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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Perdoceo Education Corporation | NASDAQ:PRDO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.8028 | 3.36% | 24.7028 | 21.75 | 24.65 | 24.05 | 23.60 | 23.92 | 400,165 | 05:00:02 |
Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2023.
Full Year 2023 Results as Compared to Prior Year
Fourth Quarter 2023 Results as Compared to Prior Year Quarter
*See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release
"We delivered strong results for the full year 2023, supported by ongoing improvements in student retention and engagement across both our academic institutions,” said Todd Nelson, President and Chief Executive Officer. “We remain committed to making investments in our student support teams and technology that we believe will further enhance student retention and academic outcomes across both our academic institutions.”
REVENUE
For the Quarter Ended December 31,
For the Year Ended December 31,
Revenue ($ in thousands)
2023
2022
% Change
2023
2022
% Change
CTU
$
104,590
$
108,446
-3.6
%
$
468,926
$
419,617
11.8
%
AIUS
43,172
67,445
-36.0
%
240,300
274,479
-12.5
%
Corporate and Other
157
254
NM
778
1,112
NM
Total
$
147,919
$
176,145
-16.0
%
$
710,004
$
695,208
2.1
%
TOTAL STUDENT ENROLLMENTS
At December 31,
Total Student Enrollments(1)
2023
2022
% Change
CTU
26,000
25,200
3.2
%
AIUS
8,500
14,000
-39.3
%
Total
34,500
39,200
-12.0
%
(1)
Total student enrollments do not include learners pursuing: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities.
OPERATING INCOME
For the Quarter Ended December 31,
For the Year Ended December 31,
Operating Income ($ in thousands)
2023
2022
% Change
2023
2022
% Change
CTU
$
25,376
$
34,082
-25.5
%
$
144,008
$
141,622
1.7
%
AIUS
600
3,469
-82.7
%
45,283
33,315
35.9
%
Corporate and Other
(10,033
)
(14,877
)
NM
(38,845
)
(45,300
)
NM
Total
$
15,943
$
22,674
-29.7
%
$
150,446
$
129,637
16.1
%
ADJUSTED OPERATING INCOME
The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)
For the Quarter Ended December 31,
For the Year Ended December 31,
Adjusted Operating Income ($ in thousands)
2023
2022
2023
2022
Operating income
$
15,943
$
22,674
$
150,446
$
129,637
Depreciation and amortization (1)
3,449
4,878
16,887
19,734
Legal fee expense related to certain matters (2)
5
4,869
7,579
14,597
Adjusted Operating Income
$
19,397
$
32,421
$
174,912
$
163,968
Increase (Decrease)
-40.2
%
6.7
%
(1)
Amortization relates to definite-lived intangible assets associated with acquisitions.
(2)
Legal fee expense associated with (i) responses to the Department of Education (the “Department”) relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
NET INCOME AND EARNINGS PER DILUTED SHARE
For the quarter ended December 31, 2023, the Company recorded:
For the year ended December 31, 2023, the Company recorded:
For the Quarter Ended December 31,
For the Year Ended December 31,
2023
2022
2023
2022
Reported Earnings Per Diluted Share
$
0.26
$
0.23
$
2.18
$
1.39
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (1)
0.02
0.03
0.11
0.11
Legal fee expense related to certain matters (2)
-
0.07
0.11
0.21
Gain on sale of intangible asset (3)
-
-
(0.32
)
-
Tax effect of adjustments (4)
(0.01
)
(0.02
)
0.02
(0.08
)
Adjusted Earnings Per Diluted Share
$
0.27
$
0.31
$
2.10
$
1.63
(1)
Amortization relates to definite-lived intangible assets associated with acquisitions.
(2)
Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
(3)
Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.
(4)
The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.
DIVIDEND PAYMENT
The board of directors declared a quarterly dividend as part of the Company’s dividend policy of $0.11 per share, which will be paid on March 15, 2024 for holders of record of common stock as of March 1, 2024. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company’s available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating acquisitions and share repurchases.
