HERNDON, Va.--(BUSINESS WIRE)--Strayer Education, Inc. (Nasdaq: STRA) today announced financial results for the three months and year ended December 31, 2011. Financial highlights are as follows:
Three Months Ended December 31
- Revenues for the three months ended December 31, 2011 decreased 9% to $155.8 million, compared to $172.0 million for the same period in 2010, due to lower enrollment partly offset by a 5% tuition increase which commenced in January 2011.
- Income from operations was $45.4 million compared to $58.9 million for the same period in 2010, a decrease of 23%. Operating income margin was 29.1% compared to 34.3% in 2010.
- Net income was $26.7 million compared to $35.9 million for the same period in 2010, a decrease of 26%. Diluted earnings per share was $2.30 compared to $2.73 for the same period in 2010, a decrease of 16%. Diluted weighted average shares outstanding decreased 12% to 11,592,000 from 13,156,000 for the same period in 2010.
Year Ended December 31
- Revenues for the year ended December 31, 2011 decreased 1% to $627.4 million, compared to $636.7 million for the same period in 2010, due to lower average enrollment partly offset by a 5% tuition increase effective for 2011.
- Income from operations was $179.1 million compared to $215.8 million for the same period in 2010, a decrease of 17%. Operating income margin was 28.6% compared to 33.9% in 2010.
- Net income was $106.0 million compared to $131.3 million in 2010, a decrease of 19%. Diluted earnings per share was $8.88 compared to $9.70 in 2010, a decrease of 8%. Diluted weighted average shares outstanding decreased 12% to 11,943,000 from 13,535,000 in 2010.
Balance Sheet and Cash Flow
At December 31, 2011, the Company had cash and cash equivalents of $57.1 million. The Company generated $154.4 million in cash from operating activities in 2011 compared to $162.8 million during the same period in 2010. Capital expenditures in 2011 were $30.0 million compared to $46.0 million for the same period in 2010.
As previously announced, the Company entered into an amended and restated revolving credit and term loan agreement on April 4, 2011. This credit facility, which is secured by the assets of the Company, provides a $100.0 million revolving credit facility and a $100.0 million term loan facility with a maturity date of March 31, 2014. Proceeds from the term loan were used to pay off the $80.0 million outstanding at March 31, 2011 under the original revolving credit facility. At December 31, 2011, the Company had $97.5 million outstanding under its term loan and $20.0 million outstanding under its revolving credit facility.
During the fourth quarter of 2011, the Company invested $20.0 million to repurchase approximately 211,300 shares of stock at an average price of $94.64 per share as part of a previously announced stock repurchase authorization. During the year ended December 31, 2011, the Company invested $202.7 million to repurchase approximately 1,581,400 shares of common stock at an average price of $128.15 per share. At December 31, 2011, the Company’s remaining share repurchase authorization was $80.0 million. During the year ended December 31, 2011, the Company declared and paid regular, quarterly dividends totaling $49.1 million ($1.00 per share for each quarterly dividend).
For the fourth quarter of 2011, bad debt expense as a percentage of revenues was 4.4% compared to 4.2% for the same period in 2010. Days sales outstanding was 15 days at the end of the fourth quarter of 2011, compared to 12 days at the end of the fourth quarter of 2010.
Student Enrollment
Total enrollment at Strayer University for the 2012 winter term decreased 12% to 50,432 students compared to 57,608 students for the same term in 2011. Across the Strayer University campus network, continuing student enrollments decreased 13% and new student enrollments decreased 8%. Global online students decreased 17%, while students taking 100% of their classes online (including campus based students) decreased 9%.
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Student Enrollment |
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Winter |
Winter |
% | |||
| 2011 | 2012 |
Change |
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| Campus Based Students: | |||||
| New Campuses (30 in operation 3 or less years) | |||||
| Classroom Students | 1,910 | 2,046 | 7% | ||
| Online Students | 2,360 | 2,995 | 27% | ||
| Total New Campus Based Students | 4,270 | 5,041 | 18% | ||
| Mature Campuses (62 in operation more than 3 years) | |||||
| Classroom Students | 22,603 | 18,203 | -19% | ||
| Online Students | 24,850 | 22,319 | -10% | ||
| Total Mature Campus Based Students | 47,453 | 40,522 | -15% | ||
| Total Campus Based Students | 51,723 | 45,563 | -12% | ||
| Global Online Students | 5,885 | 4,869 | -17% | ||
| Total University Enrollment | 57,608 | 50,432 | -12% | ||
| Total Students Taking 100% of Courses Online | 33,095 | 30,183 | -9% | ||
Jack Welch Management Institute
As previously announced, Strayer University acquired the Jack Welch Management Institute, an online leadership education program that offers a differentiated executive MBA degree and executive certificates. The transaction closed in December.
