Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA)
today announced financial results for the period ended March 31,
2021.
“We are pleased with the organization’s ongoing commitment to
the success of our students and to our mission to enable economic
mobility,” said Karl McDonnell, Chief Executive Officer of
Strategic Education. “As we continue to navigate through the
challenges presented by the COVID-19 pandemic, we are encouraged by
continued strength in our Australia/New Zealand and Alternative
Learning segments.”
STRATEGIC EDUCATION CONSOLIDATED
RESULTS
[Note: Strategic Education’s financial results for any periods
ended prior to November 3, 2020 do not include the financial
results of the Australia/New Zealand acquisition and are therefore
not directly comparable.]
Three Months Ended March 31
- Revenue increased 9.4% to $290.3 million compared to $265.3
million for the same period in 2020. Revenue in 2021 includes the
impact of a purchase accounting adjustment of $2.2 million to
record acquired contract liabilities at fair value as a result of
the acquisition of Torrens University and associated assets in
Australia and New Zealand, and foreign currency exchange impact.
Adjusted revenue, which is a non-GAAP financial measure and
excludes the aforementioned adjustments, increased 9.5% to $290.5
million compared to $265.3 million for the same period in 2020. 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 $12.0 million or 4.1% of revenue,
compared to $44.0 million or 16.6% of revenue for the same period
in 2020. Income from operations in 2021 includes the impact of the
aforementioned contract liabilities adjustment, $19.4 million of
amortization expense related to assets acquired in the merger with
Capella Education Company and the acquisition of Torrens University
and associated assets in Australia and New Zealand, $1.0 million in
expenses associated with the merger with Capella Education Company
and the acquisition of Torrens University and associated assets in
Australia and New Zealand, $18.3 million of restructuring charges
for severance costs and right-of-use lease asset impairment
charges, and foreign currency exchange impact. Income from
operations in 2020 included $15.4 million of amortization expense
related to assets acquired in the merger with Capella Education
Company and $3.8 million in expenses associated with the merger
with Capella Education Company. Adjusted income from operations was
$52.9 million in 2021 compared to $63.1 million for the same period
in 2020. The adjusted operating income margin was 18.2% compared to
23.8% for the same period in 2020.
- Net income, which includes the items described above, and also
includes income from partnership interests and other investments,
certain discrete tax adjustments, and foreign currency exchange
impact, was $9.6 million in 2021 compared to $35.2 million for the
same period in 2020. Adjusted net income was $37.0 million compared
to $46.5 million for the same period in 2020.
- Earnings before interest, taxes, depreciation, and amortization
(EBITDA) was $46.6 million in 2021 compared to $69.7 million in
2020. Adjusted EBITDA, which excludes the items described above, as
well as amortization expense associated with deferred
implementation costs incurred in cloud computing arrangements, and
stock-based compensation expense, was $70.6 million compared to
$76.5 million for the same period in 2020.
- Diluted earnings per share was $0.40 compared to $1.60 for the
same period in 2020. Adjusted diluted earnings per share decreased
to $1.53 from $2.11 for the same period in 2020. Diluted weighted
average shares outstanding increased to 24,153,000 from 22,071,000
for the same period in 2020, due primarily to new shares issued to
facilitate the acquisition of Torrens University and associated
assets in Australia and New Zealand.
U.S. Higher Education Segment Highlights
- The U.S. Higher Education segment (USHE) is comprised of
Strayer University, including the Jack Welch Management Institute
and DevMountain, Capella University, and Hackbright Academy.
- For the first quarter, student enrollment within USHE decreased
7.3% to 89,482 compared to 96,537 for the same period in 2020.
- For the first quarter, FlexPath enrollment was 17% of USHE
enrollment compared to 12% for the same period in 2020.
- Revenue decreased 11.3% to $226.5 million in the first quarter
of 2021 compared to $255.5 million for the same period in 2020,
driven by lower first quarter enrollment and lower
revenue-per-student.
