Bridgepoint Education Reports Third Quarter 2012 Results

SAN DIEGO, Nov. 5, 2012 /PRNewswire/ -- Bridgepoint Education, Inc. (NYSE: BPI), a provider of postsecondary education services, today announced its results for the three and nine months ended September 30, 2012. The company also reported that Dr. Gregory Geoffroy joined the Ashford University Board of Trustees on October 25, 2012 and on November 2, 2012 he was elected to serve as its new chairman beginning in March of 2013.   

Dr. Geoffroy brings a distinguished career in higher education to the Ashford Board of Trustees. He is president emeritus of Iowa State University in Ames, Iowa, where he currently serves as a professor of chemistry and where he spent the previous ten years as the institution's president. During Dr. Geoffroy's tenure as president, Iowa State expanded student diversity, saw major improvements to its campus infrastructure, and established the Bioeconomy Institute. 

"Our academic institutions are committed to being leaders in affordability, access, academic quality and student success. The election of Dr. Geoffroy to lead Ashford University's Board of Trustees, and the recent appointment of Dr. Richard Pattenaude as president of Ashford, demonstrate our steadfast commitment to these critical national goals, and will enhance the leadership of Ashford University," said Andrew Clark, CEO of Bridgepoint Education.

Third Quarter Results

Highlights for the third quarter ended September 30, 2012, are as follows:

  • Total student enrollment at period end was 91,358.
  • Revenue increased to $252.1 million from $242.8 million for the same period in 2011.
  • Operating income decreased to $49.7 million from $69.8 million for the same period in 2011.
  • Net income was $31.4 million compared with net income of $43.8 million for the same period in 2011.
  • Fully diluted earnings per common share was $0.56 compared with $0.78 for the same period in 2011.

Student Enrollment

Total student enrollment at the Company's academic institutions, Ashford University and University of the Rockies, was 91,358 students at September 30, 2012, compared with 90,597 students for the same period in 2011.  

New student enrollments for the third quarter of 2012 at Bridgepoint Education's academic institutions were approximately 20,500 compared with combined new student enrollments of approximately 22,000 for the same period in 2011.

Financial Results

Revenue for the third quarter of 2012 was $252.1 million compared with revenue of $242.8 million for the same period in 2011.  Revenue for the nine months ended September 30, 2012, was $758.8 million compared with revenue of $712.1 million for the same period in 2011.

Operating income for the third quarter of 2012 was $49.7 million compared with operating income of $69.8 million for the same period in 2011. Operating income for the nine months ended September 30, 2012, was $177.6 million compared with operating income of $238.4 million for the same period in 2011.   

Net income for the third quarter of 2012 was $31.4 million compared with net income of $43.8 million for the same period in 2011.  Net income for the nine months ended September 30, 2012, was $111.9 million compared with net income of $149.9 million for the same period in 2011.   

Fully diluted earnings per common share for the third quarter of 2012 was $0.56 compared with fully diluted earnings per common share of $0.78 for the same period in 2011. Fully diluted earnings per common share for the nine months ended September 30, 2012, was $2.00 compared with fully diluted earnings per common share of $2.60 for the same period in 2011.

The Company's effective tax rate for the third quarter of 2012 was 38.0%.

Balance Sheet and Cash Flow           

As of September 30, 2012, the Company had cash, cash equivalents and marketable securities of $471.4 million, compared with $407.2 million as of December 31, 2011. The Company generated $93.6 million of cash from operating activities for the nine months ended September 30, 2012, compared with $148.7 million for the same period in 2011.

Earnings Conference Call and Webcast

The Company 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 developments. The dial-in number for callers in the United States and Canada is (866) 454-4209 and for international callers is (913) 981-5551. The access code for all callers is 4122862. A live webcast will also be available on the Company's website at http://bridgepointeducation.com/investor_relations.htm.  

A replay of the call will be available via telephone through November 12, 2012. To access the replay, dial (888) 203-1112 in the United States or Canada and (719) 457-0820 for international callers; then enter the access code 4122862.

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 accredited 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, investorrelations@bridgepointeducation.com.

