Zovio Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - March 10, 2015

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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 2014 Results

SAN DIEGO (March 10, 2015) - Bridgepoint Education, Inc. (NYSE:BPI), a provider of postsecondary education services, announced the results for its fourth quarter and full year ended December 31, 2014.
Highlights for the fourth quarter ended December 31, 2014:
•
Revenue of $147.3 million compared to $162.2 million for the same period in 2013.
•
Operating loss of $10.8 million compared to operating loss of $9.9 million for the same period in 2013.
•
Net loss of $5.2 million compared to net loss of $5.1 million for the same period in 2013.
•
Fully diluted loss per common share of $0.12 compared to fully diluted loss per common share of $0.10 for the same period in 2013. Included in the fully diluted loss of $0.12 were impairment and severance charges of $14.1 million, which had an after-tax impact of $0.19 on fully diluted earnings per common share.

Highlights for the full year ended December 31, 2014:
•
Total student enrollment was 55,823 compared to 63,624 at December 31, 2013.
•
Revenue of $638.7 million compared to $751.4 million for 2013.
•
Operating income of $14.3 million compared to $68.5 million for 2013.
•
Net income of $9.7 million compared to net income of $45.9 million for 2013.
•
Fully diluted earnings per common share of $0.21 compared to fully diluted earnings per common share of $0.83 for 2013.

“Ashford University’s focus in 2014 was to continue implementing and refining its initiatives to strengthen academic quality and enhance the support the University provides students and alumni. These initiatives were successful at producing over 17,000 graduates in 2014 by providing a rigorous and engaging learning experience designed for our working adult population,” said Andrew Clark, CEO of Bridgepoint Education.
Student Enrollment
Total student enrollment at the Company’s academic institutions, Ashford University and University of the Rockies, was 55,823 at December 31, 2014, compared with 63,624 students at December 31, 2013.
Financial Results
Revenue for the fourth quarter of 2014 was $147.3 million, compared with revenue of $162.2 million for the fourth quarter of 2013. Revenue for the year ended December 31, 2014, was $638.7 million, compared with revenue of $751.4 million for the year ended December 31, 2013.
Operating loss for the fourth quarter of 2014 was $10.8 million compared with operating loss of $9.9 million for the same period in 2013. Operating income for the year ended December 31, 2014, was $14.3 million, compared with $68.5 million for the year ended December 31, 2013.


Net loss for the fourth quarter of 2014 was $5.2 million compared with net loss of $5.1 million for the fourth quarter of 2013. Net income for the year ended December 31, 2014, was $9.7 million, compared with net income of $45.9 million for the year ended December 31, 2013.
Fully diluted loss per common share for the fourth quarter of 2014 was $0.12 compared with fully diluted loss per common share of $0.10 for the fourth quarter of 2013. Fully diluted earnings per common share for the year ended December 31, 2014, was $0.21 compared with fully diluted earnings per common share of $0.83 for the year ended December 31, 2013. Included in the fully diluted earnings per common share of $0.21 for the year ended December 31, 2014 were impairment and severance charges of $14.1 million, which had an after-tax impact of $0.19 on fully diluted earnings per common share.
The Company's effective tax rate for the year ended December 31, 2014, was 43.8%.
Balance Sheet and Cash Flow    
As of December 31, 2014, the Company had cash, cash equivalents and investments of $356.5 million, compared with $356.4 million as of December 31, 2013. The Company generated $25.2 million of cash from operating activities for the year ended December 31, 2014, compared with $85.6 million for the year ended December 31, 2013.
Earnings Conference Call and Webcast
The Company will host a conference call and webcast at 11:30 a.m. ET (8:30 a.m. PT) today to discuss its latest financial results and recent developments. Call participants should dial 866-859-7412 (United States/Canada) or (832) 900-4623 (other countries) and request the Bridgepoint Education call or provide the conference ID 95525667. A live broadcast of the call will also be available via the Internet at http://ir.bridgepointeducation.com and will be archived on the site for one year.
A telephonic replay will be available at (800) 585-8367 (United States/Canada) or 404-537-3406 (other countries), passcode 95525667. The replay will be available from Tuesday, March 10, 2015, at 3:00 p.m. (Eastern Time) until April 14, 2015, at 3:00 p.m. (Eastern Time).
About Bridgepoint Education
Bridgepoint Education, Inc. (NYSE:BPI) harnesses the latest technology to reimagine the modern student experience. Bridgepoint’s technologies, such as Waypoint Outcomes, enhance the way people learn in the digital age. Bridgepoint owns two academic institutions - Ashford University and University of the Rockies. 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 in Iowa and Colorado. Bridgepoint stands for greater access, social learning, and exposure to leading minds.
For more information, visit www.bridgepointeducation.com, www.facebook.com/BridgepointEducation, or 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 management’s intentions, hopes, beliefs or expectations, and statements regarding the Company's 2015 outlook. These statements are subject to risks and uncertainties that could cause the Company's actual performance or results to differ materially from those expressed in or suggested by such statements. Such risks and uncertainties include, without limitation:
•
the failure to comply with the extensive regulatory framework applicable to the Company and its institutions, including Title IV of the Higher Education Act of 1965, as amended, and its regulations, state laws and regulatory requirements, and accrediting agency requirements;
•
adverse administrative, economic, legislative or regulatory changes affecting the Company and it'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, recruiting costs and tuition rates;


•
reputational and other risks related to potential compliance audits, regulatory actions, negative publicity or service disruptions; and
•
the inability to recruit and retain students or develop new or expanded programs in a timely and cost-effective manner.
Additional information on factors that could affect the Company's performance or 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 the Company's periodic reports filed with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 to be filed with the SEC. You should not place undue reliance on any forward-looking statements. Forward-looking statements are made on the basis of management's good faith beliefs and assumptions regarding future events based on information available at the time the statements are made. Forward-looking statements speak only as of the date they are made, and the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws.



