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05 / 2019 article

Bridgepoint Education Reports First Quarter 2011 Results

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Bridgepoint Education (NYSE: BPI), a provider of postsecondary education services, announced today its results for the three months ended March 31, 2011.

Highlights for the first quarter ended March 31, 2011, are as follows:

  • Total student enrollment at period end was 88,252.
  • Revenue increased to $229.4 million from $156.1 million for the same period in 2010.
  • Operating income increased to $86.1 million from $50.1 million for the same period in 2010.
  • Net income was $53.9 million compared with net income of $29.8 million for the same period in 2010.
  • Fully diluted earnings per common share was $0.92 compared with $0.49 for the same period in 2010.
  • Repurchased 0.7 million shares under the $60 million share repurchase program announced in August 2010.

"We are pleased with the results we achieved in the first quarter as our new enrollments were in-line with our expectations, and I am particularly pleased that our year over year student persistence increased for the fourth consecutive quarter. The increased persistence not only resulted in better than anticipated revenue for the quarter, but it more importantly reinforces that the student support initiatives we made in 2010 to enhance student persistence are working as we planned.  Our focus will remain on continuing to improve the programs we have in place to further enhance the academic readiness of the students who attend our institutions, and to provide students with an innovative, high quality learning experience that enriches their lives," said Andrew Clark, Chief Executive Officer of Bridgepoint Education.  

Student Enrollment

Total student enrollment at Bridgepoint Education's academic institutions, Ashford University and University of the Rockies, increased to 88,252 students at March 31, 2011, compared with 65,788 students at the end of the first quarter of 2010.

New student enrollments for the first quarter of 2011 at Bridgepoint Education's academic institutions were approximately 27,550, compared with combined new student enrollments of approximately 24,300 for the same period in 2010.

Financial Results

Revenue for the first quarter of 2011 was $229.4 million, compared with revenue of $156.1 million for the same period in 2010.  

Operating income for the first quarter of 2011 was $86.1 million compared with operating income of $50.1 million for the same period in 2010.  

Net income for the first quarter of 2011 was $53.9 million compared with net income of $29.8 million for the same period in 2010.  

Fully diluted earnings per common share for the first quarter of 2011 was $0.92 compared with fully diluted earnings per common share of $0.49 for the same period in 2010.

The Company's effective tax rate for the first quarter of 2011 was 37.9%.  

Balance Sheet and Cash Flow

As of March 31, 2011, Bridgepoint had cash, cash equivalents and marketable securities of $365.4 million, compared with $299.1 million as of December 31, 2010.  The Company generated $81.5 million of cash from operating activities in the first quarter of 2011, compared with $54.6 million for the same period in 2010.

During the three months ended March 31, 2011, the Company repurchased 0.7 million shares at a weighted average price of $18.33 for a total cost of $12.7 million under the $60 million repurchase program announced in August 2010.  As of March 31, 2011, approximately $5.1 million remains authorized and available under this repurchase program, which may be suspended at any time.

Additional $75 Million Share Repurchase Authorization

Bridgepoint Education's Board of Directors has authorized the repurchase of up to $75.0 million of the Company's outstanding shares of common stock over the next 12 months.  Under the share repurchase program, the Company may purchase shares from time to time in the open market, through block trades or otherwise. This repurchase authorization is in addition to the $60 million repurchase authorization announced by the Company in August 2010.  

The timing and extent of any repurchases will depend upon market conditions, the trading price of the Company's shares and other factors, and subject to the restrictions relating to volume, price and timing under applicable law.  The share repurchase may be commenced or suspended at any time or from time to time by the Company.

Full-Year 2011 Outlook

Based on Bridgepoint Education's results in the first quarter of 2011, the Company is updating its full year 2011 guidance as follows:

  • Total student enrollment is expected to be between 82,000 and 83,500.
  • Revenue is expected to be between $886.5 million and $901.5 million.
  • Net income is expected to be between $145.5 million and $151.4 million.
  • Fully diluted earnings per common share is expected to be between $2.47 and $2.57 based on an estimated fully diluted weighted average share count of 58.9 million for the year ending December 31, 2011.
  • Bad debt as a percentage of revenues for 2011 is expected to be 5.4%.
  • Capital expenditures for 2011 are expected to be between 5% and 6% of revenue.
  • The Company's effective tax rate for 2011 is estimated to be 37.8%.

