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Form 8-K STRAYER EDUCATION INC For: May 03

May 4, 2016 6:31 AM

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 3, 2016


Strayer Education, Inc.
(Exact name of registrant as specified in its charter)


MARYLAND

 

0-21039

 

52-1975978

(State or other jurisdiction of
incorporation or organization)

(Commission File Number)

(I.R.S. Employer
Identification Number)


2303 Dulles Station Boulevard
Herndon, VA

 

20171

(Address of principal executive offices)

(Zip Code)

(703) 561-1600
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.

Results of Operations and Financial Condition.

On May 4, 2016, Strayer Education, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2016.  A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.

The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 5.07.

Submission of Matters to a Vote of Security Holders.

The Company held its 2016 Annual Meeting of Stockholders on May 3, 2016.  There were 11,153,979 shares of common stock eligible to be voted at the Annual Meeting and 10,330,717 shares were presented in person or represented by proxy at the meeting which constituted a quorum to conduct business.

There were three proposals submitted to the Company’s stockholders at the Annual Meeting.  All proposals were passed.  The final results of voting on each of the proposals are as follows:

Proposal 1: Elect nine directors to the Board of Directors.

Nominee   Votes For   Votes Against   Abstain   Broker Non-Vote
Robert S. Silberman 9,663,928 196,686 3,407 466,696
Dr. John T. Casteen, III 9,576,555 273,224 14,242 466,696
Dr. Charlotte F. Beason 9,596,181 264,432 3,408 466,696
William E. Brock 9,786,737 72,297 4,987 466,696
Robert R. Grusky 9,788,751 69,851 5,419 466,696
Karl McDonnell 9,780,926 67,708 15,387 466,696
Todd A. Milano 9,594,491 264,543 4,987 466,696
G. Thomas Waite, III 9,607,819 240,815 15,387 466,696
J. David Wargo 9,362,803 496,099 5,119 466,696

Proposal 2: Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.

Votes For   Votes Against   Abstain   Broker Non-Vote
10,288,598 41,231 888 0

Proposal 3:  Approval on an advisory basis of the compensation of the named executive officers.

Votes For   Votes Against   Abstain   Broker Non-Vote
7,368,154 2,480,616 15,251 466,696

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit Number

Description

 
 

99.1

Press Release, dated May 4, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

STRAYER EDUCATION, INC.

 

Date:

May 4, 2016

By:

/s/ Daniel W. Jackson

Daniel W. Jackson

Executive Vice President and Chief Financial Officer

Exhibit 99.1

Strayer Education, Inc. Reports First Quarter Revenues and Earnings; Spring Term 2016 Enrollments

HERNDON, Va.--(BUSINESS WIRE)--May 4, 2016--Strayer Education, Inc. (Nasdaq: STRA) today announced financial results for the three months ended March 31, 2016. Financial highlights are as follows:

Three Months Ended March 31

Balance Sheet and Cash Flow

At March 31, 2016, the Company had cash and cash equivalents of $117.5 million and no debt. The Company generated $14.7 million in cash from operating activities in the first quarter of 2016, compared to $30.7 million during the same period in 2015. Capital expenditures in the first quarter of 2016 were $2.0 million, compared to $2.8 million for the same period in 2015.

The Company had $70.0 million of share repurchase authorization remaining at March 31, 2016. No shares were repurchased in the first quarter of 2016.

For the first quarter of 2016, bad debt expense as a percentage of revenues was 2.8%, compared to 3.1% for the same period in 2015.

Student Enrollment

Total enrollments at Strayer University for the spring term 2016 increased to 41,029 students, from 40,875 students for the spring term 2015. New student enrollments decreased by 7%, and continuing student enrollments increased by 2%.

Stock-based Compensation Activity

In February 2016, the Company’s Board of Directors approved grants of restricted stock to certain individuals under the Company’s 2015 Equity Compensation Plan. The Company granted a total of approximately 177,000 shares of restricted stock and restricted stock units, most of which vest over a four year period. The Company’s stock price closed at $50.67 on the date of these restricted stock grants.

Common Stock and Common Stock Equivalents

At March 31, 2016, the Company had 11,153,979 common shares issued and outstanding, including 554,541 shares of restricted stock. The Company also had 250,000 restricted stock units outstanding, and 100,000 vested stock options outstanding.

Conference Call with Management

Strayer Education, Inc. will host a conference call to discuss its first quarter 2016 earnings results at 10:00 a.m. (ET) today. To participate on the live call, investors should dial (877) 303-9047 ten minutes prior to the start time. In addition, the call will be available via live webcast. 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. Following the call, the webcast will be archived and available at www.strayereducation.com.

About Strayer Education, Inc.

Strayer Education, Inc. (NASDAQ: STRA) is an education services holding company that owns Strayer University and the New York Code and Design Academy. For more information on Strayer Education, Inc. visit www.strayereducation.com.

About Strayer University

Founded in 1892, Strayer University is a proprietary institution of higher learning that offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, nursing, public administration, and criminal justice, to working adult students. The University includes Strayer@Work, which serves corporate clients by delivering the next generation of performance improvement and workforce development. Strayer University also offers an executive MBA online and corporate training program through its Jack Welch Management Institute. Strayer University is accredited by the Middle States Commission on Higher Education, 3624 Market Street, Philadelphia, PA 19104. (267-284-5000). The Middle States Commission on Higher Education is an institutional accrediting agency recognized by the U.S. Secretary of Education and the Council for Higher Education Accreditation.

