Apollo Education Group, Inc. (NASDAQ: APOL) today reported financial
results for the three months and fiscal year ended August 31, 2015, with
fourth quarter revenue of $600.3 million and a $0.09 diluted loss per
share from continuing operations, or $0.17 earnings per share excluding
special items.
“Despite the difficult environment, we are executing on the dramatic
steps we announced last quarter for the University of Phoenix to become
a more focused, higher retaining and less complex institution,” said
Greg Cappelli, Chief Executive Officer, Apollo Education Group. “We have
also made progress on our diversification strategy through Apollo
Global, which is now growing in every country it serves.”
Fourth Quarter 2015 Results of Operations
Apollo Education Group (the “Company”) reported net revenue for the
fourth quarter 2015 of $600.3 million, compared to $696.1 million for
the fourth quarter 2014. Fourth quarter 2015 University of Phoenix New
Degreed Enrollment was 26,500 and Degreed Enrollment was 190,700,
compared to New Degreed Enrollment of 38,600 and Degreed Enrollment of
233,500 for the prior year fourth quarter. Operating loss for the fourth
quarter 2015 was $5.0 million, compared to operating income of $43.5
million for the fourth quarter 2014. Loss from continuing operations
attributable to Apollo Education Group for the fourth quarter 2015 was
$10.2 million, or $0.09 per share, compared to income of $33.0 million,
or $0.30 per share, for the prior year fourth quarter.
Excluding special items, operating income was $25.7 million for the
fourth quarter 2015, compared to $58.2 million for the fourth quarter
2014, and income from continuing operations attributable to Apollo
Education Group for the fourth quarter 2015 was $18.7 million, or $0.17
per share, compared to $38.1 million, or $0.34 per share, for the fourth
quarter 2014. Adjusted Operating Income was $55.3 million for the fourth
quarter 2015 compared to $94.1 million for the fourth quarter 2014.
(Special items and Adjusted Operating Income for the respective periods
are included in the reconciliation of GAAP to non-GAAP financial
information tables of this press release.)
Fiscal Year 2015 Results of Operations
Net revenue for fiscal year 2015 totaled $2.6 billion, compared to $3.0
billion in fiscal year 2014. In fiscal year 2015, University of Phoenix
Average Degreed Enrollment was 214,500, compared to 251,500 for fiscal
year 2014. Operating income for fiscal year 2015 was $114.9 million,
compared to $355.0 million in the prior year. Income from continuing
operations attributable to Apollo Education Group for fiscal year 2015
was $52.9 million, or $0.49 per share, compared to $225.9 million, or
$2.01 per share, for fiscal year 2014.
Excluding special items, operating income was $203.0 million for fiscal
year 2015, compared to $462.9 million for fiscal year 2014. Income from
continuing operations attributable to Apollo Education Group for fiscal
year 2015 was $120.5 million, or $1.10 per share, compared to $287.3
million, or $2.55 per share, for fiscal year 2014. Adjusted Operating
Income was $328.3 million for fiscal year 2015 compared to $601.7
million for fiscal year 2014. (Special items and Adjusted Operating
Income for the respective periods are included in the reconciliation of
GAAP to non-GAAP financial information tables of this press release.)
Balance Sheet and Cash Flow
As of August 31, 2015, the Company’s unrestricted cash and cash
equivalents and short-term marketable securities totaled $698.4 million,
compared to $1.4 billion as of August 31, 2014. The decrease was
primarily attributable to $608.9 million of net payments on borrowings,
$98.0 million for capital expenditures, $51.5 million for the purchase
of noncontrolling interests, $44.7 million of share repurchases (which
includes $6.6 million of share repurchases for tax withholding
requirements on share-based awards), $34.5 million for contingent
consideration, and $31.7 million for acquisitions. These items were
partially offset by cash provided by operations.
Total debt outstanding (including short-term borrowings and the current
portion of long-term debt) was $45.6 million as of August 31, 2015.
Business Outlook
The Company offers the following outlook for fiscal year 2016 based on
the business trends observed during the fourth quarter of fiscal year
2015, as well as management’s current expectations of future trends.
-
Net revenue of $2.18 billion to $2.23 billion; and
-
Operating income of $115 to $140 million, excluding the impact of
special items.
