FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

ITT EDUCATIONAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

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

 

44,853,914

 

Number of shares of Common Stock, $.01 par value, outstanding at June 30, 2003

 

 

ITT EDUCATIONAL SERVICES, INC.

Carmel, Indiana

 

Quarterly Report to Securities and Exchange Commission

June 30, 2003

 

PART I

FINANCIAL INFORMATION

 

 

Item 1.  FINANCIAL STATEMENTS.

 

INDEX

 

Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2003 and 2002

Consolidated Balance Sheets as of June 30, 2003 and 2002 (unaudited) and December 31, 2002

Consolidated Statements of Cash Flows (unaudited) for the three and six months ended June 30, 2003 and 2002

Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2003 and June 30, 2003 (unaudited) and the year ended December 31, 2002

Notes to Consolidated Financial Statements

 

1

 

ITT EDUCATIONAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)

 

		Three Months Ended June 30,						Six Months Ended June 30,
		2003			2002			2003			2002
Revenues (a)		$	124,831		$	108,325		$	243,831		$	213,437
Costs and Expenses (a)
Cost of educational services		72,449			65,508			140,782			128,963
Student services and administrative expenses		36,924			32,698			73,922			64,475
Total costs and expenses		109,373			98,206			214,704			193,438
Operating income		15,458			10,119			29,127			19,999
Interest income, net		550			808			998			1,295
Income before income taxes		16,008			10,927			30,125			21,294
Income taxes		6,163			4,174			11,598			8,134
Net income		$	9,845		$	6,753		$	18,527		$	13,160
Earnings per common share (b):
Basic		$	0.22		$	0.15		$	0.41		$	0.29
Diluted		$	0.21		$	0.14		$	0.40		$	0.28

 

(a)          Certain reclassifications have been made to conform to the 2003 presentation. See Note 3.

 

(b)         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 per share data)

 

		June 30, 2003			December 31, 2002			June 30, 2002
		(unaudited)						(unaudited)
Assets
Current assets
Cash and cash equivalents		$	156,212		$	123,934		$	99,817
Restricted cash		—			7,103			—
Marketable debt securities		12,188			25,671			25,235
Accounts receivable, net		8,322			8,973			11,191
Deferred and prepaid income tax		3,125			1,988			3,139
Prepaids and other current assets		5,619			5,597			8,292
Total current assets		185,466			173,266			147,674
Property and equipment, net		74,885			62,584			48,140
Direct marketing costs		10,618			10,609			10,918
Other assets		789			1,248			882
Total assets		$	271,758		$	247,707		$	207,614
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		$	41,531		$	18,162		$	26,642
Accrued compensation and benefits		10,979			9,196			6,197
Other accrued liabilities		17,785			12,140			6,592