CEC ANNOUNCES 3Q19 RESULTS …PG 1

 

 

Exhibit 99.1

CAREER EDUCATION CORPORATION REPORTS RESULTS FOR THIRD QUARTER AND YEAR TO DATE 2019

AND ANNOUNCES NEW STOCK REPURCHASE PROGRAM

 

Third quarter revenue increased 6.4% while University Group total student enrollments grew 6.1% highlighting the Company’s focus on student retention and academic outcomes

Schaumburg, Ill. (November 6, 2019) – Career Education Corporation (NASDAQ: CECO) today reported operating and financial results for the quarter and year to date ended September 30, 2019.

THIRD QUARTER 2019 RESULTS AS COMPARED TO THE PRIOR YEAR QUARTER

Financial Results

  •   

Revenue increased by 6.4 percent to $155.0 million as compared to $145.7 million with both universities contributing to this growth

  •   

Operating income increased 26.0 percent to $24.3 million as compared to $19.3 million

  •   

Earnings per diluted share of $0.25 as compared to earnings per diluted share of $0.21

  •   

Adjusted earnings per diluted share of $0.33 as compared to $0.25*

  •   

Ended the quarter with $311.8 million in cash, cash equivalents, restricted cash and available-for-sale short-term investments**

 

 

 

 

 

 

 

 

 

 

 

Key Metrics

 

  •   

CTU’s total student enrollments increased 3.2 percent supported by year to date new student enrollment growth of 6.4 percent and improving student retention while new student enrollments were relatively flat for the quarter

  •   

AIU’s total student enrollments increased 11.3 percent supported by quarterly new student enrollment growth of 10.0 percent  

  •   

Leveraging technology and data analytics to support student experiences, retention and academic outcomes continues to be a primary focus

 

 

 

 

 

YEAR TO DATE 2019 HIGHLIGHTS AS COMPARED TO THE PRIOR YEAR TO DATE

 

Revenue increased 7.7 percent to $469.3 million as compared to $435.8 million, in part, supported by total student enrollment growth at both universities

 

Operating income increased 6.5 percent to $54.4 million as compared to $51.1 million; current year operating income was impacted by $37.1 million in legal settlements as compared to $9.6 million in the prior year

 

Adjusted operating income increased 32.2 percent to $99.8 million as compared to $75.4 million*

 

New student enrollments increased 16.2 percent contributing to total enrollment growth of 6.1 percent; positively impacting these trends was the academic calendar redesign at AIU

 

Company raises full year 2019 outlook

 

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

**Includes $30.0 million of restricted funds related to the FTC settlement which was subsequently paid during October 2019.

 

“We believe our solid year to date results reflect how we have further underscored the value proposition of our academic institutions while emphasizing student retention and academic outcomes,” said President and Chief Executive Officer Todd Nelson. “We have progressively built upon our student-serving initiatives and are integrating technology across various student support and learning processes which, we believe, are further enhancing student experiences. Looking ahead, we will continue to make investments that support our strategic priority of sustainable and responsible growth to create long-term value for all our stakeholders.”

 


CEC ANNOUNCES 3Q19 RESULTS …PG 2

 

 

REVENUE

 

For the quarter ended September 30, 2019, total revenue of $155.0 million increased 6.4 percent compared to total revenue of $145.7 million for the prior year quarter.

 

For the year to date ended September 30, 2019, total revenue of $469.3 million increased 7.7 percent compared to total revenue of $435.8 million for the prior year to date.

 

Both universities contributed to the revenue growth that has been supported by underlying enrollment trends.

