Career Education Reports Record Results for 2002 Fourth Quarter and Year.Business Editors HOFFMAN ESTATES Hoffman Estates A village of northeast Illinois, a suburb of Chicago. Population: 49,700. , Ill.--(BUSINESS WIRE)--Jan. 28, 2003 Ends Year with Net Revenues up 42% & Net Income Up 76%; January January: see month. Starts up 28%; January Student Population Up 21% 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 net revenues, net income and student population for the fourth quarter and year ended December December: see month. 31, 2002, its 20th consecutive quarter of record results since becoming a public company. Fourth quarter 2002 net revenues were $219.7 million, up 42 percent from $155.2 million for the same period last year. Fourth quarter 2002 net income was $31.0 million, or $0.65 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 from last year's fourth quarter net income of $19.3 million, or $0.42 per diluted share. As previously disclosed, on January 1, 2002, the company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142"), which eliminates the amortization of goodwill. If SFAS 142 had been adopted on January 1, 2001, fourth quarter 2001 net income would have been $20.3 million, or $0.44 per diluted share and the fourth quarter 2002 increases in net income and earnings per share would have been 53 percent and 48 percent, respectively. Full year 2002 net revenues were $751.0 million, up 42 percent from $529.2 million a year earlier. Full year 2002 net income was $67.5 million, or $1.42 per diluted share, up 76 percent from $38.4 million, or $0.85 per diluted share. If SFAS 142 had been adopted on January 1, 2001, net income for 2001 would have been $42.3 million, or $0.93 per diluted share, and the increases in net income and earnings per share during 2002 would have been 60 percent and 53 percent, respectively. January 2003 new student starts rose 28 percent to approximately 10,550, up from approximately 8,250 for the same period last year. Fourth quarter 2002 new student starts rose 18 percent to approximately 13,100, up from approximately 11,100 for the same period last year. Total Career Education Corporation (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 January 31, 2003 is expected to be approximately 51,100, up 21 percent from approximately 42,100 on January 31, 2002. On a same school basis, student population is expected to increase approximately 19 percent. 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) total full time student population on January 31, 2003 is expected to exceed 3,000, an increase of approximately 76 percent over the student population on October October: see month. 31, 2002. "Career Education Corporation had an outstanding 2002, achieving record growth and profitability and becoming 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 for-prof·it adj. Established or operated with the intention of making a profit: a for-profit organization. postsecondary education in terms of revenue," said John M. Larson Larson may refer to: People with the surname Larson:
"Organic growth was driven by same-school growth and new Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. and Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. campus start-ups in our Colleges, Schools and Universities Group and by the expansion of our Online Education Group. Through acquisition, we also entered the field of health education, which will contribute significantly to continuing CEC's growth in 2003 and beyond," Larson said. "In 2002, the Online Education Group's AIU Online outperformed all our expectations," Larson said. "Expanding our online offerings to include eight degree programs helped drive an 11-fold increase in population during 2002. This strong student response also reflected the unique educational experience provided by AIU Online through our multimedia coursework coursework Noun work done by a student and assessed as part of an educational course Noun 1. coursework - work assigned to and done by a student during a course of study; usually it is evaluated as part of the student's and our pioneering Virtual Campus that replicates nearly every aspect of a bricks-and-mortar campus." CEC's marketing initiatives once again yielded record numbers of leads, up approximately 60 percent for the year, and student starts in 2002, Larson said. "Our message appealed strongly to all segments of the student population - young adults, recent high school graduates, older students and international students - who view postsecondary education as the key to realizing their life goals." Continued execution of its proven strategy will propel pro·pel tr.v. pro·pelled, pro·pel·ling, pro·pels To cause to move forward or onward. See Synonyms at push. [Middle English propellen, from Latin CEC's growth in 2003, Larson said. "The Colleges, Schools and Universities Group (CSU See DSU/CSU. 1. CSU - California State University. 2. CSU - Cleveland State University. 