Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2022 Results

Rhea-AI Summary

Perdoceo Education Corporation (NASDAQ: PRDO) reported its full year 2022 financial results, revealing a 0.3% increase in revenue to $695.2 million. Operating income fell by 13.0% to $129.6 million, and earnings per diluted share decreased to $1.39 from $1.55. The fourth quarter saw a 10.2% revenue increase compared to the prior year, totaling $176.1 million. However, total student enrollments declined 3.0%, with a 10.8% drop at AIUS. The company ended the year with $518.2 million in cash and intends to focus on technology investments for operational efficiency in 2023.

Positive

• Quarterly revenue increased by 10.2% to $176.1 million.
• Full year revenue rose by 0.3% to $695.2 million.
• CTU's revenue increased by 2.7% for the year.
• Company ended 2022 with $518.2 million in cash and investments.

Negative

• Operating income decreased by 13.0% to $129.6 million.
• Total student enrollments decreased by 3.0% year-over-year.
• AIUS experienced a 10.8% drop in total student enrollments.
• Earnings per diluted share decreased to $1.39 from $1.55.

SCHAUMBURG, Ill.--(BUSINESS WIRE)-- Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2022.

Full Year 2022 Results as Compared to Prior Year

• Revenue increased 0.3% to $695.2 million, with a 2.7% increase at CTU mostly offset by a 3.1% decline at AIUS.
• Operating income decreased 13.0% to $129.6 million, while adjusted operating income decreased 6.6% to $164.0 million.*
• Earnings per diluted share was $1.39 as compared to $1.55, while adjusted earnings per diluted share was $1.63 as compared to $1.70.*
• Total student enrollments at December 31, 2022 decreased by 3.0%. AIUS experienced a 10.8% decrease in total student enrollments that was partially offset by a 2.0% increase at CTU.
• Ended the year with $518.2 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.

Fourth Quarter 2022 Results as Compared to Prior Year Quarter

• Revenue increased 10.2% to $176.1 million, with a 13.1% increase at CTU and a 5.9% increase at AIUS.
• Operating income decreased 34.4% to $22.7 million, while adjusted operating income decreased 22.9% to $32.4 million, primarily due to certain one-time investments within our academic institutions.*
• Earnings per diluted share was $0.23 as compared to $0.35, while adjusted earnings per diluted share was $0.31 as compared to $0.40.*

*See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release

"Overall, we ended 2022 on a positive note as we experienced further improvement in student retention and engagement during the second half of 2022,” said Andrew Hurst, President and Chief Executive Officer. “As we look to 2023, we will continue to optimize investments in technology that will drive operational efficiencies across our academic institutions, while remaining committed to further enhancing student experiences and academic outcomes."

REVENUE

• For the quarter ended December 31, 2022, revenue of $176.1 million increased 10.2% compared to revenue of $159.9 million for the prior year quarter.
• For the year ended December 31, 2022, revenue of $695.2 million increased 0.3% compared to revenue of $693.0 million for the prior year.

		For the Quarter Ended December 31,												For the Year Ended December 31,
Revenue ($ in thousands)		2022 (1)				2021				% Change				2022 (1)				2021				% Change
CTU		$	108,446			$	95,904				13.1	%		$	419,617			$	408,549				2.7	%
AIUS			67,445				63,712				5.9	%			274,479				283,360				-3.1	%
Corporate and Other			254				243			NM					1,112				1,125			NM
Total		$	176,145			$	159,859				10.2	%		$	695,208			$	693,034				0.3	%

(1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS.

TOTAL STUDENT ENROLLMENTS

• As of December 31, 2022, CTU’s total student enrollments increased 2.0%, while AIUS’ total student enrollments decreased 10.8% as compared to the prior year end.

		At December 31,
Total Student Enrollments(1)		2022				2021				% Change
CTU			25,200				24,700				2.0	%
AIUS			14,000				15,700				-10.8	%
Total			39,200				40,400				-3.0	%

(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.

OPERATING INCOME

• For the quarter ended December 31, 2022, operating income decreased by 34.4% to $22.7 million as compared to the prior year quarter.

