Delaware | 001-34272 | 59-3551629 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
13500 Evening Creek Drive North, Suite 600 San Diego, California | 92128 | |
(Address of principal executive offices) | (Zip Code) |
(d) | Exhibits. |
Exhibit No. | Description | |
99.1 | Press Release of Bridgepoint Education, Inc. dated May 1, 2012 |
Date: May 1, 2012 | Bridgepoint Education, Inc. | |
By: | /s/ Daniel J. Devine | |
Name: Daniel J. Devine | ||
Title: Chief Financial Officer |
• | Total student enrollment at period end was 94,863. |
• | Revenue increased to $250.4 million from $229.4 million for the same period in 2011. |
• | Operating income decreased to $52.4 million from $86.1 million for the same period in 2011. Operating income for the first quarter of 2012 reflects a $10.8 million expense accrued in connection with a pending legal settlement. |
• | Net income was $33.0 million compared with net income of $53.9 million for the same period in 2011. |
• | Fully diluted earnings per share was $0.59 compared with $0.92 for the same period in 2011. Fully diluted earnings per share for the first quarter of 2012 reflect a $0.12 per share expense accrued in connection with the pending legal settlement. |
• | Total student enrollment is expected to be between 94,500 and 96,200 at December 31, 2012. |
• | Revenue is expected to be between $1.01 billion and $1.03 billion. |
• | Net income is expected to be between $131.5 million and $136.9 million. |
• | Adjusted net income is expected to be between $138.2 million and $143.7 million. |
• | Fully diluted earnings per share is expected to be between $2.33 and $2.43, based on an estimated fully diluted weighted average share count of 56.3 million for the year ending December 31, 2012. |
• | Adjusted EPS is expected to be between $2.45 and $2.55, based on an estimated fully diluted weighted average share count of 56.3 million for the year ending December 31, 2012. |
• | Bad debt as a percentage of revenues for 2012 is expected to be 6%. |
• | Capital expenditures for 2012 are expected to be approximately 4% of revenue. |
• | The Company's effective tax rate for 2012 is estimated to be 37.8%. |
• | Adjusted G&A. Adjusted G&A is defined as general and administrative expenses less the $10.8 million expense accrued in the first quarter of 2012 in connection with a pending legal settlement (the “Settlement Expense”). In April 2012, the Company entered into a settlement agreement with the plaintiffs of the three cases consolidated under Stevens v. Bridgepoint Education, Inc to settle the plaintiff's claims. The settlement agreement remains subject to approval by the judge overseeing the consolidated cases. |
• | Adjusted operating income. Adjusted operating income is defined as operating income plus the Settlement Expense. |
• | Adjusted net income. Adjusted net income is defined as net income plus the net income effect of the Settlement Expense. |
• | Adjusted EPS. Adjusted EPS is defined to mean adjusted net income divided by the fully diluted weighted average shares outstanding for the applicable period. |
• | 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 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. |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Revenue | $ | 250,437 | $ | 229,432 | |||
Costs and expenses: | |||||||
Instructional costs and services | 68,475 | 55,809 | |||||
Marketing and promotional | 80,063 | 58,966 | |||||
General and administrative | 49,546 | 28,545 | |||||
Total costs and expenses | 198,084 | 143,320 | |||||
Operating income | 52,353 | 86,112 | |||||
Other income, net | 683 | 673 | |||||
Income before income taxes | 53,036 | 86,785 | |||||
Income tax expense | 19,995 | 32,866 | |||||
Net income | $ | 33,041 | $ | 53,919 | |||
Earnings per share: | |||||||
Basic | $ | 0.64 | $ | 1.02 | |||
Diluted | 0.59 | 0.92 | |||||
Weighted average number of common shares outstanding used in computing earnings per share: | |||||||
Basic | 52,008 | 52,976 | |||||
Diluted | 56,203 | 58,583 |
