Perdoceo Education Corporation Reports Second Quarter and Year to Date 2022 Results

Rhea-AI Summary

Perdoceo Education Corporation (NASDAQ: PRDO) reported Q2 2022 results with a 4.5% revenue decline to $167.7 million compared to the previous year. Operating income decreased by 5.6% to $33.9 million. The company’s total student enrollments fell by 7.0%, driven by a notable 14.5% drop at AIUS. Despite the challenges, adjusted earnings per diluted share improved to $0.42 from $0.41. Year-to-date revenue decreased 2.4%, yet net income rose slightly to $57.8 million. The company ended the quarter with $516.8 million in cash and equivalents.

Positive

• Adjusted operating income increased by 6.6% to $92.9 million year to date.
• Adjusted earnings per diluted share improved to $0.42 from $0.41.

Negative

• Q2 revenue decreased by 4.5%, impacting both CTU and AIUS segments.
• Total student enrollments fell by 7.0%, primarily due to a 14.5% decline at AIUS.
• Operating income for Q2 decreased by 5.6% compared to the prior year.

SCHAUMBURG, Ill.--(BUSINESS WIRE)-- Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year to date ended June 30, 2022.

Second Quarter 2022 Results as Compared to Prior Year Quarter

• Revenue decreased 4.5 percent to $167.7 million, with both CTU and AIUS contributing to the decline.
• Operating income decreased 5.6 percent to $33.9 million, while adjusted operating income decreased 0.8 percent to $41.9 million.*
• Earnings per diluted share was $0.37 for both the current and prior year quarter, while adjusted earnings per diluted share was $0.42 compared to $0.41.*
• Total student enrollments at June 30, 2022 decreased by 7.0 percent, with a 2.3 percent decrease at CTU and a 14.5 percent decrease at AIUS.
• Ended the quarter with $516.8 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.

Year to Date 2022 Results as Compared to Prior Year to Date

• Total revenue decreased 2.4 percent to $350.6 million, with a 2.8 percent increase at CTU more than offset with a 9.5 percent decline at AIUS.
• Operating income increased 1.4 percent to $77.6 million while adjusted operating income increased 6.6 percent to $92.9 million.*
• Earnings per diluted share was $0.83 for the current year to date compared to $0.80 for the prior year to date, while adjusted earnings per diluted share was $0.93 as compared to $0.85.*

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

“We are pleased with the year to date operating results, which continue to underscore our commitment to student experiences, retention and academic outcomes. I’m proud of the entire Perdoceo team for their focus on educating, serving and supporting our students,” said Andrew Hurst, Chief Executive Officer. “We continue to leverage and integrate technology across various academic and student support processes, which improves the efficiency and effectiveness of our student related processes and overall operations.”

REVENUE

• For the quarter ended June 30, 2022, total revenue of $167.7 million decreased 4.5 percent compared to total revenue of $175.5 million for the prior year quarter.

• For the year to date ended June 30, 2022, total revenue of $350.6 million decreased 2.4 percent compared to total revenue of $359.2 million for the prior year to date.

		For the Quarter Ended June 30,												For the Year to Date Ended June 30,
Revenue ($ in thousands)		2022				2021				% Change				2022				2021				% Change
CTU		$	100,461			$	102,035				-1.5	%		$	213,609			$	207,857				2.8	%
AIUS			66,920				73,223				-8.6	%			136,452				150,700				-9.5	%
Corporate and Other			303				281			NM					582				620			NM
Total		$	167,684			$	175,539				-4.5	%		$	350,643			$	359,177				-2.4	%

TOTAL STUDENT ENROLLMENTS

• As of June 30, 2022, CTU’s total student enrollments decreased 2.3 percent, while AIUS’ total student enrollments decreased 14.5 percent as compared to the prior year quarter end.

		At June 30,
Total Student Enrollments		2022				2021				% Change
CTU			26,000				26,600				-2.3	%
AIUS			14,100				16,500				-14.5	%
Total			40,100				43,100				-7.0	%

OPERATING INCOME

• For the quarter ended June 30, 2022, operating income decreased by 5.6 percent to $33.9 million as compared to the prior year quarter.

