Strategic Education, Inc. (SEI) (NASDAQ: STRA) today announced
financial results for the period ended September 30, 2019.
Karl McDonnell, Chief Executive Officer of SEI said, “Continued
strong performance at both Strayer University and Capella
University during the third quarter positions us well as we
approach the end of 2019. Merger synergies are on track, and our
significant liquidity position provides us with a solid foundation
to drive growth as we remain focused on delivering academic success
and long-term economic mobility for our students and alumni.”
STRATEGIC EDUCATION, INC. CONSOLIDATED
RESULTS
[Note: Strategic Education,
Inc.’s financial results for any periods ended prior to August 1,
2018 do not include the financial results of Capella Education
Company and are therefore not directly comparable.]
Three Months Ended September 30
- Revenue increased 50.2% to $241.7 million compared to $160.9
million for the same period in 2018. Revenue in 2018 included a
purchase accounting adjustment of $26.2 million to reflect Capella
University contract liabilities at fair value. Adjusted revenue,
which is a non-GAAP financial measure and excludes the
aforementioned contract liabilities adjustment, increased 29.2% to
$241.7 million compared to $187.2 million for the same period in
2018. For more details on non-GAAP financial measures, refer to the
information in the Non-GAAP Financial Measures section of this
press release.
- Income from operations was $20.0 million or 8.3% of revenue,
compared to a loss from operations of $57.1 million for the same
period in 2018. Income from operations in 2019 includes $15.4
million of amortization expense related to assets acquired in the
merger with Capella Education Company and $1.5 million in costs
associated with the merger with Capella Education Company. Loss
from operations in 2018 included the aforementioned adjustment to
contract liabilities, $10.3 million of amortization expense related
to assets acquired in the merger with Capella Education Company,
$29.6 million in costs associated with the merger with Capella
Education Company, and a $13.1 million noncash charge resulting
from the impairment of intangible assets associated with The New
York Code + Design Academy. Adjusted income from operations was
$36.9 million in 2019 compared to $22.1 million for the same period
in 2018. The adjusted operating income margin was 15.3% compared to
11.8% for the same period in 2018.
- Net income, which includes the items described above, and also
includes income from partnership interests and other investments,
and certain discrete tax adjustments, was $16.7 million in 2019
compared to a net loss of $52.8 million for the same period in
2018. Adjusted net income was $28.4 million compared to $16.9
million for the same period in 2018.
- Earnings before interest, taxes, depreciation, and amortization
(EBITDA) was $46.4 million in 2019 compared to a loss of $38.7
million in 2018. Adjusted EBITDA was $50.9 million compared to
$34.0 million for the same period in 2018.
- Diluted earnings per share was $0.75 compared to a loss per
share of $2.97 for the same period in 2018. Adjusted diluted
earnings per share increased to $1.28 from $0.92 for the same
period in 2018. Diluted weighted average shares outstanding
increased to 22,129,000 from 18,480,000 for the same period in
2018, due primarily to new shares issued to facilitate the merger
with Capella Education Company.
Strayer University Segment Highlights
- For the third quarter, student enrollment at Strayer University
increased 11% to 50,582 compared to 45,431 for the same period in
2018. New student enrollment for the period increased 4% and
continuing student enrollment for the period increased 13%.
- Revenue increased 11.7% to $127.8 million in the third quarter
of 2019 compared to $114.5 million for the same period in 2018,
driven primarily by higher third quarter enrollment.
- Income from operations increased to $18.7 million in the third
quarter of 2019 from $11.9 million for the same period in 2018. The
operating income margin was 14.6%, compared to 10.4% for the same
period in 2018.
- During the third quarter of 2019, Strayer University opened a
new campus in Chattanooga, Tennessee, and is planning to open one
additional campus, pending regulatory approval, in the fourth
quarter of 2019.
Capella University Segment Highlights
- For the third quarter, student enrollment at Capella University
increased 2% to 38,451 compared to 37,822 for the same period in
2018. New student enrollment for the period increased 7% and
continuing student enrollment for the period increased
approximately 1%.
- FlexPath continued to be a significant driver of new and total
enrollment growth in the third quarter of 2019, and is 33% of
Capella University’s bachelor’s and master’s degrees total
enrollment.