• For the year ended December 31, 2022, operating income decreased by 13.0% to $129.6 million as compared to the prior year.

		For the Quarter Ended December 31,												For the Year Ended December 31,
Operating Income ($ in thousands)		2022 (1)				2021				% Change				2022 (1)				2021				% Change
CTU		$	34,082			$	35,723				-4.6	%		$	141,622			$	148,481				-4.6	%
AIUS			3,469				10,255				-66.2	%			33,315				39,130				-14.9	%
Corporate and Other			(14,877	)			(11,402	)		NM					(45,300	)			(38,595	)		NM
Total		$	22,674			$	34,576				-34.4	%		$	129,637			$	149,016				-13.0	%

(1) Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS.

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, 2022, adjusted operating income of $32.4 million decreased 22.9% compared to adjusted operating income of $42.0 million for the prior year quarter.

• For the year ended December 31, 2022, adjusted operating income of $164.0 million decreased 6.6% compared to adjusted operating income of $175.5 million for the prior year.

		For the Quarter Ended December 31,								For the Year Ended December 31,
Adjusted Operating Income ($ in thousands)		2022				2021				2022				2021
Operating income		$	22,674			$	34,576			$	129,637			$	149,016
Depreciation and amortization (1)			4,878				4,964				19,734				16,766
Legal fee expense related to certain matters (2)			4,869				2,494				14,597				9,735
Adjusted Operating Income		$	32,421			$	42,034			$	163,968			$	175,517
Increase (Decrease)			-22.9	%							-6.6	%

(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, 2022, the Company recorded:

• Net income of $16.0 million compared to $24.5 million for the prior year quarter.
• Earnings per diluted share of $0.23 compared to $0.35 for the prior year quarter.
• Adjusted earnings per diluted share of $0.31 compared to $0.40 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 year ended December 31, 2022, the Company recorded:

• Net income of $95.9 million compared to $109.6 million for the prior year.
• Earnings per diluted share of $1.39 compared to $1.55 for the prior year.
• Adjusted earnings per diluted share of $1.63 compared to $1.70 for the prior year. (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,
		2022				2021				2022				2021
Reported Earnings Per Diluted Share		$	0.23			$	0.35			$	1.39			$	1.55
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (1)			0.03				0.03				0.11				0.06
Legal fee expense related to certain matters (2)			0.07				0.04				0.21				0.14
Tax effect of adjustments (3)			(0.02	)			(0.02	)			(0.08	)			(0.05	)
Adjusted Earnings Per Diluted Share		$	0.31			$	0.40			$	1.63			$	1.70

(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 December 31, 2022, net cash provided by operating activities was $40.5 million, compared to net cash provided by operating activities of $46.9 million for the prior year quarter.
• For the year ended December 31, 2022, net cash provided by operating activities was $148.2 million, compared to net cash provided by operating activities of $191.1 million in the prior year.
• At December 31, 2022 and December 31, 2021, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $518.2 million and $499.4 million, respectively.
• For the year ended December 31, 2022, the Company repurchased 2.1 million shares for $23.1 million at an average price of $11.02 as compared to 2.3 million shares for $25.3 million at an average price of $10.94 for the year ended December 31, 2021.

		For the Quarter Ended December 31,												For the Year Ended December 31,
Selected Cash Flow Items ($ in thousands)		2022				2021				% Change				2022				2021				% Change
Net cash provided by operating activities		$	40,546			$	46,910				-13.6	%		$	148,186			$	191,116				-22.5	%
Business acquisitions, net of cash acquired		$	45,271			$	196			NM				$	84,308			$	57,143				47.5	%
Capital expenditures		$	3,515			$	4,177				-15.8	%		$	12,620			$	10,453				20.7	%