 

This guidance does not reflect the impact of any additional share repurchases the Company may complete during the remainder of 2011.  

Earnings Conference Call and Webcast

Bridgepoint Education 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 highlights. The dial-in number for callers in the United States / Canada is (888) 205-6695 and for international callers is (913) 312-6680. The access code for all callers is 9523733. A live webcast will also be available on the Company's website at www.bridgepointeducation.com.

A replay of the call will be available via telephone through May 10, 2011. To access the replay, dial (888) 203-1112 in the United States / Canada and (719) 457-0820 outside the United States; then enter the access code 9523733.

About Bridgepoint Education

Bridgepoint Education's postsecondary education services focus on offering associate's, bachelor's, master's and doctoral programs in such disciplines as business, education, psychology, social sciences and health sciences.  Bridgepoint Education's regionally accredited academic institutions – Ashford University and University of the Rockies – deliver their programs online as well as at traditional campuses located in Clinton, Iowa, and Colorado Springs, Colorado.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements may include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of financial resources. These forward-looking statements are based on assumptions and estimates including, without limitation, those regarding: the Company's value proposition to students; competitiveness of the Company's tuition; ability to continue to transfer credits from other institutions; ability to maintain and improve the quality of the Company's education; management of future growth and scalability; development of military and corporate channels; estimates of new hires; proposed new programs; expectations that the Company can effectively manage the business within the regulatory environment; expectations regarding enrollments, financial position, results of operations and  liquidity; projections, predictions, expectations, estimates or forecasts as to the Company's business, financial and operational results and future economic performance; management's goals and objectives; and other similar matters that are not historical facts.  Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions, as well as statements in the future tense, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking.

Forward-looking statements should not be interpreted as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.  Important factors that could cause such differences include, but are not limited to: the Company's inability to adequately resolve the findings and recommendations of the final audit report of the U.S. Department of Education's Office of Inspector General (OIG); the imposition of fines or other corrective measures against the Company's academic institutions; the Company's failure to comply with the extensive regulatory framework applicable to its industry, including Title IV of the Higher Education Act and its regulations, state laws and regulatory requirements, and accrediting agency requirements; adverse regulatory changes affecting the Company's industry; the Company's inability to continue to develop awareness among, to recruit and to retain students; competition in the postsecondary education market and its potential impact on the Company's market share, recruiting cost and tuition rates; reputational and other risks related to potential compliance audits, regulatory actions, negative publicity or service disruptions; the Company's ability to attract and retain the personnel needed to sustain and grow its business; the Company's inability to develop new programs or expand its existing programs in a timely and cost-effective manner; economic or other developments potentially impacting demand in the Company's core disciplines or the availability or cost of Title IV or other funding; and other factors discussed in Part II, Item 1A (Risk Factors) of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed on or about the date hereof, and in other reports the Company may file with the Securities and Exchange Commission from time to time.

Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements.

Contact: Paul Goodson, Associate Vice President of Investor Relations
866.475.0317 x2271
[email protected]

BRIDGEPOINT EDUCATION, INC.

 

Condensed Consolidated Statements of Income

 

(Unaudited)

 
         
 

Three Months Ended

 

March 31,

 
 

2011

 

2010

 
 

(In thousands, except

 
 

per share amounts)

 

Revenue

$229,432

 

$156,067

 

Costs and expenses:

       

Instructional costs and services

55,809

 

39,436

 

Marketing and promotional

58,966

 

44,212

 

General and administrative

28,545

 

22,331

 

Total costs and expenses

143,320

 

105,979

 

Operating income

86,112

 

50,088

 

Other income, net

673

 

246

 

Income before income taxes

86,785

 

50,334

 

Income tax expense

32,866

 

20,511

 

Net income

$  53,919

 

$  29,823

 

Earnings per common share:

       

Basic

$      1.02

 

$      0.55

 

Diluted

$      0.92

 

$      0.49

 

Weighted average common shares outstanding used

       

in computing earnings per common share:

       

Basic

52,976

 

54,371

 

Diluted

58,583

 

60,466

 
         
       

 

BRIDGEPOINT EDUCATION, INC.

