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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Capella Education Company (MM) | NASDAQ:CPLA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 104.00 | 85.15 | 103.00 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Minnesota
(State or other jurisdiction of
incorporation or organization)
|
|
41-1717955
(I.R.S. Employer
Identification No.)
|
|
|
|
Capella Tower
225 South Sixth Street, 9
th
Floor
Minneapolis, Minnesota
(Address of principal executive offices)
|
|
55402
(Zip Code)
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
|
|
|
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
Emerging growth company
|
o
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
o
|
|
|
Page
|
|
PART I – FINANCIAL INFORMATION
|
|
|
|
|
Item 1
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
Item 1
|
||
Item 1A
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
Item 5
|
||
Item 6
|
||
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
117,885
|
|
|
$
|
106,566
|
|
Marketable securities, current
|
37,589
|
|
|
45,226
|
|
||
Accounts receivable, net of allowance of $7,865 at June 30, 2018 and $7,979 at December 31, 2017
|
24,229
|
|
|
22,733
|
|
||
Prepaid expenses and other current assets
|
10,027
|
|
|
9,523
|
|
||
Total current assets
|
189,730
|
|
|
184,048
|
|
||
Marketable securities, non-current
|
34,386
|
|
|
29,570
|
|
||
Property and equipment, net
|
34,781
|
|
|
35,961
|
|
||
Goodwill
|
13,477
|
|
|
13,477
|
|
||
Intangibles, net
|
3,162
|
|
|
3,402
|
|
||
Deferred income taxes
|
871
|
|
|
2,839
|
|
||
Other assets
|
10,358
|
|
|
9,724
|
|
||
Total assets
|
$
|
286,765
|
|
|
$
|
279,021
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,254
|
|
|
$
|
2,281
|
|
Accrued liabilities
|
27,815
|
|
|
26,619
|
|
||
Dividends payable
|
328
|
|
|
5,228
|
|
||
Deferred revenue
|
15,635
|
|
|
13,849
|
|
||
Total current liabilities
|
45,032
|
|
|
47,977
|
|
||
Deferred rent
|
11,890
|
|
|
12,365
|
|
||
Other liabilities
|
2,413
|
|
|
3,288
|
|
||
Total liabilities
|
59,335
|
|
|
63,630
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value: Authorized shares — 100,000, Issued and Outstanding shares — 11,730 at June 30, 2018 and 11,635 at December 31, 2017
|
117
|
|
|
116
|
|
||
Additional paid-in capital
|
124,431
|
|
|
127,804
|
|
||
Accumulated other comprehensive loss
|
(211
|
)
|
|
(110
|
)
|
||
Retained earnings
|
103,093
|
|
|
87,581
|
|
||
Total shareholders’ equity
|
227,430
|
|
|
215,391
|
|
||
Total liabilities and shareholders’ equity
|
$
|
286,765
|
|
|
$
|
279,021
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Unaudited)
|
||||||||||||||
Revenues
|
$
|
111,563
|
|
|
$
|
109,584
|
|
|
$
|
223,530
|
|
|
$
|
221,372
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Instructional costs and services
|
49,350
|
|
|
48,369
|
|
|
97,782
|
|
|
96,781
|
|
||||
Marketing and promotional
|
27,739
|
|
|
27,308
|
|
|
55,755
|
|
|
54,833
|
|
||||
Admissions advisory
|
7,205
|
|
|
7,440
|
|
|
14,397
|
|
|
15,103
|
|
||||
General and administrative
|
11,317
|
|
|
11,096
|
|
|
21,196
|
|
|
21,683
|
|
||||
Merger-related costs
|
873
|
|
|
—
|
|
|
1,395
|
|
|
—
|
|
||||
Total costs and expenses
|
96,484
|
|
|
94,213
|
|
|
190,525
|
|
|
188,400
|
|
||||
Operating income
|
15,079
|
|
|
15,371
|
|
|
33,005
|
|
|
32,972
|
|
||||
Other income, net
|
695
|
|
|
56
|
|
|
1,191
|
|
|
163
|
|
||||
Income from continuing operations before income taxes
|
15,774
|
|
|
15,427
|
|
|
34,196
|
|
|
33,135
|
|
||||
Income tax expense
|
3,984
|
|
|
4,672
|
|
|
8,559
|
|
|
11,209
|
|
||||
Income from continuing operations
|
11,790
|
|
|
10,755
|
|
|
25,637
|
|
|
21,926
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||
Net income
|
$
|
11,790
|
|
|
$
|
10,755
|
|
|
$
|
25,637
|
|
|
$
|
22,021
|
|
Basic net income per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.01
|
|
|
$
|
0.92
|
|
|
$
|
2.20
|
|
|
$
|
1.89
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Basic net income per common share
|
$
|
1.01
|
|
|
$
|
0.92
|
|
|
$
|
2.20
|
|
|
$
|
1.90
|
|
Diluted net income per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.99
|
|
|
$
|
0.90
|
|
|
$
|
2.14
|
|
|
$
|
1.83
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Diluted net income per common share
|
$
|
0.99
|
|
|
$
|
0.90
|
|
|
$
|
2.14
|
|
|
$
|
1.84
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,703
|
|
|
11,644
|
|
|
11,674
|
|
|
11,602
|
|
||||
Diluted
|
11,963
|
|
|
11,992
|
|
|
11,957
|
|
|
11,965
|
|
||||
Cash dividend declared per common share
|
$
|
0.43
|
|
|
$
|
0.41
|
|
|
$
|
0.86
|
|
|
$
|
0.82
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Unaudited)
|
||||||||||||||
Net income
|
$
|
11,790
|
|
|
$
|
10,755
|
|
|
$
|
25,637
|
|
|
$
|
22,021
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss)
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
3
|
|
||||
Unrealized gains (losses) on available for sale securities, net of tax
|
—
|
|
|
5
|
|
|
(99
|
)
|
|
87
|
|
||||
Comprehensive income
|
$
|
