Perdoceo Education Corporation (NASDAQ: PRDO) today reported
operating and financial results for the quarter and year to date
ended September 30, 2022.
Third Quarter 2022
Results as Compared to Prior Year Quarter
- Revenue decreased 3.2% to $168.4 million, with a 6.9% decrease
at CTU partially offset by a 2.4% increase at AIUS.
- Operating income decreased 22.5% to $29.3 million, while
adjusted operating income decreased 16.5% to $38.7 million.*
- Earnings per diluted share was $0.32 as compared to $0.39,
while adjusted earnings per diluted share was $0.39 as compared to
$0.45.*
- Total student enrollments at September 30, 2022 decreased by
2.1%. CTU experienced a 2.7% increase in total student enrollments
that was more than offset by a 9.5% decrease at AIUS.
- Ended the quarter with $525.2 million in cash, cash
equivalents, restricted cash and available-for-sale-short-term
investments.
Year to Date 2022
Results as Compared to Prior Year to Date
- Total revenue decreased 2.6% to $519.1 million, with a 0.5%
decline at CTU and a 5.7% decline at AIUS.
- Operating income decreased 6.5% to $107.0 million, while
adjusted operating income decreased 1.5% to $131.5 million.*
- Earnings per diluted share was $1.16 as compared to $1.19 for
the prior year period, while adjusted earnings per diluted share
was $1.32 as compared to $1.29.*
*See GAAP (U.S. generally accepted accounting principles)
to non-GAAP reconciliation attached to this press release
"During the quarter, student retention and engagement
experienced meaningful improvements, and we now expect our full
year operating income to be higher than the previously provided
outlook,” said Andrew Hurst, Chief Executive Officer. “Our balance
sheet remains strong, and we continue to make investments in data
analytics and technology and evaluate acquisition opportunities
that further extend the depth and breadth of our educational
offerings."
REVENUE
- For the quarter ended September 30, 2022, total revenue of
$168.4 million decreased 3.2% compared to total revenue of $174.0
million for the prior year quarter.
- For the year to date ended September 30, 2022, total revenue of
$519.1 million decreased 2.6% compared to total revenue of $533.2
million for the prior year to date.
For the Quarter Ended
September 30,
For the Year to Date Ended
September 30,
Revenue ($ in
thousands)
2022(1)
2021
% Change
2022(1)
2021
% Change
CTU
$
97,562
$
104,788
-6.9
%
$
311,171
$
312,645
-0.5
%
AIUS
70,582
68,948
2.4
%
207,034
219,648
-5.7
%
Corporate and Other
276
262
NM
858
882
NM
Total
$
168,420
$
173,998
-3.2
%
$
519,063
$
533,175
-2.6
%
(1)
AIUS’ results of operations include an
acquisition completed on July 1, 2022.
TOTAL STUDENT ENROLLMENTS
- As of September 30, 2022, CTU’s total student enrollments
increased 2.7%, while AIUS’ total student enrollments decreased
9.5% as compared to the prior year quarter end.
At September 30,
Total Student
Enrollments(1)
2022
2021
% Change
CTU
26,500
25,800
2.7
%
AIUS
15,200
16,800
-9.5
%
Total
41,700
42,600
-2.1
%
(1)
Total student enrollments do not include
learners participating in: a) non-degree seeking professional
development and continuing education offerings, and b) degree
seeking, non-Title IV, self-paced programs at our universities
OPERATING INCOME
- For the quarter ended September 30, 2022, operating income
decreased by 22.5% to $29.3 million as compared to the prior year
quarter.
- For the year to date ended September 30, 2022, operating income
decreased by 6.5% to $107.0 million as compared to the prior year
to date.
For the Quarter Ended
September 30,
For the Year to Date Ended
September 30,
Operating Income
($ in thousands)
2022(1)
2021
% Change
2022(1)
2021
% Change
CTU
$
31,506
$
41,217
-23.6
%
$
107,540
$
112,758
-4.6
%
AIUS
9,590
8,334
15.1
%
29,846
28,875
3.4
%
Corporate and Other
(11,772
)
(11,690
)
NM
(30,423
)
(27,193
)
NM
Total
$
29,324
$
37,861
-22.5
%
$
106,963
$
114,440
-6.5
%
(1)
AIUS’ results of operations include an
acquisition completed on July 1, 2022.
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 September 30, 2022, adjusted operating
income of $38.7 million decreased 16.5% compared to adjusted
operating income of $46.3 million for the prior year quarter.
- For the year to date ended September 30, 2022, adjusted
operating income of $131.5 million decreased 1.5% compared to
adjusted operating income of $133.5 million for the prior year to
date.