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

Revenue ($ in thousands)

 

2019

 

 

2018

 

 

% Change

 

 

2019

 

 

2018

 

 

% Change

 

CTU

 

$

96,038

 

 

$

93,115

 

 

 

3.1

%

 

$

289,650

 

 

$

280,988

 

 

 

3.1

%

AIU

 

 

58,907

 

 

 

52,504

 

 

 

12.2

%

 

 

179,559

 

 

 

154,204

 

 

 

16.4

%

Total University Group

 

 

154,945

 

 

 

145,619

 

 

 

6.4

%

 

 

469,209

 

 

 

435,192

 

 

 

7.8

%

Corporate and Other (1)

 

 

14

 

 

 

71

 

 

NM

 

 

 

44

 

 

 

599

 

 

NM

 

Total

 

$

154,959

 

 

$

145,690

 

 

 

6.4

%

 

$

469,253

 

 

$

435,791

 

 

 

7.7

%

 

 

(1)

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



CEC ANNOUNCES 3Q19 RESULTS …PG 3

 

 

TOTAL AND NEW STUDENT ENROLLMENTS

 

 

For the quarter ended September 30, 2019, new student enrollments at AIU increased 10.0 percent as compared to the prior year quarter. CTU’s new student enrollments remained relatively flat in comparison to the prior year quarter primarily due to strong performance in the comparative prior year period.

 

 

As of September 30, 2019, CTU’s and AIU’s total student enrollments increased 3.2 percent and 11.3 percent, respectively, supported by year to date new student enrollment growth of 6.4 percent and 30.5 percent, respectively, as compared to the prior year to date. AIU’s year to date new student enrollments were positively impacted by the timing effect of the academic calendar redesign.

 

 

Total student enrollment growth was primarily driven by consistent levels of prospective student interest supported by our emphasis on improving student experiences, retention and academic outcomes.

 

 

 

As of September 30,

 

Total Student Enrollments

 

2019

 

 

2018

 

 

% Change

 

CTU

 

 

22,900

 

 

 

22,200

 

 

 

3.2

%

AIU

 

 

13,800

 

 

 

12,400

 

 

 

11.3

%

Total University Group

 

 

36,700

 

 

 

34,600

 

 

 

6.1

%

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

New Student Enrollments

 

2019

 

 

2018

 

 

% Change

 

 

2019

 

 

2018

 

 

% Change

 

CTU

 

 

6,500

 

 

 

6,520

 

 

 

-0.3

%

 

 

18,350

 

 

 

17,240

 

 

 

6.4

%

AIU

 

 

6,710

 

 

 

6,100

 

 

 

10.0

%

 

 

15,330

 

 

 

11,750

 

 

 

30.5

%

Total University Group

 

 

13,210

 

 

 

12,620

 

 

 

4.7

%

 

 

33,680

 

 

 

28,990

 

 

 

16.2

%



CEC ANNOUNCES 3Q19 RESULTS …PG 4

 

 

OPERATING INCOME (LOSS)

 

 

For the quarter ended September 30, 2019, operating income of $24.3 million increased 26.0 percent compared to $19.3 million for the prior year quarter.

 

For the year to date ended September 30, 2019, operating income of $54.4 million increased 6.5 percent compared to $51.1 million for the prior year to date.

 

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

Operating Income ($ in thousands)

 

2019

 

 

2018

 

 

% Change

 

 

2019

 

 

2018

 

 

% Change

 

CTU (1)

 

$

29,926

 

 

$

26,261

 

 

 

14.0

%

 

$

71,730

 

 

$

80,562

 

 

 

-11.0

%

AIU (2)

 

 

7,341

 

 

 

1,070

 

 

 

586.1

%

 

 

11,436

 

 

 

3,621

 

 

 

215.8

%

Total University Group

 

 

37,267

 

 

 

27,331

 

 

 

36.4

%

 

 

83,166

 

 

 

84,183

 

 

 

-1.2

%

Corporate and Other (3)

 

 

(12,973

)

 

 

(8,048

)

 

 

-61.2

%

 

 

(28,717

)

 

 

(33,068

)

 

 

13.2

%

Total

 

$

24,294

 

 

$

19,283

 

 

 

26.0

%

 

$

54,449

 

 

$

51,115

 

 

 

6.5

%

 

(1)

The year to date CTU operating income includes a reserve of $18.6 million related to the FTC settlement.

