Strategic Education, Inc. Reports Fourth Quarter 2021 Results
Strategic Education, Inc. (NASDAQ: STRA) reported Q4 and full-year 2021 financial results, indicating a revenue increase of 1.7% to $272.1 million in Q4, but adjusted revenue decreased 2.1% to $272.8 million. For the year, revenue rose 10.1% to $1.1317 billion. However, net income declined to $55.1 million from $86.3 million in 2020. The U.S. Higher Education segment experienced significant enrollment declines of 14.3% in Q4. A quarterly cash dividend of $0.60 per share was announced, payable on March 14, 2022.
- Q4 revenue rose 1.7% to $272.1 million compared to $267.5 million in 2020.
- Full-year revenue increased by 10.1% to $1,131.7 million compared to $1,027.7 million in 2020.
- Net income rose to $21.7 million in Q4 from $5.9 million in 2020.
- Diluted earnings per share increased to $0.90 from $0.25 in the same period last year.
- A regular cash dividend of $0.60 per share was declared.
- Adjusted revenue for Q4 declined 2.1% to $272.8 million from $278.8 million year-over-year.
- Adjusted income from operations fell to $37.9 million in Q4 from $47.1 million in 2020.
- Full-year adjusted diluted earnings per share decreased to $4.82 from $6.68 in 2020.
- Student enrollment in the U.S. Higher Education segment decreased 14.3% in Q4.
- Year-end net income fell to $55.1 million from $86.3 million in 2020.
“We are very proud of the organization’s commitment over the past year to the success of our students and our mission to enable economic mobility,” said
STRATEGIC EDUCATION CONSOLIDATED RESULTS
[Note: Strategic Education’s financial results for any periods ended prior to
Three Months Ended
-
Revenue increased
1.7% to compared to$272.1 million for the same period in 2020. Adjusted revenue, which is a non-GAAP financial measure, decreased$267.5 million 2.1% to compared to$272.8 million for the same period in 2020. For more details on non-GAAP financial measures, refer to the information in the Non-GAAP Financial Measures section of this press release.$278.8 million
-
Income from operations was
or$27.9 million 10.2% of revenue, compared to or$3.6 million 1.3% of revenue for the same period in 2020. Adjusted income from operations, which is a non-GAAP financial measure, was in 2021 compared to$37.9 million for the same period in 2020. The adjusted operating income margin, which is a non-GAAP financial measure, was$47.1 million 13.9% compared to16.9% for the same period in 2020.
-
Net income was
in 2021 compared to$21.7 million for the same period in 2020. Adjusted net income, which is a non-GAAP financial measure, was$5.9 million compared to$27.7 million for the same period in 2020.$33.4 million
-
Adjusted EBITDA, which is a non-GAAP financial measure, was
compared to$56.1 million for the same period in 2020.$64.2 million
-
Diluted earnings per share was
compared to$0.90 for the same period in 2020. Adjusted diluted earnings per share, which is a non-GAAP financial measure, decreased to$0.25 from$1.15 for the same period in 2020. Diluted weighted average shares outstanding decreased to 24,098,000 from 24,143,000 for the same period in 2020.$1.39
Year Ended
-
Revenue increased
10.1% to compared to$1,131.7 million in 2020. Adjusted revenue, which is a non-GAAP financial measure, increased$1,027.7 million 9.0% to compared to$1,132.1 million in 2020. For more details on non-GAAP financial measures, refer to the information in the Non-GAAP Financial Measures section of this press release.$1,038.9 million
-
Income from operations was
or$73.9 million 6.5% of revenue, compared to or$109.4 million 10.6% of revenue in 2020. Adjusted income from operations, which is a non-GAAP financial measure, was in 2021 compared to$165.3 million in 2020. The adjusted operating income margin, which is a non-GAAP financial measure, was$211.1 million 14.6% compared to20.3% in 2020.
-
Net income was
in 2021 compared to$55.1 million in 2020. Adjusted net income, which is a non-GAAP financial measure, was$86.3 million compared to$116.4 million in 2020.$152.7 million
-
Adjusted EBITDA, which is a non-GAAP financial measure, was
compared to$237.3 million in 2020.$271.2 million
-
Diluted earnings per share was
compared to$2.28 in 2020. Adjusted diluted earnings per share, which is a non-GAAP financial measure, decreased to$3.77 from$4.82 in 2020. Diluted weighted average shares outstanding increased to 24,122,000 from 22,860,000 in 2020, due primarily to new shares issued to facilitate the acquisition of$6.68 Torrens University and associated assets inAustralia and New Zealand .
