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Bridgepoint Education Reports Third Quarter 2016 Results

SAN DIEGO, Nov. 8, 2016 /PRNewswire/ -- Bridgepoint Education (NYSE:BPI), a provider of postsecondary education services, today announced its results for the three and nine months ended September 30, 2016.

Bridgepoint Education, Inc. logo

Financial Results for the Three Months Ended September 30, 2016

Revenue for the three months ended September 30, 2016 was $136.6 million, compared with revenue of $140.8 million for the three months ended September 30, 2015.

Operating loss for the three months ended September 30, 2016 was $8.8 million, compared with operating loss of $34.5 million for the three months ended September 30, 2015.

Net loss for the three months ended September 30, 2016 was $9.5 million, compared with net loss of $62.7 million for the three months ended September 30, 2015.

Diluted loss per share for the three months ended September 30, 2016 was $0.20, compared with diluted loss per share of $1.37 for the three months ended September 30, 2015.

The Company recognized income tax expense of $1.2 million for the three months ended September 30, 2016, compared with income tax expense of $28.7 million for the three months ended September 30, 2015.

Non-GAAP Financial Results for the Three Months Ended September 30, 2016

Non-GAAP operating income for the three months ended September 30, 2016 was $8.3 million, compared with non-GAAP operating income of $10.4 million for the three months ended September 30, 2015. Non-GAAP operating income for the three months ended September 30, 2016 excludes a legal settlement expense of $16.8 million and restructuring and impairment charges of $0.4 million.

Non-GAAP net income for the three months ended September 30, 2016 was $4.2 million, compared with non-GAAP net income of $6.0 million for the three months ended September 30, 2015. Non-GAAP net income for the three months ended September 30, 2016 excludes a legal settlement expense of $16.8 million, restructuring and impairment charges of $0.4 million and a tax benefit of $3.4 million.

Non-GAAP diluted earnings per share for the three months ended September 30, 2016 was $0.09, compared with non-GAAP diluted earnings per share of $0.13 for the three months ended September 30, 2015.

Financial Results for the Nine Months Ended September 30, 2016

Revenue for the nine months ended September 30, 2016 was $407.6 million, compared with revenue of $430.3 million for the nine months ended September 30, 2015.

Operating loss for the nine months ended September 30, 2016 was $21.8 million, compared with operating loss of $36.2 million for the nine months ended September 30, 2015.

Net loss for the nine months ended September 30, 2016 was $16.3 million, compared with net loss of $63.8 million for the nine months ended September 30, 2015.

Diluted loss per share for the nine months ended September 30, 2016 was $0.35, compared with diluted loss per share of $1.40 for the nine months ended September 30, 2015.

The Company recognized income tax benefit of $3.6 million for the nine months ended September 30, 2016, compared with income tax expense of $29.1 million for the nine months ended September 30, 2015.

Non-GAAP Financial Results for the Nine Months Ended September 30, 2016

Non-GAAP operating income for the nine months ended September 30, 2016 was $13.9 million, compared with non-GAAP operating income of $23.1 million for the nine months ended September 30, 2015. Non-GAAP operating income for the nine months ended September 30, 2016 excludes a legal settlement expense of $32.9 million and restructuring and impairment charges of $2.8 million.

Non-GAAP net income for the nine months ended September 30, 2016 was $9.0 million, compared with non-GAAP net income of $14.0 million for the nine months ended September 30, 2015. Non-GAAP net income for the nine months ended September 30, 2016 excludes a legal settlement expense of $32.9 million, restructuring and impairment charges of $2.8 million and a tax benefit of $10.4 million.

Non-GAAP diluted earnings per share for the nine months ended September 30, 2016 was $0.19, compared with non-GAAP diluted earnings per share of $0.30 for the nine months ended September 30, 2015.

Balance Sheet and Cash Flow

As of September 30, 2016, the Company had cash and cash equivalents, restricted cash and investments of $357.4 million, compared with cash and cash equivalents, restricted cash and investments of $374.0 million as of December 31, 2015.

The Company used $8.9 million of cash for operating activities during the nine months ended September 30, 2016, compared with $16.6 million of cash provided by operating activities during the nine months ended September 30, 2015.

Student Enrollment

Total student enrollment at the Company's academic institutions, Ashford University and University of the Rockies, was 47,831 students at September 30, 2016, compared with total student enrollment of 49,982 at September 30, 2015.