11,789
|
|
|
$
|
10,760
|
|
|
$
|
25,536
|
|
|
$
|
22,111
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating activities
|
(Unaudited)
|
||||||
Net income
|
$
|
25,637
|
|
|
$
|
22,021
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
95
|
|
||
Income from continuing operations
|
25,637
|
|
|
21,926
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for bad debts
|
5,870
|
|
|
5,225
|
|
||
Depreciation and amortization
|
9,638
|
|
|
10,112
|
|
||
Amortization of investment discount/premium, net
|
537
|
|
|
855
|
|
||
Impairment of property and equipment
|
916
|
|
|
440
|
|
||
Loss on disposal of property and equipment
|
89
|
|
|
243
|
|
||
Share-based compensation
|
4,571
|
|
|
3,479
|
|
||
Deferred income taxes
|
2,000
|
|
|
2,443
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
(7,366
|
)
|
|
(5,194
|
)
|
||
Prepaid expenses and other current assets
|
352
|
|
|
294
|
|
||
Accounts payable and accrued liabilities
|
(3,193
|
)
|
|
(8,565
|
)
|
||
Income taxes payable
|
(1,076
|
)
|
|
3,219
|
|
||
Deferred rent
|
(475
|
)
|
|
(735
|
)
|
||
Deferred revenue
|
1,866
|
|
|
2,413
|
|
||
Net cash provided by operating activities - continuing operations
|
39,366
|
|
|
36,155
|
|
||
Net cash provided by operating activities - discontinued operations
|
—
|
|
|
95
|
|
||
Net cash provided by operating activities
|
39,366
|
|
|
36,250
|
|
||
Investing activities
|
|
|
|
||||
Capital expenditures
|
(9,075
|
)
|
|
(12,116
|
)
|
||
Investment in partnership interests
|
(784
|
)
|
|
(354
|
)
|
||
Purchases of marketable securities
|
(33,702
|
)
|
|
(29,456
|
)
|
||
Maturities of marketable securities
|
35,855
|
|
|
35,995
|
|
||
Net cash used in investing activities - continuing operations
|
(7,706
|
)
|
|
(5,931
|
)
|
||
Net cash provided by investing activities - discontinued operations
|
—
|
|
|
3,243
|
|
||
Net cash used in investing activities
|
(7,706
|
)
|
|
(2,688
|
)
|
||
Financing activities
|
|
|
|
||||
Net proceeds (payments) for exercise of stock options
|
(333
|
)
|
|
1,273
|
|
||
Taxes paid for restricted stock units
|
(4,949
|
)
|
|
(905
|
)
|
||
Payment of dividends
|
(15,057
|
)
|
|
(9,479
|
)
|
||
Net cash used in financing activities - continuing operations
|
(20,339
|
)
|
|
(9,111
|
)
|
||
Effect of foreign exchange rates on cash
|
(2
|
)
|
|
2
|
|
||
Net increase in cash and cash equivalents
|
11,319
|
|
|
24,453
|
|
||
Cash and cash equivalents at beginning of period
|
106,566
|
|
|
93,570
|
|
||
Cash and cash equivalents at end of period
|
$
|
117,885
|
|
|
$
|
118,023
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Income taxes paid
|
$
|
7,712
|
|
|
$
|
5,562
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Purchase of equipment included in accounts payable and accrued liabilities
|
$
|
528
|
|
|
$
|
741
|
|
Declaration of cash dividend to be paid
|
$
|
—
|
|
|
$
|
4,847
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Post-Secondary revenue
|
|
|
|
|
|
|
|
||||||||
Tuition, net of discounts, grants, and scholarships
|
$
|
103,962
|
|
|
$
|
103,156
|
|
|
$
|
208,479
|
|
|
$
|
208,698
|
|
Other
1
|
4,576
|
|
|
3,818
|
|
|
9,244
|
|
|
7,757
|
|
||||
Total Post-Secondary revenue
|
108,538
|
|
|
106,974
|
|
|
217,723
|
|
|
216,455
|
|
||||
Job-Ready Skills revenue
2
|
3,025
|
|
|
2,610
|
|
|
5,807
|
|
|
4,917
|
|
||||
Consolidated revenue
|
$
|
111,563
|
|
|
$
|
109,584
|
|
|
$
|
223,530
|
|
|
$
|
221,372
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
11,790
|
|
|
$
|
10,755
|
|
|
$
|
25,637
|
|
|
$
|
21,926
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||
Net income
|
$
|
11,790
|
|
|
$
|
10,755
|
|
|
$
|
25,637
|
|
|
$
|
22,021
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic net income per common share— weighted average shares outstanding
|
11,703
|
|
|
11,644
|
|
|
11,674
|
|
|
11,602
|
|
||||
Effect of dilutive stock options, restricted stock, and market stock units
|
260
|
|
|
348
|
|
|
283
|
|
|
363
|
|
||||
Denominator for diluted net income per common share— weighted average shares outstanding
|
11,963
|
|
|
11,992
|
|
|
11,957
|
|
|
11,965
|
|
||||
Basic net income per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.01
|
|
|
$
|
0.92
|
|
|
$
|
2.20
|
|
|
$
|
1.89
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Basic net income per common share
|
$
|
1.01
|
|
|
$
|
0.92
|
|
|
$
|
2.20
|
|
|
$
|
1.90
|
|
Diluted net income per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.99
|
|
|
$
|
0.90
|
|
|
$
|
2.14
|
|
|
$
|
1.83
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Diluted net income per common share
|
$
|
0.99
|
|
|
$
|
0.90
|
|
|
$
|
2.14
|
|
|
$
|
1.84
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Anti-dilutive securities excluded from diluted earnings per share calculation, for both continuing and discontinued operations
|
—
|
|
|
121
|
|
|
16
|
|
|
106
|
|
|
As of June 30, 2018
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized (Losses)
|
|
Estimated Fair Value
|
||||||||
Tax-exempt municipal securities
|
$
|
26,248
|
|
|
$
|
4
|
|
|
$
|
(43
|
