Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2020 Results

Full year revenue increased 9.5% supported by enrollment growth at both CTU and AIU

SCHAUMBURG, Ill.--()--Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2020.

Fourth Quarter 2020 Results as Compared to the Prior Year Quarter

Financial Results

  • Revenue increased by 8.0 percent to $171.2 million
  • Operating income increased by 13.0 percent to $36.2 million while adjusted operating income increased by 16.1 percent to $40.2 million*
  • Earnings per diluted share of $0.38 remained flat while adjusted earnings per diluted share was $0.39 as compared to $0.33*
  • Ended the quarter with $410.4 million in cash, cash equivalents, restricted cash and available-for-sale short-term investments

Enrollment Metrics

  • Total student enrollments at December 31, 2020 increased 16.7 percent. CTU experienced a 4.2 percent increase while AIU experienced a 39.2 percent increase in total student enrollments. AIU’s total student enrollment growth was positively impacted by the acquisition of substantially all of the assets of Trident University International (the “Trident acquisition”) while also experiencing underlying organic growth.
  • New student enrollments increased 3.6 percent within CTU and 54.8 percent within AIU. AIU’s new student enrollments were positively impacted by the Trident acquisition while also experiencing underlying organic growth.

Full Year 2020 Results as Compared to the Prior Year

Financial Results

  • Revenue increased by 9.5 percent to $687.3 million
  • Operating income increased by 65.3 percent to $142.9 million while adjusted operating income increased by 18.4 percent to $159.0 million*
  • Earnings per diluted share of $1.74 as compared to $0.97 while adjusted earnings per diluted share was $1.56 as compared to $1.37*

Enrollment Metrics

  • New student enrollments increased 7.4 percent within CTU and 37.3 percent within AIU. AIU’s full year new student enrollments were positively impacted by the Trident acquisition while also experiencing underlying organic growth.

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

“We ended 2020 on a solid note which was marked by our commitment to serve and educate students,” said Todd Nelson, President and Chief Executive Officer. “We experienced enrollment growth at both CTU and AIU and expanded the depth of our academic program offerings with the Trident acquisition. Our balance sheet grew stronger allowing us to continue investing in data analytics, academic and student serving processes and technology, which we believe will further enhance student experiences, retention and academic outcomes.”

REVENUE

  • Revenue growth for the quarter and year ended December 31, 2020 was supported by organic student enrollment growth as well as the Trident acquisition. The Company believes investments in technology and student serving processes were effective in serving the strong prospective student interest experienced at its universities and also positively impacted student experiences and academic outcomes.

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Revenue ($ in thousands)

 

2020

 

 

2019

 

 

% Change

 

 

2020

 

 

2019

 

 

% Change

 

CTU

 

$

102,741

 

 

$

102,613

 

 

 

0.1

%

 

$

405,507

 

 

$

392,263

 

 

 

3.4

%

AIU (1)

 

 

68,082

 

 

 

55,815

 

 

 

22.0

%

 

 

281,361

 

 

 

235,374

 

 

 

19.5

%

Total University Group

 

 

170,823

 

 

 

158,428

 

 

 

7.8

%

 

 

686,868

 

 

 

627,637

 

 

 

9.4

%

Corporate and Other

 

 

336

 

 

 

23

 

 

NM

 

 

 

446

 

 

 

67

 

 

NM

 

Total

 

$

171,159

 

 

$

158,451

 

 

 

8.0

%

 

$

687,314

 

 

$

627,704

 

 

 

9.5

%

(1)

AIU’s revenue for the quarter and year ended December 31, 2020 includes revenue associated with the Trident acquisition commencing on the March 2, 2020 date of acquisition.

STUDENT ENROLLMENTS

  • Student enrollment growth at CTU for the quarter and year ended December 31, 2020 was supported by organic growth initiatives and continued growth in student enrollments from corporate partnerships. Student enrollment growth at AIU for the quarter and year ended December 31, 2020 was primarily supported by the Trident acquisition and also reflects organic growth.

 

 

As of December 31,

 

Total Student Enrollments

 

2020

 

 

2019

 

 

% Change

 

CTU

 

 

24,600

 

 

 

23,600

 

 

 

4.2

%

AIU (1)

 

 

18,100

 

 

 

13,000

 

 

 

39.2

%

Total

 

 

42,700

 

 

 

36,600

 

 

 

16.7

%

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

New Student Enrollments

 

2020

 

 

2019

 

 

% Change

 

 

2020

 

 

2019

 

 

% Change

 

CTU

 

 

7,150

 

 

 

6,900

 

 

 

3.6

%

 

 

27,110

 

 

 

25,250

 

 

 

7.4

%

AIU (1)

 

 

5,760

 

 

 

3,720

 

 

 

54.8

%

 

 

26,160

 

 

 

19,050

 

 

 

37.3

%

Total

 

 

12,910

 

 

 

10,620

 

 

 

21.6

%

 

 

53,270

 

 

 

44,300

 

 

 

20.2

%

(1)

AIU’s total student enrollments as of December 31, 2020 and new student enrollments for the quarter and year ended December 31, 2020 include enrollments related to the Trident acquisition commencing on the March 2, 2020 date of acquisition.

OPERATING INCOME

  • Operating income for the quarter ended December 31, 2020 increased 13.0 percent as compared to the prior year quarter.
  • Operating income for the year ended December 31, 2020 increased 65.3 percent primarily due to reduced legal settlement expense as compared to the prior year. Excluding the prior year legal settlements, operating income would have increased 15.7 percent with operating margins improving 110 basis points.

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Operating Income ($ in thousands)

 

2020

 

 

2019

 

 

% Change

 

 

2020

 

 

2019

 

 

% Change

 

CTU (1)

 

$

37,802

 

 

$

36,872

 

 

 

2.5

%

 

$

138,490

 

 

$

108,602

 

 

 

27.5

%

AIU (2)

 

 

5,457

 

 

 

4,977

 

 

 

9.6

%

 

 

30,822

 

 

 

16,413

 

 

 

87.8

%

Total University Group

 

 

43,259

 

 

 

41,849

 

 

 

3.4

%

 

 

169,312

 

 

 

125,015

 

 

 

35.4

%

Corporate and Other (3)

 

 

(7,070

)

 

 

(9,836

)

 

NM

 

 

 

(26,378

)

 

 

(38,553

)

 

NM

 

Total

 

$

36,189

 

 

$

32,013

 

 

 

13.0

%

 

$

142,934

 

 

$

86,462

 

 

 

65.3

%

(1)

CTU’s operating income for the full year 2019 includes an $18.6 million expense related to the FTC settlement.

(2)

AIU’s operating income for the quarter and year ended December 31, 2020 includes results associated with the Trident acquisition commencing on the March 2, 2020 date of acquisition. Operating income for the full year 2019 includes an $11.4 million expense related to the FTC settlement.

(3)

Corporate and Other’s operating loss for the full year 2019 includes $7.1 million of expense related to the Oregon arbitration settlement.

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.)

  • Revenue growth, efficiency within operating processes and pandemic-related savings for the quarter and year ended December 31, 2020, partially offset with increased investments in academics, technology and student-serving processes, contributed to increased adjusted operating income for both the quarter and year ended December 31, 2020 as compared to the prior year periods.

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Adjusted Operating Income ($ in thousands)

 

2020 (4)

 

 

2019

 

 

2020 (4)

 

 

2019

 

Operating income

 

$

36,189

 

 

$

32,013

 

 

$

142,934

 

 

$

86,462

 

Depreciation and amortization

 

 

4,001

 

 

 

2,393

 

 

 

14,786

 

 

 

9,145

 

Asset impairment (1)

 

 

-

 

 

 

-

 

 

 

612

 

 

 

-

 

Lease expenses for vacated space (2)

 

 

(30

)

 

 

177

 

 

 

659

 

 

 

1,630

 

Significant legal settlements (3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37,100

 

Adjusted Operating Income

 

$

40,160

 

 

$

34,583

 

 

$

158,991

 

 

$

134,337

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

16.1

%

 

 

 

 

 

 

18.4

%

 

 

 

 

(1)

Asset impairment relates to a right of use asset for a vacated facility for a closed campus for which the sublease income was deemed no longer recoverable.

(2)

Lease expenses for vacated space include both fixed and variable lease costs offset with sublease income for closed campuses.

(3)

Significant legal settlements relate to the FTC and Oregon arbitration matters recorded during 2019.

(4)

2020 results include the Trident acquisition commencing on the March 2, 2020 date of acquisition.

