By NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. REPORTS FISCAL 2012 SECOND QUARTER AND SIX MONTHS RESULTS
Company to host conference call on January 5, 2012, at 11:00 a.m. ET
Financial and Operational Highlights
Enrollment by headcount increased 13.0% over the prior year
to a record 10,898 students as of November 30,
2011.
FY 2012 second quarter total revenue increased 9.4% to $30.4
million from $27.8 million in the prior-year period with the
Company's academic segment's revenue increasing 9.4% to $30.2
million, compared to $27.6 million in the FY 2011 second
quarter.
FY 2012 second quarter net income attributable to the Company
was $1.9 million, compared to $2.7 million in the prior-year
period, primarily due to increased educational service and
selling, general, and administrative (SG&A) expenses incurred
from continued expansion and development of physical
locations; FY 2012 second quarter EBITDA was $4.4 million,
compared to $5.3 million in the prior-year period.
As the Company has doubled its physical locations over the
last couple of years, the Company's focus in fiscal year 2013
will be on growing program offerings and headcount at the
existing locations which will likely result in the opening of
fewer additional locations.
The Company's Board of Directors declared a cash dividend in
the amount of $0.0325 per share on all shares of the
Company's common stock outstanding and of record as of the
close of business on December 31, 2011, to be paid on or
about January 6, 2012.
Balance sheet at November 30, 2011, included cash and cash
equivalents and investments of $41.1 million; working capital
of $37.0 million; no short-term borrowings or long-term debt;
and stockholders' equity of $59.1 million.
The Company, through its wholly owned subsidiary, operates in
two business segments: 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 the Company's
revenues for the quarter ended November 30, 2011.
Ronald L. Shape, Ed.D., Chief Executive Officer of the
Company, commented, "As a result of continued investment in
NAU's geographic expansion and programmatic development, we
achieved double-digit growth in NAU's enrollment to a record
10,898 students during the fiscal 2012 second quarter.
Because of our strategic growth initiatives, SG&A expenses
were higher during the period, and we expect these expenses
will continue to be high through the third and fourth
quarters of this fiscal year. However, as we enter fiscal
2013 we will shift our resources from expanding
geographically to growing program offerings and headcount at
the existing locations. At the same time, we continue to
experience slower regulatory approvals for new locations,
which has affected our short-term enrollment growth by
approximately 4% to 6% as we cannot begin actively recruiting
at these locations until we receive all necessary approvals.
We continue to work closely with the appropriate governing
bodies to obtain necessary programmatic approvals, and we're
proud to announce last month that our baccalaureate and
master's degree programs in nursing were granted official
programmatic accreditation by the Commission on Collegiate
Nursing Education (CCNE), a renowned national accreditation
agency for nursing. We made improvements at existing
locations in Colorado, Kansas, and Texas, and also made
progress on development of our new learning centers in
several states during the period. Despite the challenges, we
continue to focus on our students, who choose to pursue their
studies at NAU
National American University Holdings, Inc. Page 2
January 4, 2012
because we offer a variety of quality academic programs and the flexibility to also meet their work and family obligations."
Facility Expansion
The Company's wholly owned subsidiary currently owns one
property and leases 34 physical properties as additional
locations or branch campuses in the states of Colorado,
Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma,
Oregon, South Dakota and Texas. Of the 34, the following
sites are pending regulatory approvals:
Weldon Spring, MO Richardson, TX Tigard, OR Georgetown, TX
Rochester, MN
NAU'S online academic and degree programs continue to grow.
In addition, NAU continues to operate hybrid additional
locations which utilize small physical facilities in
strategic geographic areas, allowing its stud ents to meet
face-to-face with staff for assistance on their educational
choices and related services while completing the majority of
the coursework online
During the remainder of fiscal year 2012, the Company is
committed to moving forward with its campus expansion plans,
while closely tracking the expenditures associated with these
new educational sites, new program development, and program
expansion within the SG&A expense category. For the three
months ended November 30,
2011, business expansion and program development expenditures
totaled $5.6 million, compared to $3.1 million in the
prior-year period. Of the $5.6 million, the Company incurred
approximately $3.2 million in marketing, advertising, and
admissions expenses. Since 2005, NAU has invested over $44
million to expand and develop physical locations and academic
programming, and the Company feels that this continued
capital investment has it positioned well for its next phase
of vertical growth.
Upon receiving regulatory approval, NAU's hybrid learning
centers have historically become profitable within 12 to
18
months and, on average, each center achieves enrollment of
approximately 150 students.
