Zovio Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 5, 2012

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News Release

Contact: Paul Goodson, Associate Vice President of Investor Relations
866.475.0317 x2271 investorrelations@bridgepointeducation.com

Bridgepoint Education Reports Third Quarter 2012 Results

SAN DIEGO, (November 5, 2012) - Bridgepoint Education, Inc. (NYSE:BPI), a provider of postsecondary education services, today announced its results for the three and nine months ended September 30, 2012. The company also reported that Dr. Gregory Geoffroy joined the Ashford University Board of Trustees on October 25, 2012 and on November 2, 2012 he was elected to serve as its new chairman beginning in March of 2013.
Dr. Geoffroy brings a distinguished career in higher education to the Ashford Board of Trustees. He is president emeritus of Iowa State University in Ames, Iowa, where he currently serves as a professor of chemistry and where he spent the previous ten years as the institution's president. During Dr. Geoffroy's tenure as president, Iowa State expanded student diversity, saw major improvements to its campus infrastructure, and established the Bioeconomy Institute.
“Our academic institutions are committed to being leaders in affordability, access, academic quality and student success. The election of Dr. Geoffroy to lead Ashford University's Board of Trustees, and the recent appointment of Dr. Richard Pattenaude as president of Ashford, demonstrate our steadfast commitment to these critical national goals, and will enhance the leadership of Ashford University,” said Andrew Clark, CEO of Bridgepoint Education.
Third Quarter Results
Highlights for the third quarter ended September 30, 2012, are as follows:
•
Total student enrollment at period end was 91,358.
•
Revenue increased to $252.1 million from $242.8 million for the same period in 2011.
•
Operating income decreased to $49.7 million from $69.8 million for the same period in 2011.
•
Net income was $31.4 million compared with net income of $43.8 million for the same period in 2011.
•
Fully diluted earnings per common share was $0.56 compared with $0.78 for the same period in 2011.
Student Enrollment
Total student enrollment at the Company's academic institutions, Ashford University and University of the Rockies, was 91,358 students at September 30, 2012, compared with 90,597 students for the same period in 2011.
New student enrollments for the third quarter of 2012 at Bridgepoint Education's academic institutions were approximately 20,500 compared with combined new student enrollments of approximately 22,000 for the same period in 2011.
Financial Results
Revenue for the third quarter of 2012 was $252.1 million compared with revenue of $242.8 million for the same period in 2011. Revenue for the nine months ended September 30, 2012, was $758.8 million compared with revenue of $712.1 million for the same period in 2011.
Operating income for the third quarter of 2012 was $49.7 million compared with operating income of $69.8 million for the same period in 2011. Operating income for the nine months ended September 30, 2012, was $177.6 million compared with operating income of $238.4 million for the same period in 2011.


Net income for the third quarter of 2012 was $31.4 million compared with net income of $43.8 million for the same period in 2011. Net income for the nine months ended September 30, 2012, was $111.9 million compared with net income of $149.9 million for the same period in 2011.
Fully diluted earnings per common share for the third quarter of 2012 was $0.56 compared with fully diluted earnings per common share of $0.78 for the same period in 2011. Fully diluted earnings per common share for the nine months ended September 30, 2012, was $2.00 compared with fully diluted earnings per common share of $2.60 for the same period in 2011.
The Company's effective tax rate for the third quarter of 2012 was 38.0%.
Balance Sheet and Cash Flow
As of September 30, 2012, the Company had cash, cash equivalents and marketable securities of $471.4 million, compared with $407.2 million as of December 31, 2011. The Company generated $93.6 million of cash from operating activities for the nine months ended September 30, 2012, compared with $148.7 million for the same period in 2011.
Earnings Conference Call and Webcast
The Company 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 developments. The dial-in number for callers in the United States and Canada is (866) 454-4209 and for international callers is (913) 981-5551. The access code for all callers is 4122862. A live webcast will also be available on the Company's website at http://bridgepointeducation.com/investor_relations.htm.
A replay of the call will be available via telephone through November 12, 2012. To access the replay, dial (888) 203-1112 in the United States or Canada and (719) 457-0820 for international callers; then enter the access code 4122862.
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 accredited 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, investorrelations@bridgepointeducation.com.
Forward-Looking Statements
This news release contains forward-looking statements including, without limitation, statements regarding measures to strengthen the academic leadership of Ashford University and related transition. These statements involve risks and uncertainties, and actual results may differ materially from those expressed in, or suggested by, such statements. More information on potential factors that could affect our future results 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 our periodic reports filed with the SEC, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 7, 2012, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, filed with the SEC on May 1, 2012 and August 7, 2012, respectively, and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, 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 Bridgepoint Education assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, except as required by law.




