Perdoceo Education Corporation (NASDAQ:PRDO) today reported operating and financial results for the quarter and year ended December 31, 2021.

Full Year 2021 Results as Compared to Prior Year

Revenue increased 0.8 percent to $693.0 million, with both CTU and the AIU System contributing to the growth.
Operating income increased 4.3 percent to $149.0 million while adjusted operating income increased 10.4 percent to $175.5 million.*
Earnings per diluted share was $1.55 as compared to $1.74 while adjusted earnings per diluted share was $1.70 as compared to $1.56.*
Total student enrollments at December 31, 2021 decreased by 5.4 percent, with CTU experiencing a 0.4 percent increase that was offset by a 13.3 percent decrease within the AIU System. Total student enrollments at CTU were positively impacted by the academic calendar redesign.
Ended the year with $499.4 million in cash, cash equivalents, restricted cash and available-for-sale-short-term investments.

Fourth Quarter 2021 Results as Compared to Prior Year Quarter

Revenue decreased 6.6 percent to $159.9 million, primarily driven by a decrease in total student enrollments.
Operating income decreased 4.5 percent to $34.6 million while adjusted operating income increased 1.7 percent to $42.0 million.*
Earnings per diluted share was $0.35 as compared to $0.38 while adjusted earnings per diluted share was $0.40 for both periods.*

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

"We are pleased with our operating performance in 2021. Our business performed well despite recent student engagement issues which we believe relate to the COVID-19 pandemic," said Todd Nelson, Perdoceo's Executive Chairman. "We are also pleased with the two acquisitions completed during 2021 which further broaden the academic offerings at our educational institutions."

Andrew Hurst, recently named as Perdoceo's President and Chief Executive Officer, added, "Our strong management team remains focused on student experiences, retention and academic outcomes while continuing to leverage data analytics and technology to benefit our institutions."

REVENUE

For the quarter ended December 31, 2021, revenue of $159.9 million decreased 6.6 percent compared to revenue of $171.2 million for the prior year quarter.

For the year ended December 31, 2021, revenue of $693.0 million increased 0.8 percent compared to revenue of $687.3 million for the prior year, with both CTU and AIUS contributing to growth.

	For the Quarter Ended December 31,							For the Year Ended December 31,
Revenue ($ in thousands)	2021		2020		% Change			2021		2020		% Change
CTU⁽¹⁾	$	95,904	$	102,741		-6.7	%	$	408,549	$	405,507		0.8	%
AIUS ⁽²⁾		63,712		68,082		-6.4	%		283,360		281,361		0.7	%
Corporate and Other		243		336	NM				1,125		446	NM
Total	$	159,859	$	171,159		-6.6	%	$	693,034	$	687,314		0.8	%

(1)	CTU's results of operations include the acquisition of Hippo Education LLC (the "Hippo acquisition") commencing on the September 10, 2021 date of acquisition.

(2)	AIUS' results of operations include the acquisition of substantially all of the assets of DigitalCrafts (the "DigitalCrafts acquisition") commencing on the August 2, 2021 date of acquisition and the acquisition of substantially all of the assets of Trident University International (the "Trident acquisition") commencing on the March 2, 2020 date of acquisition.

TOTAL STUDENT ENROLLMENTS

CTU's total student enrollments increased 0.4 percent as of December 31, 2021, while AIUS' total student enrollments decreased 13.3 percent. CTU's total student enrollments were positively impacted by the academic calendar redesign.

	At December 31,
Total Student Enrollments ⁽¹⁾	2021		2020		% Change
CTU		24,700		24,600		0.4	%
AIUS		15,700		18,100		-13.3	%
Total		40,400		42,700		-5.4	%

(1)	Total student enrollments do not include learners participating in non-degree professional development and continuing education offerings.

OPERATING INCOME

For the quarter ended December 31, 2021, operating income decreased by 4.5 percent to $34.6 million as compared to the prior year quarter.

For the year ended December 31, 2021, operating income increased by 4.3 percent to $149.0 million as compared to the prior year.

	For the Quarter Ended December 31,									For the Year Ended December 31,
Operating Income ($ in thousands)	2021			2020			% Change			2021			2020			% Change
CTU ⁽¹⁾	$	35,723		$	37,802			-5.5	%	$	148,481		$	138,490			7.2	%
AIUS ⁽²⁾		10,255			5,457			87.9	%		39,130			30,822			27.0	%
Corporate and Other ⁽³⁾		(11,402	)		(7,070	)		-61.3	%		(38,595	)		(26,378	)		-46.3	%
Total	$	34,576		$	36,189			-4.5	%	$	149,016		$	142,934			4.3	%

(1)	CTU's results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition.

