UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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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 June 30, 2004 |
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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 |
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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13000 North Meridian Street |
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46032-1404 |
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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) 706-9200 |
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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.
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Yes o No ý |
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Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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Yes ý No o |
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45,737,061
Number of shares of Common Stock, $.01 par value, outstanding at June 30, 2004
ITT EDUCATIONAL SERVICES, INC.
Carmel, Indiana
Quarterly Report to Securities and Exchange Commission
June 30, 2004
PART I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
INDEX
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Consolidated Balance Sheets as of June 30, 2004 and 2003 (unaudited) and December 31, 2003 |
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1
ITT EDUCATIONAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
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Three
Months Ended |
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Six Months
Ended |
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2004 |
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2003 |
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2004 |
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2003 |
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Revenues |
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$ |
150,931 |
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$ |
124,831 |
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$ |
292,661 |
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$ |
243,831 |
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Costs and Expenses |
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Cost of educational services |
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78,010 |
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72,449 |
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154,503 |
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140,782 |
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Student services and administrative expenses |
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45,045 |
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36,924 |
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86,494 |
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73,922 |
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Special legal and other investigation costs |
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5,606 |
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— |
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15,306 |
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— |
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Total costs and expenses |
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128,661 |
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109,373 |
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256,303 |
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214,704 |
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Operating income |
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22,270 |
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15,458 |
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36,358 |
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29,127 |
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Interest income, net |
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648 |
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550 |
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1,357 |
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998 |
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Income before income taxes |
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22,918 |
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16,008 |
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37,715 |
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30,125 |
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Income taxes |
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8,938 |
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6,163 |
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14,709 |
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11,598 |
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Net income |
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$ |
13,980 |
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$ |
9,845 |
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$ |
23,006 |
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$ |
18,527 |
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Earnings per common share (basic): |
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$ |
0.31 |
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$ |
0.22 |
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$ |
0.50 |
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$ |
0.41 |
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Earnings per common share (diluted): |
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$ |
0.30 |
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$ |
0.21 |
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$ |
0.49 |
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$ |
0.40 |
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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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June 30, 2004 |
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December 31, 2003 |
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June 30, 2003 |
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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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$ |
183,327 |
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$ |
168,273 |
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$ |
156,212 |
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Restricted cash |
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— |
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8,496 |
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— |
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Short-term investments |
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83,122 |
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63,938 |
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12,188 |
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Accounts receivable, net |
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11,320 |
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9,398 |
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8,322 |
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Deferred and prepaid income tax |
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4,399 |
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2,906 |
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3,125 |
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Prepaids and other current assets |
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6,910 |
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3,635 |
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5,619 |
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Total current assets |
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289,078 |
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256,646 |
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185,466 |
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Property and equipment, net |
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88,464 |
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81,503 |
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74,885 |
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Direct marketing costs |
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12,926 |
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10,844 |
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10,618 |
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Investments |
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18,509 |
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13,467 |
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— |
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Other assets |
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959 |
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810 |
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789 |
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Total assets |
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$ |
409,936 |
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$ |
363,270 |
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$ |
271,758 |
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Liabilities and Shareholders’ Equity |
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Current liabilities |
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Accounts payable |
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$ |
59,347 |
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$ |
36,543 |
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$ |
41,531 |
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Accrued compensation and benefits |
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14,623 |
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16,986 |
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10,979 |
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Other accrued liabilities |
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20,838 |
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18,444 |
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17,785 |
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Deferred revenue |
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122,521 |
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130,364 |
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95,027 |
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Total current liabilities |
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