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Bridgepoint Education Reports Second Quarter 2014 Results

SAN DIEGO, Aug. 7, 2014 /PRNewswire/ -- Bridgepoint Education (NYSE:BPI), a provider of postsecondary education services, announced today its results for the three and six months ended June 30, 2014.

Highlights for the second quarter ended June 30, 2014, are as follows:

  • Total student enrollment at period end was 61,117.
  • Revenue was $171.5 million compared with $193.5 million for the same period in 2013.
  • Operating income was $22.4 million compared with $19.1 million for the same period in 2013.
  • Net income was $13.0 million compared with $12.1 million for the same period in 2013.
  • Fully diluted earnings per share was $0.28 compared with $0.22 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 61,117 students at June 30, 2014, compared with 71,685 students at the end of the second quarter of 2013.

The twelve-month retention for students who started in the second quarter of 2013 was 65.6% as measured in the second quarter of 2014.  The twelve-month retention for students who started in the second quarter of 2012 was 61.2% as measured in the second quarter of 2013.

Financial Results

Revenue for the second quarter of 2014 was $171.5 million, compared with revenue of $193.5 million for the same period in 2013.  Revenue for the six months ended June 30, 2014, was $328.8 million, compared to $406.5 million for the same period in 2013.

Operating income for the second quarter of 2014 was $22.4 million compared with operating income of $19.1 million for the same period in 2013. Operating income for the six months ended June 30, 2014 was $14.6 million compared to $58.8 million for the same period in 2013.

Net income for the second quarter of 2014 was $13.0 million compared with net income of $12.1 million for the same period in 2013.   Net income for the six months ended June 30, 2014 was $8.6 million compared to $36.8 million for the same period in 2013.

Fully diluted earnings per share for the second quarter of 2014 was $0.28 compared with $0.22 for the same period in 2013.  The results for the second quarter of 2013 included 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, which was not replicated in 2014.  Fully diluted earnings per share for the six months ended June 30, 2014, was $0.19 compared with $0.66 for the same period in 2013.

The Company's effective tax rate for the second quarter of 2014 was 44.0%. 

Balance Sheet and Cash Flow   

As of June 30, 2014, the Company had cash, restricted cash, cash equivalents and marketable securities of $342.0 million, compared with $356.4 million as of December 31, 2013.  The Company used $3.8 million of cash in operating activities in the six months ended June 30, 2014, compared with generating $38.7 million for the same period in 2013.

Earnings Conference Call and Webcast

Bridgepoint Education will host a conference call at noon ET (9:00 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 80721216.  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 August 14, 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 80721216.

About Bridgepoint Education

Bridgepoint Education, Inc. (NYSE:BPI) improves the way individuals learn. By harnessing creativity, knowledge and proprietary technologies, such as Constellation® and Waypoint®, 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 Iowa (Ashford University), and 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:

  • 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 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 June 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
investorrelations@bridgepointeducation.com


 

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,


2014


2013


2014


2013

Revenue

$

171,522


$

193,470


$

328,792


$

406,456

Costs and expenses:








Instructional costs and services

76,853


99,603


159,934


196,631

Admissions advisory and marketing

55,518


57,582


121,296


115,125

General and administrative

16,737


17,152


33,006


35,891

Total costs and expenses

149,108


174,337


314,236


347,647

Operating income

22,414


19,133


14,556


58,809

Other income, net

712


748


1,079


1,585

Income before income taxes

23,126


19,881


15,635


60,394

Income tax expense

10,171


7,767


7,010


23,613

Net income

$

12,955


$

12,114


$

8,625


$

36,781

Earnings per share:








Basic

$

0.29


$

0.22


$

0.19


$

0.68

Diluted

0.28


0.22


0.19


0.66

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








Basic

45,233


54,136


45,066


54,132

Diluted

46,503


55,634


46,524


55,488

 


 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 



June 30,
 2014


December 31,
 2013

ASSETS




Current assets:




Cash and cash equivalents

$

150,490


$

212,526

Restricted cash

32,628


36,946

Investments

81,130


65,901

Accounts receivable, net

25,881


22,953

Student loans receivable, net

925


1,043

Deferred income taxes

16,734


16,683

Prepaid expenses and other current assets

23,405


21,563

Total current assets

331,193


377,615

Property and equipment, net

88,694


91,425

Investments

77,752


41,062

Student loans receivable, net

10,447


11,785

Goodwill and intangibles, net

26,232


26,878

Deferred income taxes

18,502


18,507

Other long-term assets

2,654


2,740

Total assets

$

555,474


$

570,012

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

4,029


$

5,195

Accrued liabilities

46,531


54,290

Deferred revenue and student deposits

112,404


132,791

Total current liabilities

162,964


192,276

Rent liability

22,493


23,927

Other long-term liabilities

9,693


9,271

Total liabilities

195,150


225,474

Total stockholders' equity

360,324


344,538

Total liabilities and stockholders' equity

$

555,474


$

570,012

 

 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 



Six Months Ended
 June 30,


2014


2013

Cash flows from operating activities




Net income

$

8,625


$

36,781

Adjustments to reconcile net income to net cash provided by (used in) operating activities:




Provision for bad debts

12,921


24,403

Depreciation and amortization

11,972


10,338

Amortization of premium/discount

(89)


2,165

Stock-based compensation

5,058


7,443

Excess tax benefit of option exercises

(986)


Loss on impairment of student loans receivable

1,189


292

Loss on disposal of fixed assets

52


Changes in operating assets and liabilities:




Restricted cash

4,518


6,451

Accounts receivable

(15,755)


(13,222)

Prepaid expenses and other current assets

(1,766)


(4,110)

Student loans receivable

480


3

Other long-term assets

86


801

Accounts payable and accrued liabilities

(8,842)


5,400

Deferred revenue and student deposits

(20,292)


(39,996)

Other liabilities

(1,012)


1,975

Net cash provided by (used in) operating activities

(3,841)


38,724

Cash flows from investing activities




Capital expenditures

(6,203)


(6,778)

Purchases of investments

(72,426)


(26,689)

Restricted cash

(200)


Capitalized costs for intangible assets

(2,112)


(2,353)

Sales and maturities of investments

20,000


109,916

Net cash provided by (used in) investing activities

(60,941)


74,096

Cash flows from financing activities




Proceeds from exercise of stock options

2,964


183

Excess tax benefit of option exercises

986


Proceeds from the issuance of stock under employee stock purchase plan


604

Tax withholdings on issuance of restricted stock

(1,204)


Net cash provided by financing activities

2,746


787

Net increase (decrease) in cash and cash equivalents

(62,036)


113,607

Cash and cash equivalents at beginning of period

212,526


208,971

Cash and cash equivalents at end of period

$

150,490


$

322,578

 

SOURCE Bridgepoint Education

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