Stockexpertpro
12 years ago
BPI Full DD & Analysis. First off what brought my attention to this stock was the massive sell off with the stock going from
over 22$ a share down to 8.22$ a share where its currently trading at all time lows there for i am going to take time to sit
down and tear this company apart from top to bottom i am going to be using there SEC Filings News Charts all public data that
can be found on this company that is currently avaible to the public.
First off the Chart is Extremely oversold no matter what metric you use that is screaming buy at these levels Chart below The
Sellers are clearly getting Killed here and locking in massive losses... Clearly the Sellers down here should be the ones
scared to death not the buyers
Lets go ahead and pull up the companies latest SEC 10Q Filing and lets dig through it
Market Cap: 436.73M 436 Million
P/E (ttm): 3.10 3 PE Dont get much lower then this...
EPS (ttm): 2.69 Huge Earnings
Bridgepoint Education, Inc.
13500 Evening Creek Drive North
Suite 600
San Diego, CA 92128
United States - Map
Phone: 858-668-2586 Done called the company left a message for them to call me back with the IR Dept
Fax: 858-408-2903
Website: http://www.bridgepointeducation.com
Details
Index Membership: N/A
Sector: Services
Industry: Education & Training Services
Full Time Employees: 8,900 Nearly 9000 Employees this is a Huge Company
Business Summary
Bridgepoint Education, Inc. provides postsecondary education services. It offers associate?s, bachelor?s, master?s, and
doctoral programs in the disciplines of business, education, psychology, social sciences, and health sciences. The company
offers its programs at campuses of its Ashford University located in Clinton, Iowa; and University of the Rockies located in
Colorado Springs, Colorado, as well as through online. As of December 31, 2011, it provided approximately 1,430 courses, 85
degree programs, and 140 specializations; and had 86,642 total enrolled students. The company was formerly known as
TeleUniversity, Inc. and changed its name to Bridgepoint Education, Inc. in February 2004. Bridgepoint Education, Inc. was
founded in 1999 and is headquartered in San Diego, California.
Key Statistics
Company Websites
Home Page
Search Yahoo! for:
More on Bridgepoint Education, Inc.
They are in Education have nearly 90,000 Students lets continue
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8581219-835-105414&type=sect&dcn=0001305323-12-000028
Latest 10Q Filing
The total number of shares of common stock outstanding as of April 26, 2012 , w as 52,419,245 of those 52 Million the Float
is around 17 Million Shares so pretty small float here
Lets start off with the Income Statement
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
BRIDGEPOINT EDUCATION, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except par value)
As of
March 31, 2012
As of
December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents
$
162,148 162 Million in Cash this is increasing its up over 29 Million Dollars from last year...
$
133,921
Restricted cash
25 25k in restricted in cash
25
Investments
164,562 164 Million in Investments... so beetween the Cash and Investments along Thats 326 Million Dollars+ Right there... VS
a 436 Million Market Cap Keep in mind the company grew its Cash by over 29 Million Dollars in a year this also grew by 11
Million Dollars as well Thats 40 Million Dollars in growth on the balance sheet side in a year Wow
153,779
Accounts receivable, net
92,853 92 Million in AR This also grew Kinda of a High number would like to see this come down but education i am guessing
that this is debt that students owe... Student Debt is the one thing that cant be wiped out in bankruptcy so that is a plus
it has to be repaid back...
62,156
Deferred income taxes
5,441
5,429
Prepaid expenses and other current assets
17,864
17,199
Total current assets
442,893 442 Million in total assets thats alot thats actually more then our current market cap...
372,509
Property and equipment, net
92,082 92 Million in property this is up a tad
89,667
Investments
115,431 another 115 MIllion here
119,507
Student loans receivable, net
12,065 12 MIllion thats not really that much given the size of the balance sheet
9,255
Goodwill and intangibles, net
8,378 Pretty low here thats good because i usually subtract this number out anyways
7,037
Deferred income taxes
10,805
11,200
Other long-term assets
2,517
4,461
Total assets
$
684,171 The total assets of the company is nearly 200 Million Dollars more then where the current market cap of the company
is sitting at right now... and these grew by over 71 Million Dollars yoy WOW
$
613,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
4,651 Very low actually down yoy
$
8,961
Accrued liabilities
67,409 increased but very managable
40,205
Deferred revenue and student deposits
189,169 This is just money they have recieved but they havent provided the services for yet
185,446
Total current liabilities
261,229 261 Million not to bad vs the assets of the company
234,612
Rent liability
19,741
16,595
Other long-term liabilities
8,980
8,781
Total liabilities
289,950 really low vs the asset side that is nearly 700 Million so love this balance sheet no long term debt lots of cash and
liquidity here and earnings cash flow positive as well
259,988
Commitments and contingencies (see Note 10)
Stockholders' equity:
Preferred stock, $0.01 par value:
20,000 shares authorized; zero shares issued and outstanding at March 31, 2012, and December 31, 2011
—
—
Common stock, $0.01 par value:
300,000 shares authorized; 59,526 issued and 52,276 outstanding at March 31, 2012; 58,981 issued and 51,731 outstanding at
December 31, 2011
595
590
Additional paid-in capital
144,340
137,447
Retained earnings
384,218 Wow huge earnings and they keep them these guys have been in business for a while
351,177
Accumulated other comprehensive gain (loss)
39
(595
)
Treasury stock, 7,250 shares at cost at both March 31, 2012, and December 31, 2011
(134,971
)
(134,971
)
Total stockholders' equity
394,221 394 Million thats about where the company is trading right now so i feel really comfortable buying the stock here
353,648
Total liabilities and stockholders' equity
$
684,171
$
613,636
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Very Solid balance sheet here no worrys at all with it
Lets go on to the income statement
BRIDGEPOINT EDUCATION, INC.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
March 31,
2012
2011
Revenue
$
250,437 Revenues growth by nearly 20 Million YOY The price to sales ratio here has to be tiny as well plus we get growth for
a company trading near book value Wow
$
229,432
Costs and expenses:
Instructional costs and services
68,475 not to bad given the revenues
55,809
Marketing and promotional
80,063 Looks like they spend ALOT on marketing would like to see this number come down also the increase here wasnt matched
with revenue growth like it should
58,966
General and administrative
49,546 not to bad but pretty big jump that wasnt offset by revenues growth
28,545
Total costs and expenses
198,084 The cost are lower then the revenues so there making money
143,320
Operating income
52,353 52 MIllion in opperating income Holly Cow Wow!!! Down from the 86 Million they made last year and ill tell you why its
down its due to the higher cost of the marketing and the higher general adminstrative cost... that was not off set by a
higher increase in over all revenus revenues grew just not as fast as cost did...