Quarterly Cash Dividends
The Company announced today that its Board of Directors has declared its regular, quarterly cash dividend of $1.00 per share. This dividend will be paid on March 12, 2012 to shareholders of record as of February 29, 2012.
Shares and Options Outstanding
At December 31, 2011, the Company had 11,792,456 common shares issued and outstanding and 100,000 stock options outstanding with an exercise price of $107.28 and a remaining contractual life of one year.
Business Outlook
Based on the enrollments announced for the 2012 winter term and the planned investments in opening new campuses, the Company estimates first quarter 2012 diluted earnings per share will be in the range of $2.07 to $2.09.
2012 Annual Meeting of Stockholders
The Company announced today that its 2012 Annual Meeting of Stockholders will take place on Tuesday, April 24, 2012 at the Company’s office located at 2303 Dulles Station Blvd., Herndon, Virginia 20171. The record date for this annual meeting will be March 9, 2012.
Conference Call with Management
Strayer Education, Inc. will host a conference call to discuss its fourth quarter 2011 earnings at 10:00 a.m. (ET) today. To participate on the live call, investors should dial (877) 303-9047 10 minutes prior to the start time. In addition, the call will be available via live Webcast over the Internet. To access the live Webcast of the conference call, please go to www.strayereducation.com 15 minutes prior to the start time of the call to register. An archived replay of the conference call will be available at (855) 859-2056 (conference id 32870725) starting at 1:00 p.m. (ET) today and will be available through Thursday, February 23, 2012, and archived at www.strayereducation.com for 90 days.
About Strayer Education, Inc.
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 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 services administration, public administration, and criminal justice to working adult students at 92 campuses in 22 states and Washington, D.C. and worldwide via the Internet. Strayer University also offers an executive MBA online through its Jack Welch Management Institute. 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.
Forward-Looking Statements
This press release contains statements that are forward looking and are made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “will,” “forecast,” “plan,” “project,” or similar words. The statements are based on the Company’s current expectations and are subject to a number of assumptions, uncertainties and risks. In connection with the safe-harbor provisions of the Reform Act, the Company has identified important factors that could cause the Company’s actual results to differ materially from those expressed in or implied by such statements. The assumptions, uncertainties and risks include the pace of growth of student enrollment, our continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as regional accreditation standards and state regulatory requirements, rulemaking by the Department of Education and increased focus by the U. S. Congress on for-profit education institutions, competitive factors, risks associated with the opening of new campuses, risks associated with the offering of new educational programs and adapting to other changes, risks relating to the timing of regulatory approvals, our ability to implement our growth strategy, risks associated with the ability of our students to finance their education in a timely manner, and general economic and market conditions. Further information about these and other relevant risks and uncertainties may be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and in its subsequent filings with the Securities and Exchange Commission, all of which are incorporated herein by reference and which are available from the Commission. We undertake no obligation to update or revise forward looking statements.
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STRAYER EDUCATION, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) |
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| For the three months | For the year | |||||||||||
| ended December 31, | ended December 31, | |||||||||||
| 2010 | 2011 | 2010 | 2011 | |||||||||
| Revenues | $ | 171,951 | $ | 155,824 | $ | 636,732 | $ | 627,434 | ||||
| Costs and expenses: | ||||||||||||
| Instruction and educational support | 74,153 | 72,483 | 269,557 | 292,003 | ||||||||
| Marketing | 18,337 | 18,659 | 70,270 | 74,293 | ||||||||
| Admissions advisory | 6,584 | 6,357 | 25,277 | 26,531 | ||||||||
| General and administration | 13,972 | 12,956 | 55,857 | 55,464 | ||||||||
| Income from operations | 58,905 | 45,369 | 215,771 | 179,143 | ||||||||
| Investment income | 406 | 1 | 1,228 | 152 | ||||||||
| Interest expense | -- | 1,213 | -- | 3,773 | ||||||||
| Income before income taxes | 59,311 | 44,157 | 216,999 | 175,522 | ||||||||
| Provision for income taxes | 23,428 | 17,486 | 85,739 | 69,478 | ||||||||
| Net income | $ | 35,883 | $ | 26,671 | $ | 131,260 | $ | 106,044 | ||||
| Earnings per share: | ||||||||||||
| Basic | $ | 2.74 | $ | 2.31 | $ | 9.78 | $ | 8.91 | ||||
| Diluted | $ | 2.73 | $ | 2.30 | $ | 9.70 | $ | 8.88 | ||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 13,083 | 11,564 | 13,426 | 11,906 | ||||||||
