Zovio Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - March 12, 2013

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News Release
Contact: Paul Goodson, Associate Vice President, Investor Relations
(866) 475-0317 x2271
investorrelations@bridgepointeducation.com

Bridgepoint Education Reports Full Year 2012 Results
SAN DIEGO (March 12, 2013) - Bridgepoint Education, Inc. (NYSE:BPI), a provider of postsecondary education services, announced the results for its fourth quarter and full year ended December 31, 2012.
Highlights for the fourth quarter ended December 31, 2012:
•
Revenue decreased to $209.4 million from $221.3 million for the same period in 2011.
•
Operating income decreased to $25.1 million from $35.3 million for the same period in 2011.
•
Net income decreased to $16.0 million from $22.9 million for the same period in 2011.
•
Fully diluted earnings per common share decreased to $0.29 from $0.41 for the same period in 2011.

Highlights for the full year ended December 31, 2012:
•
Total student enrollment decreased to 81,810 from 86,642 at December 31, 2011.
•
Revenue increased to $968.2 million from $933.3 million for 2011.
•
Operating income decreased to $202.7 million from $273.7 million for 2011.
•
Net income was $128.0 million compared with net income of $172.8 million for 2011.
•
Fully diluted earnings per common share was $2.29 compared with $3.02 for 2011.

Student Enrollment
Total student enrollment at the Company's academic institutions, Ashford University and University of the Rockies, was 81,810 at December 31, 2012, compared with 86,642 students at the end of the fourth quarter of 2011. Combined new student enrollments for the fourth quarter of 2012 at both of the Company's academic institutions were approximately 9,260, compared with combined new student enrollments of approximately 13,500 for the fourth quarter of 2011.
Financial Results
Effective in the fourth quarter of 2012, the Company made changes in the presentation of its operating expenses. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency to its operations. The Company also believes that the reclassification better represents the operational changes and the business initiatives that have been implemented. The Company has reclassified prior periods to conform to the new presentation.
Revenue for the fourth quarter of 2012 was $209.4 million, compared with revenue of $221.3 million for the fourth quarter of 2011. Revenue for the year ended December 31, 2012, was $968.2 million, compared with revenue of $933.3 million for the year ended December 31, 2011.
Operating income for the fourth quarter of 2012, was $25.1 million, compared with $35.3 million for the same period in 2011. Operating income for the year ended December 31, 2012, was $202.7 million, compared with $273.7 million for the year ended December 31, 2011.
Net income for the fourth quarter of 2012 was $16.0 million, compared with net income of $22.9 million for the fourth quarter of 2011. Net income for the year ended December 31, 2012, was $128.0 million, compared with net income of $172.8 million for the year ended December 31, 2011.


Fully diluted earnings per common share for the fourth quarter of 2012 was $0.29 compared with fully diluted earnings per common share of $0.41 for the fourth quarter of 2011. Fully diluted earnings per common share for the year ended December 31, 2012, was $2.29, compared with fully diluted earnings per common share of $3.02 for the year ended December 31, 2011.
The Company's effective tax rate for the year ended December 31, 2012, was 37.9%.
The Company anticipates a 2.75% tuition increase for online students at Ashford University for courses beginning on or after April 1, 2013.
Balance Sheet and Cash Flow    
As of December 31, 2012, the Company had cash, cash equivalents and investments of $514.7 million, compared with $407.2 million as of December 31, 2011. The Company generated $143.2 million of cash from operating activities for the year ended December 31, 2012, compared with $220.8 million for the year ended December 31, 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 (800) 347-6311 and for international callers is (719) 457-2086. The access code for all callers is 7577415. 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 March 19, 2013. 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 7577415.
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 academic 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.
Forward-Looking Statements
This news release may contain forward-looking statements including, without limitation, statements regarding the Company's 2013 outlook and related commentary. These statements involve risks and uncertainties, and the Company's actual performance may differ materially from those expressed in or suggested by such statements. Risks and uncertainties include, without limitation:
•
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 administrative, 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.


