Company Declares Inaugural Quarterly Cash Dividend on Common Stock

Perdoceo Education Corporation (NASDAQ:PRDO) today reported operating and financial results for the quarter and year to date ended June 30, 2023.

Second Quarter 2023 Results as Compared to Prior Year Quarter

Revenue increased 11.3% to $186.6 million, primarily driven by an 18.7% increase at CTU.
Operating income increased 41.7% to $48.1 million, while adjusted operating income increased 31.5% to $55.2 million.*
Earnings per diluted share were $0.80 as compared to $0.37, while adjusted earnings per diluted share were $0.61 as compared to $0.42.*
Total student enrollments at June 30, 2023 decreased by 5.2%. AIUS experienced a 14.2% decrease in total student enrollments while CTU remained relatively flat.
Ended the quarter with $578.1 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.
Board of Directors declared inaugural dividend for the second quarter of $0.11 per share payable on September 15, 2023.

Year to Date 2023 Results as Compared to Prior Year to Date

Revenue increased 9.0% to $382.2 million, primarily driven by a 14.1% increase at CTU.
Operating income increased 17.8% to $91.4 million, while adjusted operating income increased 16.6% to $108.3 million.*
Earnings per diluted share were $1.30 as compared to $0.83, while adjusted earnings per diluted share were $1.19 as compared to $0.93.*

*See GAAP (U.S. generally accepted accounting principles) to non-GAAP reconciliation attached to this press release

"Second quarter results came in ahead of our expectations, as we experienced further improvements in student retention and engagement, supported by various operating changes and technology upgrades within our onboarding, academic and student support processes," said Andrew Hurst, Chief Executive Officer.

REVENUE

For the quarter ended June 30, 2023, revenue of $186.6 million increased 11.3% compared to revenue of $167.7 million for the prior year quarter.
For the year to date ended June 30, 2023, revenue of $382.2 million increased 9.0% compared to revenue of $350.6 million for the prior year to date.

	For the Quarter Ended June 30,							For the Year to Date Ended June 30,
Revenue ($ in thousands)	2023		2022		% Change			2023		2022		% Change
CTU	$	119,292	$	100,461		18.7	%	$	243,784	$	213,609		14.1	%
AIUS		67,062		66,920		0.2	%		137,902		136,452		1.1	%
Corporate and Other		210		303	NM				476		582	NM
Total	$	186,564	$	167,684		11.3	%	$	382,162	$	350,643		9.0	%

TOTAL STUDENT ENROLLMENTS

As of June 30, 2023, CTU's total student enrollments decreased 0.4%, while AIUS' total student enrollments decreased 14.2% as compared to June 30, 2022.

	At June 30,
Total Student Enrollments⁽¹⁾	2023		2022		% Change
CTU		25,900		26,000		-0.4	%
AIUS		12,100		14,100		-14.2	%
Total		38,000		40,100		-5.2	%

(1)	Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at the Company's universities.

OPERATING INCOME

For the quarter ended June 30, 2023, operating income increased by 41.7% to $48.1 million as compared to the prior year quarter.

For the year to date ended June 30, 2023, operating income increased by 17.8% to $91.4 million as compared to the prior year to date.

	For the Quarter Ended June 30,									For the Year to Date Ended June 30,
Operating Income ($ in thousands)	2023			2022			% Change			2023			2022			% Change
CTU	$	40,451		$	33,008			22.5	%	$	84,141		$	76,034			10.7	%
AIUS		17,078			10,733			59.1	%		29,081			20,256			43.6	%
Corporate and Other		(9,435	)		(9,795	)	NM				(21,792	)		(18,651	)	NM
Total	$	48,094		$	33,946			41.7	%	$	91,430		$	77,639			17.8	%

ADJUSTED OPERATING INCOME

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

For the quarter ended June 30, 2023, adjusted operating income of $55.2 million increased 31.5% compared to adjusted operating income of $41.9 million for the prior year quarter.

For the year to date ended June 30, 2023, adjusted operating income of $108.3 million increased 16.6% compared to adjusted operating income of $92.9 million for the prior year to date.

	For the Quarter Ended June 30,					For the Year to Date Ended June 30,
Adjusted Operating Income ($ in thousands)	2023			2022		2023			2022
Operating income	$	48,094		$	33,946	$	91,430		$	77,639
Depreciation and amortization ⁽¹⁾		4,369			4,909		9,524			9,791
Legal fee expense related to certain matters ⁽²⁾		2,709			3,087		7,328			5,434
Adjusted Operating Income	$	55,172		$	41,942	$	108,282		$	92,864

Increase (Decrease)		*31.5*	%				*16.6*	%

(1)	Amortization relates to definite-lived intangible assets associated with acquisitions.

(2)	Legal fee expense associated with (i) responses to the Department of Education (the "Department") relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended June 30, 2023, the Company recorded:

Net income of $54.7 million compared to $25.8 million for the prior year quarter.
Earnings per diluted share of $0.80 compared to $0.37 for the prior year quarter.
Adjusted earnings per diluted share of $0.61 compared to $0.42 for the prior year quarter. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

For the year to date ended June 30, 2023, the Company recorded:

Net income of $89.2 million compared to $57.8 million for the prior year to date.
Earnings per diluted share of $1.30 compared to $0.83 for the prior year to date.
Adjusted earnings per diluted share of $1.19 compared to $0.93 for the prior year to date. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

	For the Quarter Ended June 30,						For the Year to Date Ended June 30,
	2023			2022			2023			2022

Reported Earnings Per Diluted Share	$	0.80		$	0.37		$	1.30		$	0.83

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽¹⁾		0.03			0.02			0.07			0.05
Legal fee expense related to certain matters ⁽²⁾		0.04			0.05			0.11			0.08
Gain on sale of intangible asset ⁽³⁾		(0.32	)		-			(0.32	)		-
Tax effect of adjustments ⁽⁴⁾		0.06			(0.02	)		0.03			(0.03	)
Adjusted Earnings Per Diluted Share	$	0.61		$	0.42		$	1.19		$	0.93

(1)	Amortization relates to definite-lived intangible assets associated with acquisitions.

(2)	Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

(3)	Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.

(4)	The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

INAUGURAL QUARTERLY DIVIDEND PAYMENT

The Company today announced that its board of directors has adopted a dividend policy. Pursuant to this policy, the board of directors intends to pay quarterly dividends, commencing with the Company's quarter ended June 30, 2023. The board of directors declared the first quarterly dividend as part of the dividend policy of $0.11 per share, which will be paid on September 15, 2023 for holders of record of common stock as of September 1, 2023. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company's available retained earnings, financial condition and other relevant factors.

The Company expects quarterly dividend payments to be an integral part of its balanced capital allocation strategy while also prioritizing investments in organic projects, in particularly technology-related initiatives designed to benefit students and maintaining a strong balance sheet.

BALANCE SHEET AND CASH FLOW

For the quarter ended June 30, 2023 net cash provided by operating activities was $61.6 million, compared to net cash provided by operating activities of $32.6 million for the prior year quarter.
For the year to date ended June 30, 2023, net cash provided by operating activities was $66.2 million, compared to net cash provided by operating activities of $54.8 million in the prior year to date.
As of June 30, 2023 and December 31, 2022, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $578.1 million and $518.2 million, respectively.
The Company's stock repurchase program, which was set to expire on September 30, 2023, has been extended to September 30, 2024. As of June 30, 2023, approximately $24.1 million was available under the stock repurchase program to repurchase outstanding shares of common stock.