(2)	AIUS' results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition.

(3)	Corporate and Other includes 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

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, 2021, adjusted operating income of $42.0 million increased 1.7 percent compared to adjusted operating income of $41.3 million for the prior year quarter.

For the year ended December 31, 2021, adjusted operating income of $175.5 million increased 10.4 percent compared to adjusted operating income of $159.0 million for the prior year.

	For the Quarter Ended December 31,					For the Year Ended December 31,
Adjusted Operating Income ($ in thousands)	2021			2020		2021			2020
Operating income	$	34,576		$	36,189	$	149,016		$	142,934
Depreciation and amortization⁽¹⁾		4,964			4,001		16,766			14,786
Legal fee expense related to certain matters ⁽²⁾		2,494			1,129		9,735			1,296
Adjusted Operating Income	$	42,034		$	41,319	$	175,517		$	159,016

Increase (Decrease)		*1.7*	%				*10.4*	%

(1)	Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo 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.

NET INCOME AND EARNINGS PER DILUTED SHARE

For the quarter ended December 31, 2021, the Company recorded:

Net income of $24.5 million compared to $27.1 million for the prior year quarter.
Earnings per diluted share of $0.35 compared to $0.38 for the prior year quarter.
Adjusted earnings per diluted share of $0.40 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, 2021, the Company recorded:

Net income of $109.6 million compared to $124.3 million for the prior year.
Earnings per diluted share of $1.55 compared to $1.74 for the prior year.
Adjusted earnings per diluted share of $1.70 compared to $1.56 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,
	2021			2020		2021			2020

Reported Earnings Per Diluted Share	$	0.35		$	0.38	$	1.55		$	1.74

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽¹⁾		0.03			0.01		0.06			0.04
Legal fee expense related to certain matters ⁽²⁾		0.04			0.01		0.14			0.02
Tax effect of adjustments ⁽³⁾		(0.02	)		-		(0.05	)		(0.02	)
Release of valuation allowance ⁽⁴⁾		-			-		-			(0.22	)
Adjusted Earnings Per Diluted Share	$	0.40		$	0.40	$	1.70		$	1.56

(1)	Amortization for acquired intangible assets relates to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo 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.

(4)	The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance.

BALANCE SHEET AND CASH FLOW

For the quarter ended December 31, 2021, net cash provided by operating activities was $46.9 million, compared to net cash provided by operating activities of $42.2 million during the prior year quarter.
For the year ended December 31, 2021, net cash provided by operating activities was $191.1 million, compared to net cash provided by operating activities of $180.0 million during the prior year.
At December 31, 2021 and December 31, 2020, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $499.4 million and $410.4 million, respectively.

	For the Quarter Ended December 31,							For the Year Ended December 31,
Selected Cash Flow Items ($ in thousands)	2021		2020		% Change			2021		2020		% Change
Net cash provided by operating activities	$	46,910	$	42,203		11.2	%	$	191,116	$	179,956		6.2	%
Business acquisitions, net of cash acquired	$	196	$	-	NM			$	57,143	$	39,819		43.5	%
Capital expenditures	$	4,177	$	2,289		82.5	%	$	10,453	$	9,768		7.0	%

STOCK REPURCHASE PROGRAM

The Board of Directors of the Company approved a stock repurchase program commencing March 1, 2022 which authorizes the Company to repurchase up to $50.0 million of the Company's outstanding common stock. The program expires September 30, 2023 and replaces the existing stock repurchase program that expires on February 28, 2022.

OUTLOOK

The Company is providing the following 2022 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
	2022	2021	2022	2021
Operating Income	$40.8M - $42.8M	$40.6M	$106.7M - $119.7M	$149.0M
Depreciation and amortization	$5.0M	$4.0M	$20.7M	$16.8M
Legal fee expense related to certain matters ⁽¹⁾	$2.2M	$0.3M	$7.6M	$9.7M
Adjusted Operating Income	$48.0M - $50.0M	$44.9M	$135.0M - $148.0M	$175.5M

Earnings Per Diluted Share	$0.43 - $0.45	$0.43	$1.13 - $1.27	$1.55
Amortization of acquired intangible assets	$0.02	$0.01	$0.10	$0.06
Legal fee expense related to certain matters ⁽¹⁾	$0.03	-	$0.11	$0.14
Tax effect of adjustments	($0.01)	-	($0.06)	($0.05)
Adjusted Earnings Per Diluted Share	$0.47 - $0.49	$0.44	$1.28 - $1.42	$1.70

