Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2024 Results

Published: 2025-02-18 16:10:04 ET PRDO

Perdoceo Education Corporation (NASDAQ: PRDO) today reported operating and financial results for the quarter and year ended December 31, 2024.

Full Year 2024 Results as Compared to Prior Year

Fourth Quarter 2024 Results as Compared to Prior Year Quarter

*See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release

"Quarterly operating performance at CTU and AIUS was ahead of our expectations, and we ended the year on a strong note as it relates to prospective student interest, student retention and student engagement. This broad momentum sets us up well for 2025 while our faculty and student support teams continue to prioritize enhancing student experiences, retention and academic outcomes for current and prospective learners,” said Todd Nelson, President and Chief Executive Officer.

“During the quarter, we also closed the acquisition of the University of St. Augustine for Health Sciences, which has meaningfully expanded our academic offerings in the graduate health sciences field and the number of students we serve and educate. Our balance sheet is strong, and we remain committed to making investments in student technology and student support processes, while maintaining strong liquidity.”

REVENUE

For the Quarter Ended December 31,

For the Year Ended December 31,

Revenue ($ in thousands)

2024

2023

% Change

2024

2023

% Change

CTU

114,760

104,590

9.7

456,899

468,926

-2.6

AIUS

51,433

43,172

19.1

213,547

240,300

-11.1

USAHS (1)

10,041

Corporate and Other

197

157

776

778

Total

176,431

147,919

19.3

681,263

710,004

-4.0

(1) Perdoceo completed the acquisition of USAHS on December 2, 2024.

TOTAL STUDENT ENROLLMENTS

At December 31,

Total Student Enrollments(1)

2024

2023

% Change

CTU

28,100

26,000

8.1

AIUS

9,500

8,500

11.8

USAHS (2)

3,800

Total

41,400

34,500

20.0

(1) Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities.

(2) Perdoceo completed the acquisition of USAHS on December 2, 2024 and total student enrollments represents students who are considered active at the end of the fall term in December.

OPERATING INCOME

For the Quarter Ended December 31,

For the Year Ended December 31,

Operating Income ($ in thousands)

2024

2023

% Change

2024

2023

% Change

CTU

42,015

25,376

65.6

171,260

144,008

18.9

AIUS

4,907

600

717.8

36,182

45,283

-20.1

USAHS (1)

(2,640

)

(2,640

)

Corporate and Other

(7,107

)

(10,033

)

(30,549

)

(38,845

Total

37,175

15,943

133.2

174,253

150,446

15.8

(1) Perdoceo completed the acquisition of USAHS on December 2, 2024.

ADJUSTED OPERATING INCOME

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

For the Quarter Ended December 31,

For the Year Ended December 31,

Adjusted Operating Income ($ in thousands)

2024

2023

2024

2023

Operating income

37,175

15,943

174,253

150,446

Depreciation and amortization

5,507

3,449

14,645

16,887

Legal fee expense related to certain matters (1)

545

3,309

7,579

Adjusted Operating Income

43,227

19,397

192,207

174,912

Increase (Decrease)

122.9

9.9

(1) Legal fee expense associated with (i) responses to the Department of Education (the “Department”) relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended December 31, 2024, the Company recorded:

For the year ended December 31, 2024, the Company recorded:

For the Quarter Ended December 31,

For the Year Ended December 31,

2024

2023

2024

2023

Reported Earnings Per Diluted Share

0.47

0.26

2.19

2.18

Pre-tax adjustments included in operating expenses:

Amortization for acquired intangible assets

0.03

0.02

0.09

0.11

Legal fee expense related to certain matters (1)

0.01

0.05

0.11

Gain on sale of intangible asset (2)

(0.32

)

Tax effect of adjustments (3)

(0.01

)

(0.01

)

(0.04

)

0.02

Adjusted Earnings Per Diluted Share

0.50

0.27

2.29

2.10

(1) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

(2) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.

(3) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

QUARTERLY DIVIDEND PAYMENT

The board of directors declared a quarterly dividend of $0.13 per share, which will be paid on March 13, 2025 for holders of record of common stock as of March 1, 2025. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company’s available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating acquisitions and share repurchases.

BALANCE SHEET AND CASH FLOW

For the Quarter Ended December 31,

For the Year Ended December 31,

Selected Cash Flow Items ($ in thousands)

2024

2023

% Change

2024

2023

% Change

Net cash provided by operating activities

17,599

13,192

33.4

161,594

112,025

44.2

Capital expenditures

1,628

1,610

1.1

4,625

6,411

-27.9

OUTLOOK

The Company is providing its first quarter and full year 2025 outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details.

Total Company Outlook

For Quarter Ending March 31,

For the Year Ending December 31,

OUTLOOK

ACTUAL

OUTLOOK

ACTUAL

2025

2024

2025

2024

Operating Income

$50.0M - $52.0M

$46.3M

$172.0M - $192.0M

$174.3M

Depreciation and amortization

$10.7M

$3.0M

$42.0M

$14.6M

Legal fee expense related to certain matters (1)

$0.3M

$0.2M

$1.0M

$3.3M

Adjusted Operating Income

$61.0M - $63.0M

$49.5M

$215.0M - $235.0M

$192.2M

Earnings Per Diluted Share

$0.59 - $0.62

$0.59

$2.11 - $2.31

$2.19

Amortization of acquired intangible assets

$0.06

$0.02

$0.25

$0.09

Legal fee expense related to certain matters (1)

$0.02

$0.05

Tax effect of adjustments

($0.01)

($0.07)

($0.04)

Adjusted Earnings Per Diluted Share

$0.64 - $0.67

$0.60

$2.31 - $2.51

$2.29

(1) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share, which is the most directly comparable GAAP measure to adjusted earnings per diluted share, may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2025 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs and trends in student retention and engagement remain consistent with management’s recent experiences and future expectations, (ii) no significant impact from new or proposed regulations, or from updated interpretations of current regulation, or other adverse changes in the legal or regulatory environment, which may require operational changes in the way the Company’s academic institutions attract, connect with, enroll, support and educate current and prospective students, among other impacts, (iii) no significant operating impacts from the settlement with the U.S. Federal Trade Commission or other legal or regulatory matters, (iv) the positive impact on total enrollments from various student loan initiatives implemented by the prior administration remains consistent with management's estimates, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 25.5% for the first quarter and approximately 26.0% for the full year, and (vi) excludes any future impact from the Company’s stock repurchase program. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above.

CONFERENCE CALL INFORMATION

Perdoceo Education Corporation will host a conference call on Tuesday, February 18, 2025 at 5:00 p.m. Eastern time to discuss fourth quarter and full year 2024 results and 2025 outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-800-715-9871 (domestic) or 1-646-307-1963 (international). Both dial-in numbers will use the access code 4671240. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/748718635. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days at www.perdoceoed.com in the Investor Relations section of the website.

ABOUT PERDOCEO EDUCATION CORPORATION

Perdoceo’s accredited academic institutions offer a quality postsecondary education to a diverse student population, with fully online, campus-based and hybrid learning programs. The Company’s academic institutions – Colorado Technical University (“CTU”), the American InterContinental University System (“AIUS” or “AIU System”) and University of St. Augustine for Health Sciences ("USAHS") – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Our academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. USAHS is among the nation's reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Perdoceo's academic institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “believe,” “will,” “expect,” “continue,” “outlook,” “remain,” “focused on,” “should” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs or our ability to attract and connect with prospective students; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the new 90-10, gainful employment, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of “borrower defense to repayment” regulations; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; rulemaking or changing interpretations of existing regulations, guidance or historical practices by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued ability to participate in educational assistance programs for key employers, veterans or other military personnel; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. Further information about these and other relevant risks and uncertainties may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and its subsequent filings with the Securities and Exchange Commission.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