	For the Quarter Ended June 30,							For the Year to Date Ended June 30,
Selected Cash Flow Items ($ in thousands)	2023		2022		% Change			2023		2022		% Change
Net cash provided by operating activities	$	61,648	$	32,625		89.0	%	$	66,220	$	54,779		20.9	%
Capital expenditures	$	1,687	$	2,023		-16.6	%	$	3,612	$	6,765		-46.6	%

OUTLOOK

The Company is providing the following third quarter outlook along with a full year outlook, subject to the key assumptions identified below. Please see the GAAP to non-GAAP reconciliation for adjusted operating income and adjusted earnings per diluted share attached to this press release for further details.

	Total Company Outlook
	For Quarter Ending September 30,		For the Year Ending December 31,
	OUTLOOK	ACTUAL	OUTLOOK	ACTUAL
	2023	2022	2023	2022
Operating Income	$38.6M - $40.6M	$29,324	$137.0M - $144.0M	$129,637
Depreciation and amortization	$4.1M	$5,065	$17.6M	19,734
Legal fee expense related to certain matters ⁽¹⁾	$0.3M	$4,294	$10.4M	14,597
Adjusted Operating Income	$43.0M - $45.0M	$38,683	$165.0M - $172.0M	$163,968

Earnings Per Diluted Share	$0.46 - $0.48	$0.32	$1.89 - $1.96	$1.39
Amortization of acquired intangible assets	$0.03	$0.03	$0.12	$0.11
Legal fee expense related to certain matters ⁽¹⁾	-	$0.06	$0.15	$0.21
Gain on sale of intangible asset	-	-	($0.32)	-
Tax effect of adjustments	($0.01)	($0.02)	$0.01	($0.08)
Adjusted Earnings Per Diluted Share	$0.48 - $0.50	$0.39	$1.85 - $1.92	$1.63

(1)	Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.

Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share, which is the most directly comparable GAAP measure to adjusted earnings per diluted share, may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items. The operating income, adjusted operating income, earnings per share and adjusted earnings per share outlook provided above for 2023 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company's programs and trends in student retention and engagement remain consistent with management's estimates, (ii) no significant impact of new or proposed regulations, including recent Department negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, which may require further operational changes in the way the Company's academic institutions enroll, support and educate current and prospective students, among other impacts, (iii) no significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters, (iv) the impact from student aid initiatives implemented by the current administration remains consistent with management's estimates, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 28% for the third quarter and 27% for the full year, and (vi) excludes any future impact from the Company's stock repurchase program. Although these estimates and assumptions are based upon management's good faith beliefs regarding current and future circumstances and actions that may be undertaken, actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance stockholder value may impact the outlook provided above.

CONFERENCE CALL INFORMATION

Perdoceo Education Corporation will host a conference call on Thursday, August 3, 2023 at 5:30 p.m. Eastern time to discuss second quarter and year to date 2023 results and outlook. Interested parties can access the live webcast of the conference call at www.perdoceoed.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 1-888-210-4659 (domestic) or 1-646-960-0383 (international). Both dial-in numbers will use the access code 3224322. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/519983953. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days at www.perdoceoed.com in the Investor Relations section of the website.

ABOUT PERDOCEO EDUCATION CORPORATION

Perdoceo's accredited academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company's academic institutions – Colorado Technical University ("CTU") and the American InterContinental University System ("AIUS" or "AIU System") – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Perdoceo's academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today's busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. For more information, please visit www.perdoceoed.com.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as "believe," "will," "expect," "continue," "outlook," "remain," "focused on," "should" and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment or interest in our programs; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of various versions of "borrower defense to repayment" regulations; the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; the success of our initiatives to improve student experiences, retention and academic outcomes; our continued eligibility to participate in educational assistance programs for veterans or other military personnel; our ability to pay dividends on our common stock and execute our stock repurchase program; increased competition; the impact of management changes; and changes in the overall U.S. economy. Further information about these and other relevant risks and uncertainties may be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and its subsequent filings with the Securities and Exchange Commission.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

	June 30,			December 31,
	2023			2022
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	140,533		$	109,408
Restricted cash		9,476			9,476
Short-term investments		428,104			399,315
Total cash and cash equivalents, restricted cash and short-term investments		578,113			518,199