STOCK REPURCHASE PROGRAM
The board of directors approved a new stock repurchase program commencing March 1, 2024 which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. The program expires September 30, 2025 and replaces the existing stock repurchase program that expires on September 30, 2024.
BALANCE SHEET AND CASH FLOW
For the Quarter Ended December 31,
For the Year Ended December 31,
Selected Cash Flow Items ($ in thousands)
2023
2022
% Change
2023
2022
% Change
Net cash provided by operating activities
$
13,192
$
40,546
-67.5
%
$
112,025
$
148,186
-24.4
%
Capital expenditures
$
1,610
$
3,515
-54.2
%
$
6,411
$
12,620
-49.2
%
2024 FINANCIAL OUTLOOK
The Company is providing the following 2024 outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details.
Total Company Outlook
For Quarter Ending March 31,
For the Year Ending December 31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2024
2023
2024
2023
Operating Income
$40.1M - $42.1M
$43.3M
$154.6M - $174.6M
$150.4M
Depreciation and amortization
$2.9M
$5.2M
$12.4M
$16.9M
Legal fee expense related to certain matters (1)
-
$4.6M
$3.0M
$7.6M
Adjusted Operating Income
$43.0M - $45.0M
$53.1M
$170.0M - $190.0M
$174.9M
Earnings Per Diluted Share
$0.52 - $0.54
$0.50
$1.96 - $2.18
$2.18
Amortization of acquired intangible assets
$0.02
$0.04
$0.07
$0.11
Legal fee expense related to certain matters (1)
-
$0.07
$0.04
$0.11
Gain on sale of intangible asset
-
-
-
($0.32)
Tax effect of adjustments
($0.01)
($0.03)
($0.03)
$0.02
Adjusted Earnings Per Diluted Share
$0.53 - $0.55
$0.58
$2.04 - $2.26
$2.10
(1)
Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share, which is the most directly comparable GAAP measure to adjusted earnings per diluted share, may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2024 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and trends in student retention and engagement remain consistent with management’s recent experiences, (ii) no significant impact of new or proposed regulations, or new interpretations of existing regulations, including recent Department negotiated rulemaking initiatives, FTC enforcement activity, FCC rulemaking or other adverse changes in the legal or regulatory environment or our institutions participation in Title IV programs, which may require further operational changes in the way the Company’s academic institutions market to, contact, enroll, support and educate current and prospective students, among other impacts, (iii) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (iv) the impact from federal student aid initiatives implemented by the current administration remains consistent with management's estimates, (v) no significant impact from the further delays by the Department to its implementation of a simplified FAFSA required by the FAFSA Simplification Act and the related delay of providing institutions with students' relevant aid eligibility and award information, (vi) earnings per diluted share outlook assumes an effective income tax rate of approximately 25.5% for the first quarter and approximately 26% for the full year, and (vii) excludes any future impact from the Company’s stock repurchase program. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above.
CONFERENCE CALL INFORMATION
Perdoceo Education Corporation will host a conference call on Wednesday, February 21, 2024 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2023 results and 2024 outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-888-596-4144 (domestic) or 1-646-968-2525 (international). Both dial-in numbers will use the access code 6410615. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/980571149. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days at www.perdoceoed.com in the Investor Relations section of the website.
ABOUT PERDOCEO EDUCATION CORPORATION
Perdoceo’s accredited academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company’s academic institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Perdoceo’s academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. Perdoceo's institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com.
Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “believe,” “will,” “expect,” “continue,” “outlook,” “remain,” “focused on,” “should” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs or our ability to market to and contact prospective students; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the terms of any potential changes to or conditions imposed on our continued participation in the Title IV programs under new program participation agreements, the new 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of “borrower defense to repayment” regulations; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; rulemaking or changing interpretations of existing regulations, guidance or historical practices by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued ability to participate in educational assistance programs for key employers, veterans or other military personnel; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. 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 year ended December 31, 2023 and its subsequent filings with the Securities and Exchange Commission.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31,
December 31,
2023
2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted
$
118,009
$
109,408
Restricted cash
1,012
9,476
Short-term investments
485,135
399,315
Total cash and cash equivalents, restricted cash and short-term investments
604,156
518,199
Student receivables, net
29,398
42,551
Receivables, other
4,539
3,457
Prepaid expenses
11,712
8,411
Inventories
5,004
1,904
Other current assets
155
597
Total current assets
654,964
575,119
NON-CURRENT ASSETS:
Property and equipment, net
21,371
26,038
Right of use asset, net
19,096
26,156
Goodwill
241,162
243,540
Intangible assets, net
36,219
53,564
Student receivables, net
3,859
1,850
Deferred income tax assets, net
23,804
24,613
Other assets
6,841
6,488
TOTAL ASSETS
$
1,007,316
$
957,368
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating
$
5,701
$
6,555
Accounts payable
10,766
13,518
Accrued expenses:
Payroll and related benefits
32,684
40,306
Advertising and marketing costs
7,196
8,977
Income taxes
3,974
7,814
Other
13,503
14,621
Deferred revenue
37,215
71,590
Total current liabilities
111,039
163,381
NON-CURRENT LIABILITIES:
Lease liability - operating
21,346
27,286
Other liabilities
33,510
40,856
Total non-current liabilities
54,856
68,142
STOCKHOLDERS' EQUITY:
Preferred stock
-
-
Common stock
903
894
Additional paid-in capital
694,798
684,183
Accumulated other comprehensive loss
(666
)
(5,447
)
Retained earnings
480,606
347,839
Treasury stock
(334,220
)
(301,624
)
Total stockholders' equity
841,421
725,845
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,007,316
$
957,368
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
For the Quarter Ended December 31,
2023
% of Total Revenue
2022
% of Total Revenue
REVENUE:
Tuition and fees, net
$
146,822
99.3
%
$
174,012
98.8
%
Other
1,097
0.7
%
2,133
1.2
%
Total revenue
147,919
176,145
OPERATING EXPENSES:
Educational services and facilities
30,223
20.4
%
31,217
17.7
%
General and administrative
92,756
62.7
%
114,610
65.1
%
Depreciation and amortization
3,449
2.3
%
4,878
2.8
%
Asset impairment
5,548
3.8
%
2,766
1.6
%
Total operating expenses
131,976
89.2
%
153,471
87.1
%
Operating income
15,943
10.8
%
22,674
12.9
%
OTHER INCOME:
Interest income
6,421
4.3
%
3,169
1.8
%
Interest expense
(116
)
-0.1
%
(102
)
-0.1
%
Miscellaneous income (expense)
129
0.1
%
(1,313
)
-0.7
%
Total other income
6,434
4.3
%
1,754
1.0
%
PRETAX INCOME
22,377
15.1
%
24,428
13.9
%
Provision for income taxes
5,189
3.5
%
8,473
4.8
%
NET INCOME
17,188
11.6
%
15,955
9.1
%
NET INCOME PER SHARE - BASIC:
$
0.26
$
0.24
NET INCOME PER SHARE -DILUTED:
$
0.26
$
0.23
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
65,610
67,165
Diluted
67,185
68,423
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Quarter Ended December 31,