-
The
U.S. Higher Education segment (USHE) is comprised ofStrayer University andCapella University .
-
For the fourth quarter, student enrollment within USHE decreased
14.3% to 78,721 compared to 91,846 for the same period in 2020. Full-year 2021 student enrollment within USHE decreased11.0% compared to 2020.
-
For the fourth quarter, FlexPath enrollment was
18% of USHE enrollment compared to15% for the same period in 2020.
-
Revenue decreased
14.9% to in the fourth quarter of 2021 compared to$198.6 million for the same period in 2020, driven by lower fourth quarter enrollment and slightly lower revenue-per-student.$233.4 million
-
Income from operations decreased to
in the fourth quarter of 2021 from$19.9 million for the same period in 2020. The operating income margin was$44.2 million 10.0% , compared to18.9% for the same period in 2020.
-
Strayer University has now reopened 50 campuses that had been closed during the COVID-19 pandemic, and continues to evaluate reopening additional campuses in 2022.
Education Technology Services Segment Highlights
-
The Alternative Learning segment has been renamed to the Education Technology Services segment, and is comprised primarily of Employer Solutions,
Sophia Learning , and Workforce Edge.
-
For the fourth quarter, employer affiliated enrollment was
21.7% of USHE enrollment compared to18.8% for the same period in 2020. Full-year 2021 employer affiliated enrollment was21.0% of USHE enrollment compared to17.8% in 2020.
-
As of
December 31, 2021 , Workforce Edge had a total of 32 corporate agreements, collectively employing approximately 640,000 employees.
-
Revenue increased
29.8% to in the fourth quarter of 2021 compared to$13.9 million for the same period in 2020, driven by growth in$10.7 million Sophia Learning subscriptions.
-
Income from operations increased to
in the fourth quarter of 2021 from$5.1 million for the same period in 2020. The operating income margin was$4.9 million 36.5% , compared to45.9% for the same period in 2020.
-
The
Australia /New Zealand segment (ANZ) is comprised ofTorrens University ,Think Education , andMedia Design School .
-
For the fourth quarter, student enrollment within ANZ was 18,942. On a pro forma basis, full-year 2021 student enrollment within ANZ increased
1.5% compared to 2020.
-
Revenue was
in the fourth quarter of 2021, and adjusted revenue, which is a non-GAAP financial measure, was$59.6 million .$60.3 million
-
Income from operations was
or$12.8 million 21.6% of revenue in the fourth quarter of 2021, and adjusted income from operations, which is a non-GAAP financial measure, was or$12.9 million 21.4% of adjusted revenue.
BALANCE SHEET AND CASH FLOW
At
For the fourth quarter of 2021, consolidated bad debt expense as a percentage of revenue was
COMMON STOCK CASH DIVIDEND
CONFERENCE CALL WITH MANAGEMENT
About
Forward-Looking Statements
This communication contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “may,” “will,” “forecast,” “outlook,” “plan,” “project,” “potential” and other similar words, and include all statements that are not historical facts, including with respect to, among other things, the future financial performance and growth opportunities of
-
the pace of student enrollment;
-
Strategic Education’s continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as other federal laws and regulations, institutional accreditation standards and state regulatory requirements;
-
rulemaking by the
Department of Education and increased focus by theU.S. Congress on for-profit education institutions;
-
competitive factors;
-