- Revenue was $110.5 million in the third quarter of 2019
compared to revenue of $43.8 million, or adjusted revenue of $70.0
million, for the same period in 2018. The increase was driven by
higher enrollment and higher revenue-per-learner.
- Income from operations was $18.6 million in the third quarter
of 2019 compared to a loss from operations of $14.3 million, or
adjusted income from operations of $11.9 million, for the same
period in 2018. The adjusted operating income margin was 16.9%
compared to 17.0% in 2018.
- The Company is planning to open the second Capella University
Campus Center, pending regulatory approval, in Orlando, Florida in
the fourth quarter of 2019.
Non-Degree Programs Segment Highlights
- For the third quarter, revenue increased to $3.4 million from
$2.7 million for the same period in 2018.
- Loss from operations was $0.4 million in the third quarter of
2019 compared to a loss from operations of $1.7 million in the same
period in 2018.
BALANCE SHEET AND CASH
FLOW
At September 30, 2019, Strategic Education, Inc. had cash, cash
equivalents, and marketable securities of $457.1 million, and no
debt. For the first nine months of 2019, cash provided by
operations was $141.4 million compared to cash used in operations
of $14.6 million for the same period in 2018. Capital expenditures
for the first nine months of 2019 were $27.8 million compared to
$16.0 million for the same period in 2018. Capital expenditures for
2019 are expected to be between $40 million and $45 million.
For the third quarter of 2019, consolidated bad debt expense as
a percentage of revenue was 5.0%, compared to 6.1%, or 5.3% of
adjusted revenue, for the same period in 2018.
COMMON STOCK CASH
DIVIDEND
SEI announced today that its Board of Directors has increased
its regular annual dividend by 20% to $2.40 per share, and also
declared a regular, quarterly cash dividend of $0.60 per share of
common stock. This dividend will be paid on December 9, 2019 to
shareholders of record as of November 25, 2019.
STRATEGIC EDUCATION, INC. INVESTOR AND
ANALYST DAY
SEI is holding its first Investor and Analyst Day today,
Thursday, November 7, 2019, in Washington, D.C. beginning at 8:00
a.m. ET. The Investor and Analyst Day presentation will be
available via webcast. To access the live webcast of the Investor
and Analyst Day presentation, please go to
www.strategiceducation.com in the Investor Relations section 15
minutes prior to the start time to register. An earnings release
presentation will also be posted to www.strategiceducation.com in
the Investor Relations section prior to the start time of the
webcast. Following the webcast, the webcast and presentation will
be archived and available at www.strategiceducation.com in the
Investor Relations section.
About SEI
Strategic Education, Inc. (NASDAQ: STRA)
(www.strategiceducation.com) is dedicated to enabling economic
mobility with education. We serve working adult students through a
range of educational opportunities that include: Strayer University
and Capella University (separate institutions that are each
regionally accredited), which collectively offer flexible and
affordable associate, bachelor’s, master’s, and doctoral programs;
a Top-25 Princeton Review-ranked online MBA program through the
Jack Welch Management Institute at Strayer University; self-paced
courses for college credit through Sophia; customized degrees for
corporations through Degrees@Work; and non-degree web and mobile
application development courses through DevMountain, Generation
Code, Hackbright Academy, and The New York Code + Design Academy.
These programs help our students prepare for success in today’s
jobs and find a path to bettering their lives.
Forward-Looking Statements
This communication contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements may be identified by the use of words such
as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “may,”
“will,” “forecast,” “outlook,” “plan,” “project,” “potential” and
other similar words, and include all statements that are not
historical facts, including with respect to, among other things,
the future financial performance of SEI; SEI’s plans, strategies
and prospects; and future events and expectations. The statements
are based on SEI’s current expectations and are subject to a number
of assumptions, uncertainties and risks, including but not limited
to:
- SEI’s 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;
- the pace of growth of student enrollment;
- 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 associated with the acquisition of existing educational
institutions;
- risks relating to the timing of regulatory approvals;
- SEI’s ability to implement its growth strategy;
- the risk that the benefits of the merger with Capella Education
Company, including expected synergies, may not be fully realized or
may take longer to realize than expected;
- the risk that the combined company may experience difficulty
integrating employees or operations;
- risks associated with the ability of SEI’s students to finance
their education in a timely manner;
- general economic and market conditions; and
- additional factors described in SEI’s most recent Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K.