As of September 30, 2016, the 12-month retention for all Ashford students who were active on the last day of the third quarter of 2015 was 61.6%. As of September 30, 2015, the 12-month retention for all Ashford students who were active on the last day of the third quarter of 2014 was 60.1%.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for non-GAAP operating income, non-GAAP net income and non-GAAP diluted earnings per share, which exclude a legal settlement expense, restructuring and impairment charges, and certain income tax adjustments, as applicable. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and are not based on a comprehensive set of accounting rules. Management believes non-GAAP financial measures are useful in providing investors with an understanding of how specific line items in the consolidated statements of income are affected by items that may not be indicative of the operating results of the Company's core business. To the extent that other companies use similar methods in calculating and reporting non-GAAP operating results, the Company believes provision of supplemental non-GAAP financial information allows for a meaningful comparison of the Company's performance against the performance of other companies. The Company further believes that these non-GAAP financial measures provide useful information regarding its ongoing operating activities and business trends related to its results of operations, as well as a meaningful comparison with historical financial results. The Company's management and board of directors utilize these non-GAAP financial measures, together with the Company's financial statements prepared in accordance with GAAP, in developing operating budgets and evaluating the Company's performance. These non-GAAP financial measures are intended to supplement GAAP financial information, and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Refer to the accompanying tables for a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Earnings Conference Call and Webcast

Bridgepoint Education will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Standard Time) today to discuss its latest financial results and recent highlights. The dial-in number for callers in the United States and Canada is 866-859-7412, and the dial-in number for other callers is 832-900-4623. The access code for all callers is 6563590. A live broadcast of the call 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 8, 2016. To access the replay, callers in the United States and Canada should dial 855-859-2056 and other callers should dial 404-537-3406, and enter the access code 6563590.

About Bridgepoint Education

Bridgepoint Education, Inc. (NYSE:BPI) harnesses the latest technology to reimagine the modern student experience. Bridgepoint owns two academic institutions - Ashford University and University of the Rockies. 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, visit www.bridgepointeducation.com or www.facebook.com/BridgepointEducation.

Forward-Looking Statements

This news release may contain forward-looking statements, including, without limitation, statements regarding management's intentions, hopes, beliefs or expectations, and statements regarding the Company's outlook for the remainder of 2016 and beyond. These forward-looking statements are subject to risks and uncertainties that could cause the Company's actual performance or results to differ materially from those expressed in or suggested by such statements. Such risks and uncertainties include, without limitation, the failure to comply with the extensive regulatory framework applicable to the Company and its institutions, adverse administrative, economic, legislative or regulatory changes affecting the Company and its 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, recruiting costs and tuition rates, reputational and other risks related to potential compliance audits, regulatory or legal actions, negative publicity or service disruptions, and the inability to recruit and retain students or develop new or expanded programs in a timely and cost-effective manner.

Additional information on factors that could affect the Company's performance or results is included from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 8, 2016, the Company's quarterly reports on Form 10-Q and the Company's current reports on Form 8-K. You should not place undue reliance on any forward-looking statements.  Forward-looking statements are made on the basis of management's good faith beliefs, expectations and assumptions regarding future events based on information available at the time such statements are made.  Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update or revise any forward-looking statements to reflect actual results or any changes in assumptions, expectations or other factors affecting such forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws.


 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

(In thousands, except per share amounts)



Three Months Ended
September 30,


Nine Months Ended 
September 30,


2016


2015


2016


2015

Revenue

$

136,583



$

140,762



$

407,555



$

430,337


Costs and expenses:








  Instructional costs and services

64,095



69,197



200,129



215,656


  Admissions advisory and marketing

52,590



47,794



156,798



148,636


  General and administrative

11,604



13,346



36,709



42,914


  Legal settlement  expense

16,752





32,918




  Restructuring and impairment charges

365



44,904



2,766



59,322


Total costs and expenses

145,406



175,241



429,320



466,528


Operating loss

(8,823)



(34,479)



(21,765)



(36,191)


Other income, net

557



465



1,892



1,499


Loss before income taxes

(8,266)



(34,014)



(19,873)



(34,692)


Income tax expense (benefit)

1,211



28,732



(3,622)



29,075


Net loss

$

(9,477)



$

(62,746)



$

(16,251)



$

(63,767)










Loss per share:








  Basic

$

(0.20)



$

(1.37)



$

(0.35)



$

(1.40)


  Diluted

(0.20)



(1.37)



(0.35)



(1.40)


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








  Basic

46,315



45,754



46,180



45,620


  Diluted

46,315



45,754



46,180



45,620


 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)



September 30,
2016


December 31, 
2015

ASSETS




Current assets:




  Cash and cash equivalents

$

258,354



$

282,145


  Restricted cash

26,223



24,685


  Investments

27,802



19,387


  Accounts receivable, net

30,614



24,091


  Student loans receivable, net



775


  Prepaid expenses and other current assets

39,181



52,192


Total current assets

382,174



403,275


Property and equipment, net

16,021



21,742


Investments

44,984



47,770


Student loans receivable, net



7,394


Goodwill and intangibles, net

18,301



21,265


Other long-term assets

2,713



5,320


Total assets

$

464,193



$

506,766






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




  Accounts payable and accrued liabilities

$

69,185



$

79,196


  Deferred revenue and student deposits

75,696



88,756


Total current liabilities

144,881



167,952


Rent liability

14,098



20,118


Other long-term liabilities

13,575



15,046


Total liabilities

172,554



203,116


Total stockholders' equity

291,639



303,650


Total liabilities and stockholders' equity

$

464,193



$

506,766


 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)



Nine Months Ended 
September 30,


2016


2015

Cash flows from operating activities:




Net loss

$

(16,251)



$

(63,767)


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




    Provision for bad debts

23,565



24,269


    Depreciation and amortization

10,068



15,403


    Amortization of premium/discount

38



364


    Deferred income taxes



24,081


    Stock-based compensation

5,679



7,324


    Excess tax benefit of option exercises



(426)


    Write-off or impairment of student loans receivable

7,542



1,207


    Net (gain) loss on marketable securities

(103)



125


    Loss on termination of leased space



13,540


    Loss on disposal or impairment of fixed assets

809



38,855


Changes in operating assets and liabilities:




    Restricted cash

4,066



7,712


    Accounts receivable

(29,929)



(33,524)


    Prepaid expenses and other current assets

(2,802)



5,537


    Student loans receivable

876



831


    Other long-term assets

2,607



266


    Accounts payable and accrued liabilities

5,508



(2,883)


    Deferred revenue and student deposits

(13,049)



(18,313)


    Other liabilities

(7,490)



(3,960)


   Net cash (used in) provided by operating activities

(8,866)



16,641


Cash flows from investing activities:




Capital expenditures

(1,562)



(2,324)


Purchases of investments

(20,237)



(20,242)


Non-operating restricted cash

(5,604)



(6,369)


Capitalized costs for intangible assets

(649)



(1,761)


Sales of investments



10,101


Maturities of investments

14,714



40,094


     Net cash (used in) provided by investing activities

(13,338)



19,499


Cash flows from financing activities:




Proceeds from exercise of stock options

142



260


Excess tax benefit of option exercises



426


Proceeds from the issuance of stock under employee stock purchase plan

112



136


Tax withholdings on issuance of stock awards

(1,841)



(1,292)


     Net cash used in financing activities

(1,587)



(470)


Net (decrease) increase in cash and cash equivalents

(23,791)



35,670


Cash and cash equivalents at beginning of period

282,145



207,003


Cash and cash equivalents at end of period

$

258,354



$

242,673


 


 

BRIDGEPOINT EDUCATION, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(In thousands, except per share amounts)



Three Months Ended
September 30,


Nine Months Ended 
June 30,


2016


2015


2016


2015

Operating Income (Loss) Reconciliation:








GAAP operating loss

$

(8,823)



$

(34,479)



$

(21,765)



$

(36,191)


  Legal settlement expense

16,752





32,918




  Restructuring and impairment charges

365



44,904



2,766



59,322


Non-GAAP operating income

$

8,294



$

10,425



$

13,919



$

23,131


















Net Income (Loss) Reconciliation:








GAAP net loss

$

(9,477)



$

(62,746)



$

(16,251)



$

(63,767)


  Legal settlement expense

16,752





32,918




  Restructuring and impairment charges

365



44,904



2,766



59,322


  Income tax impact

(3,445)



(16,839)



(10,407)



(22,246)


  Incremental income tax expense related to establishment of valuation allowance



40,666





40,666


Non-GAAP net income

$

4,195



$

5,985



$

9,026



$

13,975


















Diluted Earnings (Loss) Per Share Reconciliation:








GAAP diluted loss per share

$

(0.20)



$

(1.37)



$

(0.35)



$

(1.40)


  Legal settlement expense

0.36





0.70




  Restructuring and impairment charges

0.01



0.98



0.06



1.30


  Income tax impact

(0.08)



(0.37)



(0.22)



(0.49)


  Incremental income tax expense related to establishment of valuation allowance



0.89





0.89


Non-GAAP diluted earnings per share

$

0.09



$

0.13



$

0.19



$

0.30


 

Contact: Kevin Royal, Chief Financial Officer
866.475.0317 x11120
investorrelations@bridgepointeducation.com

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

 

SOURCE Bridgepoint Education

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