0001046568
false
0001046568
2024-05-01
2024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
May 01, 2024
Perdoceo Education Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 0-23245 36-3932190
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1750 E. Golf Road 60173
,
Schaumburg
,
IL
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (
847
)
781-3600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value PRDO Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s) 230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s) 240.12b-2
of this chapter).
Emerging growth company
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.
-------------------------------------------------------------------------------
Item 2.02. Results of Operations and Financial Condition.
On May 1, 2024, Perdoceo Education Corporation (the "Company") issued a press
release describing the Company's financial results for the quarter ended March
31, 2024 and providing an update on the Company's 2024 outlook. A copy of the
press release is being furnished as Exhibit 99.1, and the information
contained therein is incorporated herein by reference. Following the issuance
of the press release, the Company will host a conference call and webcast on
which its financial results for the quarter ended March 31, 2024 and outlook
will be discussed.
The information contained in Item 2.02 of this Form 8-K, including Exhibit
99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section, nor shall the information be deemed incorporated by reference
into any filing under the Securities Act of 1933 or Securities Exchange Act of
1934, each as amended, except as shall be expressly set forth by specific
reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The exhibits required by Item 601 of Regulation S-K are listed in the "Exhibit
Index" which is contained in this Current Report on Form 8-K and are
incorporated by reference herein.
-------------------------------------------------------------------------------
Exhibit Index
Exhibit Description of Exhibits
Number
99.1 Press release of the Company dated May 1, 2024 reporting the
Company's financial results for the quarter ended March 31, 2024
104 Cover Page Interactive Data File (embedded
within the Inline XBRL document)
-------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PERDOCEO EDUCATION CORPORATION
By: /s/ Ashish R. Ghia
Ashish R. Ghia
Senior Vice President and Chief Financial Officer
Date: May 1, 2024
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
1
Exhibit 99.1
PERDOCEO EDUCATION
CORPORATION
ANNOUNCES FIRST QUARTER 2024 RESULTS
Schaumburg, Ill. (May 1, 2024) Perdoceo Education Corporation (NASDAQ: PRDO)
today reported operating and financial results for the quarter ended March 31,
2024.
First Quarter 2024 Results as Compared to Prior Year Quarter
"
Operating income increased 6.8% to $46.3 million, while adjusted operating
income decreased 6.8% to $49.5 million.*
"
Earnings per diluted share was $0.59 as compared to $0.50, while adjusted
earnings per diluted share was $0.60 as compared to $0.58.*
"
Revenue decreased 14.0% to $168.3 million while total student enrollments at
March 31, 2024 increased by 9.0%.
"
Ended the quarter with $642.4 million in cash, cash equivalents, restricted
cash and available-for-sale-short-term investments.
*
See GAAP (U.S. generally accepted accounting principles) to non-GAAP
reconciliation attached to this press release
"First quarter results were better than expected, as both academic
institutions continue to experience positive trends within student retention
and engagement, said Todd Nelson, President and Chief Executive Officer. These
results and trends give us confidence that we are making effective investments
in student resources and technology, and we remain focused on prioritizing
student experiences and academic outcomes across our academic institutions."
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
2
REVENUE
"
For the quarter ended March 31, 2024, revenue of $168.3 million decreased
14.0% compared to revenue of $195.6 million for the prior year quarter.
For the Quarter Ended March 31,
Revenue ($ in thousands) 2024 2023 % Change
CTU $ 113,569 $ 124,492 -8.8 %
AIUS 54,505 70,840 -23.1 %
Corporate and Other 190 266 NM
Total $ 168,264 $ 195,598 -14.0 %
TOTAL STUDENT ENROLLMENTS
"
As of March 31, 2024, total student enrollments were 41,300, an increase of
9.0% as compared to 37,900 total student enrollments as of March 31, 2023.
As of March 31,
Total Student Enrollments 2024 2023 % Change
(1)
CTU 30,200 23,500 28.5 %
AIUS 11,100 14,400 -22.9 %
Total 41,300 37,900 9.0 %
(1)
Total student enrollments do not include learners participating in: a)
non-degree seeking and professional development programs, and b) degree
seeking, non-Title IV, self-paced programs at our universities.
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
3
OPERATING INCOME
"
For the quarter ended March 31, 2024, operating income increased by 6.8% to
$46.3 million as compared to the prior year quarter.