OUTLOOK

The Company is providing the following 2023 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
	2023	2022		2023	2022
Operating Income	$41.3M - $43.3M	$43.7M		$120.6M - $140.6M	$129.6M
Depreciation and amortization	$5.1M	$4.9M		$17.4M	$19.8M
Legal fee expense related to certain matters (1)	$4.6M	$2.3M		$12.0M	$14.6M
Adjusted Operating Income	$51.0M - $53.0M	$50.9M		$150.0M - $170.0M	$164.0M
Earnings Per Diluted Share	$0.47 - $0.49	$0.46		$1.41 - $1.63	$1.39
Amortization of acquired intangible assets	$0.04	$0.02		$0.12	$0.11
Legal fee expense related to certain matters (1)	$0.07	$0.03		$0.17	$0.21
Tax effect of adjustments	($0.03)	($0.01)		($0.07)	($0.08)
Adjusted Earnings Per Diluted Share	$0.55 - $0.57	$0.50		$1.63 - $1.85	$1.63

(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 2023 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 estimates, (ii) no significant 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 operational changes in the way the Company’s 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 26.0% for both the first quarter and the full year, and (vi) 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 Thursday, February 23, 2023 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2022 results and 2023 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 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 690929. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/456229475. 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 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; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; 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, 2022 and its subsequent filings with the Securities and Exchange Commission.

 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
		December 31,				December 31,
		2022				2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted		$	109,408			$	319,982
Restricted cash			9,476				5,196
Short-term investments			399,315				174,213
Total cash and cash equivalents, restricted cash and short-term investments			518,199				499,391
Student receivables, net			42,551				43,033
Receivables, other			3,457				1,692
Prepaid expenses			8,411				6,919
Inventories			1,904				904
Other current assets			597				2,514
Total current assets			575,119				554,453
NON-CURRENT ASSETS:
Property and equipment, net			26,038				28,355
Right of use asset, net			26,156				36,664
Goodwill			243,540				162,579
Intangible assets, net			53,564				32,208
Student receivables, net			1,850				1,372
Deferred income tax assets, net			24,613				25,114
Other assets			6,488				6,688
TOTAL ASSETS		$	957,368			$	847,433
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating		$	6,555			$	9,400
Accounts payable			13,518				10,838
Accrued expenses:
Payroll and related benefits			40,306				25,312
Advertising and marketing costs			8,977				8,690
Income taxes			7,814				211
Other			14,621				15,180
Deferred revenue			71,590				70,613
Total current liabilities			163,381				140,244
NON-CURRENT LIABILITIES:
Lease liability - operating			27,286				35,549
Other liabilities			40,856				21,530
Total non-current liabilities			68,142				57,079
STOCKHOLDERS' EQUITY:
Preferred stock			-				-
Common stock			894				887
Additional paid-in capital			684,183				674,242
Accumulated other comprehensive loss			(5,447	)			(96	)
Retained earnings			347,839				251,972
Treasury stock			(301,624	)			(276,895	)
Total stockholders' equity			725,845				650,110
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	957,368			$	847,433

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
		For the Quarter Ended December 31,
		2022				% of Total Revenue				2021				% of Total Revenue
REVENUE:
Tuition and fees, net		$	174,012				98.8	%		$	158,185				99.0	%
Other			2,133				1.2	%			1,674				1.0	%
Total revenue			176,145								159,859
OPERATING EXPENSES:
Educational services and facilities			31,217				17.7	%			25,276				15.8	%
General and administrative			114,610				65.1	%			95,043				59.5	%
Depreciation and amortization			4,878				2.8	%			4,964				3.1	%
Asset impairment			2,766				1.6	%			-				0.0	%
Total operating expenses			153,471				87.1	%			125,283				78.4	%
Operating income			22,674				12.9	%			34,576				21.6	%
OTHER INCOME:
Interest income			3,169				1.8	%			136				0.1	%
Interest expense			(102	)			-0.1	%			-				0.0	%
Miscellaneous (expense) income			(1,313	)			-0.7	%			63				0.0	%
Total other income			1,754				1.0	%			199				0.1	%
PRETAX INCOME			24,428				13.9	%			34,775				21.8	%
Provision for income taxes			8,473				4.8	%			10,309				6.4	%
NET INCOME			15,955				9.1	%			24,466				15.3	%
NET INCOME PER SHARE - BASIC:		$	0.24							$	0.35
NET INCOME PER SHARE -DILUTED:		$	0.23							$	0.35
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			67,165								69,565
Diluted			68,423								70,335
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		For the Quarter Ended December 31,
(In Thousands)		2022								2021
NET INCOME		$	15,955							$	24,466
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Foreign currency translation adjustments			217								(2	)
Unrealized gain (loss) on investments			653								(91	)
Total other comprehensive income (loss)			870								(93	)
COMPREHENSIVE INCOME		$	16,825							$	24,373

