Bridgepoint Education Reports Fourth Quarter and Full Year 2015 Results

Operating Loss of $42.3 million for 2015 Includes $68.4 million of Restructuring and Impairment Charges

Mar 08, 2016, 16:05 ET from Bridgepoint Education, Inc.

SAN DIEGO, March 8, 2016 /PRNewswire/ -- Bridgepoint Education, Inc. (NYSE: BPI), a provider of postsecondary education services, today announced the results for its fourth quarter and full year ended December 31, 2015.

Financial Results for the Three Months Ended December 31, 2015

Revenue for the fourth quarter of 2015 was $131.4 million, compared with revenue of $147.3 million for the fourth quarter of 2014.

Operating loss for the fourth quarter of 2015 was $6.1 million, compared with operating loss of $10.8 million for the fourth quarter of 2014.

The Company recognized income tax expense of $1.2 million for the fourth quarter of 2015, compared with an income tax benefit of $4.9 million for the fourth quarter of 2014.

Net loss for the fourth quarter of 2015 was $6.7 million, compared with net loss of $5.2 million for the fourth quarter of 2014.

Fully diluted loss per common share for the fourth quarter of 2015 was $0.15, compared with fully diluted loss per common share of $0.12 for the fourth quarter of 2014.

Non-GAAP Financial Results for the Three Months Ended December 31, 2015

Non-GAAP operating income for the fourth quarter of 2015 was $2.9 million, compared with non-GAAP operating income of $6.0 million for the fourth quarter of 2014. Non-GAAP operating income for the fourth quarter of 2015 excludes restructuring and impairment charges of $9.0 million. Non-GAAP operating income for the fourth quarter of 2014 excludes restructuring and impairment charges of $16.8 million.

Non-GAAP net income for the fourth quarter of 2015 was $2.0 million, compared with non-GAAP net income of $5.3 million for the fourth quarter of 2014. Non-GAAP net income for the fourth quarter of 2015 excludes restructuring and impairment charges of $9.0 million and the related tax effect, as well as tax expense of $3.0 million relating to the valuation allowance against deferred tax assets. Non-GAAP net income for the fourth quarter of 2014 excludes restructuring and impairment charges of $16.8 million and the related tax effect.

Non-GAAP fully diluted earnings per common share for the fourth quarter of 2015 was $0.04, compared with non-GAAP fully diluted earnings per common share of $0.12 for the fourth quarter of 2014.

Financial Results for the Year Ended December 31, 2015

Revenue for the year ended December 31, 2015 was $561.7 million, compared with revenue of $638.7 million for the year ended December 31, 2014.

Operating loss for the year ended December 31, 2015 was $42.3 million, compared with operating income of $14.3 million for the year ended December 31, 2014.

The Company recognized income tax expense of $30.3 million for the year ended December 31, 2015, compared with income tax expense of $7.5 million for the year ended December 31, 2014.

Net loss for the year ended December 31, 2015 was $70.5 million, compared with net income of $9.7 million for the year ended December 31, 2014.

Fully diluted loss per common share for the year ended December 31, 2015, was $1.54 compared with fully diluted earnings per common share of $0.21 for the year ended December 31, 2014.

Non-GAAP Financial Results for the Year Ended December 31, 2015

Non-GAAP operating income for the year ended December 31, 2015 was $26.1 million, compared with non-GAAP operating income of $31.1 million for the year ended December 31, 2014. Non-GAAP operating income for the year ended December 31, 2015 excludes restructuring and impairment charges of $68.4 million. Non-GAAP operating income for the year ended December 31, 2014 excludes restructuring and impairment charges of $16.8 million.

Non-GAAP net income for the year ended December 31, 2015 was $15.9 million, compared with non-GAAP net income of $20.2 million for the year ended December 31, 2014. Non-GAAP net income for the year ended December 31, 2015 excludes restructuring and impairment charges of $68.4 million and the related tax effect, as well as tax expense of $43.7 million relating to the valuation allowance against deferred tax assets. Non-GAAP net income for the year ended December 31, 2014 excludes restructuring and impairment charges of $16.8 million and the related tax effect.

Non-GAAP fully diluted earnings per common share for the year ended December 31, 2015 was $0.35, compared with non-GAAP fully diluted earnings per common share of $0.43 for the year ended December 31, 2014.

Balance Sheet and Cash Flow  

As of December 31, 2015, the Company had cash, cash equivalents and investments of $374.0 million, compared with cash, cash equivalents and investments of $356.5 million as of December 31, 2014. 

The Company generated $26.7 million of cash from operating activities for the year ended December 31, 2015, compared with $25.2 million of cash from operating activities for the year ended December 31, 2014.

Student Enrollment

Total student enrollment at the Company's academic institutions, Ashford University and University of the Rockies, was 49,159 at December 31, 2015, compared with total student enrollment of 55,823 at December 31, 2014.

