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TheStreet Open House

National American University Holdings, Inc. Reports Fiscal 2013 First Quarter Results

Conference Call Information

Management will discuss these results in a conference call (with accompanying presentation) on October 4, 2012, at 11:00 a.m. EDT.

The dial-in numbers are:
(877) 407-8033 (U.S.)
(201) 689-8033 (International)
 

Accompanying Slide Presentation and Webcast

The Company will also have an accompanying slide presentation available in PDF format at the “Investor Relations” section of the NAU website at http://www.national.edu/InvestorRelations. The presentation will be made available 30 minutes prior to the conference call. In addition, the call will be simultaneously webcast over the Internet via the “Investor Relations” section of the NAU website or by clicking on the conference call link: http://www.investorcalendar.com/IC/CEPage.asp?ID=169773.

About National American University Holdings, Inc.

National American University Holdings, Inc., through its wholly owned subsidiary, operates National American University (“NAU”), a regionally accredited, proprietary, multi-campus institution of higher learning offering associate, bachelor’s, and master’s degree programs in health care and business-related disciplines. Accredited by The Higher Learning Commission and a member of the North Central Association of Colleges and Schools, NAU has been providing technical and professional career education since 1941. NAU opened its first campus in Rapid City, South Dakota, and has since grown to multiple locations throughout the central United States. In 1998, NAU began offering online courses. Today, NAU offers degree programs in traditional, online, and hybrid formats, which provide students increased flexibility to take courses at times and places convenient to their busy lifestyles.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company's business. Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current beliefs and expectations and involve a number of assumptions. These forward-looking statements include outlooks or expectations for earnings, revenues, expenses or other future financial or business performance, strategies or expectations, or the impact of legal or regulatory matters on business, results of operations or financial condition. Specifically, forward-looking statements may include statements relating to the future financial performance of the Company; the ability to continue to receive Title IV funds; the growth of the market for the Company’s services; expansion plans and opportunities; consolidation in the market for the Company’s services generally; and other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions. These forward-looking statements involve a number of known and unknown risks and uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by those forward-looking statements. Other factors that could cause the Company’s results to differ materially from those contained in its forward-looking statements are included under, among others, the heading “Risk Factors” in the Company’s Annual Report on Form 10-K, filed on August 3, 2012, and in its other filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this release.

 
NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. AND SUBSIDIARIES
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED AUGUST 31, 2012 AND AUGUST 31, 2011
(In thousands except share data)
 
  Three Months Ended
August 31,
2012   2011
REVENUE:
Academic revenue $ 26,477 $ 23,700
Auxiliary revenue 2,699 1,427
Rental income — apartments   274     270  
 
Total revenue   29,450     25,397  
 
OPERATING EXPENSES:
Cost of educational services 7,135 6,352
Selling, general and administrative 20,421 16,775
Auxiliary expense 1,843 640
(Gain) loss on disposition of property   73     (132 )
 
Total operating expenses   29,472     23,635  
 
OPERATING INCOME (LOSS)   (22 )   1,762  
 
OTHER INCOME (EXPENSE):
Interest income 31 41
Interest expense (253 ) 0
Other income — net   35     31  
 
Total other income (expense)   (187 )   72  
 
INCOME (LOSS) BEFORE INCOME TAXES (209 ) 1,834
 
INCOME TAX (EXPENSE) BENEFIT   58     (728 )
 
NET INCOME (LOSS) (151 ) 1,106
 
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST   (13 )   (83 )
 
NET INCOME (LOSS) ATTRIBUTABLE TO NATIONAL AMERICAN UNIVERSITY
HOLDINGS, INC. AND SUBSIDIARIES (164 ) 1,023
 
OTHER COMPREHENSIVE LOSS —

Unrealized losses on investments, before tax

(22 ) (12 )
Income tax benefit related to items of other comprehensive loss   0     0  
OTHER COMPREHENSIVE LOSS, NET OF TAX   (22 )   (12 )
 

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.

