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Bridgepoint Education Reports Full Year 2013 Results

3/11/2014

SAN DIEGO, March 11, 2014 /PRNewswire/ -- Bridgepoint Education, Inc. (NYSE:BPI), a provider of postsecondary education services, announced the results for its fourth quarter and full year ended December 31, 2013.

Highlights for the fourth quarter ended December 31, 2013:

  • Revenue of $163.5 million compared to $209.4 million for the same period in 2012.
  • Operating loss of $11.9 million compared to operating income of $28.9 million for the same period in 2012.
  • Net loss of $6.5 million compared to net income of $18.4 million for the same period in 2012.
  • Fully diluted loss per common share of $0.12 compared to earnings per common share of $0.33 for the same period in 2012.
  • A legal accrual of $9.0 million increased general and administrative expenses and had an after-tax impact of $0.10 on fully diluted earnings.

Highlights for the full year ended December 31, 2013:

  • Total student enrollment was 63,624 compared to 81,810 at December 31, 2012.
  • Revenue of $768.6 million compared to $968.2 million for 2012.
  • Operating income of $60.4 million compared to $195.5 million for 2012.
  • Net income of $41.0 million compared to net income of $123.4 million for 2012.
  • Fully diluted earnings per common share of $0.74 compared to $2.21 for 2012.

"Throughout 2013, our institutions focused on delivering a relevant and high-quality education to their students," said Andrew Clark, CEO of Bridgepoint Education.  "We are pleased with the positive response we have attracted from prospective students and plan to continue this focus in 2014 and beyond."

Student Enrollment

Total student enrollment at the Company's academic institutions, Ashford University and University of the Rockies, was 63,624 at December 31, 2013, compared with 81,810 students at the end of the fourth quarter of 2012. Combined new student enrollments for the fourth quarter of 2013 at both of the Company's academic institutions increased to approximately 10,200, compared with combined new student enrollments of approximately 9,260 for the fourth quarter of 2012. 

Financial Results

Revenue for the fourth quarter of 2013 was $163.5 million, compared with revenue of $209.4 million for the fourth quarter of 2012.  Revenue for the year ended December 31, 2013, was $768.6 million, compared with revenue of $968.2 million for the year ended December 31, 2012.

Operating loss for the fourth quarter of 2013 was $11.9 million compared with operating income of $28.9 million for the same period in 2012. Operating income for the year ended December 31, 2013, was $60.4 million, compared with $195.5 million for the year ended December 31, 2012.

Net loss for the fourth quarter of 2013 was $6.5 million compared with net income of $18.4 million for the fourth quarter of 2012.  Net income for the year ended December 31, 2013, was $41.0 million, compared with net income of $123.4 million for the year ended December 31, 2012.

Fully diluted loss per common share for the fourth quarter of 2013 was $0.12 compared with fully diluted earnings per common share of $0.33 for the fourth quarter of 2012.  Fully diluted earnings per common share for the year ended December 31, 2013, was $0.74 compared with fully diluted earnings per common share of $2.21 for the year ended December 31, 2012. The results above include an accrual of $9.0 million, which represents our best estimate of the cost of a resolution of a previously disclosed civil investigative demand from the Iowa Attorney General, and had an after-tax impact of $0.10 on fully diluted earnings for the year ended December 31, 2013.

The Company's effective tax rate for the year ended December 31, 2013, was 35.7%.

The Company anticipates a 1.7% tuition increase for undergraduate online students at Ashford University for courses beginning on or after April 1, 2014.

Balance Sheet and Cash Flow 

As of December 31, 2013, the Company had cash, cash equivalents and investments of $356.4 million, compared with $514.7 million as of December 31, 2012.  The Company generated $75.5 million of cash from operating activities for the year ended December 31, 2013, compared with $143.2 million for the year ended December 31, 2012. The Company's lower cash, cash equivalents and investments balance at December 31, 2013 reflects the completion of a Tender Offer for the repurchase of 10.25 million shares in December 2013 for approximately $201 million, inclusive of fees. 

Earnings Conference Call and Webcast

The Company will host a conference call and webcast at 11:30 a.m. ET (8:30 a.m. PT) today to discuss its latest financial results and recent developments. Call participants should dial 844-891-8291 (United States/Canada) or 856-452-0684 (other countries) and request the Bridgepoint Education call or provide conference ID 4976825.  A live broadcast of the call will also be available via the Internet at http://ir.bridgepointeducation.com and will be archived on the site for one year. 

A telephonic replay will be available at 855-859-2056 (United States/Canada) or 404-537-3406 (other countries), passcode 4976825.  The replay will be available from Tuesday, March 11, 2014, at 2:30 p.m. (Eastern Time) until Tuesday, June 10, 2014, at 2:30 p.m. (Eastern Time).

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 including, without limitation, statements regarding pending legal matters, the Company's 2014 outlook and related commentary. 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:

  • 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 administrative, 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 fiscal year ended December 31, 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.