BRIDGEPOINT EDUCATION, INC.
Consolidated Statements of Income
(In thousands, except per share amounts)

 
Three Months Ended
December 31,
 
Year Ended
December 31,
 
2014
 
2013
 
2014
 
2013
Revenue
$
147,259

 
$
162,225

 
$
638,705

 
$
751,449

Costs and expenses:
 
 
 
 
 
 
 
Instructional costs and services
81,671

 
90,541

 
321,312

 
370,734

Admissions advisory and marketing
58,629

 
55,726

 
236,708

 
235,358

General and administrative
17,785

 
25,828

 
66,374

 
76,894

Total costs and expenses
158,085

 
172,095

 
624,394

 
682,986

Operating income (loss)
(10,826
)
 
(9,870
)
 
14,311

 
68,463

Other income, net
725

 
711

 
2,884

 
3,082

Income (loss) before income taxes
(10,101
)
 
(9,159
)
 
17,195

 
71,545

Income tax expense (benefit)
(4,853
)
 
(4,050
)
 
7,527

 
25,662

Net income (loss)
$
(5,248
)
 
$
(5,109
)
 
$
9,668

 
$
45,883

Earnings (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.12
)
 
$
(0.10
)
 
$
0.21

 
$
0.85

Diluted
(0.12
)
 
(0.10
)
 
0.21

 
0.83

Weighted average number of common shares outstanding used in computing earnings per common share:
 
 
 
 
 
 
 
Basic
45,381

 
53,098

 
45,204

 
53,923

Diluted
45,381

 
53,098

 
46,512

 
55,487





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

 
As of December 31,
 
2014
 
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
207,003

 
$
212,526

Restricted cash
25,934

 
36,946

Investments
12,051

 
65,901

Accounts receivable, net
21,274

 
22,953

Student loans receivable, net
1,003

 
1,043

Deferred income taxes
21,301

 
16,683

Prepaid expenses and other current assets
22,818

 
21,563

Total current assets
311,384

 
377,615

Property and equipment, net
78,219

 
91,425

Investments
111,557

 
41,062

Student loans receivable, net
9,510

 
11,785

Goodwill and intangibles, net
24,775

 
26,878

Deferred income taxes
20,175

 
18,507

Other long-term assets
2,475

 
2,740

Total assets
$
558,095

 
$
570,012

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
1,013

 
$
5,195

Accrued liabilities
51,403

 
54,290

Deferred revenue and student deposits
108,048

 
132,791

Total current liabilities
160,464

 
192,276

Rent liability
22,098

 
23,927

Other long-term liabilities
9,652

 
9,271

Total liabilities
192,214

 
225,474

Total stockholders' equity
365,881

 
344,538

Total liabilities and stockholders' equity
$
558,095

 
$
570,012




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

 
Year Ended December 31,
 
2014
 
2013
Cash flows from operating activities
 

 
 
Net income
$
9,668

 
$
45,883

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

 
 
Provision for bad debts
28,184

 
47,119

Depreciation and amortization
23,317

 
21,666

Amortization of premium/discount
206

 
2,624

Deferred income taxes
(7,096
)
 
(6,962
)
Stock-based compensation
10,558

 
13,934

Excess tax benefit of option exercises
(1,271
)
 
(2,590
)
Loss on impairment of student loans receivable
2,435

 
1,998

Net gain on marketable securities
(34
)
 
(63
)
Loss on termination of leased space
6,470

 
328

Loss on disposal of fixed assets
7,028

 
751

Changes in operating assets and liabilities:

 
 
Restricted cash
11,042

 
10,048

Accounts receivable
(27,323
)
 
(15,973
)
Prepaid expenses and other current assets
659

 
(2,607
)
Student loans receivable
809

 
291

Other long-term assets
266

 
(412
)
Accounts payable and accrued liabilities
(12,102
)
 
13,220

Deferred revenue and student deposits
(24,411
)
 
(41,607
)
Other liabilities
(3,754
)
 
(184
)
Uncertain tax position
568

 
(1,878
)
Net cash provided by operating activities
25,219

 
85,586

Cash flows from investing activities
 
 
 
Capital expenditures
(11,429
)
 
(14,825
)
Purchases of investments
(87,933
)
 
(26,759
)
Restricted cash
(30
)
 
—

Capitalized costs for intangible assets
(3,634
)
 
(19,563
)
Sales and maturities of investments
70,000

 
176,343

Net cash provided by (used in) investing activities
(33,026
)
 
115,196

Cash flows from financing activities
 
 
 
Proceeds from exercise of stock options
3,108

 
10,464

Tax withholdings related to net exercise of stock options
—

 
(9,170
)
Excess tax benefit of option exercises
1,271

 
2,590

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

 
1,234

Proceeds from the exercise of warrants
—

 
231

Issuance of restricted stock
(2,095
)
 
(1,080
)
Repurchase of common stock
—

 
(201,496
)
Net cash provided by (used in) financing activities
2,284

 
(197,227
)
Net increase (decrease) in cash and cash equivalents
(5,523
)
 
3,555

Cash and cash equivalents at beginning of period
212,526

 
208,971

Cash and cash equivalents at end of period
$
207,003

 
$
212,526



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