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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Strategic Education Inc    STRA

STRATEGIC EDUCATION INC

(STRA)
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Strategic Education, Inc. Reports Second Quarter 2019 Results; Continued Strong Performance at Both Strayer University and Capella University One Year Since Merger: Strategic Education Inc.

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08/14/2019 | 05:14pm EDT

2019 AUG 14 (NewsRx) -- By a News Reporter-Staff News Editor at Education Daily Report -- Strategic Education, Inc. (SEI) (NASDAQ: STRA) announced financial results for the period ended June 30, 2019.

Karl McDonnell, Chief Executive Officer of SEI said, “We are particularly pleased with the strong second quarter results and the organization’s continued ability to execute as we mark the one year anniversary since closing our merger with Capella Education Company. Merger integration and synergies are on track, providing us with a solid foundation as we remain focused on delivering academic success and long-term economic mobility for our students and alumni.” STRATEGIC EDUCATION, INC. CONSOLIDATED RESULTS [Note: Strategic Education, Inc.’s financial results for any periods ended prior to August 1, 2018 do not include the financial results of Capella Education Company and are therefore not directly comparable.] Three Months Ended June 30 Revenue increased 113.8% to $245.1 million compared to $114.7 million for the same period in 2018.

Income from operations was $27.6 million or 11.3% of revenue, compared to $4.2 million or 3.6% of revenue for the same period in 2018. Income from operations in 2019 includes $15.4 million of amortization expense related to assets acquired in the merger with Capella Education Company and $3.0 million in costs associated with the merger with Capella Education Company. Income from operations in 2018 included $6.2 million in charges resulting from the impairment of goodwill and intangible assets associated with The New York Code + Design Academy, and $2.8 million in costs associated with the merger with Capella Education Company. Adjusted income from operations, which is a non-GAAP financial measure and excludes the aforementioned expenses, was $46.0 million in 2019 compared to $13.2 million for the same period in 2018. The adjusted operating income margin was 18.8% compared to 11.5% for the same period in 2018. For more details on non-GAAP financial measures, refer to the information in the Non-GAAP Financial Measures section of this press release.

Net income, which includes the items described above, and also includes income from partnership interests and other investments, and certain discrete tax adjustments, was $24.4 million in 2019 compared to $5.2 million for the same period in 2018. Adjusted net income was $35.2 million compared to $9.9 million for the same period in 2018.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $54.1 million in 2019 compared to $9.1 million in 2018. Adjusted EBITDA was $60.3 million compared to $21.7 million for the same period in 2018.

Diluted earnings per share was $1.10 compared to $0.46 for the same period in 2018. Adjusted diluted earnings per share increased to $1.59 from $0.87 for the same period in 2018. Diluted weighted average shares outstanding increased to 22,109,000 from 11,380,000 for the same period in 2018, due primarily to new shares issued to facilitate the merger with Capella Education Company. Strayer University Segment Highlights The Strayer University segment is comprised of Strayer University, including its programs offered through the Jack Welch Management Institute.

For the second quarter, student enrollment at Strayer University increased 11.5% to 52,253 compared to 46,868 for the same period in 2018. New student enrollment for the period increased 8.5% and continuing student enrollment for the period increased 12.2%.

Revenue increased 13.2% to $128.9 million in the second quarter of 2019 compared to $113.9 million for the same period in 2018, driven primarily by higher second quarter enrollment.

Income from operations increased to $24.6 million in the second quarter of 2019 from $14.3 million for the same period in 2018. The operating income margin was 19.1%, compared to 12.6% for the same period in 2018.

During the second quarter of 2019, Strayer University opened a new campus in Killeen, Texas, and is planning to open two to three additional campuses through the remainder of 2019. Capella University Segment Highlights The Capella University segment consists solely of Capella University.

For the second quarter, student enrollment at Capella University increased 1.6% to 38,392 compared to 37,786 for the same period in 2018. New student enrollment for the period increased 7.8% and continuing student enrollment for the period increased 0.5%.

FlexPath continued to be a significant driver of new and total enrollment growth in the second quarter of 2019, and is 30% of Capella University’s bachelor’s and master’s degrees total enrollment.

Revenue was $112.2 million in the second quarter of 2019 and reflects higher enrollment and higher revenue-per-learner.

Income from operations was $21.1 million in the second quarter of 2019, and the operating income margin was 18.8%.

During the second quarter of 2019, the Company opened the first Capella University Campus Center in Atlanta, Georgia, and is on track to open a Capella University Campus Center, pending regulatory approval, in Orlando, Florida in the third quarter. Non-Degree Programs Segment Highlights The non-degree programs segment includes Hackbright Academy, DevMountain, The New York Code + Design Academy, and Sophia.

For the second quarter, revenue increased to $4.0 million from $0.8 million for the same period in 2018, primarily due to the inclusion of revenue from DevMountain, Hackbright Academy, and Sophia.

Income from operations was $0.3 million in the second quarter of 2019 compared to a loss from operations of $1.1 million in the same period in 2018, and the operating income margin was 7.5%. BALANCE SHEET AND CASH FLOW At June 30, 2019, Strategic Education, Inc. had cash, cash equivalents, and marketable securities of $440.5 million, and no debt. For the first six months of 2019, cash provided by operations was $103.1 million compared to $30.0 million for the same period in 2018. Capital expenditures for the first six months of 2019 were $18.9 million compared to $8.6 million for the same period in 2018. Capital expenditures for 2019 are expected to be between $40 million and $45 million.

(Our reports deliver fact-based news of research and discoveries from around the world.)

Copyright © 2019 NewsRx LLC, Education Daily Report, source Government & Education Newsletters

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Financials (USD)
Sales 2019 988 M
EBIT 2019 192 M
Net income 2019 96,4 M
Finance 2019 450 M
Yield 2019 1,14%
P/E ratio 2019 34,5x
P/E ratio 2020 23,5x
EV / Sales2019 3,35x
EV / Sales2020 3,06x
Capitalization 3 759 M
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Mean consensus OUTPERFORM
Number of Analysts 4
Average target price 201,25  $
Last Close Price 175,17  $
Spread / Highest target 24,5%
Spread / Average Target 14,9%
Spread / Lowest Target 4,47%
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Managers
NameTitle
Karl McDonnell President, Chief Executive Officer & Director
Robert S. Silberman Executive Chairman
Daniel Wayne Jackson Chief Financial Officer & Executive VP
John Kevin Gilligan Executive Vice Chairman
Charlotte F. Beason Independent Director
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