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended December 31, 2020, the Company recorded:

  • Net income of $27.1 million compared to net income of $27.5 million for the prior year quarter.
  • Earnings per diluted share of $0.38 remained flat to the prior year quarter.
  • Adjusted earnings per diluted share of $0.39 compared to adjusted earnings per diluted share of $0.33 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, 2020, the Company recorded:

  • Net income of $124.3 million compared to net income of $70.0 million for the prior year.
  • Earnings per diluted share of $1.74 compared to earnings per diluted share of $0.97 for the prior year.
  • Adjusted earnings per diluted share of $1.56 compared to adjusted earnings per diluted share of $1.37 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,

 

 

 

2020 (8)

 

 

2019

 

 

2020 (8)

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.38

 

 

$

0.38

 

 

$

1.74

 

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (1)

 

 

0.01

 

 

 

-

 

 

 

0.04

 

 

 

-

 

Asset impairment (2)

 

 

-

 

 

 

-

 

 

 

0.01

 

 

 

-

 

Lease expenses for vacated space (3)

 

 

-

 

 

 

-

 

 

 

0.01

 

 

 

0.02

 

Significant legal settlements (4)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.51

 

Total pre-tax adjustments

 

$

0.01

 

 

$

-

 

 

$

0.06

 

 

$

0.53

 

Tax effect of adjustments (5)

 

 

-

 

 

 

-

 

 

 

(0.02

)

 

 

(0.13

)

Tax effect of change in settlement deductibility (6)

 

 

-

 

 

 

(0.05

)

 

 

-

 

 

 

-

 

Release of valuation allowance (7)

 

 

-

 

 

 

-

 

 

 

(0.22

)

 

 

-

 

Total adjustments after tax

 

 

0.01

 

 

 

(0.05

)

 

 

(0.18

)

 

 

0.40

 

Adjusted Earnings Per Diluted Share

 

$

0.39

 

 

$

0.33

 

 

$

1.56

 

 

$

1.37

 

(1)

Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident acquisition.

(2)

Asset impairment relates to a right of use asset for a vacated facility for a closed campus for which the sublease income was deemed no longer recoverable.

(3)

Lease expenses for vacated space include both fixed and variable lease costs offset with sublease income for closed campuses.

(4)

Significant legal settlements relate to the FTC and Oregon arbitration matters recorded during 2019.

(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. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax.

(6)

A legal settlement of $30.0 million related to the FTC matter was an adjustment from operating income during the second quarter of 2019 to calculate adjusted operating income. However, only $6.7 million of this adjustment met the criteria for tax deductibility during the second quarter of 2019. During the fourth quarter of 2019, an additional $23.0 million related to the FTC settlement met the criteria to be deductible for tax purposes. For the full year 2019, approximately $29.7 million was considered deductible for tax purposes. The quarterly reversals and adjustments of the proportional impacts of the non-deductibility had no effect for the full year 2019.

(7)

This relates to the release of a valuation allowance in the amount of $16.0 million as a result of the determination that it is more likely than not that the Company will utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance.

(8)

2020 results include the Trident acquisition commencing on the March 2, 2020 date of acquisition.

BALANCE SHEET AND CASH FLOW

  • For the quarter and year ended December 31, 2020, net cash provided by operating activities was $42.2 million and $180.0 million, compared to net cash used in operating activities of $12.3 million and net cash provided by operating activities of $73.1 million for the respective prior year periods.
  • As of December 31, 2020 and December 31, 2019, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $410.4 million and $294.2 million, respectively.

 

 

For the Quarter Ended December 31,

 

 

For the Year Ended December 31,

 

Selected Cash Flow Items ($ in thousands)

 

2020

 

 

2019

 

 

% Change

 

 

2020

 

 

2019

 

 

% Change

 

Net cash provided by (used in) operating activities

 

$

42,203

 

 

$

(12,306

)

 

 

442.9

%

 

$

179,956

 

 

$

73,085

 

 

 

146.2

%

Capital expenditures

 

$

2,289

 

 

$

1,954

 

 

 

17.1

%

 

$

9,768

 

 

$

5,174

 

 

 

88.8

%

OUTLOOK

The Company is providing the following 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. The outlook reflects the Company’s expectation of achieving total student enrollment growth at both CTU and AIU for the first quarter of 2021 and for the full year 2021.

