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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 22.01 | 13.94 | 25.10 | 0 | 09:00:00 |
Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended September 30, 2022.
Third Quarter 2022 Results as Compared to Prior Year Quarter
Year to Date 2022 Results as Compared to Prior Year to Date
*See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release
"During the quarter, student retention and engagement experienced meaningful improvements, and we now expect our full year operating income to be higher than the previously provided outlook,” said Andrew Hurst, Chief Executive Officer. “Our balance sheet remains strong, and we continue to make investments in data analytics and technology and evaluate acquisition opportunities that further extend the depth and breadth of our educational offerings."
REVENUE
For the Quarter Ended September 30,
For the Year to Date Ended September 30,
Revenue ($ in thousands)
2022(1)
2021
% Change
2022(1)
2021
% Change
CTU
$
97,562
$
104,788
-6.9
%
$
311,171
$
312,645
-0.5
%
AIUS
70,582
68,948
2.4
%
207,034
219,648
-5.7
%
Corporate and Other
276
262
NM
858
882
NM
Total
$
168,420
$
173,998
-3.2
%
$
519,063
$
533,175
-2.6
%
(1)
AIUS’ results of operations include an acquisition completed on July 1, 2022.
TOTAL STUDENT ENROLLMENTS
At September 30,
Total Student Enrollments(1)
2022
2021
% Change
CTU
26,500
25,800
2.7
%
AIUS
15,200
16,800
-9.5
%
Total
41,700
42,600
-2.1
%
(1)
Total student enrollments do not include learners participating in: a) non-degree seeking professional development and continuing education offerings, and b) degree seeking, non-Title IV, self-paced programs at our universities
OPERATING INCOME
For the Quarter Ended September 30,
For the Year to Date Ended September 30,
Operating Income ($ in thousands)
2022(1)
2021
% Change
2022(1)
2021
% Change
CTU
$
31,506
$
41,217
-23.6
%
$
107,540
$
112,758
-4.6
%
AIUS
9,590
8,334
15.1
%
29,846
28,875
3.4
%
Corporate and Other
(11,772
)
(11,690
)
NM
(30,423
)
(27,193
)
NM
Total
$
29,324
$
37,861
-22.5
%
$
106,963
$
114,440
-6.5
%
(1)
AIUS’ results of operations include an acquisition completed on July 1, 2022.
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 September 30,
For the Year to Date Ended September 30,
Adjusted Operating Income ($ in thousands)
2022
2021
2022
2021
Operating income
$
29,324
$
37,861
$
106,963
$
114,440
Depreciation and amortization (1)
5,065
3,887
14,856
11,802
Legal fee expense related to certain matters (2)
4,294
4,583
9,728
7,241
Adjusted Operating Income
$
38,683
$
46,331
$
131,547
$
133,483
Increase (Decrease)
-16.5
%
-1.5
%
(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 September 30, 2022, the Company recorded:
For the year to date ended September 30, 2022, the Company recorded:
For the Quarter Ended September 30,
For the Year to Date Ended September 30,
2022
2021
2022
2021
Reported Earnings Per Diluted Share
$
0.32
$
0.39
$
1.16
$
1.19
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (1)
0.03
0.01
0.08
0.03
Legal fee expense related to certain matters (2)
0.06
0.06
0.14
0.10
Tax effect of adjustments (3)
(0.02
)
(0.01
)
(0.06
)
(0.03
)
Adjusted Earnings Per Diluted Share
$
0.39
$
0.45
$
1.32
$
1.29
(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)
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.