Many of these risks, uncertainties and assumptions are beyond
SEI’s ability to control or predict. Because of these risks,
uncertainties and assumptions, you should not place undue reliance
on these forward-looking statements. Furthermore, these
forward-looking statements speak only as of the information
currently available to SEI on the date they are made, and SEI
undertakes no obligation to update or revise forward-looking
statements, except as required by law. Actual results may differ
materially from those projected in the forward-looking
statements.
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per
share data)
For the three months ended
September 30,
For the nine months ended
September 30,
2018
2019
2018
2019
Revenues
$
160,945
$
241,747
$
392,082
$
733,365
Costs and expenses:
Instructional and support costs
103,079
132,527
240,830
397,281
General and administration
61,976
72,303
125,494
204,816
Amortization of intangible assets
10,278
15,417
10,278
46,251
Merger and integration costs
29,620
1,500
37,791
11,698
Impairment of intangible assets
13,119
—
19,304
—
Total costs and expenses
218,072
221,747
433,697
660,046
Income (loss) from operations
(57,127
)
20,000
(41,615
)
73,319
Other income
1,110
3,243
1,846
10,695
Income (loss) before income taxes
(56,017
)
23,243
(39,769
)
84,014
Provision (benefit) for income taxes
(3,236
)
6,551
(1,643
)
31,413
Net income (loss)
$
(52,781
)
$
16,692
$
(38,126
)
$
52,601
Earnings (loss) per share:
Basic
$
(2.97
)
$
0.77
$
(2.90
)
$
2.42
Diluted
$
(2.97
)
$
0.75
$
(2.90
)
$
2.38
Weighted average shares outstanding:
Basic
17,799
21,806
13,141
21,694
Diluted
17,799
22,129
13,141
22,096
Cash dividend declared per share
$
0.50
$
0.50
$
1.00
$
1.50
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
and per share data)
December 31, 2018
September 30, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
311,732
$
397,094
Marketable securities
37,121
33,455
Tuition receivable, net
55,694
50,964
Income taxes receivable
—
6,970
Other current assets
15,814
17,130
Total current assets
420,361
505,613
Property and equipment, net
122,677
116,489
Right-of-use lease assets
—
93,208
Marketable securities, non-current
37,678
26,532
Intangible assets, net
328,344
286,844
Goodwill
732,540
732,075
Other assets
19,429
20,435
Total assets
$
1,661,029
$
1,781,196
LIABILITIES &
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
85,979
$
86,092
Income taxes payable
419
—
Contract liabilities
38,733
45,571
Lease liabilities
—
26,167
Total current liabilities
125,131
157,830
Deferred income tax liabilities
59,358
57,016
Lease liabilities, non-current
—
83,067
Other long-term liabilities
51,316
38,624
Total liabilities
235,805
336,537
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 32,000,000
shares authorized; 21,743,498 and 21,964,505 shares issued and
outstanding at December 31, 2018 and September 30, 2019,
respectively
217
220
Additional paid-in capital
1,306,653
1,306,353
Accumulated other comprehensive income
32
447
Retained earnings
118,322
137,639
Total stockholders’ equity
1,425,224
1,444,659
Total liabilities and stockholders’
equity
$
1,661,029
$
1,781,196
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the nine months ended
September 30,
2018
2019
Cash flows from operating activities:
Net income (loss)
$
(38,126
)
$
52,601
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Amortization of deferred financing
costs
209
250
Amortization of investment
discount/premium
132
286
Depreciation and amortization
29,107
78,862
Deferred income taxes
(4,443
)
971
Stock-based compensation
11,781
9,075
Impairment of intangible assets
19,304
—
Changes in assets and liabilities:
Tuition receivable, net
8,227
2,258
Other current assets
2,223
(921
)
Other assets
(581
)
(727
)
Accounts payable and accrued expenses
(8,949
)
(2,022
)
Income taxes payable and income taxes
receivable
(7,868
)
(7,125
)
Contract liabilities
(21,946
)
10,311
Other long-term liabilities
(3,717
)
(2,412
)
Net cash provided by (used in) operating
activities
(14,647
)
141,407
Cash flows from investing activities:
Net cash acquired in acquisition
168,387
—
Purchases of property and equipment
(16,028
)
(27,769
)
Purchases of marketable securities
(11,346
)
(17,769
)
Maturities of marketable securities
5,842
32,860
Other investments
(167
)
(878
)
Net cash provided by (used in) investing
activities
146,688
(13,556
)
Cash flows from financing activities:
Common dividends paid
(16,802
)
(33,297
)
Net payments for stock awards
6,372
(9,195
)
Payment of deferred financing costs
(1,162
)
—
Net cash used in financing activities
(11,592
)
(42,492
)
Net increase in cash, cash equivalents,
and restricted cash
120,449
85,359
Cash, cash equivalents, and restricted
cash — beginning of period
156,448
312,237
Cash, cash equivalents, and restricted
cash — end of period
$
276,897
$
397,596
Noncash transactions:
Purchases of property and equipment
included in accounts payable
$
2,975
$
1,821
STRATEGIC EDUCATION,
INC.
