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|Capella Education Company Reports Second Quarter 2010 Results|
MINNEAPOLIS, Jul 27, 2010 (BUSINESS WIRE) -- Capella Education Company (NASDAQ:CPLA), a provider of exclusively online post-secondary education through its wholly owned subsidiary Capella University, today announced financial results for the three and six months ended June 30, 2010.
"We are pleased to report another quarter of strong performance," said Kevin Gilligan, chairman and chief executive officer of Capella Education Company. "Enrollment growth was impressive across all degree programs, driven by solid growth from our new programs, exceptional execution across the organization and favorable market dynamics. We are excited about the many opportunities for growth while we continue to strengthen Capella's brand and reputation as a graduate-focused university known for quality, online education for adults."
"Recently, the Department of Education released updated language in the Notice of Proposed Rulemaking," said Gilligan. "Based on our interpretation and assessment of the proposed rules, we believe Capella is well prepared to adapt to the proposed changes announced in June. We also continue to analyze the proposed gainful employment rules, which we believe require additional clarification and access to government data. However, using broad assumptions and data samples focused on programs with a large number of graduates, we believe that those programs would continue to qualify for federal student aid participation."
For the quarter ended June 30, 2010:
For the six months period ended June 30, 2010:
Balance Sheet and Cash Flow
As of June 30, 2010, the Company had cash, cash equivalents, and marketable securities of $192.3 million, compared to $172.1 million at December 31, 2009. The Company had no debt in 2010 or 2009.
Cash flow from operations for the six months ended June 30, 2010, was $43.5 million compared to $32.1 million in the same period a year ago, an increase of 35.6 percent.
"Our momentum going into the third quarter 2010 is strong due to our continued focus on educational quality and operational excellence," said Lois Martin, senior vice president and chief financial officer. "During the third quarter we expect to make additional investments in great teaching and learning and other strategic opportunities to drive long-term learner success and to strengthen and extend Capella's market opportunities. Based on our strong performance during the first half of 2010 and expectations for third quarter, we anticipate fiscal year 2010 results to be at the high-end of previously provided revenue and average quarterly enrollment growth guidance of 26.5 to 28.5 percent. We also anticipate operating margins to be at or slightly above previous guidance of 21.5 to 22.5 percent of revenue, resulting in an approximately 50 percent annual operating earnings increase."
For the third quarter ending Sept. 30, 2010, enrollment and revenue are expected to grow by 24.0 to 25.5 percent compared to third quarter 2009. The operating margin is anticipated to be approximately 18.0 to 19.0 percent of total revenue for the third quarter of 2010.
Certain information in this news release does not relate to historical financial information, including statements relating to our future prospects and our expectations regarding our revenues, enrollment, and operating performance, and may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions investors not to place undue reliance on any such forward-looking statements, which are based on information available at the time those statements are made or management's good faith belief as of that time with regard to future events, and should not be read as a guarantee of future performance or results. Such statements are subject to certain risks and uncertainties that could cause the company's actual results in the future to differ materially from its historical results and those presently anticipated or projected. The company undertakes no obligation to update its forward-looking statements to reflect events or circumstances arising after such date.
Among these risks and uncertainties are any failure to materially comply with the extensive regulatory framework applicable to us, including compliance with Title IV of the Higher Education Act and the regulations thereunder; regional accreditation standards and state and regional regulatory requirements; changes in the administration, funding and availability for Title IV programs; responding to any additional governmental inquiries into our financial aid practices; attracting and retaining learners; updating and expanding the content of existing programs and developing new programs; the review of our business and financial aid practices by governmental authorities,including action by Federal Student Aid on the final audit report of the Office of Inspector General of the U.S. Department of Education arising out of its ongoing compliance audit of Capella University; changes in applicable federal and state laws and regulations and accrediting agency policies, including as a result of current U.S. Department of Education rulemaking and recent Congressional review of our industry; maintaining and expanding existing commercial relationships with employers and developing new such relationships; our failure to keep up with advances in technology important to the online learner experience; our ability to manage growth effectively; our ability to realize expected efficiency improvements from our ERP system and our use of business technology to accurately store, process and report relevant data; unforeseen changes in student enrollment or our expenses; and risks associated with the overall competitive environment and general economic conditions
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 our most recent Form 10-K and Form 10-Qs on file with the Securities and Exchange Commission and other documents filed by the company with the Securities and Exchange Commission.
Capella will discuss its second quarter 2010 results and third quarter 2010 outlook during a conference call scheduled today, July 27, 2010, at 9:00 a.m. Eastern time (ET). To participate in the live call, investors should dial 866.385.4179 (domestic) or 706.679.1492 (international) at 8:50 a.m. (ET), conference ID 85824266. The webcast, including the accompanying presentation, will be available on the Capella Education Company Web site at http://www.capellaeducation.com. A replay of the call will be available starting on July 27, 2010 through Aug. 3, 2010, at 800.642.1687 (domestic) or 706.645.9291 (international), conference ID 85824266. It will also be archived at http://www.capellaeducation.com in the investor relations section for 60 days.
About Capella Education Company
Founded in 1991, Capella Education Company is a national leader in online education and parent company of Capella University, a regionally accredited* online university. Capella University offers online graduate degree programs in business, counseling, education, health administration, human services, information technology, nursing, psychology, public administration, public health, public safety, and social work, and bachelor's degree programs in business, information technology, nursing, psychology, public administration, and public safety. These academic programs are designed to meet the needs of working adults, combining high quality, competency-based curricula with the convenience and flexibility of an online learning format. Currently, Capella University offers 42 graduate and undergraduate degree programs with 137 specializations. More than 38,600 learners were enrolled as of June 30, 2010. For more information about Capella Education Company, please visit http://www.capellaeducation.com. For more information about Capella University, please visit http://www.capella.edu or call 1.888.CAPELLA (227.3552).
*Capella University is accredited by The Higher Learning Commission and is a member of the North Central Association of Colleges and Schools (NCA), http://www.ncahlc.org.
Capella University, Capella Tower, 225 South Sixth Street, Ninth Floor, Minneapolis, MN 55402, 1.888.CAPELLA (227.3552), www.capella.edu.
SOURCE: Capella Education Company
Capella Education Company