Bridgepoint Education Reports Third Quarter 2012 Results

Nov 05, 2012, 07:00 ET from Bridgepoint Education, Inc.

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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