$ (186 ) $ 1,011  
 
Basic net earnings (loss) attributable to National American University Holdings, Inc. $ (0.01 ) $ 0.04
 
Diluted net earnings (loss) attributable to National American University Holdings, Inc. $ (0.01 ) $ 0.04
 
Basic weighted average shares outstanding 25,574,478 26,710,881
Diluted weighted average shares outstanding 25,574,478 27,076,548
 
 

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. AND SUBSIDIARIES

 
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF AUGUST 31, 2012 AND AUDITED CONDENSED
CONSOLIDATED BALANCE SHEET AS OF MAY 31, 2012
(In thousands except share data)
 
  August 31,   May 31,
2012 2012
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 16,427 $ 15,658
Available for sale investments 11,403 14,917

Student receivables — net of allowance of $821 and $759 at August 31, 2012 and May 31, 2012, respectively

3,801 2,804
Other receivables 421 366
Bookstore inventory 0 6
Income tax receivable 1,640 974
Deferred income taxes 1,334 1,914
Prepaid and other current assets   367     613  
Total current assets   35,393     37,252  
 
Total Property and Equipment - Net   42,108     40,496  
 
OTHER ASSETS:
Condominium inventory 2,667 2,667
Land held for future development 312 312

Course development — net of accumulated amortization of $1,799 and $1,715 at August 31, 2012 and May 31, 2012, respectively

1,239 1,241
Other   1,176     1,130  
  5,394     5,350  
 
TOTAL $ 82,895   $ 83,098  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Current portion of capital lease payable $ 47 $ 40
Accounts payable 5,613 4,175
Dividends payable 1,032 840
Student accounts payable 663 659
Deferred income 221 236
Accrued and other liabilities   5,983     6,717  
Total current liabilities   13,559     12,667  
 
DEFERRED INCOME TAXES   5,098     5,098  
 
OTHER LONG-TERM LIABILITIES   4,197     4,161  
 
CAPITAL LEASE PAYABLE, NET OF CURRENT PORTION   10,447     10,460  
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS' EQUITY:
Common stock, $0.0001 par value (50,000,000 authorized; 28,059,307 issued and 25,575,540 outstanding as of August 31, 2012; 28,057,891 issued and 25,574,124 outstanding as of May 31, 2012) 3 3
Additional paid-in capital 57,282 57,203
Retained earnings 10,051 11,239
Treasury stock, at cost (2,483,767 shares at August 31, 2012 and May 31, 2012) (17,589 ) (17,589 )
Accumulated other comprehensive income, net of taxes - unrealized gain on available for sale securities   3     25  
Total National American University Holdings, Inc. stockholders' equity   49,750     50,881  
Net income attributable to non-controlling interest (156 ) (169 )
Total equity   49,594     50,712  
 
TOTAL $ 82,895   $ 83,098  
 

The following table provides a reconciliation of net income attributable to the Company to EBITDA:

 

Three Months Ended August 31,

2012     2011
(dollars in thousands)
Net Income attributable to the Company ($164 ) $1,023
Income (Loss) attributable to non-controlling interest   13   83
Interest Income (31 ) (41 )
Interest Expense 253 0
Income Taxes (58 ) 728
Depreciation and Amortization   1,351     879  
 
EBITDA $1,364 $2,672
 

Consists of income attributable to the Company, less income from non-controlling interest, plus loss from non-controlling interest, minus interest income, plus interest expense (which is not related to any debt but to the accounting required for the capital lease), plus income taxes, plus depreciation and amortization. The Company uses EBITDA as a measure of operating performance. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing its operating performance, investors should use EBITDA in addition to, and not as an alternative for, income as determined in accordance with GAAP. Because not all companies use identical calculations, its presentation of EBITDA may not be comparable to similarly titled measures of other companies and is therefore limited as a comparative measure. Furthermore, as an analytical tool, EBITDA has additional limitations, including that (a) it is not intended to be a measure of free cash flow, as it does not consider certain cash requirements such as tax payments; (b) it does not reflect changes in, or cash requirements for, its working capital needs; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements, or future requirements for capital expenditures or contractual commitments. To compensate for these limitations, the Company evaluates its profitability by considering the economic effect of the excluded expense items independently as well as in connection with its analysis of cash flows from operations and through the use of other financial measures.

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