Forward-Looking Statements

This news release contains forward-looking statements including, without limitation, statements regarding measures to strengthen the academic leadership of Ashford University and related transition. These statements involve risks and uncertainties, and actual results may differ materially from those expressed in, or suggested by, such statements. More information on potential factors that could affect our future results 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 our periodic reports filed with the SEC, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 7, 2012, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, filed with the SEC on May 1, 2012 and August 7, 2012, respectively, and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, 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 Bridgepoint Education 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

September 30,


Nine Months Ended

September 30,


2012


2011


2012


2011

Revenue

$

252,076



$

242,771



$

758,815



$

712,084


Costs and expenses:








Instructional costs and services

75,699



69,611



209,569



187,432


Marketing and promotional

90,291



68,848



248,962



190,002


General and administrative

36,364



34,539



122,673



96,215


Total costs and expenses

202,354



172,998



581,204



473,649


Operating income

49,722



69,773



177,611



238,435


Other income, net

955



608



2,492



1,937


Income before income taxes

50,677



70,381



180,103



240,372


Income tax expense

19,232



26,570



68,159



90,493


Net income

$

31,445



$

43,811



$

111,944



$

149,879


Earnings per share:








Basic

$

0.59



$

0.85



$

2.13



$

2.85


Diluted

0.56



0.78



2.00



2.60


Weighted average number of common shares

outstanding used in computing earnings per share:








Basic

53,184



51,822



52,576



52,565


Diluted

55,756



56,375



56,089



57,624


 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 


As of
September 30, 2012


As of
December 31, 2011

ASSETS




Current assets:




Cash and cash equivalents

$

181,577



$

133,921


Restricted cash



25


Investments

142,984



153,779


Accounts receivable, net

111,010



62,156


Deferred income taxes

5,313



5,429


Prepaid expenses and other current assets

22,722



17,199


Total current assets

463,606



372,509


Property and equipment, net

98,281



89,667


Investments

146,887



119,507


Student loans receivable, net

14,992



9,255


Goodwill and intangibles, net

10,182



7,037


Deferred income taxes

10,752



11,200


Other long-term assets

2,490



4,461


Total assets

$

747,190



$

613,636


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

7,357



$

8,961


Accrued liabilities

56,509



40,205


Deferred revenue and student deposits

172,255



185,446


Total current liabilities

236,121



234,612


Rent liability

24,347



16,595


Other long-term liabilities

9,293



8,781


Total liabilities

269,761



259,988


Total stockholders' equity

477,429



353,648


Total liabilities and stockholders' equity

$

747,190



$

613,636


 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 


Nine Months Ended

September 30,


2012


2011

Cash flows from operating activities




Net income

$

111,944



$

149,879


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




Provision for bad debts

41,327



40,896


Depreciation and amortization

12,761



8,694


Amortization of premium/discount

5,384



2,443


Deferred income taxes



1,720


Stock-based compensation

9,915



7,803


Excess tax benefit of option exercises

(8,446)



(15,750)


Loss on disposal of fixed assets



11


Changes in operating assets and liabilities:




Accounts receivable

(90,188)



(69,538)


Prepaid expenses and other current assets

(3,982)



(985)


Student loans receivable

(5,730)



(2,320)


Other long-term assets

1,971



(53)


Accounts payable and accrued liabilities

23,559



30,055


Deferred revenue and student deposits

(13,191)



(8,707)


Other liabilities

8,264



4,541


Net cash provided by operating activities

93,588



148,689


Cash flows from investing activities




Capital expenditures

(20,803)



(24,438)


Purchases of investments

(173,512)



(233,991)


Restricted cash

25




Capitalized curriculum development costs

(4,130)



(2,237)


Sales and maturities of investments

151,511



157,049


Net cash used in investing activities

(46,909)



(103,617)


Cash flows from financing activities




Proceeds from exercise of stock options

2,240



4,384


Tax withholdings related to net issuance of stock options

(10,418)




Excess tax benefit of option exercises

8,446



15,750


Proceeds from the issuance of stock under employee stock purchase plan

707



642


Proceeds from the exercise of warrants

2



79


Repurchase of common stock



(92,778)


Net cash provided by (used in) financing activities

977



(71,923)


Net increase (decrease) in cash and cash equivalents

47,656



(26,851)


Cash and cash equivalents at beginning of period

133,921



188,518


Cash and cash equivalents at end of period

$

181,577



$

161,667


 

SOURCE Bridgepoint Education, Inc.



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