CEC ANNOUNCES 1Q19 RESULTS …PG 1

 

 

Exhibit 99.1

CAREER EDUCATION CORPORATION ANNOUNCES FIRST QUARTER 2019 RESULTS

 

First quarter revenue increased 6.6% primarily driven by total University enrollment growth of 8.2%

 

Schaumburg, Ill. (May 8, 2019) – Career Education Corporation (NASDAQ: CECO) today reported operating and financial results for the quarter ended March 31, 2019.

 

FIRST QUARTER 2019 RESULTS AS COMPARED TO THE PRIOR YEAR QUARTER

Financial Results

  •   

Revenue increased by 6.6 percent to $157.9 million as compared to $148.1 million with both universities contributing to this growth

  •   

Operating income increased by 46.0 percent to $30.0 million as compared to $20.5 million

  •   

Earnings per diluted share of $0.35 as compared to $0.25

  •   

Adjusted earnings per diluted share of $0.36 as compared to $0.28*

  •   

Ended the quarter with $239.9 million in cash, cash equivalents, restricted cash and available-for-sale short-term investments

 

 

 

 

 

 

 

 

 

 

 

Key Metrics

  •   

CTU’s total student enrollments increased by 4.1 percent primarily driven by new enrollment growth of 14.3 percent

  •   

AIU’s new and total student enrollments increased 124.7 percent and 16.5 percent, respectively; impacting these quarterly increases was the timing impact of the academic calendar redesign

  •   

Ongoing initiatives and incremental investments in student-serving operations continue to positively impact enrollment trends

 

 

 

 

 

 

 

 

 

*See GAAP to non-GAAP reconciliation attached to this press release

 

 

“We are pleased to report solid first quarter results with key operating metrics and trends showing year over year growth,” said Todd Nelson, President and Chief Executive Officer. “Ongoing initiatives and technology investments are improving student outreach and engagement, while creating a more efficient and effective enrollment process, which should support future growth. Looking ahead, we remain committed to delivering quality academic outcomes by leveraging our technology and student serving functions while investing in responsible growth initiatives that will create long term value for our shareholders.”

 

 

 

 

 

 

 

 

 


CEC ANNOUNCES 1Q19 RESULTS …PG 2

 

 

REVENUE

For the quarter ended March 31, 2019, total revenue was $157.9 million as compared to total revenue of $148.1 million for the prior year quarter. Both universities contributed to this revenue growth primarily driven by underlying enrollment trends.

 

 

 

For The Quarter Ended March 31,

 

Revenue ($ in thousands)

 

2019

 

 

2018

 

 

Increase (Decrease)

 

CTU

 

$

97,057

 

 

$

94,607

 

 

 

2.6

%

AIU

 

 

60,779

 

 

 

53,121

 

 

 

14.4

%

Total University Group

 

 

157,836

 

 

 

147,728

 

 

 

6.8

%

Corporate and Other (1)

 

 

17

 

 

 

337

 

 

 

-95.0

%

Total

 

$

157,853

 

 

$

148,065

 

 

 

6.6

%

 

 

(1)

Corporate and other includes closed campuses which no longer meet the criteria to be reported as a separate operating segment.



CEC ANNOUNCES 1Q19 RESULTS …PG 3

 

 

TOTAL AND NEW STUDENT ENROLLMENTS

 

For the quarter ended March 31, 2019, CTU’s and AIU’s total student enrollments increased 4.1 percent and 16.5 percent, respectively, primarily driven by new student enrollment growth of 14.3 percent and 124.7 percent, respectively, as compared to the prior year quarter. Growth within both universities was driven by strong student interest within the industry and ongoing investments in the admissions and advising centers in Illinois and Arizona. AIU’s new enrollments increase was also positively impacted by the timing effect of the academic calendar redesign.