Conference Call Information
The Company will hold a conference call to discuss these earnings
results at 8:30 a.m. (ET), 5:30 a.m. (PT), today, Thursday, October 22,
2015.
Dial-In Numbers:
877-292-6888
(Domestic)
973-200-3381 (International)
Conference ID: 44015514
A live webcast of this event may be accessed by visiting the Company’s
website at www.apollo.edu.
A webcast replay will be available approximately one hour following the
conclusion of the call at the same link.
A telephone replay will be available approximately two hours following
the conclusion of the call until October 27, 2015.
Dial-In Numbers:
855-859-2056
(Domestic)
404-537-3406 (International)
Conference ID: 44015514
About Apollo Education Group, Inc.
Apollo Education Group, Inc. is one of the world’s largest private
education providers, serving students since 1973. Through its
subsidiaries, Apollo Education Group offers undergraduate, graduate,
professional development and other nondegree educational programs and
services, online and on-campus principally to working learners. Its
educational programs and services are offered throughout the United
States and in Europe, Australia, Latin America, Africa and Asia, as well
as online throughout the world. For more information about Apollo
Education Group, Inc. and its subsidiaries, call (800) 990-APOL or visit
the Company’s website at www.apollo.edu.
|
Apollo Education Group, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended August 31,
|
|
|
Year Ended August 31,
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Net revenue
|
|
|
|
|
$
|
600,291
|
|
|
|
$
|
696,074
|
|
|
|
$
|
2,566,277
|
|
|
|
$
|
2,996,865
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instructional and student advisory
|
|
|
|
|
300,187
|
|
|
|
315,198
|
|
|
|
1,207,535
|
|
|
|
1,283,194
|
|
Marketing
|
|
|
|
|
118,639
|
|
|
|
144,594
|
|
|
|
487,759
|
|
|
|
545,596
|
|
Admissions advisory
|
|
|
|
|
41,849
|
|
|
|
56,121
|
|
|
|
209,768
|
|
|
|
215,196
|
|
General and administrative
|
|
|
|
|
67,447
|
|
|
|
70,236
|
|
|
|
273,662
|
|
|
|
286,206
|
|
Depreciation and amortization
|
|
|
|
|
29,598
|
|
|
|
35,862
|
|
|
|
125,303
|
|
|
|
138,810
|
|
Provision for uncollectible accounts receivable
|
|
|
|
|
16,833
|
|
|
|
15,822
|
|
|
|
59,205
|
|
|
|
53,819
|
|
Restructuring and impairment charges
|
|
|
|
|
29,078
|
|
|
|
23,267
|
|
|
|
81,800
|
|
|
|
85,343
|
|
Acquisition and other related costs (credit), net
|
|
|
|
|
1,695
|
|
|
|
(9,336
|
)
|
|
|
6,201
|
|
|
|
19,837
|
|
Litigation charges
|
|
|
|
|
—
|
|
|
|
775
|
|
|
|
100
|
|
|
|
13,900
|
|
Total costs and expenses
|
|
|
|
|
605,326
|
|
|
|
652,539
|
|
|
|
2,451,333
|
|
|
|
2,641,901
|
|
Operating (loss) income
|
|
|
|
|
(5,035
|
)
|
|
|
43,535
|
|
|
|
114,944
|
|
|
|
354,964
|
|
Interest income
|
|
|
|
|
959
|
|
|
|
610
|
|
|
|
3,050
|
|
|
|
2,230
|
|
Interest expense
|
|
|
|
|
(1,479
|
)
|
|
|
(1,930
|
)
|
|
|
(6,595
|
)
|
|
|
(7,914
|
)
|
Other loss, net
|
|
|
|
|
(1,276
|
)
|
|
|
(1,179
|
)
|
|
|
(5,756
|
)
|
|
|
(560
|
)
|
(Loss) income from continuing operations before income taxes
|
|
|
|
|
(6,831
|
)
|
|
|
41,036
|
|
|
|
105,643
|
|
|
|
348,720
|
|
Provision for income taxes
|
|
|
|
|
(4,366
|
)
|
|
|
(9,254
|
)
|
|
|
(58,163
|
)
|
|
|
(127,290
|
)
|
