UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
 Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 Date of Report (Date of earliest event reported): November 5, 2015
 BRIDGEPOINT EDUCATION, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
001-34272
 
59-3551629
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
13500 Evening Creek Drive North
San Diego, California
 
92128
(Address of principal executive offices)
 
(Zip Code)
(858) 668-2586
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 o           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 o           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 o           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02.     Results of Operations and Financial Condition.
On November 5, 2015, Bridgepoint Education, Inc. issued a press release announcing financial results for its third quarter ended September 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In accordance with General Instruction B.2. of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference into such a filing.
Item 9.01.     Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit No.
 
Description
99.1
 
Press Release of Bridgepoint Education, Inc. dated November 5, 2015



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 5, 2015
 
Bridgepoint Education, Inc.
 
 
 
 
By:
/s/ RUSSELL SAKAMOTO
 
 
Name:  Russell Sakamoto
 
 
Title: Chief Accounting Officer





News Release
Contact: Kevin Royal, Chief Financial Officer
866.475.0317 x11120
investorrelations@bridgepointeducation.com

Bridgepoint Education Reports Third Quarter 2015 Results
Operating Loss of $34.5 million Includes $44.9 million of Restructuring and Impairment Charges

SAN DIEGO (November 5, 2015) - Bridgepoint Education (NYSE:BPI), a provider of postsecondary education services, announced today its results for the three and nine months ended September 30, 2015.
Financial Results for the Three Months Ended September 30, 2015
Revenue for the third quarter of 2015 was $140.8 million, compared with revenue of $162.7 million for the same period in 2014.
Operating loss for the third quarter of 2015 was $34.5 million compared with operating income of $10.6 million for the same period in 2014.
Net loss for the third quarter of 2015 was $62.7 million compared with net income of $6.3 million for the same period in 2014.
Fully diluted loss per share for the third quarter of 2015 was $1.37 compared with fully diluted earnings per share of $0.14 for the same period in 2014.
The Company recognized income tax expense of $28.7 million for the three months ended September 30, 2015.
Non-GAAP Financial Results for the Three Months Ended September 30, 2015
Non-GAAP operating income for the third quarter was $10.4 million compared with non-GAAP operating income of $10.6 million for the same period in 2014. Non-GAAP operating income for the third quarter excludes restructuring and impairment charges of $44.9 million.
Non-GAAP net income for the third quarter was $6.0 million compared with non-GAAP net income of $6.3 million for the same period in 2014. Non-GAAP net income for the third quarter excludes restructuring and impairment charges of $44.9 million and the related tax effect, as well as tax expense of $40.7 million to establish a valuation allowance against deferred tax assets.
Non-GAAP fully diluted earnings per share for the third quarter was $0.13 compared with non-GAAP fully diluted earnings per share of $0.14 for the same period in 2014.
Refer to the accompanying tables and related explanations for a detailed reconciliation of GAAP to non-GAAP operating income, net income and diluted earnings per share.
Financial Results for the Nine Months Ended September 30, 2015
Revenue for the nine months ended September 30, 2015 was $430.3 million, compared with revenue of $491.4 million for the same period in 2014.
Operating loss for the nine months ended September 30, 2015 was $36.2 million compared with operating income of $25.1 million for the same period in 2014.
Net loss for the nine months ended September 30, 2015 was $63.8 million compared with net income of $14.9 million for the same period in 2014.



