Education Management Corp. (EDMC, Financial) filed Quarterly Report for the period ended 2011-12-31.
Education Management Corp. has a market cap of $2.52 billion; its shares were traded at around $20.45 with a P/E ratio of 12.5 and P/S ratio of 0.9.
Net revenues for the six months ended December 31, 2011 decreased 1.3% to $1,419.3 million, compared to $1,437.9 million in the same period a year ago. The decrease in net revenues from the prior year period was primarily driven by a 3.2% decrease in average student enrollment, partially offset by an average tuition increase of 2.6% in the current year period.
General and administrative expense was $388.6 million for the current period, an increase of 4.0% from $373.7 million in the prior year period. As a percentage of net revenues, general and administrative expense increased 138 basis points compared to the six months ended December 31, 2010. As a result of efficiency and centralization efforts, we incurred a $5.2 million charge related to employee severance at several of our education systems during the current period, which accounted for an increase of 36 basis points in general and administrative expense.
Approximately 90.3% and 3.2% of our net revenues were indirectly derived from Title IV programs under the HEA and private loan programs, respectively, in fiscal 2011 compared to 88.5% and 4.5% from Title IV programs and private loan programs, respectively, in fiscal 2010. In fiscal 2011, cash receipts from Title IV programs included $664.6 million of stipends, or financing received by students in excess of tuition and fees they paid to our schools. For purposes of the 90/10 Rule, which tests receipts from Title IV programs on a cash basis and excludes certain receipts such as military aid, the percentage of revenues derived by our institutions from Title IV programs during fiscal 2011 ranged from approximately 88% to 57%, with a weighted average of approximately 78%.
Capital expenditures were $36.1 million, or 2.5% of net revenues, for the six month period ended December 31, 2011 compared to $69.7 million, or 4.8% of net revenues, for the prior year period. We expect capital expenditures in fiscal 2012 to be between 4.0% and 4.5% of net revenues, compared to 4.8% of net revenues in fiscal 2011.
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Education Management Corp. has a market cap of $2.52 billion; its shares were traded at around $20.45 with a P/E ratio of 12.5 and P/S ratio of 0.9.
Highlight of Business Operations:
General and administrative expense was $191.5 million for the current quarter, an increase of 2.4% from $187.0 million in the prior year quarter. As a percentage of net revenues, general and administrative expense increased 175 basis points compared to the quarter ended December 31, 2010. Marketing and admissions costs were 22.0% of net revenues in the current quarter compared to 20.7% of net revenues in the prior year quarter, an increase of 123 basis points. These costs increased in the current quarter primarily due to a decline in the percentage of prospective students who ultimately enrolled in one of our schools. Salaries and benefits expense related to other personnel also increased by 80 basis points due primarily to increased staffing to support certain centralization initiatives and a decrease in operating leverage due to lower student enrollment quarter to quarter.Net revenues for the six months ended December 31, 2011 decreased 1.3% to $1,419.3 million, compared to $1,437.9 million in the same period a year ago. The decrease in net revenues from the prior year period was primarily driven by a 3.2% decrease in average student enrollment, partially offset by an average tuition increase of 2.6% in the current year period.
General and administrative expense was $388.6 million for the current period, an increase of 4.0% from $373.7 million in the prior year period. As a percentage of net revenues, general and administrative expense increased 138 basis points compared to the six months ended December 31, 2010. As a result of efficiency and centralization efforts, we incurred a $5.2 million charge related to employee severance at several of our education systems during the current period, which accounted for an increase of 36 basis points in general and administrative expense.
Approximately 90.3% and 3.2% of our net revenues were indirectly derived from Title IV programs under the HEA and private loan programs, respectively, in fiscal 2011 compared to 88.5% and 4.5% from Title IV programs and private loan programs, respectively, in fiscal 2010. In fiscal 2011, cash receipts from Title IV programs included $664.6 million of stipends, or financing received by students in excess of tuition and fees they paid to our schools. For purposes of the 90/10 Rule, which tests receipts from Title IV programs on a cash basis and excludes certain receipts such as military aid, the percentage of revenues derived by our institutions from Title IV programs during fiscal 2011 ranged from approximately 88% to 57%, with a weighted average of approximately 78%.
Capital expenditures were $36.1 million, or 2.5% of net revenues, for the six month period ended December 31, 2011 compared to $69.7 million, or 4.8% of net revenues, for the prior year period. We expect capital expenditures in fiscal 2012 to be between 4.0% and 4.5% of net revenues, compared to 4.8% of net revenues in fiscal 2011.
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