 

Condensed Consolidated Balance Sheets

 

(Unaudited)

 
         
 

As of March 31,

 

As of December 31,

 

2011

 

2010

 
 

(In thousands)

 

ASSETS

       

Current assets:

       

Cash and cash equivalents

$          211,816

 

$                 188,518

 

Restricted cash

25

 

25

 

Marketable securities

88,305

 

90,611

 

Accounts receivable, net

75,428

 

58,415

 

Deferred income taxes

7,039

 

7,039

 

Prepaid expenses and other current assets

10,999

 

12,650

 

Total current assets

393,612

 

357,258

 

Property and equipment, net

67,882

 

66,542

 

Marketable securities

65,230

 

20,000

 

Goodwill and intangibles, net

4,543

 

4,123

 

Deferred income taxes

15,845

 

15,845

 

Other long term assets

7,923

 

7,457

 

Total assets

$          555,035

 

$                 471,225

 
         

LIABILITIES AND STOCKHOLDERS’ EQUITY

       

Current liabilities:

       

Accounts payable

$              3,537

 

$                     5,076

 

Accrued liabilities

58,583

 

34,895

 

Deferred revenue and student deposits

186,485

 

173,576

 

Total current liabilities

248,605

 

213,547

 

Rent liability  

12,505

 

10,910

 

Other long term liabilities

8,511

 

8,527

 

Total liabilities

269,621

 

232,984

 

Total stockholders’ equity

285,414

 

238,241

 

Total liabilities and stockholders’ equity

$          555,035

 

$                 471,225

 
         
         
         
       

 

BRIDGEPOINT EDUCATION, INC.

 

Consolidated Statements of Cash Flows

 

(Unaudited)

 
         
 

Three Months Ended

 

March 31,

 
 

2011

 

2010

 
 

(In thousands)

 

Cash flows from operating activities

       

Net income

$    53,919

 

$    29,823

 

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

       

Provision for bad debts

11,595

 

7,896

 

Depreciation and amortization

2,722

 

1,729

 

Amortization of premium/discount

587

 

(19)

 

Deferred income taxes

-

 

265

 

Stock-based compensation

1,787

 

2,001

 

Excess tax benefit of option exercises

(3,737)

 

(249)

 

Loss on disposal of fixed assets

10

 

-

 

Changes in operating assets and liabilities:

       

Accounts receivable

(28,608)

 

(24,167)

 

Prepaid expenses and other current assets

2,070

 

(6)

 

Other long-term assets

(466)

 

(897)

 

Accounts payable and accrued liabilities

27,093

 

18,499

 

Deferred revenue and student deposits

12,909

 

17,365

 

Other liabilities

1,579

 

2,317

 

Net cash provided by operating activities

81,460

 

54,557

 
         

Cash flows from investing activities

       

Capital expenditures

(5,170)

 

(3,579)

 

Purchases of marketable securities

(53,930)

 

-

 

Capitalized curriculum development costs

(529)

 

-

 

Maturities of marketable securities

10,000

 

-

 

Net cash used in investing activities

(49,629)

 

(3,579)

 
         

Cash flows from financing activities

       

Proceeds from the exercise of stock options

422

 

13

 

Excess tax benefit of option exercises

3,737

 

249

 

Proceeds from the exercise of warrants

19

 

858

 

Repurchase of common stock

(12,711)

 

-

 

Payments of capital lease obligations

-

 

(634)

 

Net cash (used in) provided by financing activities

(8,533)

 

486

 

Net increase in cash and cash equivalents

23,298

 

51,464

 

Cash and cash equivalents at beginning of period

188,518

 

125,562

 

Cash and cash equivalents at end of period

$  211,816

 

$  177,026

 
         

Supplemental disclosure of non-cash transactions:

       

Purchase of equipment included in accounts payable and accrued liabilities

$         500

 

$      1,277