Fully diluted loss per share for the nine months ended September 30, 2015 was $1.40 compared with fully diluted earnings per share of $0.32 for the same period in 2014.
The Company recognized income tax expense of $29.1 million for the nine months ended September 30, 2015.
Non-GAAP Financial Results for the Nine Months Ended September 30, 2015
Non-GAAP operating income for the nine months ended September 30, 2015 was $23.1 million compared with non-GAAP operating income of $25.1 million for the same period in 2014. Non-GAAP operating income for the nine months ended September 30, 2015 excludes restructuring and impairment charges of $59.3 million.
Non-GAAP net income for the nine months ended September 30, 2015 was $14.0 million compared with non-GAAP net income of $14.9 million for the same period in 2014. Non-GAAP net income for the nine months ended September 30, 2015 excludes restructuring and impairment charges of $59.3 million and the related tax effect, as well as tax expense of $40.7 million to establish a valuation allowance against deferred tax assets.
Non-GAAP fully diluted earnings per share for the nine months ended September 30, 2015 was $0.30 compared with non-GAAP fully diluted earnings per share of $0.32 for the same period in 2014.
Refer to the accompanying tables and related explanations for a detailed reconciliation of GAAP to non-GAAP operating income, net income and diluted earnings per share.
Balance Sheet and Cash Flow
As of September 30, 2015, the Company had cash, restricted cash, cash equivalents and marketable securities of $360.5 million, compared with $356.5 million as of December 31, 2014.
The Company generated $16.6 million of cash from operating activities during the nine months ended September 30, 2015, compared with $24.6 million of cash provided by operating activities during the same period in 2014.
Student Enrollment
Total student enrollment at Bridgepoint Education's academic institutions, Ashford University and University of the Rockies, was 49,982 students at September 30, 2015, compared with 59,552 students at September 30, 2014.
For the third quarter of 2015, the twelve-month retention for all Ashford students who were active on the last day of the third quarter of 2014 was 60.1%.  For the third quarter of 2014, the twelve-month retention for all Ashford students who were active on the last day of the third quarter of 2013 was 65.8%.
About Non-GAAP Financial Measures
The Company uses non-GAAP financial measures for internal evaluation and to report the results of its business. These non-GAAP financial measures include non-GAAP operating income, non-GAAP net income, and non-GAAP diluted earnings per share. These measures are not prepared in accordance with, nor an alternative to, U.S. generally accepted accounting principles, or GAAP. These measures are intended to supplement GAAP financial information, and may be different from non-GAAP financial measures used by other companies. The Company believes that these measures provide useful information to its management, board of directors and investors regarding its ongoing operating activities and business trends related to its financial condition and results of operations. The Company believes that it is useful to provide investors with information to understand how specific line items in the statement of operations are affected by certain items that may not be indicative of the Company’s core business operating results, such as restructuring and impairment expenses and income tax adjustments. Further, to the extent that other companies use similar methods in calculating non-GAAP measures, the provision of supplemental non-GAAP information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP operating results. In addition, the Company’s management and board of directors use these non-GAAP financial measures in developing operating budgets and in reviewing the Company’s results of operations, since such items have limited impact on their current and future operating decisions. Additionally, the Company believes that inclusion of these non-GAAP financial measures provides consistency and comparability with its past reports of financial results. However, investors should be aware that non-GAAP measures have inherent limitations and should be read in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. Refer to the accompanying tables for a detailed reconciliation of GAAP to non-GAAP operating income, net income and diluted earnings per share.



Earnings Conference Call and Webcast
Bridgepoint Education will host a conference call at 5:00 p.m. ET (2:00 p.m. PT) today to discuss its latest financial results and recent highlights. The dial-in number for callers in the United States / Canada is 866-205-7692, and for other callers, 970-315-0754. The access code for all callers is 67706253. A live webcast will also be available on the Company's website at http://ir.bridgepointeducation.com.
A replay of the call will be available via telephone through December 4, 2015. To access the replay, dial 855-859-2056 in the United States / Canada and for other callers, 404-537-3406; then enter the access code 67706253.
About Bridgepoint Education
Bridgepoint Education, Inc. (NYSE:BPI) harnesses the latest technology to reimagine the modern student experience. 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 campuses in Iowa and Colorado, respectively. Bridgepoint stands for greater access, social learning, and exposure to leading minds. For more information, visit http://ir.bridgepointeducation.com/investor-relations/ or www.facebook.com/BridgepointEducation.
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 outlook for 2015 and beyond. 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, the newly issued Gainful Employment rules and regulations, state laws and regulatory requirements, and accrediting agency requirements;
adverse administrative, economic, legislative or regulatory changes affecting the Company and its 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 (the “SEC”), including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on March 10, 2015, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 5, 2015, the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 4, 2015, and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, 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, expectations and assumptions regarding future events based on information available at the time such statements are made. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update or revise any forward-looking statements to reflect actual results or any changes in assumptions or expectations or any other factors affecting such 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.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
Revenue
$
140,762

 
$
162,654

 
$
430,337

 
$
491,446

Costs and expenses:
 
 
 
 
 
 
 
Instructional costs and services
69,197

 
79,707

 
215,656

 
239,641

Admissions advisory and marketing
47,794

 
56,783

 
148,636

 
178,079

General and administrative
13,346

 
15,583

 
42,914

 
48,589

Restructuring and impairment charges
44,904

 

 
59,322

 

Total costs and expenses
175,241

 
152,073

 
466,528

 
466,309

Operating income (loss)
(34,479
)
 
10,581

 
(36,191
)
 
25,137

Other income, net
465

 
1,080

 
1,499

 
2,159

Income (loss) before income taxes
(34,014
)
 
11,661

 
(34,692
)
 
27,296

Income tax expense
28,732

 
5,370

 
29,075

 
12,380

Net income (loss)
$
(62,746
)
 
$
6,291

 
$
(63,767
)
 
$
14,916

Earnings (loss) per share:
 
 
 
 
 
 
 
Basic
$
(1.37
)
 
$
0.14

 
$
(1.40
)
 
$
0.33

Diluted
(1.37
)
 
0.14

 
(1.40
)
 
0.32

Weighted average number of common shares outstanding used in computing earnings per share:
 
 
 
 
 
 
 