(Loss) income from continuing operations
|
|
|
|
|
(11,197
|
)
|
|
|
31,782
|
|
|
|
47,480
|
|
|
|
221,430
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
(8,279
|
)
|
|
|
(3,212
|
)
|
|
|
(23,185
|
)
|
|
|
(16,632
|
)
|
Net (loss) income
|
|
|
|
|
(19,476
|
)
|
|
|
28,570
|
|
|
|
24,295
|
|
|
|
204,798
|
|
Net loss attributable to noncontrolling interests
|
|
|
|
|
992
|
|
|
|
1,213
|
|
|
|
5,460
|
|
|
|
4,506
|
|
Net (loss) income attributable to Apollo
|
|
|
|
|
$
|
(18,484
|
)
|
|
|
$
|
29,783
|
|
|
|
$
|
29,755
|
|
|
|
$
|
209,304
|
|
Earnings (loss) per share - Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations attributable to Apollo
|
|
|
|
|
$
|
(0.09
|
)
|
|
|
$
|
0.30
|
|
|
|
$
|
0.49
|
|
|
|
$
|
2.03
|
|
Discontinued operations attributable to Apollo
|
|
|
|
|
(0.08
|
)
|
|
|
(0.03
|
)
|
|
|
(0.21
|
)
|
|
|
(0.15
|
)
|
Basic (loss) income per share attributable to Apollo
|
|
|
|
|
$
|
(0.17
|
)
|
|
|
$
|
0.27
|
|
|
|
$
|
0.28
|
|
|
|
$
|
1.88
|
|
Earnings (loss) per share - Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations attributable to Apollo
|
|
|
|
|
$
|
(0.09
|
)
|
|
|
$
|
0.30
|
|
|
|
$
|
0.49
|
|
|
|
$
|
2.01
|
|
Discontinued operations attributable to Apollo
|
|
|
|
|
(0.08
|
)
|
|
|
(0.03
|
)
|
|
|
(0.22
|
)
|
|
|
(0.15
|
)
|
Diluted (loss) income per share attributable to Apollo
|
|
|
|
|
$
|
(0.17
|
)
|
|
|
$
|
0.27
|
|
|
|
$
|
0.27
|
|
|
|
$
|
1.86
|
|
Basic weighted average shares outstanding
|
|
|
|
|
107,950
|
|
|
|
109,364
|
|
|
|
108,092
|
|
|
|
111,354
|
|
Diluted weighted average shares outstanding
|
|
|
|
|
108,694
|
|
|
|
110,839
|
|
|
|
109,038
|
|
|
|
112,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
As of August 31,
|
($ in thousands)
|
|
|
|
|
2015
|
|
|
2014
|
ASSETS
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
503,705
|
|
|
|
$
|
1,228,813
|
|
Restricted cash and cash equivalents
|
|
|
|
|
198,369
|
|
|
|
224,135
|
|
Marketable securities
|
|
|
|
|
194,676
|
|
|
|
187,472
|
|
Accounts receivable, net
|
|
|
|
|
198,459
|
|
|
|
225,398
|
|
Prepaid taxes
|
|
|
|
|
38,371
|
|
|
|
34,006
|
|
Deferred taxes
|
|
|
|
|
68,475
|
|
|
|
83,871
|
|
Other current assets
|
|
|
|
|
48,823
|
|
|
|
58,855
|
|
Assets of business held for sale
|
|
|
|
|
40,897
|
|
|
|
—
|
|
Total current assets
|
|
|
|
|
1,291,775
|
|
|
|
2,042,550
|
|
Marketable securities
|
|
|
|
|
95,815
|
|
|
|
87,811
|
|
Property and equipment, net
|
|
|
|
|
370,281
|
|
|
|
435,733
|
|
Goodwill
|
|
|
|
|
247,190
|
|
|
|
259,901
|
|
Intangible assets, net
|
|
|
|
|
143,244
|
|
|
|
189,365
|
|
Deferred taxes
|
|
|
|
|
27,361
|
|
|
|
37,335
|
|
Other assets
|
|
|
|
|
29,129
|
|
|
|
40,240
|
|
Total assets
|
|
|
|
|
$
|
2,204,795
|
|
|
|
$
|
3,092,935
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
SHAREHOLDERS’ EQUITY
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Short-term borrowings and current portion of long-term debt
|
|
|
|
|
$
|
14,080
|
|
|
|
$
|
609,506
|
|
Accounts payable
|
|
|
|
|
64,100
|
|
|
|
63,907
|
|
Student deposits
|
|
|
|
|
245,470
|
|
|
|
280,562
|
|
Deferred revenue
|
|
|
|
|
186,950
|
|
|
|
225,818
|
|
Accrued and other current liabilities
|
|
|
|
|
280,847
|
|
|
|
363,607
|
|
Liabilities of business held for sale
|
|
|
|
|
40,897
|
|
|
|
—
|
|
Total current liabilities
