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National American University Holdings Inc.
National American University Holdings Inc.
10/03/2012 | Press release
October 3, 2012 - National American University Holdings, Inc. Reports Fiscal 2013 First Quarter Results
distributed by noodls on 10/03/2012 19:30
NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. REPORTS FISCAL 2013 FIRST QUARTER RESULTS
Company to host conference call on October 4, 2012, at 11:00 a.m. EDT
Financial and Operational Highlights
Enrollment by headcount increased 10.2% over the same period last year to 10,350 students as of August 31,
2012.
FY 2013 first quarter total revenue increased 16.0% to $29.5 million from $25.4 million in the prior-year period with the Company's academic segment's revenue increasing 16.1% to $29.2 million, compared to $25.1 million in the FY 2012 first quarter.
The Company reported a FY 2013 first quarter net loss attributable to the Company of $0.2 million, compared to net income attributable to the Company of $1.0 million in the prior-year period, primarily due to selling, general, and administrative (SG&A) expenses incurred for additional expenses related to ramping up operations at NAU's new physical locations and increased expenses incurred for insurance claims; FY 2013 first quarter EBITDA was
$1.4 million, compared to $2.7 million in the prior-year period.
The Board of Directors declared a cash dividend in the amount of $0.04 per share on all shares of the Company's common stock outstanding and of record as of the close of business on September 30, 2012, which is to be paid on or about October 5, 2012.
Balance sheet at August 31, 2012, included cash and cash equivalents and investments of $27.8 million; working capital of $21.8 million; no short-term borrowings or long-term debt; and stockholders' equity of $49.6 million.
Rapid City, South Dakota, October 3, 2012 - National American University Holdings, Inc. (the "Company") (NASDAQ: NAUH), which through its wholly owned subsidiary operates National American University ("NAU"), a regionally accredited, proprietary, multi-campus institution of higher learning, today reported unaudited financial results for its FY 2013 first quarter ended August 31, 2012.
Ronald L. Shape, Ed.D., Chief Executive Officer of the Company, commented, "We were pleased to achieve double-digit growth in enrollment and revenue in the summer 2012 term, which tends to be a seasonally weaker period. Despite the continued difficult climate in our industry, NAU's enrollment increased 10.2% from the same period last year to 10,350 students. We continue to focus on our strategic goals for fiscal 2013, transitioning from geographic expansion to growing enrollment at our current locations, reducing expenditures to build efficiencies, and achieving greater economies of scale. We anticipate we will continue to see improvement over the next several quarters as the newer locations contribute to the Company's top line growth."
Operating Review
NAU currently owns one property and leases 37 physical
properties in the states of Colorado, Indiana, Kansas,
Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, Oregon,
South Dakota and Texas. Several sites operate as hybrid
learning centers in strategic geographic locations. These
centers utilize small physical facilities through which the
university provides face-to-face support services as students
participate in select, traditional classroom courses while
completing their remaining coursework online.
Of the Company's 37 campuses, the following sites are pending
regulatory approvals:
Tigard, OR
Indianapolis, IN
Roueche Graduate Center in Austin, TX
Houston, TX
10.2% Enrollment Increase
Total NAU student enrollment for the summer term of 2012 increased 10.2% to 10,350 students, up from 9,390 in the last summer term. Students enrolled in 89,363 credit hours compared to 81,175 credit hours in the summer term of
National American University Holdings, Inc. Page 2
October 3, 2012
last year. The current average age of NAU's students is in
the mid-30s, with those seeking undergraduate degrees
remaining the highest portion of NAU's student
population.
The following is a summary of student enrollment at August
31, 2012, and August 31, 2011, by degree type and by
instructional delivery method:
August 31, 2012 August 31, 2011
No. of
Students
% of
Total
No. of
Students
% of
Total
Graduate 338 3.3% 345 3.7%
Undergraduate and Diploma 10,012 96.7% 9,045 96.3%
Total 10,350 100.0% 9,390 100.0%
August 31, 2012 August 31, 2011
No. of
Students
% of
Total
No. of
Students
% of
Total
Online 6,068 58.6% 4,610 49.1% On-Campus 2,536 24.5% 3,364
35.8% Hybrid 1,746 16.9% 1,416 15.1%
Total 10,350 100.0% 9,390 100.0%
Financial Review
The Company, through its wholly owned subsidiary, operates in
two business segments: the academic segment, which consists
of NAU's undergraduate and graduate education programs and
contributes the primary portion of the Company's revenue; and
ownership in multiple apartments and condominium complexes
from which it derives sales and rental income. The real
estate operations generated approximately 1% of revenues for
the quarter ended August
31, 2012.