• For the year to date ended June 30, 2022, operating income increased by 1.4 percent to $77.6 million as compared to the prior year to date.

		For the Quarter Ended June 30,												For the Year to Date Ended June 30,
Operating Income ($ in thousands)		2022				2021				% Change				2022				2021				% Change
CTU		$	33,008			$	35,398				-6.8	%		$	76,034			$	71,541				6.3	%
AIUS			10,733				9,218				16.4	%			20,256				20,541				-1.4	%
Corporate and Other			(9,795	)			(8,654	)		NM					(18,651	)			(15,503	)		NM
Total		$	33,946			$	35,962				-5.6	%		$	77,639			$	76,579				1.4	%

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 June 30, 2022, adjusted operating income of $41.9 million decreased 0.8 percent compared to adjusted operating income of $42.3 million for the prior year quarter.

• For the year to date ended June 30, 2022, adjusted operating income of $92.9 million increased 6.6 percent compared to adjusted operating income of $87.2 million for the prior year to date.

		For the Quarter Ended June 30,								For the Year to Date Ended June 30,
Adjusted Operating Income ($ in thousands)		2022				2021				2022				2021
Operating income		$	33,946			$	35,962			$	77,639			$	76,579
Depreciation and amortization (1)			4,909				3,913				9,791				7,915
Legal fee expense related to certain matters (2)			3,087				2,416				5,434				2,658
Adjusted Operating Income		$	41,942			$	42,291			$	92,864			$	87,152
Increase (Decrease)			-0.8	%							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 June 30, 2022, the Company recorded:

• Net income of $25.8 million compared to $26.6 million for the prior year quarter.
• Earnings per diluted share of $0.37 for both the current and prior year quarter.
• Adjusted earnings per diluted share of $0.42 compared $0.41 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 to date ended June 30, 2022, the Company recorded:

• Net income of $57.8 million compared to $57.4 million for the prior year to date.
• Earnings per diluted share of $0.83 compared to $0.80 for the prior year to date.
• Adjusted earnings per diluted share of $0.93 compared $0.85 for the prior year to date. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

		For the Quarter Ended June 30,								For the Year to Date Ended June 30,
		2022				2021				2022				2021
Reported Earnings Per Diluted Share		$	0.37			$	0.37			$	0.83			$	0.80
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (1)			0.02				0.01				0.05				0.02
Legal fee expense related to certain matters (2)			0.05				0.04				0.08				0.04
Tax effect of adjustments (3)			(0.02	)			(0.01	)			(0.03	)			(0.01	)
Adjusted Earnings Per Diluted Share		$	0.42			$	0.41			$	0.93			$	0.85

(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 June 30, 2022, net cash provided by operating activities was $32.6 million, compared to net cash provided by operating activities of $38.0 million for the prior year quarter.
• At June 30, 2022 and December 31, 2021, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $516.8 million and $499.4 million, respectively.

		For the Quarter Ended June 30,												For the Year to Date Ended June 30,
Selected Cash Flow Items ($ in thousands)		2022				2021				% Change				2022				2021				% Change
Net cash provided by operating activities		$	32,625			$	38,037				-14.2	%		$	54,779			$	82,745				-33.8	%
Capital expenditures		$	2,023			$	2,017				0.3	%		$	6,765			$	3,059				121.2	%

