Grand Canyon Education, Inc. (LOPE) has reported a 12.29 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $29.24 million, or $0.62 a share in the quarter, compared with $33.34 million, or $0.70 a share for the same period last year. Revenue during the quarter grew 8.82 percent to $210.44 million from $193.39 million in the previous year period. Gross margin for the quarter contracted 165 basis points over the previous year period to 41.11 percent. Total expenses were 77.63 percent of quarterly revenues, up from 74.67 percent for the same period last year. That has resulted in a contraction of 296 basis points in operating margin to 22.37 percent.
Operating income for the quarter was $47.07 million, compared with $48.98 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $69.23 million compared with $65.17 million in the prior year period. At the same time, adjusted EBITDA margin contracted 80 basis points in the quarter to 32.90 percent from 33.70 percent in the last year period.
For the fourth-quarter 2016, Grand Canyon Education, Inc. forecasts revenue to be $241.80 million. The company expects diluted earnings per share to be $0.97 for the fourth-quarter.
For fiscal year 2016, Grand Canyon Education, Inc. forecasts revenue to be $870.50 million. The company expects diluted earnings per share to be $3.11.
Operating cash flow improves significantly
Grand Canyon Education, Inc. has generated cash of $214.45 million from operating activities during the nine month period, up 26.89 percent or $45.44 million, when compared with the last year period. The company has spent $166 million cash to meet investing activities during the nine month period as against cash outgo of $152.94 million in the last year period.
Cash flow from financing activities was $3.66 million for the nine month period as against cash outgo of $3.13 million in the last year period.
Cash and cash equivalents stood at $75.14 million as on Sep. 30, 2016, down 3.88 percent or $3.03 million from $78.18 million on Sep. 30, 2015.
Working capital turns negative
Working capital of Grand Canyon Education, Inc. has turned negative to $33.94 million on Sep. 30, 2016 from positive $24.45 million on Sep. 30, 2015. Current ratio was at 0.87 as on Sep. 30, 2016, down from 1.10 on Sep. 30, 2015.
Days sales outstanding went up to 5 days for the quarter compared with 4 days for the same period last year.
At the same time, days payable outstanding went down to 24 days for the quarter from 32 for the same period last year.
Debt moves up
Grand Canyon Education, Inc. has witnessed an increase in total debt over the last one year. It stood at $87.37 million as on Sep. 30, 2016, up 5.10 percent or $4.24 million from $83.13 million on Sep. 30, 2015. Total debt was 8.15 percent of total assets as on Sep. 30, 2016, compared with 9.11 percent on Sep. 30, 2015. Debt to equity ratio was at 0.12 as on Sep. 30, 2016, down from 0.14 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 136.82 for the quarter from 156.50 for the same period last year.
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