Education Management Corporation (NASDAQ: EDMC) is among the largest providers of private post-secondary education in North America, based on student enrollment and revenue, with 110 locations in 32 U.S. States and Canada. Headquartered in Pittsburgh, Pennsylvania, Education Management employs over 24,000 full-time, part-time and adjunct faculty and staff, and serves approximately 132,000 students as of October 2012.
EDMC yesterday after market hours reported financial results for the fourth quarter 2012:
- Net revenues were $654.9 million, a decrease of 11.2% from $737.2 million recorded in the second quarter of fiscal 2012, primarily due to a 12.7% decline in average enrolled student body for the three months ended December 31, 2012 compared to the prior year quarter.
- Net income of $31.1 million, or $0.25 per diluted share, compared to $63.1 million, or $0.49 per diluted share, for the prior year quarter.
- Cash flows provided by operating activities were $93.2 million, compared to $97.0 million in the six months ended December 31, 2011.
- Cash and cash equivalents were $189.0 million, compared to $299.9 million at December 31, 2011.
- Capital expenditures were $39.5 million, or 3.1% of net revenues, for the six months ended December 31, 2012 compared to $36.1 million, or 2.5% of net revenues, in the same period in the prior year.
- During the quarter ended December 31, 2012, the Company completed five sale-leaseback transactions with unrelated third parties for net proceeds of $65.1 million. The Company recorded a net loss of $3.5 million related to these transactions during the quarter ended December 31, 2012. A deferred gain of approximately $17.8 million will be recognized over the initial terms of the new leases, which range from three to 15 years.
Edward H. West, Education Management’s President and Chief Executive Officer, commented:
As a result of the efforts and dedication of our faculty and staff, I am pleased with the progress we have made to improve student retention which is reflected in our January class start. While the operating environment remains challenging, we continue to see several encouraging signs. In addition to positive retention rates, new student demand has turned positive at several of our colleges and universities. Furthermore, we are continuing to make investments in our students to help them achieve their goals as they progress toward graduation in this difficult economy.