OUTLOOK

The Company is providing the following third quarter outlook along with an updated full year 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 September 30,			For the Year Ending December 31,
	OUTLOOK	ACTUAL		OUTLOOK	ACTUAL
	2022	2021		2022	2021
Operating Income	$19.7M - $21.7M	$37.9M		$111.8M - $117.8M	$149.0M
Depreciation and amortization	$5.0M	$3.9M		$19.9M	$16.8M
Legal fee expense related to certain matters (1)	$3.3M	$4.5M		$10.3M	$9.7M
Adjusted Operating Income	$28.0M - $30.0M	$46.3M		$142.0M - $148.0M	$175.5M
Earnings Per Diluted Share	$0.22 - $0.24	$0.39		$1.23 - $1.30	$1.55
Amortization of acquired intangible assets	$0.02	$0.01		$0.10	$0.06
Legal fee expense related to certain matters (1)	$0.05	$0.06		$0.15	$0.14
Tax effect of adjustments	($0.01)	($0.01)		($0.07)	($0.05)
Adjusted Earnings Per Diluted Share	$0.28 - $0.30	$0.45		$1.41 - $1.48	$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 26.5% for the third quarter and 26.0% 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, August 8, 2022 at 5:30 p.m. Eastern time to discuss second 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 076271. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/287915325. 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 which may continue to be impacted by the COVID-19 pandemic. 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)
		June 30,				December 31,
		2022				2021
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted		$	148,749			$	319,982
Restricted cash			1,191				5,196
Short-term investments			366,840				174,213
Total cash and cash equivalents, restricted cash and short-term investments			516,780				499,391
Student receivables, net			32,186				43,033
Receivables, other			8,617				1,692
Prepaid expenses			10,306				6,919
Inventories			1,168				904
Other current assets			2,737				2,514
Total current assets			571,794				554,453
NON-CURRENT ASSETS:
Property and equipment, net			26,952				28,355
Right of use asset, net			32,443				36,664
Goodwill			162,579				162,579
Intangible assets, net			28,877				32,208
Student receivables, net			1,295				1,372
Deferred income tax assets, net			25,671				25,114
Other assets			6,450				6,688
TOTAL ASSETS		$	856,061			$	847,433
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating		$	7,278			$	9,400
Accounts payable			12,419				10,838
Accrued expenses:
Payroll and related benefits			22,887				25,312
Advertising and marketing costs			9,548				8,690
Income taxes			7,995				211
Other			14,504				15,180
Deferred revenue			35,567				70,613
Total current liabilities			110,198				140,244
NON-CURRENT LIABILITIES:
Lease liability - operating			31,990				35,549
Other liabilities			21,113				21,530
Total non-current liabilities			53,103				57,079
STOCKHOLDERS' EQUITY:
Preferred stock			-				-
Common stock			894				887
Additional paid-in capital			679,400				674,242
Accumulated other comprehensive loss			(3,174	)			(96	)
Retained earnings			309,817				251,972
Treasury stock			(294,177	)			(276,895	)
Total stockholders' equity			692,760				650,110
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	856,061			$	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 June 30,
		2022				% of Total Revenue				2021				% of Total Revenue
REVENUE:
Tuition and fees, net		$	165,896				98.9	%		$	174,804				99.6	%
Other			1,788				1.1	%			735				0.4	%
Total revenue			167,684								175,539
OPERATING EXPENSES:
Educational services and facilities			27,269				16.3	%			28,532				16.3	%
General and administrative			101,332				60.4	%			107,132				61.0	%
Depreciation and amortization			4,909				2.9	%			3,913				2.2	%
Asset impairment			228				0.1	%			-				0.0	%
Total operating expenses			133,738				79.8	%			139,577				79.5	%
Operating income			33,946				20.2	%			35,962				20.5	%
OTHER INCOME:
Interest income			1,094				0.7	%			322				0.2	%
Interest expense			(99	)			-0.1	%			(280	)			-0.2	%
Miscellaneous expense			(226	)			-0.1	%			(36	)			0.0	%
Total other income			769				0.5	%			6				0.0	%
PRETAX INCOME			34,715				20.7	%			35,968				20.5	%
Provision for income taxes			8,948				5.3	%			9,319				5.3	%
NET INCOME			25,767				15.4	%			26,649				15.2	%
NET INCOME PER SHARE - BASIC:		$	0.38							$	0.38
NET INCOME PER SHARE -DILUTED:		$	0.37							$	0.37
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			68,341								70,299
Diluted			69,182								71,679
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		For the Quarter Ended June 30,
(In Thousands)		2022								2021
NET INCOME		$	25,767							$	26,649
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments			(164	)							28
Unrealized loss on investments			(1,469	)							(22	)
Total other comprehensive (loss) income			(1,633	)							6
COMPREHENSIVE INCOME		$	24,134							$	26,655