 

(2)

The year to date AIU operating income includes a reserve of $11.4 million related to the FTC settlement.

 

(3)

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 $8.2 million and $3.7 million for the quarters ended September 30, 2019 and 2018, respectively, and $12.8 million and $22.2 million for the years to date ended September 30, 2019 and 2018, respectively. The current quarter and year to date operating losses related to closed campuses includes a legal settlement reserve of $7.1 million related to the Oregon arbitration matter as compared to $9.6 million in the prior year to date related to the Surrett matter.

 

 



CEC ANNOUNCES 3Q19 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.)

 

For the quarter ended September 30, 2019, adjusted operating income of $34.0 million increased 31.7 percent compared to adjusted operating income of $25.8 million for the prior year quarter.

 

For the year to date ended September 30, 2019, adjusted operating income of $99.8 million increased 32.2 percent compared to adjusted operating income of $75.4 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)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Total Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

24,294

 

 

$

19,283

 

 

$

54,449

 

 

$

51,115

 

Depreciation and amortization

 

 

2,284

 

 

 

2,364

 

 

 

6,752

 

 

 

7,049

 

Lease expenses for vacated space (1)

 

 

295

 

 

 

2,114

 

 

 

1,453

 

 

 

5,774

 

Severance and related costs, net of cancellations (2)

 

 

-

 

 

 

1,898

 

 

 

-

 

 

 

1,898

 

Significant legal settlements (3)

 

 

7,100

 

 

 

134

 

 

 

37,100

 

 

 

9,595

 

Adjusted Operating Income --

Total Company

 

$

33,973

 

 

$

25,793

 

 

$

99,754

 

 

$

75,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

31.7

%

 

 

 

 

 

 

32.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

 

(2)

Severance and related costs, net of cancellations, include charges related to significant restructuring actions which were primarily recorded within the University Group. These restructuring charges do not regularly occur and are not considered part of ongoing results.

 

(3)

Significant legal settlements relate to the FTC and the Oregon arbitration matters recorded during 2019 and the Surrett matter recorded during 2018.

 

 



CEC ANNOUNCES 3Q19 RESULTS …PG 6

 

 

NET INCOME AND EARNINGS PER DILUTED SHARE

 

For the quarter ended September 30, 2019, the Company recorded:

 

Net income of $18.2 million compared to net income of $14.9 million for the prior year quarter.

 

Earnings per diluted share of $0.25 compared to earnings per diluted share of $0.21 for the prior year quarter.

 

Adjusted earnings per diluted share of $0.33 compared to adjusted earnings per diluted share of $0.25 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, 2019, the Company recorded:

 

Net income of $42.5 million compared to net income of $41.1 million for the prior year to date.

 

Earnings per diluted share of $0.59 compared to earnings per diluted share of $0.58 for the prior year to date.

 

Adjusted earnings per diluted share of $1.07 compared to adjusted earnings per diluted share of $0.76 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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Earnings Per Diluted Share

 

$

0.25

 

 

$

0.21

 

 

$

0.59

 

 

$

0.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax adjustments included in operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expenses for vacated space (1)

 

 

-

 

 

 

0.03

 

 

 

0.02

 

 

 

0.08

 

Severance and related costs, net of cancellations (2)

 

 

-

 

 

 

0.03

 

 

 

-

 

 

 

0.03

 

Significant legal settlements (3)

 

 

0.10

 

 

 

-

 

 

 

0.52

 

 

 

0.13

 

Total pre-tax adjustments

 

$

0.10

 

 

$

0.06

 

 

$

0.54

 

 

$

0.24

 

Tax effect of adjustments (4)

 

 

(0.02

)

 

 

(0.02

)

 

 

(0.06

)

 

 

(0.06

)

Total adjustments after tax

 

 

0.08

 

 

 

0.04

 

 

 

0.48

 

 

 

0.18

 

Adjusted Earnings Per Diluted Share

 

$

0.33

 

 

$

0.25

 

 

$

1.07

 

 

$

0.76

 

 

 

(1)

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

 

(2)

Severance and related costs, net of cancellations, include charges related to significant restructuring actions which were primarily recorded within the University Group. These restructuring charges do not regularly occur and are not considered part of ongoing results.