- Income from operations decreased to $47.8 million in the first
quarter of 2021 from $56.7 million for the same period in 2020. The
operating income margin was 21.1%, compared to 22.2% for the same
period in 2020.
Alternative Learning Segment Highlights
- The Alternative Learning segment includes Employer Solutions,
Workforce Edge, Sophia Learning, and Digital Enablement
Partnerships.
- For the first quarter, employer affiliated enrollment was 20.7%
of USHE enrollment compared to 17.0% for the same period in
2020.
- Revenue increased 27.9% to $12.5 million in the first quarter
of 2021 compared to $9.8 million for the same period in 2020,
driven by growth in Sophia Learning subscriptions and employer
affiliated enrollment.
- Income from operations decreased to $5.9 million in the first
quarter of 2021 from $6.4 million for the same period in 2020, as
we continue to invest in the Alternative Learning group. The
operating income margin was 47.0%, compared to 65.3% for the same
period in 2020.
Australia/New Zealand Segment Highlights
- The Australia/New Zealand segment (ANZ) includes Torrens
University, Think Education, and Media Design School.
- For the first quarter, student enrollment within ANZ was
21,469, an increase of 11.9% compared to pro forma enrollment of
19,192 for the same period in 2020.
- Revenue was $51.3 million in the first quarter of 2021, and
adjusted revenue was $51.5 million excluding the impact of a
purchase accounting adjustment of $2.2 million to record acquired
contract liabilities at fair value as a result of the acquisition
of Torrens University and associated assets in Australia and New
Zealand, and foreign currency exchange impact. On a pro forma
basis, revenue was $50.2 million in the first quarter of 2020.
- Loss from operations was $2.9 million in the first quarter of
2021, and the adjusted loss from operations was $0.7 million
excluding the impact of a purchase accounting adjustment to record
acquired contract liabilities at fair value as a result of the
acquisition of Torrens University and associated assets in
Australia and New Zealand, and foreign currency exchange impact. On
a pro forma basis, income from operations was $2.7 million in the
first quarter of 2020.
BALANCE SHEET AND CASH
FLOW
At March 31, 2021, Strategic Education had cash, cash
equivalents, and marketable securities of $274.0 million, and
$141.8 million outstanding under its revolving credit facility. For
the first three months of 2021, cash provided by operations was
$78.8 million compared to $68.7 million for the same period in
2020. Capital expenditures for the first three months of 2021 were
$12.7 million compared to $14.3 million for the same period in
2020. Capital expenditures for 2021 are expected to be $50 million
to $55 million.
For the first quarter of 2021, consolidated bad debt expense as
a percentage of revenue and adjusted revenue was 3.7%, compared to
4.2% of revenue for the same period in 2020. Net tuition receivable
as of March 31, 2021 includes additional reserves to account for
projected deterioration in collections performance due to the
pandemic.
COMMON STOCK CASH
DIVIDEND
Strategic Education announced today that it declared a regular,
quarterly cash dividend of $0.60 per share of common stock. This
dividend will be paid on June 7, 2021 to shareholders of record as
of May 28, 2021.
CONFERENCE CALL WITH
MANAGEMENT
Strategic Education will host a conference call to discuss its
first quarter 2021 results at 10:00 a.m. (ET) today. To participate
in the live call, investors should dial (877) 303-9047 ten minutes
prior to the start time. In addition, the call will be available
via webcast. To access the live webcast of the conference call,
please go to www.strategiceducation.com in the Investor Relations
section 15 minutes prior to the start time of the call 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 call. Following the call, the webcast will
be archived and available at www.strategiceducation.com in the
Investor Relations section.
About Strategic Education, Inc.