Student receivables, net		42,322			42,551
Receivables, other		6,896			3,457
Prepaid expenses		12,524			8,411
Inventories		2,875			1,904
Other current assets		664			597
Total current assets		643,394			575,119

NON-CURRENT ASSETS:
Property and equipment, net		24,257			26,038
Right of use asset, net		23,105			26,156
Goodwill		244,114			243,540
Intangible assets, net		49,089			53,564
Student receivables, net		1,184			1,850
Deferred income tax assets, net		21,638			24,613
Other assets		6,889			6,488
TOTAL ASSETS	$	1,013,670		$	957,368

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating	$	5,695		$	6,555
Accounts payable		15,361			13,518
Accrued expenses:
Payroll and related benefits		27,291			40,306
Advertising and marketing costs		6,385			8,977
Income taxes		16,041			7,814
Other		23,008			14,621
Deferred revenue		66,914			71,590
Total current liabilities		160,695			163,381

NON-CURRENT LIABILITIES:
Lease liability - operating		24,357			27,286
Other liabilities		36,186			40,856
Total non-current liabilities		60,543			68,142

STOCKHOLDERS' EQUITY:
Preferred stock		-			-
Common stock		900			894
Additional paid-in capital		688,805			684,183
Accumulated other comprehensive loss		(5,621	)		(5,447	)
Retained earnings		436,996			347,839
Treasury stock		(328,648	)		(301,624	)
Total stockholders' equity		792,432			725,845
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,013,670		$	957,368

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages)

	For the Quarter Ended June 30,
	2023			% of Total Revenue			2022			% of Total Revenue
REVENUE:
Tuition and fees, net	$	184,520			98.9	%	$	165,896			98.9	%
Other		2,044			1.1	%		1,788			1.1	%
Total revenue		186,564						167,684
OPERATING EXPENSES:
Educational services and facilities		32,748			17.6	%		27,269			16.3	%
General and administrative		100,588			53.9	%		101,332			60.4	%
Depreciation and amortization		4,369			2.3	%		4,909			2.9	%
Asset impairment		765			0.4	%		228			0.1	%
Total operating expenses		138,470			74.2	%		133,738			79.8	%
Operating income		48,094			25.8	%		33,946			20.2	%
OTHER INCOME:
Interest income		4,531			2.4	%		1,094			0.7	%
Interest expense		(96	)		-0.1	%		(99	)		-0.1	%
Miscellaneous income (expense)		22,074			11.8	%		(226	)		-0.1	%
Total other income		26,509			14.2	%		769			0.5	%
PRETAX INCOME		74,603			40.0	%		34,715			20.7	%
Provision for income taxes		19,930			10.7	%		8,948			5.3	%

NET INCOME		54,673			29.3	%		25,767			15.4	%

NET INCOME PER SHARE - BASIC:	$	0.81					$	0.38

NET INCOME PER SHARE -DILUTED:	$	0.80					$	0.37

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		67,421						68,341
Diluted		68,533						69,182

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Quarter Ended June 30,
(In Thousands)	2023						2022
NET INCOME	$	54,673					$	25,767
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments		(3	)					(164	)
Unrealized loss on investments		(1,497	)					(1,469	)
Total other comprehensive loss		(1,500	)					(1,633	)
COMPREHENSIVE INCOME	$	53,173					$	24,134

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts and percentages)

