EXHIBIT 99.01
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION CONTACT:
Mark C. Brown, Executive Vice President and
Chief Financial Officer
(703) 247-2514
Sonya Udler, Senior Vice President,
Corporate Communications
(703) 247-2517
sonya.udler@strayer.edu
STRAYER EDUCATION, INC. REPORTS RECORD
FOURTH QUARTER AND FULL YEAR 2007 REVENUES AND EARNINGS; AND
RECORD WINTER TERM 2008 ENROLLMENTS
-- STRAYER FOURTH QUARTER REVENUES UP 20% --
-- STRAYER FOURTH QUARTER DILUTED EPS $1.34, UP 21% --
-- STRAYER FULL YEAR DILUTED EPS $4.47, UP 24% --
-- STRAYER WINTER 2008 TOTAL ENROLLMENTS UP 16%/NEW STUDENTS UP 17% --
-- TWO NEW CAMPUSES OPENED FOR 2008 SPRING TERM --
ARLINGTON, Va., February 14, 2008 -- Strayer Education, Inc. (Nasdaq: STRA)
today announced financial results for the three months and year ended December
31, 2007. Financial highlights are as follows:
THREE MONTHS ENDED DECEMBER 31
o Revenues for the three months ended December 31, 2007 increased 20% to
$89.1 million, compared to $74.3 million for the same period in 2006, due
to increased enrollment and a 5% tuition increase which commenced in
January 2007.
o Income from operations was $29.2 million compared to $24.1 million for the
same period in 2006, an increase of 21%. Operating income margin was 32.8%
compared to 32.4% in 2006.
o Net income was $19.5 million compared to $16.0 million for the same period
in 2006, an increase of 22%. Diluted earnings per share was $1.34 compared
to $1.11 for the same period in 2006, an increase of 21%. Diluted weighted
average shares outstanding increased to 14,536,000 from 14,452,000 for the
same period in 2006.
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YEAR ENDED DECEMBER 31
o Revenues for the year ended December 31, 2007 increased 21% to $318.0
million, compared to $263.6 million for the same period in 2006, due to
increased enrollment and a 5% tuition increase effective for 2007.
o Income from operations was $97.6 million compared to $79.5 million for the
same period in 2006, an increase of 23%. Operating income margin was 30.7%
compared to 30.2% in 2006.
o Net income was $64.9 million compared to $52.3 million in 2006, an increase
of 24%. Diluted earnings per share was $4.47 compared to $3.61 in 2006, an
increase of 24%. Diluted weighted average shares outstanding increased to
14,517,000 from 14,492,000 in 2006.
"We are pleased with both our fourth quarter and year-end financial results,"
said Robert S. Silberman, Chairman and Chief Executive Officer of Strayer
Education, Inc. "We had a successful start to the 2008 academic year with the
opening of new campuses in both the Raleigh and Charlotte, North Carolina
markets. We look forward to our new campus openings for the 2008 spring term in
two existing Strayer markets: Atlanta and Orlando."
BALANCE SHEET AND CASH FLOW
At December 31, 2007, the Company had cash, cash equivalents and marketable
securities (a diversified, no load, short-term, tax-exempt bond fund) of $171.3
million and no debt. The Company generated $80.8 million from operating
activities in 2007. Capital expenditures were $14.9 million for the same period.
During the fourth quarter 2007, the Company repurchased approximately 102,900
shares of common stock at an average price of $175.86 per share under a
previously announced common stock repurchase authorization. During the year
ended December 31, 2007, the Company repurchased approximately 260,800 shares of
common stock at an average price of $146.05 per share. As of December 31, 2007,
the Company had $81.9 million of share repurchase authorization remaining under
this plan.
In the fourth quarter 2007, bad debt expense as a percentage of revenue was 3.6%
compared to 3.5% for the same period in 2006. Days sales outstanding, adjusted
to exclude tuition receivable related to future quarters, was 12 days at the end
of the fourth quarter 2007, compared to 13 days at the end of the same period in
2006.