86,112
Other income, net
683
673
Income before income taxes
53,036 53 Million they are making ALOT Of money
86,785
Income tax expense
19,995 20 Million in taxes
32,866
Net income
$
33,041 33 Million in net income VERY IMPRESSIVE
$
53,919
Earnings per share:
Basic
$
0.64 64 Cents yeah its down yoy because of the above noted reasons but still VERY IMpressive esp given where the stock is
currently trading at right now
$
1.02
Diluted
0.59
0.92
Weighted average number of common shares outstanding used in computing earnings per share:
Basic
52,008 Stock actually declined wonder if they have a buy back in place betting they do
52,976
Diluted
56,203
58,583
The Income statement is very impressive i see where they can cut some cost esp in marketing and on the general and
administrative side but with that said very impressive numbers still none the less esp since we are now able to buy the stock
near its book value were basically getting the revenues and net income and cash flows for FREE ILL TAKE THAT ANYDAY
Going to look at there cash flows but there cash flow positive big time
BRIDGEPOINT EDUCATION, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
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 Yup huge cash flows here
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
Supplemental disclosure of non-cash transactions:
Purchase of equipment included in accounts payable and accrued liabilities
$
1,465
$
500
Cash Flow positive to the tune of 40 MIllion bucks
with NO DEBT
very impressive
1. Nature of Business
Bridgepoint Education, Inc. (together with its subsidiaries, the "Company"), incorporated in 1999, is a provider of
postsecondary education services. Its wholly-owned subsidiaries, Ashford University and the University of the Rockies, are
regionally accredited academic institutions that offer associate's, bachelor's, master's and doctoral programs online, as
well as at their traditional campuses located in Clinton, Iowa, and Colorado Springs, Colorado.
Been in business since 1999 so thats nearly 13 years now
Education always does well when the economy goes down more people go back to school
Deferred revenue and student deposits consist of the following (in thousands):
As of
March 31, 2012
As of
December 31, 2011
Deferred revenue
$
63,299
$
48,831
Student deposits
125,870
136,615
Total deferred revenue and student deposits
$
189,169 This is HUGE its sitting on there balance sheet as a Liablity right... Because the services have not been provided
YET but if you back this out of the liablities side since this will become a asset in the future... That right there along
places stock holders equity at 583 Million Dollars... back out the 189 Million add that back into the stock holders equity
and ya
$
185,446
6 . Credit Facilities
January 2010 Credit Facility
During the three months ended March 31, 2012 , the Company maintained a $50 million revolving line of credit with Comerica
Bank ("Comerica") pursuant to a Credit Agreement, Revolving Credit Note and Security Agreement (collectively, the "Loan
Documents"). Under the Loan Documents, Comerica agreed to make loans to the Company and issue letters of credit on the
Company's behalf, subject to the terms and conditions of the Loan Documents. Amounts subject to letters of credit issued
under the Loan Documents were treated as limitations on available borrowings under the line of credit. Interest was to be
paid monthly under the line of credit, and principal was to be paid on the maturity date of the line of credit. Interest
would accrue on amounts outstanding under the line of credit, at the Company's option, at either (1) Comerica's prime
reference rate + 0.00% or (2) one month, two month or three month LIBOR + 2.25% . As security for the performance of the
Company's obligations under the Loan Documents, the Company granted Comerica a first priority security interest in
substantially all of the Company's assets, including its real property.
On March 30, 2012, the Company entered into a Sixth Amendment to Loan Documents with Comerica pursuant to which the maturity
date of the line of credit was extended to April 15, 2012. As of March 31, 2012 , the Company had no borrowings outstanding
under the line of credit. As of March 31, 2012 , the Company used the availability under the line of credit to issue letters
of credit aggregating $5.1 million .
The Loan Documents contained financial covenants requiring the Company's educational institutions to maintain Title IV
eligibility as well as the Company's maintenance of specified adjusted quick ratios, minimum profitability, minimum cash
balances and U.S. Department of Education ("Department") financial responsibility composite scores. The Loan Documents
contained other customary affirmative and negative covenants (including cash controls, financial reporting covenants and
prohibitions on acquisitions, dividends, stock redemptions and other cash expenditures over a specified amount without
Comerica's reasonable consent), representations and warranties and events of default (including the occurrence of a "material
adverse effect," as defined in the Loan Documents). The Company was in compliance with all financial covenants in the Loan
Documents as of March 31, 2012 .