 

 

 

 

As of March 31,

 

Total Student Enrollments

 

2019

 

 

2018

 

 

Increase (Decrease)

 

CTU

 

 

23,100

 

 

 

22,200

 

 

 

4.1

%

AIU

 

 

12,700

 

 

 

10,900

 

 

 

16.5

%

Total University Group

 

 

35,800

 

 

 

33,100

 

 

 

8.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31,

 

New Student Enrollments

 

2019

 

 

2018

 

 

Increase (Decrease)

 

CTU

 

 

6,010

 

 

 

5,260

 

 

 

14.3

%

AIU

 

 

5,370

 

 

 

2,390

 

 

 

124.7

%

Total University Group

 

 

11,380

 

 

 

7,650

 

 

 

48.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



CEC ANNOUNCES 1Q19 RESULTS …PG 4

 

 

OPERATING INCOME (LOSS)

For the quarter ended March 31, 2019, the Company recorded operating income of $30.0 million, compared to operating income of $20.5 million in the prior year quarter. The improvement in operating income performance was driven by revenue growth at both universities as well as reduced operating losses at the closed campuses which are now reported within Corporate and Other, partially offset with ongoing investments in technology and student-serving processes and increased bad debt expense.

 

 

 

 

For The Quarter Ended March 31,

 

Operating Income ($ in thousands)

 

2019

 

 

2018

 

 

Increase (Decrease)

 

CTU

 

$

29,691

 

 

$

27,185

 

 

 

9.2

%

AIU

 

 

8,312

 

 

 

4,136

 

 

 

101.0

%

Total University Group

 

 

38,003

 

 

 

31,321

 

 

 

21.3

%

Corporate and Other (1)

 

 

(8,032

)

 

 

(10,792

)

 

 

25.6

%

Total

 

$

29,971

 

 

$

20,529

 

 

 

46.0

%

 

(1)

Corporate and Other includes closed campuses which no longer meet the criteria to be reported as a separate operating segment. Operating losses related to closed campuses were $2.8 million and $6.3 million for the quarters ended March 31, 2019 and 2018, respectively.

 

 



CEC ANNOUNCES 1Q19 RESULTS …PG 5

 

 

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.)

As shown in the table below, adjusted operating income for the total company was $33.0 million for the quarter ended Mach 31, 2019, as compared to $25.9 million in the prior year quarter.

 

 

 

 

 

 

 

For The Quarter Ended March 31,

 

Adjusted Operating Income

 

2019

 

 

2018

 

Total Company:

 

 

 

 

 

 

 

 

Operating income

 

$

29,971

 

 

$

20,529

 

Depreciation and amortization

 

 

2,233

 

 

 

2,582

 

Lease expenses for vacated space (1)

 

 

766

 

 

 

(751

)

Significant legal settlements (2)

 

 

-

 

 

 

3,491

 

Adjusted Operating Income --

Total Company

 

$

32,970

 

 

$

25,851

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

27.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

 

(2)

Significant legal settlements relate to the Surrett matter which was settled during 2018.



CEC ANNOUNCES 1Q19 RESULTS …PG 6

 

 

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended March 31, 2019, the Company recorded net income of $24.8 million, compared to $17.5 million for the prior year quarter. Earnings per diluted share were $0.35 for the quarter ended March 31, 2019, as compared to $0.25 for the prior year quarter. Adjusted earnings per diluted share were $0.36 for the quarter ended March 31, 2019, as compared to $0.28 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 Quarter Ended March 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.35

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

Lease expenses for vacated space (1)

 

 

0.01

 

 

 

(0.01

)

Significant legal settlements (2)

 

 

-

 

 

 

0.05

 

Total pre-tax adjustments

 

$

0.01

 

 

$

0.04

 

Tax effect of adjustments (3)

 

 

-

 

 

 

(0.01

)

Total adjustments after tax

 

 

0.01

 

 

 

0.03

 

Adjusted Earnings Per Diluted Share

 

$

0.36

 

 

$

0.28

 

 

 

(1)

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

 

(2)

Significant legal settlements relate to the Surrett matter which was settled during 2018.