Strategic Education, Inc. (NASDAQ: STRA)
(www.strategiceducation.com) is dedicated to helping advance
economic mobility through higher education. We serve working adult
students globally through our core focus areas: 1) U.S. Higher
Education, including Strayer University and Capella University,
each institutionally accredited, and collectively offer flexible
and affordable associate, bachelor’s, master’s, and doctoral
programs including the Jack Welch Management Institute at Strayer
University, and non-degree web and mobile application development
courses through Hackbright Academy and Strayer University’s
DevMountain; 2) Alternative Learning, encompassing Employer
Solutions, developing and maintaining relationships with large
employers; Workforce Edge, a full service, online employee
education management platform; Sophia Learning, self-paced general
education courses that are ACE-recommended for college credit; and
Digital Enablement Partnerships, helping advance capabilities in
course development, online delivery, and student support; and 3)
Australia/New Zealand, comprised of Torrens University, Think
Education, and Media Design School that collectively offer
certificate and degree programs in Australia and New Zealand. This
portfolio of high quality, innovative, relevant, and affordable
programs and institutions helps our students prepare for success in
today’s workforce 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 and growth opportunities of
Strategic Education; Strategic Education’s plans, strategies and
prospects; the impact of the current COVID-19 pandemic on Strategic
Education’s business and results; and future events and
expectations. The statements are based on Strategic Education’s
current expectations and are subject to a number of assumptions,
uncertainties and risks, including but not limited to:
- the pace of student enrollment;
- Strategic Education’s continued compliance with Title IV of the
Higher Education Act, and the regulations thereunder, as well as
other federal laws and regulations, institutional accreditation
standards and state regulatory requirements;
- rulemaking by the Department of Education and increased focus
by the U.S. Congress on for-profit education institutions;
- competitive factors;
- risks associated with the further spread of COVID-19, including
the ultimate impact of COVID-19 on people and economies;
- the impact of regulatory measures or voluntary actions that may
be put in place to limit the spread of COVID-19, including
restrictions on business operations or social distancing
requirements;
- 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, including in the case of Strategic Education’s
acquisition of Torrens University and associated assets in
Australia and New Zealand, the risk that the benefits of the
acquisition may not be fully realized or may take longer to realize
than expected, and the risk that the acquisition may not advance
Strategic Education’s business strategy and growth strategy;
- risks relating to the timing of regulatory approvals;
- Strategic Education’s ability to implement its growth
strategy;
- the risk that the combined company may experience difficulty
integrating employees or operations;
- risks associated with the ability of Strategic Education’s
students to finance their education in a timely manner;
- general economic and market conditions; and
- additional factors described in Strategic Education’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
Strategic Education’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 Strategic Education on the date they are
made, and Strategic Education 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
March 31,
2020
2021
Revenues
$
265,302
$
290,336
Costs and expenses:
Instructional and support costs
132,936
152,805
General and administration
69,226
86,845
Amortization of intangible assets
15,417
19,407
Merger and integration costs
3,764
1,012
Restructuring costs
—
18,267
Total costs and expenses
221,343
278,336
Income from operations
43,959
12,000
Other income
2,123
2,167
Income before income taxes
46,082
14,167
Provision for income taxes
10,843
4,590
Net income
$
35,239
$
9,577
Earnings per share:
Basic
$
1.62
$
0.40
Diluted
$
1.60
$
0.40
Weighted average shares outstanding:
Basic
21,810
23,974
Diluted
22,071
24,153
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
and per share data)