 

Total Company Outlook

 

For the Quarter Ending March 31,

 

For the Year Ending December 31,

 

OUTLOOK

ACTUAL

 

OUTLOOK

ACTUAL

 

2021

2020

 

2021

2020

Operating Income

$39.0M - $40.0M

$37.3M

 

$149.0M - $155.0M

$142.9M

Depreciation and amortization

$4.0M

$2.6M

 

$16.0M

$14.8M

Adjusted Operating Income (1)

$43.0M - $44.0M

$39.9M

 

$165.0M - $171.0M

$157.7M

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Diluted Share

$0.41 - $0.42

$0.41

 

$1.55 - $1.61

$1.74

Amortization of acquired intangible assets

$0.01

-

 

$0.04

$0.04

Tax effect of adjustments

-

-

 

($0.01)

($0.01)

Release of valuation allowance

-

-

 

-

($0.22)

Adjusted Earnings Per Diluted Share (1)

$0.42 - $0.43

$0.41

 

$1.58 - $1.64

$1.55

(1)

Beginning in 2021, the Company will no longer adjust operating income or earnings per diluted share for expenses related to vacated facilities at closed campuses as these expenses are expected to be immaterial going forward. The prior period amounts were recast to maintain comparability to the 2021 outlook.

Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and 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 such as depreciation, amortization and significant legal settlements. The operating income, adjusted operating income, earnings per share, adjusted earnings per share and total enrollment outlook provided above for 2021 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs remains consistent with recent experience, (ii) no significant changes in the timing and amounts of planned investments and investments continue to positively impact student enrollments, (iii) no significant impact of new or proposed regulations, including the “borrower defense to repayment” regulations, or other adverse changes in the legal or regulatory environment, (iv) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (v) no significant operating or financial impacts from the COVID-19 pandemic beyond known costs which have been incorporated in the outlook, (vi) earnings per diluted share outlook assumes an effective income tax rate of approximately 25.5% for the first quarter and approximately 26.0% for the full year, and (vii) any future impact from the Company’s stock repurchase program is excluded. 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 shareholder value may impact the outlook provided above.

CONFERENCE CALL INFORMATION

Perdoceo Education Corporation will host a conference call on Wednesday, February 24, 2021 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2020 results and 2021 outlook. Interested parties can access the live webcast of the conference at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-844-378-6484 (domestic) or 1-412-542-4179 (international). 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 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 accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Perdoceo’s universities offer students industry-relevant and career-focused degree programs that are designed to meet the educational needs of today’s busy adults. CTU and AIU continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. 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.

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; 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 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; rulemaking 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 operating impact of the settlements with the U.S. Federal Trade Commission and state attorneys general; the success of our initiatives to improve student experiences, retention and academic outcomes; the ability of our student admissions and advising functions to achieve anticipated operating performance; our continued eligibility to participate in educational assistance programs for veterans or other military personnel; the impact of the global COVID-19 pandemic; difficulties with integrating the assets of Trident University International into AIU’s operations; 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, 2020 and its subsequent filings with the Securities and Exchange Commission.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

105,684

 

 

$

108,687

 

Restricted cash

 

 

4,000

 

 

 

-

 

Short-term investments

 

 

300,676

 

 

 

185,488

 

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

 

 

410,360

 

 

 

294,175

 

 

 

 

 

 

 

 

 

 

Student receivables, net

 

 

44,682

 

 

 

55,018

 

Receivables, other

 

 

2,873

 

 

 

1,381

 

Prepaid expenses

 

 

8,209

 

 

 

7,299

 

Inventories

 

 

596

 

 

 

576

 

Other current assets

 

 

341

 

 

 

1,936

 

Total current assets

 

 

467,061

 

 

 

360,385

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

27,761

 

 

 

26,006

 

Right of use asset, net

 

 

44,773

 

 

 

50,366

 

Goodwill

 

 

118,312

 

 

 

87,356

 

Intangible assets, net

 

 

15,522

 

 

 

7,900

 

Student receivables, net

 

 

1,303

 

 

 

1,244

 

Deferred income tax assets, net

 

 

40,351

 

 

 

60,169

 

Other assets

 

 

6,434

 

 

 

5,720

 

TOTAL ASSETS

 

$

721,517

 

 

$

599,146

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

$

9,789

 

 

$

11,784

 

Accounts payable

 

 

13,259

 

 

 

11,533

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related benefits

 

 

22,661

 

 

 

27,616

 

Advertising and marketing costs

 

 

10,249

 

 

 

10,479

 

Income taxes

 

 

1,402

 

 

 

1,376

 

Other

 

 

11,921

 

 

 

16,378

 

Deferred revenue

 

 

34,534

 

 

 

24,647

 

Total current liabilities

 

 

103,815

 

 

 

103,813

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

 

43,405

 

 

 

52,391

 

Other liabilities

 

 

18,390

 

 

 

11,647

 

Total non-current liabilities

 

 

61,795

 

 

 

64,038

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

873

 

 

 

860

 

Additional paid-in capital

 

 

658,423

 

 

 

639,335

 

Accumulated other comprehensive income

 

 

364

 

 

 

344

 

Retained earnings

 

 

142,335

 

 

 

18,071

 

Treasury stock

 

 

(246,088

)

 

 

(227,315

)

Total stockholders' equity

 

 

555,907

 

 

 

431,295

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

721,517

 

 

$

599,146

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)

 

 

 

For the Quarter Ended December 31,

 

 

 

2020

 

 

% of
Total
Revenue

 

 

2019

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees

 

$

170,215

 

 

 

99.4

%

 

$

157,758

 

 

 

99.6

%

Other

 

 

944

 

 

 

0.6

%

 

 

693

 

 

 

0.4

%

Total revenue

 

 

171,159

 

 

 

 

 

 

 

158,451

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

28,619

 

 

 

16.7

%

 

 

24,949

 

 

 

15.7

%

General and administrative

 

 

102,350

 

 

 

59.8

%

 

 

99,096

 

 

 

62.5

%

Depreciation and amortization

 

 

4,001

 

 

 

2.3

%

 

 

2,393

 

 

 

1.5

%

Total operating expenses

 

 

134,970

 

 

 

78.9

%

 

 

126,438

 

 

 

79.8

%

Operating income

 

 

36,189

 

 

 

21.1

%

 

 

32,013

 

 

 

20.2

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

617

 

 

 

0.4

%

 

 

1,662

 

 

 

1.0

%

Interest expense

 

 

(41

)

 

 

0.0

%

 

 

(42

)

 

 

0.0

%

Miscellaneous income (expense)

 

 

113

 

 

 

0.1

%

 

 

(33

)

 

 

0.0

%

Total other income

 

 

689

 

 

 

0.4

%

 

 

1,587

 

 

 

1.0

%

PRETAX INCOME

 

 

36,878

 

 

 

21.5

%

 

 

33,600

 

 

 

21.2

%

Provision for income taxes

 

 

9,806

 

 

 

5.7

%

 

 

6,066

 

 

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

27,072

 

 

 

15.8

%

 

 

27,534

 

 

 

17.4

%

Loss from discontinued operations, net of tax

 

 

(21

)

 

 

0.0

%

 

 

(18

)

 

 

0.0

%

NET INCOME

 

$

27,051

 

 

 

15.8

%

 

$

27,516

 

 

 

17.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.39

 

 

 

 

 

 

$

0.39

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

Net income per share

 

$

0.39

 

 

 

 

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.38

 

 

 

 

 

 

$

0.38

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

Net income per share

 

$

0.38

 

 

 

 

 

 

$

0.38

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

69,555

 

 

 

 

 

 

 

70,263

 

 

 

 

 

Diluted

 

 

70,968

 

 

 

 

 

 

 

72,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Quarter Ended December 31,

 

(In Thousands)

 

2020

 

 

 

 

 

 

2019

 

 

 

 

 

NET INCOME

 

$

27,051

 

 

 

 

 

 

$

27,516

 

 

 

 

 

OTHER COMPREHENSIVE LOSS, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

71

 

 

 

 

 

 

 

89

 

 

 

 

 

Unrealized loss on investments

 

 

(310

)

 

 

 

 

 

 

(131

)

 

 

 

 

Total other comprehensive loss

 

 

(239

)

 

 

 

 

 

 

(42

)

 

 

 

 

COMPREHENSIVE INCOME

 

$

26,812

 

 

 

 

 

 

$

27,474

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For the Year Ended December 31,

 

 

 

2020

 

 

% of
Total
Revenue

 

 

2019

 

 

% of
Total
Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees

 

$

684,579

 

 

 

99.6

%

 

$

625,056

 

 

 

99.6

%

Other

 

 

2,735

 

 

 

0.4

%

 

 

2,648

 

 

 

0.4

%

Total revenue

 

 

687,314

 

 

 

 

 

 

 

627,704

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

111,768

 

 

 

16.3

%

 

 

101,944

 

 

 

16.2

%

General and administrative

 

 

417,214

 

 

 

60.7

%

 

 

430,153

 

 

 

68.5

%

Depreciation and amortization

 

 

14,786

 

 

 

2.2

%

 

 

9,145

 

 

 