 

(3)

The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25%. This tax rate reflects federal and state taxable jurisdictions as well as the nature of the adjustments.

 

BALANCE SHEET AND CASH FLOW

Net cash provided by operating activities was $12.9 million for the quarter ended March 31, 2019, compared to $11.1 million for the prior year quarter.

 

 

 

For The Quarter Ended March 31,

 

Selected Cash Flow Items

 

2019

 

 

2018

 

 

Increase (Decrease)

 

Net cash provided by operating activities

 

$

12,945

 

 

$

11,096

 

 

 

16.7

%

Capital expenditures

 

$

479

 

 

$

1,360

 

 

 

-64.8

%

As of March 31, 2019 and December 31, 2018, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $239.9 million and $229.2 million, respectively.

 



CEC ANNOUNCES 1Q19 RESULTS …PG 7

 

 

OUTLOOK                                                                                                   

The Company provided the following outlook, subject to the key assumptions identified below (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):

Financial Outlook:

 

 

Full year 2019 - total company outlook remains unchanged from prior quarter:

 

o

Revenue growth of approximately 3 percent to 4 percent

 

o

Operating income in the range of $102.0 million to $107.0 million

 

o

Adjusted operating income in the range of $114.0 million to $119.0 million

 

o

Earnings per diluted share in the range of $1.08 to $1.12

 

o

Adjusted earnings per diluted share in the range of $1.11 to $1.15

 

Second quarter 2019 - total company:

 

o

Operating income in the range of $27.0 million to $28.5 million

 

o

Adjusted operating income in the range of $30.0 million to $31.5 million

 

o

Earnings per diluted share in the range of $0.28 to $0.30

 

o

Adjusted earnings per diluted share in the range of $0.29 to $0.31

University Group Enrollment Outlook:

 

 

CTU:

 

o

New student enrollments for the full year 2019 are expected to show growth as compared to the prior year with second quarter new student enrollments expected to grow in the mid-single digits

 

 

AIU:

 

o

New student enrollments are expected to decline in the second quarter of 2019 as compared to the prior year quarter primarily driven by approximately 16 percent fewer enrollment days but AIU continues to expect new student enrollment growth for the full year 2019

 

 

University Group:

 

o

New student enrollments are expected to increase approximately 3 percent to 5 percent for the full year 2019 as compared to the prior year

 

Operating income, which is the most directly comparable GAAP measure to adjusted operating income, may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items such as lease expenses for vacated space offset with any sublease income as well as depreciation, amortization, asset impairment charges, significant restructuring charges and significant legal settlements. The revenue, operating income, adjusted operating income, earnings per share, adjusted earnings per share and enrollment outlook provided above for 2019 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs continues to trend in line with recent experiences, (ii) initiatives and investments in student-serving operations continue to positively impact enrollment trends within the University Group, (iii) no material changes in the current legal or regulatory environment, and excludes legal and regulatory liabilities and other related impacts which are not probable and estimable at this time, and any impact of new or proposed regulations, including the “borrower defense to repayment” and gainful employment regulations and any modifications thereto, (iv) no significant impact from the inquiry by the U.S. Federal Trade Commission, the Oregon arbitrations or other ongoing legal or regulatory matters, including legal fees associated therewith, (v) no material changes in the estimated amount of compensation expense that could be impacted by changes in the Company’s stock price or the Company’s assessment of the probable outcome of performance conditions relating to performance-based compensation, and (vi) earnings per diluted share outlook assumes an effective income tax rate of 26% for the second quarter and 24.5% for the full year. 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 we make in the future as we continue to evaluate diverse strategies to enhance shareholder value may impact the outlook provided above. 2019 outlook excludes any impacts of the pending acquisition of Trident University.