Fiscal 2013 First Quarter Financial Results
Total revenues for the FY 2013 first quarter increased 16.0% to $29.5 million from $25.4 million for the same period last year. As a result of NAU's enrollment growth, the academic segment's total revenue increased 16.1% to $29.2 million from $25.1 million for the prior-year period.
For the FY 2013 first quarter, educational services expense was $7.1 million, or 24.5% of the academic
segment's total revenue, compared to $6.4 million, or 25.3%,
for the FY 2012 first quarter.
Educational services expense specifically relates to the
academic segment, and includes salaries and benefits of
faculty and academic administrators, costs of educational
supplies, facility costs, faculty reference and support
material and related academic costs.
During the FY 2013 first quarter, SG&A expenses were $20.4 million, or 69.3% of total revenues, compared to
$16.8 million, or 66.1%, in the prior-year period. The
increase was primarily due to additional costs related to
ramping up operations at NAU's new physical locations,
including $1.4 million for 83 new staff members to provide
the support services necessary for NAU's growing student
population, as well as $0.4 million in increased expenses for
health-related insurance claims. The Company also incurred
additional expenses to sustain
ongoing operations that provide the support and services
necessary for the growing student population.
The Company reported a loss before income taxes and non-controlling interest for the FY 2013 first quarter of
$0.2 million, compared to income before income taxes and non-controlling interest of $1.8 million for the same period last year. The loss was primarily due to the higher SG&A expenses described above.
National American University Holdings, Inc. Page 3
October 3, 2012
Net loss attributable to the Company for the FY 2013 first quarter was $0.2 million, or $0.01 per diluted share based on 25.6 million shares outstanding, compared to net income attributable to the Company of $1.0 million, or
$0.04 per diluted share based on 27.1 million shares outstanding, in the prior-year period.
EBITDA for the FY 2013 first quarter was $1.4 million, compared to $2.7 million in the prior-year period. A table reconciling EBITDA to net income can be found at the end of this release.
Balance Sheet Highlights
|
(in millions except for percentages) |
8/31/2012 |
5/31/2012 |
% Change |
||
|
Cash and Cash Equivalents |
$ |
16.4 |
$ |
15.7 |
4.9% |
|
Available for Sale Investments |
11.4 |
14.9 |
-23.6% |
||
|
Working Capital |
21.8 |
24.6 |
-11.2% |
||
|
Total Long-term Debt |
0 |
0 |
N/A |
||
|
Stockholders' Equity |
49.6 |
50.7 |
-2.2% |
Quarterly Dividend
On August 27, 2012, the Board of Directors declared a cash dividend in the amount of $0.04 per share on all shares of the Company's common stock outstanding and of record as of the close of business on September 30, 2012, to be paid on or about October 5, 2012. This quarterly $0.04 dividend represents a 23% increase over the previous quarter's $0.0325 dividend.
Conference Call Information
Management will discuss these results in a conference call
(with accompanying presentation) on October 4, 2012, at
11:00 a.m. EDT.
The dial-in numbers are: (877) 407-8033 (U.S.)
(201) 689-8033 (International)
Accompanying Slide Presentation and Webcast
The Company will also have an accompanying slide presentation available in PDF format at the "Investor Relations" section of the NAU website at http://www.national.edu/InvestorRelations. The presentation will be made available 30 minutes prior to the conference call. In addition, the call will be simultaneously webcast over the Internet via the "Investor Relations" section of the NAU website or by clicking on the conference call link: http://www.investorcalendar.com/IC/CEPage.asp?ID=169773.
About National American University Holdings, Inc.