|
|
|
|
|
832,344
|
|
|
|
1,543,400
|
|
Long-term debt
|
|
|
|
|
31,566
|
|
|
|
47,590
|
|
Deferred taxes
|
|
|
|
|
11,460
|
|
|
|
22,674
|
|
Other long-term liabilities
|
|
|
|
|
172,452
|
|
|
|
233,942
|
|
Total liabilities
|
|
|
|
|
1,047,822
|
|
|
|
1,847,606
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests
|
|
|
|
|
11,915
|
|
|
|
64,527
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
Preferred stock, no par value
|
|
|
|
|
—
|
|
|
|
—
|
|
Apollo Class A nonvoting common stock, no par value
|
|
|
|
|
103
|
|
|
|
103
|
|
Apollo Class B voting common stock, no par value
|
|
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in capital
|
|
|
|
|
—
|
|
|
|
—
|
|
Apollo Class A treasury stock, at cost
|
|
|
|
|
(3,928,419
|
)
|
|
|
(3,936,607
|
)
|
Retained earnings
|
|
|
|
|
5,153,452
|
|
|
|
5,143,949
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(80,579
|
)
|
|
|
(27,320
|
)
|
Total Apollo shareholders’ equity
|
|
|
|
|
1,144,558
|
|
|
|
1,180,126
|
|
Noncontrolling interests
|
|
|
|
|
500
|
|
|
|
676
|
|
Total equity
|
|
|
|
|
1,145,058
|
|
|
|
1,180,802
|
|
Total liabilities, redeemable noncontrolling interests and
shareholders’ equity
|
|
|
|
|
$
|
2,204,795
|
|
|
|
$
|
3,092,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31,
|
($ in thousands)
|
|
|
|
|
2015
|
|
|
2014
|
Operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
24,295
|
|
|
|
$
|
204,798
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
|
|
38,669
|
|
|
|
42,819
|
|
Excess tax benefits from share-based compensation
|
|
|
|
|
(236
|
)
|
|
|
(1,285
|
)
|
Depreciation and amortization
|
|
|
|
|
132,012
|
|
|
|
150,575
|
|
Accelerated depreciation and impairments included in restructuring
|
|
|
|
|
22,697
|
|
|
|
7,580
|
|
Loss on asset dispositions and impairment charges
|
|
|
|
|
29,897
|
|
|
|
556
|
|
Non-cash foreign currency loss, net
|
|
|
|
|
2,389
|
|
|
|
957
|
|
Provision for uncollectible accounts receivable
|
|
|
|
|
59,205
|
|
|
|
53,819
|
|
Deferred income taxes
|
|
|
|
|
2,752
|
|
|
|
(13,912
|
)
|
Changes in assets and liabilities, excluding the impact of
acquisitions and disposition:
|
|
|
|
|
|
|
|
|
Restricted cash and cash equivalents
|
|
|
|
|
25,150
|
|
|
|
37,233
|
|
Accounts receivable
|
|
|
|
|
(74,475
|
)
|
|
|
(61,435
|
)
|
Prepaid taxes
|
|
|
|
|
(4,352
|
)
|
|
|
(2,890
|
)
|
Other assets
|
|
|
|
|
12,866
|
|
|
|
6,072
|
|
Accounts payable
|
|
|
|
|
1,994
|
|
|
|
(11,950
|
)
|
Student deposits
|
|
|
|
|
(32,298
|
)
|
|
|
(30,738
|
)
|
Deferred revenue
|
|
|
|
|
6,985
|
|
|
|
657
|
|
Accrued and other liabilities
|
|
|
|
|
(78,968
|
)
|
|
|
(6,949
|
)
|
Net cash provided by operating activities
|
|
|
|
|
168,582
|
|
|
|
375,907
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
(97,961
|
)
|
|
|
(100,666
|
)
|
Purchases of marketable securities
|
|
|
|
|
(232,700
|
)
|
|
|
(319,079
|
)
|
Maturities and sales of marketable securities
|
|
|
|
|
212,693
|
|
|
|
188,276
|
|
Acquisitions, net of cash acquired
|
|
|
|
|
(31,705
|
)
|
|
|
(119,454
|
)
|
Other investing activities
|
|
|
|
|
(4,628
|
)
|
|
|
606
|
|
Net cash used in investing activities
|
|
|
|
|
(154,301
|
)
|
|
|
(350,317
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
Payments on borrowings
|
|
|
|
|
(614,735
|