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 June 30,
		2022				% of Total Revenue				2021				% of Total Revenue
REVENUE:
Tuition and fees, net		$	347,223				99.0	%		$	357,635				99.6	%
Other			3,420				1.0	%			1,542				0.4	%
Total revenue			350,643								359,177
OPERATING EXPENSES:
Educational services and facilities			55,357				15.8	%			57,506				16.0	%
General and administrative			207,628				59.2	%			217,177				60.5	%
Depreciation and amortization			9,791				2.8	%			7,915				2.2	%
Asset impairment			228				0.1	%			-				0.0	%
Total operating expenses			273,004				77.9	%			282,598				78.7	%
Operating income			77,639				22.1	%			76,579				21.3	%
OTHER INCOME:
Interest income			1,427				0.4	%			681				0.2	%
Interest expense			(202	)			-0.1	%			(389	)			-0.1	%
Miscellaneous (expense) income			(315	)			-0.1	%			95				0.0	%
Total other income			910				0.3	%			387				0.1	%
PRETAX INCOME			78,549				22.4	%			76,966				21.4	%
Provision for income taxes			20,704				5.9	%			19,564				5.4	%
NET INCOME			57,845				16.5	%			57,402				16.0	%
NET INCOME PER SHARE - BASIC:		$	0.84							$	0.82
NET INCOME PER SHARE -DILUTED:		$	0.83							$	0.80
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			68,542								70,224
Diluted			69,376								71,616
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		For the Year to Date Ended June 30,
(In Thousands)		2022								2021
NET INCOME		$	57,845							$	57,402
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments			(245	)							(101	)
Unrealized loss on investments			(2,833	)							(243	)
Total other comprehensive loss			(3,078	)							(344	)
COMPREHENSIVE INCOME		$	54,767							$	57,058

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		For the Year to Date Ended June 30,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	57,845			$	57,402
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment			228				-
Depreciation and amortization expense			9,791				7,915
Bad debt expense			24,379				26,168
Compensation expense related to share-based awards			4,316				7,430
Deferred income taxes			(557	)			8,569
Changes in operating assets and liabilities			(41,223	)			(24,739	)
Net cash provided by operating activities			54,779				82,745
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments			(330,797	)			(218,437	)
Sales of available-for-sale investments			134,964				127,193
Purchases of property and equipment			(6,765	)			(3,059	)
Payments for pending business acquisition			(7,000	)			-
Net cash used in investing activities			(209,598	)			(94,303	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock			849				623
Purchase of treasury stock			(15,670	)			(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			(20,419	)			(6,783	)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			(175,238	)			(18,341	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period			325,178				109,684
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period		$	149,940			$	91,343

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
		For the Quarter Ended June 30,
		2022				2021
REVENUE:
CTU		$	100,461			$	102,035
AIUS			66,920				73,223
Corporate and Other			303				281
Total		$	167,684			$	175,539
OPERATING INCOME (LOSS):
CTU		$	33,008			$	35,398
AIUS			10,733				9,218
Corporate and Other			(9,795	)			(8,654	)
Total		$	33,946			$	35,962
OPERATING MARGIN (LOSS):
CTU			32.9	%			34.7	%
AIUS			16.0	%			12.6	%
Corporate and Other		NM				NM
Total			20.2	%			20.5	%

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)
		For the Year to Date Ended June 30,
		2022				2021
REVENUE:
CTU		$	213,609			$	207,857
AIUS			136,452				150,700
Corporate and Other			582				620
Total		$	350,643			$	359,177
OPERATING INCOME (LOSS):
CTU		$	76,034			$	71,541
AIUS			20,256				20,541
Corporate and Other			(18,651	)			(15,503	)
Total		$	77,639			$	76,579
OPERATING MARGIN (LOSS):
CTU			35.6	%			34.4	%
AIUS			14.8	%			13.6	%
Corporate and Other		NM				NM
Total			22.1	%			21.3	%

