Bridgepoint Education Reports Second Quarter 2013 Results

SAN DIEGO, Aug. 6, 2013 /PRNewswire/ -- Bridgepoint Education (NYSE: BPI), a provider of postsecondary education services, announced today its results for the three months ended June 30, 2013.

Highlights for the second quarter ended June 30, 2013, are as follows:

  • Total student enrollment at period end was 71,685.
  • Revenue was $197.6 million compared with $256.3 million for the same period in 2012.
  • Operating income was $16.0 million compared with $68.8 million for the same period in 2012.
  • Net income was $10.4 million compared with $43.3 million for the same period in 2012.
  • Fully diluted earnings per share was $0.19 compared with $0.77 for the same period in 2012.

"Over the last year, Bridgepoint Education has made major investments across its entire spectrum of operations, with the goal of enhancing educational quality, improving student outcomes, and supporting the success of our students as they progress toward earning their degrees.  These enhancements, together with affordable tuition, strongly position Ashford as a top choice for students seeking a high quality and affordable option for completing their education," said Andrew Clark, CEO of Bridgepoint Education. 

Student Enrollment

Total student enrollment at Bridgepoint Education's academic institutions, Ashford University and University of the Rockies, was 71,685 students at June 30, 2013, compared with 92,620 students at the end of the second quarter of 2012.

New student enrollments for the second quarter of 2013 at Bridgepoint Education's academic institutions were approximately 10,600 compared with new student enrollments of approximately 19,300 for the same period in 2012.

Financial Results

Revenue for the second quarter of 2013 was $197.6 million, compared with revenue of $256.3 million for the same period in 2012.  Revenue for the six months ended June 30, 2013, was $419.6 million, compared to $506.7 million for the same period in 2012.

Operating income for the second quarter of 2013 was $16.0 million compared with operating income of $68.8 million for the same period in 2012. Operating income for the six months ended June 30, 2013 was $59.4 million compared to $119.4 million for the same period in 2012.

Net income for the second quarter of 2013 was $10.4 million compared with net income of $43.3 million for the same period in 2012.  Net income for the six months ended June 30, 2013 was $37.3 million compared to $75.2 million for the same period in 2012.

Fully diluted earnings per share for the second quarter of 2013 was $0.19 compared with $0.77 for the same period in 2012. Fully diluted earnings per share for the six months ended June 30, 2013, was $0.67 compared with $1.34 for the same period in 2012.   The results for the second quarter of 2013 include a pre-tax charge of $5.9 million for severance, which had an impact on second quarter earnings equal to $0.06 per diluted share.

The Company's effective tax rate for the second quarter of 2013 was 39.2%. 

Balance Sheet and Cash Flow   

As of June 30, 2013, the Company had cash, cash equivalents and marketable securities of $536.2 million, compared with $514.7 million as of December 31, 2012.  The Company generated $32.3 million of cash from operating activities in the six months ended June 30, 2013, compared with $76.8 million for the same period in 2012.

Earnings Conference Call and Webcast

Bridgepoint Education will host a conference call at 11:30 a.m. ET (8:30 a.m. PT) today to discuss its latest financial results and recent highlights.  The dial-in number for callers in the United States / Canada is 888-428-9473, and for other callers is 719-325-2463.  The access code for all callers is 7760921.  A live webcast will also be available on the Company's website at www.bridgepointeducation.com/investorrelations.

A replay of the call will be available via telephone through August 14, 2013.  To access the replay, dial (888) 203-1112 in the United States / Canada and (719) 457-0820 for other callers; then enter the access code 7760921.

About Bridgepoint Education

Bridgepoint Education, Inc. (NYSE: BPI) improves the way individuals learn. By harnessing creativity, knowledge and proprietary technologies, such as Constellation, Thuze, and Waypoint Outcomes, Bridgepoint Education has re-engineered the modern student experience with innovative solutions that advance learning. Its academic institutions - Ashford University and University of the Rockies - embody the contemporary college experience. 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 traditional campuses located in Clinton, Iowa (Ashford University), and Colorado Springs, Colorado (University of the Rockies). For more information about Bridgepoint Education, call Paul Goodson, Associate Vice President of Investor Relations at 866.475.0317 x2271.

Forward-Looking Statements

This news release may contain forward-looking statements.  These statements involve risks and uncertainties, and the Company's actual performance may differ materially from those expressed in or suggested by such statements. Risks and uncertainties include, without limitation:

  • the risk that the results of the Company's investments and related enhancements may be different than currently anticipated;
  • failure to comply with the extensive regulatory framework applicable to the Company and its institutions, including Title IV of the Higher Education Act and its regulations, state laws and regulatory requirements, and accrediting agency requirements;
  • adverse regulatory or legislative changes affecting the Company's 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 and recruiting costs; and
  • reputational and other risks related to potential compliance audits, regulatory actions, negative publicity or service disruptions.