As of December 31, 2015, the 12-month retention for all Ashford students who were active on the last day of the fourth quarter of 2014 was 61.3%.  As of December 31, 2014, the 12-month retention for all Ashford students who were active on the last day of the fourth quarter of 2013 was 65.3%.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for non-GAAP operating income, non-GAAP net income and non-GAAP diluted earnings per common share which exclude restructuring and impairment charges as well as certain income tax adjustments. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and are not based on a comprehensive set of accounting rules. Management believes non-GAAP financial measures are useful in providing investors with an understanding of how specific line items in the consolidated statements of income are affected by these items that may not be indicative of the operating results of the Company's core business. To the extent that other companies use similar methods in calculating and reporting non-GAAP operating results, the Company believes provision of supplemental non-GAAP financial information allows for a meaningful comparison of the Company's performance against the performance of other companies. The Company further believes that these non-GAAP financial measures provide useful information regarding its ongoing operating activities and business trends related to its results of operations, as well as a meaningful comparison with historical financial results. The Company's management and board of directors utilize these non-GAAP financial measures, together with the Company's financial statements prepared in accordance with GAAP, in developing operating budgets and evaluating the Company's performance. These non-GAAP financial measures are intended to supplement GAAP financial information, and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Refer to the accompanying tables for a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Earnings Conference Call and Webcast

Bridgepoint Education will host a conference call and webcast at 5:00 p.m. ET (2:00 p.m. PT) today to discuss its latest financial results and recent highlights. The dial-in number for callers in the United States / Canada is (866) 859-7412, and the dial-in number for other international callers is (832) 900-4623. The access code for all callers is 60376128. A live broadcast of the call will also be available via the Internet at http://ir.bridgepointeducation.com.

A replay of the call will be available via telephone through April 7, 2016. To access the replay, callers in the United States / Canada should dial (855) 859-2056 and other callers should dial (404) 537-3406. The access code for all callers is 60376128.

About Bridgepoint Education

Bridgepoint Education, Inc. (NYSE: BPI) harnesses the latest technology to reimagine the modern student experience. Bridgepoint owns two academic institutions - Ashford University and University of the Rockies. Ashford University offers associate's, bachelor's and master's degree programs while University of the Rockies offers master's and doctoral degree programs.  Both provide progressive online platforms as well as campuses in Iowa and Colorado, respectively.  Bridgepoint stands for greater access, social learning, and exposure to leading minds. For more information, visit http://ir.bridgepointeducation.com/investor-relations/ or www.facebook.com/BridgepointEducation.

Forward-Looking Statements

This news release may contain forward-looking statements, including, without limitation, statements regarding management's intentions, hopes, beliefs or expectations, and statements regarding the Company's outlook for 2016 and beyond. These forward-looking statements are subject to risks and uncertainties that could cause the Company's actual performance or results to differ materially from those expressed in or suggested by such statements. Such risks and uncertainties include, without limitation, the failure to comply with the extensive regulatory framework applicable to the Company and its institutions, adverse administrative, economic, legislative or regulatory changes affecting the Company and its institutions, the imposition of fines or other corrective measures against the Company's institutions, competition in the postsecondary education market and its potential impact on the Company's market share, recruiting costs and tuition rates, reputational and other risks related to potential compliance audits, regulatory actions, negative publicity or service disruptions, and the inability to recruit and retain students or develop new or expanded programs in a timely and cost-effective manner.

Additional information on factors that could affect the Company's performance or results is included from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2015 to be filed with the SEC, and the Company's quarterly reports on Form 10-Q and current reports on Form 8-K. You should not place undue reliance on any forward-looking statements.  Forward-looking statements are made on the basis of management's good faith beliefs, expectations and assumptions regarding future events based on information available at the time such statements are made.  Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update or revise any forward-looking statements to reflect actual results or any changes in assumptions, expectations or other factors affecting such forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws.

 

BRIDGEPOINT EDUCATION, INC. Consolidated Statements of Income (In thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2015

2014

2015

2014

Revenue

$

131,392

$

147,259

$

561,729

$

638,705

Costs and expenses:

Instructional costs and services

65,840

75,438

281,496

315,079

Admissions advisory and marketing

48,948

53,055

197,584

231,134

General and administrative

13,674

12,764

56,588

61,353

Restructuring and impairment charges

9,034

16,828

68,356

16,828

Total costs and expenses

137,496

158,085

604,024

624,394

Operating income (loss)

(6,104)

(10,826)

(42,295)

14,311

Other income, net

607

725

2,106

2,884

Income (loss) before income taxes

(5,497)

(10,101)

(40,189)

17,195

Income tax expense (benefit)

1,190

(4,853)

30,265

7,527

Net income (loss)

$

(6,687)

$

(5,248)

$

(70,454)

$

9,668

Earnings (loss) per common share:

Basic

$

(0.15)

$

(0.12)

$

(1.54)

$

0.21

Diluted

(0.15)

(0.12)

(1.54)

0.21

Weighted average number of common shares outstanding

used in computing earnings per common share:

Basic

45,799

45,381

45,665

45,204

Diluted

45,799

45,381

45,665

46,512

 