)
|
|
|
(627,822
|
)
|
Proceeds from borrowings
|
|
|
|
|
5,800
|
|
|
|
591,131
|
|
Share repurchases
|
|
|
|
|
(44,723
|
)
|
|
|
(172,709
|
)
|
Share reissuances
|
|
|
|
|
1,538
|
|
|
|
1,793
|
|
Purchase of noncontrolling interests
|
|
|
|
|
(51,485
|
)
|
|
|
(893
|
)
|
Excess tax benefits from share-based compensation
|
|
|
|
|
236
|
|
|
|
1,285
|
|
Payment for contingent consideration
|
|
|
|
|
(21,371
|
)
|
|
|
—
|
|
Other financing activities
|
|
|
|
|
—
|
|
|
|
(4,143
|
)
|
Net cash used in financing activities
|
|
|
|
|
(724,740
|
)
|
|
|
(211,358
|
)
|
Exchange rate effect on cash and cash equivalents
|
|
|
|
|
(4,429
|
)
|
|
|
96
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
(714,888
|
)
|
|
|
(185,672
|
)
|
Cash and cash equivalents, beginning of year
|
|
|
|
|
1,228,813
|
|
|
|
1,414,485
|
|
Cash and cash equivalents and cash of business held for sale,
end of year
|
|
|
|
|
513,925
|
|
|
|
1,228,813
|
|
Less cash of business held for sale
|
|
|
|
|
(10,220
|
)
|
|
|
—
|
|
Cash and cash equivalents, end of year
|
|
|
|
|
$
|
503,705
|
|
|
|
$
|
1,228,813
|
|
Supplemental disclosure of cash flow and non-cash information:
|
|
|
|
|
|
|
|
|
Cash paid for income taxes, net of refunds
|
|
|
|
|
$
|
47,836
|
|
|
|
$
|
161,163
|
|
Cash paid for interest
|
|
|
|
|
6,674
|
|
|
|
7,657
|
|
Restricted stock units vested and released
|
|
|
|
|
19,570
|
|
|
|
37,430
|
|
Credits received for tenant improvements
|
|
|
|
|
—
|
|
|
|
1,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Segment Data and University of Phoenix Operating Metrics
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended August 31,
|
|
|
Year Ended August 31,
|
($ in thousands)
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
University of Phoenix:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Degree seeking gross revenues(1)
|
|
|
|
|
$
|
568,515
|
|
|
|
$
|
661,029
|
|
|
|
$
|
2,393,769
|
|
|
|
$
|
2,840,946
|
|
Less: Discounts and other
|
|
|
|
|
(74,788
|
)
|
|
|
(62,202
|
)
|
|
|
(294,103
|
)
|
|
|
(251,954
|
)
|
Degree seeking net revenues(1)
|
|
|
|
|
493,727
|
|
|
|
598,827
|
|
|
|
2,099,666
|
|
|
|
2,588,992
|
|
Other revenues
|
|
|
|
|
13,271
|
|
|
|
13,471
|
|
|
|
48,646
|
|
|
|
43,957
|
|
Total University of Phoenix
|
|
|
|
|
506,998
|
|
|
|
612,298
|
|
|
|
2,148,312
|
|
|
|
2,632,949
|
|
Apollo Global
|
|
|
|
|
85,355
|
|
|
|
77,756
|
|
|
|
391,217
|
|
|
|
338,008
|
|
Other
|
|
|
|
|
7,938
|
|
|
|
6,020
|
|
|
|
26,748
|
|
|
|
25,908
|
|
Net revenue
|
|
|
|
|
$
|
600,291
|
|
|
|
$
|
696,074
|
|
|
|
$
|
2,566,277
|
|
|
|
$
|
2,996,865
|
|
Operating (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
University of Phoenix
|
|
|
|
|
$
|
40,589
|
|
|
|
$
|
85,751
|
|
|
|
$
|
257,366
|
|
|
|
$
|
499,699
|
|
Apollo Global
|
|
|
|
|
(22,609
|
)
|
|
|
(22,557
|
)
|
|
|
(49,527
|
)
|
|
|
(74,189
|
)
|
Other
|
|
|
|
|
(23,015
|
)
|
|
|
(19,659
|
)
|
|
|
(92,895
|
)
|
|
|
(70,546
|
)
|
Operating (loss) income
|
|
|
|
|
$
|
(5,035
|
)
|
|
|
$
|
43,535
|
|
|
|
$
|
114,944
|
|
|
|
$
|
354,964
|
|
(1) Represents revenue from tuition and other fees for
students enrolled in University of Phoenix degree programs or
certificate programs of at least 18 credits in length with some
course applicability into a related degree program.