UNAUDITED SEGMENT
REPORTING
(in thousands)
For the three months ended
September 30,
For the nine months ended
September 30,
2018
2019
2018
2019
Revenues:
Strayer University
$
114,471
$
127,837
$
343,644
$
384,806
Capella University
43,792
110,549
43,792
337,418
Non-Degree Programs
2,682
3,361
4,646
11,141
Consolidated revenues
$
160,945
$
241,747
$
392,082
$
733,365
Income (loss) from operations:
Strayer University
$
11,904
$
18,689
$
44,215
$
68,268
Capella University
(14,326
)
18,643
(14,326
)
63,918
Non-Degree Programs
(1,688
)
(415
)
(4,131
)
(918
)
Amortization of intangible assets
(10,278
)
(15,417
)
(10,278
)
(46,251
)
Merger and integration costs
(29,620
)
(1,500
)
(37,791
)
(11,698
)
Impairment of intangible assets
(13,119
)
—
(19,304
)
—
Consolidated income (loss) from
operations
$
(57,127
)
$
20,000
$
(41,615
)
$
73,319
Non-GAAP Financial Measures
In our press release and schedules, we report certain financial
measures that are not required by, or presented in accordance with,
accounting principles generally accepted in the United States of
America ("GAAP"). We discuss management's reasons for reporting
these non-GAAP measures below, and the press release schedules that
follow reconcile the most directly comparable GAAP measure to each
non-GAAP measure that we reference. Although management evaluates
and presents these non-GAAP measures for the reasons described
below, please be aware that these non-GAAP measures have
limitations and should not be considered in isolation or as a
substitute for revenue, income from operations, operating margin,
net income, earnings per share or any other comparable financial
measure prescribed by GAAP. In addition, we may calculate and/or
present these non-GAAP financial measures differently than measures
with the same or similar names that other companies report, and as
a result, the non-GAAP measures we report may not be comparable to
those reported by others.
Management uses certain non-GAAP measures to evaluate financial
performance because those non-GAAP measures allow for
period-over-period comparisons of the Company’s ongoing operations
before the impact of certain items described below. These measures
are Adjusted Revenue, Adjusted Income from Operations, Adjusted
Operating Margin, Adjusted Net Income, Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA), Adjusted EBITDA and
Adjusted Diluted Earnings Per Share (EPS). We define Adjusted
Revenue, Adjusted Income from Operations, Adjusted Operating
Margin, Adjusted Net Income, and Adjusted Diluted EPS to exclude
(1) a purchase accounting adjustment to record Capella University
contract liabilities at fair value as a result of the Company’s
merger with Capella Education Company, (2) amortization and
depreciation expense related to intangible assets and software
assets associated with the Company’s merger with Capella Education
Company, (3) transaction and integration costs associated with the
Company’s merger with Capella Education Company, (4) goodwill and
intangible asset impairment charges related to the Company’s
acquisition of the New York Code and Design Academy, (5) income
recognized from the Company’s investments in partnership interests
and other investments, and (6) discrete tax adjustments utilizing
an adjusted effective income tax rate of 27.1% and 28.0% for 2018
and 2019, respectively. We define EBITDA as net income before the
provision for income taxes, other income, depreciation and
amortization, and from this amount in arriving at Adjusted EBITDA
we also exclude the amounts in (1), (3) and (4) above, stock-based
compensation expense, and adjustments to the value of purchase
consideration related to the Company’s acquisition of the New York
Code and Design Academy. These non-GAAP measures are reconciled to
the most directly comparable GAAP measures in the sections that
follow. Non-GAAP measures should not be viewed as substitutes for
GAAP measures.
