Perdoceo Education Corporation (NASDAQ:PRDO) today reported operating and financial results for the quarter and year ended December 31, 2022.

Full Year 2022 Results as Compared to Prior Year

Revenue increased 0.3% to $695.2 million, with a 2.7% increase at CTU mostly offset by a 3.1% decline at AIUS.
Operating income decreased 13.0% to $129.6 million, while adjusted operating income decreased 6.6% to $164.0 million.*
Earnings per diluted share was $1.39 as compared to $1.55, while adjusted earnings per diluted share was $1.63 as compared to $1.70.*
Total student enrollments at December 31, 2022 decreased by 3.0%. AIUS experienced a 10.8% decrease in total student enrollments that was partially offset by a 2.0% increase at CTU.
Ended the year with $518.2 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.

Fourth Quarter 2022 Results as Compared to Prior Year Quarter

Revenue increased 10.2% to $176.1 million, with a 13.1% increase at CTU and a 5.9% increase at AIUS.
Operating income decreased 34.4% to $22.7 million, while adjusted operating income decreased 22.9% to $32.4 million, primarily due to certain one-time investments within our academic institutions.*
Earnings per diluted share was $0.23 as compared to $0.35, while adjusted earnings per diluted share was $0.31 as compared to $0.40.*

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

"Overall, we ended 2022 on a positive note as we experienced further improvement in student retention and engagement during the second half of 2022," said Andrew Hurst, President and Chief Executive Officer. "As we look to 2023, we will continue to optimize investments in technology that will drive operational efficiencies across our academic institutions, while remaining committed to further enhancing student experiences and academic outcomes."

REVENUE

For the quarter ended December 31, 2022, revenue of $176.1 million increased 10.2% compared to revenue of $159.9 million for the prior year quarter.
For the year ended December 31, 2022, revenue of $695.2 million increased 0.3% compared to revenue of $693.0 million for the prior year.

	For the Quarter Ended December 31,							For the Year Ended December 31,
Revenue ($ in thousands)	2022⁽¹⁾		2021		% Change			2022⁽¹⁾		2021		% Change
CTU	$	108,446	$	95,904		13.1	%	$	419,617	$	408,549		2.7	%
AIUS		67,445		63,712		5.9	%		274,479		283,360		-3.1	%
Corporate and Other		254		243	NM				1,112		1,125	NM
Total	$	176,145	$	159,859		10.2	%	$	695,208	$	693,034		0.3	%

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

TOTAL STUDENT ENROLLMENTS

As of December 31, 2022, CTU's total student enrollments increased 2.0%, while AIUS' total student enrollments decreased 10.8% as compared to the prior year end.

	At December 31,
Total Student Enrollments⁽¹⁾	2022		2021		% Change
CTU		25,200		24,700		2.0	%
AIUS		14,000		15,700		-10.8	%
Total		39,200		40,400		-3.0	%

(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 our universities.

OPERATING INCOME

For the quarter ended December 31, 2022, operating income decreased by 34.4% to $22.7 million as compared to the prior year quarter.

For the year ended December 31, 2022, operating income decreased by 13.0% to $129.6 million as compared to the prior year.

	For the Quarter Ended December 31,									For the Year Ended December 31,
Operating Income ($ in thousands)	2022⁽¹⁾			2021			% Change			2022⁽¹⁾			2021			% Change
CTU	$	34,082		$	35,723			-4.6	%	$	141,622		$	148,481			-4.6	%
AIUS		3,469			10,255			-66.2	%		33,315			39,130			-14.9	%
Corporate and Other		(14,877	)		(11,402	)	NM				(45,300	)		(38,595	)	NM
Total	$	22,674		$	34,576			-34.4	%	$	129,637		$	149,016			-13.0	%

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

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 December 31, 2022, adjusted operating income of $32.4 million decreased 22.9% compared to adjusted operating income of $42.0 million for the prior year quarter.