)
|
|
$
|
26,209
|
|
Corporate debt securities
|
36,478
|
|
|
11
|
|
|
(273
|
)
|
|
36,216
|
|
||||
Variable rate demand notes
|
9,550
|
|
|
—
|
|
|
—
|
|
|
9,550
|
|
||||
Total
|
$
|
72,276
|
|
|
$
|
15
|
|
|
$
|
(316
|
)
|
|
$
|
71,975
|
|
|
|
|
|
|
|
|
|
||||||||
|
As of December 31, 2017
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized (Losses)
|
|
Estimated Fair Value
|
||||||||
Tax-exempt municipal securities
|
$
|
35,070
|
|
|
$
|
—
|
|
|
$
|
(87
|
)
|
|
$
|
34,983
|
|
Corporate debt securities
|
16,102
|
|
|
8
|
|
|
(92
|
)
|
|
16,018
|
|
||||
Variable rate demand notes
|
23,795
|
|
|
—
|
|
|
—
|
|
|
23,795
|
|
||||
Total
|
$
|
74,967
|
|
|
$
|
8
|
|
|
$
|
(179
|
)
|
|
$
|
74,796
|
|
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||
Due within one year
|
$
|
37,589
|
|
|
$
|
45,226
|
|
Due after one year through five years
|
34,386
|
|
|
29,570
|
|
||
Total
|
$
|
71,975
|
|
|
$
|
74,796
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Maturities of marketable securities
|
$
|
24,055
|
|
|
$
|
25,455
|
|
|
$
|
35,855
|
|
|
$
|
35,995
|
|
Total
|
$
|
24,055
|
|
|
$
|
25,455
|
|
|
$
|
35,855
|
|
|
$
|
35,995
|
|
|
|
Fair Value Measurements as of June 30, 2018 Using
|
||||||||||||||
Description
|
|
Fair Value
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
8,059
|
|
|
$
|
8,059
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market
|
|
108,527
|
|
|
108,527
|
|
|
—
|
|
|
—
|
|
||||
Commercial paper
|
|
1,299
|
|
|
—
|
|
|
1,299
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Tax-exempt municipal securities
|
|
26,209
|
|
|
—
|
|
|
26,209
|
|
|
—
|
|
||||
Corporate debt securities
|
|
36,216
|
|
|
—
|
|
|
36,216
|
|
|
—
|
|
||||
Variable rate demand notes
|
|
9,550
|
|
|
—
|
|
|
9,550
|
|
|
—
|
|
||||
Total assets at fair value on a recurring basis
|
|
$
|
189,860
|
|
|
$
|
116,586
|
|
|
$
|
73,274
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements as of December 31, 2017 Using
|
||||||||||||||
Description
|
|
Fair Value
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
17,951
|
|
|
$
|
17,951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market
|
|
88,615
|
|
|
88,615
|
|
|
—
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Tax-exempt municipal securities
|
|
34,983
|
|
|
—
|
|
|
34,983
|
|
|
—
|
|
||||
Corporate debt securities
|
|
16,018
|
|
|
—
|
|
|
16,018
|
|
|
—
|
|
||||
Variable rate demand notes
|
|
23,795
|
|
|
—
|
|
|
23,795
|
|
|
—
|
|
||||
Total assets at fair value on a recurring basis
|
|
$
|
181,362
|
|
|
$
|
106,566
|
|
|
$
|
74,796
|
|
|
$
|
—
|
|
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||
Accrued compensation and benefits
|
$
|
10,836
|
|
|
$
|
9,151
|
|
Accrued instructional
|
3,588
|
|
|
3,662
|
|
||
Accrued vacation
|
1,493
|
|
|
1,122
|
|
||
Accrued invoices
|
9,820
|
|
|
10,683
|
|
||
Other
(1)
|
2,078
|
|
|
2,001
|
|
||
Total
|
$
|
27,815
|
|
|
$
|
26,619
|
|
2018
|
$
|
3,489
|
|
2019
|
5,782
|
|
|
2020
|
5,355
|
|
|
2021
|
4,742
|
|
|
2022
|
4,550
|
|
|
2023 and thereafter
|
28,305
|
|
|
Total
|
$
|
52,223
|
|
Board authorizations:
|
|
||
July 2008
|
$
|
60,000
|
|
August 2010
|
60,662
|
|
|
February 2011
|
65,000
|
|
|
December 2011
|
50,000
|
|
|
August 2013
|
50,000
|
|
|
December 2015
|
50,000
|
|
|
Total amount authorized
|
335,662
|
|
|
Total value of shares repurchased
|
308,702
|
|
|
Residual authorization
|
$
|
26,960
|
|
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Dividend per Share
|
|
Total Dividend Amount
|
||||
February 21, 2018
|
|
March 8, 2018
|
|
April 13, 2018
|
|
$
|
0.43
|
|
|
$
|
5,090
|
|
April 30, 2018
|
|
May 24, 2018
|
|
June 29, 2018
|
|
$
|
0.43
|
|
|
$
|
5,121
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Instructional costs and services
|
$
|
185
|
|
|
$
|
240
|
|
|
$
|
370
|
|
|
$
|
428
|
|
Marketing and promotional
|
237
|
|
|
257
|
|
|
473
|
|
|
468
|
|
||||
Admissions advisory
|
7
|
|
|
12
|
|
|
14
|
|
|
25
|
|
||||
General and administrative
|
2,391
|
|
|
1,696
|
|
|
3,714
|
|
|
2,558
|
|
||||
Share-based compensation expense included in operating income
|
2,820
|
|
|
2,205
|
|
|
4,571
|
|
|
3,479
|
|
||||
Tax benefit from share-based compensation expense
|
676
|
|
|
864
|
|
|
1,096
|
|
|
1,350
|
|
||||
Share-based compensation expense, net of tax
|
$
|
2,144
|
|
|
$
|
1,341
|
|
|
$
|
3,475
|
|
|
$
|
2,129
|
|
|
Foreign Currency Translation Loss
|
|
Unrealized Loss on Marketable Securities
|
|
Accumulated Other Comprehensive Loss
(1)
|
||||||
Beginning balance, December 31, 2017
|
$
|
(3
|
)
|
|
$
|
(107
|
)
|
|
$
|
(110
|
)
|
Other comprehensive income (loss)
|
(2
|
)
|
|
(99
|
)
|
|
(101
|
)
|
|||
Ending balance, June 30, 2018
|
$
|
(5
|
)
|
|
$
|
(206
|
)
|
|
$
|
(211
|
)
|
(1)
|
Accumulated other comprehensive loss is presented net of tax of
$95 thousand
and
$64 thousand
as of
June 30, 2018
and
December 31, 2017
, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Post-Secondary
|
$
|
108,538
|
|
|
$
|
106,974
|
|
|
$
|
217,723
|
|
|
$
|
216,455
|
|
Job-Ready Skills
|
3,025
|
|
|
2,610
|
|
|
5,807
|
