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Capella Education Company Reports Fourth Quarter and Full Year 2015 ResultsCapella Education Company (NASDAQ:CPLA), a provider of online post-secondary education, primarily through its wholly owned subsidiary Capella University, today announced financial results for the three months and year ended Dec. 31, 2015. "2015 was a solid year for Capella," said Kevin Gilligan, chairman and chief executive officer. "We achieved our fourth consecutive year of new enrollment growth and our second consecutive year of annual total enrollment and revenue growth. To position Capella for accelerated growth, we are extending our competency-based learning and assessment capabilities to more aggressively pursue evolving market opportunities, including the flexible degree and non-degree markets." For the three months ended Dec. 31, 2015:
For the fiscal year ended Dec. 31, 2015:
Balance Sheet and Cash Flow As of Dec. 31, 2015, the Company had cash and marketable securities of $161.2 million, compared to $167.1 million at Dec. 31, 2014, and no debt for the same periods. Cash flow from operating activities for 2015 was $60.3 million compared to $65.2 million in 2014. Dividend and Share Repurchases The company announced an increase in its quarterly cash dividend to $0.39 per outstanding share of common stock during the fourth quarter of 2015. The dividend was paid on Jan. 15, 2016. The Company repurchased approximately 485,000 shares of Capella stock for total consideration of $26.0 million in fiscal year 2015. In the fourth quarter 2015, the Company repurchased approximately 155,000 shares of Capella stock for total consideration of $7.5 million. The remaining authorization as of the end of the fourth quarter was $56.0 million. Outlook Earlier today Capella announced the planned divestiture of Arden University. "We are proud of how Arden University has aligned with our high standards for academic quality and believe it is well positioned in the UK market, having received Taught Degree Awarding Powers in 2014 and university title in 2015," said Kevin Gilligan, chairman and chief executive officer. "By focusing on our FlexPath programs and opportunities in the non-degree market in the U.S., we believe we will better position Capella for sustained growth." The outlook for the first quarter of 2016 excludes Arden University results in both expectations and comparisons to the first quarter of 2015. Annual 2015 income statements excluding Arden University are attached to this news release, and quarterly and annual 2015 and annual 2014 income statements excluding Arden University are available at Capellaeducation.com in the investor relations section under financial information and attached to the current report on form 8-K the Company filed today. For the first quarter ending March 31, 2016, Capella University new enrollment is expected to be down slightly year-over-year and total enrollment is expected to grow about 1.5 to 2.5 percent year-over-year. Consolidated revenue is expected to be about flat to down 1 percent compared to first quarter 2015 and consolidated operating margin is anticipated to be approximately 14.5 to 15.5 percent of total revenue for the first quarter of 2016, excluding Arden University. "A key goal for Capella University in 2016 is to deliver annual new and total enrollment growth," said Steve Polacek, senior vice president and chief financial officer. "In addition, we are accelerating investments in growth opportunities that we believe create a higher return for our shareholders." Forward-Looking Statements Certain information in this news release does not relate to historical financial information, including statements relating to future prospects and expectations regarding our growth, revenues, enrollment, and operating performance, and should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions investors not to place undue reliance on any such forward-looking statements, which are based on information available at the time those statements are made or management's good faith belief as of that time with regard to future events, and should not be read as a guarantee of future performance or results. Such statements are subject to risks and uncertainties which could cause the company's actual results to differ materially from historical results and from results presently anticipated or projected. The company undertakes no obligation to update its forward-looking statements. Among these risks and uncertainties are any failure to materially comply with the extensive regulatory framework applicable to us, including compliance with Title IV of the Higher Education Act and the regulations thereunder; complying with U.S. Department of Education rules, including those regarding incentive compensation and gainful employment disclosures, certifications and program requirements; maintaining our business in accordance with regional and specialized accreditation standards and state regulatory and program approval requirements; adapting to changes in the administration, funding and availability for Title IV programs; any governmental review of our business, marketing, or financial aid practices, including by any state attorneys general, the federal Consumer Financial Protection Bureau, the Minnesota Office of Higher Education or other state regulatory bodies; successfully growing our FlexPath programs; maintaining and expanding existing commercial relationships with employers and developing new employer and business partner relationships; successfully managing our PhD completion efforts; improving our conversion rate and effectively leveraging our brand-driven marketing strategy; keeping up with advances in technology important to the online learner experience; effectively managing data security risks; improving our learner persistence and cohort retention rate; and managing risks associated with the overall competitive environment and general economic conditions. Other factors that could cause the company's results to differ materially from those contained in its forward-looking statements include those described in the "Risk Factors" section of our most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC), and any updates or developments described in our Quarterly Reports on Form 10-Q and other documents the company files with the SEC. Conference Call Capella will discuss its fourth quarter 2015 results and outlook during a conference call scheduled today, Feb. 11, 2016, at 9:00 a.m. Eastern time (ET). To participate in the live call, investors should dial 800.794.6623 (domestic) or 785.424.1227 (international) at 8:50 a.m. (ET), conference ID# 8176. The webcast, including the accompanying presentation, will be available on the Capella Education Company Web site at www.capellaeducation.com in the investor relations section. A replay of the call will be available starting on Feb. 11 through Feb. 18, 2016, at 800.839.2670 (domestic) or 402.220.7230 (international), conference ID# 8176. It will also be archived at www.capellaeducation.com in the investor relations section. About Capella Education Company Founded in 1991, Capella Education Company (http://www.capellaeducation.com) is a leader in online education, primarily through our wholly owned subsidiary Capella University (http://www.capella.edu), a regionally accredited* online university with approximately 37,000 learners as of Dec. 31, 2015. In addition, Capella Education Company offers online education through Arden University Ltd., formerly called Resource Development International Ltd. (RDI) (http://arden.ac.uk/), an independent provider of United Kingdom (UK) university distance learning qualifications. Capella Education Company also owns Sophia (http://www.sophia.org), an innovative learning platform leveraging technology to support self-paced learning and Capella Learning Solutions (CLS) which provides online non-degree, high-demand, job-ready skills, training solutions and services to individuals and corporate partners. *Capella University is accredited by The Higher Learning Commission.
(a) Enrollment as of December 31, 2015 and 2014 is the enrollment as of the last day of classes for the quarter ended December 31, 2015 and 2014, respectively. CAPELLA EDUCATION COMPANY Non-GAAP Pro-Forma Statement of Income and Earnings per Common Share
Year-Ended December 31, 2015
Non-GAAP Income Statement and Earnings Per Common Share:
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