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

PRDO ANNOUNCES 2Q24 RESULTS …PG 1

 

 

Exhibit 99.1

img8661304_0.jpg 

 

PERDOCEO EDUCATION CORPORATION REPORTS SECOND QUARTER AND

YEAR TO DATE 2024 RESULTS

 

Increases second quarter per share dividend by 18.2% to $0.13 per share

Schaumburg, Ill. (July 31, 2024) – Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended June 30, 2024.

 

 

Second Quarter 2024 Results as Compared to Prior Year Quarter

 

•
Total student enrollments at June 30, 2024 increased by 4.2% supported by a 14.7% increase at CTU that was partially offset with an 18.2% decrease at AIUS.
•
Revenue decreased 10.6% to $166.7 million. This decrease was expected and partially due to a lag impact from the operational changes made at AIUS in the prior year.
•
Operating income decreased 4.3% to $46.0 million, while adjusted operating income decreased 7.8% to $50.9 million.*
•
Earnings per diluted share were $0.57 as compared to $0.80, while adjusted earnings per diluted share were $0.60 as compared to $0.61.*
•
Ended the quarter with $675.2 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.
•
On July 31, 2024 the Board increased the per share quarterly dividend by 18.2% to $0.13 per share.

 

 

Year to Date 2024 Results as Compared to Prior Year to Date

 

•
Revenue decreased 12.3% to $335.0 million, which was in line with management’s expectation for a decline.
•
Operating income increased 0.9% to $92.3 million, while adjusted operating income decreased 7.3% to $100.4 million.*
•
Earnings per diluted share were $1.16 as compared to $1.30, while adjusted earnings per diluted share were $1.21 as compared to $1.19.*

 

 

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

 

"Our second quarter results exceeded expectations, as both of our academic institutions continued to experience high levels of student retention and engagement,” said Todd Nelson, President and Chief Executive Officer. “Our year-to-date results and enrollment trends have been supported by various operating process changes and technology upgrades within our onboarding, academic and student support processes. Our faculty and student support staff continue to focus on further enhancing student experiences and academic outcomes and we will continue to make informed investments in technology and student support processes.”

 

 

 

 

 

PRDO ANNOUNCES 2Q24 RESULTS …PG 2

 

 

 

REVENUE

•
For the quarter ended June 30, 2024, revenue of $166.7 million decreased 10.6% compared to revenue of $186.6 million for the prior year quarter.
•
For the year to date ended June 30, 2024, revenue of $335.0 million decreased 12.3% compared to revenue of $382.2 million for the prior year to date.

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Revenue ($ in thousands)

 

2024

 

 

2023

 

 

% Change

 

 

2024

 

 

2023

 

 

% Change

 

CTU

 

$

112,828

 

 

$

119,292

 

 

 

-5.4

%

 

$

226,397

 

 

$

243,784

 

 

 

-7.1

%

AIUS

 

 

53,722

 

 

 

67,062

 

 

 

-19.9

%

 

 

108,227

 

 

 

137,902

 

 

 

-21.5

%

Corporate and Other

 

 

190

 

 

 

210

 

 

NM

 

 

 

380

 

 

 

476

 

 

NM

 

Total

 

$

166,740

 

 

$

186,564

 

 

 

-10.6

%

 

$

335,004

 

 

$

382,162

 

 

 

-12.3

%

 

TOTAL STUDENT ENROLLMENTS

 

•
As of June 30, 2024, CTU’s total student enrollments increased 14.7%, while AIUS’ total student enrollments decreased
18.2%.

 

 

 

At June 30,

 

Total Student Enrollments(1)

 

2024

 

 

2023

 

 

% Change

 

CTU

 

 

29,700

 

 

 

25,900

 

 

 

14.7

%

AIUS

 

 

9,900

 

 

 

12,100

 

 

 

-18.2

%

Total

 

 

39,600

 

 

 

38,000

 

 

 

4.2

%

 

(1)
Total student enrollments do not include learners participating in: 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 2Q24 RESULTS …PG 3

 

 

OPERATING INCOME

 

•
For the quarter ended June 30, 2024, operating income decreased by 4.3% to $46.0 million as compared to the prior year quarter.

 

•
For the year to date ended June 30, 2024, operating income increased by 0.9% to $92.3 million as compared to the prior year to date.