For the year ended December 31, 2022, adjusted operating income of $164.0 million decreased 6.6% compared to adjusted operating income of $175.5 million for the prior year.

	For the Quarter Ended December 31,					For the Year Ended December 31,
Adjusted Operating Income ($ in thousands)	2022			2021		2022			2021
Operating income	$	22,674		$	34,576	$	129,637		$	149,016
Depreciation and amortization ⁽¹⁾		4,878			4,964		19,734			16,766
Legal fee expense related to certain matters ⁽²⁾		4,869			2,494		14,597			9,735
Adjusted Operating Income	$	32,421		$	42,034	$	163,968		$	175,517

Increase (Decrease)		*-22.9*	%				*-6.6*	%

(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 December 31, 2022, the Company recorded:

Net income of $16.0 million compared to $24.5 million for the prior year quarter.
Earnings per diluted share of $0.23 compared to $0.35 for the prior year quarter.
Adjusted earnings per diluted share of $0.31 compared to $0.40 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 ended December 31, 2022, the Company recorded:

Net income of $95.9 million compared to $109.6 million for the prior year.
Earnings per diluted share of $1.39 compared to $1.55 for the prior year.
Adjusted earnings per diluted share of $1.63 compared to $1.70 for the prior year. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

	For the Quarter Ended December 31,						For the Year Ended December 31,
	2022			2021			2022			2021

Reported Earnings Per Diluted Share	$	0.23		$	0.35		$	1.39		$	1.55

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽¹⁾		0.03			0.03			0.11			0.06
Legal fee expense related to certain matters ⁽²⁾		0.07			0.04			0.21			0.14
Tax effect of adjustments ⁽³⁾		(0.02	)		(0.02	)		(0.08	)		(0.05	)
Adjusted Earnings Per Diluted Share	$	0.31		$	0.40		$	1.63		$	1.70

(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) 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.

BALANCE SHEET AND CASH FLOW

For the quarter ended December 31, 2022, net cash provided by operating activities was $40.5 million, compared to net cash provided by operating activities of $46.9 million for the prior year quarter.
For the year ended December 31, 2022, net cash provided by operating activities was $148.2 million, compared to net cash provided by operating activities of $191.1 million in the prior year.
At December 31, 2022 and December 31, 2021, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $518.2 million and $499.4 million, respectively.
For the year ended December 31, 2022, the Company repurchased 2.1 million shares for $23.1 million at an average price of $11.02 as compared to 2.3 million shares for $25.3 million at an average price of $10.94 for the year ended December 31, 2021.

	For the Quarter Ended December 31,							For the Year Ended December 31,
Selected Cash Flow Items ($ in thousands)	2022		2021		% Change			2022		2021		% Change
Net cash provided by operating activities	$	40,546	$	46,910		-13.6	%	$	148,186	$	191,116		-22.5	%
Business acquisitions, net of cash acquired	$	45,271	$	196	NM			$	84,308	$	57,143		47.5	%
Capital expenditures	$	3,515	$	4,177		-15.8	%	$	12,620	$	10,453		20.7	%

OUTLOOK

The Company is providing the following 2023 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 March 31,		For the Year Ending December 31,
	OUTLOOK	ACTUAL	OUTLOOK	ACTUAL
	2023	2022	2023	2022
Operating Income	$41.3M - $43.3M	$43.7M	$120.6M - $140.6M	$129.6M
Depreciation and amortization	$5.1M	$4.9M	$17.4M	$19.8M
Legal fee expense related to certain matters ⁽¹⁾	$4.6M	$2.3M	$12.0M	$14.6M
Adjusted Operating Income	$51.0M - $53.0M	$50.9M	$150.0M - $170.0M	$164.0M