1.5

%

Asset impairment

 

 

612

 

 

 

0.1

%

 

 

-

 

 

 

0.0

%

Total operating expenses

 

 

544,380

 

 

 

79.2

%

 

 

541,242

 

 

 

86.2

%

Operating income

 

 

142,934

 

 

 

20.8

%

 

 

86,462

 

 

 

13.8

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

3,852

 

 

 

0.6

%

 

 

6,392

 

 

 

1.0

%

Interest expense

 

 

(167

)

 

 

0.0

%

 

 

(167

)

 

 

0.0

%

Miscellaneous income

 

 

211

 

 

 

0.0

%

 

 

335

 

 

 

0.1

%

Total other income

 

 

3,896

 

 

 

0.6

%

 

 

6,560

 

 

 

1.0

%

PRETAX INCOME

 

 

146,830

 

 

 

21.4

%

 

 

93,022

 

 

 

14.8

%

Provision for income taxes

 

 

22,476

 

 

 

3.3

%

 

 

22,428

 

 

 

3.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

124,354

 

 

 

18.1

%

 

 

70,594

 

 

 

11.2

%

Loss from discontinued operations, net of tax

 

 

(90

)

 

 

0.0

%

 

 

(612

)

 

 

-0.1

%

NET INCOME

 

$

124,264

 

 

 

18.1

%

 

$

69,982

 

 

 

11.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.79

 

 

 

 

 

 

$

1.01

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

(0.01

)

 

 

 

 

Net income per share

 

$

1.79

 

 

 

 

 

 

$

1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - DILUTED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.74

 

 

 

 

 

 

$

0.98

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

(0.01

)

 

 

 

 

Net income per share

 

$

1.74

 

 

 

 

 

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

69,414

 

 

 

 

 

 

 

70,088

 

 

 

 

 

Diluted

 

 

71,265

 

 

 

 

 

 

 

72,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

For the Year Ended December 31,

 

(In Thousands)

 

2020

 

 

 

 

 

 

2019

 

 

 

 

 

NET INCOME

 

$

124,264

 

 

 

 

 

 

$

69,982

 

 

 

 

 

OTHER COMPREHENSIVE INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

199

 

 

 

 

 

 

 

(41

)

 

 

 

 

Unrealized (loss) gain on investments

 

 

(179

)

 

 

 

 

 

 

683

 

 

 

 

 

Total other comprehensive income

 

 

20

 

 

 

 

 

 

 

642

 

 

 

 

 

COMPREHENSIVE INCOME

 

$

124,284

 

 

 

 

 

 

$

70,624

 

 

 

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For the Year Ended December 31,

 

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

124,264

 

 

$

69,982

 

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

 

 

 

 

 

 

 

 

Asset impairment

 

 

612

 

 

 

-

 

Depreciation and amortization expense

 

 

14,786

 

 

 

9,145

 

Bad debt expense

 

 

47,556

 

 

 

43,454

 

Compensation expense related to share-based awards

 

 

13,379

 

 

 

9,274

 

Loss on disposition of asset

 

 

-

 

 

 

14

 

Deferred income taxes

 

 

20,353

 

 

 

21,556

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Student receivables, gross

 

 

7,092

 

 

 

(33,697

)

Allowance for credit losses

 

 

(39,546

)

 

 

(36,326

)

Other receivables, net

 

 

(99

)

 

 

1,189

 

Inventories, prepaid expenses, and other current assets

 

 

3,031

 

 

 

(1,180

)

Deposits and other non-current assets

 

 

151

 

 

 

(489

)

Accounts payable

 

 

374

 

 

 

2,320

 

Accrued expenses and deferred rent obligations

 

 

(11,135

)

 

 

5,066

 

Deferred tuition revenue

 

 

5,138

 

 

 

(7,704

)

Right of use asset and lease liability

 

 

(6,000

)

 

 

(9,519

)

Net cash provided by operating activities

 

 

179,956

 

 

 

73,085

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(403,673

)

 

 

(449,367

)

Sales of available-for-sale investments

 

 

287,249

 

 

 

462,325

 

Purchases of property and equipment

 

 

(9,768

)

 

 

(5,174

)

Business acquisition

 

 

(39,819

)

 

 

-

 

Other

 

 

103

 

 

 

(85

)

Net cash (used in) provided by investing activities

 

 

(165,908

)

 

 

7,699

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of treasury stock

 

 

(17,862

)

 

 

(3,875

)