As of March 31, 2012 | As of December 31, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 162,148 | $ | 133,921 | |||
Restricted cash | 25 | 25 | |||||
Investments | 164,562 | 153,779 | |||||
Accounts receivable, net | 92,853 | 62,156 | |||||
Deferred income taxes | 5,441 | 5,429 | |||||
Prepaid expenses and other current assets | 17,864 | 17,199 | |||||
Total current assets | 442,893 | 372,509 | |||||
Property and equipment, net | 92,082 | 89,667 | |||||
Investments | 115,431 | 119,507 | |||||
Student loans receivable, net | 12,065 | 9,255 | |||||
Goodwill and intangibles, net | 8,378 | 7,037 | |||||
Deferred income taxes | 10,805 | 11,200 | |||||
Other long-term assets | 2,517 | 4,461 | |||||
Total assets | $ | 684,171 | $ | 613,636 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,651 | $ | 8,961 | |||
Accrued liabilities | 67,409 | 40,205 | |||||
Deferred revenue and student deposits | 189,169 | 185,446 | |||||
Total current liabilities | 261,229 | 234,612 | |||||
Rent liability | 19,741 | 16,595 | |||||
Other long-term liabilities | 8,980 | 8,781 | |||||
Total liabilities | 289,950 | 259,988 | |||||
Total stockholders' equity | 394,221 | 353,648 | |||||
Total liabilities and stockholders' equity | $ | 684,171 | $ | 613,636 |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 33,041 | $ | 53,919 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for bad debts | 14,945 | 11,595 | |||||
Depreciation and amortization | 4,095 | 2,722 | |||||
Amortization of premium/discount | 1,754 | 587 | |||||
Stock-based compensation | 2,497 | 1,787 | |||||
Excess tax benefit of option exercises | (3,588 | ) | (3,737 | ) | |||
Loss on disposal of fixed assets | — | 10 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (46,053 | ) | (28,449 | ) | |||
Prepaid expenses and other current assets | (459 | ) | 2,070 | ||||
Student loans receivable | (2,399 | ) | (663 | ) | |||
Other long-term assets | 1,944 | 38 | |||||
Accounts payable and accrued liabilities | 27,505 | 27,093 | |||||
Deferred revenue and student deposits | 3,723 | 12,909 | |||||
Other liabilities | 3,345 | 1,579 | |||||
Net cash provided by operating activities | 40,350 | 81,460 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (7,236 | ) | (5,170 | ) | |||
Purchases of investments | (36,573 | ) | (53,930 | ) | |||
Capitalized curriculum development costs | (1,638 | ) | (529 | ) | |||
Sales and maturities of investments | 28,923 | 10,000 | |||||
Net cash used in investing activities | (16,524 | ) | (49,629 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from the exercise of stock options | 813 | 422 | |||||
Excess tax benefit of option exercises | 3,588 | 3,737 | |||||
Proceeds from the exercise of warrants | — | 19 | |||||
Repurchase of common stock | — | (12,711 | ) | ||||
Net cash provided by (used in) financing activities | 4,401 | (8,533 | ) | ||||
Net increase in cash and cash equivalents | 28,227 | 23,298 | |||||
Cash and cash equivalents at beginning of period | 133,921 | 188,518 | |||||
Cash and cash equivalents at end of period | $ | 162,148 | $ | 211,816 |
Three Months Ended March 31, 2012 | |||
General and administrative expenses | $ | 49,546 | |
Adjustment for settlement expense | 10,800 | ||
Adjusted general and administrative expenses | $ | 38,746 | |
Three Months Ended March 31, 2012 | |||
Operating income | $ | 52,353 | |
Adjustment for settlement expense | 10,800 | ||
Adjusted operating income | $ | 63,153 | |
Three Months Ended March 31, 2012 | |||
Net income | $ | 33,041 | |
Adjustment for settlement expense | 6,729 | ||
Adjusted net income | $ | 39,770 | |
Three Months Ended March 31, 2012 | |||
Fully diluted earnings per share | $ | 0.59 | |
Adjustment for settlement expense | 0.12 | ||
Adjusted fully diluted earnings per share | $ | 0.71 | |
2012 Outlook: | GAAP | Settlement Expense Adjustment | Adjusted | ||||||||||||||||
Net income | $ | 131,480 | - | $ | 136,940 | $ | 6,729 | $ | 138,209 | - | $ | 143,669 | |||||||
Fully diluted earnings per share | $ | 2.33 | - | $ | 2.43 | $ | 0.12 | $ | 2.45 | - | $ | 2.55 |
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