UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One) |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended March 31, 2003 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission file number 1-13144 |
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ITT EDUCATIONAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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36-2061311 |
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(State or other
jurisdiction of |
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(I.R.S. Employer Identification No.) |
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5975 Castle Creek Parkway N. Drive |
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46250-0466 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (317) 594-9499 |
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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
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
44,775,305
Number of shares of Common Stock, $.01 par value, outstanding at March 31, 2003
ITT EDUCATIONAL SERVICES, INC.
Indianapolis, Indiana
Quarterly Report
to Securities and Exchange Commission
March 31, 2003
PART I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
INDEX
1
ITT EDUCATIONAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
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Three Months Ended |
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2003 |
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2002 |
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Revenues |
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$ |
122,399 |
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$ |
107,543 |
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Costs and Expenses |
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Cost of educational services |
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71,732 |
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65,886 |
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Student services and administrative expenses |
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36,998 |
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31,777 |
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Total costs and expenses |
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108,730 |
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97,663 |
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Operating income |
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13,669 |
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9,880 |
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Interest income, net |
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448 |
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487 |
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Income before income taxes |
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14,117 |
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10,367 |
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Income taxes |
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5,435 |
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3,960 |
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Net income |
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$ |
8,682 |
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$ |
6,407 |
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Earnings per common share (a): |
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Basic |
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$ |
0.19 |
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$ |
0.14 |
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Diluted |
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$ |
0.19 |
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$ |
0.14 |
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(a) Earnings per common share in the prior period 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.
(In thousands, except per share data)
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March 31, 2003 |
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December 31, 2002 |
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March 31, 2002 |
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(unaudited) |
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(unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
106,451 |
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$ |
123,934 |
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$ |
95,307 |
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Restricted cash |
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— |
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7,103 |
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— |
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Marketable debt securities |
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28,264 |
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25,671 |
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15,510 |
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Accounts receivable, net |
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9,162 |
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8,973 |
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11,560 |
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Deferred and prepaid income tax |
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2,609 |
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1,988 |
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3,415 |
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Prepaids and other current assets |
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8,232 |
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5,597 |
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12,609 |
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Total current assets |
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154,718 |
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173,266 |
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138,401 |
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Property and equipment, net |
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66,566 |
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62,584 |
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47,469 |
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Direct marketing costs |
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10,555 |
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10,609 |
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10,483 |
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Other assets |
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1,707 |
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1,248 |
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978 |
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Total assets |
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$ |
233,546 |
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$ |
247,707 |
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$ |
197,331 |
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Liabilities and Shareholders' Equity |
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Current liabilities |
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Accounts payable |
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$ |
24,695 |
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$ |
18,162 |
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$ |
27,621 |
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Accrued compensation and benefits |
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4,900 |
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9,196 |
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3,842 |
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Other accrued liabilities |
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9,306 |
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12,140 |
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6,845 |
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Deferred revenue |
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98,323 |
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102,997 |
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77,879 |
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Total current liabilities |
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137,224 |
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142,495 |
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116,187 |
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Deferred income tax |
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5,318 |
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6,204 |
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7,328 |
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Minimum pension liability |
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8,041 |
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8,041 |
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3,022 |
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Other liabilities |
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2,038 |
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1,943 |
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1,587 |
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Total liabilities |
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152,621 |
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158,683 |
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128,124 |
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Shareholders' equity |
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Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued or outstanding |
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–– |
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Common stock, $.01 par value, 150,000,000 shares authorized, 54,068,904 issued (a) |
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540 |
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540 |
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270 |
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Capital surplus |
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45,014 |
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40,393 |
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39,394 |
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Retained earnings |
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181,999 |
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184,409 |
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149,453 |
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Accumulated comprehensive income |
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(4,888 |
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(4,888 |
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(1,837 |
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Treasury stock, 9,293,599, 8,986,267, and 8,279,056 shares (a), at cost |
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(141,740 |
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(131,430 |
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