risks associated with the further spread of COVID-19, including the ultimate impact of COVID-19 on people and economies;
-
the impact of regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including restrictions on business operations or social distancing requirements;
-
risks associated with the opening of new campuses;
-
risks associated with the offering of new educational programs and adapting to other changes;
-
risks associated with the acquisition of existing educational institutions, including in the case of Strategic Education’s acquisition of
Torrens University and associated assets inAustralia and New Zealand , the risk that the benefits of the acquisition may not be fully realized or may take longer to realize than expected, and the risk that the acquisition may not advance Strategic Education’s business strategy and growth strategy;
-
risks relating to the timing of regulatory approvals;
-
Strategic Education’s ability to implement its growth strategy;
-
the risk that the combined company may experience difficulty integrating employees or operations;
-
risks associated with the ability of Strategic Education’s students to finance their education in a timely manner;
-
general economic and market conditions; and
- additional factors described in Strategic Education’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Many of these risks, uncertainties and assumptions are beyond Strategic Education’s ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, these forward-looking statements speak only as of the information currently available to
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) |
||||||||||||||||
|
For the three months ended
|
|
For the twelve months ended
|
|||||||||||||
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
||
Revenues |
$ |
267,494 |
|
|
$ |
272,099 |
|
|
$ |
1,027,653 |
|
$ |
1,131,686 |
|||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||
Instructional and support costs |
|
147,007 |
|
|
|
148,867 |
|
|
|
532,661 |
|
|
608,261 |
|||
General and administration |
|
84,635 |
|
|
|
85,391 |
|
|
|
295,231 |
|
|
361,345 |
|||
Amortization of intangible assets |
|
17,974 |
|
|
|
3,764 |
|
|
|
64,225 |
|
|
51,495 |
|||
Merger and integration costs |
|
5,912 |
|
|
|
7,141 |
|
|
|
13,770 |
|
|
11,201 |
|||
Restructuring costs |
|
8,358 |
|
|
|
(928 |
) |
|
|
12,382 |
|
|
25,472 |
|||
Total costs and expenses |
|
263,886 |
|
|
|
244,235 |
|
|
|
918,269 |
|
|
1,057,774 |
|||
Income from operations |
|
3,608 |
|
|
|
27,864 |
|
|
|
109,384 |
|
|
73,912 |
|||
Other income (expense) |
|
(101 |
) |
|
|
1,611 |
|
|
|
4,573 |
|
|
2,687 |
|||
Income before income taxes |
|
3,507 |
|
|
|
29,475 |
|
|
|
113,957 |
|
|
76,599 |
|||
Provision (benefit) for income taxes |
|
(2,410 |
) |
|
|
7,795 |
|
|
|
27,689 |
|
|
21,512 |
|||
Net income |
$ |
5,917 |
|
|
$ |
21,680 |
|
|
$ |
86,268 |
|
$ |
55,087 |
|||
Earnings per share: |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.25 |
|
|
$ |
0.91 |
|
|
$ |
3.81 |
|
$ |
2.30 |
|||
Diluted |
$ |
0.25 |
|
|
$ |
0.90 |
|
|
$ |
3.77 |
|
$ |
2.28 |
|||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||
Basic |
|
23,955 |
|
|
|
23,924 |
|
|
|
22,633 |
|
|
23,955 |
|||
Diluted |
|
24,143 |
|
|
|
24,098 |
|
|
|
22,860 |
|
|
24,122 |
|||
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) |
||||||||
|
|
|
|
|||||
ASSETS |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
187,509 |
|
$ |
268,918 |
|||
Marketable securities |
|
7,557 |
|
|
6,501 |
|||
Tuition receivable, net |
|
50,169 |
|
|
51,277 |
|||
Income taxes receivable |
|
1,429 |
|
|
313 |
|||