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Operating Income ($ in thousands)

 

2024

 

 

2023

 

 

% Change

 

 

2024

 

 

2023

 

 

% Change

 

CTU

 

$

42,890

 

 

$

40,451

 

 

 

6.0

%

 

$

85,046

 

 

$

84,141

 

 

 

1.1

%

AIUS

 

 

12,926

 

 

 

17,078

 

 

 

-24.3

%

 

 

22,212

 

 

 

29,081

 

 

 

-23.6

%

Corporate and Other

 

 

(9,810

)

 

 

(9,435

)

 

 

-4.0

%

 

 

(14,974

)

 

 

(21,792

)

 

 

31.3

%

Total

 

$

46,006

 

 

$

48,094

 

 

 

-4.3

%

 

$

92,284

 

 

$

91,430

 

 

 

0.9

%

 

 

 

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, 2024, adjusted operating income of $50.9 million decreased 7.8% compared to adjusted operating income of $55.2 million for the prior year quarter.

 

•
For the year to date ended June 30, 2024, adjusted operating income of $100.4 million decreased 7.3% compared to adjusted operating income of $108.3 million for the prior year to date.

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Adjusted Operating Income ($ in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating income

 

$

46,006

 

 

$

48,094

 

 

$

92,284

 

 

$

91,430

 

Depreciation and amortization

 

 

3,069

 

 

 

4,369

 

 

 

6,085

 

 

 

9,524

 

Legal fee expense related to certain matters (1)

 

 

1,815

 

 

 

2,709

 

 

 

2,045

 

 

 

7,328

 

Adjusted Operating Income

 

$

50,890

 

 

$

55,172

 

 

$

100,414

 

 

$

108,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

-7.8

%

 

 

 

 

 

-7.3

%

 

 

 

 

(1)
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 2Q24 RESULTS …PG 4

 

 

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended June 30, 2024, the Company recorded:

•
Net income of $38.4 million compared to $54.7 million for the prior year quarter.
•
Earnings per diluted share of $0.57 compared to $0.80 for the prior year quarter.
•
Adjusted earnings per diluted share of $0.60 compared to $0.61 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 to date ended June 30, 2024, the Company recorded:

•
Net income of $77.9 million compared to $89.2 million for the prior year to date.
•
Earnings per diluted share of $1.16 compared to $1.30 for the prior year to date.
•
Adjusted earnings per diluted share of $1.21 compared to $1.19 for the prior year to date. (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,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.57

 

 

$

0.80

 

 

$

1.16

 

 

$

1.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets

 

 

0.02

 

 

 

0.03

 

 

 

0.04

 

 

 

0.07

 

Legal fee expense related to certain matters (1)

 

 

0.03

 

 

 

0.04

 

 

 

0.03

 

 

 

0.11

 

Gain on sale of intangible asset

 

 

-

 

 

 

(0.32

)

 

 

-

 

 

 

(0.32

)

Tax effect of adjustments (2)

 

 

(0.02

)

 

 

0.06

 

 

 

(0.02

)

 

 

0.03

 

Adjusted Earnings Per Diluted Share

 

$

0.60

 

 

$

0.61

 

 

$

1.21

 

 

$

1.19

 

 

(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.

 

(2)
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 2Q24 RESULTS …PG 5

 

 

 

QUARTERLY DIVIDEND PAYMENT

 

On July 31, 2024, the board of directors approved its first dividend increase since implementing its dividend policy last year. The board of directors declared a quarterly dividend of $0.13 per share, an increase of 18.2%, which will be paid on September 13, 2024 for holders of record of common stock as of September 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.

 

 

AGREEMENT TO ACQUIRE University of St. Augustine for Health sciences

 

On July 16, 2024, the Company announced that it has signed a definitive agreement to acquire 100% ownership of the University of St. Augustine for Health Sciences, LLC (USAHS). USAHS is one of the nation’s leading universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs.

 

Perdoceo expects to pay approximately $142 million to $144 million in cash at closing. The actual cash paid will depend on adjustments for cash, debt and working capital based on the final closing balance sheet. Once completed, the Company expects that the acquisition will support further growth and diversification of its academic program offerings and will mark Perdoceo’s foray into health science degrees in a meaningful way. For the year ended December 31, 2023, USAHS had revenues of approximately $170 million, operating income of approximately $35 million and served approximately 4,500 graduate and post-graduate students across multiple health sciences disciplines. Perdoceo expects the transaction to be immediately accretive to the Company’s adjusted operating income beginning in 2025.