(In Thousands)
2023
2022
NET INCOME
$
17,188
$
15,955
OTHER COMPREHENSIVE INCOME, net of tax:
Foreign currency translation adjustments
53
217
Unrealized gain on investments
4,280
653
Total other comprehensive income
4,333
870
COMPREHENSIVE INCOME
$
21,521
$
16,825
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
For the Year Ended December 31,
2023
% of Total Revenue
2022
% of Total Revenue
REVENUE:
Tuition and fees, net
$
702,920
99.0
%
$
687,672
98.9
%
Other
7,084
1.0
%
7,536
1.1
%
Total revenue
710,004
695,208
OPERATING EXPENSES:
Educational services and facilities
130,324
18.4
%
116,723
16.8
%
General and administrative
398,084
56.1
%
426,120
61.3
%
Depreciation and amortization
16,887
2.4
%
19,734
2.8
%
Asset impairment
14,263
2.0
%
2,994
0.4
%
Total operating expenses
559,558
78.8
%
565,571
81.4
%
Operating income
150,446
21.2
%
129,637
18.6
%
OTHER INCOME:
Interest income
19,980
2.8
%
6,866
1.0
%
Interest expense
(404
)
-0.1
%
(400
)
-0.1
%
Miscellaneous income (expense)
22,099
3.1
%
(1,834
)
-0.3
%
Total other income
41,675
5.9
%
4,632
0.7
%
PRETAX INCOME
192,121
27.1
%
134,269
19.3
%
Provision for income taxes
44,469
6.3
%
38,402
5.5
%
NET INCOME
147,652
20.8
%
95,867
13.8
%
NET INCOME PER SHARE - BASIC:
$
2.22
$
1.41
NET INCOME PER SHARE -DILUTED:
$
2.18
$
1.39
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
66,468
67,934
Diluted
67,826
69,031
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year Ended December 31,
(In Thousands)
2023
2022
NET INCOME
$
147,652
$
95,867
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Foreign currency translation adjustments
45
(166
)
Unrealized gain (loss) on investments
4,736
(5,185
)
Total other comprehensive income (loss)
4,781
(5,351
)
COMPREHENSIVE INCOME
$
152,433
$
90,516
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year Ended December 31,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
147,652
$
95,867
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment
14,263
2,994
Gain on sale of asset
(22,086
)
-
Depreciation and amortization expense
16,887
19,734
Bad debt expense
33,215
41,574
Compensation expense related to share-based awards
8,078
8,751
Deferred income taxes
3,761
(720
)
Changes in operating assets and liabilities:
Student receivables, gross
15,929
6,380
Allowance for credit losses
(38,573
)
(38,992
)
Receivables, other
(3,922
)
(1,670
)
Inventories, prepaid expenses, and other current assets
(2,994
)
2,640
Other non-current assets
478
843
Accounts payable
(4,878
)
1,922
Accrued expenses and other non-current liabilities
(19,235
)
22,332
Deferred revenue
(34,375
)
(11,767
)
Right of use asset and lease liabilities
(2,175
)
(1,702
)
Net cash provided by operating activities
112,025
148,186
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments
(314,279
)
(492,100
)
Sales of available-for-sale investments
238,184
262,277
Purchases of property and equipment
(6,411
)
(12,620
)
Business acquisitions, net of cash acquired
-
(84,308
)
Earnout payment related to business acquisition
(6,000
)
-
Net cash used in investing activities
(88,506
)
(326,751
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock
(8,301
)
(23,117
)
Issuance of common stock
2,545
1,197
Payments of employee tax associated with stock compensation
(2,209
)
(1,612
)
Payments of cash dividends
(14,417
)
-
Release of cash held in escrow
(1,000
)
(4,197
)
Net cash used in financing activities
(23,382
)
(27,729
)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
137
(206,294
)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period
118,884
325,178
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period
$
119,021
$
118,884
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
For the Quarter Ended December 31,
2023 (1)
2022
REVENUE:
CTU
$
104,590
$
108,446
AIUS
43,172
67,445
Corporate and Other
157
254
Total
$
147,919
$
176,145
OPERATING INCOME (LOSS):
CTU
$
25,376
$
34,082
AIUS
600
3,469
