Career Education Corporation Posts Record First Quarter Results.Business Editors HOFFMAN ESTATES Hoffman Estates A village of northeast Illinois, a suburb of Chicago. Population: 49,700. , Ill.--(BUSINESS WIRE)--April 22, 2003 Quarterly Revenues Up 39%; Net Income Up 61%; Quarterly Starts Up 38%; April Student Population Up 33% Career Education Corporation (Nasdaq:CECO CECO Council of Engineering Companies of Oregon CECO Cost Estimate Change Order CECO Center for Economic and Community Outreach CECO CENTCOM Engineer Contingency Organization CECO Concrete Engineering Company of Omaha (Ceco Concrete Construction LLC) ) today reported record revenues, net income and earnings per share for the first quarter ended March 31, 2003, its 21st consecutive quarter of record results since becoming a public company. First quarter 2003 revenues were $245.6 million, up 39 percent from $176.3 million for the same period last year. First quarter 2003 net income was $19.2 million, or $0.40 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, up 61 percent and 54 percent, respectively, from first quarter 2002 net income of $12.0 million, or $0.26 per diluted share. Effective January January: see month. 1, 2003, bad debt expense is classified as a component of general and administrative expense; previously such expense was classified as a component of net revenue. The change was made to improve comparability of income statement amounts to the Company's peer group, which classify clas·si·fy tr.v. clas·si·fied, clas·si·fy·ing, clas·si·fies 1. To arrange or organize according to class or category. 2. To designate (a document, for example) as confidential, secret, or top secret. bad debt in this way. If bad debt expense was still classified as a component of net revenue, first quarter 2003 net revenues would have been $236.2 million, and the first quarter 2003 increase in net revenues would have remained at 39 percent. First quarter 2003 new student starts rose 38 percent to approximately 14,600, up from approximately 10,550 for the same period last year. The INSEEC INSEEC Institut de Hautes Etudes Economiques et Commerciales (French: Institute of Economic Studies) Group, that was acquired on February February: see month. 18, 2003, did not have new student starts during CEC's period of ownership in the first quarter. Total CEC (Central Electronic Complex) The set of hardware that defines a mainframe, which includes the CPU(s), memory, channels, controllers and power supplies included in the box. Some CECs, such as IBM's Multiprise 2000 and 3000, include data storage devices as well. student population on April 30, 2003 is expected to be approximately 54,400, up 33 percent from approximately 40,800 on April 30, 2002. On a same school basis, student population is expected to show an increase of approximately 21 percent during these periods. Total American InterContinental University American InterContinental University, commonly called AIU, is an international for-profit university owned by Career Education Corporation (stock symbol CECO). It was founded in 1977 as the American College of Applied Arts. Online (AIU AIU American Intercontinental University AIU Allegheny Intermediate Unit (Homestead, PA) AIU Atlantic International University AIU Association of Indian Universities AIU Association Internationale des Universités Online) full time student population on April 30, 2003 is expected to be approximately 4,100, up approximately 800 percent from approximately 450 on April 30, 2002. Total INSEEC Group student population on April 30, 2003 is expected to be approximately 3,700. "Career Education Corporation had an outstanding first quarter, delivering outstanding organic growth and enhanced operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ," said John M. Larson Larson may refer to: People with the surname Larson:
"Our first quarter 2003 lead flow was up approximately 52 percent over the same period last year proving that our marketing message is effectively reaching an increasing number of high school graduates, young adults, career changers
The Changers are a fictional group of anti-hero published by Wildstorm an imprint of DC Comics. and international students," Mr. Larson said. "Students come to CEC schools because of the school's reputation for delivering a high quality education, demonstrated track record in job placement, and exclusive focus on 21st century careers, including visual communication and design, IT, business, culinary cu·li·nar·y adj. Of or relating to a kitchen or to cookery. [Latin cul  n arts and health education."Mr. Larson noted progress in all aspects of CEC's multi-dimensional organic growth strategy. "During 2003, we are expecting to double from the previous year the number of campus start-ups to four and more than triple the number of program transplants Transplants are an American punk rock/rap rock supergroup. They formed in 1999 when Tim Armstrong of the band Rancid played his friend and roadie Rob Aston some beats he had made using Pro Tools and asked Rob if he would consider contributing lyrics. to 50. This will enable us to extend our geographic reach into additional high growth markets while expanding our leadership in the core curricula we provide," Mr. Larson said. "Online education is a major growth priority for CEC," Mr. Larson said. "AIU Online continues to be an innovative leader in E-learning (Electronic-LEARNING) An umbrella term for providing computer instruction (courseware) online over the public Internet, private distance learning networks or inhouse via an intranet. See CBT. , is generating record leads and enrollments and plans to introduce new degree programs during the year. As a result, AIU Online achieved approximately $20 million in revenues in the first quarter of 2003 and is expected to exceed $80 million for all of 2003, a remarkable success story given its two-year existence. This revenue rate puts us well on our way to achieving our stated goal of $200 to $300 million by 2005. This increase in revenue from our previous guidance resulted in a profitable first quarter. We expect AIU Online to remain profitable throughout 2003." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Mr. Larson, CEC's planned acquisition of Whitman Education Group is on track and is expected to close in July July: see month. 