Fourth Quarter Student Population Up 24.4% and Operating Margin
Grew from 1.5% to 10.8% SANTA ANA, Calif., Aug. 25
/PRNewswire-FirstCall/ -- Corinthian Colleges, Inc. (NASDAQ:COCO)
reported financial results today for the fourth quarter and fiscal
year ended June 30, 2009. The fourth quarter and fiscal year
results exceeded our previous guidance range for start growth,
revenue and earnings per share. "Our strong fourth quarter and
fiscal year results reflect the continued progress of our
initiatives to improve the student experience and increase top and
bottom line growth," said Peter Waller, Corinthian's chief
executive officer. "We have successfully increased our student
population for three consecutive years, and during fiscal 2009, the
recession helped increase our growth momentum. The higher student
population has resulted in improved leverage of facility and other
fixed costs. Increased advertising effectiveness and lower media
costs have improved efficiencies in marketing and admissions. Given
all of these factors, our operating margin and cash flow increased
substantially in fiscal 2009, and we expect continued improvement
in the current fiscal year." "We believe our business strategy
positions us for consistent, sustainable earnings growth," Waller
said. "In fiscal 2010 we expect our student population growth to be
derived from several sources, including continued implementation of
new programs, online enrollment, facility expansions, new branch
campuses, and high school enrollment. In addition, we expect
continued high unemployment to contribute to overall growth."
"While the recession helps drive enrollment growth, it also creates
challenges in terms of career placement and student loan
repayment," Waller added. "In fiscal 2010 we will continue to make
substantial investments in both of these areas, to help graduates
achieve their career goals and meet their financial obligations in
a difficult economy." Comparing the fourth quarter of fiscal 2009
with the same quarter of the prior year (Data is for continuing
operations only, unless otherwise noted. More detail is provided in
the "Discontinued operations" section below and in the table which
accompanies this release.): -- Net revenue was $353.5 million
versus $274.0 million, up 29.0%. -- Total student population at
June 30, 2009 was 86,088 versus 69,211 at June 30, 2008, an
increase of 24.4%. -- Total student starts were 29,188 versus
23,015, an increase of 26.8%. -- Operating income was $38.0
million, compared with $4.0 million. Fourth quarter operating
income includes an impairment and severance charge of $4.4 million
(more detail is provided below, under the heading Q4 09 Financial
Review). -- Income from continuing operations (after tax) was $24.7
million, compared with $4.8 million. Net loss from discontinued
operations was $1.5 million, versus $5.4 million. -- Diluted
earnings per share from continuing operations were $0.28 versus
$0.06. The diluted loss per share from discontinued operations was
$(0.02) versus $(0.07). Excluding impairment and severance charges,
diluted earnings per share from continuing operations were $0.31 in
Q4 09. Comparing fiscal 2009 versus fiscal 2008: -- Net revenue was
$1.31 billion versus $1.07 billion, up 22.4%. -- Operating income
was $119.3 million compared with $44.8 million, up 166.3%. --
Income from continuing operations was $71.1 million versus $32.9
million, up 116.1%. -- Diluted earnings per share from continuing
operations were $0.81 versus $0.39, up 107.7%. Q4 09 Financial
Review Impairment, facility closing and severance charges - In the
fourth quarter of fiscal 2009, we incurred impairment and severance
charges of $4.4 million. Of that amount, approximately $2.5 million
is related to an additional reserve taken on student loan
receivables that we had expected to receive from the Title IV
program. These receivables are associated with the two branch
campuses of the Atlanta, Georgia campus. The Atlanta campus was
closed in Q4 08. In addition, the company recorded severance
charges of $1.9 million for the fourth quarter, primarily related
to the restructuring of its WyoTech operations and other personnel
changes. Discontinued operations - This item includes WyoTech
Oakland, the assets of which have been sold and the school closed;
and the Everest campuses in Atlanta, Georgia and Everett and
Lynwood, Washington, which have been taught out. Educational
services expenses were 56.0% of revenue in Q4 09 versus 61.1% in Q4
08. The decrease was mainly the result of a higher student
population and the resulting leverage of compensation, facilities
and other fixed expenses. Bad debt expense was 7.1% of revenue in
Q4 09, below the previous guidance range of 7.5% - 8% and down from
9.1% in Q4 08. Marketing and admissions expenses were 21.1% of
revenue in Q4 09 versus 23.5% in Q4 08. The improvement was the
result of lower advertising costs per start, higher lead quality,
and increased admissions representative productivity. General and
administrative expenses were 10.9% of revenue in Q4 09 versus 11.6%
in Q4 08. Operating margin - As a result of the factors outlined
above, our operating margin from continuing operations was 10.8% in
Q4 09 versus 1.5% in Q4 08. Cash flow from operations, including
discontinued operations, was $198.7 million in fiscal 2009 versus
$13.6 million in fiscal 2008. The increase in cash flow is
primarily due to an increase in net income and the impact of
improved financial aid packaging. Capital expenditures were $49.5
million in fiscal 2009, compared with $54.9 million in fiscal 2008.
Guidance Please note that the following guidance pertains solely to
continuing operations, includes stock-based compensation expense
and excludes any one-time charges. Q1 10 - In Q1 10 we expect
student start growth of 15% - 17% compared with Q1 09; revenue to
range from $375 - $385 million; and diluted earnings per share to
range from approximately $0.26 - $0.29. Fiscal 2010 - In FY 10 we
expect student start growth of approximately 10% - 12% compared
with FY 09; revenue to range from $1.58 - $1.60 billion; and
diluted earnings per share to range from $1.30 - $1.36. Conference
Call Today We will host a conference call today at 12:00 p.m.
