PITTSBURGH, Aug. 6, 2002 (PRIMEZONE) -- Education Management Corporation (Nasdaq:EDMC) today reported its financial results for the fourth quarter and twelve months ended June 30, 2002.
Net revenues for the fourth quarter of fiscal 2002 increased by 41.1% to $133.5 million, compared with $94.6 million in the fourth quarter of fiscal 2001. For the twelve months ended June 30, 2002, net revenues rose 35.0% to $500.6 million, compared with $370.7 million, for the comparable twelve-month period last year.
Revenue growth in the fourth quarter resulted from a 39.2% increase in student enrollment and an approximately 6% increase in average tuition rates. Total student enrollment at the start of the fourth quarter of fiscal 2002 was 35,790 as compared to 25,711 last year. Argosy contributed 6,196 students to the fourth quarter enrollment.
Net income for the quarter grew 61.2% to $6.1 million, or $.17 per diluted share, as compared to $3.8 million, or $.12 per diluted share, in the fourth quarter last year. For fiscal 2002, net income increased 46.0% to $42.3 million, or $1.23 per diluted share, as compared to $29.0 million, or $.93 per diluted share last year. Net income for both the fourth quarter and fiscal year includes a goodwill impairment charge of approximately $.9 million related to the teach-out of ITI programs in Halifax.
At the start of the current summer quarter (first quarter of fiscal 2003), total enrollment at EDMC's schools was 32,814. The Art Institutes' enrollment increased 14.3% to 28,054 from 24,550 as of the comparable point last year. At the 20 Art Institutes operated by EDMC for two or more years, enrollment grew 9.5% to 25,976 students, as compared to 23,732 students at the start of the same period last year. Total enrollment in The Art Institutes' bachelor's degree programs was 12,929, a 49.6% increase from the prior year.
Argosy's enrollment for the beginning of the current summer quarter (first quarter of fiscal 2003) was 4,760, a 27.5% increase as compared to 3,733 students enrolled at 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 26.3% to 4,533 from 3,589 students last year.
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: "We are pleased to report strong year end results and look forward to good growth opportunities in fiscal 2003. Our enrollment trends remain solid and we are encouraged by the volume of inquiries, especially from referrals and over the Internet."
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 graduate and undergraduate degree programs in various fields including psychology, education, business, legal studies and the health sciences. 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 Twelve Months
ended June 30, ended June 30,
(unaudited)
2002 2001 2002 2001
-------- -------- --------- ---------
Net revenues $ 133,502 $ 94,642 $ 500,576 $ 370,681
Costs and expenses:
Educational services 92,318 67,113 325,027 242,313
General and
Administrative 29,380 20,417 102,486 76,716
Amortization of
Intangibles 1,879 596 4,096 1,977
-------- -------- --------- ---------
123,577 88,126 431,609 321,006
-------- -------- --------- ---------
Income before interest
and taxes (EBIT) 9,925 6,516 68,967 49,675
Interest expense, net 247 398 1,552 2,275
-------- -------- --------- ---------
Income before income
Taxes 9,678 6,118 67,415 47,400
Provision for income
Taxes 3,564 2,325 25,101 18,422
-------- -------- --------- ---------
Net income $ 6,114 $ 3,793 $ 42,314 $ 28,978
-------- -------- --------- ---------
-------- -------- --------- ---------
Diluted earnings
per share $ .17 $ .12 $ 1.23 $ .93
-------- -------- --------- ---------
-------- -------- --------- ---------
Weighted average
number of diluted
shares outstanding
(000's): 36,626 31,659 34,479 31,016
Selected Consolidated Balance Sheet Data
As of June 30
2002 2001
------ ------
Cash and cash equivalents $ 86,233 $ 47,290
Receivables, net 30,378 22,539
Current assets 140,042 83,175
Total assets 492,655 287,540
Current liabilities 139,632 73,897
Long-term debt (including
current portion) 28,576 53,660
Shareholders' investment 346,577 159,949