PITTSBURGH, Feb. 5, 2002 (PRIMEZONE) -- Education Management Corporation (Nasdaq:EDMC) today reported its financial results for the second quarter ended December 31, 2001.
Net revenues for the second quarter of fiscal 2002 increased by 25.6% to $129.5 million, compared with $103.1 million in the second quarter of fiscal 2001. Net income for the quarter grew 32.7% to $19.3 million, or $.58 per diluted share, as compared to $14.5 million, or $.47 per diluted share, in the second quarter last year.
For the six months ended December 31, 2001, net revenues rose 26.0% to $221.4 million, compared with $175.7 million, for the comparable six-month period last year. Net income for the first six months of fiscal 2002 increased 35.6% to $21.3 million, or $.65 per diluted share, as compared to $15.7 million, or $.51 per diluted share, for the same period last year.
Revenue growth in the second quarter resulted from a 15.6% increase in student enrollment and an increase in average tuition rates of approximately 7% over last year. Total student enrollment at the start of the second quarter of fiscal 2002 was 32,375 as compared to 27,999 last year.
As previously announced, the Company completed two acquisitions in the second quarter of fiscal 2002: ITI Information Technology Institute ("ITI") on November 23, 2001 and Argosy Education Group, Inc. ("Argosy") on December 21, 2001. Organizationally, ITI is being combined with Argosy. The results of operations for these entities are included in EDMC's second quarter results from the respective acquisition dates. These entities contributed approximately $1.5 million of revenue and had an immaterial effect on operating results for the second quarter.
At the start of the current third quarter, total enrollment at EDMC's schools, including Argosy and ITI, was 37,658. The Art Institutes' enrollment increased 15.8% to 31,272 from 26,997 as compared to the third quarter last year. At the 18 Art Institutes operated by EDMC for two or more years, enrollment grew 7.3% in the quarter to 27,962 students, as compared to 26,050 students at the start of the same period last year. Total enrollment in The Art Institutes' bachelor's degree programs was 12,830, a 52.6% increase from the prior year.
Argosy's enrollment for the third quarter was 6,386, a 38.1% increase as compared to the start of the same period last year. On a same school basis (excluding ITI and Western State University College of Law), Argosy's enrollment increased 22.9% from 4,625 students last January to 5,685 students this year.
The above third quarter figures exclude enrollment at The National Center for Paralegal Training. The school, which is located in The Art Institute of Atlanta facility, will no longer accept new students but will continue to conduct classes to permit its present 183 students to complete their education programs.
The Company's quarterly revenues and income fluctuate with student enrollment patterns. Student enrollment has typically increased in the fall (fiscal year second quarter), when the largest number of new high school graduates traditionally begin post-secondary education. The Company's quarterly costs and expenses, however, do not fluctuate as significantly as revenues.
Robert Knutson, EDMC's Chairman and Chief Executive Officer, commented, "The completion of our merger with Argosy Education Group in December was the culmination of over six months of effort by many people. I want to again welcome the faculty and staff of Argosy and ITI to Education Management Corporation. Our transition plans are being implemented and we are very encouraged about our combined growth opportunities."
Education Management Corporation (www.edumgt.com) is among the largest providers of private post-secondary education in North America, based on student enrollment and revenue, with 40 primary campus locations in 26 major cities, and with approximately 39,000 students as of fall 2001. EDMC's Art Institutes (www.artinstitutes.edu) offer master's, bachelor's, associate's and non-degree programs in the areas of design, media arts, fashion and culinary arts. EDMC's Argosy University (www.argosyu.edu) provides doctoral, master's, bachelor's and associate's degree programs in the behavioral sciences, education, business and health sciences fields. EDMC has provided career-oriented education for 40 years, and its education institutions have more than 135,000 alumni.
This press release may include information that could constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company's Securities and Exchange Commission filings. Past results of EDMC are not necessarily indicative of its future results. EDMC does not undertake any obligation to update any forward-looking statements.
Education Management Corporation
Summary Consolidated Statements of Income
(In thousands, except earnings per share)
Three Months Six Months
ended Dec. 31, ended Dec. 31,
(unaudited) (unaudited)
2001 2000 2001 2000
-------- -------- -------- --------
Net revenues $129,490 $103,112 $221,364 $175,673
Costs and expenses:
Educational services 74,326 58,073 141,458 111,069
General and
administrative 22,679 19,951 43,403 36,637
Amortization of
intangibles 530 449 839 817
-------- -------- -------- --------
97,535 78,473 185,700 148,523
-------- -------- -------- --------
Income before
interest and taxes
(EBIT) 31,955 24,639 35,664 27,150
Interest expense, net 548 823 1,027 1,438
-------- -------- -------- --------
Income before income
taxes 31,407 23,816 34,637 25,712
Provision for income
taxes 12,123 9,285 13,370 10,025
-------- -------- -------- --------
Net income $ 19,284 $ 14,531 $ 21,267 $ 15,687
======== ======== ======== ========
Diluted earnings
per share $ .58 $ .47 $ .65 $ .51
======== ======== ======== ========
Weighted average
number of diluted
shares outstanding
(000's): 33,363 30,963 32,626 30,628
Selected Balance Sheet Data:
As of Dec. 31
2001 2000
-------- --------
Cash and cash equivalents $ 44,452 $ 9,448
Receivables, net 33,318 26,272
Current assets 98,332 49,622
Total assets 439,312 244,486
Current liabilities 117,732 85,020
Long-term debt (including
current portion) 4,049 25,161
Shareholders' investment 312,298 134,336