Eastern Time (9:00 a.m. Pacific Time), for the purpose of
discussing our progress and outlook. The call will be open to all
interested investors through a live audio web cast at
http://www.cci.edu/ (Investor Relations/Webcasts &
Presentations) and http://www.streetevents.com/. The call will be
archived on http://www.cci.edu/ after the call. A telephonic
playback of the conference call will also be available through 5:00
p.m. ET, Tuesday, September 1, 2009. To hear the replay, dial (888)
286-8010 (domestic) or (617) 801-6888 (international), pass code
56973309. About Corinthian Colleges Corinthian Colleges is one of
the largest post-secondary education companies in North America.
The company's mission is to prepare students for careers in demand
or for advancement in their chosen field. Corinthian offers diploma
programs and associate's, bachelor's, and master's degrees in a
variety of high-demand occupational areas, including healthcare,
business, criminal justice, transportation technology and
maintenance, construction trades and information technology. More
information can be found on Corinthian's website at
http://www.cci.edu/. Certain statements in this press release may
be deemed to be forward-looking statements under the Private
Securities Litigation Reform Act of 1995. The company intends that
all such statements be subject to the "safe-harbor" provisions of
that Act. Such statements include, but are not limited to, those
pertaining to our expectations regarding (i) our business strategy
enabling us to achieve sustainable growth in both good and bad
economic times; (ii) our growth drivers in fiscal 2010; (iii)
continued high unemployment contributing to growth; and (iv) the
statements included under the heading "Guidance" above. Many
factors may cause the company's actual results to differ materially
from those discussed in any such forward-looking statements or
elsewhere, including risks associated with variability in the
expense and effectiveness of the company's advertising and
promotional efforts; the uncertain future impact of the company's
new student information system; increased competition; the
company's effectiveness in its regulatory compliance efforts; the
outcome of pending litigation against the company; the outcome of
ongoing reviews and inquiries by accrediting, state and federal
agencies; potential higher bad debt expense or reduced revenue
associated with requesting students to pay more of their
educational expenses while in school; the potential inability or
failure of the company to employ underwriting guidelines that will
limit the risk of higher student loan defaults and higher bad debt
expense; changes in general macroeconomic and market conditions
(including credit and labor market conditions, the unemployment
rate and the rates of change of each such item); and other risks
and uncertainties described in the company's filings with the U.S.
Securities and Exchange Commission. The historical results achieved
by the company are not necessarily indicative of its future
prospects. The company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. Corinthian Colleges,
Inc. (In thousands, except per share data) Consolidated Statements
of Operations For the three For the twelve months ended June 30,
months ended June 30, 2009 2008 2009 2008 (Unaudited) (Unaudited)
(Unaudited) Net revenues $ 353,513 $ 274,033 $1,307,825 $ 1,068,671
Operating expenses: Educational services 197,838 167,353 753,707
625,481 General and administrative 38,670 31,738 135,747 114,938
Marketing and admissions 74,607 64,358 294,728 276,875 Impairment,
facility closing, and severance charges 4,378 6,603 4,378 6,603
Total operating expenses 315,493 270,052 1,188,560 1,023,897 Income
from operations 38,020 3,981 119,265 44,774 Interest income (383)
(538) (1,763) (3,376) Interest expense 524 281 2,715 1,793 Other
(income) expense (1,189) (19) 1,170 (1,387) Income before provision
for income taxes 39,068 4,257 117,143 47,744 Provision (benefit)
for income taxes 14,406 (507) 46,015 14,879 Income from continuing
operations 24,662 4,764 71,128 32,865 Loss from discontinued
operations, net of tax (1,470) (5,384) (2,368) (11,598) Net income
$ 23,192 $ (620) $ 68,760 $ 21,267 Income per share - Basic: Income
from continuing operations $ 0.28 $ 0.06 $ 0.82 $ 0.39 Loss from
discontinued operations (0.01) (0.07) (0.02) (0.14) Net income $
0.27 $ (0.01) $ 0.80 $ 0.25 Income per share - Diluted: Income from
continuing operations $ 0.28 $ 0.06 $ 0.81 $ 0.39 Loss from
discontinued operations (0.02) (0.07) (0.02) (0.14) Net income $
0.26 $ (0.01) $ 0.79 $ 0.25 Weighted average number of common
shares outstanding: Basic 87,021 85,183 86,121 84,954 Diluted
88,257 86,107 87,517 86,013 Selected Consolidated Balance Sheet
Data June 30, June 30, 2009 2008 (Unaudited) Cash and cash
equivalents $ 160,276 $ 32,004 Receivables, net (including current
and long term notes receivable) 107,446 132,125 Current assets
308,531 216,959 Total assets 798,871 695,966 Current liabilities
200,583 133,645 Long-term debt and capital leases (including
current portion) 28,558 77,608 Total liabilities 281,203 273,944
Total stockholders' equity $ 517,668 $ 422,022 Contacts: Investors:
Media: Anna Marie Dunlap Robert Jaffe SVP Investor Relations Pondel
Wilkinson, Inc. Corinthian Colleges, Inc. 310-279-5969 714-424-2678
DATASOURCE: Corinthian Colleges, Inc. CONTACT: Media, Robert Jaffe
of Pondel Wilkinson, Inc., +1-310-279-5969, for Corinthian
Colleges, Inc.; or Investors, Anna Marie Dunlap, SVP Investor
Relations of Corinthian Colleges, Inc., +1-714-424-2678 Web Site:
http://www.cci.edu/
Copyright