STUDENT ENROLLMENT
Total enrollment at Strayer University for the 2008 winter term increased 16% to
37,323 students compared to 32,150 students for the same term in 2007. Across
the Strayer University campus network, new student enrollments increased 17% and
continuing student enrollments increased 16%. Global (out of area) online
students increased 32%, while students taking 100% of their classes online
(including campus based students) increased 18%. The total number of students
taking any courses online (including students at brick and mortar campuses
taking at least one online course) in the 2008 winter term increased 17% to
26,465.
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STUDENT ENROLLMENT
Winter Winter %
2007 2008 Change
------ ------ ------
Campus Based Students:
New Campuses (23 in operation 3 or less years)
Classroom Students 1,453 2,893 99%
Online Students 2,131 3,628 70%
------ ------
Total New Campus Based Students 3,584 6,521 82%
------ ------
Mature Campuses (30 in operation more than 3 years)
Classroom Students 11,890 12,175 2%
Online Students 13,696 14,687 7%
------ ------
Total Mature Campus Based Students 25,586 26,862 5%
------ ------
Total Campus Based Students 29,170 33,383 14%
Global (out of area) Online Students 2,980 3,940 32%
------ ------
Total University Enrollment 32,150 37,323 16%
====== ======
Total Students Taking 100% Courses Online 18,807 22,255 18%
Total Students Taking At Least 1 Course Online 22,591 26,465 17%
NEW CAMPUS OPENINGS
The Company announced today that it has opened two new campuses for the 2008
spring term. Both campuses are in existing markets - one in Atlanta, Georgia,
the Company's sixth campus in that market, and one in Orlando, Florida, the
Company's third campus in that market. Including the two new campuses
successfully opened for the 2008 winter quarter in Charlotte and Raleigh, North
Carolina, the Company has opened four of the nine new campuses planned for 2008.
COMMON STOCK CASH DIVIDENDS
As previously announced, the Company declared a special dividend of $2.00 per
share in the fourth quarter 2007, which was paid on January 16, 2008 to all
shareholders of record as of January 2, 2008. The Company announced today that
its Board of Directors has declared its regular, quarterly common stock cash
dividend of $0.375 per share. This dividend will be paid on March 10, 2008 to
shareholders of record as of February 28, 2008.
STOCK-BASED COMPENSATION ACTIVITY
In February 2008, the Company's Board of Directors approved grants of 42,536
shares of restricted stock to certain employees pursuant to the Company's
existing equity compensation plan. These shares vest over a 3-5 year period and
represent approximately 0.3% of the common shares outstanding. The Company's
stock price closed at $162.10 on the date of the restricted stock grant.
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BUSINESS OUTLOOK
Based on the strong enrollment growth announced for the 2008 winter term and the
planned investments in opening new campuses, the Company estimates first quarter
2008 diluted EPS will be in the range of $1.57 to $1.59.
2008 ANNUAL MEETING OF STOCKHOLDERS
The Company announced today that its 2008 annual meeting of stockholders will
take place on Tuesday, April 29, 2008 in Arlington, Virginia. Friday, March 7,
2008 will be the record date for this annual meeting.
CONFERENCE CALL WITH MANAGEMENT
Strayer Education, Inc. will host a conference call to discuss its fourth
quarter earnings and year-end results at 10:00 a.m. (ET) today. To participate
on the live call, investors should dial (800) 289-0468 10 minutes prior to the
start time. In addition, the call will be available via live Webcast over the
Internet. To access the live Webcast of the conference call, please go to
www.strayereducation.com 15 minutes prior to the start time of the call to
register. An archived replay of the conference call will be available at (888)
203-1112 (pass code 8322948) starting at 1:00 p.m. (ET) today and will be
available through Monday, February 18, and archived at www.strayereducation.com
for 90 days.