More information on potential factors that could affect the Company's performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's periodic reports filed with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 12, 2013, and amended on May 17, 2013, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, to be filed with the SEC. Forward-looking statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements are made, and the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, except as required by law.

 


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










Three Months Ended June 30,


Six Months Ended June 30,


2013


2012


2013


2012

Revenue

$

197,574



$

256,302



$

419,558



$

506,739


Costs and expenses:








Instructional costs and services(1)

106,045



85,279



207,691



169,503


Admissions advisory and marketing(1)

57,582



87,194



115,125



177,236


General and administrative(1)

17,919



15,047



37,294



40,589


Total costs and expenses

181,546



187,520



360,110



387,328


Operating income

16,028



68,782



59,448



119,411


Other income, net

1,031



854



1,849



1,537


Income before income taxes

17,059



69,636



61,297



120,948


Income tax expense

6,691



26,378



23,962



45,719


Net income

$

10,368



$

43,258



$

37,335



$

75,229


Earnings per common share:








Basic

$

0.19



$

0.82



$

0.69



$

1.44


Diluted

0.19



0.77



0.67



1.34










Weighted average number of common shares outstanding used in computing earnings per common share:
















Basic

54,136



52,531



54,132



52,269


Diluted

55,634



56,233



55,488



56,203














(1)

Effective in the fourth quarter of 2012, the Company made changes in the presentation of its operating expenses. The Company has reclassified prior periods to conform to the new presentation. The Company determined that these changes would better reflect industry practices and would provide more meaningful information as well as increased transparency to its operations. The Company believes that the reclassification better represents the operational changes and the business initiatives that have been implemented.



 

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










As of

June 30, 2013


As of

December 31, 2012

ASSETS




Current assets:




Cash and cash equivalents

$

363,121



$

255,965


Investments

86,810



136,967


Accounts receivable, net

60,502



67,927


Deferred income taxes

11,020



10,936


Prepaid expenses and other current assets

20,294



19,810


Total current assets

541,747



491,605


Property and equipment, net

94,719



95,966


Investments

86,283



121,738


Student loans receivable, net

12,722



15,143


Goodwill and intangibles, net

11,686



10,739


Deferred income taxes

13,306



13,266


Other long-term assets

1,529



2,330


Total assets

$

761,992



$

750,787


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

7,361



$

4,588


Accrued liabilities

45,089



44,640


Deferred revenue and student deposits

135,865



175,057


Total current liabilities

188,315



224,285


Rent liability

26,183



25,173


Other long-term liabilities

10,724



9,759


Total liabilities

225,222



259,217


Total stockholders' equity

536,770



491,570


Total liabilities and stockholders' equity

$

761,992



$

750,787










 

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






Six Months Ended

June 30,


2013


2012

Cash flows from operating activities




Net income

$

37,335



$

75,229


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




Provision for bad debts

36,865



33,401


Depreciation and amortization

10,338



8,384


Amortization of premium/discount

3,100



3,594


Deferred income taxes



(2)


Stock-based compensation

7,443



6,541


Excess tax benefit of option exercises



(5,625)


Loss on impairment of student loans receivable

292




Changes in operating assets and liabilities:




Accounts receivable

(28,744)



(62,501)


Prepaid expenses and other current assets

(96)



(5,084)


Student loans receivable

3



(5,626)


Other long-term assets

801



2,071


Accounts payable and accrued liabilities

2,153



18,492


Deferred revenue and student deposits

(39,192)



1,987


Other liabilities

1,975



5,945


Net cash provided by operating activities

32,273



76,806


Cash flows from investing activities




Capital expenditures

(6,778)



(14,957)


Purchases of investments

(26,689)



(108,354)


Restricted cash



25


Capitalized curriculum development costs

(2,353)



(2,935)


Sales and maturities of investments

109,916



88,189


Net cash provided by (used in) investing activities

74,096



(38,032)


Cash flows from financing activities




Proceeds from exercise of stock options

183



1,396


Excess tax benefit of option exercises



5,625


Proceeds from the issuance of stock under employee stock purchase plan

604



707


Proceeds from the exercise of warrants



2


Net cash provided by financing activities

787



7,730


Net increase in cash and cash equivalents

107,156



46,504


Cash and cash equivalents at beginning of period

255,965



133,921


Cash and cash equivalents at end of period

$

363,121



$

180,425










 

Contact: Paul Goodson, Associate Vice President of Investor Relations
866.475.0317 x2271
investorrelations@bridgepointeducation.com

SOURCE Bridgepoint Education, Inc.



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