 

(3)

Significant legal settlements relate to the FTC and Oregon arbitration matters recorded during 2019 and the Surrett matter recorded during 2018.

 

(4)

The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate reflects federal and state taxable jurisdictions as well as the nature of the adjustments. The non-deductible amount of $23.3 million for the FTC settlement within the year to date ended September 30, 2019 does not include a tax effect.

 

 

 

 

 

 

 

 

 


CEC ANNOUNCES 3Q19 RESULTS …PG 7

 

 

BALANCE SHEET AND CASH FLOW

 

For the quarter ended September 30, 2019, net cash provided by operating activities was $32.0 million compared to net cash provided by operating activities of $3.5 million for the prior year quarter.

 

For the year to date ended September 30, 2019, net cash provided by operating activities was $85.4 million compared to net cash provided by operating activities of $18.3 million for the prior year to date.  

 

As of September 30, 2019, and December 31, 2018, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $311.8 million and $229.2 million, respectively. The restricted cash balance as of September 30, 2019 includes $30.0 million of funds held in escrow related to the FTC settlement which was subsequently paid during October 2019.

 

 

For the Quarter Ended September 30,

 

 

For the Year to Date Ended September 30,

 

Selected Cash Flow Items ($ in thousands)

 

2019

 

 

2018

 

 

% Change

 

 

2019

 

 

2018

 

 

% Change

 

Net cash provided by operating activities

 

$

31,977

 

 

$

3,541

 

 

 

803.0

%

 

$

85,391

 

 

$

18,295

 

 

 

366.7

%

Capital expenditures

 

$

1,812

 

 

$

1,215

 

 

 

49.1

%

 

$

3,220

 

 

$

3,952

 

 

 

-18.5

%

 

 

BOARD APPROVES NEW STOCK REPURCHASE PROGRAM

 

On November 4, 2019, the Board of Directors of the Company approved a new stock repurchase program which authorizes the Company to repurchase up to $50 million of the Company’s outstanding common stock. The timing of purchases and the number of shares repurchased under the new program will be determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors.

 

Repurchases will be made in open market transactions, including block purchases, conducted in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Repurchases may also be made pursuant to trading plans established under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws.

 

The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice. The program expires on December 31, 2021 and replaces all prior stock repurchase programs authorized by the Board of Directors.


CEC ANNOUNCES 3Q19 RESULTS …PG 8

 

 

OUTLOOK                                                                                                   

The Company raises its full year outlook primarily driven by year to date operating performance. The fourth quarter and full year 2019 outlook is 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:

 

o

Revenue growth of approximately 6.0 percent to 6.5 percent

 

o

Operating income in the range of $81.9 million to $83.9 million

 

o

Adjusted operating income in the range of $130.0 million to $132.0 million

 

o

Earnings per diluted share in the range of $0.84 to $0.86

 

o

Adjusted earnings per diluted share in the range of $1.32 to $1.34

 

 

Fourth quarter 2019 - total company:

 

o

Operating income in the range of $27.7 million to $29.7 million

 

o

Adjusted operating income in the range of $30.2 million to $32.2 million

 

o

Earnings per diluted share in the range of $0.26 to $0.28

 

o

Adjusted earnings per diluted share in the range of $0.27 to $0.29

University Group Enrollment Outlook:

 

 

CTU:

 

o

New and total student enrollments for the fourth quarter and full year are expected to grow as compared to the respective prior year periods.

