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, 2014 (“FY 2014”) and the first fiscal quarter of 2014.
Fiscal Year 2014 Outlook
The Company is forecasting the following for FY 2014:
- Revenue of $905 million to $925 million.
- Operating income in the range of $53 million to $57 million, with a corresponding expansion of operating margin to a range of 5.7% to 6.3% in fiscal 2014.
- Capital expenditures, defined as curriculum development, software development, purchases of property and equipment and capitalized leases for student computers, of $75 million to $85 million.
- Income tax rate of 40% to 42%.
The Company also reported on October 8, 2013 that its Q1 FY 2014 average student enrollments in Managed Public Schools were 128,550, an increase of 5.7% over Q1 FY 2013. Applications for enrollment into the Company’s Managed Public Schools, which is a major indicator of demand for the Company’s products and services, rose 11% for the 2013 enrollment period versus the same period in the prior year.The increase in Managed Public School enrollments fell short of previous expectations due to several factors, which include, among others:
- The Company’s inability to convert the increased volume of student applications into enrollments at a level achieved during previous years due to performance in its enrollment centers and, to a lesser extent;
- The delayed start of the open enrollment period for certain schools.
- Revenues to increase 3% to 4% over first quarter FY 2013. This is lower than the Company’s full year growth mainly due to timing of school openings and revenue recognition rules.
- Operating loss in the range of $8 million to $10 million. Operating income / (loss) in the first quarter is negatively impacted by timing of revenue and seasonality of SG&A costs which includes enrollment center and promotional expenses.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV