PR Newswire
PHOENIX, May 4, 2022
PHOENIX, May 4, 2022 /PRNewswire/ -- Grand Canyon Education, Inc. (NASDAQ: LOPE), ("GCE" or the "Company"), is a publicly traded education services company that currently provides services to 27 university partners. GCE provides a full array of support services in the post-secondary education sector and has developed significant technological solutions, infrastructure and operational processes to provide superior services in these areas on a large scale. GCE today announced financial results for the quarter ended March 31, 2022.
Liquidity and Capital Resources
Our unrestricted cash and cash equivalents and investments were $264.3 million and $600.9 million as of March 31, 2022 and December 31, 2021, respectively. Our liquidity position, as measured by cash and cash equivalents and investments decreased by $336.6 million during fiscal 2022, which was largely attributable to the share repurchases during the first quarter of 2022 of $399.6 million, partially offset by cash provided by operating activities of $70.3 million.
Impact of COVID-19
Since March 2020, the world has been, and continues to be, impacted by the COVID-19 pandemic. This contagious outbreak, which has continued to spread, and the related adverse public health developments that have occurred at various times since March 2020, including orders to shelter-in-place, travel restrictions and mandated non-essential business closures, have adversely affected workforces, organizations, customers, economies and financial markets globally. It has also disrupted the normal operations of many businesses, including ours, and that of our university partners.
Pursuant to the Master Services Agreement, GCE provides education services to GCU in return for 60% of GCU's tuition and fee revenues, which includes fee revenues from room, board, and other ancillary businesses including a student-run golf course and hotel. GCU has four types of students: traditional ground university students, who attend class on its campus in Phoenix, Arizona and of which approximately 70% have historically lived on campus in university owned residence halls; professional studies students, who are working adult students who attend class one night a week on the Phoenix campus; online students who attend class fully online; and students who are studying in hybrid programs in which the ground component takes place at off-campus classroom and laboratory sites.
The COVID-19 outbreak, as well as measures taken to contain its spread, has impacted GCU's students and its business in a number of ways. A full description of those impacts is described in our 2021 Form 10-K. Below is an explanation of those impacts from the COVID-19 pandemic, that had an effect on GCU's tuition and non-tuition revenue during 2021 and the first quarter of 2022 and, consequently, the service revenues we earned under the Master Services Agreement:
The changes described above at GCU have impacted or will impact GCE's service revenue under the Master Services Agreement. In addition, due to the limited operating expenses that we incur to deliver those services, there has been or will be a direct reduction in our operating profit and operating margin.
GCE also provides services to numerous university partners across the United States, including GCU, at off-campus classroom and laboratory sites. The majority of these university partners' students are studying in the Accelerated Bachelor of Science in Nursing ("ABSN") program which is offered in a 12-16-month format in three or four academic semesters. Beginning with the Summer 2021 semester we experienced a decline in revenue per student from students in these programs caused primarily by some students delaying their scheduled clinical courses due to vaccine mandates at hospital partners and we started to see a reduction in our off-site classroom and laboratory student enrollment growth rate due primarily to delays in the opening of scheduled new sites and requests by some of our university or hospital partners or their state regulatory boards to reduce cohort sizes due to concerns over potential clinical faculty availability caused by nursing and other healthcare employee shortages. This is especially true with one of our university partner's Occupational Therapy Assistants ("OTA") program in which enrollment declined 35.4% between March 31, 2021 and 2022 as the university partner stopped admitting new students for most of 2021 due to clinical placement backlog. None of our ABSN partners have stopped admitting new students but some locations that were scheduled to open in 2021 and 2022 have been pushed back and some existing partners have reduced incoming cohort sizes due to the concern that there are not enough nurses to serve as clinical faculty.
No other changes are currently anticipated with our other university partners related to the Spring 2022 semester that would have a material impact on GCE's service revenue, operating profit and operating margins. However, if one of our university partners were to close an off-campus classroom and laboratory site prior to the end of the Spring 2022 semester or take some other action that adversely impacted program enrollment, such an event would reduce the service revenues earned by GCE.
Beginning at the time of the COVID-19 outbreak a large percentage of our workforce began to work remotely and is expected to continue doing so for the foreseeable future. This degree of remote working could increase risks in the areas of internal control, cyber security and the use of remote technology, and thereby result in interruptions or disruptions in normal operational processes.
It is not possible for us to completely predict the duration or magnitude of the adverse results of the COVID-19 pandemic and its effects on our business, results of operations or financial condition at this time, but such effects may be material in future quarters.
2022 Outlook | |
| |
Q2 2022: | Service revenue of between $199.5 million and $202.7 million; As Adjusted Operating Margin of between 17.2% and 18.4%; Effective tax rate of 24.9%; As Adjusted Diluted EPS of between $0.80 and $0.87 using 32.1 million diluted shares |
Q3 2022: | Service revenue of between $209.8 million and $218.0 million; As Adjusted Operating Margin of between 18.7% and 21.8%; Effective tax rate of 24.9%; As Adjusted Diluted EPS of between $0.93 and $1.12 using 31.7 million diluted shares |
Q4 2022: | Service revenue of between $254.2 million and $266.8 million; As Adjusted Operating Margin of between 34.1% and 37.2%; Effective tax rate of 24.5%; As Adjusted Diluted EPS of between $2.08 and $2.38 using 31.5 million diluted shares |
Full Year 2022: | Service revenue of between $907.6 million and $931.6 million; As Adjusted Operating Margin of between 26.4% and 28.3%; Effective tax rate of 24.9%; As Adjusted Diluted EPS of between $5.53 and $6.09 using 32.5 million diluted shares |
Forward-Looking Statements
This news release contains "forward-looking statements" which include information relating to future events, future financial performance, strategies expectations, competitive environment, regulation, and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; whether regulatory, economic, or business developments or other matters may or may not have a material adverse effect on our financial position, results of operations, or liquidity; projections, predictions, expectations, estimates, and forecasts as to our business, financial and operating results, and future economic performance; and management's goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions, the negative of these expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause our actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements include, but are not limited to: the harm to our business, results of operations, and financial condition, and harm to our university partners resulting from epidemics, pandemics, including the continuing, and potential future, adverse effects of the COVID-19 pandemic, or public health crises: the occurrence of any event, change or other circumstance that could give rise to the termination of any of our key university partner agreements; our ability to properly manage risks and challenges associated with strategic initiatives, including potential acquisitions or divestitures of, or investments in, new businesses, acquisitions of new properties and new university partners, and expansion of services provided to our existing university partners; our failure to comply with the extensive regulatory framework applicable to us either directly as a third party education services provider or indirectly through our university partners, including Title IV of the Higher Education Act and the regulations thereunder, state laws and regulatory requirements, and accrediting commission requirements; competition from other education services companies in our geographic region and market sector, including competition for students, qualified executives and other personnel; the pace of growth of our university partners' enrollment and its effect on the pace of our own growth; our ability to, on behalf of our university partners, convert prospective students to enrolled students and to retain active students to graduation; our success in updating and expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis for our university partners; the impact of any natural disasters or public health emergencies; and other factors discussed in reports on file with the Securities and Exchange Commission, including as set forth in Part I, Item 1A of our Annual Report on Form 10-K for period ended December 31, 2021, as updated in our subsequent reports filed with the Securities and Exchange Commission on Form 10Q or Form 8-K.
Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Conference Call
Grand Canyon Education, Inc. will discuss its first quarter 2022 results and full year 2022 outlook during a conference call scheduled for today, May 4, 2022 at 4:30 p.m. Eastern time (ET). To participate in the live call, investors should dial 877-577-1769 (domestic and Canada) or 706-679-7806 (international), passcode 3393146 at 4:25 p.m. (ET). The Webcast will be available on the Grand Canyon Education, Inc. website at www.gce.com.
A replay of the call will be available approximately two hours following the conclusion of the call, at 855-859-2056 (domestic) or 404-537-3406 (international), passcode 3393146. It will also be archived at www.gce.com in the investor relations section for 60 days.
About Grand Canyon Education, Inc.
Grand Canyon Education, Inc. ("GCE"), incorporated in 2008, is a publicly traded education services company that currently provides services to 27 university partners. GCE is uniquely positioned in the education services industry in that its leadership has over 30 years of proven expertise in providing a full array of support services in the post-secondary education sector and has developed significant technological solutions, infrastructure and operational processes to provide superior services in these areas on a large scale. GCE provides services that support students, faculty and staff of partner institutions such as marketing, strategic enrollment management, counseling services, financial services, technology, technical support, compliance, human resources, classroom operations, content development, faculty recruitment and training, among others. For more information about GCE visit the Company's website at www.gce.com.
Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, AZ 85017, www.gce.com.
GRAND CANYON EDUCATION, INC. Consolidated Income Statements (Unaudited) | |||||||
| |||||||
| | Three Months Ended | | ||||
| | March 31, | | ||||
| | 2022 | | 2021 | | ||
(In thousands, except per share data) | | | | | | | |
Service revenue | | $ | 244,133 | | $ | 236,934 | |
Costs and expenses: | | | | | | | |
Technology and academic services | | | 36,306 | | | 32,051 | |
Counseling services and support | | | 67,513 | | | 61,239 | |
Marketing and communication | | | 50,851 | | | 47,731 | |
General and administrative | | | 9,893 | | | 9,582 | |
Amortization of intangible assets | | | 2,105 | | | 2,105 | |
Total costs and expenses | | | 166,668 | | | 152,708 | |
Operating income | | | 77,465 | | | 84,226 | |
Interest income on Secured Note | | | — | | | 14,549 | |
Interest expense | | | — | | | (799) | |
Investment interest and other | | | 205 | | | 121 | |
Income before income taxes | | | 77,670 | | | 98,097 | |
Income tax expense | | | 19,592 | | | 19,985 | |
Net income | | $ | 58,078 | | $ | 78,112 | |
Earnings per share: | | | | | | | |
Basic income per share | | $ | 1.67 | | $ | 1.70 | |
Diluted income per share | | $ | 1.66 | | $ Werbung Mehr Nachrichten zur Grand Canyon Education Aktie kostenlos abonnieren
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