|
|
University of Phoenix Enrollment Data:
|
(Rounded to the nearest hundred, except per degreed enrollment)
|
|
|
|
|
Three Months Ended August 31,
|
|
|
|
|
|
|
|
Year Ended August 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
Degreed Enrollment(1)
|
|
|
|
|
190,700
|
|
|
|
233,500
|
|
|
|
(18.3
|
)%
|
|
|
|
|
Average Degreed Enrollment(3)
|
|
|
214,500
|
|
|
|
251,500
|
|
|
|
(14.7
|
)%
|
New Degreed Enrollment(2)
|
|
|
|
|
26,500
|
|
|
|
38,600
|
|
|
|
(31.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Degree seeking net revenues per degreed enrollment
|
|
|
|
|
$
|
2,589
|
|
|
|
$
|
2,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents students enrolled in a degree program who
attended a credit bearing course during the quarter and had not
graduated as of the end of the quarter; students who previously
graduated from one degree program and started a new degree program
in the quarter (e.g., a graduate of an associate’s degree program
returns for a bachelor’s degree); and students participating in
certain certificate programs of at least 18 credits with some course
applicability into a related degree program.
|
(2) Represents new students and students who have been
out of attendance for more than 12 months who enroll in a degree
program and start a credit bearing course in the quarter; students
who have previously graduated from a degree program and start a new
degree program in the quarter; and students who commence
participation in certain certificate programs of at least 18 credits
with some course applicability into a related degree program.
|
(3) Represents the average of quarterly Degreed
Enrollment from the beginning to the end of the respective periods.
|
|
|
|
|
|
|
|
|
|
|
Apollo Education Group, Inc. and Subsidiaries
|
Reconciliation of GAAP Financial Information to Non-GAAP
Financial Information
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended August 31,
|
|
|
Year Ended August 31,
|
($ in thousands, except per share data)
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating (loss) income
|
|
|
|
|
$
|
(5,035
|
)
|
|
|
$
|
43,535
|
|
|
|
$
|
114,944
|
|
|
|
$
|
354,964
|
|
(Loss) income from continuing operations before income taxes
|
|
|
|
|
(6,831
|
)
|
|
|
41,036
|
|
|
|
105,643
|
|
|
|
348,720
|
|
Provision for income taxes
|
|
|
|
|
(4,366
|
)
|
|
|
(9,254
|
)
|
|
|
(58,163
|
)
|
|
|
(127,290
|
)
|
Net (loss) income attributable to Apollo
|
|
|
|
|
(18,484
|
)
|
|
|
29,783
|
|
|
|
29,755
|
|
|
|
209,304
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
(8,279
|
)
|
|
|
(3,212
|
)
|
|
|
(23,185
|
)
|
|
|
(16,632
|
)
|
(Loss) income from continuing operations attributable to Apollo
|
|
|
|
|
$
|
(10,205
|
)
|
|
|
$
|
32,995
|
|
|
|
$
|
52,940
|
|
|
|
$
|
225,936
|
|
Diluted (loss) income per share from continuing operations
attributable to Apollo
|
|
|
|
|
$
|
(0.09
|
)
|
|
|
$
|
0.30
|
|
|
|
$
|
0.49
|
|
|
|
$
|
2.01
|
|
Special items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and impairment charges
|
|
|
|
|
$
|
29,078
|
|
|
|
$
|
23,267
|
|
|
|
$
|
81,800
|
|
|
|
$
|
85,343
|
|
Acquisition and other related costs (credit), net
|
|
|
|
|
1,695
|
|
|
|
(9,336
|
)
|
|
|
6,201
|
|
|
|
19,837
|
|
Litigation charges
|
|
|
|
|
—
|
|
|
|
775
|
|
|
|
100
|
|
|
|
13,900
|
|