BRIDGEPOINT EDUCATION, INC. Consolidated Balance Sheets (In thousands, except par value)

As of December 31,

2015

2014

ASSETS

Current assets:

Cash and cash equivalents

$

282,145

$

207,003

Restricted cash

24,685

25,934

Investments

19,387

12,051

Accounts receivable, net

24,091

21,274

Student loans receivable, net

775

1,003

Deferred income taxes

21,301

Prepaid expenses and other current assets

52,192

22,818

Total current assets

403,275

311,384

Property and equipment, net

21,742

78,219

Investments

47,770

111,557

Student loans receivable, net

7,394

9,510

Goodwill and intangibles, net

21,265

24,775

Deferred income taxes

20,175

Other long-term assets

5,320

2,475

Total assets

$

506,766

$

558,095

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

4,762

$

1,013

Accrued liabilities

74,434

51,403

Deferred revenue and student deposits

88,756

108,048

Total current liabilities

167,952

160,464

Rent liability

20,118

22,098

Other long-term liabilities

15,046

9,652

Total liabilities

203,116

192,214

Total stockholders' equity

303,650

365,881

Total liabilities and stockholders' equity

$

506,766

$

558,095

 

BRIDGEPOINT EDUCATION, INC. Consolidated Statements of Cash Flows (In thousands)

Year Ended December 31,

2015

2014

Cash flows from operating activities

Net income (loss)

$

(70,454)

$

9,668

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for bad debts

29,863

28,184

Depreciation and amortization

19,578

23,317

Amortization of premium/discount

475

206

Deferred income taxes

40,944

(7,096)

Stock-based compensation

9,710

10,558

Excess tax benefit of option exercises

(460)

(1,271)

Loss on impairment of student loans receivable

1,328

2,435

Net gain (loss) on marketable securities

91

(34)

Loss on termination of leased space

17,047

6,470

Loss on impairment of fixed assets

44,949

7,028

Changes in operating assets and liabilities:

Restricted cash

7,913

11,042

Accounts receivable

(32,383)

(27,323)

Prepaid expenses and other current assets

(14,446)

659

Student loans receivable

1,139

809

Other long-term assets

(2,845)

266

Accounts payable and accrued liabilities

1,104

(12,102)

Deferred revenue and student deposits

(19,170)

(24,411)

Other liabilities

(7,952)

(3,754)

Uncertain tax position

284

568

Net cash provided by operating activities

26,715

25,219

Cash flows from investing activities

Capital expenditures

(2,477)

(11,429)

Purchases of investments

(20,280)

(87,933)

Non-operating restricted cash

(6,665)

(30)

Capitalized costs for intangible assets

(2,153)

(3,634)

Sales and maturities of investments

76,197

70,000

Net cash provided by (used in) investing activities

44,622

(33,026)

Cash flows from financing activities

Proceeds from exercise of stock options

284

3,108

Excess tax benefit of option exercises

460

1,271

Proceeds from the issuance of stock under employee stock purchase plan

261

Tax withholding on issuance of stock awards

(1,341)

(2,095)

Proceeds from failed sale-leaseback transaction

4,141

Net cash provided by financing activities

3,805

2,284

Net increase (decrease) in cash and cash equivalents

75,142

(5,523)

Cash and cash equivalents at beginning of period

207,003

212,526

Cash and cash equivalents at end of period

$

282,145

$

207,003

 

BRIDGEPOINT EDUCATION, INC. Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share amounts) (Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2015

2014

2015

2014

Operating Income (Loss) Reconciliation:

GAAP operating income (loss)

$

(6,104)

$

(10,826)

$

(42,295)

$

14,311

Restructuring and impairment charges

9,034

16,828

68,356

16,828

Non-GAAP operating income

$

2,930

$

6,002

$

26,061

$

31,139

Net Income (Loss) Reconciliation:

GAAP net income (loss)

$

(6,687)

$

(5,248)

$

(70,454)

$

9,668

Restructuring and impairment charges

9,034

16,828

68,356

16,828

Income tax expense related to restructuring

and impairment charges (1)

(3,388)

(6,311)

(25,634)

(6,311)

Incremental income tax expense related to

establishment of valuation allowance

2,999

43,665

Non-GAAP net income

$

1,958

$

5,269

$

15,933

$

20,185

Diluted Earnings (Loss) Per Share Reconciliation:

GAAP diluted earnings (loss) per share

$

(0.15)

$

(0.12)

$

(1.54)

$

0.21

Restructuring and impairment charges

0.20

0.37

1.49

0.36

Income tax expense related to restructuring

and impairment charges (1)

(0.07)

(0.13)

(0.56)

(0.14)

Incremental income tax expense related to

establishment of valuation allowance

0.06

0.96

Non-GAAP diluted earnings per share

$

0.04

$

0.12

$

0.35

$

0.43

(1) -  Calculated using a statutory tax rate equal to 37.5%

 

Contact: Kevin Royal, Chief Financial Officer (866) 475-0317 x11120 investorrelations@bridgepointeducation.com

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SOURCE Bridgepoint Education, Inc.



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