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)
		For the Year Ended December 31,
		2022				% of Total Revenue				2021				% of Total Revenue
REVENUE:
Tuition and fees, net		$	687,672				98.9	%		$	688,415				99.3	%
Other			7,536				1.1	%			4,619				0.7	%
Total revenue			695,208								693,034
OPERATING EXPENSES:
Educational services and facilities			116,723				16.8	%			108,743				15.7	%
General and administrative			426,120				61.3	%			418,509				60.4	%
Depreciation and amortization			19,734				2.8	%			16,766				2.4	%
Asset impairment			2,994				0.4	%			-				0.0	%
Total operating expenses			565,571				81.4	%			544,018				78.5	%
Operating income			129,637				18.6	%			149,016				21.5	%
OTHER INCOME:
Interest income			6,866				1.0	%			930				0.1	%
Interest expense			(400	)			-0.1	%			(920	)			-0.1	%
Miscellaneous (expense) income			(1,834	)			-0.3	%			41				0.0	%
Total other income			4,632				0.7	%			51				0.0	%
PRETAX INCOME			134,269				19.3	%			149,067				21.5	%
Provision for income taxes			38,402				5.5	%			39,430				5.7	%
NET INCOME			95,867				13.8	%			109,637				15.8	%
NET INCOME PER SHARE - BASIC:		$	1.41							$	1.57
NET INCOME PER SHARE -DILUTED:		$	1.39							$	1.55
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			67,934								70,024
Diluted			69,031								70,881
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		For the Year Ended December 31,
(In Thousands)		2022								2021
NET INCOME		$	95,867							$	109,637
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments			(166	)							(177	)
Unrealized loss on investments			(5,185	)							(283	)
Total other comprehensive loss			(5,351	)							(460	)
COMPREHENSIVE INCOME		$	90,516							$	109,177

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		For the Year Ended December 31,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	95,867			$	109,637
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment			2,994				-
Depreciation and amortization expense			19,734				16,766
Bad debt expense			41,574				44,344
Compensation expense related to share-based awards			8,751				14,972
Deferred income taxes			(720	)			15,330
Changes in operating assets and liabilities:
Student receivables, gross			6,380				6,631
Allowance for credit losses			(38,992	)			(47,417	)
Receivables, other			(1,670	)			5,396
Inventories, prepaid expenses, and other current assets			2,640				3,285
Other non-current assets			843				72
Accounts payable			1,922				(2,744	)
Accrued expenses and other non-current liabilities			22,332				(3,404	)
Deferred revenue			(11,767	)			30,724
Right of use asset and lease liability			(1,702	)			(2,476	)
Net cash provided by operating activities			148,186				191,116
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments			(492,100	)			(269,739	)
Sales of available-for-sale investments			262,277				391,659
Purchases of property and equipment			(12,620	)			(10,453	)
Business acquisitions, net of cash acquired			(84,308	)			(57,143	)
Net cash (used in) provided by investing activities			(326,751	)			54,324
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock			(23,117	)			(25,296	)
Issuance of common stock			1,197				861
Payments of employee tax associated with stock compensation			(1,612	)			(5,511	)
Release of cash held in escrow			(4,197	)			-
Net cash used in financing activities			(27,729	)			(29,946	)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			(206,294	)			215,494
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period			325,178				109,684
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period		$	118,884			$	325,178

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
		For the Quarter Ended December 31,
		2022(1)				2021
REVENUE:
CTU		$	108,446			$	95,904
AIUS			67,445				63,712
Corporate and Other			254				243
Total		$	176,145			$	159,859
OPERATING INCOME (LOSS):
CTU		$	34,082			$	35,723
AIUS			3,469				10,255
Corporate and Other			(14,877	)			(11,402	)
Total		$	22,674			$	34,576
OPERATING MARGIN (LOSS):
CTU			31.4	%			37.2	%
AIUS			5.1	%			16.1	%
Corporate and Other		NM				NM
Total			12.9	%			21.6	%

