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ITT Educational Services Inc. Reports Operating Results (10-Q)

April 22, 2011 | About:
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10qk

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ITT Educational Services Inc. (ESI) filed Quarterly Report for the period ended 2011-03-31.

Itt Educational Services has a market cap of $2.1 billion; its shares were traded at around $73.99 with a P/E ratio of 6.6 and P/S ratio of 1.3. Itt Educational Services had an annual average earning growth of 35.5% over the past 10 years. GuruFocus rated Itt Educational Services the business predictability rank of 4.5-star.

Highlight of Business Operations:

Cost of educational services increased $3.5 million, or 2.6%, to $137.9 million in the three months ended March 31, 2011 compared to $134.4 million in the three months ended March 31, 2010. The primary factors that contributed to this increase included, in order of significance:

Student services and administrative expenses decreased $2.4 million, or 2.2%, to $104.6 million in the three months ended March 31, 2011 compared to $107.0 million in the three months ended March 31, 2010. The principal cause of this decrease was a reduction in the amount of bad debt expense which was partially offset by:

Operating income decreased $2.0 million, or 1.4%, to $140.7 million in the three months ended March 31, 2011 compared to $142.6 million in the three months ended March 31, 2010, as a result of the impact of the factors discussed above in connection with revenue, cost of educational services and student services and administrative expenses. Our operating margin decreased to 36.7% in the three months ended March 31, 2011 compared to 37.1% in the three months ended March 31, 2010, as a result of the impact of the factors discussed above.

Interest income increased $0.1 million, or 17.8%, to $0.8 million in the three months ended March 31, 2011 compared to $0.7 million in the three months ended March 31, 2010, primarily due to amortization of the discount on the Subordinated Note. Interest expense increased $0.1 million, or 32.6%, to $0.6 million in the three months ended March 31, 2011 compared to $0.4 million in the three months ended March 31, 2010, due to an increase in the effective interest rate on our revolving credit facilities.

Cash and cash equivalents were $187.9 million as of March 31, 2011 compared to $163.8 million as of December 31, 2010 and $165.5 million as of March 31, 2010. We also had short-term investments of $152.6 million as of March 31, 2011 compared to $149.2 million as of December 31, 2010 and $156.1 million as of March 31, 2010. In total, our cash and cash equivalents and short-term investments were $340.5 million as of March 31, 2011 compared to $312.9 million as of December 31, 2010 and $321.7 million as of March 31, 2010. The $27.6 million increase in cash and cash equivalents and short-term investments as of March 31, 2011 compared to December 31, 2010 was primarily due to cash generated from operations which was offset by repurchases of our common stock. The $18.8 million increase in cash and cash equivalents and short-term investments as of March 31, 2011 compared to March 31, 2010 was primarily due to cash generated from operations which was offset by repurchases of our common stock.

Operations. Cash from operating activities increased $23.0 million to $182.1 million in the three months ended March 31, 2011 compared to $159.1 million in the three months ended March 31, 2010, primarily due to an increase in funds received from private education loans made to our students by third-party lenders.

Read the The complete Report

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