For the Quarter Ended March 31,
Operating Income ($ in thousands) 2024 2023 % Change
CTU $ 42,156 $ 43,690 -3.5 %
AIUS 9,286 12,003 -22.6 %
Corporate and Other (5,164 ) (12,357 ) 58.2 %
Total $ 46,278 $ 43,336 6.8 %
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 March 31, 2024, adjusted operating income of $49.5
million decreased 6.8% as compared to adjusted operating income of $53.1
million for the prior year quarter.
For the Quarter Ended March 31,
Adjusted Operating Income ($ in thousands) 2024 2023
Operating income $ 46,278 $ 43,336
Depreciation and amortization 3,016 5,155
Legal fee expense related to certain matters 230 4,619
(1)
Adjusted Operating Income $ 49,524 $ 53,110
Increase (Decrease) -6.8 %
(1)
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.
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
4
NET INCOME AND EARNINGS PER DILUTED SHARE
For the quarter ended March 31, 2024, the Company recorded:
"
Net income of $39.4 million compared to $34.5 million for the prior year
quarter.
"
Earnings per diluted share of $0.59 compared to $0.50 for the prior year
quarter.
"
Adjusted earnings per diluted share of $0.60 compared to $0.58 for the prior
year quarter. (See table below and the GAAP to non-GAAP reconciliation
attached to this press release for further details.)
For the Quarter Ended March 31,
2024 2023
Reported Earnings Per Diluted Share $ 0.59 $ 0.50
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets 0.02 0.04
Legal fee expense related to certain matters - 0.07
(1)
Tax effect of adjustments (0.01 ) (0.03 )
(2)
Adjusted Earnings Per Diluted Share $ 0.60 $ 0.58
(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.
(2)
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
In line with the Company's dividend policy, the board of directors declared a
quarterly dividend of $0.11 per share, which will be paid on June 15, 2024 for
holders of record of common stock as of June 1, 2024. Any decision to pay
future cash dividends, however, will be made by the board of directors and
depend on the Companys 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.
BALANCE SHEET AND CASH FLOW
"
For the quarter ended March 31, 2024, net cash provided by operating
activities was $54.5 million, compared to net cash provided by operating
activities of $4.6 million for the prior year quarter.
"
As of March 31, 2024 and December 31, 2023, cash, cash equivalents, restricted
cash and available-for-sale short-term investments totaled $642.4 million and
$604.2 million, respectively.
For the Quarter Ended March 31,
Selected Cash Flow Items ($ in thousands) 2024 2023 % Change
Net cash provided by operating activities $ 54,492 $ 4,572 NM
Capital expenditures $ 1,198 $ 1,925 -37.8 %
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
5
OUTLOOK
The Company is updating its full year outlook and providing its second 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 June 30, For the Year Ending December 31,
OUTLOOK ACTUAL OUTLOOK ACTUAL
2024 2023 2024 2023
Operating Income $43.7M - $45.7M $48.1M $159.3M - $174.3M $150.4M
Depreciation and amortization $3.1M $4.4M $12.3M $16.9M
Legal fee expense related to certain matters $1.2M $2.7M $3.4M $7.6M
(1)
Adjusted Operating Income $48.0M - $50.0M $55.2M $175.0M - $190.0M $174.9M
Earnings Per Diluted Share $0.55 - $0.57 $0.80 $2.02 - $2.18 $2.18
Amortization of acquired intangible assets $0.02 $0.03 $0.07 $0.11
Legal fee expense related to certain matters $0.02 $0.04 $0.05 $0.11
(1)
Gain on sale of intangible asset - ($0.32) - ($0.32)
Tax effect of adjustments ($0.02) $0.06 ($0.03) $0.02
Adjusted Earnings Per Diluted Share $0.57 - $0.59 $0.61 $2.11 - $2.27 $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 Companys
programs and trends in student retention and engagement remain consistent with
managements estimates, (ii) no significant additional impact of new or
proposed regulations, including recent Department negotiated rulemaking
initiatives, or other adverse changes in the legal or regulatory environment,
which may require further operational changes in the way the Companys academic
institutions 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 student loan
initiatives implemented by the current administration remains consistent with
management's estimates, (v) earnings per diluted share outlook assumes an
effective income tax rate of approximately 27% for the second quarter and
approximately 26% for the full year, and (vi) excludes any future impact from
the Companys stock repurchase program. Although these estimates and
assumptions are based upon managements 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.