Student Enrollment
Total NAU student enrollment for the fall term of 2011
increased 13.0% to 10,898 students, up from 9,643 in the last
fall term. Students enrolled in 95,792 credit hours compared
to 87,010 credit hours in the fall term of last year. The
current average age of NAU's students is 34 years, with those
seeking undergraduate degrees remaining the highest portion
of NAU's student population (virtually unchanged from the
prior year).
The following is a summary of student enrollment at November
30, 2011, and November 30, 2010, by degree type and by
instructional delivery method:
Graduate 385 3.5% 415 4.3%
Undergraduate and Diploma 10,513 96.5% 9,228 95.7%
Total 10,898 100.0% 9,643 100.0%
Online 5,329 48.9% 4,198 43.5% On-Campus 3,771 34.6% 3,854
40.0% Hybrid 1,798 16.5% 1,591 16.5%
Total 10,898 100.0% 9,643 100.0%
National American University Holdings, Inc. Page 3
January 4, 2012
FY 2012 Second Quarter Financial Results
The Company's total revenues for the three months ended
November 30, 2011, increased 9.4% to $30.4 million from $27.8
million for the same period last year. As a result of the
increase in enrollment and a Board-approved tuition increase
of 4.7% that became effective September 2011, the academic
segment's total revenue increased
9.4% to $30.2 million from $27.6 million for the prior-year
period.
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. For the three months
ended November 30, 2011, this expense was $6.9 million, or
22.9% of the academic segment's total revenue, compared to
$5.5 million, or 20.1%, for the three months ended November
30, 2010. This increase was primarily a result of additional
expenses incurred from instructional compensation and hiring
additional faculty and staff, such as program chairs for
occupational therapy and cardiovascular. It is also the
result of moving expense for those locations and new programs
out of business expansion and development (categorized as
SG&A on the income statement) and into cost of educational
services. The Company feels this expansion will help provide
and sustain quality educational services to NAU's growing
student population
During the fiscal year 2012 second quarter, the Company's
SG&A expenses were $19.4 million, or 64.2% of NAU's revenues,
compared to $16.8 million, or 61.0%, in the prior-year
period. This increase was primarily due to a $2.5 million
increase in spending for business expansion and development
of NAU's physical locations and academic programming.
The Company's income before income taxes and non-controlling
interest for the three months ended November
30, 2011, was $3.2 million, compared to $4.6 million for the
same period last year. This decrease was primarily due to
higher educational service expense and SG&A expenses.
Net income attributable to the Company for the fiscal year
2012 second quarter was $1.9 million, or $0.07 per diluted
share based on 27.0 million shares outstanding, compared to
$2.7 million, or $0.10 per diluted share based on 26.8
million shares outstanding, in the prior-year period.
The Company's EBITDA for the second quarter of FY 2012 was
$4.4 million, compared to $5.3 million in the prior-year
period. A table reconciling EBITDA to net income can be found
at the end of this release.
FY 2012 Six Months Financial Results
The Company's total revenues for the six months ended
November 30, 2011, increased 9.5% to $55.8 million from $51.0
million for the same period last year. As a result of the
continued increases in enrollment, the academic segment's
total revenue increased 10.0% to $55.3 million from $50.3
million for the prior-year period. The Company attributes the
enrollment growth to its continued investment in geographic
and programmatic expansion, a weaker economy, and improved
recruitment processes.
NAU's educational services expense for the six months ended
November 30, 2011, was $13.3 million, or 24.0% of the
academic segment's total revenue, compared to $10.8 million,
or 21.4%, in the prior-year period. This increase was
primarily a result of additional expenses incurred from the
expansion and development of physical locations.
During the first six months of FY 2012, the Company's SG&A
expenses were $36.2 million, or 65.4% of NAU's revenues,
compared to $31.8 million, or 63.2%, in the prior-year
period. This increase was primarily due to a $3.8 million
increase in spending for business expansion and development
of NAU's physical locations and academic programming.
The Company's income before income taxes and non-controlling
interest for the six months ended November 30,
2011, was $5.1 million, compared to $6.8 million for the same
period last year. This decrease was primarily due to higher
educational service expense and SG&A expenses.
Net income attributable to the Company during the first six
months of fiscal 2012 was $3.0 million, or $0.11 per diluted
share based on 27.0 million shares outstanding, compared to
$4.1 million, or $0.15 per diluted share based on 27.0
million shares outstanding, in the prior-year period.
National American University Holdings, Inc. Page 4
January 4, 2012
The Company's EBITDA for the first six months of FY 2012 was $7.0 million, compared to $8.1 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) | 11/30/2011 | 5/31/2011 | % Change | ||
Cash and Cash Equivalents | $ | 18.2 | $ | 25.7 | -29.3% |
Short Term Investments | 23.0 | 19.1 | 20.3% | ||
Working Capital | 37.0 | 39.5 | -6.3% | ||
Total Long-term Debt | 0 | 0 | N/A | ||
Stockholders' Equity | 59.1 | 58.5 | 1.1% |
Stock Repurchase Plan Update
On November 4, 2011, the Company announced that its Board of Directors had authorized the establishment of a stock repurchase program for the Company to purchase up to $10 million of common stock in both open market and privately negotiated transactions. By the end of the second quarter, the Company had repurchased 127,867 shares of common stock at an average stock price of $7.26.
Conference Call Information
The Company will discuss these results in a conference call
(with accompanying presentation) on January 5, 2012, at
11:00 a.m. ET.
The dial-in numbers are: (877) 407-8033 (U.S.)
(201) 689-8033 (International)
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=166886.
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 provides 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, 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
National American University Holdings, Inc. Page 5
January 4, 2012
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, which was filed on
August 5, 2011, 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:
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, Inc. | Page 6 |
January 4, 2012 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 30, 2011 AND NOVEMBER 30, 2010
(In thousands except per share data)
Three Months Ended
November 30,
Six Months Ended
November 30,
2011 2010 2011 2010
REVENUE: Academic revenue | $ 28,603 | $ 25,822 | $ 52,303 | $ 47,080 |
Auxiliary revenue | 1,575 | 1,766 | 3,002 | 3,213 |
Rental income - apartments | 267 | 252 | 537 | 495 |
Condominium sales | 0 | 0 | 0 | 224 |
Total revenue | 30,445 | 27,840 | 55,842 | 51,012 |
OPERATING EXPENSES: Cost of educational services | 6,918 | 5,543 | 13,270 | 10,782 |
Selling, general and administrative | 19,387 | 16,836 | 36,162 | 31,790 |
Auxiliary expense | 881 | 866 | 1,521 | 1,540 |
Cost of condominium sales | 0 | 0 | 0 | 193 |
(Gain) loss on disposition of property | 1 | 41 | (131) | 51 |
Total operating expenses 27,18723,28650,82244,356
OPERATING INCOME 3,2584,5545,0206,656
OTHER INCOME (EXPENSE):
Interest income 33 34 74 74
Interest expense (81) 0 (81) 0
Other income - net 29456071
Total other income (expense) (19) 7953145
INCOME BEFORE INCOME TAXES 3,239 4,633 5,073 6,801
INCOME TAX EXPENSE (1,281) (1,876) (2,009) (2,696)
NET INCOME 1,958 2,757 3,064 4,105
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST (15) (11) (98) (19)
NET INCOME ATTRIBUTABLE TO NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. AND
SUBSIDIARIES 1,943 2,746 2,966 4,086
OTHER COMPREHENSIVE INCOME (LOSS) -
Unrealized losses on investments (21) (17) (33) (1)
COMPREHENSIVE INCOME ATTRIBUTABLE TO NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
$ 1,922 $
2,729 $
2,933 $
4,085
Basic net earnings attributable to National American University
Holdings, Inc.
Diluted net earnings attributable to National American
University Holdings, Inc.
$ 0.07 $
$ 0.07 $
0.10 $
0.10 $
0.11 $
0.11 $
0.16
0.15
Basic weighted average shares outstanding 26,884,087 26,242,653 26,797,010 26,242,653
Diluted weighted average shares outstanding 27,009,979 26,814,921 27,045,457 26,975,616
National American University Holdings, Inc. Page 7
January 4, 2012
NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF NOVEMBER 30, 2011 AND AUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF MAY 31, 2011 (In thousands except share data) ASSETSCURRENT ASSETS:
November 30, May 31, 2011 2011Common stock, $0.0001 par value (50,000,000 authorized; 28,057,419 issued and 26,914,658
National American University Holdings, Inc. Page 8
January 4, 2012
The following table provides a reconciliation of net income attributable to the Company to EBITDA:
Three Months Ended
November 30,
Six Months Ended
November 30,
2011 2010 2011 2010 (dollars in thousands)
Net Income attributable to the Company $ 1,943 $ 2,746 $ 2,966 $ 4,086
Income (Loss) attributable to non-controlling interest 15 11 98 19
Interest Income (33) (34) (74) (74) Interest Expense 81 0 81 0
Income Taxes 1,281 1,876 2,009 2,696
Depreciation and Amortization 1,0706911,9491,328
EBITDA
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, 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.
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| January 4, 2012 - National American University Holdings, INC. Reports Fiscal 2012 Second Quarter and Six Months Results |