Basic
45,754

 
45,301

 
45,620

 
45,145

Diluted
45,754

 
46,474

 
45,620

 
46,495




BRIDGEPOINT EDUCATION, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

 
September 30,
2015
 
December 31,
2014
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
242,673

 
$
207,003

Restricted cash
24,591

 
25,934

Investments
21,902

 
12,051

Accounts receivable, net
30,793

 
21,274

Student loans receivable, net
928

 
1,003

Deferred income taxes
12,757

 
21,301

Prepaid expenses and other current assets
33,577

 
22,818

Total current assets
367,221

 
311,384

Property and equipment, net
30,560

 
78,219

Investments
71,364

 
111,557

Student loans receivable, net
7,607

 
9,510

Goodwill and intangibles, net
22,221

 
24,775

Deferred income taxes
4,118

 
20,175

Other long-term assets
2,209

 
2,475

Total assets
$
505,300

 
$
558,095

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
2,128

 
$
1,013

Accrued liabilities
72,364

 
51,403

Deferred revenue and student deposits
89,614

 
108,048

Total current liabilities
164,106

 
160,464

Rent liability
21,397

 
22,098

Other long-term liabilities
11,902

 
9,652

Total liabilities
197,405

 
192,214

Total stockholders' equity
307,895

 
365,881

Total liabilities and stockholders' equity
$
505,300

 
$
558,095




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

 
Nine Months Ended September 30,
 
2015
 
2014
Cash flows from operating activities
 
 
 
Net income (loss)
$
(63,767
)
 
$
14,916

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Provision for bad debts
24,269

 
21,961

Depreciation and amortization
15,403

 
17,914

Amortization of premium/discount
364

 
85

Deferred income taxes
24,081

 
1,124

Stock-based compensation
7,324

 
7,891

Excess tax benefit of option exercises
(426
)
 
(1,171
)
Loss on impairment of student loans receivable
1,207

 
1,466

Net gain (loss) on marketable securities
125

 
(22
)
Loss on termination of leased space
13,540

 

Loss on impairment of fixed assets
38,855

 
80

Changes in operating assets and liabilities:
 
 
 
Restricted cash
7,712

 
12,202

Accounts receivable
(33,524
)
 
(30,314
)
Prepaid expenses and other current assets
5,537

 
3,317

Student loans receivable
831

 
763

Other long-term assets
266

 
368

Accounts payable and accrued liabilities
(2,883
)
 
(532
)
Deferred revenue and student deposits
(18,313
)
 
(23,600
)
Other liabilities
(3,960
)
 
(1,864
)
Net cash provided by operating activities
16,641

 
24,584

Cash flows from investing activities:
 
 
 
Capital expenditures
(2,324
)
 
(9,644
)
Purchases of investments
(20,242
)
 
(87,855
)
Non-operating restricted cash
(6,369
)
 
(29
)
Capitalized costs for intangible assets
(1,761
)
 
(2,957
)
Sales and maturities of investments
50,195

 
50,000

Net cash provided by (used in) investing activities
19,499

 
(50,485
)
Cash flows from financing activities:
 
 
 
Proceeds from exercise of stock options
260

 
3,076

Excess tax benefit of option exercises
426

 
1,171

Proceeds from the issuance of stock under employee stock purchase plan
136

 

Tax withholdings on issuance of stock awards
(1,292
)
 
(2,093
)
Net cash (used in) provided by financing activities
(470
)
 
2,154

Net increase (decrease) in cash and cash equivalents
35,670

 
(23,747
)
Cash and cash equivalents at beginning of period
207,003

 
212,526

Cash and cash equivalents at end of period
$
242,673

 
$
188,779






BRIDGEPOINT EDUCATION, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)


 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
Operating Income (Loss) Reconciliation:
 
 
 
 
 
 
 
GAAP operating income (loss)
$
(34,479
)
 
$
10,581

 
$
(36,191
)
 
$
25,137

Restructuring and impairment charges
44,904

 

 
59,322

 

Non-GAAP operating income
$
10,425

 
$
10,581

 
$
23,131

 
$
25,137

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Reconciliation:
 
 
 
 
 
 
 
GAAP net income (loss)
$
(62,746
)
 
$
6,291

 
$
(63,767
)
 
$
14,916

Restructuring and impairment charges
44,904

 

 
59,322

 

Income tax expense related to restructuring and impairment charges (1)
(16,839
)
 

 
(22,246
)
 

Incremental income tax expense related to establishment of valuation allowance
40,666

 

 
40,666

 

Non-GAAP net income
$
5,985

 
$
6,291

 
$
13,975

 
$
14,916

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted Earnings (Loss) Per Share Reconciliation:
 
 
 
 
 
 
 
GAAP diluted earnings (loss) per share
$
(1.37
)
 
$
0.14

 
$
(1.40
)
 
$
0.32

Restructuring and impairment charges
0.98

 

 
1.30

 

Income tax expense related to restructuring and impairment charges (1)
(0.37
)
 

 
(0.49
)
 

Incremental income tax expense related to establishment of valuation allowance
0.89

 

 
0.89

 

Non-GAAP diluted earnings per share
$
0.13

 
$
0.14

 
$
0.30

 
$
0.32


(1) - Calculated using a statutory tax rate equal to 37.5%.

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