For the Quarter Ended
September 30,
For the Year to Date Ended
September 30,
Adjusted
Operating Income ($ in thousands)
2022
2021
2022
2021
Operating income
$
29,324
$
37,861
$
106,963
$
114,440
Depreciation and amortization (1)
5,065
3,887
14,856
11,802
Legal fee expense related to certain
matters (2)
4,294
4,583
9,728
7,241
Adjusted Operating Income
$
38,683
$
46,331
$
131,547
$
133,483
Increase (Decrease)
-16.5
%
-1.5
%
(1)
Amortization relates to
definite-lived intangible assets associated with acquisitions.
(2)
Legal fee expense associated with
(i) responses to the Department of Education (the “Department”)
relating to borrower defense to repayment applications from former
students, and (ii) acquisition efforts.
NET INCOME AND EARNINGS PER DILUTED SHARE
For the quarter ended September 30, 2022, the Company
recorded:
- Net income of $22.1 million compared to $27.8 million for the
prior year quarter.
- Earnings per diluted share of $0.32 compared to $0.39 for the
prior year quarter.
- Adjusted earnings per diluted share of $0.39 compared $0.45 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 September 30, 2022, the Company
recorded:
- Net income of $79.9 million compared to $85.2 million for the
prior year to date.
- Earnings per diluted share of $1.16 compared to $1.19 for the
prior year to date.
- Adjusted earnings per diluted share of $1.32 compared to $1.29
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
September 30,
For the Year to Date Ended
September 30,
2022
2021
2022
2021
Reported Earnings Per Diluted
Share
$
0.32
$
0.39
$
1.16
$
1.19
Pre-tax adjustments included in
operating expenses:
Amortization for acquired intangible
assets (1)
0.03
0.01
0.08
0.03
Legal fee expense related to certain
matters (2)
0.06
0.06
0.14
0.10
Tax effect of adjustments (3)
(0.02
)
(0.01
)
(0.06
)
(0.03
)
Adjusted Earnings Per Diluted
Share
$
0.39
$
0.45
$
1.32
$
1.29
(1)
Amortization relates to
definite-lived intangible assets associated with acquisitions.
(2)
Legal fee expense associated with
(i) responses to the Department relating to borrower defense to
repayment applications from former students, and (ii) acquisition
efforts.
(3)
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.
BALANCE SHEET AND CASH FLOW
- For the quarter ended September 30, 2022, net cash provided by
operating activities was $52.9 million, compared to net cash
provided by operating activities of $61.5 million for the prior
year quarter.
- At September 30, 2022 and December 31, 2021, cash, cash
equivalents, restricted cash and available-for-sale short-term
investments totaled $525.2 million and $499.4 million,
respectively.
For the Quarter Ended
September 30,
For the Year to Date Ended
September 30,
Selected Cash
Flow Items ($ in thousands)
2022
2021
% Change
2022
2021
% Change
Net cash provided by operating
activities
$
52,861
$
61,461
-14.0
%
$
107,640
$
144,206
-25.4
%
Business acquisitions, net of cash
acquired
$
32,037
$
56,947
-43.7
%
$
39,037
$
56,947
-31.5
%
Capital expenditures
$
2,340
$
3,217
-27.3
%
$
9,105
$
6,276
45.1
%
OUTLOOK
The Company is raising its full year outlook, supported by
improved student retention and engagement, and is also providing
the following fourth quarter 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 December
31,
For the Year Ending December
31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2022
2021
2022
2021
Operating Income
$17.3M - $20.3M
$34.6M
$124.2M - $127.2M
$149.0M
Depreciation and amortization
$5.2M
$4.9M
$20.1M
$16.8M
Legal fee expense related to certain
matters (1)
$3.0M
$2.5M
$12.7M
$9.7M
Adjusted Operating Income
$25.5M - $28.5M
$42.0M
$157.0M - $160.0M
$175.5M
Earnings Per Diluted Share
$0.22 - $0.25
$0.35
$1.37 - $1.40
$1.55
Amortization of acquired intangible
assets
$0.03
$0.03
$0.11
$0.06
Legal fee expense related to certain
matters (1)
$0.04
$0.04
$0.19
$0.14
Tax effect of adjustments
($0.02)
($0.02)
($0.08)
($0.05)
Adjusted Earnings Per Diluted
Share
$0.27 - $0.30
$0.40
$1.59 - $1.62
$1.70
(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 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 2022 are based on the following key assumptions and factors,
among others: (i) prospective student interest in the Company’s
programs and student retention remain consistent with management’s
estimates, (ii) no significant impact of new or proposed
regulations, including recent Department of Education negotiated
rulemaking initiatives, or other adverse changes in the legal or
regulatory environment, (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)
earnings per diluted share outlook assumes an effective income tax
rate of approximately 25.0% for the fourth quarter and 27.0% for
the full year, and (v) 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
stockholder value may impact the outlook provided above.