 

 

 

 


CEC ANNOUNCES 1Q19 RESULTS …PG 8

 

 

 

 

 

CONFERENCE CALL INFORMATION

 

Career Education Corporation will host a conference call on Wednesday, May 8, 2019 at 5:30 p.m. Eastern time to discuss its first quarter 2019 results and 2019 outlook. Interested parties can access the live webcast of the conference at www.careered.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.careered.com in the Investor Relations section of the website.

ABOUT CAREER EDUCATION CORPORATION

Career Education’s academic institutions offer a quality education to a diverse student population in a variety of disciplines through online, campus-based and blended learning programs. The Company’s two regionally accredited universities – Colorado Technical University (“CTU”) and American InterContinental University (“AIU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Both universities predominantly serve students online with 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 new personalized learning technologies like their intellipath® learning platform. Career Education is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

A listing of individual campus locations and web links to Career Education institutions can be found at www.careered.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,” “estimate,” “continue,” “outlook,” “trend,” “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 gainful employment, 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 recently effective “borrower defense to repayment” regulations and any modifications thereto; 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; our ability to successfully and cost effectively defend litigation and other claims brought against us (including the inquiry by the U.S. Federal Trade Commission); the success of our initiatives to improve student experiences, retention and academic outcomes; the ability of our student admissions and advising centers to achieve anticipated operating performance; 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, 2018 and its subsequent filings with the Securities and Exchange Commission.

###

 

 

 



CEC ANNOUNCES 1Q19 RESULTS …PG 9

 

 

 

CONTACT

 

Investors:

Alpha IR Group

Chris Donovan or Chris Hodges

(312) 445-2870

CECO@alpha-ir.com

Or

 

Media:

Career Education Corporation

(847) 585-2600

media@careered.com

 


 

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

38,799

 

 

$

32,394

 

Restricted cash

 

 

337

 

 

 

337

 

Short-term investments

 

 

200,768

 

 

 

196,428

 

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

 

 

239,904

 

 

 

229,159

 

 

 

 

 

 

 

 

 

 

Student receivables, net

 

 

29,840

 

 

 

28,751

 

Receivables, other, net

 

 

2,581

 

 

 

2,567

 

Prepaid expenses

 

 

8,381

 

 

 

7,771

 

Inventories

 

 

727

 

 

 

763

 

Other current assets

 

 

628

 

 

 

437

 

Assets of discontinued operations

 

 

120

 

 

 

-

 

Total current assets

 

 

282,181

 

 

 

269,448

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

28,397

 

 

 

30,048

 

Right of use asset

 

 

43,389

 

 

 

-

 

Goodwill

 

 

87,356

 

 

 

87,356

 

Intangible assets, net

 

 

7,900

 

 

 

7,900

 

Student receivables, net

 

 

975

 

 

 

942

 

Deferred income tax assets, net

 

 

74,850

 

 

 

81,628

 

Other assets

 

 

4,930

 

 

 

4,993

 

Assets of discontinued operations

 

 

178

 

 

 

178

 

TOTAL ASSETS

 

$

530,156

 

 

$

482,493

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

$

14,595

 

 

$

-

 

Accounts payable

 

 

13,072

 

 

 

9,195

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related benefits

 

 

17,449

 

 

 

24,530

 

Advertising and marketing costs

 

 

11,633

 

 

 

9,300

 

Income taxes

 

 

1,298

 

 

 

1,472

 

Other

 

 

10,277

 

 

 

19,668

 

Deferred revenue

 

 

24,289

 

 

 

32,351

 

Liabilities of discontinued operations

 

 

8

 

 

 

536

 

Total current liabilities

 

 

92,621

 

 

 

97,052

 

 

 

 

 

 

 

 

 

 

NON-CURRENT  LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

 

47,328

 

 

 

-

 

Deferred rent obligations

 

 

-

 

 

 

12,745

 

Other liabilities

 

 

9,885

 

 

 

17,493

 

Total non-current liabilities

 

