Bridgepoint Education Reports Second Quarter 2013 Results

News provided by

Bridgepoint Education, Inc.

Aug 06, 2013, 07:00 ET

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
[email protected]

SOURCE Bridgepoint Education, Inc.

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