Bridgepoint Education Reports Third Quarter 2014 Results

News provided by

Bridgepoint Education

Nov 05, 2014, 07:00 ET

SAN DIEGO, Nov. 5, 2014 /PRNewswire/ -- Bridgepoint Education (NYSE:BPI), a provider of postsecondary education services, announced today its results for the three and nine months ended September 30, 2014.

Highlights for the third quarter ended September 30, 2014, are as follows:

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  • Total student enrollment at period end was 59,552.
  • Revenue was $162.7 million compared with $182.8 million for the same period in 2013.
  • Operating income was $10.6 million compared with $19.5 million for the same period in 2013.
  • Net income was $6.3 million compared with $14.2 million for the same period in 2013.
  • Fully diluted earnings per share was $0.14 compared with $0.25 for the same period in 2013.

Student Enrollment

Total student enrollment at Bridgepoint Education's academic institutions, Ashford University and University of the Rockies, was 59,552 students at September 30, 2014, compared with 68,566 students at the end of the third quarter of 2013.

The twelve-month retention for students who started in the third quarter of 2013 was 65.8% as measured in the third quarter of 2014.  The twelve-month retention for students who started in the third quarter of 2012 was 60.9% as measured in the third quarter of 2013.

Financial Results

Revenue for the third quarter of 2014 was $162.7 million, compared with revenue of $182.8 million for the same period in 2013.  Revenue for the nine months ended September 30, 2014, was $491.4 million, compared to $589.2 million for the same period in 2013.

Operating income for the third quarter of 2014 was $10.6 million compared with operating income of $19.5 million for the same period in 2013. Operating income for the nine months ended September 30, 2014 was $25.1 million compared to $78.3 million for the same period in 2013.

Net income for the third quarter of 2014 was $6.3 million compared with net income of $14.2 million for the same period in 2013.   Net income for the nine months ended September 30, 2014 was $14.9 million compared to $51.0 million for the same period in 2013.

Fully diluted earnings per share for the third quarter of 2014 was $0.14 compared with $0.25 for the same period in 2013.  The results for the year to date period in 2013 included a pre-tax charge of $5.9 million for severance, which had an impact on earnings equal to $0.06 per diluted share, which did not occur in 2014.  Fully diluted earnings per share for the nine months ended September 30, 2014, was $0.32 compared with $0.91 for the same period in 2013.

The Company's effective tax rate for the third quarter of 2014 was 46.1%.

Balance Sheet and Cash Flow    

As of September 30, 2014, the Company had cash, restricted cash, cash equivalents and marketable securities of $357.4 million, compared with $356.4 million as of December 31, 2013.  The Company generated $24.6 million of cash in operating activities in the nine months ended September 30, 2014, compared with $61.8 million for the same period in 2013.

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 866-859-7412, and for other callers, 856-452-0684.  The access code for all callers is 25687326.  A live webcast will also be available on the Company's website at http://ir.bridgepointeducation.com.

A replay of the call will be available via telephone through December 6, 2014.  To access the replay, dial 855-859-2056 in the United States / Canada and for other callers, 404-537-3406; then enter the access code 25687326.

About Bridgepoint Education

Bridgepoint Education, Inc. (NYSE:BPI) harnesses the latest technology to reimagine the modern student experience.  Bridgepoint's technologies, such as Waypoint Outcomes, enhance the way people learn in the digital age. Bridgepoint owns three academic institutions – Ashford University, University of the Rockies, and Denver Learning Institute.  Together, these programs, technologies, and resources represent a unique model for advancing education in the 21st century.  Bridgepoint stands for greater access, social learning, and exposure to leading minds.  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:

  • any statements regarding enrollments and student retention;
  • our ability to successfully remediate the control deficiencies that constitute the material weaknesses in our internal controls;
  • Ashford University's ability to successfully operate as an accredited institution subject to the requirements of the California Bureau for Private Postsecondary Education;
  • 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 implementing regulations, the newly issued "Gainful Employment" rules and 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 or its 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, 2013, filed with the SEC on March 17, 2014, and amended on August 1, 2014, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, 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.