3. CSU - Channel Service Unit. Group) plans approximately 50 curriculum 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. during 2003, up from 15 this past year. Also, due to the outstanding success of our new campus start-ups, the CSU Group is expected to increase its annual openings from two to four campuses. During 2003, we expect to open new campuses in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , and Detroit Detroit, city, United States Detroit (dĭtroit`), city (1990 pop. 1,027,974), seat of Wayne co., SE Mich., on the Detroit River and between lakes St. Clair and Erie; inc. as a city 1815. . We will also continue to pursue acquisition opportunities to further extend our geographic reach, strengthen our position in existing core curricula, and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. provide entree into new curricular areas. "The Online Education Group, meanwhile, will continue its strong growth in 2003 by continuing to expand its program and degree options, by implementing new marketing strategies, and by leveraging its capability to provide a superior educational experience for online students," Larson 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 is summarized below: - Quarterly Days Sales Outstanding (DSOs) for total accounts receivable were 33 days at December 31, 2002. This represents a three-day decrease from the quarterly DSOs at December 31, 2001 of 36 days. - Bad Debt Expense was 3.7 percent for the quarter ended December 31, 2002, compared with 3.7 percent for the quarter ended December 31, 2001. 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. . - We expect full year 2003 revenue to be approximately $940 to $950 million. We expect AIU-Online full year 2003 revenue, included in the preceding amounts, to exceed $60 million. We expect the first quarter 2003 revenue to be approximately $218 to $221 million. - 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 with stronger improvement in the first and second quarters of 2003. - We expect full year 2003 earnings per share to be approximately $1.80 to $1.82. We expect first quarter 2003 earnings per share to be approximately $0.34 to $0.35. - We expect our 2003 effective income tax rate to decrease to 40.5 percent from 41.0 percent in 2002. - We expect 2003 capital expenditures to be approximately $75 to $80 million. Conference Call Career Education Corporation will host a conference call on Wednesday Wednesday: see week. , January 29, 2003 at 10:00 a.m. (Eastern Time) to discuss its fourth quarter and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002 results. 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 call (973) 317-5319 and cite "Career Education 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 282588. Career Education Corporation (www.careered.com) is the world's largest on-campus provider of private, for-profit postsecondary education and has a rapidly-growing presence in online education. The six divisions of the Colleges, Schools and Universities Group operate 43 campuses in the U.S. and internationally and offer 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 bach·e·lor's n. A bachelor's degree. 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 cu·li·nar·y adj. Of or relating to a kitchen or to cookery. [Latin cul  n arts,
and health education. The Online Education Group's AIU Online
Division offers master's degree and bachelor's degree programs
in information technology, visual communication, business administration
and education. CEC's total student population on January 31, 2003
is expected to be approximately 51,100 students.The forward-looking statements contained in this release are based upon various assumptions, and certain risks and uncertainties could cause actual results to differ materially from those stated. Factors that could cause such differences include costs and difficulties associated with opening new campuses and in integrating acquisitions, costs associated with the Online Education Group, changes in the 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. environment and those matters disclosed in Career Education Corporation's filings with the Securities and Exchange Commission (SEC). Career Education Corporation assumes no obligation to update its forward-looking statements.
Career Education Corporation
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended December 31, 2002 and 2001
(Amounts in thousands, except EPS)
% of % of
2002 NSR 2001 NSR
--------- ---- --------- ----
Revenue:
Tuition and
registration
fees, net $ 199,359 90.8% $ 138,998 89.5%
Other, net 20,331 9.2% 16,226 10.5%
--------- ---------
Total net revenue 219,690 100.0% 155,224 100.0%
--------- ---------
Operating Expenses:
Educational services
and facilities 79,630 36.2% 57,438 37.0%
General and
administration 79,144 36.0% 55,472 35.7%
Depreciation and
amortization 8,922 4.1% 8,228 5.3%
--------- ---------
Total operating
expenses 167,696 76.3% 121,138 78.0%
--------- ---------
Income from operations 51,994 23.7% 34,086 22.0%
Other Income (Expense):
Interest income
(expense), net (394) -0.2% 355 0.2%
Share of affiliate
earnings 955 0.4% 640 0.4%
--------- ---------
Total other income
(expense) 561 0.2% 995 0.6%
--------- ---------
Income before provision
for income taxes 52,555 23.9% 35,081 22.6%
Provision for
income taxes 21,548 9.8% 15,787 10.2%
--------- ---------
Net income $ 31,007 14.1% $ 19,294 12.4%
========= =========
Elimination of goodwill
amortization, net of
tax effect of $70 (1) 1,030 0.7%
=========
Pro forma net
income (1) $ 20,324 13.1%
=========
======================================================================
Earnings before
Interest, Taxes,
Depreciation &
Amortization (EBITDA) $ 61,871 28.2% $ 42,954 27.7%
(includes "Share of
affiliate earnings)
Diluted net income
per share $ 0.65 $ 0.42
Pro forma diluted net
income per share (1) $ 0.65 $ 0.44
Diluted weighted
average number of
shares outstanding 47,920 46,119
======================================================================
(1) Pro forma net income and pro forma diluted net income per share
assumes adoption of SFAS 142 on January 1, 2001.