Gain related to foreign indirect taxes(1)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11,173
|
)
|
Special items before income taxes
|
|
|
|
|
30,773
|
|
|
|
14,706
|
|
|
|
88,101
|
|
|
|
107,907
|
|
Less: income tax effects of special items
|
|
|
|
|
(11,921
|
)
|
|
|
(9,554
|
)
|
|
|
(33,669
|
)
|
|
|
(36,373
|
)
|
Open Colleges valuation allowance charge
|
|
|
|
|
10,082
|
|
|
|
—
|
|
|
|
10,082
|
|
|
|
—
|
|
Tax expense from resolution with tax authority
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,002
|
|
|
|
—
|
|
Tax benefit from Internal Revenue Service settlement
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,176
|
)
|
Special items, net of income tax
|
|
|
|
|
$
|
28,934
|
|
|
|
$
|
5,152
|
|
|
|
$
|
67,516
|
|
|
|
$
|
61,358
|
|
Excluding special items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
$
|
25,738
|
|
|
|
$
|
58,241
|
|
|
|
$
|
203,045
|
|
|
|
$
|
462,871
|
|
Income from continuing operations before income taxes
|
|
|
|
|
23,942
|
|
|
|
55,742
|
|
|
|
193,744
|
|
|
|
456,627
|
|
Provision for income taxes
|
|
|
|
|
(6,205
|
)
|
|
|
(18,808
|
)
|
|
|
(78,748
|
)
|
|
|
(173,839
|
)
|
Income from continuing operations attributable to Apollo
|
|
|
|
|
18,729
|
|
|
|
38,147
|
|
|
|
120,456
|
|
|
|
287,294
|
|
Diluted income per share from continuing operations attributable to
Apollo
|
|
|
|
|
$
|
0.17
|
|
|
|
$
|
0.34
|
|
|
|
$
|
1.10
|
|
|
|
$
|
2.55
|
|
(1) This gain is included in instructional and student
advisory on the Company’s Condensed Consolidated Statements of
Operations.
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (Loss)
Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
Apollo Global(1)
|
|
|
|
|
|
Three Months Ended August 31,
|
|
|
Year Ended August 31,
|
|
|
Three Months Ended August 31,
|
|
|
Year Ended August 31,
|
($ in thousands)
|
|
|
|
|
2015
|
2014
|
|
|
2015
|
2014
|
|
|
2015
|
2014
|
|
|
2015
|
2014
|
Operating (loss) income
|
|
|
|
|
$
|
(5,035
|
)
|
$
|
43,535
|
|
|
|
$
|
114,944
|
|
$
|
354,964
|
|
|
|
$
|
(22,609
|
)
|
$
|
(22,557
|
)
|
|
|
$
|
(49,527
|
)
|
$
|
(74,189
|
)
|
Depreciation and amortization
|
|
|
|
|
29,598
|
|
35,862
|
|
|
|
125,303
|
|
138,810
|
|
|
|
9,699
|
|
11,747
|
|
|
|
39,376
|
|
38,168
|
|
Restructuring and impairment charges
|
|
|
|
|
29,078
|
|
23,267
|
|
|
|
81,800
|
|
85,343
|
|
|
|
443
|
|
707
|
|
|
|
585
|
|
6,091
|
|
Acquisition and other related costs (credit), net
|
|
|
|
|
1,695
|
|
(9,336
|
)
|
|
|
6,201
|
|
19,837
|
|
|
|
(359
|
)
|
(9,844
|
)
|
|
|
1,299
|
|
18,990
|
|
Litigation charges
|
|
|
|
|
—
|
|
775
|
|
|
|
100
|
|
13,900
|
|
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
Gain related to foreign indirect taxes
|
|
|
|
|
—
|
|
—
|
|
|
|
—
|
|
(11,173
|
)
|
|
|
—
|
|
—
|
|
|
|
—
|
|
(11,173
|
)
|
Adjusted Operating Income (Loss)
|
|
|
|
|
$
|
55,336
|
|
$
|
94,103
|
|
|
|
$
|
328,348
|
|
$
|
601,681
|
|
|
|
$
|
(12,826
|
)
|
$
|
(19,947
|
)
|
|
|
$
|
(8,267
|
)
|
$
|
(22,113
|
)
|
(1) Apollo Global’s subsidiaries experience seasonality
associated with the timing of when courses begin, exam dates, the
timing of their respective holidays and other factors. These
factors have historically resulted in lower adjusted operating
results in the second and fourth quarters because of lower net
revenue, particularly for BPP, and due to BPP’s relatively fixed
cost structure.
