Apollo Group, Inc. Reports Fiscal 2005 First Quarter Results.PHOENIX, Ariz. -- Apollo Group Apollo Group, Inc. NASDAQ: APOL is an S&P 500 corporation based in Phoenix, Arizona. Apollo Group, Inc., through its subsidiaries, provides higher education to working adults. , Inc. (Nasdaq:APOL APOL Asia Pacific Online APOL Alternate Person on Line ) today reported fiscal 2005 financial results for the first quarter ended November November: see month. 30, 2004. Net income attributed to Apollo Apollo (əpŏl`ō), in Greek religion and mythology, one of the most important Olympian gods, concerned especially with prophecy, medicine, music and poetry, archery, and various bucolic arts, particularly the care of flocks and herds. Education Group common stock for the three months ended November 30, 2004, was $109.5 million, or $.58 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $78.4 million, or $.44 per diluted share reported for the same period last year. Todd S Todd , Sir Alexander Robertus 1907-1997. British chemist. He won a 1957 Nobel Prize for his study of nucleic acids and nucleotide structures. . Nelson, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "We are very pleased with our continued strong financial and enrollment performance. This quarter we continued to leverage our instructional costs and services and general and administrative expenses. Selling and promotional expenses Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade increased due to strong lead generation during the quarter. These advertising expenditures will ensure our ability to continue degree enrollment growth into future quarters." Mr. Nelson further commented, "During the quarter, the University of Phoenix opened a new campus in Springfield, Missouri Springfield is the third largest city in Missouri. On July 1, 2006, its estimated population was 150,797, of whom 150,790 lived in Greene County and 7 lived in Christian County[1]. It is the county seat of Greene County. and five new learning centers." Total consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues for Apollo Group, Inc. for the three months ended November 30, 2004, rose 29.9% to $534.9 million, compared with $411.8 million in the first quarter of fiscal 2004. The University of Phoenix accounted for 94.0% of the $493.5 million in net tuition For tuition fees in the United Kingdom, see . Tuition means instruction, teaching or a fee charged for educational instruction especially at a formal institution of learning or by a private tutor usually in the form of one-to-one tuition. revenues from students enrolled in degree programs for the quarter ended November 30, 2004. Consolidated net income for Apollo Group, Inc. for the three months ended November 30, 2004, increased 30.0% to $109.5 million, compared to $84.3 million for the same period last year. Net cash provided by operating activities for Apollo Group, Inc. for the three months ended November 30, 2004, was $136.2 million, compared to $134.2 million for the three months ended November 30, 2003. Net additions to property and equipment for Apollo Group, Inc. (excluding the purchase and sale of land and buildings related to future Online expansion) for the three months ended November 30, 2004, were $21.9 million, compared to $12.6 million for the three months ended November 30, 2003. Consolidated degree enrollments for all of the Apollo Group, Inc. institutions at November 30, 2004, increased by 27% to 267,900 students compared to 211,300 students at November 30, 2003. Degree enrollments at University of Phoenix local campuses were 107,500 students at November 30, 2004, compared to 95,200 students at November 30, 2003, representing a 13% increase. Online degree enrollments at November 30, 2004, increased by 46% to 132,700 students compared to 91,000 students at November 30, 2003. Business Outlook Apollo Group, Inc. --We expect revenue for the quarter ending February February: see month. 28, 2005, to be between $507 million and $511 million and to be between $2.288 billion and $2.292 billion for fiscal 2005. --Operating margin is expected to be between 27.0% and 27.5% for the quarter ending February 28, 2005, and to be between 32.5% and 33.0% for fiscal 2005. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of are expected to be $.46 for the quarter ending February 28, 2005. Excluding non-cash stock-based compensation charges related to the conversion in 2004 of University of Phoenix Online stock options into Apollo Education Group Class A stock options anticipated to occur when the options vest in the fourth quarter of fiscal 2005, diluted earnings per share are expected to be $2.42 for fiscal 2005. We expect degree enrollments at local campuses to grow between 12% and 13% over the prior year at the end of the second quarter of fiscal 2005. In addition, we expect online degree enrollments to grow in excess of 40% over the prior year at the end of the second quarter of fiscal 2005. The company will hold a conference call to discuss these earnings results at 11:00 AM Eastern time, 9:00 AM Phoenix time, on Thursday Thursday: see week. , December December: see month. 