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K12 Offers Guidance For FY 2013, Reaffirms First Call FY 2013 Consensus Estimates, And Provides Supplemental Historical Revenue And Enrollment Data

K12 Inc. (NYSE: LRN), a leading provider of proprietary, technology-based curriculum, software and education services created for individualized learning for students primarily in kindergarten through 12th grade, today announced guidance for the full fiscal year ending June 30, 2013 (“FY 2013”). The Company is also separately providing supplemental historical revenue and enrollment data.

Fiscal Year 2013 Outlook and Q1 Enrollment Data

The Company is forecasting the following for FY 2013:
  • Revenue of $840 million to $870 million
  • EBITDA of $107 million to $115 million (see GAAP reconciliation below)
  • Operating income of $45 million to $50 million
  • Depreciation and amortization expense of $60 million to $65 million
  • Capital expenditures including capitalized curriculum, capitalized software development, and property and equipment of approximately $55 million to $60 million
  • Capitalized leases for student computers of approximately $20 million to $25 million
  • Income tax rate of 42% to 44%

The mid-point of this guidance is consistent with FY 2013 estimates as posted on First Call through yesterday afternoon, which reported on a consensus basis revenue of $854.6 million, EBITDA of $112.1 million and operating income of $46.3 million. For Q1 FY 2013, average student enrollments in Managed Public Schools (defined below) were 121,704. For the International and Private Pay Business (defined below), total student enrollments were approximately 12,400 and total semester course enrollments were approximately 34,300.

Supplemental Historical Revenue and Enrollment Data

As described in the Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (the “FY 2012 Form 10-K”), the Company reclassified its three lines of business: Managed Public Schools (turn-key management services provided to public schools), Institutional Business (educational products and services provided to school districts, public schools and other educational institutions that it does not manage), and International and Private Pay Business (private schools for which it charges student tuition and makes direct consumer sales).
               

Managed Public Schools

Institutional Business

International and Private Pay Business

Full-time virtual schools

K12 curriculum

Managed private schools

Blended schools

Aventa curriculum
—The Keystone School

—Flex schools

A+ curriculum

—George Washington University Online HS

—Passport schools

Middlebury joint venture

—K 12 International Academy

—Discovery schools

Pre-kindergarten

—International School of Berne

—Other blended schools

Post-secondary

Web International Education Group, Ltd. (via investment)

Independent course sales (Consumer)
 

The FY 2012 Form 10-K did not disclose historical revenue or enrollment data, adjusted to reflect the reclassification of the lines of business. Accordingly, presented below is quarterly supplemental historical revenue and enrollment data for the last two completed fiscal years.

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