Other current assets |
|
39,458 |
|
|
40,777 |
|||
Total current assets |
|
286,122 |
|
|
367,786 |
|||
Property and equipment, net |
|
158,854 |
|
|
150,589 |
|||
Right-of-use lease assets |
|
120,687 |
|
|
149,587 |
|||
Marketable securities, non-current |
|
30,270 |
|
|
23,377 |
|||
Intangible assets, net |
|
326,420 |
|
|
276,380 |
|||
|
|
1,318,526 |
|
|
1,285,864 |
|||
Other assets |
|
54,928 |
|
|
52,297 |
|||
Total assets |
$ |
2,295,807 |
|
$ |
2,305,880 |
|||
|
|
|
|
|||||
LIABILITIES & STOCKHOLDERS’ EQUITY |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Accounts payable and accrued expenses |
$ |
104,742 |
|
$ |
95,518 |
|||
Contract liabilities |
|
60,501 |
|
|
73,232 |
|||
Lease liabilities |
|
34,809 |
|
|
27,005 |
|||
Total current liabilities |
|
200,052 |
|
|
195,755 |
|||
Long-term debt |
|
141,823 |
|
|
141,630 |
|||
Deferred income tax liabilities |
|
53,407 |
|
|
44,595 |
|||
Lease liabilities, non-current |
|
106,151 |
|
|
162,821 |
|||
Other long-term liabilities |
|
46,055 |
|
|
47,089 |
|||
Total liabilities |
|
547,488 |
|
|
591,890 |
|||
Commitments and contingencies |
|
|
|
|||||
Stockholders’ equity: |
|
|
|
|||||
Common stock, par value |
|
244 |
|
|
246 |
|||
Additional paid-in capital |
|
1,519,549 |
|
|
1,529,969 |
|||
Accumulated other comprehensive income |
|
48,880 |
|
|
9,203 |
|||
Retained earnings |
|
179,646 |
|
|
174,572 |
|||
Total stockholders’ equity |
|
1,748,319 |
|
|
1,713,990 |
|||
Total liabilities and stockholders’ equity |
$ |
2,295,807 |
|
$ |
2,305,880 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
|
For the year ended
|
|||||||
|
|
2020 |
|
|
|
2021 |
|
|
Cash flows from operating activities: |
|
|
|
|||||
Net income |
$ |
86,268 |
|
|
$ |
55,087 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||
Loss on sale of marketable securities |
|
— |
|
|
|
781 |
|
|
Gain on sale of property and equipment |
|
— |
|
|
|
(2,656 |
) |
|
Amortization of deferred financing costs |
|
466 |
|
|
|
552 |
|
|
Amortization of investment discount/premium |
|
146 |
|
|
|
70 |
|
|
Depreciation and amortization |
|
109,154 |
|
|
|
103,416 |
|
|
Deferred income taxes |
|
(13,431 |
) |
|
|
(7,710 |
) |
|
Stock-based compensation |
|
14,610 |
|
|
|
18,149 |
|
|
Impairment of right-of-use lease assets |
|
848 |
|
|
|
18,876 |
|
|
Changes in assets and liabilities: |
|
|
|
|||||
Tuition receivable, net |
|
19,659 |
|
|
|
(196 |
) |
|
Other assets |
|
(32,326 |
) |
|
|
(6,964 |
) |
|
Accounts payable and accrued expenses |
|
(22,685 |
) |
|
|
(6,700 |
) |
|
Income taxes payable and income taxes receivable |
|
(4,020 |
) |
|
|
1,196 |
|
|
Contract liabilities |
|
(10,095 |
) |
|
|
13,995 |
|
|
Other liabilities |
|
(5,689 |
) |
|
|
(7,369 |
) |
|
Net cash provided by operating activities |
|
142,905 |
|
|
|
180,527 |
|
|
|
|
|
|
|||||
Cash flows from investing activities: |
|
|
|
|||||
Cash paid for acquisition, net of cash acquired |
|
(628,759 |
) |
|
|
— |
|
|
Purchases of property and equipment |
|
(46,812 |
) |
|
|
(49,433 |
) |
|
Purchases of marketable securities |
|
(1,863 |
) |
|
|
— |
|
|
Proceeds from marketable securities |
|
36,192 |
|
|
|
9,300 |
|
|
Proceeds from sale of property and equipment |
|
— |
|
|
|
8,331 |
|
|
Other investments |
|
(950 |
) |
|
|
(1,292 |
) |
|
Net cash used in investing activities |
|
(642,192 |
) |
|
|
(33,094 |
) |
|
|
|
|
|
|||||
Cash flows from financing activities: |
|
|
|
|||||
Net proceeds from issuance of common stock |
|
220,248 |
|
|
|
— |
|
|
Proceeds from long-term debt |
|
145,630 |
|
|
|
— |
|
|
Common dividends paid |
|
(55,956 |
) |
|
|
(59,045 |
) |
|
Net payments for stock awards |
|
(24,741 |
) |
|
|
(2,938 |
) |
|
Payments on long-term debt |
|
(3,807 |
) |
|
|
— |
|
|
Payment of deferred financing costs |
|
(1,940 |
) |
|
|
— |
|
|
Repurchase of common stock |
|
(247 |
) |
|
|
(5,905 |
) |
|
Net cash provided by (used in) financing activities |
|
279,187 |
|
|
|
(67,888 |
) |
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
1,623 |
|
|
|
(2,353 |
) |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
(218,477 |
) |
|
|
77,192 |
|
|
Cash, cash equivalents, and restricted cash — beginning of period |
|
420,497 |
|
|
|
202,020 |
|
|
Cash, cash equivalents, and restricted cash — end of period |
$ |
202,020 |
|
|
$ |
279,212 |
|
UNAUDITED SEGMENT REPORTING (in thousands) |
||||||||||||||||
|
For the three months
|
|
For the twelve months
|
|||||||||||||
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
Revenues: |
|
|
|
|
|
|
|
|||||||||
|
$ |
233,405 |
|
|
$ |
198,623 |
|
|
$ |
966,579 |
|
|
$ |
829,270 |
|
|
|
|
23,381 |
|
|
|
59,575 |
|
|
|
23,381 |
|
|
|
250,124 |
|
|
Education Technology Services |
|
10,708 |
|
|
|
13,901 |
|
|
|
37,693 |
|
|
|
52,292 |
|
|
Consolidated revenues |
$ |
267,494 |
|
|
$ |
272,099 |
|
|
$ |
1,027,653 |
|
|
$ |
1,131,686 |
|
|
Income (loss) from operations: |
|
|
|
|
|
|
|
|||||||||
|
$ |
44,213 |
|
|
$ |
19,933 |
|
|
$ |
193,393 |
|
|
$ |
104,914 |
|
|
|
|
(13,275 |
) |
|
|
12,839 |
|
|
|
(13,275 |
) |
|
|
35,855 |
|
|
Education Technology Services |
|
4,914 |
|
|
|
5,069 |
|
|
|
19,643 |
|
|
|
21,311 |
|
|
Amortization of intangible assets |
|
(17,974 |
) |
|
|
(3,764 |
) |
|
|
(64,225 |
) |
|
|
(51,495 |
) |
|
Merger and integration costs |
|
(5,912 |
) |
|
|
(7,141 |
) |
|
|
(13,770 |
) |
|
|
(11,201 |
) |
|
Restructuring costs |
|
(8,358 |
) |
|
|
928 |
|
|
|
(12,382 |
) |
|
|
(25,472 |
) |
|
Consolidated income from operations |
$ |
3,608 |
|
|
$ |
27,864 |
|
|
$ |
109,384 |
|
|
$ |
73,912 |
|
Non-GAAP Financial Measures
In our press release and schedules, we report certain financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in
Management uses certain non-GAAP measures to evaluate financial performance because those non-GAAP measures allow for period-over-period comparisons of the Company’s ongoing operations before the impact of certain items described below. Management believes this information is useful to investors to compare the Company’s results of operations period-over-period. These measures are Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), Adjusted EBITDA and Adjusted Diluted Earnings Per Share (EPS). We define Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted EPS to exclude (1) a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company’s acquisition of
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS (in thousands, except per share data) |
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|
|
|
For the three months ended Non-GAAP Adjustments |
|
|
|||||||||||||||||||||||||||
|
As
|
|
Purchase
|
|
Merger and
|
|
Restructuring
|
|
Income from
|
|
Tax
|
|
Foreign
|
|
As
|
|||||||||||||||||
Revenues |
$ |
267,494 |
|
|
$ |
11,296 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
278,790 |
|
||
Total costs and expenses |
$ |
263,886 |
|
|
$ |
(17,974 |
) |
|
$ |
(5,912 |
) |
|
$ |
(8,358 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
231,642 |
|
||
Income from operations |
$ |
3,608 |
|
|
$ |
29,270 |
|
|
$ |
5,912 |
|
|
$ |
8,358 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
47,148 |
|
||
Operating margin |
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.9 |