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
ADJUSTED INCOME FROM
OPERATIONS, ADJUSTED NET INCOME, AND ADJUSTED EPS
(in thousands, except per
share data)
For the three months ended
September 30, 2018
Non-GAAP Adjustments
As Reported (GAAP)
Contract liability
adjustment (1)
Amortization of intangible
assets(2)
Merger and integration
costs(3)
Impairment of intangible
assets(4)
Income from other investments
(5)
Tax adjustments (6)
As Adjusted
(Non- GAAP)
Revenues
$
160,945
$
26,214
$
—
$
—
$
—
$
—
$
—
$
187,159
Costs and expenses:
Instructional and support costs
103,079
—
—
—
—
—
—
103,079
General and administration
61,976
—
—
—
—
—
—
61,976
Amortization of intangible assets
10,278
—
(10,278)
—
—
—
—
—
Merger and integration costs
29,620
—
—
(29,620)
—
—
—
—
Impairment of intangible assets
13,119
—
—
—
(13,119)
—
—
—
Total costs and expenses
218,072
—
(10,278)
(29,620)
(13,119)
—
—
165,055
Income (loss) from operations
(57,127)
26,214
10,278
29,620
13,119
—
—
22,104
Operating margin
(35.5%)
11.8%
Other income, net
1,110
—
—
—
—
—
1,110
Income (loss) before income taxes
(56,017)
26,214
10,278
29,620
13,119
—
—
23,214
Provision (benefit) for income taxes
(3,236)
—
—
—
—
—
9,527
6,291
Net income (loss)
$
(52,781)
$
26,214
$
10,278
$
29,620
$
13,119
$
—
$
(9,527)
$
16,923
Earnings (loss) per share:
Basic
$
(2.97)
$
0.95
Diluted
$
(2.97)
$
0.92
Weighted average shares
outstanding:
Basic
17,799
17,799
Diluted
17,799
18,480
For the three months ended
September 30, 2019
Non-GAAP Adjustments
As Reported (GAAP)
Contract liability adjustment
(1)
Amortization of intangible
assets(2)
Merger and integration
costs(3)
Impairment of intangible
assets(4)
Income from other investments
(5)
Tax adjustments (6)
As Adjusted
(Non- GAAP)
Revenues
$
241,747
$
—
$
—
$
—
$
—
$
—
$
—
$
241,747
Costs and expenses:
Instructional and support costs
132,527
—
—
—
—
—
—
132,527
General and administration
72,303
—
—
—
—
—
—
72,303
Amortization of intangible assets
15,417
—
(15,417)
—
—
—
—
—
Merger and integration costs
1,500
—
—
(1,500)
—
—
—
—
Impairment of intangible assets
—
—
—
—
—
—
—
—
Total costs and expenses
221,747
—
(15,417)
(1,500)
—
—
—
204,830
Income from operations
20,000
—
15,417
1,500
—
—
—
36,917
Operating margin
8.3%
15.3%
Other income, net
3,243
—
—
—
—
(706)
—
2,537
Income before income taxes
23,243
—
15,417
1,500
—
(706)
—
39,454
Provision for income taxes
6,551
—
—
—
—
—
4,496
11,047
Net income
$
16,692
$
—
$
15,417
$
1,500
$
—
$
(706)
$
(4,496)
$
28,407
Earnings per share:
Basic
$
0.77
$
1.30
Diluted
$
0.75
$
1.28
Weighted average shares
outstanding:
Basic
21,806
21,806
Diluted
22,129
22,129
(1)
Reflects a purchase accounting adjustment
to record Capella University contract liabilities at fair value as
a result of the Company's merger with Capella Education
Company.
(2)
Reflects amortization and depreciation
expense of intangible assets and software assets acquired through
the Company’s merger with Capella Education Company.
(3)
Reflects transaction and integration
charges associated with the Company's merger with Capella Education
Company.