They dont really need this credit facility they have tons of cash and liquid assets
for the three months ended March 31, 2012 , was 37.9% . The Company's effective income tax rate was 37.7% for the three
months ended March 31, 2012 . The effective rate for the three months ended March 31, 2012 , differed from the Company's
estimated annual effective tax rate due to the impact of discrete items on the Company's income before the provision for
income taxes, particularly interest accrued on unrecognized tax benefits and an adjustment to the value of the Company's net
deferred tax assets related to an increase in the effective state tax rate.
At both March 31, 2012 , and December 31, 2011 , the Company had gross unrecognized tax benefits of $8.1 million , of which
$5.8 million would impact the effective income tax rate if recognized.
The Company is subject to U.S. federal income tax and multiple state tax jurisdictions. The 2002 through 2011 tax years
remain open to examination by major taxing jurisdictions to which the Company is subject. The California Franchise Tax Board
commenced an audit of the Company's 2008 and 2009 California income tax returns in October 2011. The Company does not expect
any significant adjustments resulting from this audit.
The Company's continuing practice is to recognize interest and penalties related to uncertain tax positions in income tax
expense. Accrued interest and penalties related to uncertain tax positions as of both March 31, 2012 , and December 31, 2011
, was $1.4 million .
Compliance Audit by the Department's Office of the Inspector General ("OIG")
In January 2011, Ashford University received a final audit report from the OIG regarding the compliance audit commenced in
May 2008 and covering the period July 1, 2006 through June 30, 2007. The audit covered Ashford University's administration of
Title IV program funds, including compliance with regulations governing institutional and student eligibility, awards and
disbursements of Title IV program funds, verification of awards and returns of unearned funds during that period, and its
compensation of financial aid and recruiting personnel during the period May 10, 2005 through June 30, 2009.
The final audit report contained audit findings, in each case for the period July 1, 2006 through June 30, 2007, which are
applicable to award year 2006-2007. Each finding was accompanied by one or more recommendations to the Department's Office of
Federal Student Aid ("FSA"). If the FSA were to determine to assess a monetary liability or commence other administrative
action, Ashford University would have an opportunity to contest the assessment or proposed action through administrative
proceedings, with the right to seek review of any final administrative action in the federal courts.
Rosendahl v. Bridgepoint Education, Inc.
In January 2011, the Company received a copy of a complaint filed as a class action lawsuit naming the Company, Ashford
University and University of the Rockies as defendants. The complaint was filed in the U.S. District Court for the Southern
District of California and is captioned Rosendahl v. Bridgepoint Education, Inc. The complaint generally alleges that the
Company and the other defendants engaged in improper, fraudulent and illegal behavior in their efforts to recruit and retain
students.
The Company responded to the complaint by filing a motion to dismiss the complaint in its entirety and motions to strike
certain allegations in the complaint. The court allowed the matter to proceed on certain claims for alleged violations of the
Business and Professions Code, violations of the Consumer Legal Remedies Act, and negligent misrepresentations, but only as
14
BRIDGEPOINT EDUCATION, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)
the specific alleged misrepresentations made to the named plaintiffs. The Company then moved to compel the plaintiffs' claims
to arbitration. In February 2012, the Court issued an order compelling the plaintiffs to arbitrate their claims against the
defendants and closed the court case. The Company has not yet received an arbitration demand from the plaintiffs.
Iowa Attorney General Civil Investigation of Ashford University
In February 2011, Ashford University received from the Attorney General of the State of Iowa (“Iowa Attorney General”) a
Civil Investigative Demand and Notice of Intent to Proceed (“CID”) relating to the Iowa Attorney General's investigation of
whether certain of the university's business practices comply with Iowa consumer laws. The CID contains no specific
allegations of wrongdoing. Pursuant to the CID, the Iowa Attorney General has requested documents and detailed information
for the time period January 1, 2008 to present. Ashford University continues to respond to the CID and intends to comply with
the Iowa Attorney General's request.
Stevens v. Bridgepoint Education, Inc.
In February 2011, the Company received a copy of a complaint filed as a class action lawsuit naming the Company, Ashford
University, LLC, and certain employees as defendants. The complaint was filed in the Superior Court of the State of
California in San Diego and is captioned Stevens v. Bridgepoint Education, Inc. The complaint generally alleges that the
plaintiffs and similarly situated employees were improperly denied certain wage and hour protections under California law.
In April 2011, the Company received a copy of a complaint filed as a class action lawsuit naming the Company and Ashford
University, LLC, as defendants. The complaint was filed in the Superior Court of the State of California in San Diego , and
is captioned Moore v. Ashford University, LLC. The complaint generally alleges that the plaintiff and similarly situated
employees were improperly denied certain wage and hour protections under California law.
In May 2011, the Company received a copy of a complaint filed as a class action lawsuit naming the Company as a defendant.
The complaint was filed in the Superior Court of the State of California in San Diego and is captioned Sanchez v. Bridgepoint
Education, Inc. The complaint generally alleges that the plaintiff and similarly situated employees were improperly denied
certain wage and hour protections under California law.