|
|
4,917
|
|
||||
Consolidated Revenues
|
$
|
111,563
|
|
|
$
|
109,584
|
|
|
$
|
223,530
|
|
|
$
|
221,372
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
||||||||
Post-Secondary
|
$
|
18,029
|
|
|
$
|
17,754
|
|
|
$
|
37,473
|
|
|
$
|
38,005
|
|
Job-Ready Skills
|
(2,077
|
)
|
|
(2,383
|
)
|
|
(3,073
|
)
|
|
(5,033
|
)
|
||||
Merger-related costs
|
(873
|
)
|
|
—
|
|
|
(1,395
|
)
|
|
—
|
|
||||
Consolidated operating income
|
15,079
|
|
|
15,371
|
|
|
33,005
|
|
|
32,972
|
|
||||
Other income, net
|
695
|
|
|
56
|
|
|
1,191
|
|
|
163
|
|
||||
Income from continuing operations before income taxes
|
$
|
15,774
|
|
|
$
|
15,427
|
|
|
$
|
34,196
|
|
|
$
|
33,135
|
|
•
|
Capella University (the University) offers a variety of doctoral, master’s and bachelor’s programs, primarily for working adults, in the following markets: public service leadership, nursing and health sciences, social and behavioral sciences, business and technology, education, and undergraduate studies. We focus on master's and doctoral degrees, with 71% of our learners enrolled in a master’s or doctoral degree program. Our academic offerings are built with competency-based curricula and are delivered in an online format that is convenient and flexible. We design our offerings to help working adult learners develop specific competencies they can apply in their workplace. We actively support and engage with our learners throughout their programs to enhance their prospects for successful program completion. We believe the relevance of our programs, combined with a focus on working adult professionals and offering the most direct path to learners' professional and academic goals, sets Capella University apart in the education space. At
June 30, 2018
, we offered over 2,100 online courses and 53 academic programs with 143 specializations to nearly 38,000 learners.
|
•
|
Sophia Learning, LLC (Sophia) is an innovative learning company which leverages technology to support self-paced learning, including courses eligible for transfer into credit at over 2,000 colleges and universities.
|
•
|
Capella Learning Solutions, LLC (CLS) provides online, non-degree training solutions and services to individuals and corporate partners focused on the delivery of job-ready skills in high-demand employment areas, including
|
•
|
Hackbright Academy, Inc. (Hackbright) is a leading software engineering school for women with a mission to close the gender gap in the high-demand software engineering space. Hackbright’s primary offering is an intensive 12-week accelerated software development program for women, together with placement services and coaching. This program is a live, in-person educational experience held in Hackbright’s classrooms in the San Francisco Bay Area. Hackbright partners with employers to facilitate alumnae transition from program completion into the workplace.
|
•
|
DevMountain, LLC (DevMountain) is a leading software development school with a mission to be the most impactful coding school in the country by offering affordable, high-quality, leading-edge software coding education. DevMountain primarily offers Web Development, iOS Development, and UX Design programs in a 12- week immersive experience. Learners engage in DevMountain courses in-person, at DevMountain’s classrooms in Provo and Salt Lake City, Utah, Dallas, Texas, and Phoenix, Arizona. In 2017, DevMountain introduced its first online program in Web Development.
|
•
|
Innovation.
We operate in a very competitive market environment, and we have demonstrated that we can effectively compete and differentiate in our market. Our long-term success will depend on our ability to continue innovating around our competency-based learning capacities to develop new academic and business models. We
|
•
|
Capella University total enrollment.
Total enrollment at Capella University is a key driver for the Company’s revenue growth as well as operating performance. To achieve total enrollment growth, Capella University must attract new learners and maintain and/or improve learner persistence. Total enrollment growth requires both sustained new enrollment growth over several quarters as well as stable or improved learner persistence as a result of the large population of total enrollment (all learners) relative to new enrollment (first-time learners.) While new enrollment is an early indicator of future growth, early cohort persistence is an indicator of the sustainability of growth. These metrics should be viewed over multiple quarters because quarterly volatility is common. We have consistently improved early cohort persistence over a period of more than six years, and these persistence improvements carry into later periods. In the second quarter of 2018, end-of-period total enrollment grew by 0.5
percent year-over-year compared to total enrollment declines of 1.7 percent in the same period of 2017. Total enrollment growth was primarily driven by growth in bachelors and doctoral total enrollments.
|
•
|
Capella University new enrollment.
