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Grand Canyon Education, Inc. Reports Fourth Quarter And Full Year 2010 Results

PHOENIX, Feb. 22, 2011 (GLOBE NEWSWIRE) -- Grand Canyon Education, Inc. (Nasdaq:LOPE), a regionally accredited provider of online and campus-based post-secondary education services, today announced financial results for the three months and year ended December 31, 2010.

For the three months ended December 31, 2010:

  • Net revenues increased 29.1% to $100.0 million for the fourth quarter of 2010, compared to $77.5 million for the fourth quarter of 2009.
  • At December 31, 2010 our enrollment was 41,482, compared to 37,709 at December 31, 2009. Enrollment at December 31, 2010 represents individual students who attended a course during the last two months of the calendar quarter. Prior to our transition to BBAY, enrollment had been defined as individual students that attended a course in a term that was in session as of the end of the quarter. We estimated that enrollment at December 31, 2009 under the revised methodology would have been between 34,000 and 35,000.
  • Operating income for the fourth quarter of 2010 was $11.3 million, compared to $17.9 million for the same period in 2009. The operating margin for the fourth quarter of 2010 was 11.3%, compared to 23.1% for the same period in 2009. Excluding the contract termination fees related to the termination of a contract with a related party and the charitable contributions we made in lieu of state income taxes, operating income and operating margin for the fourth quarter were $21.5 million and 21.5%, respectively. Excluding the estimated exit costs associated with our closing of the Utah call center and the charitable contributions we made in lieu of state income taxes, operating income and operating margin for the fourth quarter of 2009 were $19.8 million and 25.6%, respectively.
  • Adjusted EBITDA increased 15.1% to $26.5 million for the fourth quarter of 2010, compared to $23.0 million for the same period in 2009.
  • The tax rate in the fourth quarter of 2010 was 31.9% compared to 37.2% in the fourth quarter of 2009. Excluding the $1.0 million and $0.8 million of contributions made in lieu of state income taxes in the fourth quarter of 2010 and 2009, respectively, our effective tax rate would have been 37.5% and 39.8% in the fourth quarter of 2010 and 2009, respectively.
  • Net income decreased 31.8% to $7.6 million for the fourth quarter of 2010, compared to $11.1 million for the same period in 2009. 
  • Diluted net income per share was $0.16 for the fourth quarter of 2010, compared to $0.24 for the same period in 2009. Excluding the contract termination fees related to the termination of a contract with a related party net of taxes of $5.5 million, diluted net income per share was $0.29 for the fourth quarter of 2010.   Excluding the estimated exit costs net of taxes of $0.7 million, diluted net income per share was $0.26 for the fourth quarter of 2009.

For the fiscal year ended December 31, 2010:

  • Net revenues increased 47.3% to $385.8 million for fiscal 2010, compared to $261.9 million for fiscal 2009.
  • Operating income for fiscal 2010 was $73.5 million, compared to $46.6 million for fiscal 2009. The operating margin for fiscal 2010 was 19.1%, compared to 17.8% for fiscal 2009. Excluding the contract termination fees related to the termination of a contract with a related party and contributions made in lieu of state taxes, operating income was $83.8 million and operating margin was 21.7% for the year ended December 31, 2010. Excluding the estimated litigation loss, estimated exit costs and contributions made in lieu of state taxes, operating income was $53.7 million and operating margin was 20.5% for the year ended December 31, 2009.
  • Adjusted EBITDA increased 55.4% to $101.2 million for fiscal 2010, compared to $65.1 million for fiscal 2009.
  • The tax rate for fiscal 2010 was 39.1% compared to 39.7% for fiscal 2009.
  • Net income increased 62.5% to $44.4 million for fiscal 2010, compared to $27.3 million for fiscal 2009.
  • Diluted net income per share was $0.96 for fiscal 2010, compared to $0.60 for fiscal 2009. Excluding the contract termination fees related to the termination of a contract with a related party, net of taxes, diluted net income per share was $1.08 for the year ended December 31, 2010. Excluding the estimated litigation loss and estimated exit costs, net of taxes, diluted net income per share was $0.69 for the year ended December 31, 2009.

Balance Sheet and Cash Flow

As of December 31, 2010, the University had unrestricted cash, cash equivalents and marketable securities of $33.6 million compared to $63.1 million in cash and cash equivalents at the end of 2009 and restricted cash, cash equivalents and investments at December 31, 2010 and 2009 of $52.9 million and $3.2 million, respectively. As a result of our move to BBAY, the University receives a greater proportion of student financial aid prior to the time courses have begun, which has resulted in the shift of unrestricted cash to restricted cash and caused a significant increase in our restricted cash amount between December 31, 2009 and 2010. 

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