In October 2011, the cases captioned Moore v. Ashford University, LLC and Sanchez v. Bridgepoint Education, Inc. were
consolidated with Stevens v. Bridgepoint Education, Inc. , with Stevens v. Bridgepoint Education, Inc. designated as the lead
case, as the three cases involve common questions of fact and law.
In March 2012, the Company entered into a memorandum of understanding with the plaintiffs of the above named cases to
memorialize the terms of a settlement agreement among the parties. In April 2012, the Company signed a settlement agreement
with the plaintiffs which did not change the terms of the memorandum of understanding. Under the settlement agreement, which
is pending court approval, the Company agreed to pay to the plaintiffs an amount to settle their claims, plus any related
payroll taxes. As the Company determined that the loss related to settling the consolidated cases is both probable and
reasonably estimable, the Company accrued $10.8 million for such a loss during the three months ended March 31, 2012.
New York Attorney General Investigation of Bridgepoint Education, Inc.
In May 2011, the Company received from the Attorney General of the State of New York (“NY Attorney General”) a Subpoena Duces
Tecum (“Subpoena”) relating to the NY Attorney General's investigation of whether the Company and its academic institutions
have complied with certain New York state consumer protection, securities and finance laws. Pursuant to the Subpoena, the NY
Attorney General has requested from the Company and its academic institutions documents and detailed information for the time
period March 17, 2005, to present. The Company is responding to the Subpoena and intends to comply with the NY Attorney
General's request.
North Carolina Attorney General Investigation of Bridgepoint Education, Inc.
In September 2011, Ashford University received from the Attorney General of the State of North Carolina (“NC Attorney
General”) an Investigative Demand relating to the NC Attorney General's investigation of whether the university's business
practices complied with North Carolina consumer protection law. Pursuant to the Investigative Demand, the NC Attorney
15
BRIDGEPOINT EDUCATION, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)
General has requested from Ashford University documents and detailed information for the time period January 1, 2008, to
present. The university continues to dialogue with the NC Attorney General and intends to comply with the NC Attorney
General's requests.
Looks like they have had some legal problems in the years past but looks like they have resolved most all of those issiues
Stock Repurchase Program
On April 30, 2012, the Company's board of directors authorized the repurchase of up to $75.0 million of the Company's
outstanding shares of common stock over the following 12 months. The repurchase program was authorized by the Company's board
of directors with the intention of creating additional value for stockholders. Under the repurchase program, the Company is
authorized to purchase shares from time to time in the open market, through block trades or otherwise. No shares have yet
been repurchased under this program.
They are buying back stock they should take full advantage of the current stock price to load up cheap ill be sure to tell
them that when they call me back
Overview
Background
We are a provider of postsecondary education services. Our regionally accredited academic institutions, Ashford University
and University of the Rockies, offer associate's, bachelor's, master's and doctoral programs online as well as at their
traditional campuses located in Clinton, Iowa and Colorado Springs, Colorado. As of March 31, 2012 , our institutions offered
approximately 1,430 courses, 85 degree programs and 140 specializations. We are also focused on developing innovative new
technologies to improve the way students learn, such as Constellation, Thuze and Waypoint Outcomes, and the mobile learning
platforms for our institutions.
Key operating data
In evaluating our operating performance, our management focuses in large part on (i) revenue, (ii) operating income and (iii)
period end enrollment at our institutions (online and campus-based). The following table, which you should read in
conjunction with our condensed consolidated financial statements contained elsewhere in this report, presents our key
operating data for the three months ended March 31, 2012 and 2011 (in thousands, except for enrollment data):
Enrollment at our academic institutions grew from 86,642 at December 31, 2011 , to 94,863 at March 31, 2012 , an increase of
9.5% . In the three months ended March 31, 2012 , we had new student enrollments of approximately 24,275 , compared with new
student enrollments of approximately 27,550 for the same period in 2011 , a decrease of 11.9% . The following table presents
new student enrollments for the most recent five quarters and compares them to the same periods in the previous year:
So they have more students then i thought
In recent quarters, we have experienced a decline in new student enrollments. We believe the primary driver for the lower new
student enrollments during the first three months of 2012 was the change in compensation methodology for certain personnel
required by Department regulations that became effective on July 1, 2011, which resulted in our admissions counselors having
lower productivity levels. Additionally, we believe the new student enrollments have been impacted by the student quality and
preparedness initiatives we implemented in the two most recent fiscal years, as well as the negative media scrutiny of our
company and the private sector postsecondary education industry in general. However, after observing admissions counselor
productivity over the past three quarters, we believe that new student enrollments will grow in 2012 as compared to 2011.
Anticipated future trends in results of operations
In recent years, we have seen total student enrollment and revenue continue to increase despite difficult general economic
conditions, and have not experienced any significant negative impact from the fluctuation in general economic conditions on
our liquidity, capital resources or results of operations. While we cannot guarantee that these trends will continue, we
believe that the performance of our company has been resilient in the current economic environment due to the continued
availability of Title IV funds to finance student tuition payments and the continuing demand for postsecondary education.
In 2012, we plan to continue to invest in admissions counselors and in online and other advertising, including pursuant to a
recently launched branding campaign for us and our institutions. We expect these efforts will result in (1) an increase in
new student enrollment compared to 2011 and (2) our total student enrollment and revenue otherwise continuing to grow, though
perhaps not at the same rate as in the past, particularly given the larger size of our enrollment base and recent changes in
the
18
regulatory environment, including the final incentive compensation regulations that became effective on July 1, 2011.
