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Strayer Education, Inc. Reports Third Quarter 2011 Revenues And Earnings; And Fall Term 2011 Enrollments

Stocks in this article: STRA

For more information on Strayer Education, Inc. visit www.strayereducation.com and for Strayer University visit www.strayer.edu.

Forward-Looking Statements

This press release contains statements that are forward looking and are made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “will,” “forecast,” “plan,” “project,” or similar words. The statements are based on the Company’s current expectations and are subject to a number of assumptions, uncertainties and risks. In connection with the safe-harbor provisions of the Reform Act, the Company has identified important factors that could cause the Company’s actual results to differ materially from those expressed in or implied by such statements. The assumptions, uncertainties and risks include the pace of growth of student enrollment, our continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as regional accreditation standards and state regulatory requirements, rulemaking by the Department of Education and increased focus by the U. S. Congress on for-profit education institutions, competitive factors, risks associated with the opening of new campuses, risks associated with the offering of new educational programs and adapting to other changes, risks relating to the timing of regulatory approvals, our ability to implement our growth strategy, risks associated with the ability of our students to finance their education in a timely manner, and general economic and market conditions. 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 fiscal year ended December 31, 2010 and in its subsequent filings with the Securities and Exchange Commission, all of which are incorporated herein by reference and which are available from the Commission. We undertake no obligation to update or revise forward looking statements.

       
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
 
For the three months For the nine months
ended September 30, ended September 30,
2010 2011 2010 2011
Revenues $ 147,597 $ 135,865 $ 464,781 $ 471,610
Costs and expenses:
Instruction and educational support 65,759 68,170 195,404 219,519
Marketing 23,621 23,351 51,933 55,634
Admissions advisory 6,583 6,533 18,693 20,174
General and administration   13,385   13,406   41,885   42,508
Income from operations 38,249 24,405 156,866 133,775
Investment income 331 5 822 149
Interest expense   --   1,209   --   2,559
Income before income taxes 38,580 23,201 157,688 131,365
Provision for income taxes   15,239   9,266   62,311   51,992
Net income $ 23,341 $ 13,935 $ 95,377 $ 79,373
Earnings per share:
Basic $ 1.73 $ 1.20 $ 7.04 $ 6.61
Diluted $ 1.72 $ 1.20 $ 6.98 $ 6.58
Weighted average shares outstanding:
Basic 13,467 11,623 13,542 12,016
Diluted 13,557 11,647 13,663 12,055
Shares outstanding at end of quarter 13,589 12,006 13,589 12,006
Dividends per share (paid) $ 0.75 $ 1.00 $ 2.25 $ 3.00
 

   
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
 
December 31, September 30,
2010 2011
ASSETS
Current assets:
Cash and cash equivalents $ 64,107 $ 57,071
Marketable securities available for sale, at fair value 12,386 --

Tuition receivable, net of allowances for doubtful accounts of $7,935 and $7,025 at December 31, 2010 and September 30, 2011, respectively

22,011 21,200
Other current assets   10,231   12,785  
Total current assets 108,735 91,056
Property and equipment, net 116,063 121,898
Deferred income taxes 8,374 7,412
Restricted cash 500 500
Other assets   1,506   3,339  
Total assets $ 235,178 $ 224,205  
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:

 

Accounts payable $ 31,280 $ 38,014
Accrued expenses 10,512 4,862
Income taxes payable 934 2,620
Unearned tuition 3,523 14,612
Other current liabilities 281 281
Current portion of term loan   --   22,500  
Total current liabilities 46,530 82,889
Revolving credit facility -- 5,000
Term loan, less current portion -- 77,500
Other long-term liabilities   12,644   15,066  
Total liabilities   59,174   180,455  
Commitments and contingencies
Stockholders’ equity:

Common stock, par value $0.01; 20,000,000 shares authorized; 13,316,822 and 12,006,075 shares issued and outstanding at December 31, 2010 and September 30, 2011, respectively

133 120
Additional paid-in capital 1,206 6,059
Retained earnings 174,625 38,411
Accumulated other comprehensive income (loss)   40   (840 )
Total stockholders’ equity   176,004   43,750  
Total liabilities and stockholders’ equity $ 235,178 $ 224,205  
 

 
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 

For the nine months ended

September 30,

2010   2011
Cash flows from operating activities:
Net income $ 95,377 $ 79,373
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of marketable securities (118 ) (66 )
Amortization of gain on sale of assets (211 ) (211 )
Amortization of deferred rent 54 885
Depreciation and amortization 12,813 15,779
Amortization of deferred financing costs -- 463
Deferred income taxes (3,474 ) 941
Stock-based compensation 8,984 9,798
Changes in assets and liabilities:
Tuition receivable, net (3,479 ) 811
Other current assets (2,869 ) (2,580 )
Other assets (257 ) 80
Accounts payable 20,574 10,155
Accrued expenses 3,638 (5,650 )
Income taxes payable (9,056 ) 1,585
Excess tax benefits from stock-based payment arrangements (2,808 ) --
Unearned tuition 21,553 11,089
Deferred lease incentives   725     297  
Net cash provided by operating activities   141,446     122,749  
Cash flows from investing activities:
Purchases of property and equipment (32,067 ) (24,887 )
Purchases of marketable securities (523 ) (2 )
Proceeds from the sale of marketable securities   12,500     12,388  
Net cash used in investing activities   (20,090 )   (12,501 )
Cash flows from financing activities:
Common dividends paid (31,224 ) (37,161 )
Proceeds from exercise of stock options 452 --
Excess tax benefits from stock-based payment arrangements 2,808 --
Repurchase of common stock (73,228 ) (182,664 )
Proceeds from revolving credit facility -- 100,000
Payments on revolving credit facility -- (95,000 )
Proceeds from term loan -- 100,000
Payment of deferred financing costs   --     (2,459 )
Net cash used in financing activities   (101,192 )   (117,284 )
Net increase (decrease) in cash and cash equivalents 20,164 (7,036 )
Cash and cash equivalents – beginning of period   63,958     64,107  
Cash and cash equivalents – end of period $ 84,122   $ 57,071  
Non-cash transactions:
Purchases of property and equipment included in accounts payable $ 2,667 $ 2,087
 




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