Earnings Per Diluted Share	$0.47 - $0.49	$0.46	$1.41 - $1.63	$1.39
Amortization of acquired intangible assets	$0.04	$0.02	$0.12	$0.11
Legal fee expense related to certain matters ⁽¹⁾	$0.07	$0.03	$0.17	$0.21
Tax effect of adjustments	($0.03)	($0.01)	($0.07)	($0.08)
Adjusted Earnings Per Diluted Share	$0.55 - $0.57	$0.50	$1.63 - $1.85	$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 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 loan 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 26.0% for both the first quarter and 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, February 23, 2023 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2022 results and 2023 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 1-844-200-6205 (domestic) or 1-929-526-1599 (international). Both dial-in numbers will use the access code 690929. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/456229475. 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; 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
CONSOLIDATED BALANCE SHEETS
(In thousands)

	December 31,			December 31,
	2022			2021

ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	109,408		$	319,982
Restricted cash		9,476			5,196
Short-term investments		399,315			174,213
Total cash and cash equivalents, restricted cash and short-term investments		518,199			499,391

Student receivables, net		42,551			43,033
Receivables, other		3,457			1,692
Prepaid expenses		8,411			6,919
Inventories		1,904			904
Other current assets		597			2,514
Total current assets		575,119			554,453

NON-CURRENT ASSETS:
Property and equipment, net		26,038			28,355
Right of use asset, net		26,156			36,664
Goodwill		243,540			162,579
Intangible assets, net		53,564			32,208
Student receivables, net		1,850			1,372
Deferred income tax assets, net		24,613			25,114
Other assets		6,488			6,688
TOTAL ASSETS	$	957,368		$	847,433

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating	$	6,555		$	9,400
Accounts payable		13,518			10,838
Accrued expenses:
Payroll and related benefits		40,306			25,312
Advertising and marketing costs		8,977			8,690
Income taxes		7,814			211
Other		14,621			15,180
Deferred revenue		71,590			70,613
Total current liabilities		163,381			140,244

NON-CURRENT LIABILITIES:
Lease liability - operating		27,286			35,549
Other liabilities		40,856			21,530
Total non-current liabilities		68,142			57,079

STOCKHOLDERS' EQUITY:
Preferred stock		-			-
Common stock		894			887
Additional paid-in capital		684,183			674,242
Accumulated other comprehensive loss		(5,447	)		(96	)
Retained earnings		347,839			251,972
Treasury stock		(301,624	)		(276,895	)
Total stockholders' equity		725,845			650,110
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	957,368		$	847,433

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

	For the Quarter Ended December 31,
	2022			% of Total Revenue			2021			% of Total Revenue
REVENUE:
Tuition and fees, net	$	174,012			98.8	%	$	158,185			99.0	%
Other		2,133			1.2	%		1,674			1.0	%
Total revenue		176,145						159,859
OPERATING EXPENSES:
Educational services and facilities		31,217			17.7	%		25,276			15.8	%
General and administrative		114,610			65.1	%		95,043			59.5	%
Depreciation and amortization		4,878			2.8	%		4,964			3.1	%
Asset impairment		2,766			1.6	%		-			0.0	%
Total operating expenses		153,471			87.1	%		125,283			78.4	%
Operating income		22,674			12.9	%		34,576			21.6	%
OTHER INCOME:
Interest income		3,169			1.8	%		136			0.1	%
Interest expense		(102	)		-0.1	%		-			0.0	%
Miscellaneous (expense) income		(1,313	)		-0.7	%		63			0.0	%
Total other income		1,754			1.0	%		199			0.1	%
PRETAX INCOME		24,428			13.9	%		34,775			21.8	%
Provision for income taxes		8,473			4.8	%		10,309			6.4	%

NET INCOME		15,955			9.1	%		24,466			15.3	%

NET INCOME PER SHARE - BASIC:	$	0.24					$	0.35

NET INCOME PER SHARE -DILUTED:	$	0.23					$	0.35

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		67,165						69,565
Diluted		68,423						70,335