(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 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 2022 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company's programs remains consistent with recent experience, (ii) no significant impact of new or proposed regulations, including recent Department of Education negotiated rulemaking initiatives, or other adverse changes in the legal or regulatory environment, (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) no significant future operating or financial impacts relating to the COVID-19 pandemic, (v) earnings per diluted share outlook assumes an effective income tax rate of approximately 27.0% for the first quarter and 26.0% for the full year, and (vi) any future impact from the Company's stock repurchase program is excluded. 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 24, 2022 at 5:30 p.m. Eastern time to discuss fourth quarter and full year 2021 results and 2022 outlook. Interested parties can access the live webcast of the conference 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 553619. Viewers can also access the conference call by following this link https://events.q4inc.com/attendee/364159545. 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 following the call at www.perdoceoed.com in the Investor Relations section of the website.

ABOUT PERDOCEO EDUCATION CORPORATION

Perdoceo's 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 accredited 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 professional development and continuing education offerings. Perdoceo's universities 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 support students and enhance learning. 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; 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 which may continue to be impacted by the COVID-19 pandemic. 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, 2021 and its subsequent filings with the Securities and Exchange Commission.

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

	December 31,			December 31,
	2021			2020

ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	319,982		$	105,684
Restricted cash		5,196			4,000
Short-term investments		174,213			300,676
Total cash and cash equivalents, restricted cash and short-term investments		499,391			410,360

Student receivables, net		43,033			44,682
Receivables, other		1,692			2,873
Prepaid expenses		6,919			8,209
Inventories		904			596
Other current assets		2,514			341
Total current assets		554,453			467,061

NON-CURRENT ASSETS:
Property and equipment, net		28,355			27,761
Right of use asset, net		36,664			44,773
Goodwill		162,579			118,312
Intangible assets, net		32,208			15,522
Student receivables, net		1,372			1,303
Deferred income tax assets, net		25,114			40,351
Other assets		6,688			6,434
TOTAL ASSETS	$	847,433		$	721,517

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability - operating	$	9,400		$	9,789
Accounts payable		10,838			13,259
Accrued expenses:
Payroll and related benefits		25,312			22,661
Advertising and marketing costs		8,690			10,249
Income taxes		211			1,402
Other		15,180			11,921
Deferred revenue		70,613			34,534
Total current liabilities		140,244			103,815

NON-CURRENT LIABILITIES:
Lease liability - operating		35,549			43,405
Other liabilities		21,530			18,390
Total non-current liabilities		57,079			61,795

STOCKHOLDERS' EQUITY:
Preferred stock		-			-
Common stock		887			873
Additional paid-in capital		674,242			658,423
Accumulated other comprehensive (loss) income		(96	)		364
Retained earnings		251,972			142,335
Treasury stock		(276,895	)		(246,088	)
Total stockholders' equity		650,110			555,907
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	847,433		$	721,517

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

	For the Quarter Ended December 31,
	2021			% of Total Revenue			2020			% of Total Revenue
REVENUE:
Tuition and fees, net	$	158,185			99.0	%	$	170,215			99.4	%
Other		1,674			1.0	%		944			0.6	%
Total revenue		159,859						171,159
OPERATING EXPENSES:
Educational services and facilities		25,276			15.8	%		28,619			16.7	%
General and administrative		95,043			59.5	%		102,350			59.8	%
Depreciation and amortization		4,964			3.1	%		4,001			2.3	%
Total operating expenses		125,283			78.4	%		134,970			78.9	%
Operating income		34,576			21.6	%		36,189			21.1	%
OTHER INCOME:
Interest income, net		136			0.1	%		576			0.3	%
Miscellaneous income		67			0.0	%		113			0.1	%
Total other income		203			0.1	%		689			0.4	%
PRETAX INCOME		34,779			21.8	%		36,878			21.5	%
Provision for income taxes		10,309			6.4	%		9,806			5.7	%

INCOME FROM CONTINUING OPERATIONS		24,470			15.3	%		27,072			15.8	%
Loss from discontinued operations, net of tax		(4	)		0.0	%		(21	)		0.0	%
NET INCOME		24,466			15.3	%		27,051			15.8	%

NET INCOME PER SHARE - BASIC:	$	0.35					$	0.39

NET INCOME PER SHARE -DILUTED:	$	0.35					$	0.38

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		69,565						69,555
Diluted		70,335						70,968