CONFERENCE CALL INFORMATION
Perdoceo Education Corporation will host a conference call on
Monday, November 7, 2022 at 5:30 p.m. Eastern time to discuss third
quarter and year to date 2022 results and 2022 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 1-844-200-6205 (domestic) or 1-929-526-1599
(international). Both dial-in numbers will use the access code
107191. Viewers can also access the conference call by following
this link https://events.q4inc.com/attendee/853587339. 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 (“AIUS” or “AIU
System”) – provide degree programs from the associate through
doctoral level as well as non-degree professional development and
continuing education offerings. Perdoceo’s universities 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 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. 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; 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 success of
our initiatives to improve student experiences, retention and
academic outcomes; our continued eligibility to participate in
educational assistance programs for veterans or other military
personnel; 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, 2021 and its subsequent filings with the Securities
and Exchange Commission.
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
September 30,
December 31,
2022
2021
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents,
unrestricted
$
147,120
$
319,982
Restricted cash
2,191
5,196
Short-term investments
375,871
174,213
Total cash and cash equivalents,
restricted cash and short-term investments
525,182
499,391
Student receivables, net
43,059
43,033
Receivables, other
2,261
1,692
Prepaid expenses
9,251
6,919
Inventories
2,041
904
Other current assets
521
2,514
Total current assets
582,315
554,453
NON-CURRENT ASSETS:
Property and equipment, net
26,290
28,355
Right of use asset, net
30,313
36,664
Goodwill
184,135
162,579
Intangible assets, net
44,262
32,208
Student receivables, net
1,328
1,372
Deferred income tax assets, net
24,015
25,114
Other assets
6,545
6,688
TOTAL ASSETS
$
899,203
$
847,433
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Lease liability - operating
$
5,963
$
9,400
Accounts payable
13,285
10,838
Accrued expenses:
Payroll and related benefits
26,733
25,312
Advertising and marketing costs
9,550
8,690
Income taxes
8,082
211
Other
14,813
15,180
Deferred revenue
61,978
70,613
Total current liabilities
140,404
140,244
NON-CURRENT LIABILITIES:
Lease liability - operating
30,385
35,549
Other liabilities
22,192
21,530
Total non-current liabilities
52,577
57,079
STOCKHOLDERS' EQUITY:
Preferred stock
-
-
Common stock
894
887
Additional paid-in capital
681,385
674,242
Accumulated other comprehensive loss
(6,317
)
(96
)
Retained earnings
331,884
251,972
Treasury stock
(301,624
)
(276,895
)
Total stockholders' equity
706,222
650,110
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
899,203
$
847,433
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share
amounts and percentages)
For the Quarter Ended
September 30,
2022
% of Total Revenue
2021
% of Total Revenue
REVENUE:
Tuition and fees, net
$
166,437
98.8
%
$
172,595
99.2
%
Other
1,983
1.2
%
1,403
0.8
%
Total revenue
168,420
173,998
OPERATING EXPENSES:
Educational services and facilities
30,149
17.9
%
25,961
14.9
%
General and administrative
103,882
61.7
%
106,289
61.1
%
Depreciation and amortization
5,065
3.0
%
3,887
2.2
%
Total operating expenses
139,096
82.6
%
136,137
78.2
%
Operating income
29,324
17.4
%
37,861
21.8
%
OTHER INCOME:
Interest income
2,270
1.3
%
154
0.1
%
Interest expense
(96
)
-0.1
%
(572
)
-0.3
%
Miscellaneous expense
(206
)
-0.1
%
(117
)
-0.1
%
Total other income (expense)
1,968
1.2
%
(535
)
-0.3
%
PRETAX INCOME
31,292
18.6
%
37,326
21.5
%
Provision for income taxes
9,225
5.5
%
9,557
5.5
%
NET INCOME
22,067
13.1
%
27,769
16.0
%
NET INCOME PER SHARE - BASIC:
$
0.33
$
0.40
NET INCOME PER SHARE -DILUTED:
$
0.32
$
0.39
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic
67,506
70,089
Diluted
68,550
71,466
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Quarter Ended
September 30,
(In Thousands)
2022
2021
NET INCOME
$
22,067
$
27,769
OTHER COMPREHENSIVE LOSS, net of
tax:
Foreign currency translation
adjustments