2003. "We are working closely with the Whitman team to ensure a smooth and seamless transition that will provide great benefits to both organizations," he said. Selected Financial Data Certain supplemental information related to Accounts Receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and Bad Debt Expense are summarized below: -- Quarterly Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSOs) for total accounts receivable were 33 days at March 31, 2003, compared with 33 days at March 31, 2002 and at December 31, 2002. -- Bad debt expense was 3.8 percent as a percent of revenue for the quarter ended March 31, 2003, compared with 3.6 percent for the quarter ended March 31, 2002 and 3.7 percent for the quarter ended December 31, 2002. Business Outlook While the Company may make further acquisitions, none are contemplated by these 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. . These statements exclude the impact of the expected merger with Whitman Education Group, Inc. -- We expect full year 2003 revenue to be approximately $1.029 billion to $1.038 billion and full year 2003 earnings per share to be approximately $1.90 to $1.92. We expect AIU-Online full year 2003 revenue, included in the preceding amounts, to be at least $80 million. -- We expect second quarter 2003 revenue to be approximately $241 to $243 million and second quarter 2003 earnings per share to be approximately $0.30 to $0.31. -- We expect third quarter 2003 revenue to be approximately $253 to $256 million and third quarter 2003 earnings per share to be approximately $0.37 to $0.38. -- We expect fourth quarter 2003 revenue to be approximately $290 to $294 million and fourth quarter 2003 earnings per share to be approximately $0.81 to $0.82. -- We expect full year 2003 operating profit margin Operating profit margin The ratio of operating profit to net sales. improvement to be approximately 50 basis points from 2002 with stronger improvement in the second quarter of 2003. -- We expect our 2003 effective income tax rate to remain at 40.5 percent for 2003. -- We reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it that 2003 capital expenditures are expected to be approximately $75 to $80 million. Conference Call Career Education Corporation will host a conference call on Wednesday, April 23, 2002 at 10:30 a.m. (Eastern Daylight Time) to discuss its first quarter 2003. Interested parties can listen to the conference call live through the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.careered.com or by calling (973) 317-5319 and citing "Career Education Corporation Conference Call". Following the conference call, a rebroadcast will be available for 90 days at www.careered.com or for seven days by calling (973) 709-2089 and citing confirmation code 289245. Career Education Corporation (www.careered.com) is the world's largest on-campus on-campus adjective Referring to an on-site site of a medical complex with multiple buildings. Cf 'Off campus.'. provider of private, for-profit postsecondary education and has a rapidly growing presence in online education. CEC's total student population is expected to be 54,400 on April 30, 2003. CEC's Colleges, Schools and Universities Group operates 51 campuses in the U.S., Canada, France, the United Kingdom and the United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. and offers master's degree master's degree n. An academic degree conferred by a college or university upon those who complete at least one year of prescribed study beyond the bachelor's degree. Noun 1. , bachelor's degree, associate degree and diploma DIPLOMA. An instrument of writing, executed by, a corporation or society, certifying that a certain person therein named is entitled to a certain distinction therein mentioned. 2. programs in the career-oriented disciplines of visual communication and design technologies, information technology, business studies, culinary arts and health education. The Online Education Group's AIU Online Division offers master's degree, bachelor's degree and associate degree programs in information technology, business administration, visual communication and education. Including the impact of the proposed merger with Whitman Education Group, Inc., CEC would have 73 campuses and CEC's total student population on April 30, 2003 is expected to be approximately 64,200 students. Except for the historical and present factual information contained herein, the matters set forth in this release, including statements as to future financial and operating results, future opportunities, the expected closing date of the merger with Whitman Education Group, Inc. and any other statements identified by words such as "anticipates," "expects," "projects," "plans," "will," and similar expressions are forward-looking statements within the meaning of 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. " provisions 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. Such statements are based on information currently available to us and involve risks and uncertainties that could cause our actual growth, results, performance and business prospects and opportunities to differ materially from those expressed in, or implied by these statements. These risks and uncertainties include, but are not limited to, costs and difficulties related to the integration of acquired businesses, costs, delays, and any other difficulties related to the merger with Whitman Education Group, Inc., risks and effects of legal and administrative proceedings An administrative proceeding is a non-judicial determination of fault or guilt and may include in some cases penalties of various forms. A "Captain's Mast", held by a commanding officer of a warship is one such proceeding. and governmental regulations, future financial and operational results, competition, general economic conditions, ability to manage and continue growth, and other risk factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our industry and business as detailed in CEC'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 year ended December 31, 2002 and from time to time in CEC's reports filed with the SEC. CEC disclaims any responsibility to update these forward-looking statements.