December 31, 2020
March 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
187,509
$
238,290
Marketable securities
7,557
6,455
Tuition receivable, net
50,169
63,469
Income taxes receivable
1,429
—
Other current assets
39,458
44,714
Total current assets
286,122
352,928
Property and equipment, net
158,854
164,277
Right-of-use lease assets
120,687
142,998
Marketable securities, non-current
30,270
29,280
Intangible assets, net
326,420
308,190
Goodwill
1,318,526
1,311,487
Other assets
54,928
60,282
Total assets
$
2,295,807
$
2,369,442
LIABILITIES &
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
104,742
$
97,448
Income taxes payable
—
11,350
Contract liabilities
60,501
108,073
Lease liabilities
34,809
32,886
Total current liabilities
200,052
249,757
Long-term debt
141,823
141,798
Deferred income tax liabilities
53,407
44,264
Lease liabilities, non-current
106,151
152,981
Other long-term liabilities
46,055
44,717
Total liabilities
547,488
633,517
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 32,000,000
shares authorized; 24,418,939 and 24,651,205 shares issued and
outstanding at December 31, 2020 and March 31, 2021,
respectively
244
247
Additional paid-in capital
1,519,549
1,521,145
Accumulated other comprehensive income
48,880
40,064
Retained earnings
179,646
174,469
Total stockholders’ equity
1,748,319
1,735,925
Total liabilities and stockholders’
equity
$
2,295,807
$
2,369,442
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the three months ended
March 31,
2020
2021
Cash flows from operating activities:
Net income
$
35,239
$
9,577
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of deferred financing
costs
83
138
Amortization of investment
discount/premium
65
24
Depreciation and amortization
25,733
34,571
Deferred income taxes
(2,108)
(8,898)
Stock-based compensation
3,025
3,900
Impairment of right-of-use lease
assets
453
14,388
Changes in assets and liabilities:
Tuition receivable, net
3,553
(13,417)
Other assets
(3,090)
(9,897)
Accounts payable and accrued expenses
(7,028)
(10,276)
Income taxes payable and income taxes
receivable
12,314
12,777
Contract liabilities
1,901
46,872
Other long-term liabilities
(1,445)
(978)
Net cash provided by operating
activities
68,695
78,781
Cash flows from investing activities:
Purchases of property and equipment
(14,258)
(12,650)
Purchases of marketable securities
(1,863)
—
Proceeds from marketable securities
9,905
1,930
Other investments
(118)
(72)
Net cash used in investing activities
(6,334)
(10,792)
Cash flows from financing activities:
Common dividends paid
(13,327)
(14,778)
Net payments for stock awards
(25,089)
(2,326)
Repurchase of common stock
(247)
—
Net cash used in financing activities
(38,663)
(17,104)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
—
(866)
Net increase in cash, cash equivalents,
and restricted cash
23,698
50,019
Cash, cash equivalents, and restricted
cash — beginning of period
420,497
202,020
Cash, cash equivalents, and restricted
cash — end of period
$
444,195
$
252,039
STRATEGIC EDUCATION,
INC.
UNAUDITED SEGMENT
REPORTING
(in thousands)
For the three months ended
March 31,
2020
2021
Revenues:
U.S. Higher Education
$
255,513
$
226,547
Australia/New Zealand
—
51,265
Alternative Learning
9,789
12,524
Consolidated revenues
$
265,302
$
290,336
Income (loss) from operations:
U.S. Higher Education
$
56,743
$
47,754
Australia/New Zealand
—
(2,949)
Alternative Learning
6,397
5,881
Amortization of intangible assets
(15,417)
(19,407)
Merger and integration costs
(3,764)
(1,012)
Restructuring costs
—
(18,267)
Consolidated income from operations
$
43,959
$
12,000
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, total costs and expenses, income from
operations, operating margin, income before income taxes, 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. Management
believes this information is useful to investors to compare the
Company’s results of operation period-over-period. These measures
are Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted
Income from Operations, Adjusted Operating Margin, Adjusted Income
Before Income Taxes, 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 Total Costs and Expenses, Adjusted Income from
Operations, Adjusted Operating Margin, Adjusted Income Before
Income Taxes, Adjusted Net Income, and Adjusted Diluted EPS to
exclude (1) a purchase accounting adjustment to record acquired