 

Please refer to our Form 8-K filed on July 16, 2024 for other details, material terms and other conditions related to the pending acquisition.

 

 

BALANCE SHEET AND CASH FLOW

•
For the quarter ended June 30, 2024 net cash provided by operating activities was $38.5 million, compared to net cash provided by operating activities of $61.6 million for the prior year quarter.
•
For the year to date ended June 30, 2024, net cash provided by operating activities was $93.0 million, compared to net cash provided by operating activities of $66.2 million in the prior year to date.
•
As of June 30, 2024 and December 31, 2023, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $675.2 million and $604.2 million, respectively.

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

Selected Cash Flow Items ($ in thousands)

 

2024

 

 

2023

 

 

% Change

 

 

2024

 

 

2023

 

 

% Change

 

Net cash provided by operating activities

 

$

38,525

 

 

$

61,648

 

 

 

-37.5

%

 

$

93,017

 

 

$

66,220

 

 

 

40.5

%

Capital expenditures

 

$

824

 

 

$

1,687

 

 

 

-51.2

%

 

$

2,022

 

 

$

3,612

 

 

 

-44.0

%

 

 

 

 

 

PRDO ANNOUNCES 2Q24 RESULTS …PG 6

 

 

OUTLOOK

The Company is providing the following third quarter outlook along with a 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

 

2024

2023

 

2024

2023

Operating Income

$41.6M - $43.6M

$43,073

 

$161.8M - $172.8M

$150,446

Depreciation and amortization

$3.1M

$3,914

 

$14.1M

16,887

Legal fee expense related to certain matters (1)

$0.3M

$246

 

$3.1M

7,579

Adjusted Operating Income

$45.0M - $47.0M

$47,233

 

$179.0M - $190.0M

$174,912

 

 

 

 

 

 

Earnings Per Diluted Share

$0.51 - $0.53

$0.62

 

$2.04 - $2.16

$2.18

Amortization of acquired intangible assets

$0.02

$0.03

 

$0.08

$0.11

Legal fee expense related to certain matters (1)

-

-

 

$0.05

$0.11

Gain on sale of intangible asset

-

-

 

-

($0.32)

Tax effect of adjustments

($0.01)

($0.01)

 

($0.04)

$0.02

Adjusted Earnings Per Diluted Share

$0.52 - $0.54

$0.64

 

$2.13 - $2.25

$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 estimates, (ii) no significant additional impact of new or proposed regulations, including recent Department negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, which may require further operational changes in the way the Company’s academic institutions 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 student loan initiatives implemented by the current administration remains consistent with management's estimates, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 28% for the third quarter and approximately 27% for the full year, and (vi) 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 2Q24 RESULTS …PG 7

 

 

 

CONFERENCE CALL INFORMATION

 

Perdoceo Education Corporation will host a conference call on Wednesday, July 31, 2024 at 5:30 p.m. Eastern time to discuss second quarter and year to date 2024 results and 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 1-800-715-9871 (domestic) or 1-646-307-1963 (international). Both dial-in numbers will use the access code 5668214. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/614624375. 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 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 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 2Q24 RESULTS …PG 8

 

 

CONTACT

 

Investors:

Alpha IR Group

Sam Gibbons

(312) 445-2870

PRDO@alpha-ir.com

 

Or

 

Media:

Perdoceo Education Corporation

(847) 585-2600

media@perdoceoed.com

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

127,852

 

 

$

118,009

 

Restricted cash

 

 

1,037

 

 

 

1,012

 

Short-term investments

 

 

546,273

 

 

 

485,135

 

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

 

 

675,162

 

 

 

604,156

 

 

 

 

 

 

 

 

Student receivables, net

 

 

34,855

 

 

 

29,398

 

Receivables, other

 

 

4,982

 

 

 

4,539

 

Prepaid expenses

 

 

12,558

 

 

 

11,712

 

Inventories

 

 

4,467

 

 

 

5,004

 

Other current assets

 

 

457

 

 

155

 

Total current assets

 

 

732,481

 

 

 

654,964

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

Property and equipment, net

 

 

19,087

 

 

 

21,371

 

Right of use asset, net

 

 

16,455

 

 

 

19,096

 

Goodwill

 

 

241,162

 

 

 

241,162

 

Intangible assets, net

 

 

34,002

 

 

 

36,219

 

Student receivables, net

 

 

5,267

 

 

 

3,859

 

Deferred income tax assets, net

 

 

23,242

 

 

 

23,804

 

Other assets

 