BALANCE SHEET AND CASH FLOW
For the Quarter Ended September 30,
For the Year to Date Ended September 30,
Selected Cash Flow Items ($ in thousands)
2022
2021
% Change
2022
2021
% Change
Net cash provided by operating activities
$
52,861
$
61,461
-14.0
%
$
107,640
$
144,206
-25.4
%
Business acquisitions, net of cash acquired
$
32,037
$
56,947
-43.7
%
$
39,037
$
56,947
-31.5
%
Capital expenditures
$
2,340
$
3,217
-27.3
%
$
9,105
$
6,276
45.1
%
OUTLOOK
The Company is raising its full year outlook, supported by improved student retention and engagement, and is also providing the following fourth quarter 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 December 31,
For the Year Ending December 31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2022
2021
2022
2021
Operating Income
$17.3M - $20.3M
$34.6M
$124.2M - $127.2M
$149.0M
Depreciation and amortization
$5.2M
$4.9M
$20.1M
$16.8M
Legal fee expense related to certain matters (1)
$3.0M
$2.5M
$12.7M
$9.7M
Adjusted Operating Income
$25.5M - $28.5M
$42.0M
$157.0M - $160.0M
$175.5M
Earnings Per Diluted Share
$0.22 - $0.25
$0.35
$1.37 - $1.40
$1.55
Amortization of acquired intangible assets
$0.03
$0.03
$0.11
$0.06
Legal fee expense related to certain matters (1)
$0.04
$0.04
$0.19
$0.14
Tax effect of adjustments
($0.02)
($0.02)
($0.08)
($0.05)
Adjusted Earnings Per Diluted Share
$0.27 - $0.30
$0.40
$1.59 - $1.62
$1.70
(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 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 2022 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and student retention remain consistent with management’s estimates, (ii) no significant impact of new or proposed regulations, including recent Department of Education negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, (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) earnings per diluted share outlook assumes an effective income tax rate of approximately 25.0% for the fourth quarter and 27.0% for the full year, and (v) any future impact from the Company’s stock repurchase program is excluded. 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 Monday, November 7, 2022 at 5:30 p.m. Eastern time to discuss third quarter and year to date 2022 results and 2022 outlook. Interested parties can access the live webcast of the conference at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 107191. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/853587339. 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 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 accredited 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 professional development and continuing education offerings. Perdoceo’s universities 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 support students and enhance learning. Perdoceo is 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; 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 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; rulemaking 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 eligibility to participate in educational assistance programs for veterans or other military personnel; 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, 2021 and its subsequent filings with the Securities and Exchange Commission.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30,
December 31,
2022
2021
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted
$
147,120
$
319,982
Restricted cash
2,191
5,196
Short-term investments
375,871
174,213
Total cash and cash equivalents, restricted cash and short-term investments
525,182
499,391
Student receivables, net
43,059
43,033
Receivables, other
2,261
1,692
Prepaid expenses
9,251
6,919
Inventories
2,041
904
Other current assets
521
2,514
Total current assets
582,315
554,453
NON-CURRENT ASSETS:
Property and equipment, net
26,290
28,355
Right of use asset, net
30,313
36,664
Goodwill
184,135
162,579
Intangible assets, net
44,262
32,208
Student receivables, net
1,328
1,372
Deferred income tax assets, net
24,015
25,114
Other assets
6,545
6,688
TOTAL ASSETS
$
899,203
$
847,433
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating
$
5,963
$
9,400
Accounts payable
13,285
10,838
Accrued expenses:
Payroll and related benefits
26,733
25,312
Advertising and marketing costs
9,550
8,690
Income taxes
8,082
211
Other