 

57,213

 

 

 

30,238

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

857

 

 

 

852

 

Additional paid-in capital

 

 

629,768

 

 

 

628,295

 

Accumulated other comprehensive gain (loss)

 

 

49

 

 

 

(298

)

Accumulated deficit

 

 

(27,120

)

 

 

(52,946

)

Treasury stock

 

 

(223,232

)

 

 

(220,700

)

Total stockholders' equity

 

 

380,322

 

 

 

355,203

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

530,156

 

 

$

482,493

 


 

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(In thousands, except per share amounts and percentages)

 

 

 

For The Quarter Ended March 31,

 

 

 

2019

 

 

% of

Total

Revenue

 

 

2018

 

 

% of

Total

Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees

 

$

157,228

 

 

 

99.6

%

 

$

147,510

 

 

 

99.6

%

Other

 

 

625

 

 

 

0.4

%

 

 

555

 

 

 

0.4

%

Total revenue

 

 

157,853

 

 

 

 

 

 

 

148,065

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

26,327

 

 

 

16.7

%

 

 

26,946

 

 

 

18.2

%

General and administrative

 

 

99,322

 

 

 

62.9

%

 

 

98,008

 

 

 

66.2

%

Depreciation and amortization

 

 

2,233

 

 

 

1.4

%

 

 

2,582

 

 

 

1.7

%

Total operating expenses

 

 

127,882

 

 

 

81.0

%

 

 

127,536

 

 

 

86.1

%

Operating income

 

 

29,971

 

 

 

19.0

%

 

 

20,529

 

 

 

13.9

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,440

 

 

 

0.9

%

 

 

634

 

 

 

0.4

%

Interest expense

 

 

(42

)

 

 

0.0

%

 

 

(109

)

 

 

-0.1

%

Miscellaneous income

 

 

226

 

 

 

0.1

%

 

 

328

 

 

 

0.2

%

Total other income

 

 

1,624

 

 

 

1.0

%

 

 

853

 

 

 

0.6

%

PRETAX INCOME

 

 

31,595

 

 

 

20.0

%

 

 

21,382

 

 

 

14.4

%

Provision for income taxes

 

 

6,407

 

 

 

4.1

%

 

 

3,498

 

 

 

2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

25,188

 

 

 

16.0

%

 

 

17,884

 

 

 

12.1

%

Loss from discontinued operations, net of tax

 

 

(397

)

 

 

-0.3

%

 

 

(382

)

 

 

-0.3

%

NET INCOME

 

 

24,791

 

 

 

15.7

%

 

 

17,502

 

 

 

11.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME (LOSS), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(52

)

 

 

 

 

 

 

86

 

 

 

 

 

Unrealized gain (loss) on investments

 

 

399

 

 

 

 

 

 

 

(218

)

 

 

 

 

Total other comprehensive income (loss)

 

 

347

 

 

 

 

 

 

 

(132

)

 

 

 

 

COMPREHENSIVE INCOME

 

$

25,138

 

 

 

 

 

 

$

17,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER SHARE - BASIC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.36

 

 

 

 

 

 

$

0.26

 

 

 

 

 

Loss from discontinued operations

 

 

(0.01

)

 

 

 

 

 

 

(0.01

)

 

 

 

 

Net income per share

 

$

0.35

 

 

 

 

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER SHARE - DILUTED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.35

 

 

 

 

 

 

$

0.25

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

Net income per share

 

$

0.35

 

 

 

 

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

69,837

 

 

 

 

 

 

 

69,216

 

 

 

 

 

Diluted

 

 

71,492

 

 

 

 

 

 

 

71,119

 

 

 

 

 

 

 


 

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For The Quarter Ended March 31,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

24,791

 

 

$

17,502

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

2,233

 

 

 

2,582

 

Bad debt expense

 

 

11,709

 

 

 

6,982

 

Compensation expense related to share-based awards

 

