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Strayer Education, Inc. Reports Second Quarter 2012 Revenues And Earnings; And Summer Term 2012 Enrollments

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, 2011 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 six months
ended June 30, ended June 30,
2011   2012 2011   2012
Revenues $ 163,789 $ 146,254 $ 335,745 $ 295,786
Costs and expenses:
Instruction and educational support 76,373 75,652 151,349 149,416
Marketing 16,241 15,053 32,283 30,522
Admissions advisory 6,450 6,453 13,641 13,246
General and administration   14,580   12,928   29,102   25,576
Income from operations 50,145 36,168 109,370 77,026
Investment income 26 2 144 3
Interest expense   1,167   1,109   1,350   2,317
Income before income taxes 49,004 35,061 108,164 74,712
Provision for income taxes   19,357   13,849   42,726   29,511
Net income $ 29,647 $ 21,212 $ 65,438 $ 45,201
Earnings per share:
Basic $ 2.54 $ 1.86 $ 5.36 $ 3.96
Diluted $ 2.53 $ 1.85 $ 5.34 $ 3.94
Weighted average shares outstanding:
Basic 11,692 11,430 12,215 11,425
Diluted 11,737 11,483 12,263 11,480
Shares outstanding at end of quarter 12,009 11,874 12,009 11,874
Dividends per share $ 1.00 $ 1.00 $ 2.00 $ 2.00
 

 
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
   
December 31, June 30,
2011 2012
ASSETS
Current assets:
Cash and cash equivalents $ 57,137 $ 48,690
Tuition receivable, net of allowances for doubtful accounts of $7,279

and $7,317 at December 31, 2011 and June 30, 2012, respectively

25,006 24,218
Income taxes receivable 394 136
Other current assets   12,131     11,886  
Total current assets 94,668 84,930
Property and equipment, net 121,149 118,836
Deferred income taxes 3,326 4,708
Goodwill 6,800 6,800
Other assets   5,190     4,869  
Total assets $ 231,133   $ 220,143  
 
LIABILITIES & STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable and accrued expenses $ 34,039 $ 25,757
Unearned tuition 15,364 3,161
Other current liabilities 281 281
Current portion of term loan   27,500     30,000  
Total current liabilities 77,184 59,199
Revolving credit facility 20,000 15,000
Term loan, less current portion 70,000 55,000
Other long-term liabilities   21,656     21,697  
Total liabilities   188,840     150,896  
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 20,000,000 shares authorized;
11,792,456 and 11,874,290 shares issued and outstanding
at December 31, 2011 and June 30, 2012, respectively 118 119
Additional paid-in capital 295 5,731
Retained earnings 42,491 63,955
Accumulated other comprehensive income (loss)   (611 )   (558 )
Total stockholders' equity   42,293     69,247  
Total liabilities and stockholders’ equity $ 231,133   $ 220,143  
 

 
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
For the six months ended June 30,
2011   2012
Cash flows from operating activities:
Net income $ 65,438 $ 45,201
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of gain on sale of assets (140 ) (140 )
Amortization of deferred rent 599 148
Gain on sale of marketable securities (66 ) --
Amortization of deferred financing costs 264 399
Depreciation and amortization 10,165 11,749
Deferred income taxes (256 ) (1,531 )
Stock-based compensation 6,328 5,830
Changes in assets and liabilities:
Tuition receivable, net (338 ) 788
Other current assets (874 ) 357
Other assets 36 (133 )
Accounts payable and accrued expenses (2,936 ) (7,752 )
Income taxes payable and income taxes receivable 4,433 (136 )
Unearned tuition 4,503 (12,203 )
Other long-term liabilities   277     84  
Net cash provided by operating activities   87,433     42,661  
Cash flows from investing activities:
Purchases of property and equipment (18,062 ) (9,871 )
Purchases of marketable securities (2 ) --
Proceeds from the sale of marketable securities   12,388     --  
Net cash used in investing activities   (5,676 )   (9,871 )
Cash flows from financing activities:
Common dividends paid (25,183 ) (23,737 )
Repurchase of common stock (182,664 ) --
Proceeds from revolving credit facility 95,000 28,000
Payments on revolving credit facility (80,000 ) (33,000 )
Proceeds from term loan 100,000 --
Payments on term loan -- (12,500 )
Payment of deferred financing costs   (2,459 )   --  
Net cash used in financing activities   (95,306 )   (41,237 )
Net decrease in cash and cash equivalents (13,549 ) (8,447 )
Cash and cash equivalents – beginning of period   64,107     57,137  
Cash and cash equivalents – end of period $ 50,558   $ 48,690  
Non-cash transactions:
Purchases of property and equipment included in accounts payable $ 2,267 $ 585




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