 

6,545

 

 

 

6,841

 

TOTAL ASSETS

 

$

1,078,241

 

 

$

1,007,316

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Lease liability - operating

 

$

5,397

 

 

$

5,701

 

Accounts payable

 

 

13,267

 

 

 

10,766

 

Accrued expenses:

 

 

 

 

 

 

Payroll and related benefits

 

 

25,295

 

 

 

32,684

 

Advertising and marketing costs

 

 

6,984

 

 

 

7,196

 

Income taxes

 

 

6,502

 

 

 

3,974

 

Other

 

 

22,023

 

 

 

13,503

 

Deferred revenue

 

 

55,390

 

 

 

37,215

 

Total current liabilities

 

 

134,858

 

 

 

111,039

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

Lease liability - operating

 

 

18,443

 

 

21,346

 

Other liabilities

 

 

25,416

 

 

33,510

 

Total non-current liabilities

 

 

43,859

 

 

 

54,856

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

910

 

 

903

 

Additional paid-in capital

 

 

701,153

 

 

694,798

 

Accumulated other comprehensive loss

 

 

(1,721

)

 

(666

)

Retained earnings

 

 

543,606

 

 

 

480,606

 

Treasury stock

 

 

(344,424

)

 

 

(334,220

)

Total stockholders' equity

 

 

899,524

 

 

 

841,421

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,078,241

 

 

$

1,007,316

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2024

 

 

% of
Total
Revenue

 

 

2023

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

165,404

 

 

 

99.2

%

 

$

184,520

 

 

 

98.9

%

Other

 

 

1,336

 

 

 

0.8

%

 

 

2,044

 

 

 

1.1

%

Total revenue

 

 

166,740

 

 

 

 

 

 

186,564

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

27,516

 

 

 

16.5

%

 

 

32,748

 

 

 

17.6

%

General and administrative

 

 

89,311

 

 

 

53.6

%

 

 

100,588

 

 

 

53.9

%

Depreciation and amortization

 

 

3,069

 

 

 

1.8

%

 

 

4,369

 

 

 

2.3

%

Asset impairment

 

 

838

 

 

 

0.5

%

 

 

765

 

 

 

0.4

%

Total operating expenses

 

 

120,734

 

 

 

72.4

%

 

 

138,470

 

 

 

74.2

%

Operating income

 

 

46,006

 

 

 

27.6

%

 

 

48,094

 

 

 

25.8

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

7,190

 

 

 

4.3

%

 

 

4,531

 

 

2.4

%

Interest expense

 

 

(112

)

 

 

-0.1

%

 

 

(96

)

 

 

-0.1

%

Miscellaneous (expense) income

 

 

(70

)

 

 

0.0

%

 

 

22,074

 

 

11.8

%

Total other income

 

 

7,008

 

 

 

4.2

%

 

 

26,509

 

 

 

14.2

%

PRETAX INCOME

 

 

53,014

 

 

 

31.8

%

 

 

74,603

 

 

 

40.0

%

Provision for income taxes

 

 

14,585

 

 

 

8.7

%

 

 

19,930

 

 

 

10.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

38,429

 

 

 

23.0

%

 

 

54,673

 

 

 

29.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.59

 

 

 

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

0.57

 

 

 

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

65,611

 

 

 

 

 

 

67,421

 

 

 

 

Diluted

 

 

67,077

 

 

 

 

 

 

68,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Quarter Ended June 30,

 

 

 

 

(In Thousands)

 

2024

 

 

 

 

 

2023

 

 

 

 

NET INCOME

 

$

38,429

 

 

 

 

 

$

54,673

 

 

 

 

OTHER COMPREHENSIVE LOSS, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(8

)

 

 

 

 

 

(3

)

 

 

 

Unrealized loss on investments

 

 

(93

)

 

 

 

 

 

(1,497

)

 

 

 

Total other comprehensive loss

 

 

(101

)

 

 

 

 

 

(1,500

)

 

 

 

COMPREHENSIVE INCOME

 

$

38,328

 

 

 

 

 

$

53,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2024

 

 

% of
Total
Revenue

 

 

2023

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

332,402

 

 

 

99.2

%

 

$

377,839

 

 

 

98.9

%

Other

 

 

2,602

 

 

 

0.8

%

 

 

4,323

 

 

 

1.1

%

Total revenue

 

 

335,004

 

 

 

 

 

 

382,162

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

57,374

 

 

 

17.1

%

 