14,813
15,180
Deferred revenue
61,978
70,613
Total current liabilities
140,404
140,244
NON-CURRENT LIABILITIES:
Lease liability - operating
30,385
35,549
Other liabilities
22,192
21,530
Total non-current liabilities
52,577
57,079
STOCKHOLDERS' EQUITY:
Preferred stock
-
-
Common stock
894
887
Additional paid-in capital
681,385
674,242
Accumulated other comprehensive loss
(6,317
)
(96
)
Retained earnings
331,884
251,972
Treasury stock
(301,624
)
(276,895
)
Total stockholders' equity
706,222
650,110
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
899,203
$
847,433
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
For the Quarter Ended September 30,
2022
% of Total Revenue
2021
% of Total Revenue
REVENUE:
Tuition and fees, net
$
166,437
98.8
%
$
172,595
99.2
%
Other
1,983
1.2
%
1,403
0.8
%
Total revenue
168,420
173,998
OPERATING EXPENSES:
Educational services and facilities
30,149
17.9
%
25,961
14.9
%
General and administrative
103,882
61.7
%
106,289
61.1
%
Depreciation and amortization
5,065
3.0
%
3,887
2.2
%
Total operating expenses
139,096
82.6
%
136,137
78.2
%
Operating income
29,324
17.4
%
37,861
21.8
%
OTHER INCOME:
Interest income
2,270
1.3
%
154
0.1
%
Interest expense
(96
)
-0.1
%
(572
)
-0.3
%
Miscellaneous expense
(206
)
-0.1
%
(117
)
-0.1
%
Total other income (expense)
1,968
1.2
%
(535
)
-0.3
%
PRETAX INCOME
31,292
18.6
%
37,326
21.5
%
Provision for income taxes
9,225
5.5
%
9,557
5.5
%
NET INCOME
22,067
13.1
%
27,769
16.0
%
NET INCOME PER SHARE - BASIC:
$
0.33
$
0.40
NET INCOME PER SHARE -DILUTED:
$
0.32
$
0.39
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
67,506
70,089
Diluted
68,550
71,466
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Quarter Ended September 30,
(In Thousands)
2022
2021
NET INCOME
$
22,067
$
27,769
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments
(138
)
(74
)
Unrealized (loss) gain on investments
(3,005
)
51
Total other comprehensive loss
(3,143
)
(23
)
COMPREHENSIVE INCOME
$
18,924
$
27,746
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
For the Year to Date Ended September 30,
2022
% of Total Revenue
2021
% of Total Revenue
REVENUE:
Tuition and fees, net
$
513,660
99.0
%
$
530,230
99.4
%
Other
5,403
1.0
%
2,945
0.6
%
Total revenue
519,063
533,175
OPERATING EXPENSES:
Educational services and facilities
85,506
16.5
%
83,467
15.7
%
General and administrative
311,510
60.0
%
323,466
60.7
%
Depreciation and amortization
14,856
2.9
%
11,802
2.2
%
Asset impairment
228
0.0
%
-
0.0
%
Total operating expenses
412,100
79.4
%
418,735
78.5
%
Operating income
106,963
20.6
%
114,440
21.5
%
OTHER INCOME:
Interest income
3,697
0.7
%
835
0.2
%
Interest expense
(298
)
-0.1
%
(961
)
-0.2
%
Miscellaneous expense
(521
)
-0.1
%
(22
)
0.0
%
Total other income (expense)
2,878
0.6
%
(148
)
0.0
%
PRETAX INCOME
109,841
21.2
%
114,292
21.4
%
Provision for income taxes
29,929
5.8
%
29,121
5.5
%
NET INCOME
79,912
15.4
%
85,171
16.0
%
NET INCOME PER SHARE - BASIC:
$
1.17
$
1.21
NET INCOME PER SHARE -DILUTED:
$
1.16
$
1.19
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
68,193
70,179
Diluted
69,131
71,649
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year to Date Ended September 30,
(In Thousands)
2022
2021
NET INCOME
$
79,912
$
85,171
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments
(383
)
(175
)
Unrealized loss on investments
(5,838
)
(192
)
Total other comprehensive loss
(6,221
)
(367
)
COMPREHENSIVE INCOME
$
73,691
$
84,804
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Year to Date Ended September 30,
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
79,912
$
85,171
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment
228
-
Depreciation and amortization expense
14,856
11,802
Bad debt expense
32,284
36,360
Compensation expense related to share-based awards
6,234
11,287
Deferred income taxes
1,099
9,938
Changes in operating assets and liabilities
(26,973
)
(10,352
)
Net cash provided by operating activities
107,640
144,206
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments
(410,493
)
(269,739
)
Sales of available-for-sale investments
202,927
357,280
Purchases of property and equipment
(9,105
)
(6,276
)
Business acquisitions, net of cash acquired
(39,037
)
(56,947
)
Net cash (used in) provided by investing activities
(255,708
)
24,318