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Quarter Ended December 31,
(In Thousands)	2021						2020
NET INCOME	$	24,466					$	27,051
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments		(2	)					71
Unrealized loss investments		(91	)					(310	)
Total other comprehensive loss		(93	)					(239	)
COMPREHENSIVE INCOME	$	24,373					$	26,812

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

	For the Year Ended December 31,
	2021			% of Total Revenue			2020			% of Total Revenue
REVENUE:
Tuition and fees, net	$	688,415			99.3	%	$	684,579			99.6	%
Other		4,619			0.7	%		2,735			0.4	%
Total revenue		693,034						687,314
OPERATING EXPENSES:
Educational services and facilities		108,743			15.7	%		111,768			16.3	%
General and administrative		418,509			60.4	%		417,214			60.7	%
Depreciation and amortization		16,766			2.4	%		14,786			2.2	%
Asset impairment		-			0.0	%		612			0.1	%
Total operating expenses		544,018			78.5	%		544,380			79.2	%
Operating income		149,016			21.5	%		142,934			20.8	%
OTHER INCOME:
Interest income		930			0.1	%		3,852			0.6	%
Interest expense		(920	)		-0.1	%		(167	)		0.0	%
Miscellaneous income		58			0.0	%		211			0.0	%
Total other income		68			0.0	%		3,896			0.6	%
PRETAX INCOME		149,084			21.5	%		146,830			21.4	%
Provision for income taxes		39,430			5.7	%		22,476			3.3	%

INCOME FROM CONTINUING OPERATIONS		109,654			15.8	%		124,354			18.1	%
Loss from discontinued operations, net of tax		(17	)		0.0	%		(90	)		0.0	%
NET INCOME		109,637			15.8	%		124,264			18.1	%

NET INCOME PER SHARE - BASIC:	$	1.57					$	1.79

NET INCOME PER SHARE -DILUTED:	$	1.55					$	1.74

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		70,024						69,414
Diluted		70,881						71,265

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	For the Year Ended December 31,
(In Thousands)	2021						2020
NET INCOME	$	109,637					$	124,264
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments		(177	)					199
Unrealized loss on investments		(283	)					(179	)
Total other comprehensive (loss) income		(460	)					20
COMPREHENSIVE INCOME	$	109,177					$	124,284

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

	For the Year Ended December 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	109,637		$	124,264
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment		-			612
Depreciation and amortization expense		16,766			14,786
Bad debt expense		44,344			47,556
Compensation expense related to share-based awards		14,972			13,379
Deferred income taxes		15,330			20,353
Changes in operating assets and liabilities:
Student receivables, gross		6,631			7,092
Allowance for credit losses		(47,417	)		(39,546	)
Receivables, other		5,396			(99	)
Inventories, prepaid expenses, and other current assets		3,285			3,031
Other non-current assets		72			151
Accounts payable		(2,744	)		374
Accrued expenses and other non-current liabilities		(3,404	)		(11,135	)
Deferred revenue		30,724			5,138
Right of use asset and lease liability		(2,476	)		(6,000	)
Net cash provided by operating activities		191,116			179,956

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(269,739	)		(403,673	)
Sales of available-for-sale investments		391,659			287,249
Purchases of property and equipment		(10,453	)		(9,768	)
Business acquisitions, net of acquired cash		(57,143	)		(39,819	)
Other		-			103
Net cash provided by (used in) investing activities		54,324			(165,908	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock		(25,296	)		(17,862	)
Issuance of common stock		861			5,723
Payments of employee tax associated with stock compensation		(5,511	)		(912	)
Net cash used in financing activities		(29,946	)		(13,051	)

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		215,494			997

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period		109,684			108,687
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$	325,178		$	109,684

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

	For the Quarter Ended December 31,
	2021			2020
REVENUE:
CTU ⁽¹⁾	$	95,904		$	102,741
AIUS ⁽²⁾		63,712			68,082
Corporate and Other		243			336
Total	$	159,859		$	171,159

OPERATING INCOME (LOSS):
CTU ⁽¹⁾	$	35,723		$	37,802
AIUS ⁽²⁾		10,255			5,457
Corporate and Other		(11,402	)		(7,070	)
Total	$	34,576		$	36,189

OPERATING MARGIN (LOSS):
CTU ⁽¹⁾		37.2	%		36.8	%
AIUS ⁽²⁾		16.1	%		8.0	%
Corporate and Other	NM			NM
Total		21.6	%		21.1	%

(1)	CTU's results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition.