National American University Holdings, Inc., through its wholly owned subsidiary, operates National American University ("NAU"), a regionally accredited, proprietary, multi-campus institution of higher learning offering associate, bachelor's, and master's degree programs in health care and business-related disciplines. Accredited by The Higher Learning Commission and a member of the North Central Association of Colleges and Schools, NAU has been providing technical and professional career education since 1941. NAU opened its first campus in Rapid City, South Dakota, and has since grown to multiple locations throughout the central United States. In 1998, NAU began offering online courses. Today, NAU offers degree programs in traditional, online, and hybrid formats, which provide students increased flexibility to take courses at times and places convenient to their busy lifestyles.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company's business. Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current beliefs and expectations and involve a number of assumptions. These forward-looking statements include outlooks or expectations for earnings, revenues, expenses or other future financial or business performance, strategies or expectations, or the impact of legal or regulatory matters on business,
National American University Holdings, Inc. Page 4
October 3, 2012
results of operations or financial condition. Specifically,
forward-looking statements may include statements relating to
the future financial performance of the Company; the ability
to continue to receive Title IV funds; the growth of the
market for the Company's services; expansion plans and
opportunities; consolidation in the market for the Company's
services generally; and other statements preceded by,
followed by or that include the words "estimate," "plan,"
"project," "forecast," "intend," "expect," "anticipate,"
"believe," "seek," "target" or similar expressions. These
forward-looking statements involve a number of known and
unknown risks and uncertainties or other assumptions that may
cause actual results or performance to be materially
different from those expressed or implied by those
forward-looking statements. Other factors that could cause
the Company's results to differ materially from those
contained in its forward-looking statements are included
under, among others, the heading "Risk Factors" in the
Company's Annual Report on Form 10-K, filed on August 3,
2012, and in its other filings with the Securities and
Exchange Commission. The Company assumes no obligation to
update the information contained in this release.
Contact Information:
National American University Holdings, Inc.
Dr. Ronald Shape
605-721-5220 rshape@national.edu
Investor Relations Counsel The Equity Group Inc. Carolyne
Yu
212-836-9610 cyu@equityny.com
Adam Prior
212-836-9606 aprior@equityny.com
National American University Holdings, lnc. October 3, 2012
Page 5
NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. ANO SUBSIDIARIES
UNAUOITEO CONOENSEO CONSOLIOATEO STATEMENTS OF OPERATIONS ANO COMPREHENSIVE INCOME FOR THE THREE MONTHS ENOEO AUGUST 31, 2012 ANO AUGUST 31, 2011
(In thousands except share data)
REVENUE: Academic revenue Auxiliruy revenue
Rental income-apartments
Total revenue
OPERATrnG EXPENSES: Cost ofeducational services Selling, generai and administrative Auxiliruy expense
(Gain) loss on disposition of property
Total operating expenses
OPERATrnG ll'J"COME (LOSS) OlHER ll'J"COME (EXPENSE):
futerest income
futerest expense
Other income-net
Total other income (expense)
ll'J"COME (LOSS) BEFORE ll'J"COME TAXES
ll'J"COME TAX (EXPENSE) BENEFIT NET ll'J"COME (LOSS)
NET ll'J"COME ATIRIBUTABLE TO NON-CONlROLLillG WIEREST
NET ll'J"COME (LOSS) ATIRIBUTABLE TO NATIONAL M1ERICAN UNNERSITY HOLDillGS, rnc. AND SUBSIDIARIES
OlHER COMPREHENSNE LOSS- Unrealized losses on investments, before tax
fucome tax benefit related to items of other comprehensive loss
OlHER COMPREHENSNE LOSS, NET OF TAX
COMPREHENSNE ll'J"COME (LOSS) ATIRIBUTABLE TO NATIONAL M1ERICAN UNNERSITY HOLDillGS, rnc.
Basic net eamings (loss) attributable to National American University Holdings, fuc. Diluted net eamings (loss) attributable to National American University Holdings, fuc.