 

 

AIU:

 

o

New and total student enrollments for the fourth quarter and full year are expected to grow as compared to the respective prior year periods, with the number of enrollment days in the fourth quarter relatively comparable to the prior year quarter and 8.2 percent higher for the full year as compared to the prior year pursuant to the academic calendar.

 

 

University Group:

 

o

New student enrollments are expected to increase approximately 12.0 percent to 13.0 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, and earnings per diluted share may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items such as 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 remains consistent with recent experience, (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” regulations, (iv) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (v) no 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, (vi) earnings per diluted share outlook assumes an effective income tax rate of approximately 32.5% for the fourth quarter and 30% for the full year, (vii) any impact from the Company’s stock repurchase program is excluded, and (viii) any results of operations from Trident University are 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 we make in the future as we continue to evaluate diverse strategies to enhance shareholder value may impact the outlook provided above.

 


CEC ANNOUNCES 3Q19 RESULTS …PG 9

 

 

CONFERENCE CALL INFORMATION

 

Career Education Corporation will host a conference call on Wednesday, November 6, 2019 at 5:30 p.m. Eastern time to discuss its third quarter and year to date 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 university 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 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 and recently adopted “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 (in particular as these risks and uncertainties may be exacerbated leading up to and following the 2020 U.S. presidential election); the operating impact of the settlements with the FTC and state attorneys general; the success of our initiatives to improve student experiences, retention and academic outcomes; the ability of our student admissions and advising 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 3Q19 RESULTS …PG 10

 

 

 

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)

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

47,411

 

 

$

32,394

 

Restricted cash

 

 

30,000

 

 

 

337

 

Short-term investments

 

 

234,415

 

 

 

196,428

 

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

 

 

311,826

 

 

 

229,159

 

 

 

 

 

 

 

 

 

 

Student receivables, net

 

 

29,913

 

 

 

28,751

 

Receivables, other, net

 

 

1,336

 

 

 

2,567

 

Prepaid expenses

 

 

7,645

 

 

 

7,771

 

Inventories

 

 

665

 

 

 

763

 

Other current assets

 

 

1,640

 

 

 

437

 

Total current assets

 

 

353,025

 

 

 

269,448

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

26,698

 

 

 

30,048

 

Right of use asset

 

 

52,016

 

 

 

-

 

Goodwill

 

 

87,356

 

 

 

87,356

 

Intangible assets, net

 

 

7,900

 

 

 

7,900

 

Student receivables, net

 

 

1,131

 

 

 

942

 

Deferred income tax assets, net

 

 

65,363

 

 

 

81,628

 

Other assets

 

 

5,140

 

 

 

4,993

 

Assets of discontinued operations

 

 

178

 

 

 

178

 

TOTAL ASSETS

 

$

598,807

 

 

$

482,493

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

$

12,109

 

 

$

-

 

Accounts payable

 

 

11,044

 

 

 

9,195

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related benefits

 

 

25,019

 

 

 

24,530

 

Advertising and marketing costs

 

 

11,896

 

 

 

9,300

 

Income taxes

 

 

1,675

 

 

 

1,472

 

Other

 

 

46,610

 

 

 

19,668

 

Deferred revenue

 

 

23,784

 

 

 

32,351

 

Liabilities of discontinued operations

 

 

3

 

 

 

536

 

Total current liabilities

 

 

132,140

 

 

 

97,052

 

 

 

 

 

 

 

 

 

 

NON-CURRENT  LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability - operating

 

 

54,904

 

 

 

-

 

Deferred rent obligations

 

-

 

 

 

12,745

 

Other liabilities

 

 

9,819

 

 

 

17,493

 

Total non-current liabilities

 

 

64,723

 

 

 

30,238

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

859

 

 

 

852

 

Additional paid-in capital

 

 

633,536

 

 

 

628,295

 

Accumulated other comprehensive gain (loss)

 

 

386

 

 

 

(298

)

Accumulated deficit

 

 

(9,445

)

 

 

(52,946

)

Treasury stock

 