December 31,

2024

2023

ASSETS

CURRENT ASSETS:

Cash and cash equivalents, unrestricted

109,130

118,009

Restricted cash

22,623

1,012

Short-term investments

459,795

485,135

Total cash and cash equivalents, restricted cash and short-term investments

591,548

604,156

Student receivables, net

22,807

29,398

Receivables, other

5,330

4,539

Prepaid expenses

16,910

11,712

Inventories

3,388

5,004

Other current assets

171

155

Total current assets

640,154

654,964

NON-CURRENT ASSETS:

Property and equipment, net

95,508

21,371

Right of use assets, net - operating

50,099

19,096

Right of use assets, net - finance

15,375

Goodwill

258,012

241,162

Intangible assets, net

95,006

36,219

Student receivables, net

6,195

3,859

Deferred income tax assets, net

68,774

23,804

Other assets

7,911

6,841

TOTAL ASSETS

1,237,034

1,007,316

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Lease liabilities - operating

7,792

5,701

Lease liabilities - finance

5,466

Accounts payable

12,805

10,766

Accrued expenses:

Payroll and related benefits

35,059

32,684

Advertising and marketing costs

8,135

7,196

Income taxes

4,926

3,974

Other

21,239

13,503

Deferred revenue

36,740

37,215

Total current liabilities

132,162

111,039

NON-CURRENT LIABILITIES:

Lease liabilities - operating

50,224

21,346

Lease liabilities - finance

11,555

Construction financing

56,500

Other liabilities

27,057

33,510

Total non-current liabilities

145,336

54,856

STOCKHOLDERS' EQUITY:

Preferred stock

Common stock

910

903

Additional paid-in capital

707,212

694,798

Accumulated other comprehensive income (loss)

166

(666

)

Retained earnings

595,672

480,606

Treasury stock

(344,424

)

(334,220

)

Total stockholders' equity

959,536

841,421

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

1,237,034

1,007,316

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

For the Quarter Ended December 31,

2024

% of Total Revenue

2023

% of Total Revenue

REVENUE:

Tuition and fees, net

175,227

99.3

146,822

99.3

Other

1,204

0.7

1,097

0.7

Total revenue

176,431

147,919

OPERATING EXPENSES:

Educational services and facilities

35,199

20.0

30,223

20.4

General and administrative

96,565

54.7

92,756

62.7

Depreciation and amortization

5,507

3.1

3,449

2.3

Asset impairment

1,985

1.1

5,548

3.8

Total operating expenses

139,256

78.9

131,976

89.2

Operating income

37,175

21.1

15,943

10.8

OTHER INCOME:

Interest income

7,308

4.1

6,421

4.3

Interest expense

(84

)

0.0

(116

)

-0.1

Miscellaneous (expense) income

(1,186

)

-0.7

129

0.1

Total other income

6,038

3.4

6,434

4.3

PRETAX INCOME

43,213

24.5

22,377

15.1

Provision for income taxes

11,749

6.7

5,189

3.5

NET INCOME

31,464

17.8

17,188

11.6

NET INCOME PER SHARE - BASIC:

0.48

0.26

NET INCOME PER SHARE -DILUTED:

0.47

0.26

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic

65,718

65,610

Diluted

67,456

67,185

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Quarter Ended December 31,

(In Thousands)

2024

2023

NET INCOME

31,464

17,188

OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:

Foreign currency translation adjustments

(35

)

Unrealized (loss) gain on investments

(1,367

)

4,280

Total other comprehensive (loss) income

(1,402

)

4,333

COMPREHENSIVE INCOME

30,062

21,521

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

For the Year Ended December 31,

2024

% of Total Revenue

2023

% of Total Revenue

REVENUE:

Tuition and fees, net

676,071

99.2

702,920

99.0

Other

5,192

0.8

7,084

1.0

Total revenue

681,263

710,004

OPERATING EXPENSES:

Educational services and facilities

120,860

17.7

130,324

18.4

General and administrative

367,052

53.9

398,084

56.1

Depreciation and amortization

14,645

2.1

16,887

2.4

Asset impairment

4,453

0.7

14,263

2.0

Total operating expenses

507,010

74.4

559,558

78.8

Operating income

174,253

25.6

150,446

21.2

OTHER INCOME:

Interest income

28,993

4.3

19,980

2.8

Interest expense

(613

)

-0.1

(404

)

-0.1

Miscellaneous (expense) income

(1,193

)

-0.2

22,099

3.1

Total other income

27,187

4.0

41,675

5.9

PRETAX INCOME

201,440

29.6

192,121

27.1

Provision for income taxes

53,850

7.9

44,469

6.3

NET INCOME

147,590

21.7

147,652

20.8

NET INCOME PER SHARE - BASIC:

2.25

2.22

NET INCOME PER SHARE -DILUTED:

2.19

2.18

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic

65,646

66,468

Diluted

67,242

67,826

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Year Ended December 31,

(In Thousands)

2024

2023

NET INCOME

147,590

147,652

OTHER COMPREHENSIVE INCOME, net of tax:

Foreign currency translation adjustments

(28

)

Unrealized gain on investments

860

4,736

Total other comprehensive income

832

4,781

COMPREHENSIVE INCOME

148,422

152,433

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Year Ended December 31,

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

147,590

147,652

Adjustments to reconcile net income to net cash provided by operating activities:

Asset impairment

4,453

14,263

Gain on sale of asset

(22,086

)

Depreciation and amortization expense

14,645

16,887

Bad debt expense

33,719

33,215

Compensation expense related to share-based awards

10,188

8,078

Deferred income taxes

2,656

3,761

Changes in operating assets and liabilities:

Student receivables, gross

)

15,929

Allowance for credit losses

(27,981

)

(38,573

)

Receivables, other

(8,052

)

(3,922

)

Inventories, prepaid expenses, and other current assets

4,473

(2,994

)

Other non-current assets

692

478

Accounts payable

(727

)

(4,878

)

Accrued expenses and other non-current liabilities

(5,792

)

(19,235

)

Deferred revenue

(10,612

)

(34,375

)

Right of use asset and lease liabilities -operating

(3,654

)

(2,175

)

Net cash provided by operating activities

161,594

112,025

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of available-for-sale investments

(412,894

)

(314,279

)

Sales of available-for-sale investments

447,502

238,184

Purchases of property and equipment

(4,625

)

(6,411

)

Business acquisition, net of cash acquired

(137,766

)

Earnout payment related to business acquisition

(6,000

)

Net cash used in investing activities

(107,783

)

(88,506

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Purchase of treasury stock

(6,769

)

(8,301

)

Issuance of common stock

2,234

2,545

Payments of employee tax associated with stock compensation

(3,436

)

(2,209

)

Payments of cash dividends and dividend equivalents

(31,699

)

(14,417

)

Release of cash held in escrow

(276

)

(1,000

)

Principal payments for finance leases

(398

)

Principal payments for failed sale leaseback

(735

)

Net cash used in financing activities

(41,079

)

(23,382

)

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

12,732

137

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period

119,021

118,884

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period

131,753

119,021

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

For the Quarter Ended December 31,

2024

2023

REVENUE:

CTU

114,760

104,590

AIUS

51,433

43,172

USAHS (1)

10,041

Corporate and Other

197

157

Total

176,431

147,919

OPERATING INCOME (LOSS):

CTU

42,015

25,376

AIUS

4,907

600

USAHS (1)

(2,640

)

Corporate and Other

(7,107

)

(10,033

)

Total

37,175

15,943

OPERATING MARGIN (LOSS):