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)
(In thousands, unless otherwise noted)
		For the Quarter Ended June 30,								For the Year to Date Ended June 30,
		ACTUAL								ACTUAL
Adjusted Operating Income		2022				2021				2022				2021
Operating income		$	33,946			$	35,962			$	77,639			$	76,579
Depreciation and amortization (2)			4,909				3,913				9,791				7,915
Legal fee expense related to certain matters (3)			3,087				2,416				5,434				2,658
Adjusted Operating Income		$	41,942			$	42,291			$	92,864			$	87,152
		For the Quarter Ending September 30,								For the Year Ending December 31,
		OUTLOOK				ACTUAL				OUTLOOK				ACTUAL
		2022				2021				2022				2021
Operating income		$19.7M - $21.7M				$	37,861			$111.8M - $117.8M				$	149,016
Depreciation and amortization (2)		5.0M					3,887			19.9M					16,766
Legal fee expense related to certain matters (3)		3.3M					4,583			10.3M					9,735
Adjusted Operating Income		$28.0M - $30.0M				$	46,331			$142.0M - $148.0M				$	175,517

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)
		For the Quarter Ended June 30,								For the Year to Date Ended June 30,
		ACTUAL								ACTUAL
		2022				2021				2022				2021
Reported Earnings Per Diluted Share		$	0.37			$	0.37			$	0.83			$	0.80
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)			0.02				0.01				0.05				0.02
Legal fee expense related to certain matters (3)			0.05				0.04				0.08				0.04
Total pre-tax adjustments		$	0.07			$	0.05			$	0.13			$	0.06
Tax effect of adjustments (4)			(0.02	)			(0.01	)			(0.03	)			(0.01	)
Total adjustments after tax			0.05				0.04				0.10				0.05
Adjusted Earnings Per Diluted Share		$	0.42			$	0.41			$	0.93			$	0.85
		For the Quarter Ending September 30,								For the Year Ending December 31,
		OUTLOOK				ACTUAL				OUTLOOK				ACTUAL
		2022				2021				2022				2021
Reported Earnings Per Diluted Share		$0.22 - $0.24				$	0.39			$1.23 - $1.30				$	1.55
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (2)		0.02					0.01			0.10					0.06
Legal fee expense related to certain matters (3)		0.05					0.06			0.15					0.14
Total pre-tax adjustments		$0.07				$	0.07			$0.25				$	0.20
Tax effect of adjustments (4)		(0.01)					(0.01	)		(0.07)					(0.05	)
Total adjustments after tax		0.06					0.06			0.18					0.15
Adjusted Earnings Per Diluted Share		$0.28 - $0.30				$	0.45			$1.41 - $1.48				$	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 DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Hippo acquisition commencing on the September 10, 2021 date of acquisition.
(2)		Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo 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/20220808005669/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

Source: Perdoceo Education Corporation

FAQ

What were Perdoceo Education Corporation's Q2 2022 revenue results?

Perdoceo reported Q2 2022 revenue of $167.7 million, down 4.5% from the previous year.

How did earnings per share perform in Q2 2022 for PRDO?

Earnings per diluted share for Q2 2022 remained stable at $0.37, while adjusted earnings per share increased to $0.42 from $0.41.

What are the total student enrollment figures for Perdoceo as of June 30, 2022?

As of June 30, 2022, total student enrollments were 40,100, reflecting a 7.0% decrease compared to the prior year.

What is the outlook for Perdoceo Education Corporation for Q3 2022?

The company provided an outlook for Q3 2022, expecting operating income between $19.7 million and $21.7 million.

How much cash did Perdoceo have at the end of Q2 2022?

At the end of Q2 2022, Perdoceo had $516.8 million in cash, cash equivalents, and restricted cash.