Additionally, we expect increases in marketing costs related to the branding campaign and the hiring of new admissions
counselors, which will likely result in a decrease in our operating income in 2012 as compared to 2011.
Liquidity and capital resources and anticipated capital expenditures
We have financed our operating activities and capital expenditures during 2012 and 2011 primarily through cash provided by
operating activities. At March 31, 2012 , we had cash, cash equivalents and investments totaling $442.1 million and no
long-term debt. Based on our current level of operations and anticipated growth in enrollments, we believe that our cash flow
from operating activities, our existing cash and cash equivalents and other sources of liquidity will provide adequate funds
for ongoing operations, planned capital expenditures and working capital requirements for at least the next 12 months. For
the year ending December 31, 2012 , we expect capital expenditures to be approximately $41.0 million.
Recent Developments
WASC Site Visit of Ashford University. In March 2012, Ashford University hosted a site visit team from the Accrediting
Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges (“WASC”). The purpose of
the site visit was to validate the information provided in the institution's application for regional accreditation from
WASC, particularly its compliance with WASC standards and criteria for review. The next step in the accreditation process is
for the site visit team to submit a final team report to WASC. Before the submission of the final team report to WASC,
Ashford University will be given an opportunity to review the report for correction of errors of fact and to prepare a
written response to the final team report, which will be provided to WASC for consideration along with the report. The site
visit team will also submit a confidential recommendation to the WASC Commission as to whether or not the institution should
be accredited. This confidential recommendation is separate from and not included with the final team report and is not
shared with the institution. If upon review of the application and supporting documentation, including the team report and
the institution's response, Ashford University is found to be in substantial compliance with all of WASC's standards, WASC
may grant initial accreditation, typically with a comprehensive review cycle of five years. Depending on the circumstances,
WASC may also grant initial accreditation with requirements for interim reports, special visits or both. If initial
accreditation from WASC is secured, then Ashford University will commence the process of redesignating its primary
institutional accreditor from the Higher Learning Commission to WASC.
Settlement of Class Action Lawsuits. In March 2012, we entered into a memorandum of understanding with the plaintiffs of the
cases consolidated under Stevens v. Bridgepoint Education, Inc. to memorialize the terms of a settlement agreement among the
parties. In April 2012, we signed a settlement agreement with the plaintiffs which did not change the terms of the memorandum
of understanding. Under the settlement agreement, which is pending court approval, we agreed to pay to the plaintiffs an
amount to settle their claims, plus any related payroll taxes. As we determined that the loss related to settling the
consolidated cases is both probable and reasonably estimable, we accrued $10.8 million for such loss during the three months
ended March 31, 2012. For more information regarding the consolidated cases, see Part II, Item 1 (Legal Proceedings) of this
report.
April 2012 Credit Facility. In April 2012, we entered into a $50 million revolving line of credit ("New Facility") pursuant
to an Amended and Restated Revolving Credit Agreement ("Revolving Credit Agreement") with the lenders signatory thereto and
Comerica Bank ("Comerica"), as administrative agent for the lenders. The Revolving Credit Agreement amends, restates and
supersedes the Credit Agreement dated January 29, 2010, as amended, with Comerica. At the company's option, we may increase
the size of the New Facility up to $100 million (in certain minimum increments), subject to the terms and conditions of the
Revolving Credit Agreement. Additionally, we may request swing-line advances under the New Facility up to $3 million in the
aggregate. For more information regarding the Revolving Credit Agreement and the New Facility, see Note 6 , “ Credit
Facilities ,” to our condensed consolidated financial statements which are included elsewhere in this report.
Seasonality
Our operations are generally subject to seasonal trends. While we enroll students throughout the year, our fourth quarter
revenue generally is lower than other quarters due to the holiday break in December. We generally experience a seasonal
increase in new enrollments in August and September of each year when most other colleges and universities begin their fall
semesters.
So business should start to pick up in the coming months
hree Months Ended March 31, 2012 , Compared to Three Months Ended March 31, 2011
Revenue. Our revenue for the three months ended March 31, 2012 , was $250.4 million , representing an increase of $21.0
million , or 9.2% , as compared to revenue of $229.4 million for the three months ended March 31, 2011 . This increase was
primarily due to a tuition increase of 5% which was effective April 1, 2011. The tuition increase accounted for approximately
54.8% of the $21.0 million revenue increase between periods. In addition to the tuition increase, the revenue increase was
also positively impacted by the enrollment growth of 7.5% , from 88,252 students at March 31, 2011 , to 94,863 students at
March 31, 2012 . Enrollment growth is driven by various factors including prospective students' acceptance of our educational
offerings, the quality of lead generation efforts, the number of admissions counselors and our ability to retain existing
students. The increase in revenue was partially offset by an increase in institutional scholarships of $8.5 million in the
aggregate between periods. We earned technology fees of $15.8 million for the three months ended March 31, 2012 ,
representing 6.3% of total revenue during the period, compared to technology fees of $18.7 million for the three months ended
March 31, 2011 , representing 8.1% of total revenue during that period. The decrease in technology fees is primarily due to
the 11.9% decline in new student enrollments between periods.
