NEW YORK, Nov. 10, 2014 /PRNewswire/ -- Analyst Brief by Small Cap IR. -- National American University Holdings Inc. (NASDAQ: NAUH) operates as a holding company and operates primarily in the education and learning services industry. The company, through its subsidiaries, provides postsecondary education focused on the needs of working adults and other non-traditional students, offering associate, bachelor, and master degrees in business-related disciplines. The firm is incorporated in 2009 and locates in Rapid City, South Dakota. Its main subsidiary, the National American University was established in 1941 with a main campus in Rapid City, but has been recently expanding to multiple cities in the central United States. The university offers traditional classes, online courses and hybrid centers, providing its students flexibility to obtain the necessary skills and knowledge at times and places convenient to their busy lifestyles.
On October 6th, 2014, National American University Holdings Inc., declared cash dividend of $0.045 for the second quarter of the year. The firm has increased its profitability by 759.6% when compared to the same quarter one year prior, rising from a loss of $0.33 million to a profit of $2.17 million. Also, the firm has been able to maintain a very low debt-to-equity ratio. A debt-to-equity ratio of 0.23, significant lower than the industry average, reflects an effective debt management method. Also, with a quick ratio of 3.10, the firm is capable of covering short-term cash needs.
The company has been through a difficult fundamental stress with both of its major segments being pressured by macro conditions and general economic weakness. There has been changing trends in the demographic base targeted by the university, thus which combined with the company's reduction in counselors, decreased the recent revenue. There appears to have been several metrics that moderated, signaling improved performance both financially and strategically. The balance sheet has adequate strength to maintain the dividend and allow strategy adjustments to occur.
On October 17th, 2014, the university announced appointment of James A. Rowan to Board of Directors. Mr. Rowan has been serving in several boards, and is experienced with the proprietary education and training industries. In 1993, Mr. Rowan joined Legg Mason Capital Markets, which was subsequently acquired by Stifel Nicolaus, and played an integral part in developing the firm's significant investment banking role in the field. The National American University Holdings is currently going under restructuring. As a result, the company's revenue and profitability have been fluctuating since the beginning of the year. However, this is expectable for any firm that goes through restructuring process. As for the National American University Holdings, expected slight decrease in revenue, followed by significant increase in profitability (approximately 10%), implies effective management. With the participation of Mr. Rowan, the firm is expected to have a great improvement in the near future.
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