In the second quarter of 2018, Capella University new enrollment, calculated from the last day a new learner can drop a course without financial penalty, increased by 14.7 percent year-over-year compared to new enrollment declines of 9.6 percent in the same period in 2017. New enrollment growth occurred at all degree levels.
|
•
|
Persistence/learner succes
s. Compared to the same period in the prior year, Capella University early cohort persistence remained relatively unchanged. Early cohort persistence measures the four-quarter weighted moving average new cohort persistence rate during a learner's first four quarters of enrollment. We have experienced improvements in early cohort persistence of approximately 22 percent over a period of more than six years, in large part as a result of our successful execution of strategic, organization-wide learner success initiatives aimed at driving total enrollment growth and improved learner outcomes. This includes investments in infrastructure, analytics capabilities, learner support and a marketing strategy focused on attracting the right learners.
|
•
|
Investing in our actionable analytics capabilities to further leverage data, refine our models, and accurately predict the likelihood of prospective, new, and current learners persisting to critical thresholds of success and to help provide individualized paths to improve a learner's opportunity to succeed;
|
•
|
Providing timely and clear information to our learners, faculty, advisors and staff to help learners persist and successfully complete their programs;
|
•
|
Redesigning programs to improve academic quality, remove unintended barriers that can disrupt learner progression, and deliver operational process efficiencies;
|
•
|
Piloting, implementing, and optimizing programs such as assessments and orientations to create personalized pathways for different learner groups which focus on transitioning learners into the online environment, creating a supportive community, and providing a proactive support structure;
|
•
|
Optimizing our marketing approaches to increase emphasis on attracting learners who are more likely to persist in our programs;
|
•
|
Promoting affordability and encouraging learners to persist by offering learner success scholarships to new learners who meet admissions requirements, enroll, apply within certain timeframes, and stay continuously enrolled; and
|
•
|
Diversifying outside of Capella University by creating innovative new learning technologies which have potential to increase affordability and better serve the life-long learning needs of working adult professionals and therefore increase learner success.
|
•
|
Doctoral enrollment
. During the second quarter of 2018, doctoral total enrollment for Capella University increased by 0.9
percent compared to the same period in the prior year. Consistent doctoral total enrollment growth will depend on sustained new enrollment growth over several quarters as well as maintaining or improving learner success.
|
•
|
Marketing strategy.
During the course of the past few years, we have made significant strides in shifting from a demand driven strategy towards a comprehensive marketing strategy which is focused on building relationships with prospective learners early in their decision cycle. In addition, we are developing opportunities in the employer channel to build brand awareness and differentiation. With our vision of providing the most direct path between learning and employment and our dedication to serving the Job-Ready Skills market, we are changing the conversation with employers and are working to further strengthen and articulate our differentiation.
|
•
|
Introducing prospective learners to Capella with a differentiated message in channels such as mass media and strategic relationships with employers and professional organizations;
|
•
|
Connecting with prospective learners by generating and nurturing inquiries through direct media such as natural search, our website, display media, and through paid search platforms and aggregators; and
|
•
|
Engaging with prospective learners by developing meaningful and increasingly personalized relationships such as through social media, via mobile devices, or by way of direct engagement.
|
•
|
Offering a platform of capabilities which range from Capella University’s post-secondary degrees to shorter programs in the Job-Ready Skills software engineering and coding areas to targeted skill-building programs;
|
•
|
Developing new programs such as Capella University’s Workforce Edge, where an employee can earn a degree with little to no out-of-pocket costs when she or he leverages employer tuition reimbursement. This program enables employers to attract, support, and retain more productive employees utilizing a competency-based learning solution; and
|
•
|
Leveraging Capella University’s state of the art, competency-based direct assessment programs to offer employers innovative solutions that fit their learning objectives and their budgets and which provide reporting tools to track participants' competency development.
|
•
|
Establishing new growth platforms.
We seek to drive long-term growth that is an extension of our core competencies into new and expanded markets. One of our key growth platforms is FlexPath. FlexPath is a learning model that decouples from the credit-hour requirements and allows learners to complete coursework at their own pace through the demonstration of specific competencies. Capella University was the first institution with approval from the Higher Learning Commission and the Department of Education to offer and provide Title IV funding for direct assessment programs at both the Bachelor's and Master's degree levels. These approvals allow learners enrolled in FlexPath to apply for federal financial aid. Only a few other universities received approvals by their accreditor and the Department of Education to offer similar programs. Approval processes for this innovative model are stringent, and the Department of Education has indicated that direct assessment program specializations will also require specific approval by the Higher Learning Commission and the Department of Education to offer
|
•
|
Bachelor of Science in Business;
|
•
|
Bachelor of Science in Information Technology;
|
•
|
Bachelor of Science in Psychology;
|
•
|
Registered Nurse to Bachelor of Science in Nursing;
|
•
|
Master of Business Administration;
|
•
|
Master of Science in Psychology;
|
•
|
Master of Education;
|
•
|
Master of Health Administration; and
|
•
|
Master of Science in Nursing.
|
•
|
CLS offerings.
In 2013, the Company introduced the first set of CLS offerings - online training solutions and services to corporate partners. CLS focuses its offerings on non-degree training solutions and services to individuals and corporate partners focused on the delivery of job-ready skills in high-demand employment areas.
|
•
|
Coding schools performance.