 

66,599

 

 

 

17.4

%

General and administrative

 

 

176,793

 

 

 

52.8

%

 

 

213,274

 

 

 

55.8

%

Depreciation and amortization

 

 

6,085

 

 

 

1.8

%

 

 

9,524

 

 

 

2.5

%

Asset impairment

 

 

2,468

 

 

 

0.7

%

 

 

1,335

 

 

 

0.3

%

Total operating expenses

 

 

242,720

 

 

 

72.5

%

 

 

290,732

 

 

 

76.1

%

Operating income

 

 

92,284

 

 

 

27.5

%

 

 

91,430

 

 

 

23.9

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

13,983

 

 

 

4.2

%

 

 

8,349

 

 

 

2.2

%

Interest expense

 

 

(447

)

 

 

-0.1

%

 

 

(191

)

 

 

0.0

%

Miscellaneous income

 

 

45

 

 

 

0.0

%

 

 

22,068

 

 

 

5.8

%

Total other income

 

 

13,581

 

 

 

4.1

%

 

 

30,226

 

 

 

7.9

%

PRETAX INCOME

 

 

105,865

 

 

 

31.6

%

 

 

121,656

 

 

 

31.8

%

Provision for income taxes

 

 

27,994

 

 

 

8.4

%

 

 

32,499

 

 

 

8.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

77,871

 

 

 

23.2

%

 

 

89,157

 

 

 

23.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

1.19

 

 

 

 

 

$

1.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

$

1.16

 

 

 

 

 

$

1.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

65,583

 

 

 

 

 

 

67,328

 

 

 

 

Diluted

 

 

66,956

 

 

 

 

 

 

68,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Year to Date Ended June 30,

 

 

 

 

(In Thousands)

 

2024

 

 

 

 

 

2023

 

 

 

 

NET INCOME

 

$

77,871

 

 

 

 

 

$

89,157

 

 

 

 

OTHER COMPREHENSIVE LOSS, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(39

)

 

 

 

 

 

23

 

 

 

 

Unrealized loss on investments

 

 

(1,016

)

 

 

 

 

 

(197

)

 

 

 

Total other comprehensive loss

 

 

(1,055

)

 

 

 

 

 

(174

)

 

 

 

COMPREHENSIVE INCOME

 

$

76,816

 

 

 

 

 

$

88,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

For the Year to Date Ended June 30,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

77,871

 

 

$

89,157

 

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

 

 

 

 

 

 

Asset impairment

 

 

2,468

 

 

 

1,335

 

Gain on sale of asset

 

 

-

 

 

 

(22,086

)

Depreciation and amortization expense

 

 

6,085

 

 

 

9,524

 

Bad debt expense

 

 

12,631

 

 

 

18,927

 

Compensation expense related to share-based awards

 

 

4,557

 

 

 

4,315

 

Deferred income taxes

 

 

562

 

 

 

2,975

 

Changes in operating assets and liabilities

 

 

(11,157

)

 

 

(37,927

)

Net cash provided by operating activities

 

 

93,017

 

 

 

66,220

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(204,060

)

 

 

(159,183

)

Sales of available-for-sale investments

 

 

145,945

 

 

 

132,325

 

Purchases of property and equipment

 

 

(2,022

)

 

 

(3,612

)

Net cash used in investing activities

 

 

(60,137

)

 

 

(30,470

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Issuance of common stock

 

 

1,805

 

 

313

 

Purchase of treasury stock

 

 

(6,769

)

 

 

(2,729

)

Payments of employee tax associated with stock compensation

 

 

(3,435

)

 

 

(2,209

)

Payments of cash dividends and dividend equivalents

 

 

(14,613

)

 

 

-

 

Net cash used in financing activities

 

 

(23,012

)

 

 

(4,625

)

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

9,868

 

 

 

31,125

 

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

 

 

119,021

 

 

 

118,884

 

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

 

$

128,889

 

 

$

150,009

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

 

For the Quarter Ended June 30,

 

 

 

2024

 

 

2023

 

REVENUE:

 

 

 

 

 

 

CTU

 

$

112,828

 

 

$

119,292

 

AIUS

 

 

53,722

 

 

 

67,062

 

Corporate and Other

 

 

190

 

 

 

210

 

Total

 

$

166,740

 

 

$

186,564

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

CTU

 

$

42,890

 

 

$

40,451

 

AIUS

 

 

12,926

 

 

 

17,078

 

