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05 / 2019 article

Bridgepoint Education Reports Second Quarter 2011 Results

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SAN DIEGO, Aug. 2, 2011 /PRNewswire/ -- Bridgepoint Education (NYSE: BPI), a provider of postsecondary education services, announced today its results for the three months ended June 30, 2011.

Highlights for the second quarter ended June 30, 2011, are as follows:

  • Total student enrollment at period end was 84,545.
  • Revenue increased to $239.9 million from $173.8 million for the same period in 2010.
  • Operating income increased to $82.5 million from $59.2 million for the same period in 2010.
  • Net income was $52.1 million compared with $35.3 million for the same period in 2010.
  • Fully diluted earnings per common share was $0.90 compared with $0.58 for the same period in 2010.
  • Repurchased 1.9 million shares, at an average price per share of $23.15, for a total of $43.7 million during the second quarter. 

 

"During the first half of 2011, our institutions continued to make progress on key initiatives to improve the academic readiness of students and to provide students with an innovative, high quality learning experience.   Our deep commitment to enhancing access through technology was evident in the introduction of new Android™ and Apple™ mobile apps, as well as the improved Constellation™ iPad™ app," 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 84,545 students at June 30, 2011, compared with 67,744 students at the end of the second quarter of 2010.

New student enrollments for the second quarter of 2011 at Bridgepoint Education's academic institutions were approximately 19,050, compared with combined new student enrollments of approximately 18,450 for the same period in 2010.

Financial Results

Revenue for the second quarter of 2011 was $239.9 million, compared with revenue of $173.8 million for the same period in 2010.  Revenue for the six months ended June 30, 2011, was $469.3 million, compared to $329.9 million for the same period in 2010.

Operating income for the second quarter of 2011 was $82.5 million compared with operating income of $59.2 million for the same period in 2010. Operating income for the six months ended June 30, 2011 was $168.7 million compared to $109.3 million for the same period in 2010.

Net income for the second quarter of 2011 was $52.1 million compared with net income of $35.3 million for the same period in 2010. Net income for the six months ended June 30, 2011 was $106.1 million compared to $65.1 million for the same period in 2010.

Fully diluted earnings per common share for the second quarter of 2011 was $0.90 compared with $0.58 for the same period in 2010. Fully diluted earnings per common share for the six months ended June 30, 2011, was $1.82 compared with $1.07 for the same period in 2010.

The Company's effective tax rate for the second quarter of 2011 was 37.3%.  

Balance Sheet and Cash Flow    

As of June 30, 2011, the Company had cash, cash equivalents and marketable securities of $357.4 million, compared with $299.1 million as of December 31, 2010.  The Company generated $116.2 million of cash from operating activities in the six months ended June 30, 2011, compared with $45.4 million for the same period in 2010.

During the three months ended June 30, 2011, the Company repurchased 1.9 million shares, at a weighted average price of $23.15 per share, for a total cost of $43.7 million.  As of June 30, 2011, approximately $36.4 million remains available under the share repurchase programs approved by the Company's Board of Directors, which may be suspended at any time.

Full-Year 2011 Outlook

Based on the results in the second quarter of 2011, the Company is updating its full year 2011 guidance as follows:  

  • Total student enrollment is expected to be between 79,500 and 83,500.
  • Revenue is expected to be between $886.5 million and $901.5 million.
  • Net income is expected to be between $148.3 million and $155.2 million.
  • Fully diluted earnings per common share is expected to be between $ 2.56 and $2.68 based on an estimated fully diluted weighted average share count of 57.9 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 4.5% and 5.0% 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) 661-5144 and for international callers is (913) 312-1517. The access code for all callers is 8178745. 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 August 9, 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 8178745.

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; 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 or legislative 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 the risk factors included in Part II, Item 1A of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 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)

(In thousands, except per share amounts)

 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 
 

2011

 

2010

 

2011

 

2010

 

Revenue

$    239,880

 

$    173,840

 

$    469,313

 

$    329,907

 

Costs and expenses:

               

Instructional costs and services

62,012

 

43,257

 

117,821

 

82,693

 

Marketing and promotional

62,188

 

50,096

 

121,154

 

94,309

 

General and administrative

33,131

 

21,257

 

61,677

 

43,588

 

Total costs and expenses

157,331

 

114,610

 

300,652

 

220,590

 

Operating income

82,549

 

59,230

 

168,661

 

109,317

 

Other income, net

(657)

 

(370)

 