Throughout 2017, Hackbright and DevMountain continued to develop their offerings. In May 2017, DevMountain received approval to begin operating in Phoenix, and in the fourth quarter 2017, DevMountain introduced its first online program offering. During the first six-months of 2018, Hackbright opened two new classrooms in the San Francisco Bay Area. Since the dates of acquisition, we have made investments in both businesses to position them for scalable growth and will continue to make additional investments for the foreseeable future. Although both acquisitions have had a positive impact on our revenue growth, Hackbright and DevMountain have not achieved the degree of revenue growth initially anticipated or met operating performance expectations, and these trends are expected to continue. As a result, during the year ended December 31, 2017, we recorded goodwill and intangible asset impairment charges of $15.0 million based on the results of the goodwill and intangible assets impairment analysis. If the overall trend in revenue growth and operating performance of the coding schools continues and operating improvements as discussed above are not realized, some or all of the remaining goodwill and intangible assets associated with the Coding Schools reporting unit could become impaired in the future, resulting in the recognition of additional impairment charges.
|
•
|
Redesign of programs and specializations
. We continue to evaluate our existing offerings for opportunities to drive affordability and speed to competency, enhance learner success, meet employer needs, maintain programmatic approvals and fulfill evolving regulatory standards. Utilizing our competency-based curriculum mapping, we are focused on maximizing efficiencies in our existing programs, resulting in improved learning and career outcomes.
|
•
|
Current
market and regulatory environment.
The environment remains very competitive. We believe our initiatives to improve learner success and innovation in our academic and business model, as well as our efforts to increase productivity and achieve greater economies of scale where possible, will position us to continue to be a leader in the online postsecondary education market. Additionally, we are working even more closely to align with employers. Developments in federal regulations may have an impact on us as well, including the Gainful
|
•
|
Tax Cuts and Jobs Act of 2017.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 ("Tax Reform") was signed into law making significant changes to the Internal Revenue Code. Changes included, but are not limited to, a corporate tax rate decrease from 35% to 21% and modification of the employee compensation limit effective for tax years beginning after December 31, 2017. The Company recorded income tax expense of
$4.0 million
and
$8.6 million
for the three and six months ended June 30, 2018, which reflects an effective tax rate of
25.3%
and
25.0%
, respectively. During the three and six months ended June 30, 2017, the Company recorded income tax expense of
$4.7 million
and
$11.2 million
, respectively, reflecting an effective tax rate of
30.3%
and
33.8%
, respectively. The decrease in income tax expense is primarily attributable to the reduction in the federal corporate income tax rate under Tax Reform.
|
•
|
U.S. Legislation and Congressional Activity.
It is unclear when Congress will reauthorize the Higher Education Act (HEA) which governs federal financial assistance for higher education. When reauthorization of HEA is considered, it will create opportunity to expand innovation in the delivery of higher education. As with any new legislation, there is also a risk of unintended consequences from new laws and regulatory requirements. Capella maintains strong relationships with policy makers and a reputation for quality. We will work to be a constructive voice in any dialogue on innovation in higher education.
|
•
|
Gainful Employment (GE) and Department of Education.
The final Gainful Employment rule went into effect on July 1, 2015. It applies to all GE programs, which include non-degree programs at public and private non-profit institutions, and all programs offered by proprietary institutions. The rule establishes a “debt-to-earnings” (DTE) ratio that GE programs must satisfy over the course of annual measurement periods to remain eligible for Title IV federal student aid. A program is determined to “pass” in a given year if the calculation shows that the graduates who received loans have annual loan payments less than 8% of total earnings OR less than 20% of discretionary earnings. A program is determined to “fail” in a given year if the calculation shows that graduates who received loans have annual loan payments greater than 12% of total earnings AND greater than 30% of discretionary earnings. A program is determined to be in the “Zone” in a given year if the program does not “pass,” AND if the calculation shows that graduates who received loans have annual loan payments between 8% and 12% of total earnings OR between 20% and 30% of discretionary earnings.
|
•
|
Current negotiated rulemaking.
On October 12, 2016 the Department of Education published final rules related to teacher preparation and the Teacher Education Assistance for College and Higher Education (TEACH) grant requirements for distance education programs. The regulations clarified that institutions that do not have initial teacher licensure programs have no obligation to report anything to any state under the new requirements. The final rules clarified that TEACH Grant funds are specifically available to students enrolled in graduate degree programs (which do not lead to initial teacher licensure) for teachers and others in high-need education fields. Capella University ended its participation in the TEACH Grant Program effective in October 2016. The published final rules were to be effective July 1, 2017; however, in early 2017, the United States Congress invoked the Congressional Review Act authority to overturn this regulation, which was signed into law by President Trump in March 2017.
|
•
|
State or Federal court or administrative tribunal judgment against a school related to the loan or the educational services for which the loan was made;
|
•
|
Breach of contract; or
|
•
|
Substantial misrepresentation by the school.
|
•
|
Minnesota Office of Higher Education (MOHE).
Capella University is registered as a private institution with the MOHE pursuant to Minnesota Statute sections 136A.61-131A.71 as required for most post-secondary private institutions that grant degrees at the associate level or above in Minnesota, and as required by the Higher Education Act to participate in Title IV programs.
|
•
|
State Authorization Reciprocity Agreement (SARA).
SARA is a nationwide state regulatory initiative intended to make distance education courses more accessible to learners across state lines and make it easier for states to regulate and institutions to participate in interstate distance education. On January 27, 2015, Minnesota joined SARA, and on March 6, 2015, Capella University was approved as an institutional participant in SARA. There are currently 49 SARA member states.
|
•
|
Program Participation Agreement.
The Department of Education approved Capella University's Program Participation Agreement (PPA) in August 2014. Capella University is fully certified by the Department of Education to participate in Title IV programs through June 30, 2020.
|
•
|
Student Loan Cohort Default Rates
. To remain eligible to participate in Title IV programs, an educational institution's student loan cohort default rates must remain below certain specified levels. Under current regulations, an educational institution will lose its eligibility to participate in Title IV programs if its three-year measuring period student loan cohort default rate equals or exceeds 30% for three consecutive cohort years, or 40% for any given year. Capella University's three-year cohort default rates for the 2014, 2013, and 2012 cohorts are 6.9%, 6.5%, and 8.9%, respectively. The average cohort default rates for proprietary institutions nationally were 15.5%, 15.0%, and 15.8% in cohort years 2014, 2013, and 2012, respectively. The average cohort default rates for all institutions nationally were 11.5%, 11.3%, and 11.8% in cohort years 2014, 2013 and 2012, respectively.
|
•
|
Higher Learning Commission.
The Higher Learning Commission, Capella University’s accrediting body, is continuously developing new standards and approval processes under which it evaluates programs and institutions. Consistent with that approach, on August 31, 2016, the Higher Learning Commission adopted policy changes which include giving the Commission more discretion to designate institutions to be in "financial distress” or under "government investigation.” In November 2017, the HLC announced additional policy changes to become effective September 1, 2019, mandating certain recruitment, admissions and related institutional practices, and in November 2017, the HLC introduced guidelines for shared services relationships. While the Company believes its strong reputation and compliance record will continue to place it in favorable standing with the Higher Learning Commission, compliance with the new policies may increase risk, cost and operational complexity.
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||
|
(Unaudited)
|
|
$ Change
|
|
% Change
|
|
% of Revenue
|
||||||||||||||||
$ in thousands
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Revenues
|
$
|
111,563
|
|
|
$
|
109,584
|
|
|
$
|
1,979
|
|
|
1.8
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
0.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Instructional costs and services
|
49,350
|
|
|
48,369
|
|
|
981
|
|
|
2.0
|
|
|
44.2
|
|
|
44.1
|
|
|
0.1
|
|
|||
Marketing and promotional
|
27,739
|
|
|
27,308
|
|
|
431
|
|
|
1.6
|
|
|
24.9
|
|
|
24.9
|
|
|
—
|
|
|||
Admissions advisory
|
7,205
|
|
|
7,440
|
|
|
(235
|
)
|
|
(3.2
|
)
|
|
6.5
|
|
|
6.8
|
|
|
(0.3
|
)
|
|||
General and administrative
|
11,317
|
|
|
11,096
|
|
|
221
|
|
|
2.0
|
|
|
10.1
|
|
|
10.1
|
|
|
—
|
|
|||
Merger-related costs
|
873
|
|
|
—
|
|
|
873
|
|
|
*
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Total costs and expenses
|
96,484
|
|
|
94,213
|
|
|
2,271
|
|
|
2.4
|
|
|
86.5
|
|
|
86.0
|
|
|
0.5
|
|
|||
Operating income
|
15,079
|
|
|
15,371
|
|
|
(292
|
)
|
|
(1.9
|
)
|
|
13.5
|
|
|
14.0
|
|
|
(0.5
|
)
|
|||
Other income, net
|
695
|
|
|
56
|
|
|
639
|
|
|
*
|
|
0.6
|
|
|
0.1
|
|
|
0.5
|
|
||||
Income before income taxes
|
15,774
|
|
|
15,427
|
|
|
347
|
|
|
2.2
|
|
|
14.1
|
|
|
14.1
|
|
|
—
|
|
|||
Income tax expense
|
3,984
|
|
|
4,672
|
|
|
(688
|
)
|
|
(14.7
|
)
|
|
3.6
|
|
|
4.3
|
|
|
(0.7
|
)
|
|||
Effective tax rate
|
25.3
|
%
|
|
30.3
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
11,790
|
|
|
$
|
10,755
|
|
|
$
|
1,035
|
|
|
9.6
|
%
|
|
10.6
|
%
|
|
9.8
|
%
|
|
0.8
|
%
|
|
June 30,
|
|
|
|||||
Capella University Enrollment by Degree
(a)
:
|
2018
|
|
2017
|
|
% Change
|
|||
Doctoral
|
9,129
|
|
|
9,052
|
|
|
0.9
|
%
|
Master's
|
17,540
|
|
|
17,714
|
|
|
(1.0
|
)%
|
Bachelor's
|
10,066
|
|
|
9,760
|
|
|
3.1
|
%
|
Other
|
1,051
|
|
|
1,062
|
|
|
(1.0
|
)%
|
Total
|
37,786
|
|
|
37,588
|
|
|
0.5
|
%
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
(Unaudited)
|
|
$ Change
|
|
% Change
|
|
% of Revenue
|
||||||||||||||||
$ in thousands
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
Revenues
|
$
|
223,530
|
|
|
$
|
221,372
|
|
|
$
|
2,158
|
|
|
1.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Instructional costs and services
|
97,782
|
|
|
96,781
|
|
|
1,001
|
|
|
1.0
|
|
|
43.7
|
|
|
43.7
|
|
|
—
|
|
|||
Marketing and promotional
|
55,755
|
|
|
54,833
|
|
|
922
|
|
|
1.7
|
|
|
24.9
|
|
|
24.8
|
|
|
0.1
|
|
|||
Admissions advisory
|
14,397
|
|
|
15,103
|
|
|
(706
|
)
|
|
(4.7
|
)
|
|
6.4
|
|
|
6.8
|
|
|
(0.4
|
)
|
|||
General and administrative
|
21,196
|
|
|
21,683
|
|
|
(487
|
)
|
|
(2.2
|
)
|
|
9.5
|
|
|
9.8
|
|
|
(0.3
|
)
|
|||
Merger-related costs
|
1,395
|
|
|
—
|
|
|
1,395
|
|
|
*
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Total costs and expenses
|
190,525
|
|
|
188,400
|
|
|
2,125
|
|
|
1.1
|
|
|
85.2
|
|
|
85.1
|
|
|
0.1
|
|
|||
Operating income
|
33,005
|
|
|
32,972
|
|
|
33
|
|
|
0.1
|
|
|
14.8
|
|
|
14.9
|
|
|
(0.1
|
)
|
|||
Other income, net
|
1,191
|
|
|
163
|
|
|
1,028
|
|
|
*
|
|
0.5
|
|
|
0.1
|
|
|
0.4
|
|
||||
