FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

(Mark One)

ý                                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2002

 

OR

 

o                                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                 to

 

Commission file number    1-13144

 

 

ITT EDUCATIONAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

Registrant’s telephone number, including area code:  (317) 594-9499

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes    ý                     No    o

 

45,447,164

Number of shares of Common Stock, $.01 par value, outstanding at September 30, 2002

 

 

ITT EDUCATIONAL SERVICES, INC.

Indianapolis, Indiana

 

Quarterly Report to Securities and Exchange Commission

September 30, 2002

 

PART I

FINANCIAL INFORMATION

 

 

Item 1.  FINANCIAL STATEMENTS.

 

 

 

INDEX

 

Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2002 and 2001
Consolidated Balance Sheets as of September 30, 2002 and 2001 (unaudited) and December 31, 2001
Consolidated Statements of Cash Flows (unaudited) for the three and nine months ended September 30, 2002 and 2001
Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2002, June 30, 2002 and September 30, 2002 (unaudited) and the year ended December 31, 2001
Notes to Consolidated Financial Statements

 

 

1

 

 

ITT EDUCATIONAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(unaudited)

 

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2002			2001			2002			2001
Revenues		$	120,509		$	106,269		$	338,881		$	298,509
Costs and Expenses
Cost of educational services		67,506			63,678			201,405			185,600
Student services and administrative expenses		34,166			28,740			98,642			84,336
Total costs and expenses		101,672			92,418			300,047			269,936
Operating income		18,837			13,851			38,834			28,573
Interest income, net		755			946			2,052			2,137
Income before income taxes		19,592			14,797			40,886			30,710
Income taxes		7,491			5,618			15,625			11,665
Net income		$	12,101		$	9,179		$	25,261		$	19,045
Earnings per common share (a):
Basic		$	0.26		$	0.19		$	0.55		$	0.40
Diluted		$	0.26		$	0.19		$	0.54		$	0.39

 

(a) Earnings per common share in all prior periods have been restated to reflect the two-for-one stock split  declared on May 10, 2002 that became effective on June 6, 2002.

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

2

 

 

ITT EDUCATIONAL SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

		September 30, 2002			December 31, 2001			September 30, 2001
		(unaudited)						(unaudited)
Assets
Current assets
Cash and cash equivalents		$	94,496		$	63,702		$	69,498
Restricted cash		—			5,462			32
Marketable debt securities		32,080			41,068			38,789
Accounts receivable, net		12,780			12,679			16,147
Deferred and prepaid income tax		3,621			3,989			4,782
Prepaids and other current assets		5,068			7,310			8,610
Total current assets		148,045			134,210			137,858
Property and equipment, net		66,054			49,593			52,228
Direct marketing costs		10,432			10,520			10,889
Other assets		1,313			1,076			1,297
Total assets		$	225,844		$	195,399		$	202,272
Liabilities and Shareholders’ Equity