% |
|||||||||||||
Income before income taxes |
$ |
3,507 |
|
|
$ |
29,270 |
|
|
$ |
5,912 |
|
|
$ |
8,358 |
|
|
$ |
(315 |
) |
|
$ |
— |
|
|
$ |
— |
|
$ |
46,732 |
|
||
Net income |
$ |
5,917 |
|
|
$ |
29,270 |
|
|
$ |
5,912 |
|
|
$ |
8,358 |
|
|
$ |
(315 |
) |
|
$ |
(15,700 |
) |
|
$ |
— |
|
$ |
33,442 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted |
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1.39 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Diluted |
|
24,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,143 |
|
|
|
|
For the three months ended Non-GAAP Adjustments |
|
|
|||||||||||||||||||||||||||
|
As
|
|
Purchase
|
|
Merger and
|
|
Restructuring
|
|
Income from
|
|
Tax
|
|
Foreign
|
|
As
|
|||||||||||||||||
Revenues |
$ |
272,099 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
698 |
|
$ |
272,797 |
|
||
Total costs and expenses |
$ |
244,235 |
|
|
$ |
(3,764 |
) |
|
$ |
(7,141 |
) |
|
$ |
928 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
646 |
|
$ |
234,904 |
|
||
Income from operations |
$ |
27,864 |
|
|
$ |
3,764 |
|
|
$ |
7,141 |
|
|
$ |
(928 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
52 |
|
$ |
37,893 |
|
||
Operating margin |
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.9 |
% |
|||||||||||||
Income before income taxes |
$ |
29,475 |
|
|
$ |
3,764 |
|
|
$ |
7,141 |
|
|
$ |
(928 |
) |
|
$ |
(2,330 |
) |
|
$ |
— |
|
|
$ |
52 |
|
$ |
37,174 |
|
||
Net income |
$ |
21,680 |
|
|
$ |
3,764 |
|
|
$ |
7,141 |
|
|
$ |
(928 |
) |
|
$ |
(2,330 |
) |
|
$ |
(1,682 |
) |
|
$ |
52 |
|
$ |
27,697 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted |
$ |
0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1.15 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Diluted |
|
24,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,098 |
|
|||||||||||||
|
|
|
For the twelve months ended Non-GAAP Adjustments |
|
|
|||||||||||||||||||||||||||
|
As
|
|
Purchase
|
|
Merger and
|
|
Restructuring
|
|
Income from
|
|
Tax
|
|
Foreign
|
|
As
|
|||||||||||||||||
Revenues |
$ |
1,027,653 |
|
|
$ |
11,296 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
1,038,949 |
|
||
Total costs and expenses |
$ |
918,269 |
|
|
$ |
(64,225 |
) |
|
$ |
(13,770 |
) |
|
$ |
(12,382 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
827,892 |
|
||
Income from operations |
$ |
109,384 |
|
|
$ |
75,521 |
|
|
$ |
13,770 |
|
|
$ |
12,382 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
211,057 |
|
||
Operating margin |
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20.3 |
% |
|||||||||||||
Income before income taxes |
$ |
113,957 |
|
|
$ |
75,521 |
|
|
$ |
13,770 |
|
|
$ |
12,382 |
|
|
$ |
(2,094 |
) |
|
$ |
— |
|
|
$ |
— |
|
$ |
213,536 |
|
||
Net income |
$ |
86,268 |
|
|
$ |
75,521 |
|
|
$ |
13,770 |
|
|
$ |
12,382 |
|
|
$ |
(2,094 |
) |
|
$ |
(33,141 |
) |
|
$ |
— |
|
$ |
152,706 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted |
$ |
3.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6.68 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Diluted |
|
22,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,860 |
|
|
|
|
For the twelve months ended Non-GAAP Adjustments |
|
|
|||||||||||||||||||||||||||
|
As
|
|
Purchase
|
|
Merger and
|
|
Restructuring
|
|
Income from
|
|
Tax
|
|
Foreign
|
|
As
|
|||||||||||||||||
Revenues |
$ |
1,131,686 |
|
|
$ |
3,646 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(3,209 |
) |
|
$ |
1,132,123 |
|
|
Total costs and expenses |
$ |
1,057,774 |
|
|
$ |
(51,495 |
) |
|
$ |
(11,201 |
) |
|
$ |