(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 SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
		For the Year Ended December 31,
		2022(1)				2021
REVENUE:
CTU		$	419,617			$	408,549
AIUS			274,479				283,360
Corporate and Other			1,112				1,125
Total		$	695,208			$	693,034
OPERATING INCOME (LOSS):
CTU		$	141,622			$	148,481
AIUS			33,315				39,130
Corporate and Other			(45,300	)			(38,595	)
Total		$	129,637			$	149,016
OPERATING MARGIN (LOSS):
CTU			33.8	%			36.3	%
AIUS			12.1	%			13.8	%
Corporate and Other		NM				NM
Total			18.6	%			21.5	%

(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		2022				2021				2022				2021
Operating income		$	22,674			$	34,576			$	129,637			$	149,016
Depreciation and amortization (2)			4,878				4,964				19,734				16,766
Legal fee expense related to certain matters (3)			4,869				2,494				14,597				9,735
Adjusted Operating Income		$	32,421			$	42,034			$	163,968			$	175,517
		For the Quarter Ending March 31,								For the Year Ending December 31,
		OUTLOOK				ACTUAL				OUTLOOK				ACTUAL
		2023				2022				2023				2022
Operating income		$41.3M - $43.3M				$	43,693			$120.6M - $140.6M				$	129,637
Depreciation and amortization (2)		5.1M					4,882			17.4M					19,734
Legal fee expense related to certain matters (3)		4.6M					2,347			12.0M					14,597
Adjusted Operating Income		$51.0M - $53.0M				$	50,922			$150.0M - $170.0M				$	163,968

 

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
		2022				2021				2022				2021
Reported Earnings Per Diluted Share		$	0.23			$	0.35			$	1.39			$	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)			0.07				0.04				0.21				0.14
Total pre-tax adjustments		$	0.10			$	0.07			$	0.32			$	0.20
Tax effect of adjustments (4)			(0.02	)			(0.02	)			(0.08	)			(0.05	)
Total adjustments after tax			0.08				0.05				0.24				0.15
Adjusted Earnings Per Diluted Share		$	0.31			$	0.40			$	1.63			$	1.70
		For the Quarter Ending March 31,								For the Year Ending December 31,
		OUTLOOK				ACTUAL				OUTLOOK				ACTUAL
		2023				2022				2023				2022
Reported Earnings Per Diluted Share		$0.47 - $0.49				$	0.46			$1.41 -$ 1.63				$	1.39
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)		0.04					0.02			0.12					0.11
Legal fee expense related to certain matters (3)		0.07					0.03			0.17					0.21
Total pre-tax adjustments		$	0.11			$	0.05			$	0.29			$	0.32
Tax effect of adjustments (4)		(0.03)					(0.01	)		($0.07)					(0.08	)
Total adjustments after tax		0.08					0.04			0.22					0.24
Adjusted Earnings Per Diluted Share		$0.55 - $0.57				$	0.50			$1.63 - $1.85				$	1.63

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 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 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, 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/20230223005867/en/

Investors:

Alpha IR Group

Davis Snyder

(312) 445-2870

PRDO@alpha-ir.com

Or

Media:

Perdoceo Education Corporation

(847) 585-2600

media@perdoceoed.com

Source: Perdoceo Education Corporation

FAQ

What were Perdoceo Education Corporation's revenue figures for 2022?

Perdoceo reported a revenue of $695.2 million for 2022, a 0.3% increase from the previous year.

How did Perdoceo's operating income change in Q4 2022?

Operating income for Q4 2022 decreased by 34.4% to $22.7 million compared to Q4 2021.

What is the earnings per share for Perdoceo Education in 2022?

Earnings per diluted share for 2022 were $1.39, down from $1.55 in 2021.

How many total student enrollments did Perdoceo report at the end of 2022?

Total student enrollments decreased to 39,200 at the end of 2022 from 40,400 in 2021.

What is the outlook for Perdoceo Education Corporation in 2023?

Perdoceo anticipates operating income between $120.6 million to $140.6 million for 2023.