contract liabilities at fair value as a result of the Company’s
acquisition of Torrens University and associated assets in
Australia and New Zealand, and amortization and depreciation
expense related to intangible assets and software assets associated
with the Company’s merger with Capella Education Company and the
Company’s acquisition of Torrens University and associated assets
in Australia and New Zealand, (2) transaction and integration
expenses associated with the Company's merger with Capella
Education Company and the Company’s acquisition of Torrens
University and associated assets in Australia and New Zealand, (3)
severance costs and right-of-use lease asset impairment charges
associated with the Company’s restructuring, (4) income recognized
from the Company’s investments in partnership interests and other
investments, (5) discrete tax adjustments utilizing adjusted
effective income tax rates of 28.5% and 29.2% for the three months
ended March 31, 2020 and 2021, respectively, and (6) foreign
currency exchange impact related to translating foreign currency
results at a constant exchange rate of 0.743 Australian Dollars to
U.S. Dollars, which is the 2021 budget rate. We define EBITDA as
net income before other income, the provision for income taxes,
depreciation and amortization, and from this amount in arriving at
Adjusted EBITDA we also exclude stock-based compensation expense,
amortization expense associated with deferred implementation costs
incurred in cloud computing arrangements, a purchase accounting
adjustment to record acquired contract liabilities at fair value,
and the amounts in (2), (3) and (6) above. 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 REVENUE, ADJUSTED
TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM
OPERATIONS, ADJUSTED INCOME
BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED
EPS
(in thousands, except per
share data)
For the three months ended
March 31, 2020 Non-GAAP Adjustments
As Reported (GAAP)
Purchase accounting
adjustments(1)
Merger and integration
costs(2)
Restructuring costs(3)
Income from other
investments(4)
Tax adjustments(5)
Foreign currency
adjustments(6)
As Adjusted (Non-GAAP)
Revenues
$
265,302
$
—
$
—
$
—
$
—
$
—
$
—
$
265,302
Total costs and expenses
$
221,343
$
(15,417)
$
(3,764)
$
—
$
—
$
—
$
—
$
202,162
Income from operations
$
43,959
$
15,417
$
3,764
$
—
$
—
$
—
$
—
$
63,140
Operating margin
16.6%
23.8%
Income before income taxes
$
46,082
$
15,417
$
3,764
$
—
$
(254)
$
—
$
—
$
65,009
Net income
$
35,239
$
15,417
$
3,764
$
—
$
(254)
$
(7,685)
$
—
$
46,481
Earnings per share:
Diluted
$
1.60
$
2.11
Weighted average shares
outstanding:
Diluted
22,071
22,071
For the three months ended
March 31, 2021 Non-GAAP Adjustments
As Reported (GAAP)
Purchase accounting
adjustments(1)
Merger and integration
costs(2)
Restructuring costs(3)
Income from other
investments(4)
Tax adjustments(5)
Foreign currency
adjustments(6)
As Adjusted (Non-GAAP)
Revenues
$
290,336
$
2,223
$
—
$
—
$
—
$
—
$
(2,019)
$
290,540
Total costs and expenses
$
278,336
$
(19,407)
$
(1,012)
$
(18,267)
$
—
$
—
$
(2,041)
$
237,609
Income from operations
$
12,000
$
21,630
$
1,012
$
18,267
$
—
$
—
$
22
$
52,931
Operating margin
4.1%
18.2%
Income before income taxes
$
14,167
$
21,630
$
1,012
$
18,267
$
(2,783)
$
—
$
22
$
52,315
Net income
$
9,577
$
21,630
$
1,012
$
18,267
$
(2,783)
$
(10,688)
$
22
$
37,037
Earnings per share:
Diluted
$
0.40
$
1.53
Weighted average shares
outstanding:
Diluted
24,153
24,153
(1)
Reflects a purchase accounting adjustment
to record acquired contract liabilities at fair value as a result
of the Company's acquisition of Torrens University and associated
assets in Australia and New Zealand, and amortization and
depreciation expense of intangible assets and software assets
acquired through the Company’s merger with Capella Education
Company and the Company’s acquisition of Torrens University and
associated assets in Australia and New Zealand.
(2)
Reflects transaction and integration
expenses associated with the Company's merger with Capella
Education Company and the Company's acquisition of Torrens
University and associated assets in Australia and New Zealand.
(3)
Reflects severance costs and right-of-use
lease asset impairment charges associated with the Company’s
restructuring.
(4)
Reflects income recognized from the
Company's investments in partnership interests and other
investments.