Instructional costs and services. Our instructional costs and services for the three months ended March 31, 2012 , were
$68.5 million , representing an increase of $12.7 million , or 22.7% , as compared to instructional costs and services of
$55.8 million for the three months ended March 31, 2011 . This increase was primarily due to additional costs necessary to
support increased student enrollment. Specific increases between periods were direct compensation in the areas of academic
management, financial aid support and student services of $6.1 million, bad debt expense of $3.4 million, instructor fees of
$2.0 million and facilities costs of $1.4 million. Instructional costs and services increased, as a percentage of revenue, to
27.3% for the three months ended March 31, 2012 , as compared to 24.3% for the three months ended March 31, 2011 . The
increase of 3.0% , as a percentage of revenue, included relative increases in direct compensation of 1.8%, an increase of
0.9% in bad debt expense to 6.0% for the three months ended March 31, 2012 , compared to 5.1% for three months ended March
31, 2011 , and increases in instructor fees and facilities costs of 0.4% each. The relative increases were partially offset
by a relative decrease in financial aid processing fees of 0.8%. The relative increase in bad debt expense was due to weak
general economic conditions and the timing of internal collections efforts; we continue to enhance our processes to improve
this metric.
Marketing and promotional expenses. Our marketing and promotional expenses for the three months ended March 31, 2012 ,
were $80.1 million , representing an increase of $21.1 million , or 35.8% , as compared to marketing and promotional expenses
of $59.0 million for the three months ended March 31, 2011 . The increase was primarily due to the growth of our admissions
counselor workforce, as well as costs incurred for expanded marketing and branding efforts. Specific factors contributing to
the overall increase between periods were increases in selling compensation of $11.5 million, advertising costs
There cost went up but so did there revenues cost are still well inline tho with revenues and growth is there as well
21
of $6.2 million and facilities costs of $2.0 million. The increase in selling compensation and advertising spending is
expected to continue as we grow our admissions counselor workforce and increase our lead generation efforts to support such
personnel. Our marketing and promotional expenses, as a percentage of revenue, increased to 32.0% for the three months ended
March 31, 2012 , from 25.7% for the three months ended March 31, 2011 . The increase of 6.3% as a percentage of revenue was
mainly due to the relative increases in selling compensation of 3.4%, advertising costs of 1.9% and facilities costs of 0.5%.
General and administrative expenses. Our general and administrative expenses for the three months ended March 31, 2012 ,
were $49.5 million , representing an increase of $21.0 million , or 73.6% , as compared to general and administrative
expenses of $28.5 million for the three months ended March 31, 2011 . The overall increase between periods was primarily due
to an accrual of $10.8 million related to a settlement agreement for three consolidated lawsuits that was recorded in the
three months ended March 31, 2012 . Other increases between periods were administrative compensation of $4.8 million,
consulting and outside services of $1.4 million and facilities costs of $0.7 million. Our general and administrative
expenses, as a percentage of revenue, increased to 19.8% for the three months ended March 31, 2012 , from 12.5% for the three
months ended March 31, 2011 . The increase of 7.3% included relative increases for the settlement accrual of 4.3%,
administrative labor of 1.4% consulting fees and outside services of 0.5%.
Other income, net. Other income, net, was $0.7 million for both the three months ended March 31, 2012 and 2011 .
Income tax expense. We recognized income tax expense for the three months ended March 31, 2012 and 2011 , of $20.0
million and $32.9 million , respectively, at effective tax rates of 37.7% and 37.9% , respectively. The decrease in our
effective tax rate between periods was primarily due to an adjustment to the value of our net deferred tax assets related to
an increase in our state effective tax rate.
Net income. Net income was $33.0 million for the three months ended March 31, 2012 , compared to net income of $53.9
million for the three months ended March 31, 2011 , a decrease of $20.9 million , as a result of the factors discussed above.
Liquidity and Capital Resources
We financed our operating activities and capital expenditures during the three months ended March 31, 2012 and 2011 ,
primarily through cash provided by operating activities. Our cash and cash equivalents were $162.1 million at March 31, 2012
, and $133.9 million at December 31, 2011 . At March 31, 2012 , and December 31, 2011 , we had investments of $280.0 million
and $273.3 million , respectively.
We manage our excess cash pursuant to the quantitative and qualitative operational guidelines of our cash investment policy.
Our cash investment policy is managed by our chief financial officer and has the following primary objectives: preserving
principal, meeting our liquidity needs, minimizing market and credit risk, and providing after-tax returns. Under the
policy's guidelines, we invest our excess cash exclusively in high-quality, U.S. dollar-denominated financial instruments.
For a discussion of the measures we use to mitigate the exposure of our cash investments to market risk, credit risk and
interest rate risk, see Part I, Item 3, "Quantitative and Qualitative Disclosures About Market Risk," of this report.
We noted an increase in fair value of our short and long-term investments at March 31, 2012 , as compared to December 31,
2011. We believe that the increase is due to market response to the stabilization of credit ratings and the on-going
financial recoveries of many major U.S and world banks. We believe that the fluctuations we have recently experienced are
temporary in nature and we maintain that while some our securities are classified as available-for-sale, we have the ability
and intent to hold them until maturity, if necessary, to recover the value.