For more information on Strayer University visit www.strayer.edu.

About New York Code and Design Academy

New York Code and Design Academy (NYCDA) is a New York City-based provider of non-degree web and mobile app development courses. NYCDA courses are delivered primarily on-ground to students seeking to further their career in software application development. NYCDA does not participate in the Federal Title IV lending program.

For more information on NYCDA visit www.nycda.com.

Forward-Looking Statements

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 (the "Reform Act"). Such statements may be identified by the use of words such as "expect," "estimate," "assume," "believe," "anticipate," "will," "forecast," "plan," "project," or similar words. The statements are based on the Company's current expectations and are subject to a number of assumptions, 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 assumptions, uncertainties and risks include the pace of growth of student enrollment, the Company’s continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as regional accreditation standards and state regulatory requirements, rulemaking by the Department of Education and increased focus by the U.S. Congress on for-profit education institutions, competitive factors, risks associated with the opening of new campuses, risks associated with the offering of new educational programs and adapting to other changes, risks relating to the timing of regulatory approvals, the Company’s ability to implement its growth strategy, risks associated with the ability of the University’s students to finance their education in a timely manner, 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 for the fiscal year ended December 31, 2015 and in its subsequent filings with the Securities and Exchange Commission, all of which are incorporated herein by reference and which are available from the Commission. The Company undertakes no obligation to update or revise forward-looking statements.

   
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
 
For the three months ended
March 31,
2015 2016
Revenues $ 111,885 $ 111,166
Costs and expenses:
Instruction and educational support 59,697 58,098
Marketing 16,681 18,298
Admissions advisory 3,993 4,349
General and administration   11,655   10,329
Total costs and expenses   92,026   91,074
Income from operations 19,859 20,092
Investment income 78 100
Interest expense   1,273   160
Income before income taxes 18,664 20,032
Provision for income taxes   7,279   7,612
Net income $ 11,385 $ 12,420
Earnings per share:
Basic $ 1.08 $ 1.17
Diluted $ 1.06 $ 1.15
Weighted average shares outstanding:
Basic 10,579 10,596
Diluted 10,738 10,782
 
   
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
 
December 31, 2015 March 31, 2016
ASSETS
Current assets:
Cash and cash equivalents $ 106,889 $ 117,498
Tuition receivable, net 18,519 18,613
Other current assets   6,944   8,383
Total current assets 132,352 144,494
Property and equipment, net 77,139 74,954
Deferred income taxes 26,449 22,930
Goodwill 6,800 21,042
Other assets   5,694   14,276
Total assets $ 248,434 $ 277,696
 
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 42,253 $ 38,108
Income taxes payable 2,684 7,231
Deferred revenue 12,373 16,868
Other current liabilities   281   281
Total current liabilities 57,591 62,488
Other long-term liabilities   47,987   57,091
Total liabilities   105,578   119,579
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 20,000,000 shares authorized; 11,027,177 and 11,153,979 shares issued and outstanding at December 31, 2015 and March 31, 2016, respectively 110 112
Additional paid-in capital 24,738 27,577
Retained earnings   118,008   130,428
Total stockholders’ equity   142,856   158,117
Total liabilities and stockholders’ equity $ 248,434 $ 277,696
 
   
STRAYER EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
For the Three Months Ended
March 31,
2015 2016
Cash flows from operating activities:
Net income $ 11,385 $ 12,420
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of gain on sale of assets (71 ) (71 )
Amortization of deferred rent (279 ) (52 )
Amortization of deferred financing costs 195 66
Depreciation and amortization 4,713 4,425
Deferred income taxes (426 ) (633 )
Stock-based compensation 2,451 2,891
Changes in assets and liabilities:
Tuition receivable, net 1,914 717
Other current assets 2,573 (1,440 )
Other assets — (2,983 )
Accounts payable and accrued expenses (983 ) (4,335 )
Income taxes payable and income taxes receivable 7,547 4,620
Deferred revenue 2,504 1,435
Other long-term liabilities   (831 )   (2,380 )
Net cash provided by operating activities   30,692     14,680  
 
Cash flows from investing activities:
Purchases of property and equipment (2,834 ) (2,031 )

Cash used in acquisition, net of cash acquired

  —     (1,635 )
Net cash used in investing activities   (2,834 )   (3,666 )
 
Cash flows from financing activities:
Payments on term loan (1,562 ) —
Payment of contingent consideration   (300 )   (405 )
Net cash used in financing activities   (1,862 )   (405 )
Net increase in cash and cash equivalents 25,996 10,609
Cash and cash equivalents — beginning of period   162,283     106,889  
Cash and cash equivalents — end of period $ 188,279   $ 117,498  
 
Non-cash transactions:
Purchases of property and equipment included in accounts payable $ 724 $ 91
Changes in contingent consideration related to acquisitions $ — $ 14,625
 

CONTACT:
Strayer Education, Inc.
Daniel Jackson
Executive Vice President and Chief Financial Officer
703-713-1862
[email protected]

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