16, 2004. The call may be accessed by dialing (877) 292-6888 (domestic) or (706) 634-1393 (internationally). The conference ID number is 2312860. A live webcast of this event may be accessed by visiting the company website at: www.apollogrp.edu See .edu. (networking) edu - ("education") The top-level domain for educational establishments in the USA (and some other countries). E.g. "mit.edu". The UK equivalent is "ac.uk". . A replay of the call will be available on our website or at (706) 645-9291 (conf. ID #2312860) until December 31, 2004. Apollo Group, Inc. has been providing higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. programs to working adults for over 25 years. Apollo Group, Inc., operates through its subsidiaries The University of Phoenix, Inc., Institute for Professional Development, The College for Financial Planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against Institutes Corporation, and Western International University, Inc. The consolidated enrollment in its educational programs makes it the largest private institution of higher education in the United States Higher education in the United States refers to colleges and universities within the United States. Overview The American university system, like the American educational system in general, is highly decentralized because the U.S. . It offers educational programs and services at 85 campuses and 142 learning centers in 39 states, Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and Vancouver Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography . Combined degree enrollment was 267,900 students as of November 30, 2004. For more information about Apollo Group, Inc. and its subsidiaries, call (800) 990-APOL or visit Apollo on the company website at: www.apollogrp.edu. This press release includes statements that constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 (the "Reform Act"). Apollo Group, Inc. claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Specific forward-looking statements contained in this press release relate, among other matters, to the business outlook of Apollo Group, Inc. Forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Apollo Group, Inc. to be materially different from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Factors that could affect Apollo Group, Inc.'s results and cause them to materially differ from those contained in the forward-looking statements include, without limitation: --the failure to maintain or renew required regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals, accreditation accreditation, n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice. or state authorizations; --the failure to obtain authorizations from states in which University of Phoenix does not currently provide degree programs; --the failure to obtain the Higher Learning higher learning n. Education or academic accomplishment at the college or university level. Commission's approval for University of Phoenix to operate in new states; --our ability to continue to attract and retain students; --our ability to successfully manage economic conditions, including stock market volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the ; --risk factors and cautionary statements made in Apollo Group, Inc.'s Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the period ended August 31, 2004; and --other factors that Apollo Group is currently unable to identify or quantify Quantify - A performance analysis tool from Pure Software. , but may arise or become known in the future. These forward-looking statements are based on estimates, projections, beliefs, and assumptions of Apollo Group, Inc. and its management and speak only as of the date made and are not guarantees of future performance. Apollo Group, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, or any facts, events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" that may bear upon forward-looking statements. You are advised, however, to consult any further disclosures Apollo Group, Inc. makes in its reports filed with the Securities and Exchange Commission.
APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND OPERATING DATA
(Dollars in thousands, except per share amounts)
For the Three
Months Ended
November 30,
2004 2003
--------- ---------
(Unaudited)
Revenues:
Tuition and other, net $534,926 $411,809
--------- ---------
Costs and expenses:
Instructional costs and services 217,417 174,887
Selling and promotional 120,585 81,639
General and administrative 21,188 20,608
--------- ---------
359,190 277,134
--------- ---------
Income from operations 175,736 134,675
Interest income and other, net 4,562 4,157
--------- ---------
Income before income taxes 180,298 138,832
Provision for income taxes 70,767 54,561
--------- ---------
Net income $109,531 $84,271
========= =========
Net income attributed to:
Apollo Education Group common stock $109,531 $78,355
========= =========
University of Phoenix Online common stock $5,916
=========
Earnings per share attributed to:
Apollo Education Group common stock:
Diluted net income per share $0.58 $0.44
========= =========
Diluted weighted average shares outstanding 189,831 178,726
========= =========
University of Phoenix Online common stock:
Diluted net income per share $0.34
