RAPID CITY, SD--(Marketwired - Aug 6, 2014) - National American University Holdings, Inc. (
Financial and Operational Highlights
National American University Holdings, Inc. (the "Company") (
Ronald L. Shape, Ed.D., Chief Executive Officer of the Company, commented, "We began implementing changes in our admissions department during the FY 2014 fourth quarter, which included rolling out the new software we invested in and additional training to help improve the efficiency of our enrollment counselors, and are pleased with the initial results from these efforts. Enrollment for the spring 2014 term declined 5.4% to 10,857 students, which was a result of weaker demand among NAU's targeted student demographic as well as a reduction in enrollment counselors. Lower enrollment impacted revenues for the FY 2014 fourth quarter, but as a result of lower SG&A expenses related to decreased admissions staffing, we were able to achieve $1.3 million in net income attributable to the Company during the period, a 16.5% increase from the FY 2013 fourth quarter. We are now focused on providing our enrollment counselors with improved training and technologies that will help them better manage their time and become more effective in the long run."
Dr. Shape continued, "It has been an overall challenging year for our industry, and we have not been immune to the enrollment issues affecting the majority of institutions. However, we continued working on executing our strategic initiatives and were thrilled to launch our doctoral program in community college leadership in the first half of FY 2014, welcoming our first full cohort of doctoral students in January 2014. We are very pleased to say that we continue to realize 100% retention and look forward to welcoming additional cohorts to the doctoral program in this coming fall term."
Operating Review
NAU currently leases 37 physical properties in the states of Colorado, Indiana, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, Oregon, South Dakota and Texas. Several sites operate as hybrid learning centers in strategic geographic locations. These centers utilize physical facilities through which the university provides face-to-face support services as students participate in select, traditional classroom courses while completing their remaining coursework online.
Of NAU's 37 locations, the following sites are pending regulatory approvals:
Enrollment Update
Total NAU student enrollment for the spring term of 2014 decreased 5.4% to 10,857 students from 11,472 during the prior spring term. Students enrolled in 93,742 credit hours compared to 99,146 credit hours during the prior spring term. The current average age of NAU's students continues to be in the mid-30s, with those seeking undergraduate degrees remaining the highest portion of NAU's student population.
The following is a summary of student enrollment at May 31, 2014, and May 31, 2013, by degree level and by instructional delivery method:
Financial Review
The Company, through its wholly owned subsidiary, operates in two business segments: the academic segment, which consists of NAU's undergraduate, graduate, and doctoral education programs and contributes the primary portion of the Company's revenue; and ownership in multiple apartments and condominium complexes from which it derives sales and rental income. The real estate operations generated approximately 0.9% of revenues for the quarter ended May 31, 2014.
Fiscal 2014 Fourth Quarter Financial Results
FY 2014 Financial Results
Quarterly Dividend
The Board of Directors declared a cash dividend in the amount of $0.045 per share on all shares of the Company's common stock outstanding and of record as of the close of business on June 30, 2014, that was paid on or about July 11, 2014.
FY 2015 Outlook
Dr. Shape concluded, "As we continue working on executing our strategic initiatives and taking full advantage of our current resources, we expect enrollments will return to positive growth rates in the second half of FY 2015. We anticipate the changes we have made in our enrollment counselor system to be fully implemented by December 2014 and will continue to evaluate our counselors' performance to gauge its impact. Going into FY 2015, our goal is to increase enrollments at the newer locations we established over the past few years and regain enrollment stability at our more seasoned campus options. The majority of these locations have developed a strong student base and have yielded excellent results, while others need improvement. We will continue to monitor their progress and are committed to executing on our initiatives, while keeping an eye on our expenditures to ensure that expenses are in line with our revenue projections. As we return to positive enrollment growth, we expect to gain greater efficiencies as economies of scale are realized with NAU's expanded physical footprint and increased student-instructor ratios. But first and foremost, we are committed to serving our students and providing them with the support and academic quality they need to succeed, and we look forward to improving and expanding upon our academic offerings in FY 2015."
