SAN DIEGO, Nov. 8, 2018 /PRNewswire/ — Bridgepoint Education (NYSE:BPI), a provider of postsecondary education services, today announced its results for the three and nine months ended September 30, 2018.

Bridgepoint Education, Inc. logo (PRNewsFoto/Bridgepoint Education)

Financial Results for the Three Months Ended September 30, 2018

Revenue for the three months ended September 30, 2018 was $114.9 million, compared with revenue of $119.4 million for the three months ended September 30, 2017.

Operating income for the three months ended September 30, 2018 was $3.5 million, compared with operating loss of $1.5 million for the three months ended September 30, 2017.

Net income for the three months ended September 30, 2018 was $4.3 million, compared with net income of $39,000 for the three months ended September 30, 2017.

Diluted income per share for the three months ended September 30, 2018 was $0.16, compared with diluted income per share of $0.00 for the three months ended September 30, 2017.

The Company recognized an income tax benefit of $0.4 million for the three months ended September 30, 2018, compared with an income tax benefit of $1.2 million for the three months ended September 30, 2017.

Non-GAAP Financial Results for the Three Months Ended September 30, 2018

Non-GAAP operating income for the three months ended September 30, 2018 was $7.4 million, compared with non-GAAP operating income of $6.5 million for the three months ended September 30, 2017. Non-GAAP operating income for the three months ended September 30, 2018 excludes restructuring and impairment expenses of $1.2 million, as well as separation transaction costs of $2.6 million. There were restructuring and impairment expenses of $8.0 million for the three months ended September 30, 2017.

Non-GAAP net income for the three months ended September 30, 2018 was $8.0 million, compared with non-GAAP net income of $7.5 million for the three months ended September 30, 2017. Non-GAAP net income for the three months ended September 30, 2018 excludes a restructuring and impairment expenses of $1.2 million, separation transaction costs of $2.6 million and an income tax benefit of $0.2 million, primarily associated with a non-recurring income tax audit examination settlement. There were restructuring and impairment expenses of $8.0 million as well as the related income tax benefit of $0.6 million for the three months ended September 30, 2017.

Non-GAAP diluted income per share for the three months ended September 30, 2018 was $0.29, compared with non-GAAP diluted income per share of $0.25 for the three months ended September 30, 2017.

Financial Results for the Nine Months Ended September 30, 2018

Revenue for the nine months ended September 30, 2018 was $353.7 million, compared with revenue of $373.4 million for the nine months ended September 30, 2017.

Operating income for the nine months ended September 30, 2018 was $15.5 million, compared with operating income of $14.3 million for the nine months ended September 30, 2017.

Net income for the nine months ended September 30, 2018 was $23.8 million, compared with net income of $16.2 million for the nine months ended September 30, 2017.

Diluted income per share for the nine months ended September 30, 2018 was $0.87, compared with diluted income per share of $0.47 for the nine months ended September 30, 2017.

The Company recognized an income tax benefit of $7.5 million for the nine months ended September 30, 2018, compared with an income tax benefit of $0.7 million for the nine months ended September 30, 2017.

Non-GAAP Financial Results for the Nine Months Ended September 30, 2018

Non-GAAP operating income for the nine months ended September 30, 2018 was $24.3 million, compared with non-GAAP operating income of $22.3 million for the nine months ended September 30, 2017. Non-GAAP operating income for the nine months ended September 30, 2018 excludes a legal settlement charge of $0.1 million,  restructuring and impairment charges of $3.8 million, as well as separation transaction costs of $4.9 million. There were restructuring and impairment charges of $8.0 million for the nine months ended September 30, 2017.

Non-GAAP net income for the nine months ended September 30, 2018 was $25.0 million, compared with non-GAAP net income of $23.6 million for the nine months ended September 30, 2017. Non-GAAP net income for the nine months ended September 30, 2018 excludes a legal settlement charge of $0.1 million, restructuring and impairment charges of $3.8 million, separation transaction costs of $4.9 million and an income tax benefit of $7.7 million. The income tax benefit is primarily associated with a non-recurring income tax audit examination settlements as well as tax deductions for refund claims for qualified production activities. There were restructuring and impairment charges of $8.0 million, as well as the related income tax benefit of $0.6 million for the nine months ended September 30, 2017.