Basic weighted average shares outstanding
Diluted weighted average shares outstanding
Three Months Ended
August 31,
2012 2011
$ 26,477 $ 23,700
2,699 1,427
274 270
29,450 25,397
7,135 6,352
20,421 16,775
1,843 640
73 (132)
29,472 23,635 (22) 1,762
31 41 (253) o
35 31(187) 72 (209) 1,834
58 (728)
(151) 1,106 (13) (83)
(164) 1,023
(22) (12)
o o
(22) (12)
$ (186) $ 1,011
$ (0.01) $ 0.04
$ (0.01) $ 0.04
25,574,478 26,710,881
25,574,478 27,076,548
National American University Holdings, lnc. Page 6
October 3, 2012
NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. ANO SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF AUGUST 31, 2012 ANO AUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF MAY 31, 2012
(In thousands except share data)
ASSETS
CURRENT ASSETS:
August 31, May 31,
2012 2012
Cash and cash equivalents $ 16,427 $ 15,658
Availab1e for sale inves1rnents 11,403 14,917
Student receivab1es -net of al1owance of$821 and $759 at August 31, 2012 and
May 31, 2012, respective1y 3,801 2,804
Other receivab1es 421 366
Bookstore inventory o 6
Incarne tax receivab1e 1,640 974
Deferred incarne taxes 1,334 1,914
Prepaid and other current assets 367613
Total current assets 35,39337,252
Total Property and Equiprnent- N et 42,108 40,496
OTHER ASSETS:
Condorninium inventory 2,667 2,667
Land he1d for future deve1oprnent 312 312
Course deve1oprnent -net ofaccumulated amorti.zation of$1,799 and $1,715 at
August 31, 2012 and May 31, 2012, respective1y 1,239 1,241
01her 1,1761,130
5,394 5,350
TOTAL $ 82,895 $ 83,098
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Current porti.on of capital1ease payab1e $ 47 $ 40
Accounts payab1e 5,613 4,175
Dividends payab1e 1,032 840
Student accounts payab1e 663 659
Deferred incarne 221 236
Accrued and other liabilities 5,9836,717
Total current liabiliti.es 13,55912,667
DEFERRED INCOME TAXES 5,098 5,098
OTHER LONG-TERM LIABILITIES 4,197 4,161
CAPITAL LEASE PAYABLE, NET OF CURRENT PORTION 10,447 10,460
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY:
Cornrnon stock, $0.0001 par value (50,000,000 authorized; 28,059,307 issued and 25,575,540 outstanding as
of August 31, 2012; 28,057,891 issued and 25,574,124 outstanding as ofMay 31, 2012) 3 3
|
Additional paid-in capital |
57,282 |
57,203 |
|
|
Retained eamings |
10,051 |
11,239 |
|
|
Treasury stock, at cost (2,483,767 shares at August 31, 2012 and May 31, 2012) |
(17,589) |
(17,589) |
|
|
Accumulated other cornprehensive incarne, net oftaxes- unrealized gain on availab1e for sale securiti.es |
3 |
25 |
|
|
Total Nati.onal American University Ho1dings, Inc. stockho1ders' equity |
49,750 |
50,881 |
|
|
Net incarne attributab1e to non-controlling interest |
(156) |
(169) |
|
|
Total equity |
49,594 |
50,712 |
|
|
TOTAL |
$ 82,895 |
$ 83,098 |
National American University Holdings, Inc. Page 7
October 3, 2012
The following table provides a reconciliation of net income attributable to the Company to EBITDA:
Three Months Ended
August 31,
2012 2011 (dollars in thousands)
Net Income attributable to the Company ($164) $1,023
Income (Loss) attributable to non-controlling interest 13
83
Interest Income (31) (41) Interest Expense 253 0
Income Taxes (58) 728
Depreciation and Amortization 1,351879
EBITDA $1,364 $2,672
Consists of income attributable to the Company, less income
from non-controlling interest, plus loss from non-controlling
interest, minus interest income, plus interest expense (which
is not related to any debt but to the accounting required for
the capital lease), plus income taxes, plus depreciation and
amortization. The Company uses EBITDA as a measure of
operating performance. However, EBITDA is not a recognized
measurement under U.S. generally accepted accounting
principles, or GAAP, and when analyzing its operating
performance, investors should use EBITDA in addition to, and
not as an alternative for, income as determined in accordance
with GAAP. Because not all companies use identical
calculations, its presentation of EBITDA may not be
comparable to similarly titled measures of other companies
and is therefore limited as a comparative measure.
Furthermore, as an analytical tool, EBITDA has additional
limitations, including that (a) it is not intended to be a
measure of free cash flow, as it does not consider certain
cash requirements such as tax payments; (b) it does not
reflect changes in, or cash requirements for, its working
capital needs; and (c) although depreciation and amortization
are non-cash charges, the assets being depreciated and
amortized often will have to be replaced in the future, and
EBITDA does not reflect any cash requirements for such
replacements, or future requirements for capital expenditures
or contractual commitments. To compensate for these
limitations, the Company evaluates its profitability by
considering the economic effect of the excluded expense items
independently as well as in connection with its analysis of
cash flows from operations and through the use of other
financial measures.
The Company believes EBITDA is useful to an investor in
evaluating its operating performance because it is widely
used to measure a company's operating performance without
regard to certain non-cash expenses (such as depreciation and
amortization) and expenses that are not reflective of its
core operating results over time. The Company believes EBITDA
presents a meaningful measure of corporate performance
exclusive of its capital structure, the method by which
assets were acquired and non-cash charges, and provides us
with additional useful information to measure its performance
on a consistent basis, particularly with respect to changes
in performance from period to period.