| Diluted | 13,156 | 11,592 | 13,535 | 11,943 | ||||||||
| Shares outstanding at end of quarter | 13,317 | 11,792 | 13,317 | 11,792 | ||||||||
| Dividends per share (paid) | $ | 1.00 | $ | 1.00 | $ | 3.25 | $ | 4.00 | ||||
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STRAYER EDUCATION, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) |
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| December 31, | December 31, | ||||||
| 2010 | 2011 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 64,107 | $ | 57,137 | |||
| Marketable securities available for sale, at fair value | 12,386 | -- | |||||
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Tuition receivable, net of allowances for doubtful accounts of $7,935 and $7,279 at December 31, 2010 and 2011, respectively |
22,011 | 25,006 | |||||
| Income taxes receivable | -- | 394 | |||||
| Other current assets | 10,231 | 12,131 | |||||
| Total current assets | 108,735 | 94,668 | |||||
| Property and equipment, net | 116,063 | 121,149 | |||||
| Deferred income taxes | 8,374 | 3,326 | |||||
| Goodwill | -- | 6,800 | |||||
| Other assets | 2,006 | 5,190 | |||||
| Total assets | $ | 235,178 | $ | 231,133 | |||
| LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: |
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| Accounts payable and accrued expenses | $ | 41,792 | $ | 34,039 | |||
| Income taxes payable | 934 | -- | |||||
| Unearned tuition | 3,523 | 15,364 | |||||
| Other current liabilities | 281 | 281 | |||||
| Current portion of term loan | -- | 27,500 | |||||
| Total current liabilities | 46,530 | 77,184 | |||||
| Revolving credit facility | -- | 20,000 | |||||
| Term loan, less current portion | -- | 70,000 | |||||
| Other long-term liabilities | 12,644 | 21,656 | |||||
| Total liabilities | 59,174 | 188,840 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
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Common stock, par value $0.01; 20,000,000 shares authorized; 13,316,822 and 11,792,456 shares issued and outstanding at December 31, 2010 and 2011, respectively |
133 | 118 | |||||
| Additional paid-in capital | 1,206 | 295 | |||||
| Retained earnings | 174,625 | 42,491 | |||||
| Accumulated other comprehensive income (loss) | 40 | (611 | ) | ||||
| Total stockholders’ equity | 176,004 | 42,293 | |||||
| Total liabilities and stockholders’ equity | $ | 235,178 | $ | 231,133 | |||
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STRAYER EDUCATION, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amount in thousands) |
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For the year ended December 31, |
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| 2010 | 2011 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 131,260 | $ | 106,044 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Amortization of gain on sale of assets | (281 | ) | (281 | ) | ||||
| Amortization of deferred rent | 275 | 1,177 | ||||||
| Gain on sale of marketable securities | (406 | ) | (66 | ) | ||||
| Amortization of deferred financing costs | -- | 663 | ||||||
| Depreciation and amortization | 17,309 | 21,525 | ||||||
| Deferred income taxes | 353 | 3,722 | ||||||
| Stock-based compensation | 11,987 | 13,234 | ||||||
| Changes in assets and liabilities: | ||||||||
| Tuition receivable, net | (4,233 | ) | (2,995 | ) | ||||
| Other current assets | (1,153 | ) | (768 | ) | ||||
| Other assets | (258 | ) | 102 | |||||
| Accounts payable and accrued expenses | 10,146 | (3,360 | ) | |||||
| Income taxes payable and income taxes receivable | (1,358 | ) | (1,279 | ) | ||||
| Excess tax benefits from stock-based payment arrangements | (2,808 | ) | -- | |||||
| Unearned tuition | 1,083 | 11,841 | ||||||
| Other long-term liabilities | 905 | 4,804 | ||||||
| Net cash provided by operating activities | 162,821 | 154,363 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (46,015 | ) | (29,991 | ) | ||||
| Purchases of marketable securities | (559 | ) | (2 | ) | ||||
| Proceeds from the sale of marketable securities | 40,700 | 12,388 | ||||||
| Acquisition of assets | -- | (7,000 | ) | |||||
| Net cash used in investing activities | (5,874 | ) | (24,605 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Common dividends paid | (44,541 | ) | (49,105 | ) | ||||
| Proceeds from exercise of stock options | 452 | -- | ||||||
| Excess tax benefits from stock-based payment arrangements | 2,808 | -- | ||||||
| Repurchase of common stock | (115,517 | ) | (202,664 | ) | ||||
| Proceeds from revolving credit facility | -- | 120,000 | ||||||
| Payments on revolving credit facility | -- | (100,000 | ) | |||||
| Proceeds from term loan | -- | 100,000 | ||||||
| Payments on term loan | -- | (2,500 | ) | |||||
| Payment of deferred financing costs | -- | (2,459 | ) | |||||
| Net cash used in financing activities | (156,798 | ) | (136,728 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 149 | (6,970 | ) | |||||
| Cash and cash equivalents – beginning of period | 63,958 | 64,107 | ||||||
| Cash and cash equivalents – end of period | $ | 64,107 | $ | 57,137 | ||||
| Non-cash transactions: | ||||||||
| Purchases of property and equipment included in accounts payable | $ | 5,508 | $ | 1,115 | ||||