=========
Diluted weighted average shares outstanding 17,186
=========
At November 30,
2004 2003
--------- ---------
OPERATING DATA
Students enrolled in degree programs 267,900 211,300
========= =========
Number of locations:
Campuses 85 74
Learning Centers 142 122
--------- ---------
227 196
========= =========
APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
November 30, August 31,
2004 2004
------------ ------------
(Unaudited)
Assets:
Current assets
Cash and cash equivalents $123,657 $244,519
Restricted cash 209,855 184,463
Marketable securities 260,188 248,343
Receivables, net 151,583 146,497
Deferred tax assets, net 10,625 10,020
Other current assets 23,017 20,842
------------ ------------
Total current assets 778,925 854,684
Property and equipment, net 178,656 169,377
Marketable securities 232,718 316,743
Cost in excess of fair value of assets
purchased, net 37,096 37,096
Deferred tax assets, net 34,118 47,520
Other assets 28,047 26,853
------------ ------------
Total assets $1,289,560 $1,452,273
============ ============
Liabilities and Shareholders' Equity:
Current liabilities
Current portion of long-term liabilities $4,179 $3,186
Accounts payable 41,290 50,895
Accrued liabilities 49,435 69,481
Income taxes payable 43,095 11,856
Student deposits and current portion of
deferred revenue 352,351 330,020
------------ ------------
Total current liabilities 490,350 465,438
Deferred tuition revenue, less current
portion 393 528
Long-term liabilities, less current portion 29,827 29,166
------------ ------------
Total liabilities 520,570 495,132
------------ ------------
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value, 1,000,000
shares authorized; none issued
Apollo Education Group Class A nonvoting
common stock, no par value, 400,000,000
shares authorized; 183,950,000 and
187,567,000 issued and outstanding at
November 30, 2004 and August 31, 2004,
respectively 103 103
Apollo Education Group Class B voting common
stock, no par value, 3,000,000 shares
authorized; 477,000 issued and outstanding
at November 30, 2004 and August 31, 2004 1 1
Additional paid-in capital 14,291 28,787
Apollo Education Group Class A treasury
stock, at cost, 4,052,000 shares at
November 30, 2004 (282,640)
Retained earnings 1,038,346 928,815
Accumulated other comprehensive loss (1,111) (565)
------------ ------------
Total shareholders' equity 768,990 957,141
------------ ------------
Total liabilities and shareholders' equity $1,289,560 $1,452,273
============ ============
APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Three Months Ended
November 30,
2004 2003
--------- ---------
(Unaudited)
Cash flows provided by (used for) operating
activities:
Net income $109,531 $84,271
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 12,306 10,703
Amortization of investment premiums 1,205 1,546
Provision for uncollectible accounts 9,067 6,748
Deferred income taxes 12,797 (2,055)
Tax benefits of stock options exercised 7,950 17,673
Increase in assets:
Restricted cash (25,392) (9,615)
Receivables (14,153) (12,375)
Other assets (2,934) (1,873)
Increase in liabilities:
Accounts payable and accrued liabilities 2,794 25,518
Student deposits and deferred revenue 22,196 12,601
Other liabilities 822 1,090
--------- ---------
Net cash provided by operating activities 136,189 134,232
--------- ---------
Cash flows provided by (used for) investing
activities:
Net additions to property and equipment (21,866) (12,561)
Purchase of land and buildings related to future
Online expansion (13,423)
Purchase of marketable securities (1,211) (141,613)
Maturities of marketable securities 72,186 43,543
Purchase of other assets (528) (530)
--------- ---------
Net cash provided by (used for) investing
activities 48,581 (124,584)
--------- ---------
Cash flows provided by (used for) financing
activities:
Purchase of Apollo Education Group Class A
common stock (319,321)
Issuance of Apollo Education Group Class A
common stock 14,235 15,802
Issuance of University of Phoenix Online common
stock 8,055
--------- ---------
Net cash provided by (used for) financing
activities (305,086) 23,857
--------- ---------
Currency translation loss (546) (313)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (120,862) 33,192
Cash and cash equivalents at beginning of period 244,519 416,452
--------- ---------
Cash and cash equivalents at end of period $123,657 $449,644
========= =========
APOLLO GROUP, INC. AND SUBSIDIARIES
DEGREE ENROLLMENTS
November 30,
2004 2003
-------- --------
University of Phoenix Local Campuses:
Established prior to November 1999 86,098 81,191
Established after November 1999 21,399 14,004
-------- --------
Total University of Phoenix Local Campuses: 107,497 95,195
-------- --------
Western International University Local Campuses 2,234 2,072
Online Campuses 132,709 90,974
Institute for Professional Development 24,021 22,256
College for Financial Planning 1,393 768
-------- --------
Total Degree Enrollment 267,854 211,265
======== ========
This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act of 1995. This information may involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements. |
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