Income from continuing operations before income taxes
|
34,196
|
|
|
33,135
|
|
|
1,061
|
|
|
3.2
|
|
|
15.3
|
|
|
15.0
|
|
|
0.3
|
|
|||
Income tax expense
|
8,559
|
|
|
11,209
|
|
|
(2,650
|
)
|
|
(23.6
|
)
|
|
3.8
|
|
|
5.1
|
|
|
(1.3
|
)
|
|||
Effective tax rate
|
25.0
|
%
|
|
33.8
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
25,637
|
|
|
21,926
|
|
|
3,711
|
|
|
16.9
|
|
|
11.5
|
|
|
9.9
|
|
|
1.6
|
|
|||
Income from discontinued operations, net of tax
|
—
|
|
|
95
|
|
|
(95
|
)
|
|
*
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
$
|
25,637
|
|
|
$
|
22,021
|
|
|
$
|
3,616
|
|
|
16.4
|
%
|
|
11.5
|
%
|
|
9.9
|
%
|
|
1.6
|
%
|
|
June 30,
|
|
|
|||||
Capella University Enrollment by Degree
(a)
:
|
2018
|
|
2017
|
|
% Change
|
|||
Doctoral
|
9,129
|
|
|
9,052
|
|
|
0.9
|
%
|
Master's
|
17,540
|
|
|
17,714
|
|
|
(1.0
|
)%
|
Bachelor's
|
10,066
|
|
|
9,760
|
|
|
3.1
|
%
|
Other
|
1,051
|
|
|
1,062
|
|
|
(1.0
|
)%
|
Total
|
37,786
|
|
|
37,588
|
|
|
0.5
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
(Unaudited)
|
|
$ Change
|
|
% Change
|
|
(Unaudited)
|
|
$ Change
|
|
% Change
|
||||||||||||||||||
$ in thousands
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Post-Secondary
|
$
|
108,538
|
|
|
$
|
106,974
|
|
|
$
|
1,564
|
|
|
1.5
|
%
|
|
$
|
217,723
|
|
|
$
|
216,455
|
|
|
$
|
1,268
|
|
|
0.6
|
%
|
Job-Ready Skills
|
3,025
|
|
|
2,610
|
|
|
415
|
|
|
15.9
|
|
|
5,807
|
|
|
4,917
|
|
|
890
|
|
|
18.1
|
|
||||||
Consolidated revenues
|
$
|
111,563
|
|
|
$
|
109,584
|
|
|
$
|
1,979
|
|
|
1.8
|
%
|
|
$
|
223,530
|
|
|
$
|
221,372
|
|
|
$
|
2,158
|
|
|
1.0
|
%
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Post-Secondary
|
$
|
18,029
|
|
|
$
|
17,754
|
|
|
$
|
275
|
|
|
1.5
|
%
|
|
$
|
37,473
|
|
|
$
|
38,005
|
|
|
$
|
(532
|
)
|
|
(1.4
|
)%
|
Job-Ready Skills
|
(2,077
|
)
|
|
(2,383
|
)
|
|
306
|
|
|
(12.8
|
)
|
|
(3,073
|
)
|
|
(5,033
|
)
|
|
1,960
|
|
|
(38.9
|
)
|
||||||
Merger-related costs
|
(873
|
)
|
|
—
|
|
|
(873
|
)
|
|
*
|
|
(1,395
|
)
|
|
—
|
|
|
(1,395
|
)
|
|
*
|
||||||||
Consolidated operating income
|
15,079
|
|
|
15,371
|
|
|
(292
|
)
|
|
(1.9
|
)
|
|
33,005
|
|
|
32,972
|
|
|
33
|
|
|
0.1
|
|
||||||
Other income, net
|
695
|
|
|
56
|
|
|
639
|
|
|
*
|
|
1,191
|
|
|
163
|
|
|
1,028
|
|
|
*
|
||||||||
Income from continuing operations before income taxes
|
$
|
15,774
|
|
|
$
|
15,427
|
|
|
$
|
347
|
|
|
2.2
|
%
|
|
$
|
34,196
|
|
|
$
|
33,135
|
|
|
$
|
1,061
|
|
|
3.2
|
%
|
Number
|
|
Description
|
|
Method of Filing
|
|
|
|
|
|
3.1
|
|
|
Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 20, 2006.
|
|
|
|
|
|
|
3.2
|
|
|
Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on December 10, 2008.
|
|
|
|
|
|
|
4.1
|
|
|
Incorporated by reference to Exhibit 4.1 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 20, 2006.
|
|
|
|
|
|
|
31.1
|
|
|
Filed electronically.
|
|
|
|
|
|
|
31.2
|
|
|
Filed electronically.
|
|
|
|
|
|
|
32.1
|
|
|
Filed electronically.
|
|
|
|
|
|
|
32.2
|
|
|
Filed electronically.
|
|
|
|
|
|
|
EX-101.INS
|
|
XBRL Instance Document
(1)
|
|
Filed electronically.
|
|
|
|
|
|
EX-101.SCH
|
|
XBRL Taxonomy Extension Schema Document
(1)
|
|
Filed electronically.
|
|
|
|
|
|
EX-101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
(1)
|
|
Filed electronically.
|
|
|
|
|
|
EX-101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
(1)
|
|
Filed electronically.
|
|
|
|
|
|
EX-101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
(1)
|
|
Filed electronically.
|
|
|
|
|
|
EX-101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
(1)
|
|
Filed electronically.
|
(1)
|
The XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
|
CAPELLA EDUCATION COMPANY
|
|
/s/ J. Kevin Gilligan
|
August 1, 2018
|
J. Kevin Gilligan
Chief Executive Officer
|
(Principal Executive Officer)
|
|
/s/ Steven L. Polacek
|
August 1, 2018
|
Steven L. Polacek
Senior Vice President and Chief Financial Officer
|
(Principal Financial and Accounting Officer)
|
|
1 Year Capella Education Company (MM) Chart |
1 Month Capella Education Company (MM) Chart |
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