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Quarter Ended December 31,
(In Thousands)	2022						2021
NET INCOME	$	15,955					$	24,466
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Foreign currency translation adjustments		217						(2	)
Unrealized gain (loss) on investments		653						(91	)
Total other comprehensive income (loss)		870						(93	)
COMPREHENSIVE INCOME	$	16,825					$	24,373

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts and percentages)

	For the Year Ended December 31,
	2022			% of Total Revenue			2021			% of Total Revenue
REVENUE:
Tuition and fees, net	$	687,672			98.9	%	$	688,415			99.3	%
Other		7,536			1.1	%		4,619			0.7	%
Total revenue		695,208						693,034
OPERATING EXPENSES:
Educational services and facilities		116,723			16.8	%		108,743			15.7	%
General and administrative		426,120			61.3	%		418,509			60.4	%
Depreciation and amortization		19,734			2.8	%		16,766			2.4	%
Asset impairment		2,994			0.4	%		-			0.0	%
Total operating expenses		565,571			81.4	%		544,018			78.5	%
Operating income		129,637			18.6	%		149,016			21.5	%
OTHER INCOME:
Interest income		6,866			1.0	%		930			0.1	%
Interest expense		(400	)		-0.1	%		(920	)		-0.1	%
Miscellaneous (expense) income		(1,834	)		-0.3	%		41			0.0	%
Total other income		4,632			0.7	%		51			0.0	%
PRETAX INCOME		134,269			19.3	%		149,067			21.5	%
Provision for income taxes		38,402			5.5	%		39,430			5.7	%

NET INCOME		95,867			13.8	%		109,637			15.8	%

NET INCOME PER SHARE - BASIC:	$	1.41					$	1.57

NET INCOME PER SHARE -DILUTED:	$	1.39					$	1.55

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		67,934						70,024
Diluted		69,031						70,881

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Year Ended December 31,
(In Thousands)	2022						2021
NET INCOME	$	95,867					$	109,637
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments		(166	)					(177	)
Unrealized loss on investments		(5,185	)					(283	)
Total other comprehensive loss		(5,351	)					(460	)
COMPREHENSIVE INCOME	$	90,516					$	109,177

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	For the Year Ended December 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	95,867		$	109,637
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment		2,994			-
Depreciation and amortization expense		19,734			16,766
Bad debt expense		41,574			44,344
Compensation expense related to share-based awards		8,751			14,972
Deferred income taxes		(720	)		15,330
Changes in operating assets and liabilities:
Student receivables, gross		6,380			6,631
Allowance for credit losses		(38,992	)		(47,417	)
Receivables, other		(1,670	)		5,396
Inventories, prepaid expenses, and other current assets		2,640			3,285
Other non-current assets		843			72
Accounts payable		1,922			(2,744	)
Accrued expenses and other non-current liabilities		22,332			(3,404	)
Deferred revenue		(11,767	)		30,724
Right of use asset and lease liability		(1,702	)		(2,476	)
Net cash provided by operating activities		148,186			191,116

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(492,100	)		(269,739	)
Sales of available-for-sale investments		262,277			391,659
Purchases of property and equipment		(12,620	)		(10,453	)
Business acquisitions, net of cash acquired		(84,308	)		(57,143	)
Net cash (used in) provided by investing activities		(326,751	)		54,324

CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock		(23,117	)		(25,296	)
Issuance of common stock		1,197			861
Payments of employee tax associated with stock compensation		(1,612	)		(5,511	)
Release of cash held in escrow		(4,197	)		-
Net cash used in financing activities		(27,729	)		(29,946	)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(206,294	)		215,494
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period		325,178			109,684
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$	118,884		$	325,178

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION
(In thousands, except percentages)

	For the Quarter Ended December 31,
	2022⁽¹⁾			2021
REVENUE:
CTU	$	108,446		$	95,904
AIUS		67,445			63,712
Corporate and Other		254			243
Total	$	176,145		$	159,859