(138
)
(74
)
Unrealized (loss) gain on investments
(3,005
)
51
Total other comprehensive loss
(3,143
)
(23
)
COMPREHENSIVE INCOME
$
18,924
$
27,746
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
September 30,
2022
% of Total Revenue
2021
% of Total Revenue
REVENUE:
Tuition and fees, net
$
513,660
99.0
%
$
530,230
99.4
%
Other
5,403
1.0
%
2,945
0.6
%
Total revenue
519,063
533,175
OPERATING EXPENSES:
Educational services and facilities
85,506
16.5
%
83,467
15.7
%
General and administrative
311,510
60.0
%
323,466
60.7
%
Depreciation and amortization
14,856
2.9
%
11,802
2.2
%
Asset impairment
228
0.0
%
-
0.0
%
Total operating expenses
412,100
79.4
%
418,735
78.5
%
Operating income
106,963
20.6
%
114,440
21.5
%
OTHER INCOME:
Interest income
3,697
0.7
%
835
0.2
%
Interest expense
(298
)
-0.1
%
(961
)
-0.2
%
Miscellaneous expense
(521
)
-0.1
%
(22
)
0.0
%
Total other income (expense)
2,878
0.6
%
(148
)
0.0
%
PRETAX INCOME
109,841
21.2
%
114,292
21.4
%
Provision for income taxes
29,929
5.8
%
29,121
5.5
%
NET INCOME
79,912
15.4
%
85,171
16.0
%
NET INCOME PER SHARE - BASIC:
$
1.17
$
1.21
NET INCOME PER SHARE -DILUTED:
$
1.16
$
1.19
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic
68,193
70,179
Diluted
69,131
71,649
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year to Date Ended
September 30,
(In Thousands)
2022
2021
NET INCOME
$
79,912
$
85,171
OTHER COMPREHENSIVE LOSS, net of
tax:
Foreign currency translation
adjustments
(383
)
(175
)
Unrealized loss on investments
(5,838
)
(192
)
Total other comprehensive loss
(6,221
)
(367
)
COMPREHENSIVE INCOME
$
73,691
$
84,804
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year to Date Ended
September 30,
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
79,912
$
85,171
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset impairment
228
-
Depreciation and amortization expense
14,856
11,802
Bad debt expense
32,284
36,360
Compensation expense related to
share-based awards
6,234
11,287
Deferred income taxes
1,099
9,938
Changes in operating assets and
liabilities
(26,973
)
(10,352
)
Net cash provided by operating
activities
107,640
144,206
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of available-for-sale
investments
(410,493
)
(269,739
)
Sales of available-for-sale
investments
202,927
357,280
Purchases of property and equipment
(9,105
)
(6,276
)
Business acquisitions, net of cash
acquired
(39,037
)
(56,947
)
Net cash (used in) provided by investing
activities
(255,708
)
24,318
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock
916
793
Purchase of treasury stock
(23,117
)
(5,372
)
Payments of employee tax associated with
stock compensation
(1,612
)
(2,034
)
Release of cash held in escrow
(3,986
)
-
Net cash used in financing activities
(27,799
)
(6,613
)
NET (DECREASE) INCREASE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(175,867
)
161,911
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, beginning of the period
325,178
109,684
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, end of the period
$
149,311
$
271,595
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT
INFORMATION
(In thousands, except
percentages)
For the Quarter Ended
September 30,
2022(1)
2021
REVENUE:
CTU
$
97,562
$
104,788
AIUS
70,582
68,948
Corporate and Other
276
262
Total
$
168,420
$
173,998
OPERATING INCOME (LOSS):
CTU
$
31,506
$
41,217
AIUS
9,590
8,334
Corporate and Other
(11,772
)
(11,690
)
Total
$
29,324
$
37,861
OPERATING MARGIN (LOSS):
CTU
32.3
%
39.3
%
AIUS
13.6
%
12.1
%
Corporate and Other
NM
NM
Total
17.4
%
21.8
%
(1)
AIUS’ results of operations include the
CalSouthern acquisition as of the July 1, 2022 date of
acquisition.
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT
INFORMATION
(In thousands, except
percentages)
For the Year to Date Ended
September 30,
2022(1)
2021
REVENUE:
CTU
$
311,171
$
312,645
AIUS
207,034
219,648
Corporate and Other
858
882
Total
$
519,063
$
533,175
OPERATING INCOME (LOSS):
CTU
$
107,540
$
112,758
AIUS
29,846
28,875
Corporate and Other
(30,423
)
(27,193
)
Total
$
106,963
$
114,440
OPERATING MARGIN (LOSS):
CTU
34.6
%
36.1
%
AIUS
14.4
%
13.1
%
Corporate and Other
NM
NM
Total
20.6
%
21.5
%
(1)
AIUS’ results of operations include the
CalSouthern acquisition as of the July 1, 2022 date of
acquisition.