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock
916
793
Purchase of treasury stock
(23,117
)
(5,372
)
Payments of employee tax associated with stock compensation
(1,612
)
(2,034
)
Release of cash held in escrow
(3,986
)
-
Net cash used in financing activities
(27,799
)
(6,613
)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(175,867
)
161,911
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period
325,178
109,684
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period
$
149,311
$
271,595
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
For the Quarter Ended September 30,
2022(1)
2021
REVENUE:
CTU
$
97,562
$
104,788
AIUS
70,582
68,948
Corporate and Other
276
262
Total
$
168,420
$
173,998
OPERATING INCOME (LOSS):
CTU
$
31,506
$
41,217
AIUS
9,590
8,334
Corporate and Other
(11,772
)
(11,690
)
Total
$
29,324
$
37,861
OPERATING MARGIN (LOSS):
CTU
32.3
%
39.3
%
AIUS
13.6
%
12.1
%
Corporate and Other
NM
NM
Total
17.4
%
21.8
%
(1)
AIUS’ results of operations include the CalSouthern acquisition as of the July 1, 2022 date of acquisition.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
For the Year to Date Ended September 30,
2022(1)
2021
REVENUE:
CTU
$
311,171
$
312,645
AIUS
207,034
219,648
Corporate and Other
858
882
Total
$
519,063
$
533,175
OPERATING INCOME (LOSS):
CTU
$
107,540
$
112,758
AIUS
29,846
28,875
Corporate and Other
(30,423
)
(27,193
)
Total
$
106,963
$
114,440
OPERATING MARGIN (LOSS):
CTU
34.6
%
36.1
%
AIUS
14.4
%
13.1
%
Corporate and Other
NM
NM
Total
20.6
%
21.5
%
(1)
AIUS’ results of operations include the CalSouthern acquisition as of the July 1, 2022 date of acquisition.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)
(In thousands, unless otherwise noted)
For the Quarter Ended September 30,
For the Year to Date Ended September 30,
ACTUAL
ACTUAL
Adjusted Operating Income
2022
2021
2022
2021
Operating income
$
29,324
$
37,861
$
106,963
$
114,440
Depreciation and amortization (2)
5,065
3,887
14,856
11,802
Legal fee expense related to certain matters (3)
4,294
4,583
9,728
7,241
Adjusted Operating Income
$
38,683
$
46,331
$
131,547
$
133,483
For the Quarter Ending December 31,
For the Year Ending December 31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2022
2021
2022
2021
Operating income
$17.3M - $20.3M
$
34,576
$124.2M - $127.2M
$
149,016
Depreciation and amortization (2)
5.2M
4,964
20.1M
16,766
Legal fee expense related to certain matters (3)
3.0M
2,494
12.7M
9,735
Adjusted Operating Income
$25.5M - $28.5M
$
42,034
$157.0M - $160.0M
$
175,517
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)
For the Quarter Ended September 30,
For the Year to Date Ended September 30,
ACTUAL
ACTUAL
2022
2021
2022
2021
Reported Earnings Per Diluted Share
$
0.32
$
0.39
$
1.16
$
1.19
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)
0.03
0.01
0.08
0.03
Legal fee expense related to certain matters (3)
0.06
0.06
0.14
0.10
Total pre-tax adjustments
$
0.09
$
0.07
$
0.22
$
0.13
Tax effect of adjustments (4)
(0.02
)
(0.01
)
(0.06
)
(0.03
)
Total adjustments after tax
0.07
0.06
0.16
0.10
Adjusted Earnings Per Diluted Share
$
0.39
$
0.45
$
1.32
$
1.29
For the Quarter Ending December 31,
For the Year Ending December 31,
OUTLOOK
ACTUAL
OUTLOOK
ACTUAL
2022
2021
2022
2021
Reported Earnings Per Diluted Share
$0.22 - $0.25
$
0.35
$1.37 - $1.40
$
1.55
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)
0.03
0.03
0.11
0.06
Legal fee expense related to certain matters (3)
0.04
0.04
0.19
0.14
Total pre-tax adjustments
$
0.07
$
0.07
$
0.30
$
0.20
Tax effect of adjustments (4)
(0.02
)
(0.02
)
(0.08)
(0.05
)
Total adjustments after tax
0.05
0.05
0.22
0.15
Adjusted Earnings Per Diluted Share
$0.27 - $0.30
$
0.40
$1.59 - $1.62
$
1.70
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. 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 CalSouthern acquisition as of July 1, 2022, the DigitalCrafts acquisition as of August 2, 2021 and the Hippo acquisition as of September 10, 2021.
(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)
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/20221107006030/en/
Investors: Alpha IR Group Davis Snyder or Eric Markman (312) 445-2870 PRDO@alpha-ir.com Or Media: Perdoceo Education Corporation (847) 585-2600 media@perdoceoed.com
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