Capella Education Company, a provider of exclusively online post-secondary education through its subsidiary Capella University, announced financial results for the three and nine months ended Sept. 30.
"Third quarter 2010 was another quarter of strong results," said Kevin Gilligan, chairman and chief executive officer of Capella Education Company. "Quality post-secondary education remains very attractive due to the opportunity for high life-time return on investment for graduates. Capella has built a leadership position in online learning and a strong reputation for academic quality. Coupled with the breadth of our educational program offerings and focus on learner success, Capella is well-positioned to benefit from the long-term growth drivers in the higher education market."
"In the near-term, the market environment is becoming more challenging as competition increases for high-quality prospective learners and consumers react to the prolonged uncertainty around the economy," said Gilligan. "We are responding to this challenge in a disciplined way and remain confident our brand, advanced marketing analytics, and highly differentiated programs will set Capella apart in an increasingly competitive environment. We remain committed to managing our business for sustained long-term growth by differentiating through high-quality learning and career outcomes."
Total enrollment increased by 25.7 percent from the prior year to 38,634 learners. Graduate program enrollment increased by 19.4 percent year-over-year to slightly over 30,000 learners.
-Revenues increased by 25.7 percent to $105.0 million, compared to $83.6 million for the third quarter in 2009.-Operating income for the quarter was $21.0 million, or 20.0 percent of revenue, compared to $14.5 million, or 17.4 percent of revenue for the same period in 2009.Net income for the third quarter was $13.5 million, or $0.80 per share compared to $9.8 million, or $0.57 per share for the same period in 2009.During the quarter, the company repurchased approximately 300,000 shares for total consideration of $21.1 million. The remaining authorization under the current share repurchase program is $61.2 million as of Sept. 30.
For the fourth quarter ending Dec. 31, enrollment is expected to grow 16.0 to 17.0 percent year-over-year with revenue expected to grow 20.0 to 22.0 percent year-over-year. The operating margin is anticipated to be approximately 24.5 to 25.5 percent of total revenue for the fourth quarter of 2010.
Total enrollment growth for fourth quarter 2010 is anticipated to moderate due to tougher comparisons related to significant process improvements implemented in the second half of 2009 and lower new enrollments.
"New enrollment is anticipated to be slightly down from fourth quarter 2009, due to an increasingly challenging external market environment and our continued focus on attracting high-quality learners prepared for Capella's rigorous academic experience," said Steve Polacek, senior vice president and chief financial officer. "We plan to make modest increases in marketing expense while driving productivity and fixed cost leverage to deliver strong operating margin expansion."
Based on reported year-to-date results and expectations for fourth quarter 2010, we anticipate fiscal year 2010 performance to be within the previously provided guidance ranges of 26.5 to 28.5 percent for annual revenue and average quarterly enrollment growth and operating margins of 21.5 to 22.5 percent of revenue.
Capella Education Company is a provider of online education and parent company of Capella University, a regionally accredited online university. Capella University offers online graduate degree programs in business, counseling, education, health administration, human services, information technology, nursing, psychology, public administration, public health, public safety, and social work, and bachelor's degree programs in business, information technology, nursing, psychology, public administration, and public safety.
By Capella Education
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