Conference Call Information
Management will discuss these results in a conference call (with accompanying presentation) on August 7, 2014, at 11:00 a.m. EDT.
The dial-in numbers are:
(877) 407-9078 (U.S.)
(201) 493-6745 (International)
Accompanying Slide Presentation and Webcast
The Company will also have an accompanying slide presentation available in PDF format at the "Investor Relations" section of the NAU website at http://www.national.edu/InvestorRelations. The presentation will be made available 30 minutes prior to the conference call. In addition, the call will be simultaneously webcast over the Internet via the "Investor Relations" section of the NAU website or by clicking on the conference call link: http://national.equisolvewebcast.com/q4-2014.
About National American University Holdings, Inc.
National American University Holdings, Inc., through its wholly owned subsidiary, operates National American University ("NAU"), a regionally accredited, proprietary, multi-campus institution of higher learning offering associate, bachelor's, master's, and doctoral degree programs in technical and professional disciplines. Accredited by The Higher Learning Commission and a member of the North Central Association of Colleges and Schools, NAU has been providing technical and professional career education since 1941. NAU opened its first campus in Rapid City, South Dakota, and has since grown to multiple locations throughout the United States. In 1998, NAU began offering online courses. Today, NAU offers degree programs in traditional, online, and hybrid formats, which provide students increased flexibility to take courses at times and places convenient to their busy lifestyles.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company's business. Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current beliefs and expectations and involve a number of assumptions. These forward-looking statements include outlooks or expectations for earnings, revenues, expenses or other future financial or business performance, strategies or expectations, or the impact of legal or regulatory matters on business, results of operations or financial condition. Specifically, forward-looking statements may include statements relating to the future financial performance of the Company; the ability to continue to receive Title IV funds; the growth of the market for the Company's services; expansion plans and opportunities; consolidation in the market for the Company's services generally; and other statements preceded by, followed by or that include the words "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target" or similar expressions. These forward-looking statements involve a number of known and unknown risks and uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by those forward-looking statements. Other factors that could cause the Company's results to differ materially from those contained in its forward-looking statements are included under, among others, the heading "Risk Factors" in the Company's Annual Report on Form 10-K, which is to be filed on August 8, 2014, and in its other filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this release.
The following table provides a reconciliation of net income attributable to the Company to EBITDA:
EBITDA consists of income attributable to the Company, less income from non-controlling interest, plus loss from non-controlling interest, minus interest income, plus interest expense (which is not related to any debt but to the accounting required for the capital lease), plus income taxes, plus depreciation and amortization. The Company uses EBITDA as a measure of operating performance. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing its operating performance, investors should use EBITDA in addition to, and not as an alternative for, income as determined in accordance with GAAP. Because not all companies use identical calculations, the Company's presentation of EBITDA may not be comparable to similarly titled measures of other companies and is therefore limited as a comparative measure. Furthermore, as an analytical tool, EBITDA has additional limitations, including that (a) it is not intended to be a measure of free cash flow, as it does not consider certain cash requirements such as tax payments; (b) it does not reflect changes in, or cash requirements for, its working capital needs; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements, or future requirements for capital expenditures or contractual commitments. To compensate for these limitations, the Company evaluates its profitability by considering the economic effect of the excluded expense items independently as well as in connection with its analysis of cash flows from operations and through the use of other financial measures.
The Company believes EBITDA is useful to an investor in evaluating its operating performance because it is widely used to measure a company's operating performance without regard to certain non-cash expenses (such as depreciation and amortization) and expenses that are not reflective of its core operating results over time. The Company believes EBITDA presents a meaningful measure of corporate performance exclusive of its capital structure, the method by which assets were acquired and non-cash charges, and provides us with additional useful information to measure its performance on a consistent basis, particularly with respect to changes in performance from period to period.