Corporate and Other

 

 

(9,810

)

 

 

(9,435

)

Total

 

$

46,006

 

 

$

48,094

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

CTU

 

 

38.0

%

 

 

33.9

%

AIUS

 

 

24.1

%

 

 

25.5

%

Corporate and Other

 

NM

 

 

NM

 

Total

 

 

27.6

%

 

 

25.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

 

For the Year to Date Ended June 30,

 

 

 

2024

 

 

2023

 

REVENUE:

 

 

 

 

 

CTU

 

$

226,397

 

 

$

243,784

 

AIUS

 

 

108,227

 

 

 

137,902

 

 Corporate and Other

 

 

380

 

 

 

476

 

Total

 

$

335,004

 

 

$

382,162

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

CTU

 

$

85,046

 

 

$

84,141

 

AIUS

 

 

22,212

 

 

 

29,081

 

 Corporate and Other

 

 

(14,974

)

 

 

(21,792

)

Total

 

$

92,284

 

 

$

91,430

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

CTU

 

 

37.6

%

 

 

34.5

%

AIUS

 

 

20.5

%

 

 

21.1

%

 Corporate and Other

 

NM

 

 

NM

 

Total

 

 

27.5

%

 

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating income

 

$

46,006

 

 

$

48,094

 

 

$

92,284

 

 

$

91,430

 

Depreciation and amortization

 

 

3,069

 

 

 

4,369

 

 

 

6,085

 

 

 

9,524

 

Legal fee expense related to certain matters (2)

 

 

1,815

 

 

 

2,709

 

 

 

2,045

 

 

 

7,328

 

Adjusted Operating Income

 

$

50,890

 

 

$

55,172

 

 

$

100,414

 

 

$

108,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending September 30,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating income

 

$41.6M - $43.6M

 

 

$

43,073

 

 

$161.8M - $172.8M

 

 

$

150,446

 

Depreciation and amortization

 

3.1M

 

 

 

3,914

 

 

14.1M

 

 

 

16,887

 

Legal fee expense related to certain matters (2)

 

0.3M

 

 

 

246

 

 

3.1M

 

 

 

7,579

 

Adjusted Operating Income

 

$45.0M - $47.0M

 

 

$

47,233

 

 

$179.0M - $190.0M

 

 

$

174,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

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

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

 

 

ACTUAL

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported Earnings Per Diluted Share

 

$

0.57

 

 

$

0.80

 

 

$

1.16

 

 

$

1.30

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets

 

 

0.02

 

 

 

0.03

 

 

 

0.04

 

 

 

0.07

 

Legal fee expense related to certain matters (2)

 

 

0.03

 

 

 

0.04

 

 

 

0.03

 

 

 

0.11

 

Gain on sale of intangible asset (3)

 

 

-

 

 

 

(0.32

)

 

 

-

 

 

 

(0.32

)

Total pre-tax adjustments

 

$

0.05

 

 

$

(0.25

)

 

$

0.07

 

 

$

(0.14

)

Tax effect of adjustments (4)

 

 

(0.02

)

 

 

0.06

 

 

 

(0.02

)

 

 

0.03

 

Total adjustments after tax

 

 

0.03

 

 

 

(0.19

)

 

 

0.05

 

 

 

(0.11

)

Adjusted Earnings Per Diluted Share

 

$

0.60

 

 

$

0.61

 

 

$

1.21

 

 

$

1.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending September 30,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported Earnings Per Diluted Share

 

$0.51 - $0.53

 

 

$

0.62

 

 

$2.04 - $2.16

 

 

$

2.18

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets

 

0.02

 

 

 

0.03

 

 

0.08

 

 

 

0.11

 

Legal fee expense related to certain matters (2)

 

 

-

 

 

 

-

 

 

0.05

 

 

 

0.11

 

Gain on sale of intangible asset (3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.32

)

Total pre-tax adjustments

 

$0.02

 

 

$

0.03

 

 

$0.13

 

 

$

(0.10

)

Tax effect of adjustments (4)

 

(0.01)

 

 

 

(0.01

)

 

(0.04)

 

 

 

0.02

 

Total adjustments after tax

 

0.01

 

 

 

0.02

 

 

0.09

 

 

 

(0.08

)

Adjusted Earnings Per Diluted Share

 

$0.52 - $0.54

 

 

$

0.64

 

 

$2.13 - $2.25

 

 

$

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 necessary to run its 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.

(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.