Contact: Paul Goodson, Associate Vice President of Investor Relations
866.475.0317 x2271
[email protected]

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,

2014

2013

2014

2013

Revenue

$

162,654

$

182,768

$

491,446

$

589,224

Costs and expenses:









   Instructional costs and services

79,707

83,562

239,641

280,193

   Admissions advisory and marketing

56,783

64,507

178,079

179,632

   General and administrative

15,583

15,175

48,589

51,066

Total costs and expenses

152,073

163,244

466,309

510,891

Operating income

10,581

19,524

25,137

78,333

Other income, net

1,080

786

2,159

2,371

Income before income taxes

11,661

20,310

27,296

80,704

Income tax expense

5,370

6,099

12,380

29,712

Net income

$

6,291

$

14,211

$

14,916

$

50,992

Earnings per share:









   Basic

$

0.14

$

0.26

$

0.33

$

0.94

   Diluted

0.14

0.25

0.32

0.91

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









   Basic

45,301

54,336

45,145

54,201

   Diluted

46,474

56,431

46,495

55,795

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






September 30,
2014

December 31,
2013

ASSETS



Current assets:



   Cash and cash equivalents

$

188,779

$

212,526

   Restricted cash

24,773

36,946

   Investments

51,074

65,901

   Accounts receivable, net

31,375

22,953

   Student loans receivable, net

984

1,043

   Deferred income taxes

16,698

16,683

   Prepaid expenses and other current assets

18,365

21,563

Total current assets

332,048

377,615

Property and equipment, net

88,098

91,425

Investments

92,777

41,062

Student loans receivable, net

9,977

11,785

Goodwill and intangibles, net

25,586

26,878

Deferred income taxes

17,441

18,507

Other long-term assets

2,372

2,740

Total assets

$

568,299

$

570,012

LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:



   Accounts payable

$

10,460

$

5,195

   Accrued liabilities

48,854

54,290

   Deferred revenue and student deposits

109,105

132,791

Total current liabilities

168,419

192,276

Rent liability

21,356

23,927

Other long-term liabilities

9,978

9,271

Total liabilities

199,753

225,474

Total stockholders' equity

368,546

344,538

Total liabilities and stockholders' equity

$

568,299

$

570,012

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



Nine Months Ended
September 30,

2014

2013

Cash flows from operating activities



Net income

$

14,916

$

50,992

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



   Provision for bad debts

21,961

31,670

   Depreciation and amortization

17,914

15,861

   Amortization of premium/discount

85

2,662

   Deferred income taxes

1,124

—

   Stock-based compensation

7,891

10,704

   Excess tax benefit of option exercises

(1,171)

(863)

   Loss on impairment of student loans receivable

1,466

790

   Net gain on marketable securities

(22)

(62)

   Loss on disposal of fixed assets

80

—

Changes in operating assets and liabilities:



   Restricted cash

12,202

7,531

   Accounts receivable

(30,314)

(18,826)

   Prepaid expenses and other current assets

3,317

(155)

   Student loans receivable

763

218

   Other long-term assets

368

379

   Accounts payable and accrued liabilities

(532)

8,960

   Deferred revenue and student deposits

(23,600)

(48,160)

   Other liabilities

(1,864)

107

Net cash provided by operating activities

24,584

61,808

Cash flows from investing activities



Capital expenditures

(9,644)

(11,737)

Purchases of investments

(87,855)

(26,724)

Restricted cash

(29)

—

Capitalized costs for intangible assets

(2,957)

(3,518)

Sales and maturities of investments

50,000

161,854

Net cash provided by (used in) investing activities

(50,485)

119,875

Cash flows from financing activities



Proceeds from exercise of stock options

3,076

1,250

Excess tax benefit of option exercises

1,171

863

Proceeds from the issuance of stock under employee stock purchase plan

—

604

Proceeds from the exercise of warrants

—

8

Tax withholdings on issuance of restricted stock

(2,093)

(1,080)

Net cash provided by financing activities

2,154

1,645

Net increase (decrease) in cash and cash equivalents

(23,747)

183,328

Cash and cash equivalents at beginning of period

212,526

208,971

Cash and cash equivalents at end of period

$

188,779

$

392,299

Logo - http://photos.prnewswire.com/prnh/20140912/145861

SOURCE Bridgepoint Education

Related Links

http://www.bridgepointeducation.com

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