(25,472 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(2,823 |
) |
|
$ |
966,783 |
|
|
Income from operations |
$ |
73,912 |
|
|
$ |
55,141 |
|
|
$ |
11,201 |
|
|
$ |
25,472 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(386 |
) |
|
$ |
165,340 |
|
|
Operating margin |
|
6.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.6 |
% |
|||||||||||||
Income before income taxes |
$ |
76,599 |
|
|
$ |
55,141 |
|
|
$ |
11,201 |
|
|
$ |
25,472 |
|
|
$ |
(5,300 |
) |
|
$ |
— |
|
|
$ |
(386 |
) |
|
$ |
162,727 |
|
|
Net income |
$ |
55,087 |
|
|
$ |
55,141 |
|
|
$ |
11,201 |
|
|
$ |
25,472 |
|
|
$ |
(5,300 |
) |
|
$ |
(24,865 |
) |
|
$ |
(386 |
) |
|
$ |
116,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted |
$ |
2.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4.82 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Diluted |
|
24,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,122 |
|
(1) |
Reflects a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company’s acquisition of |
|
(2) |
Reflects transaction and integration expenses associated with the Company's merger with |
|
(3) |
Reflects severance costs and right-of-use lease asset impairment charges associated with the Company’s restructuring. | |
(4) |
Reflects income recognized from the Company's investments in partnership interests and other investments. | |
(5) |
Reflects tax impacts of the adjustments described above and discrete tax adjustments related to stock-based compensation and other adjustments, utilizing adjusted effective income tax rates of |
|
(6) |
Reflects foreign currency exchange impact related to translating foreign currency results at a constant exchange rate of |
UNAUDITED NON-GAAP SEGMENT REPORTING (in thousands) |
||||||||||||||||
|
For the three months ended |
|
For the twelve months ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
Revenues: |
|
|
|
|
|
|
|
|||||||||
|
$ |
233,405 |
|
|
$ |
198,623 |
|
|
$ |
966,579 |
|
|
$ |
829,270 |
|
|
|
|
23,381 |
|
|
|
59,575 |
|
|
|
23,381 |
|
|
|
250,124 |
|
|
Education Technology Services |
|
10,708 |
|
|
|
13,901 |
|
|
|
37,693 |
|
|
|
52,292 |
|
|
Consolidated revenues |
|
267,494 |
|
|
|
272,099 |
|
|
|
1,027,653 |
|
|
|
1,131,686 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjustments to consolidated revenues: |
|
|
|
|
|
|
|
|||||||||
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
11,296 |
|
|
|
698 |
|
|
|
11,296 |
|
|
|
437 |
|
|
Education Technology Services |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total adjustments to consolidated revenues |
|
11,296 |
|
|
|
698 |
|
|
|
11,296 |
|
|
|
437 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted revenues by segment: |
|
|
|
|
|
|
|
|||||||||
|
|
233,405 |
|
|
|
198,623 |
|
|
|
966,579 |
|
|
|
829,270 |
|
|
|
|
34,677 |
|
|
|
60,273 |
|
|
|
34,677 |
|
|
|
250,561 |
|
|
Education Technology Services |
|
10,708 |
|
|
|
13,901 |
|
|
|
37,693 |
|
|
|
52,292 |
|
|
Adjusted consolidated revenues |
$ |
278,790 |
|
|
$ |
272,797 |
|
|
$ |
1,038,949 |
|
|
$ |
1,132,123 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from operations: |
|
|
|
|
|
|
|
|||||||||
|
$ |
44,213 |
|
|
$ |
19,933 |
|
|
$ |
193,393 |
|
|
$ |
104,914 |
|
|
|
|
(13,275 |
) |
|
|
12,839 |
|
|
|
(13,275 |
) |
|
|
35,855 |
|
|
Education Technology Services |
|
4,914 |
|
|
|
5,069 |
|
|
|
19,643 |
|
|
|
21,311 |
|
|
Amortization of intangible assets |
|
(17,974 |
) |
|
|
(3,764 |
) |
|
|
(64,225 |
) |
|
|
(51,495 |
) |
|
Merger and integration costs |
|
(5,912 |
) |
|
|
(7,141 |
) |
|
|
(13,770 |
) |
|
|
(11,201 |
) |
|
Restructuring costs |