(4)
Reflects impairment of goodwill and
intangible assets related to the Company’s acquisition of the New
York Code and Design Academy.
(5)
Reflects income recognized from the
Company's investments in partnership interests and other
investments.
(6)
Reflects tax impacts of the adjustments
described above and discrete tax adjustments related to stock-based
compensation and other adjustments, utilizing adjusted effective
tax rates of 27.1% and 28.0% for the three months ended September
30, 2018 and 2019, respectively.
STRATEGIC EDUCATION,
INC.
UNAUDITED NON-GAAP SEGMENT
REPORTING
(in thousands)
For the Three Months
Ended
For the Nine Months
Ended
September 30,
September 30,
2018
2019
2018
2019
Revenues:
Strayer University
$
114,471
$
127,837
$
343,644
$
384,806
Capella University
43,792
110,549
43,792
337,418
Non-Degree Programs
2,682
3,361
4,646
11,141
Consolidated revenues
160,945
241,747
392,082
733,365
Adjustments to consolidated revenues:
Strayer University
—
—
—
—
Capella University
26,214
—
26,214
—
Non-Degree Programs
—
—
—
—
Total adjustments to consolidated
revenues
26,214
—
26,214
—
Adjusted revenues by segment:
Strayer University
114,471
127,837
343,644
384,806
Capella University
70,006
110,549
70,006
337,418
Non-Degree Programs
2,682
3,361
4,646
11,141
Adjusted consolidated revenues
$
187,159
$
241,747
$
418,296
$
733,365
Income (loss) from operations:
Strayer University
$
11,904
$
18,689
$
44,215
$
68,268
Capella University
(14,326)
18,643
(14,326)
63,918
Non-Degree Programs
(1,688)
(415)
(4,131)
(918)
Amortization of intangible assets
(10,278)
(15,417)
(10,278)
(46,251)
Merger and integration costs
(29,620)
(1,500)
(37,791)
(11,698)
Impairment of intangible assets
(13,119)
—
(19,304)
—
Consolidated income (loss) from
operations
(57,127)
20,000
(41,615)
73,319
Adjustments to consolidated income (loss)
from operations:
Contract liabilities adjustment
26,214
—
26,214
—
Amortization of intangible assets
10,278
15,417
10,278
46,251
Merger and integration costs
29,620
1,500
37,791
11,698
Impairment of intangible assets
13,119
—
19,304
—
Total adjustments to consolidated income
(loss) from operations
79,231
16,917
93,587
57,949
Adjusted income (loss) from operations by
segment:
Strayer University
11,904
18,689
44,215
68,268
Capella University
11,888
18,643
11,888
63,918
Non-Degree Programs
(1,688)
(415)
(4,131)
(918)
Total adjusted income (loss) from
operations
$
22,104
$
36,917
$
51,972
$
131,268
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
(in thousands)
For the three months ended
September 30,
2018
2019
Net income
$
(52,781)
$
16,692
Provision (benefit) for income taxes
(3,236)
6,551
Other income
(1,110)
(3,243)
Depreciation and amortization
18,457
26,365
EBITDA (1)
(38,670)
46,365
Stock-based compensation
3,572
3,020
Merger and integration costs (2)
29,620
1,500
Impairment of intangible assets and fair
value adjustments (3)
13,246
—
Contract liability adjustment (4)
26,214
—
Adjusted EBITDA (1)
$
33,982
$
50,885
(1)
Denotes non-GAAP financial measures.
Please see the information in the Non-GAAP Financial Measures
section of this press release for more detail regarding these
adjustments and management’s reasons for providing this
information.
(2)
Reflects transaction and integration
charges associated with the Company's merger with Capella Education
Company. Includes $0.5 million of stock-based compensation benefit
related to forfeitures of stock-based awards for the three months
ended September 30, 2019.
(3)
Reflects adjustments to the value of
purchase consideration and goodwill and intangible asset impairment
charges related to the Company’s acquisition of The New York Code
and Design Academy, Inc. for the three months ended September 30,
2018.
(4)
Reflects a purchase accounting adjustment
to record Capella University contract liabilities at fair value as
a result of the Company's merger with Capella Education
Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107005039/en/
Terese Wilke Manager, Investor Relations Strategic Education,
Inc. (612) 977-6331 terese.wilke@strategiced.com
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