(5)
Reflects tax impacts of the adjustments
described above and discrete tax adjustments related to stock-based
compensation and other adjustments, utilizing adjusted effective
income tax rates of 28.5% and 29.2% for the three months ended
March 31, 2020 and 2021, respectively.
(6)
Reflects foreign currency exchange impact
related to translating foreign currency results at a constant
exchange rate of 0.743 Australian Dollars to U.S. Dollars, which is
the 2021 budget rate.
STRATEGIC EDUCATION,
INC.
UNAUDITED NON-GAAP SEGMENT
REPORTING
(in thousands)
For the three months
ended
March 31,
2020
2021
Revenues:
U.S. Higher Education
$
255,513
$
226,547
Australia/New Zealand
—
51,265
Alternative Learning
9,789
12,524
Consolidated revenues
265,302
290,336
Adjustments to consolidated revenues:
U.S. Higher Education
—
—
Australia/New Zealand1
—
204
Alternative Learning
—
—
Total adjustments to consolidated
revenues
—
204
Adjusted revenues by segment:
U.S. Higher Education
255,513
226,547
Australia/New Zealand
—
51,469
Alternative Learning
9,789
12,524
Adjusted consolidated revenues
$
265,302
$
290,540
Income (loss) from operations:
U.S. Higher Education
$
56,743
$
47,754
Australia/New Zealand
—
(2,949)
Alternative Learning
6,397
5,881
Amortization of intangible assets
(15,417)
(19,407)
Merger and integration costs
(3,764)
(1,012)
Restructuring costs
—
(18,267)
Consolidated income from operations
43,959
12,000
Adjustments to consolidated income from
operations:
Australia/New Zealand1
—
2,245
Amortization of intangible assets
15,417
19,407
Merger and integration costs
3,764
1,012
Restructuring costs
—
18,267
Total adjustments to consolidated income
from operations
19,181
40,931
Adjusted income (loss) from operations by
segment:
U.S. Higher Education
56,743
47,754
Australia/New Zealand
—
(704)
Alternative Learning
6,397
5,881
Total adjusted income from operations
$
63,140
$
52,931
____________________
1Adjustments to the Australia/New Zealand
segment revenue and loss from operations include a purchase
accounting adjustment of $2.2 million to record acquired contract
liabilities at fair value as a result of the Company's acquisition
of Torrens University and associated assets in Australia and New
Zealand, and foreign currency exchange impact of ($2.0) million
related to translating foreign currency results at a constant
exchange rate of 0.743 Australian Dollars to U.S. Dollars, which is
the 2021 budget rate.
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
(in thousands)
For the three months
ended
March 31,
2020
2021
Net income
$
35,239
$
9,577
Provision for income taxes
10,843
4,590
Other income
(2,123)
(2,167)
Depreciation and amortization
25,733
34,571
EBITDA (1)
69,692
46,571
Stock-based compensation
3,025
3,900
Merger and integration costs (2)
3,764
1,012
Restructuring costs (3)
—
16,231
Cloud computing amortization (4)
—
641
Contract liability adjustment (5)
—
2,223
Foreign currency exchange impact (6)
—
22
Adjusted EBITDA (1)
$
76,481
$
70,600
(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 and the Company’s acquisition of Torrens University and
associated assets in Australia and New Zealand.
(3)
Reflects severance costs and right-of-use
lease asset impairment charges associated with the Company’s
restructuring. Excludes $2.0 million of depreciation and
amortization expense for the three months ended March 31, 2021.
(4)
Reflects amortization expense associated
with deferred implementation costs incurred in cloud computing
arrangements.
(5)
Reflects a purchase accounting adjustment
to record acquired contract liabilities at fair value as a result
of the Company's acquisition of Torrens University and associated
assets in Australia and New Zealand.
(6)
Reflects foreign currency exchange impact
related to translating foreign currency results at a constant
exchange rate of 0.743 Australian Dollars to U.S. Dollars, which is
the 2021 budget rate.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429005295/en/
Terese Wilke Manager, Investor Relations Strategic Education,
Inc. (612) 977-6331 terese.wilke@strategiced.com
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