Contact: Paul Goodson, Associate Vice President, Investor Relations
(866) 475-0317 x2271
investorrelations@bridgepointeducation.com

 

BRIDGEPOINT EDUCATION, INC.

Consolidated Statements of Income

(In thousands, except per share amounts)



Three Months Ended

December 31,


Year Ended

December 31,


2013


2012


2013


2012

Revenue

$

163,453



$

209,356



$

768,623



$

968,171


Costs and expenses:








Instructional costs and services

93,755



102,607



395,928



364,001


Admissions advisory and marketing

55,726



65,239



235,358



339,209


General and administrative

25,828



12,566



76,894



69,497


Total costs and expenses

175,309



180,412



708,180



772,707


Operating income (loss)

(11,856)



28,944



60,443



195,464


Other income, net

710



878



3,346



3,370


Income (loss) before income taxes

(11,146)



29,822



63,789



198,834


Income tax expense (benefit)

(4,686)



11,450



22,779



75,413


Net income (loss)

$

(6,460)



$

18,372



$

41,010



$

123,421


Earnings (loss) per common share:








Basic

$

(0.12)



$

0.34



$

0.76



$

2.33


Diluted

(0.12)



0.33



0.74



2.21


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








Basic

53,098



54,050



53,923



52,947


Diluted

53,098



54,938



55,487



55,946


 

BRIDGEPOINT EDUCATION, INC.

Consolidated Balance Sheets

(In thousands, except par value)



As of December 31,


2013


2012

ASSETS




Current assets:




Cash and cash equivalents

$

249,472



$

255,965


Investments

65,901



136,967


Accounts receivable, net

28,565



67,371


Student loans receivable, net

1,043



556


Deferred income taxes

15,232



10,936


Prepaid expenses and other current assets

21,369



19,810


Total current assets

381,582



491,605


Property and equipment, net

91,425



95,966


Investments

41,062



121,738


Student loans receivable, net

11,785



15,143


Goodwill and intangibles, net

26,878



10,739


Deferred income taxes

18,507



13,266


Other long-term assets

2,740



2,330


Total assets

$

573,979



$

750,787


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

5,195



$

4,588


Accrued liabilities

54,756



44,640


Deferred revenue and student deposits

132,791



175,057


Total current liabilities

192,742



224,285


Rent liability

23,927



25,173


Other long-term liabilities

9,271



9,759


Total liabilities

225,940



259,217


Total stockholders' equity

348,039



491,570


Total liabilities and stockholders' equity

$

573,979



$

750,787


 

BRIDGEPOINT EDUCATION, INC.

Consolidated Statements of Cash Flows

(In thousands)



Year Ended December 31,


2013


2012

Cash flows from operating activities




Net income

$

41,010



$

123,421


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




Provision for bad debts

72,313



73,696


Depreciation and amortization

21,666



17,424


Amortization of premium/discount

3,559



6,805


Deferred income taxes

(10,506)



(9,972)


Stock-based compensation

13,934



13,729


Excess tax benefit of option exercises

(2,590)



(10,058)


Loss on impairment of student loans receivable

1,998




Net realized gain on sale of marketable securities

(63)




Loss on termination of leased space

328




Loss on disposal of fixed assets

751



1,153


Changes in operating assets and liabilities:




Accounts receivable

(34,348)



(81,577)


Prepaid expenses and other current assets

(2,411)



(1,056)


Student loans receivable

291



(3,778)


Other long-term assets

(412)



2,131


Accounts payable and accrued liabilities

13,687



12,100


Deferred revenue and student deposits

(41,607)



(10,389)


Other liabilities

(184)



8,772


Uncertain tax position

(1,878)



784


Net cash provided by operating activities

75,538



143,185


Cash flows from investing activities




Capital expenditures

(14,825)



(25,296)


Purchases of investments

(26,759)



(179,387)


Restricted cash



25


Capitalized costs for intangible assets

(19,563)



(5,262)


Sales and maturities of investments

176,343



186,911


Net cash provided by (used in) investing activities

115,196



(23,009)


Cash flows from financing activities




Proceeds from exercise of stock options

10,464



2,257


Tax withholdings related to net exercise of stock options

(9,170)



(10,418)


Excess tax benefit of option exercises

2,590



10,058


Proceeds from the issuance of stock under employee stock purchase plan

1,234



1,340


Proceeds from the exercise of warrants

231



490


Tax withholdings related to net exercise of warrants



(944)


Issuance of restricted stock

(1,080)



(313)


Repurchase of common stock

(201,496)



(602)


Net cash provided by (used in) financing activities

(197,227)



1,868


Net increase (decrease) in cash and cash equivalents

(6,493)



122,044


Cash and cash equivalents at beginning of period

255,965



133,921


Cash and cash equivalents at end of period

$

249,472



$

255,965


 

SOURCE Bridgepoint Education

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