Strayer Education, Inc. (Nasdaq: STRA) is an education services holding company
that owns Strayer University and certain other assets. Strayer's mission is to
make higher education achievable and convenient for working adults in today's
economy. Strayer University is a proprietary institution of higher learning that
offers undergraduate and graduate degree programs in business administration,
accounting, information technology, education, and public administration to more
than 37,000 working adult students at 55 campuses in 12 states in the Eastern
United States and Washington, D.C. and worldwide via the Internet. Strayer
University is committed to providing an education that prepares working adult
students for advancement in their careers and professional lives. Founded in
1892, Strayer University is accredited by the Middle States Commission on Higher
Education.
For more information on Strayer Education, Inc. visit www.strayereducation.com
and for Strayer University visit www.strayer.edu.
This press release contains statements that are forward looking and are made
pursuant to the "safe-harbor" provisions of the Private Securities Litigation
Reform Act of 1995 ("Reform Act"). The statements are based on the Company's
current expectations and are subject to a number of uncertainties and risks. In
connection with the Safe Harbor provisions of the Reform Act, the Company has
identified important factors that could cause the Company's actual results to
differ materially from those expressed in or implied by such statements. The
uncertainties and risks include the pace of growth of student enrollment, our
continued compliance with Title IV of the Higher Education Act, and the
regulations thereunder, as well as regional accreditation standards and state
and regional regulatory requirements, competitive factors, our ability to
implement our growth strategy, 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, risks relating to the timing of regulatory approvals,
and general economic and market conditions. Further information about these and
other relevant risks and uncertainties may be found in the Company's annual
report on Form 10-K and its other filings with the Securities and Exchange
Commission, all of which are incorporated herein by reference and which are
available from the Commission. We undertake no obligation to update or revise
forward looking statements.
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STRAYER EDUCATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
For the three months For the year
ended December 31, ended December 31,
-------------------- -------------------
(unaudited)
2006 2007 2006 2007
-------- -------- -------- --------
Revenues ................................ $74,307 $89,131 $263,648 $318,012
Costs and expenses:
Instruction and educational support... 24,750 29,637 91,120 108,852
Selling and promotion ................ 14,258 16,635 52,269 60,760
General and administration ........... 11,220 13,658 40,723 50,843
------- ------- -------- --------
Income from operations ............ 24,079 29,201 79,536 97,557
Investment and other income ............. 1,265 1,712 4,542 6,495
------- ------- -------- --------
Income before income taxes ........ 25,344 30,913 84,078 104,052
Provision for income taxes .............. 9,347 11,417 31,771 39,115
------- ------- -------- --------
Net income ........................ $15,997 $19,496 $ 52,307 $ 64,937
======= ======= ======== ========
Net income per share:
Basic ................................ $ 1.13 $ 1.37 $ 3.69 $ 4.56
Diluted .............................. $ 1.11 $ 1.34 $ 3.61 $ 4.47
Weighted average shares outstanding:
Basic ................................ 14,136 14,242 14,187 14,248
Diluted .............................. 14,452 14,536 14,492 14,517
Common dividends per share (paid) ....... $ 0.31 $ 0.38 $ 1.06 $ 1.31
- -----------------------------------------------------------------------------------------
In 2006, the Company began recording stock-based compensation expense under SFAS
123(R). The table below sets forth the amount of stock-based compensation
expense recorded in each of the expense line items.