(1,330)

 

(617)

 

Income before income taxes

83,206

 

59,600

 

169,991

 

109,934

 

Income tax expense

31,057

 

24,330

 

63,923

 

44,841

 

Net income

$     52,149

 

$     35,270

 

$     106,068

 

$     65,093

 

Earnings per common share:

               

Basic

$         0.99

 

$         0.65

 

$          2.00

 

$         1.19

 

Diluted

$         0.90

 

$         0.58

 

$          1.82

 

$         1.07

 

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

               

Basic

52,911

 

54,608

 

52,943

 

54,490

 

Diluted

57,939

 

60,728

 

58,253

 

60,613

 
   
               

 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 
 

As of
June 30, 2011

 

As of
December 31, 2010

 

ASSETS

       

Current assets:

       

Cash and cash equivalents

$    210,495

 

$    188,518

 

Restricted cash

25

 

25

 

Marketable securities

78,032

 

90,611

 

Accounts receivable, net

78,685

 

58,415

 

Deferred income taxes

7,039

 

7,039

 

Prepaid expenses and other current assets

13,267

 

12,650

 

Total current assets

387,543

 

357,258

 

Property and equipment, net

75,500

 

66,542

 

Marketable securities

68,837

 

20,000

 

Goodwill and intangibles, net

5,209

 

4,123

 

Deferred income taxes

15,845

 

15,845

 

Other long-term assets

8,566

 

7,457

 

Total assets

$    561,500

 

$    471,225

 

LIABILITIES AND STOCKHOLDERS' EQUITY

       

Current liabilities:

       

Accounts payable

$        3,081

 

$        5,076

 

Accrued liabilities

47,618

 

34,895

 

Deferred revenue and student deposits

180,730

 

173,576

 

Total current liabilities

231,429

 

213,547

 

Rent liability

14,191

 

10,910

 

Other long-term liabilities

8,538

 

8,527

 

Total liabilities

254,158

 

232,984

 

Total stockholders' equity

307,342

 

238,241

 

Total liabilities and stockholders' equity

$    561,500

 

$    471,225

 
   
       

 

BRIDGEPOINT EDUCATION, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 
 

Six Months Ended
June 30,

 
 

2011

 

2010

 

Cash flows from operating activities

       

Net income

$    106,068

 

$     65,093

 

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

       

Provision for bad debts

23,614

 

16,262

 

Depreciation and amortization

5,572

 

3,776

 

Amortization of premium/discount

1,380

 

(12)

 

Deferred income taxes

 

(13)

 

Stock-based compensation

4,796

 

3,681

 

Excess tax benefit of option exercises

(10,365)

 

(757)

 

Loss on disposal of fixed assets

11

 

 

Changes in operating assets and liabilities:

       

     Accounts receivable

(43,884)

 

(54,547)

 

     Prepaid expenses and other current assets

360

 

(3,131)

 

     Other long-term assets

(1,109)

 

(934)

 

     Accounts payable and accrued liabilities

19,276

 

7,899

 

     Deferred revenue and student deposits

7,154

 

3,458

 

     Other liabilities

3,292

 

4,638

 

Net cash provided by operating activities

116,165

 

45,413

 

Cash flows from investing activities

       

Capital expenditures

(12,477)

 

(12,060)

 

Purchases of marketable securities

(114,115)

 

(5,009)

 

Capitalized curriculum development costs

(1,333)

 

(259)

 

Maturities of marketable securities

75,500

 

30,000

 

Net cash (used in) provided by investing activities

(52,425)

 

12,672

 

Cash flows from financing activities

       

Proceeds from the exercise of stock options

3,577

 

411

 

Excess tax benefit of option exercises

10,365

 

757

 

Proceeds from the issuance of stock under employee stock purchase plan

642

 

501

 

Proceeds from the exercise of warrants

79

 

1,188

 

Repurchase of common stock

(56,426)

 

 

Payments of capital lease obligations

 

(634)

 

Net cash (used in) provided by financing activities

(41,763)

 

2,223

 

Net increase in cash and cash equivalents

21,977

 

60,308

 

Cash and cash equivalents at beginning of period

188,518

 

125,562

 

Cash and cash equivalents at end of period

$    210,495

 

$    185,870

 

Supplemental disclosure of non-cash transactions:

       

Purchase of equipment included in accounts payable and accrued liabilities

$        3,524

 

$           810

 
   
       

 

SOURCE Bridgepoint Education, Inc.