Printer Friendly

Education Management Corporation reports first quarter financial results.

PITTSBURGH--(BUSINESS WIRE)--Nov. 25, 1996--Education Management Corporation (Nasdaq: EDMC) today reported financial results for the first fiscal quarter of 1997 ended September 30, 1996, which is the Company's first quarterly reporting period since its initial public offering on October 31, 1996.

Net revenues for the first quarter of fiscal 1997 increased by 17.9% to $33.4 million, compared with $28.3 million in the first quarter of fiscal 1996. The Company reported a net loss for the three months ended September 30, 1996 of $635,000, or $0.15 per share, as compared to a loss of $931,000, or $0.22 per share, for the same period last year. The net loss per share pro forma for certain capital transactions was $0.07 in fiscal 1997 compared to a loss of $0.10 per share during the same quarter of last fiscal year.

Revenue growth in the first quarter resulted primarily from a 13.7% increase in student enrollments at Education Management (EDMC) company-owned schools, as well as an average 6.0% tuition price increase at The Art Institutes. During the past year, the Company increased the number of company-owned schools from 9 to 13, which contributed to the solid revenue growth. In November 1995, EDMC acquired two schools and renamed them The Illinois Institute of Art at Chicago and The Illinois Institute of Art at Schaumburg. In addition, in January 1996 a new school, The Art Institute of Phoenix, commenced classes and in August of 1996 the Company acquired the New York Restaurant School (NYRS). Total student enrollment at the Company's schools in the first quarter of fiscal 1997 was 11,303 compared to 9,944 last year.

For the current fall quarter (second quarter of fiscal 1997), which is seasonally the Company's strongest quarter, the total student enrollment at company-owned schools increased more than 18% from last year to approximately 15,800.

The lower loss in income for the first quarter resulted principally from improved operations at company-owned schools, partially offset by a lower credit for income taxes.

The Company's quarterly revenues and income fluctuate with student enrollment patterns. Student enrollments are typically lowest during the Company's first fiscal quarter because many students choose not to attend classes during the summer months. Enrollment increases in the fall (fiscal year second quarter) when the largest number of new high school graduates traditionally begin post-secondary education. The Company's costs and expenses, however, do not fluctuate as significantly as revenues on a quarterly basis. Historically, Education Management incurs greater expenses in the first fiscal quarter in preparation for the peak enrollments in the fall. These costs, together with lower revenues during the period, have historically led to net losses in the first quarter.

Robert Knutson, Chairman and Chief Executive Officer, said, "The gain in revenue reflects the growing demand for the Company's education programs as well as our efforts to strategically expand our business. Our programs are designed to meet the needs of employers and our students for today's competitive job market."

Mr. Knutson continued, "As a newly public company, we are committed to growing our business and creating value for our students and shareholders. We continue to look to expand to new cities as well as add new programs to existing locations. We will also explore opportunities for strategic acquisitions that will further our national expansion."

On October 31, 1996, Education Management completed an initial public offering of 5,073,600 common shares at $15 each, which after underwriting fees and expenses raised approximately $45 million for the Company. The Company has used the proceeds to pay back debt and for general corporate purposes.

Education Management Corporation is among the largest providers of proprietary post-secondary education in the United States based on student enrollments and revenues. Through its operating units, The Art Institutes, the New York Restaurant School, the National Center for Paralegal Training, and the National Center for Professional Development, the Company offers associate's and bachelor's degree programs and non-degree programs in the areas of design, media arts, culinary and hospitality arts, fashion, and paralegal studies. The Company has provided career-oriented education programs for nearly 35 years, and its schools have graduated over 100,000 students. -0-

 Education Management Corporation and Subsidiaries
 Summary Consolidated Income Statement

 Three months ended September 30,
 ($000, except per share amounts)
 1996 1995
Net revenues $33,410 $28,333

Cost and expenses:
 Educational services 24,929 21,942
 General and
 administrative 8,177 6,453
 Amortization of
 intangibles 447 265
 ESOP expense - 238
Total cost and expenses 33,553 28,898

Income (loss) before
 interest and taxes (EBIT) (143) (565)
Interest expense 952 916

Income (loss) before taxes (1,095) (1,481)
Income tax credit (460) (550)
Net income (loss) $ (635) $ (931)

Series A Preferred Stock
 Dividends paid $ (83) $ (563)
 Redemption premium (107) -
 Dividends accruable
 but not paid (223) -

Income (loss) applicable
 to common shareholders $ (1,048) $ (1,494)

Earnings Per Share:
Actual $ (0.15) $ (0.22)
Pro forma for the
 capital transactions
 (but excluding the IPO) $ (0.07) $ (0.10)

Weighted average number
 of shares outstanding 6,922,000 6,916,000
Pro forma weighted
 average number of
 shares outstanding 11,026,000 11,019,000

CONTACT: Education Management Corporation

Robert McDowell

Senior Vice President and

Chief Financial Officer

(412) 562-0900


Donna Stein/Mitchell Burd/Stephanie Conzelman

Morgen-Walke Associates, Inc.

(212) 850-5600



Miriam Adler/Erika Brown

(212) 850-5600
COPYRIGHT 1996 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Nov 25, 1996
Previous Article:GT Interactive acquires Warner Interactive Europe.
Next Article:Varlen reports record third quarter sales, operating profit.

Related Articles
Cholestech announces first quarter results.
Cholestech Announces First Quarter Results.
Education Management Corporation Reports Fiscal 1997 Fourth Quarter and Year End Results.
Education Management Corporation Reports Financial Results for the Fiscal 1998 Third Quarter and Nine Months.
Education Management Corporation Reports Fiscal 1998 Fourth Quarter and Year End Financial Results.
Education Management Corporation Reports Fiscal 1999 Third Quarter Results.
Education Management Corporation Reports Fiscal 2000 Third Quarter Financial Results.
Education Management Corporation Reports Fiscal 2000 Third Quarter Financial Results.
VCampus Sees over 200% Quarter over Quarter Growth in Registrations in Select Partner Online Courses.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters