 

  Allowance for credit losses

 

 

(38,573

)

 

 

(38,992

)

  Receivables, other

 

 

(3,922

)

 

 

(1,670

)

  Inventories, prepaid expenses, and other current assets

 

 

(2,994

)

 

 

2,640

 

  Other non-current assets

 

 

478

 

 

 

843

 

  Accounts payable

 

 

(4,878

)

 

 

1,922

 

  Accrued expenses and other non-current liabilities

 

 

(19,235

)

 

 

22,332

 

  Deferred revenue

 

 

(34,375

)

 

 

(11,767

)

  Right of use asset and lease liabilities

 

 

(2,175

)

 

 

(1,702

)

Net cash provided by operating activities

 

 

112,025

 

 

 

148,186

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(314,279

)

 

 

(492,100

)

Sales of available-for-sale investments

 

 

238,184

 

 

 

262,277

 

Purchases of property and equipment

 

 

(6,411

)

 

 

(12,620

)

Business acquisitions, net of cash acquired

 

 

-

 

 

 

(84,308

)

Earnout payment related to business acquisition

 

 

(6,000

)

 

 

-

 

Net cash used in investing activities

 

 

(88,506

)

 

 

(326,751

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Purchase of treasury stock

 

 

(8,301

)

 

 

(23,117

)

Issuance of common stock

 

 

2,545

 

 

1,197

 

Payments of employee tax associated with stock compensation

 

 

(2,209

)

 

 

(1,612

)

Payments of cash dividends

 

 

(14,417

)

 

 

-

 

Release of cash held in escrow

 

 

(1,000

)

 

 

(4,197

)

Net cash used in financing activities

 

 

(23,382

)

 

 

(27,729

)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

137

 

 

 

(206,294

)

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

 

 

118,884

 

 

 

325,178

 

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

 

$

119,021

 

 

$

118,884

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

 

For the Quarter Ended December 31,

 

 

 

2023 (1)

 

 

2022

 

REVENUE:

 

 

 

 

 

 

CTU

 

$

104,590

 

 

$

108,446

 

AIUS

 

 

43,172

 

 

 

67,445

 

Corporate and Other

 

 

157

 

 

 

254

 

Total

 

$

147,919

 

 

$

176,145

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

CTU

 

$

25,376

 

 

$

34,082

 

AIUS

 

 

600

 

 

 

3,469

 

Corporate and Other

 

 

(10,033

)

 

 

(14,877

)

Total

 

$

15,943

 

 

$

22,674

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

CTU

 

 

24.3

%

 

 

31.4

%

AIUS

 

 

1.4

%

 

 

5.1

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

10.8

%

 

 

12.9

%

 

 

 

 

 

 

 

 

(1)
Results of operations include an acquisition completed on December 1, 2022 within CTU.

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

 

For the Year Ended December 31,

 

 

 

2023 (1)

 

 

2022 (1)

 

REVENUE:

 

 

 

 

 

CTU

 

$

468,926

 

 

$

419,617

 

AIUS

 

 

240,300

 

 

 

274,479

 

 Corporate and Other

 

 

778

 

 

 

1,112

 

Total

 

$

710,004

 

 

$

695,208

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

CTU

 

$

144,008

 

 

$

141,622

 

AIUS

 

 

45,283

 

 

 

33,315

 

 Corporate and Other

 

 

(38,845

)

 

 

(45,300

)

Total

 

$

150,446

 

 

$

129,637

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

CTU

 

 

30.7

%

 

 

33.8

%

AIUS

 

 

18.8

%

 

 

12.1

%

 Corporate and Other

 

NM

 

 

NM

 

Total

 

 

21.2

%

 

 

18.6

%

 

 

 

 

 

 

 

 

(1)
Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS.

 

 

 

 

 

 

 

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

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating income

 

$

15,943

 

 

$

22,674

 

 

$

150,446

 

 

$

129,637

 

Depreciation and amortization (2)

 

 

3,449

 

 

 

4,878

 

 

 

16,887

 

 

 

19,734

 

Legal fee expense related to certain matters (3)

 

 

5

 

 

 

4,869

 

 

 

7,579

 

 

 

14,597

 

Adjusted Operating Income

 

$

19,397

 

 

$

32,421

 

 

$

174,912

 

 

$

163,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending March 31,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating income

 

$40.1M - $42.1M

 

 

$

43,336

 

 

$154.6M - $174.6M

 

 

$

150,446

 

Depreciation and amortization (2)

 

$2.9M

 

 

 

5,155

 

 

$12.4M

 

 

 

16,887

 

Legal fee expense related to certain matters (3)

 

 

-

 

 

 

4,619

 

 

$3.0M

 

 

 

7,579

 

Adjusted Operating Income

 

$43.0M - $45.0M

 

 

$

53,110

 

 

$170.0M - $190.0M

 

 

$

174,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Reported Earnings Per Diluted Share

 

$

0.26

 

 

$

0.23

 

 

$

2.18

 

 

$

1.39

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

 

0.02

 

 

 

0.03

 

 

 

0.11

 

 

 

0.11

 

Legal fee expense related to certain matters (3)

 

 

-

 

 

 

0.07

 

 

 

0.11

 

 

 

0.21

 

Gain on sale of intangible asset (4)

 

 

-

 

 

 

-

 

 

 

(0.32

)

 

 

-

 

Total pre-tax adjustments

 

$

0.02

 

 

$

0.10

 

 

$

(0.10

)

 

$

0.32

 

Tax effect of adjustments (5)

 

 

(0.01

)

 

 

(0.02

)

 

 

0.02

 

 

 

(0.08

)

Total adjustments after tax

 

 

0.01

 

 

 

0.08

 

 

 

(0.08

)

 

 

0.24

 

Adjusted Earnings Per Diluted Share

 

$

0.27

 

 

$

0.31

 

 

$

2.10

 

 

$

1.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending March 31,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported Earnings Per Diluted Share

 

$0.52 - $0.54

 

 

$

0.50

 

 

$1.96 - $2.18

 

 

$

2.18

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

$0.02

 

 

 

0.04

 

 

$0.07

 

 

 

0.11

 

Legal fee expense related to certain matters (3)

 

 

-

 

 

 

0.07

 

 

$0.04

 

 

 

0.11

 

Gain on sale of intangible asset (4)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.32

)

Total pre-tax adjustments

 

$0.02

 

 

$

0.11

 

 

$0.11

 

 

$

(0.10

)

Tax effect of adjustments (5)

 

($0.01)

 

 

 

(0.03

)

 

($0.03)

 

 

 

0.02

 

Total adjustments after tax

 

$0.01

 

 

 

0.08

 

 

$0.08

 

 

 

(0.08

)

Adjusted Earnings Per Diluted Share

 

$0.53 - $0.55

 

 

$

0.58

 

 

$2.04 - $2.26

 

 

$

2.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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. The Company believes the items it is adjusting for are not normal operating expenses reflective of its underlying business. 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 Coding Dojo acquisition as of December 1, 2022 and the CalSouthern acquisition as of July 1, 2022.

(2)
Amortization for acquired intangible assets relate to definite-lived intangible assets associated with 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)
Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.
(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.