Issuance of common stock

 

 

5,723

 

 

 

1,774

 

Payments of employee tax associated with stock compensation

 

 

(912

)

 

 

(2,740

)

Net cash used in financing activities

 

 

(13,051

)

 

 

(4,841

)

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

 

 

-

 

 

 

13

 

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

997

 

 

 

75,956

 

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

 

 

108,687

 

 

 

32,731

 

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

 

$

109,684

 

 

$

108,687

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For the Quarter Ended December 31,

 

 

 

2020

 

 

2019

 

REVENUE:

 

 

 

 

 

 

 

 

CTU

 

$

102,741

 

 

$

102,613

 

AIU (1)

 

 

68,082

 

 

 

55,815

 

Total University Group

 

 

170,823

 

 

 

158,428

 

Corporate and Other (2)

 

 

336

 

 

 

23

 

Total

 

$

171,159

 

 

$

158,451

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU

 

$

37,802

 

 

$

36,872

 

AIU (1)

 

 

5,457

 

 

 

4,977

 

Total University Group

 

 

43,259

 

 

 

41,849

 

Corporate and Other (2)

 

 

(7,070

)

 

 

(9,836

)

Total

 

$

36,189

 

 

$

32,013

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU

 

 

36.8

%

 

 

35.9

%

AIU (1)

 

 

8.0

%

 

 

8.9

%

Total University Group

 

 

25.3

%

 

 

26.4

%

Corporate and Other (2)

 

NM

 

 

NM

 

Total

 

 

21.1

%

 

 

20.2

%

(1)

AIU’s revenue and operating income for the quarter ended December 31, 2020 include results associated with the Trident acquisition commencing on the March 2, 2020 date of acquisition.

(2)

Corporate and Other includes results of operations for closed campuses.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For the Year Ended December 31,

 

 

 

2020

 

 

2019

 

REVENUE:

 

 

 

 

 

 

 

 

CTU

 

$

405,507

 

 

$

392,263

 

AIU (1)

 

 

281,361

 

 

 

235,374

 

Total University Group

 

 

686,868

 

 

 

627,637

 

Corporate and Other (2)

 

 

446

 

 

 

67

 

Total

 

$

687,314

 

 

$

627,704

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU (3)

 

$

138,490

 

 

$

108,602

 

AIU (1) (4)

 

 

30,822

 

 

 

16,413

 

Total University Group

 

 

169,312

 

 

 

125,015

 

Corporate and Other (2)

 

 

(26,378

)

 

 

(38,553

)

Total

 

$

142,934

 

 

$

86,462

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU (3)

 

 

34.2

%

 

 

27.7

%

AIU (1) (4)

 

 

11.0

%

 

 

7.0

%

Total University Group

 

 

24.6

%

 

 

19.9

%

Corporate and Other (2)

 

NM

 

 

NM

 

Total

 

 

20.8

%

 

 

13.8

%

(1)

AIU’s revenue and operating income for the year ended December 31, 2020 include results associated with the Trident acquisition commencing on the March 2, 2020 date of acquisition.

(2)

Corporate and Other includes results of operations for closed campuses. The full year 2019 includes an expense of $7.1 million related to the Oregon arbitration matter.

(3)

The full year 2019 includes an expense of $18.6 million related to the FTC settlement recorded within CTU.

(4)

The full year 2019 includes an expense of $11.4 million related to the FTC settlement recorded within AIU.

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

 

2020 (10)

 

 

2019

 

 

2020 (10)

 

 

2019

 

Operating income

 

$

36,189

 

 

$

32,013

 

 

$

142,934

 

 

$

86,462

 

Depreciation and amortization (2)

 

 

4,001

 

 

 

2,393

 

 

 

14,786

 

 

 

9,145

 

Asset impairment (3)

 

 

-

 

 

 

-

 

 

 

612

 

 

 

-

 

Lease expenses for vacated space (4)

 

 

(30

)

 

 

177

 

 

 

659

 

 

 

1,630

 

Significant legal settlements (5)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37,100

 

Adjusted Operating Income

 

$

40,160

 

 

$

34,583

 

 

$

158,991

 

 

$

134,337

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending March 31,

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2021

 

 

2020 (10)

 

 

2021

 

 

2020 (10)

 

Operating income

 

$39.0M - $40.0M

 

 

$

37,303

 

 

$149.0M - $155.0M

 

 

$

142,934

 

Depreciation and amortization (2)

 

4.0M

 

 

 