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
6
CONFERENCE CALL INFORMATION
Perdoceo Education Corporation will host a conference call on Wednesday, May
1, 2024 at 5:30 p.m. Eastern time to discuss first quarter 2024 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 1-800-715-9871
(domestic) or 1-646-307-1963 (international). Both dial-in numbers will use
the access code 7780778. Viewers can also access the conference call by
following this link https://events.q4inc.com/attendee/251610351. 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
Perdoceos accredited academic institutions offer a quality postsecondary
education primarily online to a diverse student population, along with
campus-based and blended learning programs. The Companys 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. Perdoceos
academic institutions offer students industry-relevant and career-focused
academic programs that are designed to meet the educational needs of todays
busy adults. CTU and AIUS continue to show innovation in higher education,
advancing personalized learning technologies like their intellipath(R)
learning platform and using data analytics and technology to serve and educate
students while enhancing overall learning and academic experiences. 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
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 Companys Annual Report on Form 10-K for the year ended December
31, 2023 and its subsequent filings with the Securities and Exchange
Commission.
###
-------------------------------------------------------------------------------
PRDO ANNOUNCES 1Q24 RESULTS ...PG
7
CONTACT
Investors:
Alpha IR Group
Sam Gibbons
(312) 445-2870
PRDO@alpha-ir.com
Or
Media:
Perdoceo Education Corporation
(847) 585-2600
media@perdoceoed.com
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2024 2023
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted $ 125,807 $ 118,009
Restricted cash 1,024 1,012
Short-term investments 515,602 485,135
Total cash and cash equivalents, restricted cash and short-term investments 642,433 604,156
Student receivables, net 41,942 29,398
Receivables, other 5,289 4,539
Prepaid expenses 11,912 11,712
Inventories 4,251 5,004
Other current assets 196 155
Total current assets 706,023 654,964
NON-CURRENT ASSETS:
Property and equipment, net 20,938 21,371
Right of use asset, net 13,963 19,096
Goodwill 241,162 241,162
Intangible assets, net 35,110 36,219
Student receivables, net 4,860 3,859
Deferred income tax assets, net 23,063 23,804
Other assets 6,846 6,841
TOTAL ASSETS $ 1,051,965 $ 1,007,316
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating $ 5,989 $ 5,701
Accounts payable 11,830 10,766
Accrued expenses:
Payroll and related benefits 18,726 32,684
Advertising and marketing costs 6,810 7,196
Income taxes 16,543 3,974
Other 21,112 13,503
Deferred revenue 61,498 37,215
Total current liabilities 142,508 111,039
NON-CURRENT LIABILITIES:
Lease liability - operating 16,701 21,346
Other liabilities 26,650 33,510
Total non-current liabilities 43,351 54,856
STOCKHOLDERS' EQUITY:
Preferred stock - -
Common stock 909 903
Additional paid-in capital 698,619 694,798
Accumulated other comprehensive loss (1,620 ) (666 )
Retained earnings 512,622 480,606
Treasury stock (344,424 ) (334,220 )
Total stockholders' equity 866,106 841,421
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,051,965 $ 1,007,316
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
For the Quarter Ended March 31,
2024 % of 2023 % of
Total Total
Revenue Revenue
REVENUE:
Tuition and fees, net $ 166,998 99.2 % $ 193,319 98.8 %
Other 1,266 0.8 % 2,279 1.2 %
Total revenue 168,264 195,598
OPERATING EXPENSES:
Educational services and facilities 29,858 17.7 % 33,851 17.3 %
General and administrative 87,482 52.0 % 112,686 57.6 %
Depreciation and amortization 3,016 1.8 % 5,155 2.6 %
Asset impairment 1,630 1.0 % 570 0.3 %
Total operating expenses 121,986 72.5 % 152,262 77.8 %
Operating income 46,278 27.5 % 43,336 22.2 %
OTHER INCOME:
Interest income 6,793 4.0 % 3,818 2.0 %
Interest expense (335 ) -0.2 % (95 ) 0.0 %
Miscellaneous income (expense) 115 0.1 % (6 ) 0.0 %
Total other income 6,573 3.9 % 3,717 1.9 %
PRETAX INCOME 52,851 31.4 % 47,053 24.1 %
Provision for income taxes 13,409 8.0 % 12,569 6.4 %
NET INCOME 39,442 23.4 % 34,484 17.6 %
NET INCOME PER SHARE - BASIC: $ 0.60 $ 0.51
NET INCOME PER SHARE -DILUTED: $ 0.59 $ 0.50
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 65,555 67,235
Diluted 66,841 68,514
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Quarter Ended March 31,
(In Thousands) 2024 2023
NET INCOME $ 39,442 $ 34,484
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments (31 ) 26