Available borrowing facilities
For the three months ended March 31, 2012 , we were party to a $50 million revolving line of credit (the "Old Facility")with
Comerica Bank ("Comerica") pursuant to a Credit Agreement, Revolving Credit Note and Security Agreement (collectively, the
"Loan Documents"). On April 13, 2012, the Company entered into a new revolving line of credit ("New Facility") pursuant to an
Amended and Restated Revolving Credit Agreement ("Revolving Credit Agreement") with the lenders signatory thereto and
Comerica as administrative agent. The Revolving Credit Agreement and the New Facility amend, restate and supersede the Old
Facility. At the company's option, we may increase the size of the New Facility up to $100 million (in certain minimum
increments), subject to the terms and conditions of the Revolving Credit Agreement. Additionally, the Company may request
swing-line advances under the New Facility up to $3 million in the aggregate. For more information
Off-Balance Sheet Arrangements
As part of our normal business operations, we are required to provide surety bonds in certain states where we do business. In
May 2009, we entered into a surety bond facility with an insurance company to provide such bonds when required. As of March
31, 2012 , our total available surety bond facility was $12.0 million and the surety had issued bonds totaling $9.8 million
on our behalf under such facility.
Done with this SEC Filing love the balance sheet love the income statement and cash flows statement very strong buy no
worries at all now after doing the above DD buying and holding this stock at the current price
Need to continue on with the DD The reason for the drop and can this be resolved
There is a few 8k Filings let have a look first one
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8716124-843-8705&type=sect&dcn=0001305323-12-000034
Item 8.01 Other Information.
Notification from Higher Learning Commission regarding Special Monitoring
On July 12, 2012, Bridgepoint Education's subsidiary, Ashford University, received a letter from the Higher Learning
Commission of the North Central Association of Schools and Colleges (“H LC”) requiring Ashford University to provide certain
information and evidence of compliance with HLC accreditation standards. HL C is a regional accrediting body recognized by
the U.S. Department of Education and is the principal accreditor of Ashford University and its programs. The HLC letter
relates to the recent visiting team report and action letter received by the University from the Accrediting Commission for
Senior Colleges and Universities of the Western Association of Schools and Colleges (“WASC”) on July 5, 2012.
The letter requires that Ashford University submit a report to HLC no later than August 10, 2012 that will be followed by an
Advisory Visit that will occur no later than October 9, 2012. The University's report must demonstrate that the University
remains in compliance with the HLC's Criteria for Accreditation and include: (i) evidence that Ashford University meets the
HLC Criteria for Accreditation relating to the role and autonomy of the University's governing board and its relationship
with Bridgepoint Education, including the role of faculty in overseeing academic policies and the integrity and continuity of
academic programs, (ii) evidence that Ashford University's resource allocations are sufficiently aligned with educational
purposes and objectives in the areas of student completion and retention, the sufficiency of full-time faculty and model for
faculty development, and plans for increasing enrollments, and (iii) evidence demonstrating that Ashford University has an
effective system for assessing and monitoring student learning and assuring academic vigor.
The letter states that HLC's President will present the report of the Advisory Visit team and the President's recommendation
to the HLC Board for action at its February 2013 meeting. At that meeting, the HLC Board may act to continue accreditation,
with or without further monitoring, continue accreditation under sanction or “Show Cause” order, or withdraw accreditation.
The letter further states that Ashford University would be scheduled for a HLC Board Committee Hearing prior to any Board
action to withdraw accreditation. HLC policies also provide for a right to appeal any Board action to withdraw accreditation.
Ashford University believes it is in substantial compliance with the HLC accreditation criteria and Bridgepoint Education and
Ashford University intend to cooperate fully with HLC in this matter.
Special Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements including, without limitation, statements regarding
Ashford University's plans in response to the Higher Learning Commission's communication regarding the institution's
compliance with its accreditation requirements. These statements involve risks and uncertainties, and actual results may
differ materially from those expressed in or suggested by such statements. Such risks and uncertainties include, without
limitation: the inability of Ashford University to demonstrate to the Higher Learning Commission its compliance with the
Commission's accreditation requirements, which could lead to a loss of accreditation and eligibility to participate in Title
IV programs; and uncertain costs, management distraction and potential business disruption.
More information on potential factors that could affect our future 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 our periodic
reports filed with the SEC, including, without limitation, our Annual Report on Form 10-K for the year ended December 31,
2011, filed with the SEC on March 7, 2012, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed
with the SEC on May 1, 2012.
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 Bridgepoint Education assumes no obligation to update any
forward-looking statements or information, which speak as of their respective dates, except as required by law.
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: July 13, 2012
Bridgepoint Education, Inc.
By:
/s/ Diane L. Thompson
Name: Diane L. Thompson
Title: Senior Vice President, Secretary and General Counsel
Ok lets read this VERY Carefully... First off no action will be taken till 2013... Thats Next Year... so clearly the stock
way over reacted on the news...
Ashford University believes it is in substantial compliance with the HLC accreditation criteria and Bridgepoint Education and
Ashford University intend to cooperate fully with HLC in this matter.
So basically they are going to visit the college and make sure that they are going in lines with there accrediation guidlines
and since they have a advance warning you can bet that they are going to be very prepared for this visit and be on there ps
and qs...
Next 8k
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8709316-852-9810&type=sect&dcn=0001305323-12-000032
Item 8.01 Other Information.
Denial of Initial Accreditation for Ashford University
On July 5, 2012, Ashford University received official notice from the Accrediting Commission for Senior Colleges and
Universities of the Western Association of Schools and Colleges ("WASC") that WASC has acted (1) to deny initial
accreditation to the institution and (2) to permit the institution to reapply for accreditation with a single special visit
to occur as early as spring 2013. This reapplication process would allow WASC to act in June 2013 and does not require
Ashford University to undertake another full self-study.