OPERATING INCOME (LOSS):
CTU	$	34,082		$	35,723
AIUS		3,469			10,255
Corporate and Other		(14,877	)		(11,402	)
Total	$	22,674		$	34,576

OPERATING MARGIN (LOSS):
CTU		31.4	%		37.2	%
AIUS		5.1	%		16.1	%
Corporate and Other	NM			NM
Total		12.9	%		21.6	%

(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 Ended December 31,
	2022⁽¹⁾			2021
REVENUE:
CTU	$	419,617		$	408,549
AIUS		274,479			283,360
Corporate and Other		1,112			1,125
Total	$	695,208		$	693,034

OPERATING INCOME (LOSS):
CTU	$	141,622		$	148,481
AIUS		33,315			39,130
Corporate and Other		(45,300	)		(38,595	)
Total	$	129,637		$	149,016

OPERATING MARGIN (LOSS):
CTU		33.8	%		36.3	%
AIUS		12.1	%		13.8	%
Corporate and Other	NM			NM
Total		18.6	%		21.5	%

(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 December 31,

For the Year Ended December 31,

ACTUAL

Adjusted Operating Income

2022

2021

2022

2021

Operating income

22,674

34,576

129,637

149,016

Depreciation and amortization⁽²⁾

4,878

4,964

19,734

16,766

Legal fee expense related to certain matters ⁽³⁾

4,869

2,494

14,597

9,735

Adjusted Operating Income

32,421

42,034

163,968

175,517

For the Quarter Ending March 31,

For the Year Ending December 31,

OUTLOOK

ACTUAL

OUTLOOK

ACTUAL

2023

2022

2023

2022

Operating income

$41.3M - $43.3M

43,693

$120.6M - $140.6M

129,637

Depreciation and amortization⁽²⁾

5.1M

4,882

17.4M

19,734

Legal fee expense related to certain matters ⁽³⁾

4.6M

2,347

12.0M

14,597

Adjusted Operating Income

$51.0M - $53.0M

50,922

$150.0M - $170.0M

163,968

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

	For the Quarter Ended December 31,						For the Year Ended December 31,
	ACTUAL						ACTUAL
	2022			2021			2022			2021
Reported Earnings Per Diluted Share	$	0.23		$	0.35		$	1.39		$	1.55

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽²⁾		0.03			0.03			0.11			0.06
Legal fee expense related to certain matters ⁽³⁾		0.07			0.04			0.21			0.14
Total pre-tax adjustments	$	0.10		$	0.07		$	0.32		$	0.20
Tax effect of adjustments ⁽⁴⁾		(0.02	)		(0.02	)		(0.08	)		(0.05	)
Total adjustments after tax		0.08			0.05			0.24			0.15
Adjusted Earnings Per Diluted Share	$	0.31		$	0.40		$	1.63		$	1.70


	For the Quarter Ending March 31,						For the Year Ending December 31,
	OUTLOOK			ACTUAL			OUTLOOK			ACTUAL
	2023			2022			2023			2022
Reported Earnings Per Diluted Share	$0.47 - $0.49			$	0.46		$1.41 -$ 1.63			$	1.39

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽²⁾	0.04				0.02		0.12				0.11
Legal fee expense related to certain matters ⁽³⁾	0.07				0.03		0.17				0.21
Total pre-tax adjustments	$	0.11		$	0.05		$	0.29		$	0.32
Tax effect of adjustments ⁽⁴⁾	(0.03)				(0.01	)	($0.07)				(0.08	)
Total adjustments after tax	0.08				0.04		0.22				0.24
Adjusted Earnings Per Diluted Share	$0.55 - $0.57			$	0.50		$1.63 - $1.85			$	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, the CalSouthern acquisition as of July 1, 2022, the DigitalCrafts acquisition as of August 2, 2021 and the Hippo acquisition as of September 10, 2021.

(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) 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 Fourth Quarter and Full Year 2022 Results