2,639

 

 

16.0M

 

 

 

14,786

 

Adjusted Operating Income (6)

 

$43.0M - $44.0M

 

 

$

39,942

 

 

$165.0M - $171.0M

 

 

$

157,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

2020 (10)

2019

 

2020 (10)

 

2019

 

Reported Earnings Per Diluted Share

$

0.38

$

0.38

 

$

1.74

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

0.01

 

-

 

 

0.04

 

 

-

 

Asset impairment (3)

 

-

 

-

 

 

0.01

 

 

-

 

Lease expenses for vacated space (4)

 

-

 

-

 

 

0.01

 

 

0.02

 

Significant legal settlements (5)

 

-

 

-

 

 

-

 

 

0.51

 

Total pre-tax adjustments

$

0.01

$

-

 

$

0.06

 

$

0.53

 

Tax effect of adjustments (7)

 

-

 

-

 

 

(0.02

)

 

(0.13

)

Tax effect of change in settlement deductibility (8)

 

-

 

(0.05

)

 

-

 

 

-

 

Release of valuation allowance (9)

 

-

 

-

 

 

(0.22

)

 

-

 

Total adjustments after tax

 

0.01

 

(0.05

)

 

(0.18

)

 

0.40

 

Adjusted Earnings Per Diluted Share

$

0.39

$

0.33

 

$

1.56

 

$

1.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending March 31,

 

For the Year Ending December 31,

 

 

OUTLOOK

ACTUAL

 

OUTLOOK

 

ACTUAL

 

 

2021

2020 (10)

 

2021

 

2020 (10)

 

Reported Earnings Per Diluted Share

$0.41 - $0.42

$

0.41

 

$1.55 - $1.61

 

$

1.74

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Amortization for acquired intangible assets (2)

 

0.01

 

-

 

 

0.04

 

 

0.04

 

Total pre-tax adjustments

$

0.01

$

-

 

$

0.04

 

$

0.04

 

Tax effect of adjustments (7)

 

-

 

-

 

 

(0.01

)

 

(0.01

)

Release of valuation allowance (9)

 

-

 

-

 

 

-

 

 

(0.22

)

Total adjustments after tax

 

0.01

 

-

 

 

0.03

 

 

(0.19

)

Adjusted Earnings Per Diluted Share (6)

$0.42 - $0.43

$

0.41

 

$1.58 - $1.64

 

$

1.55

 

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 restructuring charges and significant legal settlements. 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)

Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident acquisition.

 

(3)

Asset impairment relates to a right of use asset for a vacated facility for a closed campus for which the sublease income was deemed no longer recoverable.

 

(4)

Lease expenses for vacated space include both fixed and variable lease costs offset with sublease income for closed campuses.

 

(5)

Significant legal settlements relate to the FTC and Oregon arbitration matters recorded during 2019.

 

(6)

Beginning in 2021, the Company will no longer adjust operating income or earnings per diluted share for expenses related to vacated facilities at closed campuses as these expenses are expected to be immaterial going forward. The prior period amounts were recast to maintain comparability to the 2021 outlook.

 

(7)

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. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax.

 

(8)

A legal settlement of $30.0 million related to the FTC matter was an adjustment from operating income during the second quarter of 2019 to calculate adjusted operating income. However, only $6.7 million of this adjustment met the criteria for tax deductibility during the second quarter. During the fourth quarter of 2019, an additional $23.0 million related to the FTC settlement met the criteria to be deductible for tax purposes. For the full year 2019, approximately $29.7 million was considered deductible for tax purposes. The quarterly reversals and adjustments of the proportional impacts of the non-deductibility had no effect for the full year 2019.

 

(9)

This relates to the release of a valuation allowance in the amount of $16.0 million as a result of the determination that it is more likely than not that the Company will utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance.

 

(10)

2020 results include the Trident acquisition commencing on the March 2, 2020 date of acquisition.

 

Contacts

Investors:
Alpha IR Group
Wyatt Turk or Chris Hodges
(312) 445-2870
PRDO@alpha-ir.com

Or

Media:
Perdoceo Education Corporation
(847) 585-2600
media@perdoceoed.com

Release Summary

PERDOCEO EDUCATION CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS

Contacts

Investors:
Alpha IR Group
Wyatt Turk or Chris Hodges
(312) 445-2870
PRDO@alpha-ir.com

Or

Media:
Perdoceo Education Corporation
(847) 585-2600
media@perdoceoed.com