Non-GAAP diluted income per share for the nine months ended September 30, 2018 was $0.91, compared with non-GAAP diluted income per share of $0.69 for the nine months ended September 30, 2017.

Balance Sheet and Cash Flow

As of September 30, 2018, the Company had combined cash, cash equivalents, restricted cash and investments of $190.7 million, compared with combined cash, cash equivalents, restricted cash and investments of $207.6 million as of December 31, 2017.

The Company used $10.7 million of cash in operating activities during the nine months ended September 30, 2018, compared with $16.7 million of cash used in operating activities during the nine months ended September 30, 2017.

Student Enrollment

Total student enrollment at the Company’s combined academic institutions was 39,584 students at September 30, 2018, compared with total student enrollment of 42,132 at September 30, 2017.

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 income per share, which exclude legal settlement expense, restructuring and impairment charges, separation transaction costs, as well as 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 7157708. 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, 2018. 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 7157708.

About Bridgepoint Education

Bridgepoint Education, Inc. (NYSE:BPI) harnesses the latest technology to reimagine the modern student experience through programs, technologies, and resources representing 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 which are not statements of historical fact and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding management’s intentions, hopes, beliefs or expectations, and statements regarding the Company’s outlook for the remainder of 2018 and beyond. These forward-looking statements are based on current information and expectations and are subject to various risks and uncertainties. The Company’s actual performance or results may differ materially from those expressed in or suggested by such statements due to various factors, including without limitation: our ability to convert Ashford University into a not-for-profit university; the impact of the proposed conversion, and separation of the Company from its academic institutions to to become a technology services provider; the success of our marketing, technology and new program development initiatives, the success of our Education Partnership programs, the impact of our ongoing cost-reduction initiatives; our ability to comply with the extensive and continually evolving 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; the impact of competition in the postsecondary education market; recruiting costs and tuition rates; reputational and other risks related to potential compliance audits; regulatory or legal actions; negative publicity or service disruptions; and our ability to attract, recruit and retain students or develop new or expanded programs in a timely and cost-effective manner.

Additional information on factors that could cause actual plans implemented and actual results achieved to differ materially from those set forth in the forward-looking statements 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 fiscal year ended December 31, 2017 filed with the SEC on February 21, 2018, the Company’s quarterly reports on Form 10-Q and the Company’s current reports on Form 8-K which are available at www.bridgepointeducation.com. 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, except to the extent required by applicable securities laws.

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018

2017

2018

2017

Revenue

$

114,858

$

119,367

$

353,723

$

373,438

Costs and expenses:

Instructional costs and services

54,470

57,756

165,318

181,943

Admissions advisory and marketing

41,902

43,669

129,971

132,133

General and administrative

13,731

11,441

39,028

37,019

Legal settlement expense

141

Restructuring and impairment expense

1,225

8,004

3,795

8,004

Total costs and expenses

111,328

120,870

338,253

359,099

Operating income (loss)

3,530

(1,503)

15,470

14,339

Other income, net

367

381

899

1,165

Income (loss) before income taxes

3,897

(1,122)

16,369

15,504

Income tax benefit

(408)

(1,161)

(7,464)

(718)

Net income

$

4,305

$

39

$

23,833

$

16,222

Income per share:

Basic

$

0.16

$

0.00

$

0.88

$

0.49

Diluted

$

0.16

$

0.00

$

0.87

$

0.47

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

Basic

27,061

29,123

27,131

33,333

Diluted

27,589

29,671

27,532

34,193

 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

September 30,
 2018

December 31,
 2017

ASSETS

Current assets:

Cash and cash equivalents

$

163,091

$

185,098

Restricted cash

25,444

20,428

Investments

2,203

2,065

Accounts receivable, net

33,566

27,077

Prepaid expenses and other current assets

20,361

22,388

Total current assets

244,665

257,056

Property and equipment, net

14,715

10,434

Goodwill and intangibles, net

13,332

14,593

Other long-term assets

3,030

5,456

Total assets

$

275,742

$

287,539

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

58,369

$

71,165

Deferred revenue and student deposits

53,870

68,207

Total current liabilities

112,239

139,372

Rent liability

4,790

7,001

Other long-term liabilities

9,835

12,708

Total liabilities

126,864

159,081

Total stockholders’ equity

148,878

128,458

Total liabilities and stockholders’ equity

$

275,742

$

287,539

 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Nine Months Ended
September 30,

2018

2017

Cash flows from operating activities:

Net income

$

23,833

$

16,222

Adjustments to reconcile net income to net cash used in operating activities:

  Provision for bad debts

18,538

24,440

  Depreciation and amortization

5,200

6,821

  Amortization of premium/discount

20

  Deferred income taxes

54

25

  Stock-based compensation

3,590

2,834

  Net gain on marketable securities

(63)

(193)

  Reassessment of lease charges

1,864

5,829

  Loss on disposal or impairment of fixed assets

334

66

Changes in operating assets and liabilities:

  Accounts receivable

(27,713)

(32,286)

  Prepaid expenses and other current assets

2,027

(1,081)

  Other long-term assets

2,082

(3,164)

  Accounts payable and accrued liabilities

(14,743)

(13,920)

  Deferred revenue and student deposits

(14,801)

(12,952)

  Other liabilities

(10,870)

(9,405)

   Net cash used in operating activities

(10,668)

(16,744)

Cash flows from investing activities:

Capital expenditures

(1,696)

(2,876)

Purchases of investments

(1,050)

(83)

Capitalized costs for intangible assets

(700)

(438)

Sales of investments

975

Maturities of investments

22,725

   Net cash (used in) provided by investing activities

(2,471)

19,328

Cash flows from financing activities:

Proceeds from exercise of stock options

455

3,799

Tax withholdings related to net issuance of stock options

(1,097)

Proceeds from the issuance of stock under employee stock purchase plan

98

141

Tax withholdings on issuance of stock awards

(884)

(1,762)

Repurchase of common stock

(2,424)

(152,000)

   Net cash used in financing activities

(3,852)

(149,822)

Net decrease in cash, cash equivalents and restricted cash

(16,991)

(147,238)

Cash, cash equivalents and restricted cash at beginning of period

205,526

332,335

Cash, cash equivalents and restricted cash at end of period

$

188,535

$

185,097

 

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
September 30,

2018

2017

2018

2017

Operating Income (Loss) Reconciliation:

GAAP operating income (loss)

$

3,530

$

(1,503)

$

15,470

$

14,339

Legal settlement expense

141

Restructuring and impairment expense

1,225

8,004

3,795

8,004

Separation transaction costs

2,615

4,878

Non-GAAP operating income

$

7,370

$

6,501

$

24,284

$

22,343

Net Income Reconciliation:

GAAP net income

$

4,305

$

39

$

23,833

$

16,222

Legal settlement expense

141

Restructuring and impairment expense

1,225

8,004

3,795

8,004

Separation transaction costs

2,615

4,878

Income tax impacts

(159)

(590)

(7,695)

(590)

Non-GAAP net income

$

7,986

$

7,453

$

24,952

$

23,636

Diluted Income Per Share Reconciliation:

GAAP diluted income per share

$

0.16

$

0.00

$

0.87

$

0.47

Legal settlement expense

0.01

Restructuring and impairment expense

0.04

0.27

0.13

0.23

Separation transaction costs

0.10

0.18

Income tax impacts

(0.01)

(0.02)

(0.28)

(0.01)

Non-GAAP diluted income per share

$

0.29

$

0.25

$

0.91

$

0.69

Contact: Dori Abel, VP of Investor Relations
866.475.0317 x11619
investorrelations@bridgepointeducation.com

 

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SOURCE Bridgepoint Education