Career Education Corporation
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2003 and 2002
(Amounts in thousands, except EPS)
% of % of
2003 Revenue 2002 Revenue
---------------- ----------------
Revenue:
Tuition and registration fees $224,001 91.2% $160,248 90.9%
Other 21,542 8.8% 16,038 9.1%
--------- ---------
Total revenue 245,543 100.0% 176,286 100.0%
--------- ---------
Operating expenses:
Educational services and
facilities 92,143 37.5% 67,140 38.1%
General and administration 113,276 46.1% 81,317 46.1%
Depreciation and amortization 9,185 3.8% 8,106 4.6%
--------- ---------
Total operating expenses 214,604 87.4% 156,563 88.8%
--------- ---------
Income from operations 30,939 12.6% 19,723 11.2%
Other income (expense):
Interest income 549 0.2% 145 0.1%
Interest expense (342) -0.1% (325) -0.2%
Share of affiliate earnings 1,166 0.5% 737 0.4%
--------- ---------
Total other income 1,373 0.6% 557 0.3%
--------- ---------
Income before provision for income
taxes 32,312 13.2% 20,280 11.5%
Provision for income taxes 13,086 5.4% 8,315 4.7%
--------- ---------
Net income $19,226 7.8% $11,965 6.8%
========= =========
======================================================================
Diluted net income per share $0.40 $0.26
Diluted weighted average number of
shares outstanding 48,071 46,868
======================================================================
Note: 2002 bad debt expense of $6,374 has been reclassified from
revenue to general and administration expense to conform with
2003 financial statement presentation
Career Education Corporation
SELECTED BALANCE SHEET & FINANCIAL DATA
As of March 31, 2003 and 2002
(Amounts in thousands)
2003 2002
------------------ --------------------
Cash $27,139 $4,148
Receivables, net 90,746 64,048
Current assets 158,374 97,656
Total assets 620,174 461,212
Current liabilities 147,036 96,052
Long-term debt and capital
lease obligations 21,915 24,733
Other long-term liabilities 19,689 17,064
Stockholders' investment 431,534 323,363
----------------------------------------------------------------------
Purchases of Net cash
property provided by
and equipment, net operating activities
------------------ --------------------
Three months ended
March 31, 2003 $14,273 $27,059
Career Education Corporation
SELECTED HISTORICAL REVENUE DATA
1998 - 2002
Net Bad Debt Gross
Revenue Expense Revenue
----------- ----------- ----------
1998 1Q $32,597 $1,355 $33,952
---- 2Q 32,325 1,275 33,600
3Q 34,994 1,065 36,059
4Q 44,316 1,288 45,604
1999 1Q $45,435 $2,724 $48,159
---- 2Q 48,780 1,290 50,070
3Q 55,605 1,181 56,786
4Q 66,984 1,502 68,486
2000 1Q $70,315 $1,877 $72,192
---- 2Q 73,581 1,719 75,300
3Q 82,261 2,648 84,909
4Q 99,136 2,991 102,127
2001 1Q $119,715 $3,492 $123,207
---- 2Q 121,298 3,375 124,673
3Q 133,003 4,936 137,939
4Q 155,224 6,016 161,240
2002 1Q $169,912 $6,374 $176,286
---- 2Q 172,004 6,386 178,390
3Q 189,402 7,753 197,155
4Q 219,690 8,538 228,228
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