Career Education Corporation
CONSOLIDATED STATEMENTS OF INCOME
For the Twelve Months Ended December 31, 2002 and 2001
(Amounts in thousands, except EPS)
% of % of
2002 NSR 2001 NSR
--------- ---- --------- ----
Revenue:
Tuition and
registration
fees, net $ 675,121 89.9% $ 477,333 90.2%
Other, net 75,887 10.1% 51,907 9.8%
--------- ---------
Total net revenue 751,008 100.0% 529,240 100.0%
--------- ---------
Operating Expenses:
Educational services
and facilities 294,539 39.2% 213,916 40.4%
General and
administration 309,535 41.2% 215,684 40.8%
Depreciation and
amortization 33,636 4.5% 30,818 5.8%
--------- ---------
Total operating
expenses 637,710 84.9% 460,418 87.0%
--------- ---------
Income from operations 113,298 15.1% 68,822 13.0%
Other Income (Expense):
Interest expense, net (1,286) -0.2% (759) -0.1%
Share of affiliate
earnings 2,348 0.3% 1,674 0.3%
--------- ---------
Total other
income (expense) 1,062 0.1% 915 0.2%
--------- ---------
Income before provision
for income taxes 114,360 15.2% 69,737 13.2%
Provision for
income taxes 46,888 6.2% 31,382 6.0%
--------- ---------
Net income $ 67,472 9.0% $ 38,355 7.2%
========= =========
Elimination of goodwill
amortization, net of
tax effect of $279 (1) 3,918 0.8%
=========
Pro forma net
income (1) $ 42,273 8.0%
=========
======================================================================
Earnings before
Interest, Taxes,
Depreciation &
Amortization (EBITDA) $ 149,282 19.9% $ 101,314 19.1%
(includes "Share of
affiliate earnings)
Diluted net income
per share $ 1.42 $ 0.85
Pro forma diluted net
income per share (1) $ 1.42 $ 0.93
Diluted weighted average
number of shares
outstanding 47,547 45,390
======================================================================
(1) Pro forma net income and pro forma diluted net income per share
assumes adoption of SFAS 142 on January 1, 2001.
Career Education Corporation
SELECTED BALANCE SHEET & FINANCIAL DATA
As of December 31, 2002 and 2001
(Amounts in thousands)
2002 2001
-------------- --------------
Cash $ 33,474 $ 39,675
Receivables, net 82,320 62,813
Current assets 149,244 130,594
Total assets 586,136 490,789
Current liabilities 133,208 120,373
Long-term debt and capital lease
obligations, net 29,686 45,553
Other long-term liabilities 17,545 18,458
Stockholders' investment 405,697 306,405
Net Bad Debt Gross
Revenue Expense Revenue
------- -------- -------
Three months ended December 31, 2002 $ 219,690 $ 8,521 $ 228,211
Year ended December 31, 2002 $ 751,008 $ 29,033 $ 780,041
Capital Operating
Expenditures Cash Flow
------------ ---------
Three months ended December 31, 2002 $ 20,062 $ 54,805
Year ended December 31, 2002 $ 60,871 $ 106,230
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