Corporate and Other
(10,033
)
(14,877
)
Total
$
15,943
$
22,674
OPERATING MARGIN (LOSS):
CTU
24.3
%
31.4
%
AIUS
1.4
%
5.1
%
Corporate and Other
NM
NM
Total
10.8
%
12.9
%
(1)
Results of operations include an acquisition completed on December 1, 2022 within CTU.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
For the Year Ended December 31,
2023 (1)
2022 (1)
REVENUE:
CTU
$
468,926
$
419,617
AIUS
240,300
274,479
Corporate and Other
778
1,112
Total
$
710,004
$
695,208
OPERATING INCOME (LOSS):
CTU
$
144,008
$
141,622
AIUS
45,283
33,315
Corporate and Other
(38,845
)
(45,300
)
Total
$
150,446
$
129,637
OPERATING MARGIN (LOSS):
CTU
30.7
%
33.8
%
AIUS
18.8
%
12.1
%
Corporate and Other
NM
NM
Total
21.2
%
18.6
%
(1)
Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)
(In thousands, unless otherwise noted)
For the Quarter Ended December 31,
For the Year Ended December 31,
ACTUAL
ACTUAL
Adjusted Operating Income
2023
2022
2023
2022
Operating income
$
15,943
$
22,674
$
150,446
$
129,637
Depreciation and amortization (2)
3,449
4,878
16,887
19,734
Legal fee expense related to certain matters (3)
5
4,869
7,579
14,597
Adjusted Operating Income
$
19,397
$
32,421
$
174,912
$
163,968
For the Quarter Ending March 31,
For the Year Ending December 31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2024
2023
2024
2023
Operating income
$40.1M - $42.1M
$
43,336
$154.6M - $174.6M
$
150,446
Depreciation and amortization (2)
$2.9M
5,155
$12.4M
16,887
Legal fee expense related to certain matters (3)
-
4,619
$3.0M
7,579
Adjusted Operating Income
$43.0M - $45.0M
$
53,110
$170.0M - $190.0M
$
174,912
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)
For the Quarter Ended December 31,
For the Year Ended December 31,
ACTUAL
ACTUAL
2023
2022
2023
2022
Reported Earnings Per Diluted Share
$
0.26
$
0.23
$
2.18
$
1.39
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)
0.02
0.03
0.11
0.11
Legal fee expense related to certain matters (3)
-
0.07
0.11
0.21
Gain on sale of intangible asset (4)
-
-
(0.32
)
-
Total pre-tax adjustments
$
0.02
$
0.10
$
(0.10
)
$
0.32
Tax effect of adjustments (5)
(0.01
)
(0.02
)
0.02
(0.08
)
Total adjustments after tax
0.01
0.08
(0.08
)
0.24
Adjusted Earnings Per Diluted Share
$
0.27
$
0.31
$
2.10
$
1.63
For the Quarter Ending March 31,
For the Year Ending December 31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2024
2023
2024
2023
Reported Earnings Per Diluted Share
$0.52 - $0.54
$
0.50
$1.96 - $2.18
$
2.18
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)
$0.02
0.04
$0.07
0.11
Legal fee expense related to certain matters (3)
-
0.07
$0.04
0.11
Gain on sale of intangible asset (4)
-
-
-
(0.32
)
Total pre-tax adjustments
$0.02
$
0.11
$0.11
$
(0.10
)
Tax effect of adjustments (5)
($0.01)
(0.03
)
($0.03)
0.02
Total adjustments after tax
$0.01
0.08
$0.08
(0.08
)
Adjusted Earnings Per Diluted Share
$0.53 - $0.55
$
0.58
$2.04 - $2.26
$
2.10
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)
(1)
The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance.
The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. The Company believes the items it is adjusting for are not normal operating expenses reflective of its underlying business. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity.
Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.
Results of operations include the Coding Dojo acquisition as of December 1, 2022 and the CalSouthern acquisition as of July 1, 2022.
(2)
Amortization for acquired intangible assets relate to definite-lived intangible assets associated with acquisitions.
(3)
Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
(4)
Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.
(5)
The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221341398/en/
Investors: Alpha IR Group Davis Snyder or Nick Nelson (312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com
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