Message #13 From:
NewsBot Date: October 18, 2006 04:00:00 AM
APOL News Apollo Group, Inc. Reports Fiscal 2006 Fourth Quarter and Year-End Results
PHOENIX--(BUSINESS WIRE)--Apollo Group, Inc. (Nasdaq:APOL) today reported unaudited fiscal 2006
financial results for the fourth quarter and year ended August 31, 2006.
On June 23, 2006, the Company’s Board of
Directors appointed a special committee of two independent members of
the Board of Directors to oversee the previously announced review of the
Company’s practices related to stock option
grants. The special committee has retained independent legal counsel who
engaged outside accounting advisors to assist with the review. The
review is ongoing, however, various deficiencies in the process of
granting and documenting stock options have been identified to date. The
accounting impact of these matters has not been quantified. There can be
no assurances that the results of the investigation will not require a
possible restatement of the Company’s
financial statements when the potential errors are quantified and
assessed. The attached unaudited financial statements do not include the
impact of any unrecorded non-cash equity-based compensation charges that
may be required at the conclusion of the review.
Net income attributed to Apollo Education Group common stock for the
three months ended August 31, 2006, was $93.5 million, or $.54 per
diluted share on 174.5 million weighted average shares outstanding,
compared to $106.2 million, or $.58 per diluted share on 182.9 million
weighted average shares outstanding reported for the same period last
year.
Net income attributed to Apollo Education Group common stock for the
year ended August 31, 2006, was $438.2 million, or $2.49 per diluted
share, compared to $444.7 million, or $2.39 per diluted share reported
for the year ended August 31, 2005.
Total consolidated revenues for Apollo Group, Inc. for the three months
ended August 31, 2006, rose 5.5% to $624.2 million, compared with $591.8
million in the fourth quarter of fiscal 2005. The University of Phoenix
accounted for 86.9% of the $574.4 million in net tuition revenues from
students enrolled in degree programs for the quarter ended August 31,
2006.
Total consolidated revenues for Apollo Group, Inc. for the year ended
August 31, 2006, rose 10.0% to $2.476 billion, compared with $2.251
billion in the same period last year. The University of Phoenix
accounted for 84.2% of the $2.283 billion in net tuition revenues from
students enrolled in degree programs for the year ended August 31, 2006.
Commenting on the quarter, Brian Mueller, President, said, “Since
January, we have focused on making significant strategic changes in two
major areas of our business: marketing and retention. Much of the work
required to launch our marketing and branding efforts is complete and we
are already seeing evidence of its effectiveness. Our retention and
academic strategies are equally significant although more complex, and
as such, they will take longer to implement. However, we are confident
that our decision to invest in these improvements will benefit both our
students and our shareholders over the long run.”
The company will hold a conference call to discuss these earnings
results at 11:00 AM Eastern time, 8:00 AM Phoenix time, on Wednesday,
October 18, 2006. The call may be accessed by dialing 877-292-6888
(domestic) or 706-634-1393 (internationally). The conference ID number
is 8999037. A live webcast of this event may be accessed by visiting the
company website at: www.apollogrp.edu.
A replay of the call will be available on our website or at 706-645-9291
(conf. ID # 8999037) until October 31, 2006.
Apollo Group, Inc. has been providing higher education programs to
working adults for almost 30 years. Apollo Group, Inc., operates through
its subsidiaries: The University of Phoenix, Inc., Institute for
Professional Development, The College for Financial Planning Institutes
Corporation, and Western International University, Inc. The consolidated
enrollment in its educational programs makes it the largest private
institution of higher education in the United States. It offers
educational programs and services at 100 campuses and 159 learning
centers in 39 states, Puerto Rico, Washington DC, Alberta, British
Columbia, Netherlands, and Mexico.
For more information about Apollo Group, Inc. and its subsidiaries, call
800-990-APOL or visit Apollo on the company website at: www.apollogrp.edu.
-Table to Follow-
APOLLO GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended
For the Year Ended
August 31,
August 31,
2006
2005
2006
2005
(In thousands, except per share amounts)
Revenues:
Tuition and other, net
$
624,206
$
591,842
$
2,476,269
$
2,251,472
Costs and expenses:
Instructional costs and services
292,394
253,459
1,083,799
935,743
Selling and promotional
153,792
125,016
544,211
484,770
General and administrative
32,729
44,100
150,991
118,110
478,915
422,575
1,779,001
1,538,623
Income from operations
145,291
169,267
697,268
712,849
Interest income and other, net
5,669
4,592
18,215
16,993
Income before income taxes
150,960
173,859
715,483
729,842
Provision for income taxes
57,510
67,611
277,283
285,111
Net income
$
93,450
$
106,248
$
438,200
$
444,731
Earnings per share attributed to Apollo Education Group
common stock:
Diluted net income per share
$
0.54
$
0.58
$
2.49
$
2.39
Diluted weighted average shares outstanding
174,459
182,903
176,198
186,015
This Condensed Consolidated Statement of Operations does not include
the impact of any unrecorded non-cash equity-based compensation charges
that may be required at the conclusion of the stock option grant review.
APOLLO GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
August 31,
August 31,
2006
2005
(Dollars in thousands)
Assets:
Current assets
Cash and cash equivalents
$
316,984
$
145,607
Restricted cash
230,341
225,706
Marketable securities
45,978
224,112
Receivables, net
204,597
201,615
Income taxes receivable
3,105
Deferred tax assets, net
15,095
14,991
Other current assets
18,611
23,058
Total current assets
834,711
835,089
Property and equipment, net
327,364
268,661
Marketable securities
53,692
97,350
Cost in excess of fair value of assets purchased, net
37,096
37,096
Deferred tax assets, net
32,441
35,756
Other assets
30,202
28,993
Total assets
$
1,315,506
$
1,302,945
Liabilities and Shareholders' Equity:
Current liabilities
Current portion of long-term liabilities
$
22,449
$
18,878
Accounts payable
61,290
40,129
Accrued liabilities
69,813
61,315
Income taxes payable
9,740
Student deposits and current portion of deferred revenue
396,637
387,910
Total current liabilities
550,189
517,972
Deferred tuition revenue, less current portion
384
351
Long-term liabilities, less current portion
80,106
77,748
Total liabilities
630,679
596,071
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value, 1,000,000 shares authorized; none
issued
Apollo Education Group Class A nonvoting common stock, no par
value, 400,000,000 shares authorized; 188,004,000 and 188,002,000
issued at August 31, 2006 and 2005, respectively, and 172,555,000
and 179,184,000 outstanding at August 31, 2006 and 2005,
respectively
103
103
Apollo Education Group Class B voting common stock, no par value,
3,000,000 shares authorized; 475,000 and 477,000 issued and
outstanding at August 31, 2006 and 2005, respectively
1
1
Additional paid-in capital
Apollo Education Group Class A treasury stock, at cost, 15,449,000
and 8,818,000 shares at
August 31, 2006 and 2005, respectively
(1,054,046)
(645,742)
Retained earnings
1,740,426
1,353,650
Accumulated other comprehensive loss
(1,657)
(1,138)
Total shareholders' equity
684,827
706,874
Total liabilities and shareholders' equity
$
1,315,506
$
1,302,945
This Condensed Consolidated Balance Sheet does not include the impact
of any unrecorded non-cash equity-based compensation charges that may be
required at the conclusion of the stock option grant review.
APOLLO GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Year Ended
August 31,
2006
2005
(In thousands)
Cash flows provided by (used for) operating activities:
Net income
$
438,200
$
444,731
Adjustments to reconcile net income to net cash provided by
operating activities:
