Strayer Education Inc. (STRA) filed Quarterly Report for the period ended 2009-09-30.
STRAYER EDUCATION INC. The College is a regional proprietary institution of higher education offering undergraduate and graduate degree programs to more than 7000 students at eight campuses in Washington D.C. and Northern Virginia. Strayer Education Inc. has a market cap of $2.82 billion; its shares were traded at around $201.83 with a P/E ratio of 30.5 and P/S ratio of 7.1. The dividend yield of Strayer Education Inc. stocks is 0.9%. Strayer Education Inc. had an annual average earning growth of 19% over the past 10 years. GuruFocus rated Strayer Education Inc. the business predictability rank of 3-star.
Highlight of Business Operations:
In the third quarter of 2009, the Company generated $114.4 million in revenue, an increase of 31% compared to the same period in 2008, as a result of average enrollment growth during the quarter of 24% and a 5% tuition increase which commenced at the beginning of 2009. Income from operations was $27.3 million for the third quarter of 2009, an increase of 49% compared to the same period in 2008. Net income was $16.7 million in the third quarter of 2009, an increase of 42%, compared to the same period in 2008. Diluted earnings per share was $1.21 for the third quarter of 2009 compared to $0.83 for the same period in 2008, an increase of 46%.
Instruction and educational support expenses. Instruction and educational support expenses increased $9.6 million, or 31%, to $40.1 million in the third quarter of 2009 from $30.5 million in the third quarter of 2008. This increase was principally due to direct costs necessary to support the increase in student enrollments, including faculty compensation, related academic staff salaries, and campus facility costs, which increased $2.2 million, $3.6 million, and $2.4 million, respectively. Instruction and educational support expenses as a percentage of revenues remained constant at 35.1% in both the third quarter of 2008 and 2009.
General and administration expenses. General and administration expenses increased $4.4 million, or 29%, to $19.6 million in the third quarter of 2009 from $15.2 million in the third quarter of 2008. This increase was principally due to increased employee compensation, employee relocation costs, and higher bad debt expense, which increased $0.7 million, $0.6 million, and $2.0 million, respectively, from the third quarter of 2008. General and administration expenses as a percentage of revenues decreased to 17.1% in the third quarter of 2009 from 17.5% in the third quarter of 2008, largely attributable to employee costs and stock-based compensation growing at a lower rate than revenue partly offset by higher bad debt expense.
Instruction and educational support expenses. Instruction and educational support expenses increased $25.0 million, or 26%, to $120.1 million in the nine months ended September 30, 2009 from $95.1 million in the nine months ended September 30, 2008. This increase was principally due to direct costs necessary to support the increase in student enrollments, including faculty compensation, related academic staff salaries, and campus facility costs, which increased $7.0 million, $7.0 million, and $6.1 million, respectively. These expenses as a percentage of revenues decreased to 32.9% for the nine months ended September 30, 2009 from 33.7% in the nine months ended September 30, 2008.
General and administration expenses. General and administration expenses increased $12.7 million, or 28%, to $57.4 million in the nine months ended September 30, 2009 from $44.7 million in the nine months ended September 30, 2008. This increase was principally due to increased employee compensation costs and higher bad debt expense, which increased $4.0 million and $6.0 million, respectively. General and administration expenses as a percentage of revenues decreased slightly to 15.7% for the nine months ended September 30, 2009 from 15.8% in the nine months ended September 30, 2008.
For the nine months ended September 30, 2009, the Company generated $89.8 million of net cash from operating activities compared to $63.0 million for the same period in 2008. Capital expenditures were $22.1 million for the nine months ended September 30, 2009 compared to $15.3 million for the same period in 2008. During the nine months ended September 30, 2009, the Company paid regular, quarterly dividends totaling $21.1 million ($0.50 per share for each quarterly dividend). The Company also received $6.0 million upon the exercise of options to purchase 60,417 shares of Company stock. During the three months ended September 30, 2009, the Company invested $5.0 million for the repurchase of 24,528 shares of stock at an average price of $202.13 per share as part of a previously announced stock repurchase authorization. The Company had no remaining authorization for stock repurchases at September 30, 2009, having spent $70.1 million for repurchases in the nine months ended September 30, 2009. On October 27, 2009, the Company’s Board of Directors amended the share repurchase program to authorize the repurchase of up to $100 million in value of the Company’s common stock over the next 14 months.
STRA is in the portfolios of Steve Mandel of Lone Pine Capital, Ron Baron of Baron Funds, Lee Ainslie of Maverick Capital, Wallace Weitz of Weitz Wallace R & Co.
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