Unrealized (loss) gain on investments (923 ) 1,300
Total other comprehensive (loss) income (954 ) 1,326
COMPREHENSIVE INCOME $ 38,488 $ 35,810
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter Ended March 31,
2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 39,442 $ 34,484
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment 1,630 570
Depreciation and amortization expense 3,016 5,155
Bad debt expense 6,556 10,757
Compensation expense related to share-based awards 2,307 2,294
Deferred income taxes 741 304
Changes in operating assets and liabilities 800 (48,992 )
Net cash provided by operating activities 54,492 4,572
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments (104,558 ) (83,777 )
Sales of available-for-sale investments 74,955 64,344
Purchases of property and equipment (1,198 ) (1,925 )
Net cash used in investing activities (30,801 ) (21,358 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 1,520 247
Purchase of treasury stock (6,769 ) (815 )
Payments of employee tax associated with stock compensation (3,435 ) (2,209 )
Payments of cash dividends (7,197 ) -
Net cash used in financing activities (15,881 ) (2,777 )
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 7,810 (19,563 )
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period 119,021 118,884
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period $ 126,831 $ 99,321
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
For the Quarter Ended March 31,
2024 2023
REVENUE:
CTU $ 113,569 $ 124,492
AIUS 54,505 70,840
Corporate and Other 190 266
Total $ 168,264 $ 195,598
OPERATING INCOME (LOSS):
CTU $ 42,156 $ 43,690
AIUS 9,286 12,003
Corporate and Other (5,164 ) (12,357 )
Total $ 46,278 $ 43,336
OPERATING MARGIN (LOSS):
CTU 37.1 % 35.1 %
AIUS 17.0 % 16.9 %
Corporate and Other NM NM
Total 27.5 % 22.2 %
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS
(1)
(In thousands, unless otherwise noted)
For the Quarter Ended March 31,
ACTUAL
Adjusted Operating Income 2024 2023
Operating income $ 46,278 $ 43,336
Depreciation and amortization 3,016 5,155
Legal fee expense related to certain matters 230 4,619
(2)
Adjusted Operating Income $ 49,524 $ 53,110
For the Quarter Ending June 30,
OUTLOOK ACTUAL
2024 2023
Operating income $43.7M -$45.7M $ 48,094
Depreciation and amortization 3.1M 4,369
Legal fee expense related to certain matters 1.2M 2,709
(2)
Adjusted Operating Income $48.0M - $50.0M $ 55,172
For the Year Ending December 31,
OUTLOOK ACTUAL
2024 2023
Operating income $159.3M - $174.3M $ 150,446
Depreciation and amortization 12.3M 16,887
Legal fee expense related to certain matters 3.4M 7,579
(2)
Adjusted Operating Income $175.0M - $190.0M $ 174,912
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS
(1)
(contd)
For the Quarter Ended March 31,
ACTUAL
2024 2023
Reported Earnings Per Diluted Share $ 0.59 $ 0.50
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets 0.02 0.04
Legal fee expense related to certain matters - 0.07
(2)
Total pre-tax adjustments $ 0.02 $ 0.11
Tax effect of adjustments (0.01 ) (0.03 )
(4)
Total adjustments after tax 0.01 0.08
Adjusted Earnings Per Diluted Share $ 0.60 $ 0.58
For the Quarter Ending June 30,
OUTLOOK ACTUAL
2024 2023
Reported Earnings Per Diluted Share $0.55 $0.57 $ 0.80
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets 0.02 0.03
Legal fee expense related to certain matters 0.02 0.04
(2)
Gain on sale of intangible asset - (0.32 )
(3)
Total pre-tax adjustments $0.04 $ (0.25 )
Tax effect of adjustments (0.02) 0.06
(4)
Total adjustments after tax 0.02 (0.19 )
Adjusted Earnings Per Diluted Share $0.57 - $0.59 $ 0.61
For the Year Ending December 31,
OUTLOOK ACTUAL
2024 2023
Reported Earnings Per Diluted Share $2.02 - $2.18 $ 2.18
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets 0.07 0.11
Legal fee expense related to certain matters 0.05 0.11
(2)
Gain on sale of intangible asset - (0.32 )
(3)
Total pre-tax adjustments 0.12 $ (0.10 )
Tax effect of adjustments (0.03) 0.02
(4)
Total adjustments after tax 0.09 (0.08 )
Adjusted Earnings Per Diluted Share $2.11 $2.27 $ 2.10
-------------------------------------------------------------------------------
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS
(1)
(contd)
(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 Companys 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 necessary to run its 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 Companys
results of operations and the factors and trends affecting the Companys
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.
(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.
-------------------------------------------------------------------------------
{graphic omitted}
{graphic omitted}
{graphic omitted}