	For the Year to Date Ended June 30,
	2023			% of Total Revenue			2022			% of Total Revenue
REVENUE:
Tuition and fees, net	$	377,839			98.9	%	$	347,223			99.0	%
Other		4,323			1.1	%		3,420			1.0	%
Total revenue		382,162						350,643
OPERATING EXPENSES:
Educational services and facilities		66,599			17.4	%		55,357			15.8	%
General and administrative		213,274			55.8	%		207,628			59.2	%
Depreciation and amortization		9,524			2.5	%		9,791			2.8	%
Asset impairment		1,335			0.3	%		228			0.1	%
Total operating expenses		290,732			76.1	%		273,004			77.9	%
Operating income		91,430			23.9	%		77,639			22.1	%
OTHER INCOME:
Interest income		8,349			2.2	%		1,427			0.4	%
Interest expense		(191	)		0.0	%		(202	)		-0.1	%
Miscellaneous income (expense)		22,068			5.8	%		(315	)		-0.1	%
Total other income		30,226			7.9	%		910			0.3	%
PRETAX INCOME		121,656			31.8	%		78,549			22.4	%
Provision for income taxes		32,499			8.5	%		20,704			5.9	%

NET INCOME		89,157			23.3	%		57,845			16.5	%

NET INCOME PER SHARE - BASIC:	$	1.32					$	0.84

NET INCOME PER SHARE -DILUTED:	$	1.30					$	0.83

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		67,328						68,542
Diluted		68,512						69,376

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Year to Date Ended June 30,
(In Thousands)	2023						2022
NET INCOME	$	89,157					$	57,845
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments		23						(245	)
Unrealized loss on investments		(197	)					(2,833	)
Total other comprehensive loss		(174	)					(3,078	)
COMPREHENSIVE INCOME	$	88,983					$	54,767

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

	For the Year to Date Ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	89,157		$	57,845
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment		1,335			228
Gain on sale of asset		(22,086	)		-
Depreciation and amortization expense		9,524			9,791
Bad debt expense		18,927			24,379
Compensation expense related to share-based awards		4,315			4,316
Deferred income taxes		2,975			(557	)
Changes in operating assets and liabilities		(37,927	)		(41,223	)
Net cash provided by operating activities		66,220			54,779

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(159,183	)		(330,797	)
Sales of available-for-sale investments		132,325			134,964
Purchases of property and equipment		(3,612	)		(6,765	)
Business acquisition		-			(7,000	)
Net cash used in investing activities		(30,470	)		(209,598	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		313			849
Purchase of treasury stock		(2,729	)		(15,670	)
Payments of employee tax associated with stock compensation		(2,209	)		(1,612	)
Release of cash held in escrow		-			(3,986	)
Net cash used in financing activities		(4,625	)		(20,419	)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		31,125			(175,238	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period		118,884			325,178
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$	150,009		$	149,940

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages)

	For the Quarter Ended June 30,
	2023 ⁽¹⁾			2022
REVENUE:
CTU	$	119,292		$	100,461
AIUS		67,062			66,920
Corporate and Other		210			303
Total	$	186,564		$	167,684

OPERATING INCOME (LOSS):
CTU	$	40,451		$	33,008
AIUS		17,078			10,733
Corporate and Other		(9,435	)		(9,795	)
Total	$	48,094		$	33,946

OPERATING MARGIN (LOSS):
CTU		33.9	%		32.9	%
AIUS		25.5	%		16.0	%
Corporate and Other	NM			NM
Total		25.8	%		20.2	%

(1)	Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (In thousands, except percentages)

	For the Year to Date Ended June 30,
	2023 ⁽¹⁾			2022
REVENUE:
CTU	$	243,784		$	213,609
AIUS		137,902			136,452
Corporate and Other		476			582
Total	$	382,162		$	350,643

OPERATING INCOME (LOSS):
CTU	$	84,141		$	76,034
AIUS		29,081			20,256
Corporate and Other		(21,792	)		(18,651	)
Total	$	91,430		$	77,639

OPERATING MARGIN (LOSS):
CTU		34.5	%		35.6	%
AIUS		21.1	%		14.8	%
Corporate and Other	NM			NM
Total		23.9	%		22.1	%

(1)	Results of operations include an acquisition completed on December 1, 2022 within CTU and an acquisition completed on July 1, 2022 within AIUS.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS ⁽¹⁾