WASC found that Ashford University had not yet demonstrated substantial compliance with certain of the WASC Standards for
Accreditation, as would be required for initial accreditation. Ashford University intends to appeal this decision and
simultaneously to undertake the process for reapplying for initial accreditation. Under WASC rules, if Ashford University
decides to reapply for accreditation, the institution will be required to demonstrate that it has satisfactorily addressed
the report's conclusions and has come into compliance with the WASC Standards of Accreditation.
A copy of the visiting team report and WASC action letter from the review of Ashford University will be available on the WASC
website at www.wascsenior.org.
Ashford University remains regionally accredited by the Higher Learning Commission of the North Central Association of
Colleges and Schools ("Higher Learning Commission"), with the next comprehensive evaluation scheduled for 2014-15. Ashford
University intends to work collaboratively with both WASC and the Higher Learning Commission to ensure it continues to
satisfy the Higher Learning Commission's accreditation requirements while it seeks accreditation with WASC.
Notification from Higher Learning Commission regarding Jurisdiction over Ashford University
On June 25, 2012, the Higher Learning Commission informed Ashford University that the institution must demonstrate, no later
than December 1, 2012, that it has a "substantial presence," as defined by commission policy, in the 19-state north central
region and accordingly is within the Higher Learning Commission's jurisdiction under new requirements which became effective
on July 1, 2012. Ashford University is communicating with the Higher Learning Commission regarding the timing and components
of becoming compliant with the commission's jurisdictional requirements in light of the institution's plans to reapply for
initial accreditation with WASC.
If Ashford University is required to comply with the Higher Learning Commission's jurisdictional requirements, it is expected
that the institution would need to consolidate a significant portion of its educational administration and activity, business
operations and executive and administrative leadership in the 19-state north central region. Additionally, if Ashford
University is unable to demonstrate in a timely manner that it has a substantial presence in the north central region, the
Higher Learning Commission has stated that it will begin a process of reconsidering the institution's accreditation. Ashford
University intends to maintain its accreditation with the Higher Learning Commission until such time as it can transfer its
accreditation to WASC.
So looks like they lost there accrediation but they are working to get it back sounds like a temp problem to me
Next 8k Form
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8629486-866-7545&type=sect&dcn=0001305323-12-000030
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On May 15, 2012, the Compensation Committee adopted the 2012 Executive Profit Sharing Plan ("2012 Plan") for Messrs. Andrew
S. Clark, Daniel J. Devine and Rodney T. Sheng, Dr. Jane L. McAuliffe and Ms. Diane L. Thompson (collectively, the "named
executive officers"). Under the 2012 Plan, the payment to the named executive officers of annual performance-based cash
bonuses related to 2012 performance will be based on the achievement of corresponding company-wide performance targets
related to quality, EBITDA and revenue, with each respective metric receiving one-third of the weighting. There will be no
individual performance metrics. The performance target for quality will require the achievement by our company in 2012 of
certain quality metrics based on cohort default rates, 90/10 ratio, net promoter score, employee retention, and the
development and enhancement of certain predictive modeling and learning tools.
The Compensation Committee has determined that the 2012 target bonus amounts for Messrs. Clark, Devine and Sheng would be
100%, 65% and 75%, respectively, of their annual base salaries, and that the 2012 target bonus amounts for Dr. McAuliffe and
Ms. Thompson would be 55% and 35%, respectively, of their annual base salaries. Actual bonus amounts paid to the named
executive officers may be or more or less than the target bonus amounts. For 2012, the Compensation Committee determined that
(1) the minimum or threshold bonus amount for each named executive officer will be 50% of the officer's target bonus amount,
and (2) the maximum bonus amount for each named executive officer will be 200% of the officer's target bonus amount. The
Compensation Committee has the discretion to award bonus amounts that fall in between the threshold, target and maximum
amounts for attainment of performance that falls in between the specified goals.
Item 5.07. Submission of Matters to a Vote of Security Holders.
On May 14, 2012, we held our 2012 Annual Meeting of Stockholders at which the stockholders (1) elected Andrew S. Clark and
Patrick T. Hackett as Class III directors for a three-year term to expire at the 2015 Annual Meeting of Stockholders and (2)
ratified the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending
December 31, 2012.
The final voting results on these matters were as follows:
Proposal 1 - Election of two Class III directors for a three-year term to expire at the 2015 Annual Meeting of
Stockholders:
Name
Votes For
Votes Withheld
Votes Abstained
Broker Non-Votes
Andrew S. Clark
42,824,769
2,932,669
—
3,247,486
Patrick T. Hackett
45,372,108
385,330
—
3,247,486
Proposal 2 - Ratification of selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm
for the year ending December 31, 2012:
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
48,868,306
108,239
28,379
—
Thats just pay for the people running the company
Ok overall love the balance sheet the income statement the cash flows this all comes down to them being accredited i think
that they will keep there accrediation they have plenty of time to prepare and take the necessary actions to be prepared to
be accredited they have been for over 12 years now
I think that they can make the necessary changes to get there accrediation back at the current price there really is not much
downside risk as the companys balance sheet provides protection but the upside here could be huge once the company gets this
behind them... Based on the Above DD I give the stock a Strong Buy Rating at the current price and market cap given the chart
fundamentals and over all sistution... DD Given
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ClarkKant
8 years ago
Penny Roger$
13 years ago
