PITTSBURGH, May 1, 2002 (PRIMEZONE) -- Education Management Corporation (Nasdaq:EDMC) today reported its financial results for the third quarter and nine months ended March 31, 2002.
Net revenues for the third quarter of fiscal 2002 increased by 45.2% to $145.7 million, compared with $100.4 million in the third quarter of fiscal 2001. Net income for the quarter grew 57.2% to $14.9 million, or $.41 per diluted share, as compared to $9.5 million, or $.30 per diluted share, in the third quarter last year. Approximately $.02 of this increase in earnings per share in the third quarter of fiscal 2002 relates to a non-recurring tax credit.
For the nine months ended March 31, 2002, net revenues rose 33.0% to $367.1 million, compared with $276.0 million, for the comparable nine-month period last year. Net income for the first nine months of fiscal 2002 increased 43.7% to $36.2 million, or $1.07 per diluted share, as compared to $25.2 million, or $.82 per diluted share, for the same period last year.
Revenue growth in the third quarter resulted from a 38.1% increase in student enrollment and an increase in average tuition rates. Total student enrollment at the start of the third quarter of fiscal 2002 was 37,658 as compared to 26,997 last year.
At the start of the current fourth quarter, total enrollment at EDMC's schools was 35,790. The Art Institutes' enrollment increased 15.1% to 29,594 from 25,711 as compared to the fourth quarter last year. At the 18 Art Institutes operated by EDMC for two or more years, enrollment grew 6.9% to 26,317 students, as compared to 24,626 students at the start of the same period last year. Total enrollment in The Art Institutes' bachelor's degree programs was 12,775, a 50.6% increase from the prior year.
Argosy's enrollment for the beginning of the current fourth quarter was 6,196, a 24.7% increase as compared to the start of the same period last year. Argosy was acquired on December 21, 2001 by EDMC. On a same school basis, Argosy's enrollment increased 25.4% from 4,550 students last April to 5,704 students this year.
The above fourth quarter total enrollment figures exclude students at The National Center for Paralegal Training. The school, which is located in The Art Institute of Atlanta facility, has stopped accepting new students but will continue to conduct classes to permit its present 132 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, "Our recent strong financial results represent the tangible return from continuing investments in our people, teaching facilities, academic programs, and new school locations through start-up and acquisition. Argosy is performing well, and as expected, has become an important element in our growth strategy."
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 Education Group provides doctoral, master's, bachelor's and associate's degree programs in the behavioral sciences, education, business and health sciences fields through Argosy University (www.argosyu.edu), and offers legal studies, graduate business and technology programs, test preparation courses and programs for employed educators. 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 Nine Months
ended March 31, ended March 31,
(unaudited) (unaudited)
2002 2001 2002 2001
-------- -------- -------- --------
Net revenues $145,710 $100,366 $367,074 $276,039
Costs and expenses:
Educational services 91,251 64,131 232,709 175,200
General and
administrative 29,703 19,662 73,106 56,299
Amortization of
intangibles 1,378 564 2,217 1,381
-------- -------- -------- --------
122,332 84,357 308,032 232,880
-------- -------- -------- --------
Income before interest
and taxes (EBIT) 23,378 16,009 59,042 43,159
Interest expense, net 278 439 1,305 1,877
-------- -------- -------- --------
Income before
income taxes 23,100 15,570 57,737 41,282
Provision for
income taxes 8,167 6,072 21,537 16,097
-------- -------- -------- --------
Net income $ 14,933 $ 9,498 $ 36,200 $ 25,185
======== ======== ======== ========
Diluted earnings
per share $ .41 $ .30 $ 1.07 $ .82
======== ======== ======== ========
Weighted average
number of diluted
shares outstanding
(000's): 36,361 31,535 33,796 30,830
Selected Balance Sheet Data (unaudited):
As of March 31
2002 2001
-------- --------
Cash and cash equivalents $ 73,929 $ 9,216
Receivables, net 36,244 24,879
Current assets 133,242 45,519
Total assets 472,641 242,783
Current liabilities 130,039 85,396
Long-term debt
(including current portion) 3,696 12,279
Shareholders' investment 332,832 145,107