For the three months For the year ended
ended December 31, December 31,
-------------------- ------------------
(unaudited)
2006 2007 2006 2007
--------- -------- ------- --------
Instruction and educational support ........ $ 150 $ 170 $ 638 $ 680
Selling and promotion ...................... 136 164 545 634
General and administration ................. 2,232 2,254 6,866 8,893
------ ------ ------ -------
Total stock-based compensation expense... $2,518 $2,588 $8,049 $10,207
====== ====== ====== =======
- -----------------------------------------------------------------------------------------
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STRAYER EDUCATION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
December 31, December 31,
2006 2007
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents ..................................... $ 52,663 $ 95,036
Marketable securities available for sale, at fair value ....... 75,763 76,299
Tuition receivable, net of allowances for doubtful accounts of
$3,029 and $3,206 in 2006 and 2007, respectively ........... 80,753 100,651
Other current assets .......................................... 4,653 4,097
-------- --------
Total current assets ....................................... 213,832 276,083
Property and equipment, net. ..................................... 52,748 57,946
Deferred income taxes ............................................ 3,400 8,830
Restricted cash .................................................. 500 500
Other assets. .................................................... 364 419
-------- --------
Total assets ............................................... $270,844 $343,778
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .............................................. $ 10,923 $ 15,682
Accrued expenses .............................................. 1,830 3,303
Income taxes payable .......................................... 4,979 4,754
Dividends payable. ............................................ -- 28,853
Unearned tuition .............................................. 73,896 91,476
Other current liabilities. .................................... -- 281
-------- --------
Total current liabilities. ................................. 91,628 144,349
Long-term liabilities. ........................................... 7,689 10,922
-------- --------
Total liabilities .......................................... 99,317 155,271
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01; 20,000,000 shares authorized;
14,293,584 and 14,426,634 shares issued and outstanding
as of December 31, 2006 and 2007, respectively ............. 141 144
Additional paid-in capital. ................................... 87,487 87,080
Retained earnings ............................................. 84,043 101,102
Accumulated other comprehensive (loss) income ................. (144) 181
-------- --------
Total stockholders' equity ................................. 171,527 188,507
-------- --------
Total liabilities and stockholders' equity. ................ $270,844 $343,778
======== ========
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STRAYER EDUCATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
For the year ended
December 31,
-------------------
2006 2007
-------- --------
Cash flows from operating activities:
Net income ........................................................ $ 52,307 $ 64,937
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on disposal of assets ..................................... -- 51
Amortization of gain on sale of assets ......................... -- (148)
Amortization of deferred rent .................................. 190 (115)
Depreciation and amortization .................................. 7,059 8,523
Provision for student loan losses .............................. (120) --
Deferred income taxes .......................................... (4,034) (5,700)
Stock-based compensation ....................................... 7,413 9,834
Changes in assets and liabilities:
Tuition receivable, net ........................................ (24,818) (19,898)
Other current assets ........................................... (1,710) 617
Other assets ................................................... (25) (55)
Accounts payable ............................................... 4,581 2,911
Accrued expenses ............................................... 347 1,473
Income taxes payable ........................................... 4,801 12,453
Excess tax benefits from stock-based payment arrangements ...... (3,595) (12,678)
Unearned tuition ............................................... 18,118 17,580
Deferred lease incentives ...................................... 1,235 968
Student loans originated .......................................... (3) --
Collections on student loans receivable ........................... 23 --
-------- --------
Net cash provided by operating activities ................... 61,769 80,753
-------- --------
Cash flows from investing activities:
Purchases of property and equipment ............................... (13,183) (14,869)
Proceeds from the sale of property and equipment .................. -- 5,754
Purchases of marketable securities ................................ (30,000) --
-------- --------
Net cash used in investing activities ....................... (43,183) (9,115)
-------- --------
Cash flows from financing activities:
Common dividends paid ............................................. (15,284) (19,027)
Proceeds from exercise of stock options ........................... 6,595 15,178
Excess tax benefits from stock-based payment arrangements ......... 3,595 12,678
Repurchase of common stock ........................................ (35,041) (38,094)
-------- --------
Net cash used in financing activities ....................... (40,135) (29,265)
-------- --------
Net (decrease) increase in cash and cash equivalents ........ (21,549) 42,373
Cash and cash equivalents - beginning of period ...................... 74,212 52,663
-------- --------
Cash and cash equivalents - end of period ............................ $ 52,663 $ 95,036
======== ========
Non-cash transactions:
Purchases of property and equipment included in accounts payable .. $ 501 $ 2,349
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