(In thousands, unless otherwise noted)

For the Quarter Ended June 30,

For the Year to Date Ended June 30,

ACTUAL

Adjusted Operating Income

2023

2022

2023

2022

Operating income

48,094

33,946

91,430

77,639

Depreciation and amortization⁽²⁾

4,369

4,909

9,524

9,791

Legal fee expense related to certain matters ⁽³⁾

2,709

3,087

7,328

5,434

Adjusted Operating Income

55,172

41,942

108,282

92,864

For the Quarter Ending September 30,

For the Year Ending December 31,

OUTLOOK

ACTUAL

OUTLOOK

ACTUAL

2023

2022

2023

2022

Operating income

$38.6M - $40.6M

29,324

$137.0M - $144.0M

129,637

Depreciation and amortization⁽²⁾

$4.1M

5,065

$17.6M

19,734

Legal fee expense related to certain matters ⁽³⁾

$0.3M

4,294

$10.4M

14,597

Adjusted Operating Income

$43.0M - $45.0M

38,683

$165.0M - $172.0M

163,968

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS ⁽¹⁾ (cont'd)

	For the Quarter Ended June 30,						For the Year to Date Ended June 30,
	ACTUAL						ACTUAL
	2023			2022			2023			2022
Reported Earnings Per Diluted Share	$	0.80		$	0.37		$	1.30		$	0.83

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽²⁾		0.03			0.02			0.07			0.05
Legal fee expense related to certain matters ⁽³⁾		0.04			0.05			0.11			0.08
Gain on sale of intangible asset ⁽⁴⁾		(0.32	)		-			(0.32	)		-
Total pre-tax adjustments	$	(0.25	)	$	0.07		$	(0.14	)	$	0.13
Tax effect of adjustments ⁽⁵⁾		0.06			(0.02	)		0.03			(0.03	)
Total adjustments after tax		(0.19	)		0.05			(0.11	)		0.10
Adjusted Earnings Per Diluted Share	$	0.61		$	0.42		$	1.19		$	0.93


	For the Quarter Ending September 30,						For the Year Ending December 31,
	OUTLOOK			ACTUAL			OUTLOOK			ACTUAL
	2023			2022			2023			2022
Reported Earnings Per Diluted Share	$0.46 - $0.48			$	0.32		$1.89 -$1.96			$	1.39

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽²⁾	0.03				0.03		0.12				0.11
Legal fee expense related to certain matters ⁽³⁾		-			0.06		0.15				0.21
Gain on sale of intangible asset ⁽⁴⁾		-			-		(0.32)				-
Total pre-tax adjustments	$0.03			$	0.09		(0.05)			$	0.32
Tax effect of adjustments ⁽⁵⁾	(0.01)				(0.02	)	0.01				(0.08	)
Total adjustments after tax	0.02				0.07		(0.04)				0.24
Adjusted Earnings Per Diluted Share	$0.48 - $0.50			$	0.39		$1.85 - $1.92			$	1.63

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS ⁽¹⁾ (cont'd)

(1)	The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company's historical results and to provide estimates of future performance.
	The Company believes adjusted operating income and adjusted earnings per diluted share allow it to analyze and assess its operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as amortization for acquired intangible assets, significant legal settlements and legal fee expense related to certain matters. The Company believes the items it is adjusting for are not normal operating expenses necessary to run its business. In evaluating adjusted operating income and adjusted earnings per diluted share, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income and adjusted earnings per diluted share should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of liquidity.
	Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company's results of operations and the factors and trends affecting the Company's business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.
	Results of operations include the Coding Dojo acquisition as of December 1, 2022 and the CalSouthern acquisition as of July 1, 2022.
(2)	Amortization for acquired intangible assets relate to definite-lived intangible assets associated with acquisitions.
(3)	Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
(4)	Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.
(5)	The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25.0%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

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Perdoceo Education Corporation Reports Second Quarter and Year to Date 2023 Results