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP ITEMS (1)
(In thousands, unless otherwise
noted)
For the Quarter Ended
September 30,
For the Year to Date Ended
September 30,
ACTUAL
ACTUAL
Adjusted
Operating Income
2022
2021
2022
2021
Operating income
$
29,324
$
37,861
$
106,963
$
114,440
Depreciation and amortization (2)
5,065
3,887
14,856
11,802
Legal fee expense related to certain
matters (3)
4,294
4,583
9,728
7,241
Adjusted Operating Income
$
38,683
$
46,331
$
131,547
$
133,483
For the Quarter Ending
December 31,
For the Year Ending December
31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2022
2021
2022
2021
Operating income
$17.3M - $20.3M
$
34,576
$124.2M - $127.2M
$
149,016
Depreciation and amortization (2)
5.2M
4,964
20.1M
16,766
Legal fee expense related to certain
matters (3)
3.0M
2,494
12.7M
9,735
Adjusted Operating Income
$25.5M - $28.5M
$
42,034
$157.0M - $160.0M
$
175,517
PERDOCEO EDUCATION CORPORATION
AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP ITEMS (1) (cont’d)
For the Quarter Ended
September 30,
For the Year to Date Ended
September 30,
ACTUAL
ACTUAL
2022
2021
2022
2021
Reported Earnings Per Diluted
Share
$
0.32
$
0.39
$
1.16
$
1.19
Pre-tax adjustments included in
operating expenses:
Amortization for acquired intangible
assets (2)
0.03
0.01
0.08
0.03
Legal fee expense related to certain
matters (3)
0.06
0.06
0.14
0.10
Total pre-tax adjustments
$
0.09
$
0.07
$
0.22
$
0.13
Tax effect of adjustments (4)
(0.02
)
(0.01
)
(0.06
)
(0.03
)
Total adjustments after tax
0.07
0.06
0.16
0.10
Adjusted Earnings Per Diluted
Share
$
0.39
$
0.45
$
1.32
$
1.29
For the Quarter Ending
December 31,
For the Year Ending December
31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2022
2021
2022
2021
Reported Earnings Per Diluted
Share
$0.22 - $0.25
$
0.35
$1.37 - $1.40
$
1.55
Pre-tax adjustments included in
operating expenses:
Amortization for acquired intangible
assets (2)
0.03
0.03
0.11
0.06
Legal fee expense related to certain
matters (3)
0.04
0.04
0.19
0.14
Total pre-tax adjustments
$
0.07
$
0.07
$
0.30
$
0.20
Tax effect of adjustments (4)
(0.02
)
(0.02
)
(0.08)
(0.05
)
Total adjustments after tax
0.05
0.05
0.22
0.15
Adjusted Earnings Per Diluted
Share
$0.27 - $0.30
$
0.40
$1.59 - $1.62
$
1.70
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. In evaluating adjusted operating income and
adjusted earnings per diluted share, investors should be aware that
in the future the Company may incur expenses similar to the
adjustments presented above. The presentation of adjusted operating
income and adjusted earnings per diluted share should not be
construed as an inference that the Company's future results will be
unaffected by expenses that are unusual, non-routine or
non-recurring. Adjusted operating income and adjusted earnings per
diluted share have limitations as an analytical tool, and should
not be considered in isolation, or as a substitute for net income,
operating income, earnings per diluted share, or any other
performance measure derived in accordance and reported under GAAP
or as an alternative to cash flow from operating activities or as a
measure of liquidity.
Non-GAAP financial measures, when viewed
in a reconciliation to corresponding GAAP financial measures,
provide an additional way of viewing the Company’s results of
operations and the factors and trends affecting the Company’s
business. Non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to, the
corresponding financial results presented in accordance with
GAAP.
Results of operations include the
CalSouthern acquisition as of July 1, 2022, the DigitalCrafts
acquisition as of August 2, 2021 and the Hippo acquisition as of
September 10, 2021.
(2)
Amortization for acquired intangible
assets relate to definite-lived intangible assets associated with
acquisitions.
(3)
Legal fee expense associated with (i)
responses to the Department relating to borrower defense to
repayment applications from former students, and (ii) acquisition
efforts.
(4)
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221107006030/en/
Investors: Alpha IR Group Davis Snyder or Eric Markman
(312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo
Education Corporation (847) 585-2600 media@perdoceoed.com
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