 

1,369

 

 

 

1,501

 

Deferred income taxes

 

 

6,778

 

 

 

3,704

 

Changes in operating assets and liabilities:

 

 

(33,935

)

 

 

(21,175

)

Net cash provided by operating activities

 

 

12,945

 

 

 

11,096

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(138,700

)

 

 

(50,799

)

Sales of available-for-sale investments

 

 

135,062

 

 

 

49,257

 

Purchases of property and equipment

 

 

(479

)

 

 

(1,360

)

Net cash used in investing activities

 

 

(4,117

)

 

 

(2,902

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

109

 

 

 

875

 

Payments of employee tax associated with stock compensation

 

 

(2,532

)

 

 

(2,981

)

Net cash used in financing activities

 

 

(2,423

)

 

 

(2,106

)

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

6,405

 

 

 

6,088

 

CASH AND CASH EQUIVALENTS, beginning of the period

 

 

32,731

 

 

 

18,899

 

CASH AND CASH EQUIVALENTS, end of the period

 

$

39,136

 

 

$

24,987

 


 

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

 

 

 

For The Quarter Ended March 31,

 

 

 

2019

 

 

2018

 

REVENUE:

 

 

 

 

 

 

 

 

CTU

 

$

97,057

 

 

$

94,607

 

AIU

 

 

60,779

 

 

 

53,121

 

Total University Group

 

 

157,836

 

 

 

147,728

 

Corporate and Other (1)

 

 

17

 

 

 

337

 

Total

 

$

157,853

 

 

$

148,065

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS):

 

 

 

 

 

 

 

 

CTU

 

$

29,691

 

 

$

27,185

 

AIU

 

 

8,312

 

 

 

4,136

 

Total University Group

 

 

38,003

 

 

 

31,321

 

Corporate and Other (1)

 

 

(8,032

)

 

 

(10,792

)

Total

 

$

29,971

 

 

$

20,529

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN (LOSS):

 

 

 

 

 

 

 

 

CTU

 

 

30.6

%

 

 

28.7

%

AIU

 

 

13.7

%

 

 

7.8

%

Total University Group

 

 

24.1

%

 

 

21.2

%

Corporate and Other (1)

 

NM

 

 

NM

 

Total

 

 

19.0

%

 

 

13.9

%

 

 

(1)

Corporate and Other includes closed campuses which no longer meet the criteria to be reported as a separate operating segment. Operating losses related to the closed campuses were $2.8 million and $6.3 million for the quarters ended March 31, 2019 and 2018, respectively.



 

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)

(In thousands, unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended March 31,

 

 

 

ACTUAL

 

Adjusted Operating Income

 

2019

 

 

2018

 

Total Company

 

 

 

 

 

 

 

 

Operating income

 

$

29,971

 

 

$

20,529

 

Depreciation and amortization

 

 

2,233

 

 

 

2,582

 

Lease expenses for vacated space (2)

 

 

766

 

 

 

(751

)

Significant legal settlements (3)

 

 

-

 

 

 

3,491

 

Adjusted Operating Income -- Total Company

 

$

32,970

 

 

$

25,851

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ending June 30,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2019

 

 

2018

 

Total Company

 

 

 

 

 

 

 

 

Operating income

 

$27M - $28.5M

 

 

$

11,303

 

Depreciation and amortization

 

~2.5

 

 

 

2,103

 

Lease expenses for vacated space (2)

 

~0.5

 

 

 

4,411

 

Significant legal settlements (3)

 

 

 

 

 

5,970

 

Adjusted Operating Income -- Total Company

 

$30M - $31.5M

 

 

$

23,787

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ending December 31,

 

 

 

OUTLOOK

 

 

ACTUAL

 

 

 

2019

 

 

2018

 

Total Company

 

 

 

 

 

 

 

 

Operating income

 

$102M - $107M

 

 

$

71,298

 

Depreciation and amortization