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Form 10-Q PERDOCEO EDUCATION Corp For: Jun 30

August 8, 2022 4:19 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark one)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM          TO             

Commission File Number: 0-23245

 

PERDOCEO EDUCATION CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware

36-3932190

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

231 N. Martingale Road

Schaumburg, Illinois

60173

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (847781-3600

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.01 par value

 

PRDO

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

Non-accelerated filer

 

 

Smaller reporting company

Emerging growth company

 

  

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Indicate by check mark whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act.    Yes      No  

Number of shares of registrant’s common stock, par value $0.01, outstanding as of August 2, 2022: 67,756,553

 


 

PERDOCEO EDUCATION CORPORATION

FORM 10-Q

TABLE OF CONTENTS

 

 

 

 

 

 

Page

PART I—FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets

1

 

 

 

 

Condensed Consolidated Statements of Income (Unaudited)

2

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

2

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

3

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

4

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

28

 

 

 

Item 4.

Controls and Procedures

29

 

 

PART II—OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

30

 

 

 

Item 1A.

Risk Factors

30

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

Item 6.

Exhibits

30

 

 

SIGNATURES

32

 

 

 


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

December 31,

 

(In Thousands, Except Share and Per Share Amounts)

 

2022

 

 

2021

 

ASSETS

 

(unaudited)

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

148,749

 

 

$

319,982

 

Restricted cash

 

 

1,191

 

 

 

5,196

 

Total cash, cash equivalents and restricted cash

 

 

149,940

 

 

 

325,178

 

Short-term investments

 

 

366,840

 

 

 

174,213

 

Total cash and cash equivalents, restricted cash and short-term investments

 

 

516,780

 

 

 

499,391

 

Student receivables, gross

 

 

73,129

 

 

 

79,418

 

Allowance for credit losses

 

 

(40,943

)

 

 

(36,385

)

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 of accumulated depreciation of $116,233 and $113,711

   as of June 30, 2022 and December 31, 2021, respectively

 

 

26,952

 

 

 

28,355

 

Right of use asset, net

 

 

32,443

 

 

 

36,664

 

Goodwill

 

 

162,579

 

 

 

162,579

 

Intangible assets, net of amortization of $11,994 and $8,662 as of June 30, 2022 and December 31, 2021, respectively

 

 

28,877

 

 

 

32,208

 

Student receivables, gross

 

 

4,138

 

 

 

4,242

 

Allowance for credit losses

 

 

(2,843

)

 

 

(2,870

)

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, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 300,000,000 shares authorized; 89,358,511

   and 88,724,438 shares issued, 67,756,553 and 68,748,662 shares

   outstanding as of June 30, 2022 and December 31, 2021, respectively

 

 

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, at cost; 21,601,958 and 19,975,776 shares as of June 30, 2022

   and December 31, 2021, respectively

 

 

(294,177

)

 

 

(276,895

)

Total stockholders' equity

 

 

692,760

 

 

 

650,110

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

856,061

 

 

$

847,433

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

1


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

(In Thousands, Except Per Share Amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

165,896

 

 

$

174,804

 

 

$

347,223

 

 

$

357,635

 

Other

 

 

1,788

 

 

 

735

 

 

 

3,420

 

 

 

1,542

 

Total revenue

 

 

167,684

 

 

 

175,539

 

 

 

350,643

 

 

 

359,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

27,269

 

 

 

28,532

 

 

 

55,357

 

 

 

57,506

 

General and administrative

 

 

101,332

 

 

 

107,132

 

 

 

207,628

 

 

 

217,177

 

Depreciation and amortization

 

 

4,909

 

 

 

3,913

 

 

 

9,791

 

 

 

7,915

 

Asset impairment

 

 

228

 

 

 

-

 

 

 

228

 

 

 

-

 

Total operating expenses

 

 

133,738

 

 

 

139,577

 

 

 

273,004

 

 

 

282,598

 

Operating income

 

 

33,946

 

 

 

35,962

 

 

 

77,639

 

 

 

76,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,094

 

 

 

322

 

 

 

1,427

 

 

 

681

 

Interest expense

 

 

(99

)

 

 

(280

)

 

 

(202

)

 

 

(389

)

Miscellaneous (expense) income

 

 

(226

)

 

 

(36

)

 

 

(315

)

 

 

95

 

Total other income

 

 

769

 

 

 

6

 

 

 

910

 

 