 

(223,392

)

 

 

(220,700

)

Total stockholders' equity

 

 

401,944

 

 

 

355,203

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

598,807

 

 

$

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 September 30,

 

 

 

2019

 

 

% of

Total

Revenue

 

 

2018

 

 

% of

Total

Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees

 

$

154,291

 

 

 

99.6

%

 

$

144,882

 

 

 

99.4

%

Other

 

 

668

 

 

 

0.4

%

 

 

808

 

 

 

0.6

%

Total revenue

 

 

154,959

 

 

 

 

 

 

 

145,690

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

25,318

 

 

 

16.3

%

 

 

27,201

 

 

 

18.7

%

General and administrative

 

 

103,063

 

 

 

66.5

%

 

 

96,842

 

 

 

66.5

%

Depreciation and amortization

 

 

2,284

 

 

 

1.5

%

 

 

2,364

 

 

 

1.6

%

Total operating expenses

 

 

130,665

 

 

 

84.3

%

 

 

126,407

 

 

 

86.8

%

Operating income

 

 

24,294

 

 

 

15.7

%

 

 

19,283

 

 

 

13.2

%

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,698

 

 

 

1.1

%

 

 

950

 

 

 

0.7

%

Interest expense

 

 

(43

)

 

 

0.0

%

 

 

(108

)

 

 

-0.1

%

Miscellaneous income

 

 

97

 

 

 

0.1

%

 

 

32

 

 

 

0.0

%

Total other income

 

 

1,752

 

 

 

1.1

%

 

 

874

 

 

 

0.6

%

PRETAX INCOME

 

 

26,046

 

 

 

16.8

%

 

 

20,157

 

 

 

13.8

%

Provision for income taxes

 

 

7,653

 

 

 

4.9

%

 

 

5,089

 

 

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

18,393

 

 

 

11.9

%

 

 

15,068

 

 

 

10.3

%

Loss from discontinued operations, net of tax

 

 

(159

)

 

 

-0.1

%

 

 

(211

)

 

 

-0.1

%

NET INCOME

 

 

18,234

 

 

 

11.8

%

 

 

14,857

 

 

 

10.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(113

)

 

 

 

 

 

 

(21

)

 

 

 

 

Unrealized gain on investments

 

 

44

 

 

 

 

 

 

 

106

 

 

 

 

 

Total other comprehensive (loss) income

 

 

(69

)

 

 

 

 

 

 

85

 

 

 

 

 

COMPREHENSIVE INCOME

 

$

18,165

 

 

 

 

 

 

$

14,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.26

 

 

 

 

 

 

$

0.21

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

Net income per share

 

$

0.26

 

 

 

 

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE -DILUTED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.25

 

 

 

 

 

 

$

0.21

 

 

 

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

Net income per share

 

$

0.25

 

 

 

 

 

 

$

0.21

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

70,142

 

 

 

 

 

 

 

69,737

 

 

 

 

 

Diluted

 

 

72,142

 

 

 

 

 

 

 

71,790

 

 

 

 

 

 

 

 

 

 

 

 

 


 

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(In thousands, except per share amounts and percentages)

 

 

For the Year to Date Ended September 30,

 

 

 

2019

 

 

% of

Total

Revenue

 

 

2018

 

 

% of

Total

Revenue

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees

 

$

467,298

 

 

 

99.6

%

 

$

433,736

 

 

 

99.5

%

Other

 

 

1,955

 

 

 

0.4

%

 

 

2,055

 

 

 

0.5

%

Total revenue

 

 

469,253

 

 

 

 

 

 

 

435,791

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

76,995

 

 

 

16.4

%

 

 

84,437

 

 

 

19.4

%

General and administrative

 

 

331,057

 

 

 

70.5

%

 

 

293,190

 

 

 

67.3

%

Depreciation and amortization

 

 

6,752

 

 

 

1.4

%

 

 

7,049

 

 

 

1.6