CTU

36.6

24.3

AIUS

9.5

1.4

USAHS (1)

Corporate and Other

Total

21.1

10.8

(1) Perdoceo completed the acquisition of USAHS on December 2, 2024.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

For the Year Ended December 31,

2024

2023

REVENUE:

CTU

456,899

468,926

AIUS

213,547

240,300

USAHS (1)

10,041

Corporate and Other

776

778

Total

681,263

710,004

OPERATING INCOME (LOSS):

CTU

171,260

144,008

AIUS

36,182

45,283

USAHS (1)

(2,640

)

Corporate and Other

(30,549

)

(38,845

)

Total

174,253

150,446

OPERATING MARGIN (LOSS):

CTU

37.5

30.7

AIUS

16.9

18.8

USAHS (1)

Corporate and Other

Total

25.6

21.2

(1) Perdoceo completed the acquisition of USAHS on December 2, 2024.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)

(In thousands, unless otherwise noted)

For the Quarter Ended December 31,

For the Year Ended December 31,

ACTUAL

Adjusted Operating Income

2024

2023

2024

2023

Operating income

37,175

15,943

174,253

150,446

Depreciation and amortization (2)

5,507

3,449

14,645

16,887

Legal fee expense related to certain matters (3)

545

3,309

7,579

Adjusted Operating Income

43,227

19,397

192,207

174,912

For the Quarter Ending March 31,

For the Year Ending December 31,

OUTLOOK

ACTUAL

OUTLOOK

ACTUAL

2025

2024

2025

2024

Operating income

$50.0M - $52.0M

46,278

$172.0M - $192.0M

174,253

Depreciation and amortization (2)

10.7M

3,016

42.0M

14,645

Legal fee expense related to certain matters (3)

0.3M

230

1.0M

3,309

Adjusted Operating Income

$61.0M - $63.0M

49,524

$215.0M - $235.0M

192,207

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)

For the Quarter Ended December 31,

For the Year Ended December 31,

ACTUAL

2024

2023

2024

2023

Reported Earnings Per Diluted Share

0.47

0.26

2.19

2.18

Pre-tax adjustments included in operating expenses:

Amortization for acquired intangible assets (2)

0.03

0.02

0.09

0.11

Legal fee expense related to certain matters (3)

0.01

0.05

0.11

Gain on sale of intangible asset (4)

(0.32

)

Total pre-tax adjustments

0.04

0.02

0.14

(0.10

)

Tax effect of adjustments (5)

(0.01

)

(0.01

)

(0.04

)

0.02

Total adjustments after tax

0.03

0.01

0.10

(0.08

)

Adjusted Earnings Per Diluted Share

0.50

0.27

2.29

2.10

For the Quarter Ending March 31,

For the Year Ending December 31,

OUTLOOK

ACTUAL

OUTLOOK

ACTUAL

2025

2024

2025

2024

Reported Earnings Per Diluted Share

$0.59 - $0.62

0.59

$2.11 - $2.31

2.19

Pre-tax adjustments included in operating expenses:

Amortization for acquired intangible assets (2)

0.06

0.02

0.25

0.09

Legal fee expense related to certain matters (3)

0.02

0.05

Total pre-tax adjustments

$0.06

0.02

$0.27

0.14

Tax effect of adjustments (5)

(0.01)

(0.01

)

(0.07)

(0.04

)

Total adjustments after tax

0.05

0.01

0.20

0.10

Adjusted Earnings Per Diluted Share

$0.64 - $0.67

0.60

$2.31 - $2.51

2.29

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (cont’d)

(1)

The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance.

The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. The Company believes the items it is adjusting for are not normal operating expenses necessary to run its business. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity.

Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.

Results of operations include the USAHS acquisition as of December 2, 2024

(2)

Amortization for acquired intangible assets relate to definite-lived intangible assets associated with acquisitions.

(3)

Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

(4)

Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.

(5)

The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

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