|
(8,358 |
) |
|
|
928 |
|
|
|
(12,382 |
) |
|
|
(25,472 |
) |
|
Consolidated income from operations |
|
3,608 |
|
|
|
27,864 |
|
|
|
109,384 |
|
|
|
73,912 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjustments to consolidated income from operations: |
|
|
|
|
|
|
|
|||||||||
|
|
11,296 |
|
|
|
52 |
|
|
|
11,296 |
|
|
|
3,260 |
|
|
Amortization of intangible assets |
|
17,974 |
|
|
|
3,764 |
|
|
|
64,225 |
|
|
|
51,495 |
|
|
Merger and integration costs |
|
5,912 |
|
|
|
7,141 |
|
|
|
13,770 |
|
|
|
11,201 |
|
|
Restructuring costs |
|
8,358 |
|
|
|
(928 |
) |
|
|
12,382 |
|
|
|
25,472 |
|
|
Total adjustments to consolidated income from operations |
|
43,540 |
|
|
|
10,029 |
|
|
|
101,673 |
|
|
|
91,428 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted income (loss) from operations by segment: |
|
|
|
|
|
|
|
|||||||||
|
|
44,213 |
|
|
|
19,933 |
|
|
|
193,393 |
|
|
|
104,914 |
|
|
|
|
(1,979 |
) |
|
|
12,891 |
|
|
|
(1,979 |
) |
|
|
39,115 |
|
|
Education Technology Services |
|
4,914 |
|
|
|
5,069 |
|
|
|
19,643 |
|
|
|
21,311 |
|
|
Total adjusted income from operations |
$ |
47,148 |
|
|
$ |
37,893 |
|
|
$ |
211,057 |
|
|
$ |
165,340 |
|
(1) |
Adjustments to the |
|
(2) |
Adjustments to the |
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA (in thousands) |
||||||||||||||||
|
For the three months ended |
|
For the twelve months ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ |
5,917 |
|
|
$ |
21,680 |
|
|
$ |
86,268 |
|
|
$ |
55,087 |
|
|
Provision (benefit) for income taxes |
|
(2,410 |
) |
|
|
7,795 |
|
|
|
27,689 |
|
|
|
21,512 |
|
|
Other (income) expense |
|
101 |
|
|
|
(1,611 |
) |
|
|
(4,573 |
) |
|
|
(2,687 |
) |
|
Gain on sale of property and equipment |
|
— |
|
|
|
(1,975 |
) |
|
|
— |
|
|
|
(2,656 |
) |
|
Depreciation and amortization |
|
30,965 |
|
|
|
15,228 |
|
|
|
109,154 |
|
|
|
103,416 |
|
|
EBITDA (1) |
|
34,573 |
|
|
|
41,117 |
|
|
|
218,538 |
|
|
|
174,672 |
|
|
Stock-based compensation |
|
3,851 |
|
|
|
5,435 |
|
|
|
14,610 |
|
|
|
18,852 |
|
|
Merger and integration costs (2) |
|
5,912 |
|
|
|
7,141 |
|
|
|
13,770 |
|
|
|
11,201 |
|
|
Restructuring costs (3) |
|
8,009 |
|
|
|
1,026 |
|
|
|
12,033 |
|
|
|
25,472 |
|
|
Cloud computing amortization (4) |
|
520 |
|
|
|
1,347 |
|
|
|
983 |
|
|
|
3,848 |
|
|
Contract liability adjustment (5) |
|
11,296 |
|
|
|
— |
|
|
|
11,296 |
|
|
|
3,646 |
|
|
Foreign currency exchange impact (6) |
|
— |
|
|
|
52 |
|
|
|
— |
|
|
|
(386 |
) |
|
Adjusted EBITDA (1) |
$ |
64,161 |
|
|
$ |
56,118 |
|
|
$ |
271,230 |
|
|
$ |
237,305 |
|
(1) |
Denotes non-GAAP financial measures. Please see the information in the Non-GAAP Financial Measures section of this press release for more detail regarding these adjustments and management’s reasons for providing this information. | |
(2) |
Reflects transaction and integration charges associated with the Company's merger with |
|
(3) |
Reflects severance costs and right-of-use lease asset impairment charges associated with the Company’s restructuring. Includes |
|
(4) |
Reflects amortization expense associated with deferred implementation costs incurred in cloud computing arrangements. | |
(5) |
Reflects a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company’s acquisition of |
|
(6) |
Reflects foreign currency exchange impact related to translating foreign currency results at a constant exchange rate of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220225005096/en/
Director of Investor Relations
(612) 977-6331
terese.wilke@strategiced.com
Source:
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