|
|
Use of Non-GAAP Financial Information
The Company’s non-GAAP financial measures are intended to supplement,
but not substitute for, the most directly comparable GAAP measures.
Management uses, and chooses to disclose to investors, these non-GAAP
financial measures because: (i) such measures provide an additional
analytical tool to clarify the Company’s results from operations and
help to identify underlying trends in its results of operations; (ii) as
to the non-GAAP earnings measures, such measures help compare the
Company’s performance on a consistent basis across time periods; and
(iii) these non-GAAP measures are employed by the Company’s management
in its own evaluation of performance and are utilized in financial and
operational decision-making processes, such as budgeting and
forecasting. Exclusion of items in the non-GAAP presentation should not
be construed as an inference that these items are unusual, infrequent or
non-recurring. Other companies, including other companies in the
education industry, may calculate non-GAAP financial measures
differently, limiting their usefulness as a comparative measure across
companies.
Adjusted Operating Income (Loss) excludes depreciation and amortization
and certain other items and is intended to provide an indicator of our
operating performance across time periods due to the impact of
acquisitions.
Forward-Looking Statements Safe Harbor
Statements about Apollo Education Group and its business in this release
which are not statements of historical fact, including statements
regarding Apollo Education Group’s future strategy and plans and
commentary regarding future results of operations and prospects, are
forward-looking statements and are subject to the Safe Harbor provisions
created by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current information and
expectations and involve a number of risks and uncertainties. Actual
plans implemented and actual results achieved may differ materially from
those set forth in or implied by such statements due to various factors,
including without limitation: (i) the impact of increased competition
from traditional public universities and proprietary educational
institutions; (ii) the impact of the initiatives to transform University
of Phoenix into a more focused, higher retaining and less complex
institution, including the near-term impact on enrollment; (iii) impacts
from actions taken by our regulators that could affect University of
Phoenix’s eligibility to participate in or the manner in which it
participates in U.S. federal and state student financial aid programs;
(iv) further delay in the University’s pending recertification by the
U.S. Department of Education for participation in Title IV student
financial aid programs, or any limitations or qualifications imposed in
connection with any recertification; (v) the impact of the U.S.
Department of Defense (“DoD”) action to place University of Phoenix on
probation in relation to participation in the DoD’s Tuition Assistance
Program for active duty military students; (vi) the impact of the
Company’s ongoing restructuring and cost-reduction initiatives; (vii)
the impact of any reduction in financial aid available to students,
including active and retired military personnel, due to the U.S.
government deficit reduction proposals, debt ceiling limitations, budget
sequestration or otherwise; (viii) changes in University of Phoenix
enrollment or student mix; and (ix) unexpected expenses or other
challenges in integrating acquired businesses, consumer or regulatory
impact arising from consummation of such acquisitions, and unexpected
changes or developments in the acquired businesses. For a discussion of
the various factors that may cause actual plans implemented and actual
results achieved to differ materially from those set forth in the
forward-looking statements, please refer to the risk factors and other
disclosures contained in Apollo Education Group’s Form 10-K for fiscal
year 2015, and other filings with the Securities and Exchange Commission
which are available at www.apollo.edu.
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