(2)	AIUS' results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition.

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

	For the Year Ended December 31,
	2021			2020
REVENUE:
CTU ⁽¹⁾	$	408,549		$	405,507
AIUS ⁽²⁾		283,360			281,361
Corporate and Other		1,125			446
Total	$	693,034		$	687,314

OPERATING INCOME (LOSS):
CTU ⁽¹⁾	$	148,481		$	138,490
AIUS ⁽²⁾		39,130			30,822
Corporate and Other		(38,595	)		(26,378	)
Total	$	149,016		$	142,934

OPERATING MARGIN (LOSS):
CTU ⁽¹⁾		36.3	%		34.2	%
AIUS ⁽²⁾		13.8	%		11.0	%
Corporate and Other	NM			NM
Total		21.5	%		20.8	%

(1)	CTU's results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition.

(2)	AIUS' results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition.

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

2021

2020

2021

2020

Operating income

34,576

36,189

149,016

142,934

Depreciation and amortization⁽²⁾

4,964

4,001

16,766

14,786

Legal fee expense related to certain matters ⁽³⁾

2,494

1,129

9,735

1,296

Adjusted Operating Income ⁽⁴⁾

42,034

41,319

175,517

159,016

For the Quarter Ending March 31,

For the Year Ending December 31,

OUTLOOK

ACTUAL

OUTLOOK

ACTUAL

2022

2021

2022

2021

Operating income

$40.8M - $42.8M

40,617

$106.7M - $119.7M

149,016

Depreciation and amortization⁽²⁾

$5.0M

4,002

$20.7M

16,766

Legal fee expense related to certain matters ⁽³⁾

$2.2M

242

$7.6M

9,735

Adjusted Operating Income ⁽⁴⁾

$48.0M - $50.0M

44,861

$135.0M - $148.0M

175,517

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
	2021			2020		2021			2020
Reported Earnings Per Diluted Share	$	0.35		$	0.38	$	1.55		$	1.74

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽²⁾		0.03			0.01		0.06			0.04
Legal fee expense related to certain matters ⁽³⁾		0.04			0.01		0.14			0.02
Total pre-tax adjustments	$	0.07		$	0.02	$	0.20		$	0.06
Tax effect of adjustments ⁽⁵⁾		(0.02	)		-		(0.05	)		(0.02	)
Release of valuation allowance ⁽⁶⁾		-			-		-			(0.22	)
Total adjustments after tax		0.05			0.02		0.15			(0.18	)
Adjusted Earnings Per Diluted Share ⁽⁴⁾	$	0.40		$	0.40	$	1.70		$	1.56


	For the Quarter Ending March 31,					For the Year Ending December 31,
	OUTLOOK			ACTUAL		OUTLOOK			ACTUAL
	2022			2021		2022			2021
Reported Earnings Per Diluted Share	$0.43 - $0.45			$	0.43	$1.13 - $1.27			$	1.55

Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets ⁽²⁾	0.02				0.01	0.10				0.06
Legal fee expense related to certain matters ⁽³⁾	0.03				-	0.11				0.14
Total pre-tax adjustments	$0.05			$	0.01	$0.21			$	0.20
Tax effect of adjustments ⁽⁵⁾	(0.01		)		-	(0.06		)		(0.05	)
Total adjustments after tax	0.04				0.01	0.15				0.15
Adjusted Earnings Per Diluted Share ⁽⁴⁾	$0.47 - $0.49			$	0.44	$1.28 - $1.42			$	1.70

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. 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 DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition, the Hippo acquisition commencing on the September 10, 2021 date of acquisition and the Trident acquisition commencing on the March 2, 2020 date of acquisition.

(2)	Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident, DigitalCrafts and Hippo 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 Company began adjusting for legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts, during the second quarter of 2021. The Company believes that these expenses are not reflective of underlying operating performance. Also, the Company no longer adjusts operating income for expenses related to the vacated facilities at closed campuses as these expenses are expected to be immaterial. Prior period amounts were recast for these items to maintain comparability.

(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. There is no tax effect applied to the adjustment related to the release of the valuation allowance as this is an adjustment for income tax.

(6)	The release of a valuation allowance in the amount of $16.0 million was a result of the determination during the period that it was more likely than not that the Company would utilize its deferred tax assets associated with the portion of the foreign tax credit carryforward supported by an overall domestic loss account balance.

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Perdoceo Education Corporation Reports Fourth Quarter and Full Year 2021 Results