More information on potential factors that could affect the Company's performance 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 the Company's periodic reports filed with the SEC, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 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 the Company 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.
Consolidated Statements of Income
(In thousands, except per share amounts)

 
 
Year Ended
December 31,
 
 
2012
 
2011
Revenue
 
$
968,171

 
$
933,349

Costs and expenses:
 
 
 
 
Instructional costs and services
 
355,273

 
303,860

Admissions advisory and marketing
 
339,209

 
297,619

General and administrative
 
70,975

 
58,123

Total costs and expenses
 
765,457

 
659,602

Operating income
 
202,714

 
273,747

Other income, net
 
3,370

 
2,768

Income before income taxes
 
206,084

 
276,515

Income tax expense
 
78,121

 
103,751

Net income
 
$
127,963

 
$
172,764

Earnings per common share:
 
 
 
 
Basic
 
$
2.42

 
$
3.30

Diluted
 
2.29

 
3.02

Weighted average number of common shares outstanding used in computing earnings per common share:
 
 
 
 
Basic
 
52,947

 
52,291

Diluted
 
55,946

 
57,133





BRIDGEPOINT EDUCATION, INC.
Consolidated Balance Sheets
(In thousands, except par value)

 
As of December 31,
 
2012
 
2011
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
255,965

 
$
133,921

Restricted cash
—

 
25

Investments
136,967

 
153,779

Accounts receivable, net
75,177

 
62,156

Deferred income taxes
8,228

 
5,429

Prepaid expenses and other current assets
19,810

 
17,199

Total current assets
496,147

 
372,509

Property and equipment, net
95,966

 
89,667

Investments
121,738

 
119,507

Student loans receivable, net
15,143

 
9,255

Goodwill and intangibles, net
10,739

 
7,037

Deferred income taxes
13,266

 
11,200

Other long-term assets
2,330

 
4,461

Total assets
$
755,329

 
$
613,636

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
4,588

 
$
8,961

Accrued liabilities
44,640

 
40,205

Deferred revenue and student deposits
175,057

 
185,446

Total current liabilities
224,285

 
234,612

Rent liability
25,173

 
16,595

Other long-term liabilities
9,759

 
8,781

Total liabilities
259,217

 
259,988

Total stockholders' equity
496,112

 
353,648

Total liabilities and stockholders' equity
$
755,329

 
$
613,636




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

 
Year Ended December 31,
 
2012
 
2011
Cash flows from operating activities
 
 
 
Net income
$
127,963

 
$
172,764

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provision for bad debts
66,446

 
58,511

Depreciation and amortization
17,424

 
12,743

Amortization of premium/discount
6,805

 
3,969

Deferred income taxes
(7,264
)
 
6,606

Stock-based compensation
13,729

 
10,595

Excess tax benefit of option exercises
(10,058
)
 
(19,096
)
Loss on disposal of fixed assets
1,153

 
13

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(81,577
)
 
(60,817
)
Prepaid expenses and other current assets
(1,056
)
 
(2,104
)
Student loans receivable
(3,778
)
 
(7,947
)
Other long-term assets
2,131

 
253

Accounts payable and accrued liabilities
12,100

 
27,509

Deferred revenue and student deposits
(10,389
)
 
11,870

Other liabilities
8,772

 
5,882

Uncertain tax position
784

 
57

Net cash provided by operating activities
143,185

 
220,808

Cash flows from investing activities
 
 
 
Capital expenditures
(25,296
)
 
(34,492
)
Purchases of investments
(179,387
)
 
(337,084
)
Restricted cash
25

 
—

Capitalized curriculum development costs
(5,262
)
 
(3,521
)
Sales and maturities of investments
186,911

 
167,049

Net cash used in investing activities
(23,009
)
 
(208,048
)
Cash flows from financing activities
 
 
 
Proceeds from exercise of stock options
2,257

 
4,889

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

Excess tax benefit of option exercises
10,058

 
19,096

Proceeds from the issuance of stock under employee stock purchase plan
1,340

 
1,330

Proceeds from the exercise of warrants
490

 
106

Tax withholdings related to net issuance of warrants
(944
)
 
—

Issuance of restricted stock
(313
)
 
—

Repurchase of common stock
(602
)
 
(92,778
)
Net cash provided by (used in) financing activities
1,868

 
(67,357
)
Net increase (decrease) in cash and cash equivalents
122,044

 
(54,597
)
Cash and cash equivalents at beginning of period
133,921

 
188,518

Cash and cash equivalents at end of period
$
255,965

 
$
133,921




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