 

387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRETAX INCOME

 

 

34,715

 

 

 

35,968

 

 

 

78,549

 

 

 

76,966

 

Provision for income taxes

 

 

8,948

 

 

 

9,319

 

 

 

20,704

 

 

 

19,564

 

NET INCOME

 

 

25,767

 

 

 

26,649

 

 

 

57,845

 

 

 

57,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.38

 

 

$

0.38

 

 

$

0.84

 

 

$

0.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - DILUTED:

 

$

0.37

 

 

$

0.37

 

 

$

0.83

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

68,341

 

 

 

70,299

 

 

 

68,542

 

 

 

70,224

 

Diluted

 

 

69,182

 

 

 

71,679

 

 

 

69,376

 

 

 

71,616

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

For the Quarter Ended June 30,

 

 

For the Year to Date Ended June 30,

 

(In Thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

NET INCOME

 

$

25,767

 

 

$

26,649

 

 

$

57,845

 

 

$

57,402

 

OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(164

)

 

 

28

 

 

 

(245

)

 

 

(101

)

Unrealized loss on investments

 

 

(1,469

)

 

 

(22

)

 

 

(2,833

)

 

 

(243

)

     Total other comprehensive (loss) income

 

 

(1,633

)

 

 

6

 

 

 

(3,078

)

 

 

(344

)

COMPREHENSIVE INCOME

 

$

24,134

 

 

$

26,655

 

 

$

54,767

 

 

$

57,058

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 

2


 

 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

Accumulated Other

 

 

 

 

 

 

 

 

 

(In Thousands)

 

Issued Shares

 

 

$0.01 Par

Value

 

 

Purchased Shares

 

 

Cost

 

 

Additional Paid-in Capital

 

 

Comprehensive Loss

 

 

Retained Earnings

 

 

Total

 

BALANCE, April 1, 2022

 

 

89,264

 

 

$

893

 

 

 

(20,485

)

 

$

(282,333

)

 

$

677,311

 

 

$

(1,541

)

 

$

284,050

 

 

$

678,380

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

25,767

 

 

 

25,767

 

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(164

)

 

 

-

 

 

 

(164

)

Unrealized loss on investments, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,469

)

 

 

-

 

 

 

(1,469

)

Treasury stock purchased

 

 

-

 

 

 

-

 

 

 

(1,117

)

 

 

(11,842

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11,842

)

Share-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,900

 

 

 

-

 

 

 

-

 

 

 

1,900

 

Common stock issued

 

 

95

 

 

 

1

 

 

 

-

 

 

 

(2

)

 

 

189

 

 

 

-

 

 

 

-

 

 

 

188

 

BALANCE, June 30, 2022

 

 

89,359

 

 

$

894

 

 

 

(21,602

)

 

$

(294,177

)

 

$

679,400

 

 

$

(3,174

)

 

$

309,817

 

 

$

692,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

Accumulated Other

 

 

 

 

 

 

 

 

 

(In Thousands)

 

Issued Shares

 

 

$0.01 Par

Value

 

 

Purchased Shares

 

 

Cost

 

 

Additional Paid-in Capital

 

 

Comprehensive Income

 

 

Retained Earnings

 

 

Total

 

BALANCE, April 1, 2021

 

 

87,795

 

 

$

878

 

 

 

(17,363

)

 

$

(248,120

)

 

$

662,485

 

 

$

14

 

 

$

173,088

 

 

$

588,345

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

26,649

 

 

 

26,649

 

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

28

 

 

 

-

 

 

 

28

 

Unrealized loss on investments, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(22

)

 

 

-

 

 

 

(22

)

Treasury stock purchased

 

 

-

 

 

 

-

 

 

 

(440

)

 

 

(5,372

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,372

)

Share-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,677

 

 

 

-

 

 

 

-

 

 

 

3,677

 

Common stock issued

 

 

90

 

 

 

1

 

 

 

-

 

 

 

(2

)

 

 

308

 

 

 

-

 

 

 

-

 

 

 

307

 

BALANCE, June 30, 2021

 

 

87,885

 

 

$

879

 

 

 

(17,803

)

 

$

(253,494

)

 

$

666,470

 

 

$

20

 

 

$

199,737

 

 

$

613,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

Accumulated Other

 

 

 

 

 

 

 

 

 

(In Thousands)

 

Issued Shares

 

 

$0.01 Par

Value

 

 

Purchased Shares