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,
 
2012
 
2011
 
2012
 
2011
Revenue
$
252,076

 
$
242,771

 
$
758,815

 
$
712,084

Costs and expenses:
 
 
 
 
 
 
 
Instructional costs and services
75,699

 
69,611

 
209,569

 
187,432

Marketing and promotional
90,291

 
68,848

 
248,962

 
190,002

General and administrative
36,364

 
34,539

 
122,673

 
96,215

Total costs and expenses
202,354

 
172,998

 
581,204

 
473,649

Operating income
49,722

 
69,773

 
177,611

 
238,435

Other income, net
955

 
608

 
2,492

 
1,937

Income before income taxes
50,677

 
70,381

 
180,103

 
240,372

Income tax expense
19,232

 
26,570

 
68,159

 
90,493

Net income
$
31,445

 
$
43,811

 
$
111,944

 
$
149,879

Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.59

 
$
0.85

 
$
2.13

 
$
2.85

Diluted
0.56

 
0.78

 
2.00

 
2.60

Weighted average number of common shares outstanding used in computing earnings per share:
 
 
 
 
 
 
 
Basic
53,184

 
51,822

 
52,576

 
52,565

Diluted
55,756

 
56,375

 
56,089

 
57,624





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

 
As of
September 30, 2012
 
As of
December 31, 2011
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
181,577

 
$
133,921

Restricted cash
—

 
25

Investments
142,984

 
153,779

Accounts receivable, net
111,010

 
62,156

Deferred income taxes
5,313

 
5,429

Prepaid expenses and other current assets
22,722

 
17,199

Total current assets
463,606

 
372,509

Property and equipment, net
98,281

 
89,667

Investments
146,887

 
119,507

Student loans receivable, net
14,992

 
9,255

Goodwill and intangibles, net
10,182

 
7,037

Deferred income taxes
10,752

 
11,200

Other long-term assets
2,490

 
4,461

Total assets
$
747,190

 
$
613,636

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
7,357

 
$
8,961

Accrued liabilities
56,509

 
40,205

Deferred revenue and student deposits
172,255

 
185,446

Total current liabilities
236,121

 
234,612

Rent liability
24,347

 
16,595

Other long-term liabilities
9,293

 
8,781

Total liabilities
269,761

 
259,988

Total stockholders' equity
477,429

 
353,648

Total liabilities and stockholders' equity
$
747,190

 
$
613,636





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

 
Nine Months Ended September 30,
 
2012
 
2011
Cash flows from operating activities
 
 
 
Net income
$
111,944

 
$
149,879

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provision for bad debts
41,327

 
40,896

Depreciation and amortization
12,761

 
8,694

Amortization of premium/discount
5,384

 
2,443

Deferred income taxes
—

 
1,720

Stock-based compensation
9,915

 
7,803

Excess tax benefit of option exercises
(8,446
)
 
(15,750
)
Loss on disposal of fixed assets
—

 
11

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(90,188
)
 
(69,538
)
Prepaid expenses and other current assets
(3,982
)
 
(985
)
Student loans receivable
(5,730
)
 
(2,320
)
Other long-term assets
1,971

 
(53
)
Accounts payable and accrued liabilities
23,559

 
30,055

Deferred revenue and student deposits
(13,191
)
 
(8,707
)
Other liabilities
8,264

 
4,541

Net cash provided by operating activities
93,588

 
148,689

Cash flows from investing activities
 
 
 
Capital expenditures
(20,803
)
 
(24,438
)
Purchases of investments
(173,512
)
 
(233,991
)
Restricted cash
25

 
—

Capitalized curriculum development costs
(4,130
)
 
(2,237
)
Sales and maturities of investments
151,511

 
157,049

Net cash used in investing activities
(46,909
)
 
(103,617
)
Cash flows from financing activities
 
 
 
Proceeds from exercise of stock options
2,240

 
4,384

Tax withholdings related to net issuance of stock options
(10,418
)
 
—

Excess tax benefit of option exercises
8,446

 
15,750

Proceeds from the issuance of stock under employee stock purchase plan
707

 
642

Proceeds from the exercise of warrants
2

 
79

Repurchase of common stock
—

 
(92,778
)
Net cash provided by (used in) financing activities
977

 
(71,923
)
Net increase (decrease) in cash and cash equivalents
47,656

 
(26,851
)
Cash and cash equivalents at beginning of period
133,921

 
188,518

Cash and cash equivalents at end of period
$
181,577

 
$
161,667




Zovio Inc Reports